<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 30, 1998
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Fund America Investors Corporation II
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(Exact name of registrant as specified in charter)
<TABLE>
Delaware 33-73748 84-1218906
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<S> <C> <C>
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
6400 S. Fiddler's Green Circle, Suite 1200B, Englewood, Colorado 80111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 290-6025
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(Former name or former address, if changed since last report.)
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Item 1.Changes in Control of Registrant.
Not Applicable.
Item 2.Acquisition or Disposition of Assets.
Not Applicable.
Item 3.Bankruptcy or Receivership.
Not Applicable.
Item 4.Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5.Other Events.
On April 30, 1998, the Registrant caused the issuance and sale of
$60,373,853 original principal amount of its Pass-Through Certificates, Series
1998-A, Class 1A and Class 2A (the "Certificates") pursuant to a Pooling
Agreement, dated as of April 1, 1998 (the "Pooling Agreement"), by and between
the Registrant, as seller, and State Street Bank and Trust Company, as trustee
(the "Trustee"). The Certificates were issued in two Classes, with an Initial
Principal Amount and a Pass-Through Rate as described below
<TABLE>
<CAPTION>
Class Initial Pass-Through
Designation Principal Amount Rate
----------- ---------------- -----
<S> <C> <C> <C>
Class 1A $23,500,002 (1)
Class 2A $36,873,851 (1)
</TABLE>
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(1) The effective per annum interest rate borne by either Class of
Certificates during each Interest Accrual Period (as defined in the Prospectus)
with respect to a Distribution Date (as defined in the Prospectus) will equal a
fraction, expressed as a percentage truncated at the fourth decimal place, the
numerator of which is equal to the aggregate amount in respect of interest paid
on the Pooled Certificates relating to each Class for the related Interest
Accrual period (after payment of the Trustee's Fee and subject to the
adjustments of certain amounts with respect to the Class 2A Certificates as
described in the Prospectus) multiplied by 12, and the denominator of which is
the principal amount of such Class of related Certificates immediately prior to
such Distribution Date. Under certain circumstances, the principal amount of
either Class of Certificates could be paid in full while interest would remain
payable, in which case, the calculation of the effective per annum interest rate
borne by such Class of Certificates would not be meaningful. The effectiv per
annum interest rate borne by such Class of Certificates would not be meaningful.
The effective per annum interest rate borne by the Class 1A Certificates during
the first Interest Accrual Period is projected to be approximately 6.6985%. The
effective per annum interest rate borne by the Class 2A Certificates during the
first Interest Accrual Period is projected assuming a constant prepayment rate
of 200% (as defined in the Prospectus) to be approximately 7.7367%.
The Certificates evidence, in the aggregate, the entire beneficial
ownership interest in two groups of underlying securities, each of which
constitute a separate sub-trust, held by a trust (the "Trust"), which consists
primarily of a portion of (i) one class of Guaranteed REMIC Pass-Through
Certificates issued by Fannie Mae, (ii) two classes of
<PAGE> 3
certificates issued by Freddie Mac, as part of separate series of such
certificates, including one class of Payment Exchange Certificates and one class
of Multiclass REMIC Certificates, and (iii) a single class of collateralized
mortgage obligations, Series 1993-2, issued by the Fund America Investors Trust
I. The Certificates were purchased by the Registrant in a privately-negotiated
transaction with Bear, Stearns & Co. Inc. ("Bear") pursuant to a Purchase
Agreement (the "Purchase Agreement"), dated April 28, 1998, by and between the
Registrant, as Purchaser and Bear, as Seller.
The Certificates have been sold by the Registrant to Bear pursuant to
an Underwriting Agreement, dated as of April 28, 1998, between the Underwriter
and the Registrant and the related Terms Agreement, dated April 28, 1998 (the
"Underwriting Agreement").
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling Agreement.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Not Applicable.
Exhibits
1.1 Copy of the Underwriting Agreement, dated as of April 28, 1998, by
and between the Registrant and Bear, Stearns & Co. Inc.
4.1 Copy of the Pooling Agreement, dated as of April 1, 1998, by and
between the Registrant and State Street Bank and Trust Company, as
Trustee (related exhibits available upon request of the Trustee).
<PAGE> 4
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 12, 1998 FUND AMERICA INVESTORS CORPORATION II
By: /s/ STEVEN B. CHOTIN
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Name: Steven B. Chotin
Title: President
<PAGE> 5
INDEX TO EXHIBITS
Page
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1.1 Copy of the Underwriting Agreement, dated as of
April 28, 1998, by and among the Registrant and
Bear, Stearns & Co. Inc..............................................
4.1 Copy of the Pooling Agreement, dated as of April 1, 1998,
by and between the Registrant and State Street Bank and
Trust Company, as Trustee (related exhibits available
upon request of the Trustee).........................................
<PAGE> 1
EXHIBIT 1.1
FUND AMERICA INVESTORS CORPORATION II
PASS-THROUGH CERTIFICATES
UNDERWRITING AGREEMENT
April 28, 1998
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
1. Introduction. Fund America Investors Corporation II, a Delaware
corporation (the "Company"), from time to time proposes to issue and sell
Pass-Through Certificates ("Certificates") in various series (each a "Series"),
and, within each Series, in various classes, in one or more offerings on terms
determined at the time of sale. The Certificates of each series will be issued
pursuant to a pooling agreement (each, a "Pooling Agreement") among the Company,
as seller, one or more master servicers which may include the Company and a
third-party trustee (the "Trustee"). Upon issuance, the Certificates of each
series will evidence undivided interests in the Trust Fund (as defined in the
Pooling Agreement) established for such series containing mortgages or mortgage
related securities or, in the event the Trust Fund, or a portion thereof,
constitutes the upper tier of a two-tier real estate mortgage investment conduit
("REMIC"), the Trust Fund may contain interests issued by a lower tier trust
which will contain mortgages or mortgage related securities, all as described in
the Prospectus (as defined below). Terms not defined herein which are defined in
the Pooling Agreement shall have the meanings ascribed to them in the Pooling
Agreement.
Whenever the Company determines to make an offering of a Series of
Certificates (an "Offering") through you or an underwriting syndicate managed or
co-managed by you, it will offer to enter into an agreement ("Terms Agreement")
providing for the sale of such Certificates to, and the purchase and offering
thereof by, you and such other co-managers and underwriters, if any, which have
been selected by you and have authorized you to enter into such Terms Agreement
and other related documentation on their behalf (the "Underwriters," which term
shall include you whether acting alone in the sale of Certificates or as a
co-manager or as a member of an underwriting syndicate). The Terms Agreement
relating to each Offering shall specify the
<PAGE> 2
principal amount of Certificates to be issued and their terms not otherwise
specified in the Pooling Agreement, the price at which the Certificates are to
be purchased by each of the Underwriters from the Company and the initial
public offering price or the method by which the price at which the
Certificates are to be sold will be determined. The Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of an
exchange of any standard form of written telecommunication between you and the
Company. Each Offering governed by this Agreement, as supplemented by the
applicable Terms Agreement, shall inure to the benefit of and be binding upon
the Company and each of the Underwriters participating in the Offering of such
Certificates.
The Company hereby agrees with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to you as of the date hereof, and to the Underwriters
named in the applicable Terms Agreement as of the date of such Terms Agreement,
as follows:
(a) A registration statement, including a prospectus, and such
amendments thereto as may have been required to the date hereof, relating to the
Certificates and the offering thereof from time to time in accordance with Rule
415 under the Securities Act of 1933, as amended ("Act"), have been filed with
the Securities and Exchange Commission ("Commission") and such registration
statement as amended has become effective. Such registration statement as
amended and the prospectus relating to the sale of Certificates constituting a
part thereof as from time to time amended or supplemented (including any
prospectus filed with the Commission pursuant to Rule 424 of the rules and
regulations of the Commission ("Rules and Regulations") under the Act, including
any documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the Effective Date of the Registration
Statement or the date of the Prospectus Supplement, are respectively referred to
herein as the "Registration Statement" and the "Prospectus"; provided, however,
that a supplement to the Prospectus (a "Prospectus Supplement") prepared
pursuant to Section 5(a) hereof shall be deemed to have supplemented the
Prospectus only with respect to the Offering of the Series of Certificates to
which it relates. The conditions of Rule 415 under the Act have been satisfied
with respect to the Company and the Registration Statement.
(b) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all material respects to
the requirements of the Act and the Rules and Regulations, and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement, the Registration Statement
and the Prospectus will conform in all material respects to the requirements of
the Act and the Rules and Regulations, and the Prospectus will not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading; provided,
however, that the foregoing does not apply to (i) statements or omissions in
such documents based upon written information furnished to the Company by or for
the benefit of any
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<PAGE> 3
Underwriter specifically for use therein or (ii) any Current Report (as defined
in Section 5(b) below) or in any amendment thereof or supplement thereto,
incorporated by reference in such Registration Statement or such Prospectus (or
any amendment thereof or supplement thereto).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus except as otherwise stated
therein, there has been no material adverse change in the condition, financial
or otherwise, earnings, affairs, regulatory situation or business prospects of
the Company whether or not arising in the ordinary course of business.
(d) This Agreement has been, and the Pooling Agreement, when executed
and delivered as contemplated hereby and thereby will have been, duly executed
and delivered by the Company and each constitutes, or will constitute when so
executed and delivered, a legal, valid and binding instrument enforceable
against the Company in accordance with its terms, subject, as to the
enforceability of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of creditors
generally, and to general principles of equity and the discretion of the court
(regardless of whether enforceability of such remedies is considered in a
proceeding in equity or at law), and except that the provisions relating to
indemnification and contribution may be unenforceable as against public policy.
(e) At the applicable Closing Date, each applicable Terms
Agreement will have been duly authorized, executed and delivered by the
Company and will be a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance and other laws
affecting the rights of creditors generally, and to general principles of
equity and the discretion of the court (regardless of whether
enforceability of such remedies is considered in a proceeding in equity or
at law), and except that the provisions relating to indemnification and
contribution may be unenforceable as against public policy.
(f) The issuance of the Certificates has been duly authorized by the
Company and, when such Certificates are executed and authenticated in accordance
with the Pooling Agreement and delivered against payment pursuant to this
Agreement, such Certificates will be validly issued and outstanding; and the
Certificates will be entitled to the benefits provided by the Pooling Agreement.
The Certificates are in all material respects in the form contemplated by the
Pooling Agreement.
(g) Neither the Company nor the Trust Fund is or, as a result of the
offer and sale of the Certificates as contemplated in this Agreement will
become, an "investment company" as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or an "affiliated person" of
any such "investment company" that is registered or is required to be registered
under the Investment Company Act (or an "affiliated person" of any such
"affiliated person"), as such terms are defined in the Investment Company Act.
(h) The representations and warranties made by the Company in the
Pooling Agreement and made in any Officer's Certificate of the Company delivered
pursuant to the Pooling Agreement will be true and correct at the time made and
on the Closing Date.
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3. Purchase, Sale and Delivery of Certificates. Subject to the terms
and conditions hereof, the delivery of the applicable mortgage loans or mortgage
related securities and in reliance upon the representations and warranties set
forth herein, the Company agrees to sell to the Underwriters and the
Underwriters agree to purchase the Certificates. Delivery of and payment for the
Certificates shall be made at your office or at such other location as you shall
make known at such time as shall be specified in the applicable Terms Agreement,
each such time being herein referred to as a "Closing Date." Delivery of the
Certificates shall be made by the Company to the Underwriters against payment of
the purchase price specified in the applicable Terms Agreement in Federal Funds
by wire or check. Unless delivery is made through the facilities of the
Depository Trust Company, the Certificates so to be delivered will be in
definitive, fully registered form, in such denominations and registered in such
names as you request, and will be made available for inspection and packaging at
your office at least twenty-four hours prior to the applicable Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Certificates for sale to the public as set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with
you and the several Underwriters participating in the Offering of any Series of
Certificates that:
(a) In connection with the execution of each Terms Agreement, the
Company will prepare a Prospectus Supplement to be filed under the Act setting
forth the principal amount of Certificates covered thereby and their terms not
otherwise specified in the Prospectus, the price at which the Certificates are
to be purchased by the Underwriters from the Company, either the initial public
offering price or the method by which the price at which the Certificates are to
be sold will be determined, the selling concession and reallowance, if any, any
delayed delivery arrangements, and such other information as you and the Company
deem appropriate in connection with the offering of the Certificates, but the
Company will not file any amendments to the Registration Statement or any
amendments or supplements to the Prospectus, unless it shall first have
delivered copies of such amendments or supplements to you, and you shall not
have objected thereto promptly after receipt thereof. The Company will advise
you or your counsel promptly (i) when notice is received from the Commission
that any post-effective amendment to the Registration Statement has become or
will become effective, and (ii) of any order or communication suspending or
preventing, or threatening to suspend or prevent, the offer and sale of the
Certificates, or of any proceedings or examinations that may lead to such an
order or communication, whether by or of the Commission or any authority
administering any state securities or Blue Sky law, as soon as the Company is
advised thereof, and will use its best efforts to prevent the issuance of any
such order or communication and to obtain as soon as possible its lifting, if
issued.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to each
Series of Certificates that are delivered by the Underwriters to the Company
pursuant to Section 8 to be filed with the Commission on a Current Report on
Form 8-K (a "Current Report") pursuant to Rule 13a-11
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<PAGE> 5
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") on
the business day immediately following the day on which such Computational
Materials and Structural Term Sheets are delivered to counsel for the Company by
any of the Underwriters prior to 10:30 a.m. (and will use its best efforts to
cause such Computational Materials and Structural Term Sheets to be so filed
prior to 2:00 p.m., New York time, on such business day), and will promptly
advise you when such Current Report has been so filed. The Company will cause
one Collateral Term Sheet (as defined in Section 9 below) with respect to an
Offering of a Series that is delivered by any of the Underwriters to the Company
in accordance with the provisions of Section 9 to be filed with the Commission
on a Current Report pursuant to Rule 13a-11 under the Exchange Act on the
business day immediately following the day on which such Collateral Term Sheet
is delivered to counsel for the Company by any of the Underwriters prior to
10:30 a.m. In addition, if at any time prior to the availability of the related
Prospectus Supplement, any of the Underwriters has delivered to any prospective
investor a subsequent Collateral Term Sheet that reflects, in the reasonable
judgment of such Underwriter and the Company, a material change in the
characteristics of the mortgage loans or mortgage related securities for the
related Series from those on which a Collateral Term Sheet with respect to the
related Series previously filed with the Commission was based, the Company will
cause any such Collateral Term Sheet that is delivered by such Underwriter to
the Company in accordance with the provisions of Section 9 to be filed with the
Commission on a Current Report on the business day immediately following the day
on which such Collateral Term Sheet is delivered to counsel for the Company by
such Underwriter prior to 2:00 p.m. In each case, the Company will promptly
advise you when such Current Report has been so filed. Notwithstanding the four
preceding sentences, the Company shall have no obligation to file any materials
provided by any of the Underwriters pursuant to Sections 8 and 9 which (i) in
the reasonable determination of the Company are not required to be filed
pursuant to the Kidder Letters or the PSA Letter (each as defined in Section 8
below), or (ii) contain erroneous information or contain any untrue statement of
a material fact or, when read in conjunction with the Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being understood,
however, that the Company shall have no obligation to review or pass upon the
accuracy or adequacy of, or to correct, any Computational Materials or ABS Term
Sheets (as defined in Section 9 below) provided by such Underwriter to the
Company pursuant to Section 8 or Section 9 hereof. The Company shall give notice
to you and such Underwriter of its determination not to file any materials
pursuant to clause (i) of the preceding sentence and agrees to file such
materials if such Underwriter or you reasonably object to such determination
within one business day after receipt of such notice.
(c) If at any time when a prospectus relating to the Certificates is
required to be delivered under the Act any event occurs as a result of which in
the opinion of counsel for the Company or the Underwriters the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance; provided, however, that (i) the Company will not be
required to file any such amendment or
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<PAGE> 6
supplement with respect to any Computational Materials, Structural Term Sheets
or Collateral Term Sheets incorporated by reference in the Prospectus other than
any amendments or supplements of such Computational Materials or Structural Term
Sheets that are furnished to the Company by the Underwriter pursuant to Section
8(e) hereof or any amendments or supplements of such Collateral Term Sheets that
are furnished to the Company by the Underwriter pursuant to Section 9(d) hereof
which are required to be filed in accordance therewith and (ii) any such
amendment or update prepared at the request of the Underwriters or as required
by applicable securities laws more than nine months after the Closing Date shall
be at the expense of the Underwriters.
(d) With respect to each Series of Certificates, the Company will
make generally available to the holders of the Certificates and will deliver to
you, in each case as soon as practicable, an earnings statement covering the
twelve-month period beginning after the date of the Terms Agreement in respect
of such series of Certificates, which will satisfy the provisions of Section
11(a) of the Act with respect to the Certificates.
(e) The Company will furnish to you copies of the Registration
Statement (two of which will be signed and will include all documents and
exhibits thereto or incorporated by reference therein), each related preliminary
prospectus, the Prospectus, and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as you
request.
(f) The Company will use its best efforts arrange for the
qualification of the Certificates for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as you
reasonably designate and will continue such qualifications in effect so long as
reasonably required for the distribution; provided, however, that the Company
shall not be required to qualify to do business in any jurisdiction where it is
not qualified on the date of the related Terms Agreement or to take any action
which would subject it to general or unlimited service of process in any
jurisdiction in which it is not, on the date of the related Terms Agreement,
subject to such service of process; and provided further that the Underwriters
will pay all costs and expenses associated therewith.
(g) The Company will pay all expenses incidental to the performance
of its obligations under this Agreement and any Terms Agreement and will
reimburse the Underwriters for any expenses (including fees and disbursements of
counsel and accountants) incurred by them in connection with qualification of
the Certificates and determination of their eligibility for investment under the
laws of such jurisdictions as you designate and the printing of memoranda
relating thereto, for any fees charged by the nationally recognized statistical
rating agencies for the rating of the Certificates, for the filing fee of the
National Association of Securities Dealers, Inc. relating to the Certificates,
if applicable, and for expenses incurred in distributing preliminary
prospectuses to the Underwriters.
(h) During the period when a prospectus is required by law to be
delivered in connection with the sale of the Certificates pursuant to this
Agreement, the Company will file or cause to be filed, on a timely and complete
basis, all documents that are required to be filed by
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<PAGE> 7
the Company with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
(i) So long as the Certificates of a Series shall be outstanding, the
Company will deliver to you the annual statement of compliance delivered to the
Trustee pursuant to the Pooling Agreement and the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to the Pooling
Agreement as soon as such statements are furnished to the Trustee.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters named in any Terms Agreement to purchase and pay for the
Certificates will be subject to the accuracy of the representations and
warranties on the part of the Company as of the date hereof, the date of the
applicable Terms Agreement and the applicable Closing Date, to the accuracy of
the statements made in any officers' certificates (each an "Officer's
Certificate") pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a)(i) At the time the applicable Terms Agreement is executed,
Deloitte & Touche and/or any other firm of certified independent public
accountants acceptable to you shall have furnished to you a letter, addressed to
you, and in form and substance satisfactory to you in all respects, stating in
effect that using the assumptions and methodology used by the Company, all of
which shall be described in such letter or the Prospectus Supplement, they have
recalculated such numbers, percentages and weighted average lives set forth in
the Prospectus as you may reasonably request, compared the results of their
calculations to the corresponding items in the Prospectus, and found each such
number, percentage, and weighted average life set forth in the Prospectus to be
in agreement with the results of such calculations. To the extent historical
financial delinquency or related information is included with respect to one or
more master servicers, such letter or letters shall also relate to such
information.
(a)(ii) At the Closing Date, Deloitte & Touche and/or any other firm
of certified independent public accountants acceptable to you shall have
furnished to you a letter, addressed to you, and in form and substance
satisfactory to you in all respects, relating to the extent such information is
not covered in the letter or letters provided pursuant to clause (a)(i), to a
portion of the information set forth on the Schedule attached to the Pooling
Agreement and the characteristics of the mortgage loans or mortgage related
securities, as presented in the Prospectus Supplement or the Form 8-K relating
thereto, or if a letter relating to the same information is provided to the
Trustee, indicating that you are entitled to rely upon its letter to the
Trustee.
(b) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective change, in or
affecting the business or properties of the Company or any of its affiliates the
effect of which, in any case, is, in your judgment, so material and adverse as
to make it impracticable or inadvisable to proceed with the Offering or the
delivery of the Certificates as contemplated by the Registration Statement and
the Prospectus. All actions required to be taken and all filings required to be
made by the Company under the Act
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<PAGE> 8
and the Exchange Act prior to the sale of the Certificates shall have been duly
taken or made; and prior to the applicable Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted, or to the
knowledge of the Company or you, shall be contemplated by the Commission or by
any authority administering any state securities or Blue Sky law.
(c) Unless otherwise specified in any applicable Terms Agreement for
a Series, the Certificates shall be rated in one of the four highest grades by
one or more nationally recognized statistical rating agencies specified in said
Terms Agreement.
(d) You shall have received the opinion of counsel, dated the
applicable Closing Date, to the effect that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its assets and conduct its business as
described in the Prospectus. The Company has no subsidiaries.
2. The Underwriting Agreement, the Terms Agreement, and the Purchase
Agreement have been duly authorized, executed and delivered by the Company and
assuming due and valid authorization and execution by the Underwriter, each
constitutes a legal, valid and binding obligation of the Company.
3. The Pooling Agreement has been duly and validly authorized,
executed and delivered by the Company and assuming due and valid authorization
and execution by the other parties thereto, constitutes the valid and binding
agreement of the Company, enforceable in accordance with its terms.
4. Upon due execution and authentication by the Trustee of the
Certificates in accordance with the Pooling Agreement, and delivery to, and
payment for the Certificates by the Underwriter, as provided in the Underwriting
Agreement and the Terms Agreement, the Certificates will be validly issued and
entitled to the benefits of the Pooling Agreement.
5. The Registration Statement has become effective under the
Securities Act, and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Securities Act.
6. The statements in the Prospectus under the heading "Certain
Federal Income Tax Consequences" and in the Prospectus Supplement under the
heading "Certain Federal Income Tax Considerations," to the extent that they
constitute matters of law or legal conclusions have been prepared or reviewed by
us and provide a fair summary of such law or conclusions.
7. The Pooling Agreement is not required to be qualified under the
Trust
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<PAGE> 9
Indenture Act of 1939, as amended, and neither the Company nor the Trust is
required to be registered under the Investment Company Act of 1940, as amended.
Each opinion also shall relate to such other matters as may be
specified in the related Terms Agreement or as to which you reasonably may
request. In rendering any such opinion, counsel for the Company may rely on
certificates of responsible officers of the Company, the Trustee, and public
officials or, as to matters of law other than Delaware or Federal law, on
opinions of other counsel (copies of which opinions shall be delivered to you),
provided that, in cases of opinions of other counsel, counsel for the Company
shall include in its opinion a statement of its belief that both it and you are
justified in relying on such opinions.
(e) You shall have received from counsel for the Company a letter,
dated as of the Closing Date, stating that you may rely on the opinions
delivered by such firm under the Pooling Agreement and to the rating agency or
agencies rating the Certificates as if such opinions were addressed directly to
you (copies of which opinions shall be delivered to you).
(f) You shall have received from counsel for the Underwriters, if
such counsel is different from counsel to the Company, such opinion or opinions,
dated as of the Closing Date, with respect to the validity of the Certificates,
the Registration Statement, the Prospectus and other related matters as the
Underwriters may require, and the Company shall have furnished to such counsel
such documents as they may have requested from it for the purpose of enabling
them to pass upon such matters.
(g) You shall have received Officer's Certificates signed by such of
the principal executive, financial and accounting officers of the Company as you
may request, dated as of the Closing Date, in which such officers, to the best
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct; that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date; that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated; that, subsequent to the respective dates as of
which information is given in the Prospectus, and except as set forth or
contemplated in the Prospectus, there has not been any material adverse change
in the general affairs, business, key personnel, capitalization, financial
condition or results of operations of the Company; and that except as otherwise
stated in the Prospectus, there are no material actions, suits or proceedings
pending before any court or governmental agency, authority or body or, to their
knowledge, threatened, affecting the Company or the transactions contemplated by
this Agreement.
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects with respect to a particular Offering
when and as provided in this Agreement and the related Terms Agreement, or if
any of the opinions and certificates mentioned above or
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<PAGE> 10
elsewhere in this Agreement and the related Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to you, this
Agreement (with respect to the related Offering) and the related Terms Agreement
and all obligations of the Underwriters hereunder (with respect to the related
Offering) and thereunder may be canceled at, or at any time prior to, the
related Closing Date by the Underwriter. Notice of such cancellation shall be
given to the Company in writing, or by telephone or telegraph confirmed in
writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
any and all losses, claims, damages, liabilities and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act, or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
relating to the applicable Series of Certificates (the "Applicable Registration
Statement") as it became effective or in any amendment or supplement thereof, or
in the Applicable Registration Statement or the related Prospectus, or in any
amendment thereof, or arise out of or are based upon the omission or alleged
omission (in the case of any Computational Materials or ABS Term Sheets in
respect of which the Company agrees to indemnify the Underwriters, as set forth
below, when such are read in conjunction with the related Prospectus and
Prospectus Supplement) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that (i) the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein (A) in reliance upon and in conformity with written
information furnished to the Company as herein stated by or on behalf of the
Underwriters specifically for use in connection with the preparation thereof or
(B) in any Current Report or any amendment or supplement thereof, except to the
extent that any untrue statement or alleged untrue statement therein or omission
therefrom results (or is alleged to have resulted) directly from an error (a
"Mortgage Pool Error") in the information concerning the characteristics of the
mortgage loans or mortgage related securities furnished by the Company to the
Underwriters in writing or by electronic transmission that was used in the
preparation of either (x) any Computational Materials or ABS Term Sheets (or
amendments or supplements thereof) included in such Current Report (or amendment
or supplement thereof) or (y) any written or electronic materials furnished to
prospective investors on which the Computational Materials (or amendments or
supplements) were based, (ii) such indemnity with respect to any Corrected
Statement (as defined below) in such Prospectus (or Prospectus Supplement
thereto) shall not inure to the benefit of the Underwriters (or any person
controlling any Underwriter) from whom the person asserting any loss, claim,
damage or liability purchased the Certificates of the related Series that are
the subject thereof if such person did not receive a copy of a Prospectus
Supplement to such Prospectus at or prior to the confirmation of the sale of
such Certificates and
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<PAGE> 11
the untrue statement or omission of a material fact contained in such
Prospectus (or Prospectus Supplement thereto) was corrected (a "Corrected
Statement") in such other supplement and such supplement was furnished by the
Company to the Underwriters prior to the delivery of such confirmation, and
(iii) such indemnity with respect to any Mortgage Pool Error shall not inure to
the benefit of the Underwriters (or any person controlling any Underwriter)
from whom the person asserting any loss, claim, damage or liability received
any Computational Materials (or any written or electronic materials on which
the Computational Materials are based) or ABS Term Sheets that were prepared on
the basis of such Mortgage Pool Error, if, prior to the time of confirmation of
the sale of the applicable Series of Certificates to such person, the Company
notified the Underwriters in writing of the Mortgage Pool Error or provided in
written or electronic form information superseding or correcting such Mortgage
Pool Error (in any such case, a "Corrected Mortgage Pool Error"), and the
Underwriters failed to notify such person thereof or to deliver to such person
corrected Computational Materials (or underlying written or electronic
materials) or ABS Term Sheets. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) The Underwriters severally, and not jointly, agree to indemnify
and hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
claims, damages, liabilities and expenses whatsoever (including but not limited
to attorneys' fees and any and all expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in the Applicable Registration Statement,
as originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that any such loss, claim, damage, liability or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company, by or on behalf of such Underwriter
expressly for use therein; or (B) any Computational Materials or ABS Term Sheets
(or amendments or supplements thereof) furnished to the Company by such
Underwriter pursuant to Section 8 and incorporated by reference in such
Registration Statement or the related Prospectus, Prospectus Supplement or any
amendment or supplement thereof (except that no such indemnity shall be
available for any losses, claims, damages or liabilities, or actions in respect
thereof resulting from any Mortgage Pool Error, other than a Corrected Mortgage
Pool Error). This indemnity will be in addition to any liability which the
Underwriters may otherwise have. The Company acknowledges that, unless otherwise
set forth in the applicable Terms Agreement, the statements set forth in the
last paragraph of the cover page and under the caption "Method of Distribution"
and the stabilization legend required by Item 502(d)(1) under
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<PAGE> 12
Regulation S-K of the Act included in the Prospectus Supplement relating to a
Series of Certificates constitute the only information furnished in writing by
or on behalf of any Underwriter expressly for use in the Applicable Registration
Statement or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be (other than any Computational Materials or ABS Term Sheets
(or amendments or supplements thereof) furnished to the Company by such
Underwriter), and each Underwriter confirms, on its behalf, that such statements
are correct.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in Section 7 hereof is for any reason held to
be unavailable, on grounds of public policy or otherwise, from the Company or
the Underwriters or is insufficient to hold harmless a party indemnified
thereunder, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company any contribution received by the Company from persons, other than the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the
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<PAGE> 13
Exchange Act, officers of the Company who signed the Applicable Registration
Statement and directors of the Company) to which the Company and the
Underwriters may be subject (i) in the case of any losses, claims, damages and
liabilities (or actions in respect thereof) which do not arise out of or are not
based upon any untrue statement or omission of a material fact in any
Computational Materials or ABS Term Sheets (or any amendments or supplements
thereof), in such proportions as is appropriate to reflect the relative benefits
received by the Company on one hand and the Underwriters on the other from the
Offering of the Certificates as to which such loss, liability, claim, damage or
expense is claimed to arise or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 7(c)
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company on one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations or (ii) in the
case of any losses, claims, damages and liabilities (or actions in respect
thereof) which arise out of or are based upon any untrue statement or omission
of a material fact in any Computational Materials or ABS Term Sheets (or any
amendments or supplements thereof) or in any written or electronic materials
distributed to prospective investors on which the Computational Materials are
based, in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Underwriter that furnished such Computational
Materials or ABS Term Sheets on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations; provided, however, that in no case shall such Underwriter be
responsible under this subparagraph (ii) for any amount in excess of the
aggregate Purchase Price for the Offered Certificates.
The relative benefits received by the Company on one hand and the
Underwriters on the other shall be deemed to be in the same proportion as (x)
the total proceeds from the Offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the Terms Agreement in respect of the
Offering of the Certificates as to which such loss, liability, claim, damage or
expense is claimed to arise. The relative fault of the Company on one hand and
the Underwriters on the other shall be determined by reference to, among other
things, (A) in the case of clause (i) of the preceding paragraph, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on one hand or the Underwriters on the other, (B) in the case of clause (ii) of
the preceding paragraph, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to any untrue statement or omission of a material fact in any
Computational Materials or ABS Term Sheets (or any amendments or supplements
thereof) or in any written or electronic materials distributed by the applicable
Underwriter to prospective investors on which the Computational Materials are
based, and (C) in the case of either clause (i) or clause (ii) of the preceding
paragraph, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation or by any
other
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<PAGE> 14
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 7(d), (x)
except as otherwise provided in Section 7(d)(ii), in no case shall the
Underwriters be liable or responsible for any amount in excess of the
underwriting discount set forth in the Terms Agreement relating to the
Certificates as to which such losses, claims, damages, liabilities or expenses
are claimed to arise, and (y) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Applicable Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7(d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 7(d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7(d) or otherwise. No
party shall be liable for contribution with respect to any action or claim
settled without its consent; provided, however, that such consent was not
unreasonably withheld.
8. Computational Materials and Structural Term Sheets. (a) Not later
than 2:00 p.m., New York time, on the business day before the date on which the
Current Report relating to the Certificates of a Series is required to be filed
by the Company with the Commission pursuant to Section 5(b) hereof, you and any
other applicable Underwriter shall deliver to the Company, and unless otherwise
agreed to by the Company, in a form reasonably convertible to an EDGAR filing
format, a copy of all materials provided by the Underwriters to prospective
investors in such Certificates which constitute (i) "Computational Materials,
within the meaning of the no-action letter dated May 20, 1994 issued by the
Division of Corporation Finance of the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset
Corporation and the no-action letter dated May 27, 1994 issued by the Division
of Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters") and the filing of such material is a condition
of the relief granted in such letter (such materials being the "Computational
Materials"), and (ii) "Structural Term Sheets" within the meaning of the
no-action letter dated February 17, 1995 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (the "PSA
Letter") and the filing of such material is a condition of the relief granted in
such letter (such materials being the "Structural Term Sheets"). Each delivery
of Computational Materials and Structural Term Sheets to the Company by you and
any other applicable Underwriter pursuant to this paragraph (a) shall be
effected by delivering a copy of such materials to counsel for the Company on
behalf of the Company at the address specified by the Company and one copy of
such materials to the Company.
(b) You and each other Underwriter, by virtue of its having executed
and
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<PAGE> 15
delivered the related Terms Agreement, which shall incorporate this Section 8(b)
by reference, represents and warrants to and agrees with the Company, as of the
date of the related Terms Agreement and as of the Closing Date, that:
(i) the Computational Materials furnished to the Company
pursuant to Section 8(a) constitute (either in original, aggregated
or consolidated form) all of the materials furnished to prospective
investors by such Underwriter prior to the time of delivery thereof
to the Company that are required to be filed with the Commission with
respect to the Offering of the Certificates in accordance with the
Kidder Letters, and such Computational Materials comply with the
requirements of the Kidder Letters;
(ii) the Structural Term Sheets furnished to the Company
pursuant to Section 8(a) constitute all of the materials furnished to
prospective investors by such Underwriter prior to the time of
delivery thereof to the Company that are required to be filed with
the Commission as "Structural Term Sheets" with respect to the
related Offering of the Certificates in accordance with the PSA
Letter, and such Structural Term Sheets comply with the requirements
of the PSA Letter;
(iii) on the date any such Computational Materials or
Structural Term Sheets with respect to the Offering of the
Certificates (or any written or electronic materials furnished to
prospective investors on which the Computational Materials are based)
were last furnished to each prospective investor and on the date of
delivery thereof to the Company pursuant to Section 8(a) and on the
related Closing Date, such Computational Materials (or such other
materials) or Structural Term Sheets did not and will not include any
untrue statement of a material fact or, when read in conjunction with
the related Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(iv) all Computational Materials (or underlying materials
distributed to prospective investors on which the Computational
Materials were based) or Structural Term Sheets furnished to
prospective investors contained and will contain a legend,
prominently displayed on the first page thereof, to the effect that
the Company has not prepared, reviewed or participated in the
preparation of such materials and is not responsible for the accuracy
thereof.
Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Computational Materials or
Structural Term Sheets (or any written or electronic materials on which
the Computational Materials are based) included or will include any untrue
statement resulting directly from any Mortgage Pool Error (except any
Corrected
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<PAGE> 16
Mortgage Pool Error, with respect to materials prepared after the receipt by the
Underwriters from the Company of notice of such Corrected Mortgage Pool Error or
materials superseding or correcting such Corrected Mortgage Pool Error).
(c) Each Underwriter delivering Computational Materials shall cause a
firm of public accountants to furnish to the Company a letter, dated as of the
date on which such Underwriter delivers any Computational Materials (which term
shall be deemed to include, for purposes of this paragraph (c), calculated
statistical information delivered to prospective investors in the form of a
Structural Term Sheet) to the Company pursuant to Section 8(a), in form and
substance satisfactory to the Company, stating in effect that they have verified
the mathematical accuracy of any calculations performed by such Underwriter and
set forth in such Computational Materials.
(d) The Underwriters acknowledge and agree that the Company has
not authorized and will not authorize the distribution of any
Computational Materials (or any written or electronic materials on which
the Computational Materials are based) or Structural Term Sheets to any
particular prospective investor, and agrees that any Computational
Materials or Structural Term Sheets with respect to any Series of
Certificates furnished to prospective investors shall include a disclaimer
in the form described in paragraph (b) (iv) above. The Underwriters agree
that they will not represent to prospective investors that any
Computational Materials or Structural Term Sheets were prepared or
disseminated on behalf of the Company.
(e) If, at any time when a prospectus relating to the
Certificates of a Series is required to be delivered under the Act, it shall be
necessary to amend or supplement the related Prospectus or Prospectus
Supplement as a result of an untrue statement of a material fact contained in
any Computational Materials or Structural Term Sheets provided by an
Underwriter pursuant to this Section 8 or the omission to state therein a
material fact required, when considered in conjunction with the related
Prospectus and Prospectus Supplement, to be stated therein or necessary to make
the statements therein, when read in conjunction with the related Prospectus
and Prospectus Supplement, not misleading, or if it shall be necessary to amend
or supplement any Current Report relating to any Computational Materials or
Structural Term Sheets to comply with the Act or the rules thereunder, such
Underwriter promptly will prepare and furnish to the Company for filing with
the Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Such Underwriter
will deliver an Officer's Certificate to the Company representing and
warranting to the Company that, as of the date of delivery of such amendment or
supplement to the Company, such amendment or supplement will not include any
untrue statement of a material fact or, when read in conjunction with the
related Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that such Underwriter will make no
representation or warranty as to whether any such amendment or supplement will
include any untrue statement resulting directly from any Mortgage Pool Error
(except any Corrected Mortgage Pool Error, with respect to any such amendment
or supplement prepared after the receipt by such Underwriter from the Company
of notice of such Corrected Mortgage Pool Error or materials superseding or
correcting such Corrected Mortgage Pool Error). The Company shall have no
obligation to file such
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<PAGE> 17
amendment or supplement if (i) the Company determines that such amendment or
supplement contains any untrue statement of a material fact or, when read in
conjunction with the related Prospectus and Prospectus Supplement, omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; it being understood, however, that the
Company shall have no obligation to review or pass upon the accuracy or
adequacy of, or to correct, any such amendment or supplement provided by such
Underwriter to the Company pursuant to this paragraph (e) or (ii) the Company
reasonably determines that such filing is not required under the Act and such
Underwriter does not object as provided below. The Company shall give notice to
such Underwriter of its determination not to file an amendment or supplement
pursuant to clause (ii) of the preceding sentence and agrees to file such
amendment or supplement if such Underwriter reasonably objects to such
determination within one business day after receipt of such notice.
9. Collateral Term Sheets. (a) Prior to the delivery of any
"Collateral Term Sheet" within the meaning of the PSA Letter, the filing of
which material is a condition of the relief granted in such letter (such
material being the "Collateral Term Sheets"), to a prospective investor in the
Certificates, the applicable Underwriter shall notify the Company and its
counsel by telephone of its intention to deliver such materials and the
approximate date on which the first such delivery of such materials is expected
to occur. Not later than 10:30 a.m., New York time, on the business day
immediately following the date on which any Collateral Term Sheet was first
delivered to a prospective investor in the Certificates of an offered series,
such applicable Underwriter shall deliver to the Company, and unless otherwise
agreed to by the Company, in a form reasonably convertible to an EDGAR format, a
complete copy of all materials provided by such Underwriter to prospective
investors in such Certificates which constitute "Collateral Term Sheets." Each
delivery of a Collateral Term Sheet to the Company pursuant to this paragraph
(a) shall be effected by delivering a copy of such materials to counsel for the
Company on behalf of the Company at the address specified by the Company and one
copy of such materials to the Company. (Collateral Term Sheets and Structural
Term Sheets are, together, referred to herein as "ABS Term Sheets.") At the time
of each such delivery, such Underwriter shall indicate in writing that the
materials being delivered constitute Collateral Term Sheets, and, if there has
been any prior such delivery with respect to the related Series, shall indicate
whether such materials differ in any material respect from any Collateral Term
Sheets previously delivered to the Company with respect to such Series pursuant
to this Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Mortgage Loans.
(b) You and each other Underwriter, by virtue of its having executed
and delivered the related Terms Agreement, which shall incorporate this Section
9(b) by reference, represents and warrants to and agrees with the Company as of
the date of the related Terms Agreement and as of the Closing Date, that:
(i) The Collateral Term Sheets furnished to the Company
pursuant to Section 9(a) constitute all of the materials furnished to
prospective investors by such Underwriter prior to time of delivery
thereof to the Company that are required to be filed with the
Commission as "Collateral Term Sheets" with respect to the related
Offering of the Certificates in accordance with the PSA Letter, and
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<PAGE> 18
such Collateral Term Sheets comply with the requirements of the PSA
Letter;
(ii) On the date any such Collateral Term Sheets with
respect to the Offering of the Certificates were last furnished to
each prospective investor and on the date of delivery thereof to the
Company pursuant to Section 9(a) and on the related Closing Date,
such Collateral Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and
(iii) such Underwriter has not represented to any
prospective investor that any Collateral Term Sheets with respect to
any Series were prepared or disseminated on behalf of the Company,
and, except as otherwise disclosed by such Underwriter to the Company
in writing prior to the date hereof, all Collateral Term Sheets
previously furnished to prospective investors included a disclaimer
to the effect set forth in Section 8(b)(iv).
Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Collateral Term Sheet included or
will include any untrue statement or material omission resulting directly from
any Mortgage Pool Error (except any Corrected Mortgage Pool Error, with respect
to materials prepared after the receipt by such Underwriter from the Company of
notice of such Corrected Mortgage Pool Error or materials superseding or
correcting such Corrected Mortgage Pool Error).
(c) Each Underwriter delivering Collateral Term Sheets acknowledges
and agrees that any Collateral Term Sheets with respect to any Series of
Certificates furnished to prospective investors from and after the date hereof
shall include a disclaimer to the effect set forth in Section 8(d) hereof, and
to the effect that the information contained in such materials supersedes the
information contained in any prior Collateral Term Sheet with respect to such
Series of Certificates being offered and will be superseded by the description
of the related Mortgage Loans in the related Prospectus Supplement. The
Underwriters agree that they will not represent to any prospective investors
that any Collateral Term Sheets were prepared or disseminated on behalf of the
Company.
(d) If, at any time when a prospectus relating to the Certificates of
a Series is required to be delivered under the Act, it shall be necessary to
amend or supplement the related Prospectus as a result of an untrue statement of
a material fact contained in any Collateral Term Sheets provided by an
Underwriter pursuant to this Section 9 or the omission to state therein a
material fact required, when considered in conjunction with the related
Prospectus and Prospectus Supplement, to be stated therein or necessary to make
the statements therein, when read in conjunction with the related Prospectus and
Prospectus Supplement, not misleading, or if it shall be necessary to amend or
supplement any Current Report relating to any Collateral Term Sheets to comply
with the Act or the rules thereunder, such Underwriter promptly will prepare and
furnish to the Company for filing with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will effect
such compliance.
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<PAGE> 19
Such Underwriter will deliver an Officer's Certificate to the Company
representing and warranting to the Company that, as of the date of delivery of
such amendment or supplement to the Company, such amendment or supplement will
not include any untrue statement of a material fact or, when read in conjunction
with the related Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, such Underwriter will make no representation
or warranty as to whether any such amendment or supplement will include any
untrue statement resulting directly from any Mortgage Pool Error (except any
Corrected Mortgage Pool Error, with respect to any such amendment or supplement
prepared after the receipt by such Underwriter from the Company of notice of
such Corrected Mortgage Pool Error or materials superseding or correcting such
Corrected Mortgage Pool Error). The Company shall have no obligation to file
such amendment or supplement if the Company determines that (i) such amendment
or supplement contains any untrue statement of a material fact or, when read in
conjunction with the related Prospectus and Prospectus Supplement, omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; it being understood, however, that the
Company shall have no obligation to review or pass upon the accuracy or adequacy
of, or to correct, any such amendment or supplement provided by such Underwriter
to the Company pursuant to this paragraph (d) or (ii) such filing is not
required under the Act. The Company shall give notice to such Underwriter of its
determination not to file an amendment or supplement pursuant to clause (ii) of
the preceding sentence.
10. Default of Underwriters. If any Underwriter or Underwriters
participating in an Offering of Certificates default in their obligations to
purchase Certificates hereunder and under the Terms Agreement and the aggregate
purchase price of Certificates which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the aggregate purchase
price of the Certificates then being purchased, you may make arrangements
satisfactory to the Company for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective total commitments as set forth in
the applicable Terms Agreement (for all classes of Certificates), to purchase
the Certificates which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate purchase price of Certificates with respect to which such default or
defaults occur is more than 10% of the aggregate purchase price of Certificates
then being purchased, and arrangements satisfactory to you and the Company for
the purchase of such Certificates by other persons are not made within 36 hours
after such default, the Terms Agreement as to which such offering relates will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 11. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will
-19-
<PAGE> 20
remain in full force and effect, regardless of any investigation, or statement
as to the result thereof, made by or on behalf of any Underwriter or the
Company or any of its officers or directors or any controlling person, and will
survive delivery of and payment for the Certificates and any termination of
this Agreement or any Terms Agreement, including any termination pursuant to
Section 10.
12. Termination. You shall have the right to terminate any Terms
Agreement at any time prior to the applicable Closing Date if any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, securities markets; or
if trading on the New York or American Stock Exchanges shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required on the New
York or American Stock Exchanges by the New York or American Stock Exchanges or
by order of the Commission or any other governmental authority having
jurisdiction; or if the United States shall have become involved in a war or
major hostilities; or if a banking moratorium has been declared by a state or
Federal authority, or if a banking moratorium in foreign exchange trading by
major international banks or persons has been declared; or if any new
restriction materially and adversely affecting the distribution of the Series of
Certificates as to which such Terms Agreement relates shall have become
effective; or if there shall have been such change in the market for securities
in general or in political, financial or economic conditions as in your judgment
would be so materially adverse as to make it inadvisable to proceed with the
Offering, sale and delivery of the Series of Certificates as to which such Terms
Agreement relates on the terms contemplated in such Terms Agreement. Any notice
of termination pursuant to this Section 12 shall be by telephone, telex, or
telegraph, confirmed in writing by letter.
13. Notices. All communications hereunder will be in writing, and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to you at 245 Park Avenue, New York, New York 10167, Attention: General Counsel
or if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at Plaza Tower One, Suite 1200, 6400 South Fiddler's Green
Circle, Englewood, Colorado 80111, Attention: Steven B. Chotin; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed to such Underwriter at the address furnished by it.
14. Successors. This Agreement and the Terms Agreement will inure to
the benefit of and be binding upon the parties hereto and thereto, and their
respective successors and the officers and directors and controlling persons
referred to in Section 7, and no other person will have any right or obligation
hereunder or thereunder.
15. Representation of Underwriters. You will act for the several
Underwriters in connection with each Offering of Certificates governed by this
Agreement, and any action under this Agreement and any Terms Agreement taken by
you will be binding upon all the Underwriters identified in such Terms
Agreement.
16. Construction. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws.
-20-
<PAGE> 21
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
FUND AMERICA INVESTORS CORPORATION II
By:
------------------------------
Name:
Title:
The foregoing Underwriting Agreement
hereby is confirmed and accepted
as of the date first above written.
BEAR, STEARNS & CO. INC.
By:
----------------------------
Title:
-21-
<PAGE> 22
EXHIBIT A
FUND AMERICA INVESTORS CORPORATION II
Pass-Through Certificates
FORM OF TERMS AGREEMENT
Dated: _________, 199_
To: FUND AMERICA INVESTORS CORPORATION II [AND _____________]
Re: Underwriting Agreement dated April __, l998
Series Designation: Series 19 __ - __
Class Designation Schedule:
Terms of the Certificates:
<TABLE>
<CAPTION>
Original
Principal Interest Price to
Class Amount Rate Public(1)(2)
- ----- --------- -------- ------------
<S> <C> <C> <C>
</TABLE>
- ----------------------------
(1) Do not include if the Certificates will be offered from time to time
by the Underwriter in negotiated transactions at varying prices to be
determined at the time of sale.
(2) Plus accrued interest, if any, at the applicable rate from ______________.
Distribution Dates: The __th day of each month or, if such __th day is
not a business day, the next succeeding business day commencing _____________.
Certificate Rating:
-22-
<PAGE> 23
Mortgage Assets: The initial amounts to be included in any Reserve Fund
and other accounts are as set forth, and the Mortgage Loans to be included
in the Trust Fund are as described, in Annex A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriter
for the Certificates covered by this Agreement will be
$_________________. [Purchase price may also be separately stated by
class.]
Credit Enhancement:
[Include pool policies, letters of credit, bonds, subordination and
similar arrangements.]
Closing Date: ______, 19__, ____ a.m., N.Y. Time
The undersigned, agrees, subject to the terms and provisions of the
above-referenced Underwriting Agreement, which is incorporated herein in
its entirety and made a part hereof, to purchase the respective principal
amounts of the Classes of the above-referenced Series of Certificates set
forth [herein] [on Schedule I attached hereto].
BEAR, STEARNS & CO. INC.
By:
----------------------------
Senior Managing Director
[ADDITIONAL UNDERWRITERS]
By:
--------------------------
--------------------------
Title:
Accepted:
FUND AMERICA INVESTORS CORPORATION II
By:
-------------------------
-2-
<PAGE> 24
Schedule I (for Multiple Underwriters)
<TABLE>
<CAPTION>
Underwriters
Name Class Class Class Class Class
- ---- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Bear, Stearns $ $ $ $ $
& Co. Inc.
[Other
Underwriters]
----- ----- ----- ----- -----
Total
===== ===== ===== ===== =====
</TABLE>
-3-
<PAGE> 25
FUND AMERICA INVESTORS CORPORATION II
Pass-Through Certificates
TERMS AGREEMENT
Dated: April 28, 1998
To: FUND AMERICA INVESTORS CORPORATION II
Re: Underwriting Agreement dated April 28, 1998
Series Designation: Series 1998-A
Class Designation Schedule: Class 1A, Class 2A
Terms of the Certificates:
Original Principal Pass-Through
Class Amount Interest Rate
- ----- ------------------- ---------------
1A $23,500,002 (1)
2A $36,873,851 (1)
- ---------------------
(1) The effective per annum interest rate borne by either Class of
Certificates during each Interest Accrual Period with respect to a
Distribution Date will equal a fraction, expressed as a percentage
truncated at the fourth decimal place, the numerator of which is
equal to the aggregate amount in respect of interest paid on the
Pooled Certificates relating to each Class the related Interest
Accrual Period (after payment of the Trustee's Fee and subject to the
adjustments of certain amounts with respect to the Class 2A
Certificates as described in the applicable Prospectus Supplement)
multiplied by 12, and the denominator of which is the principal
amount of such Class of the Certificates immediately prior to such
Distribution Date. Under certain circumstances, the principal amount
of either Class of the Certificates could be paid in full while
interest would remain payable, in which case, the calculation of the
effective per annum interest rate borne by the Certificates would not
be meaningful.
<PAGE> 26
Distribution Dates: With respect to each month, beginning in May 1998, the first
Business Day (as defined herein) after the 25th day of such month, or, if such
is not a Business Day, then on the first Business Day after the first Business
Day after the 25th day of each month. A "Business Day" means a day other than a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or the city in which the corporate trust office of the Trustee is located are
authorized or obligated by law or executive order to be closed.
Certificate Rating: "Aaa" by Moody's Investors Service, Inc. and "AAA" by Fitch
IBCA, Inc.
Form of Certificates: Book-entry (The Depository Trust Company).
Trust Fund Assets: The Pooled Certificates and Treasury Securities to be
included in the Trust Fund are as described in Schedule A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriter for the
Certificates covered by this Agreement will be 108.3% of the principal balance
of the Certificates plus accrued interest from April 1, 1998 to, but not
including, the Closing Date.
Closing Date: April 30, 1998, 9:00 a.m., New York time
Computational Materials and Term Sheets: The Underwriter has not prepared
Computational Materials, ABS Term Sheets, and/or Structural Term Sheets which
would be required to be filed by Fund America Investors Corporation II with the
Securities and Exchange Commission on Form 8-K.
Expenses: Notwithstanding anything to the contrary in the Underwriting
Agreement, the Underwriter will pay all expenses in connection with the offering
of the Securities, including, but not limited to, all the expenses included in
Section 5(g) of the Underwriting Agreement.
Information Furnished by the Underwriter: The Underwriter confirms that it has
furnished the information set forth in Schedule A hereto for use in the
applicable Prospectus Supplement.
Miscellaneous Matters: (a) The Pooling Agreement and the Schedule referred to in
the Underwriting Agreement shall be deemed to be references to the Pooling
Agreement dated as of April 1, 1998 between Fund America Investors Corporation
II, as seller, and State Street Bank & Trust Company, as trustee, and Schedule A
(attached thereto), respectively;
(b) Notices to the Underwriter shall be to the attention of Jeffrey
Mayer and notices to the Company shall be to the attention of Steven B.Chotin.
(c) The payment of certain additional expenses will be governed by
the letter agreement dated April 28, 1998 between the Underwriter and the
Company.
2
<PAGE> 27
The undersigned, as sole Underwriter, agrees, subject to the terms and
provisions of the above-referenced Underwriting Agreement, which is incorporated
herein in its entirety and made a part hereof, to purchase the principal amount
of the Class of the above-referenced Series of Certificates set forth herein.
BEAR, STEARNS & CO. INC.
By:
------------------------------
Name:
Title:
Accepted:
FUND AMERICA INVESTORS CORPORATION II
By:
------------------------------
Name:
Title:
3
<PAGE> 28
SCHEDULE A
POOLED CERTIFICATES
<TABLE>
<CAPTION>
Current Principal or
Full Name of Series % of Class Notional Balance
- ------------------------------------------------------ ---------- -------------------
<S> <C> <C>
POOLED FREDDIE MAC CERTIFICATES
Multiclass Mortgage Securities, Series G063, Class A 21.25% $18,211,492.25
Multiclass Mortgage Securities, Series 2043, Class ZB 17.36% $12,150,000.00
POOLED FANNIE MAE CERTIFICATES
Guaranteed REMIC Pass-Through Certificates, Fannie
Mae REMIC Trust 1994-6, Class F 27.53% $38,255,036.32
POOLED NON-AGENCY CERTIFICATES
Fund America Investors Trust I
Collateral Mortgage Obligations, Series 1993-2,
Class A-1 3.41% $2,268,817.89
</TABLE>
<TABLE> TREASURY SECURITIES
<CAPTION>
Amount to be Paid
Designation PT/IT at Maturity Due Date CUSIP No.
----------- ----- ----------------- ---------- ----------
<S> <C> <C> <C> <C>
United States Treasury Security PT $1,200,000 February 15, 2001 912820AZ0
United States Treasury Security IT $6,000,000 February 15, 1999 912833BZ2
United States Treasury Security IT $500,000 February 15, 2002 912833CF5
</TABLE>
4
<PAGE> 1
EXHIBIT 4.1
===============================================================================
FUND AMERICA INVESTORS CORPORATION II,
as Seller
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
--------------------------------
POOLING AGREEMENT
Dated as of April 1, 1998
--------------------------------
$60,373,853
Fund America Investors Corporation II
Pass-Through Certificates
Series 1998-A
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I -- DEFINITIONS 1
Section 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II -- CONVEYANCE OF THE POOLED SECURITIES AND TREASURY SECURITIES;
ORIGINAL ISSUANCE OF SECURITIES 14
Section 2.01. Conveyance of the Pooled Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 2.02. Acceptance of Trust Fund by Trustee; Initial Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . .15
Section 2.03. Representations and Warranties of the Seller and the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 2.04. Substitution of Pooled Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE III -- ADMINISTRATION OF THE POOLED CERTIFICATES AND TREASURY
SECURITIES; PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS 21
Section 3.01. Administration of the Trust Fund and the Pooled Certificates . . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 3.02. Collection of Monies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 3.03. Establishment of Asset Proceeds and Trustee Fee Accounts; Deposits Therein . . . . . . . . . . . . . . . . . . .21
Section 3.04. Permitted Withdrawals From the Asset Proceeds Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 3.05. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Section 3.06. Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 3.07. Access to Certain Documentation and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE IV -- THE CERTIFICATES 27
Section 4.01. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 4.02. Registration of Transfer and Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 4.04. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 4.05. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE V -- THE TRUSTEE 31
Section 5.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Section 5.02. Certain Matters Affecting the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 5.03. Trustee Not Liable for Certificates or Pooled Certificates or Treasury Securities . . . . . . . . . . . . . . . .34
Section 5.04. Trustee May Own Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 5.05. Trustee's Fees; Indemnification of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 5.06. Eligibility Requirements for Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 5.07. Resignation and Removal of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 5.08. Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 5.09. Merger or Consolidation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 5.10. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 5.10. Massachusetts Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI -- THE SELLER 38
Section 6.01. Liability of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 6.02. Merger, Consolidation or Conversion of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 6.03. Limitation on Liability of the Seller and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
ARTICLE VII -- TERMINATION 39
Section 7.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VIII - TAX PROVISIONS 43
Section 8.01 Trust Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 8.02 Prohibited Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE IX -- MISCELLANEOUS PROVISIONS 44
Section 9.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Section 9.02. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 9.03. Limitation on Rights of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 9.04. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 9.05. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 9.06. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 9.07. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 9.08. Article and Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Section 9.09. Notices to Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Exhibit A - Form of Class 1A Certificate
Exhibit B - Form of Class 2A Certificate
Exhibit C - Form of Option Exercise Notice
Schedule A - Pooled Certificates and Treasury Securities
Schedule B - Underlying FAIT Certificates
</TABLE>
(ii)
<PAGE> 4
POOLING AGREEMENT, dated as of April 1, 1998, by and between
Fund America Investors Corporation II, as depositor (the "Seller"), and State
Street Bank and Trust Company, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Seller intends to cause the issuance of and to sell its
Pass-Through Certificates, Series 1998-A representing in the aggregate the
entire beneficial ownership of a trust fund (the "Trust Fund"), the primary
assets of which are the Pooled Certificates (defined herein) and the Treasury
Securities (defined herein).
All things necessary to make this Agreement a valid
declaration of trust by the Seller in accordance with its terms have been done.
In consideration of the premises and the mutual agreements
herein contained, the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms
Whenever used in this Agreement, including the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Affiliate: With respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling," "controlled by" and "under common control with"
have meanings correlative to the foregoing.
Aggregate Principal Balance: The sum of the Class 1A Balance
plus the Class 2A Balance.
Agreement: This Pooling Agreement and all amendments hereof
and supplements hereto.
Asset Proceeds Account: The trust account or accounts, which
shall at all times be Eligible Accounts, created and maintained by the Trustee
for the benefit of the
<PAGE> 5
Certificateholders pursuant to Section 3.03. Funds deposited in the Asset
Proceeds Account shall be held in trust for the Certificateholders for the uses
and purposes set forth in Article III hereof.
Available Funds: As of any date of determination, the
aggregate amount on deposit in the Asset Proceeds Account as of such date, net
of any portion thereof which represents amounts to be paid to any Person
pursuant to clauses (ii) and (iv) of Section 3.04.
Business Day: Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York or in the city in which the
Corporate Trust Office of the Trustee is located are authorized or obligated by
law or executive order to close.
Certificate or Certificates: Class 1A Certificates and Class
2A Certificates or, as the context so indicates, either Class 1A Certificates
or Class 2A Certificates.
Certificate Principal Balance: With respect to any
Certificate, as of any date of determination, the then outstanding principal
amount of such Certificate, which is equal to the product of (a) the Class
Percentage Interest evidenced by such Certificate and (b) the then Class
Principal Balance of the Certificate.
Certificate Registrar and Certificate Register: Shall each
have the meanings provided in Section 4.02.
Certificateholder or Holder: As to the Certificates, the
person in whose name a Certificate is registered in the Certificate Register,
except that, solely for the purpose of giving any consent, approval or waiver
pursuant to this Agreement, any Certificate registered in the name of the
Seller or any Affiliate thereof shall be deemed not to be outstanding and shall
not be taken into account for purposes of determining whether the Holders of
Certificates evidencing the requisite aggregate Percentage Interest necessary
to effect any such consent, approval or waiver has been obtained, unless such
Persons collectively own all the Certificates.
Class: Collectively, all of the Certificates bearing the same
designation.
Class 1A Available Distribution: Means, as of any
Distribution Date, all distributions received by the Trustee on the Group 1A
Pooled Certificates and deposited by the Trustee in the Asset Proceeds Account
as of such Distribution Date, minus the pro rata portion of the Trustee Fee
paid to the Trustee, as of such Distribution Date.
Class 1A Balance: The aggregate principal amount of Class 1A
Certificates outstanding as of any date of determination, which is equal to the
Original Class 1A Balance minus all amounts received as principal on the Class
1A Pooled Certificates and applied to principal on the then outstanding Class
1A Certificates.
2
<PAGE> 6
Class 1A Certificate: Any one of the Class 1A Certificates,
as executed hereunder by the Trustee and authenticated and delivered hereunder
by the Certificate Registrar, substantially in the form of Exhibit A hereto.
Class 1A Certificateholder: As to the Class 1A Certificates,
the person in whose name a Class 1A Certificate is registered in the
Certificate Register.
Class Percentage Interest: With respect to any Certificate of
any Class, the portion of the Certificates of such Class represented by such
Certificate, expressed as a percentage, the numerator of which is the initial
outstanding principal amount of such Certificate as of the Closing Date, as
specified on the face thereof, and the denominator of which is, for a Class 1A
Certificate, the Original Class 1A Balance and, for a Class 2A Certificate, the
Original Class 2A Balance.
Class Principal Balance: The Class 1A Balance or the Class 2A
Balance.
Class 2A Available Distribution: Means, as of any
Distribution Date, all distributions received by the Trustee on the Group 2A
Pooled Certificates and the Treasury Securities and deposited by the Trustee in
the Asset Proceeds Account as of such Distribution Date, minus the pro rata
portion of the Trustee Fee paid to the Trustee, as of such Distribution Date.
Class 2A Balance: The aggregate principal amount of Class 2A
Certificates outstanding as of any date of determination, which is equal to the
Original Class 2A Balance (i) minus all amounts received on the Group 2A Pooled
Certificates and applied to principal on the then outstanding Class 2A
Certificates, (ii) minus all amounts applied to pay principal on the then
outstanding Class 2A Certificates from the Reserve Fund, (iii) minus the
aggregate of any Pooled Non-Agency Certificate Reallocation Amount applied to
pay principal on the Class 2A Certificates and (iv) plus all amounts of
accreted interest added thereto. If, on any Distribution Date, the amount by
which the Z Certificates have accreted exceeds the aggregate of the amounts set
forth in clauses (i), (ii) and (iii) of the definition of Class 2A Balance in
respect of such Distribution Date, the Class 2A Balance will be increased by
the amount of such excess.
Class 2A Certificate: Any one of the Class 2A Certificates,
as executed hereunder by the Trustee and authenticated and delivered hereunder
by the Certificate Registrar, substantially in the form of Exhibit B hereto.
Class 2A Certificateholder: As to the Class 2A Certificates,
the person in whose name a Class 2A Certificate is registered in the
Certificate Register.
Closing Date: April 30, 1998.
Code: The Internal Revenue Code of 1986, as amended.
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Corporate Trust Office: The corporate trust office of the
Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of
the execution of this Agreement is located at Two International Place, Boston,
Massachusetts 02110, Attention: FAIC 1998-A, telephone no. (617) 786-3000,
facsimile no. (617) 664-5367.
Definitive Certificates: The meaning specified in Section
4.01(b) hereof.
Deleted Pooled Certificate: A Pooled Certificate replaced by
a Substitute Pooled Certificate.
Deleted Treasury Security: A Treasury Security replaced by a
Substitute Treasury Security.
Depository: DTC, the nominee of which is Cede & Co., or any
successor thereto.
Depository Agreement: The meaning specified in Subsection
4.01(a) hereof.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Time: Noon, Eastern Standard Time, on a
Distribution Date.
Distribution Date: With respect to any month, the
Distribution Date shall be the first Business Day after the 25th day of such
month or, if such day is not a Business Day, then on the first Business Day,
after the first Business Day after the 25th day of each month. The first
Distribution Date shall occur on May 27, 1998.
DTC: The Depository Trust Company.
Eligible Account: Any of (i) an account maintained with a
federal or state chartered depository institution or trust company, the
short-term unsecured debt obligations of which are rated at least P-1 by
Moody's and A-1+ by S&P (or comparable ratings if Moody's and S&P are not the
Rating Agencies) at any time funds are on deposit therein, (ii) a trust account
or accounts maintained with the trust department of a federally chartered
depository institution or trust company acting in its fiduciary capacity, or
(iii) a trust account or accounts maintained with the trust department of a
state chartered depository institution or trust company acting in its fiduciary
capacity and subject to regulations regarding fiduciary funds on deposit
therein substantially similar to 12 CFR Section 9.10(b).
ERISA: The Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
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<PAGE> 8
Exchange Date: A date on which Certificates are exchanged for
a pro rata portion of the Pooled Certificates and, with respect to the Class 2A
Certificates, Treasury Securities pursuant to Section 4.05.
Fannie Mae: Fannie Mae, formerly known as the Federal National
Mortgage Association.
Freddie Mac: Freddie Mac, formerly known as the Federal Home
Loan Mortgage Corporation.
Final Distribution Date: With respect to the Pooled
Certificates, the Treasury Securities or the Certificates, as applicable, the
Pooled Certificate Distribution Date, Treasury Security Distribution Date or
the Distribution Date, as applicable, on which the final distribution thereon
is to be made in accordance with the related Underlying Agreement, the terms of
the Treasury Securities or this Agreement, as the case may be.
Fitch: Fitch IBCA, Inc., or its successor in interest.
FMV Opinion: An opinion of an investment banking firm of
national reputation (other than an Affiliate of the Seller), which may be
obtained in connection with the determination of the Repurchase Price for a
repurchase pursuant to Section 2.03(c).
Ginnie Mae: Ginnie Mae, formerly known as Government National
Mortgage Association.
Group 1A Pool: Means the Group 1A Pooled Certificates.
Group 1A Pooled Certificates: Means (i) $4,285,057.00
aggregate notional amount of the Pooled Freddie Mac G063 Certificate and (ii)
$23,500,002.45 aggregate principal amount of the Pooled Fannie Mae Certificate.
Group 2A Pool: Means the Group 2A Pooled Certificates and the
Treasury Securities.
Group 2A Pooled Certificates: Means (i) $13,926,435.25
aggregate notional amount of the Pooled Freddie Mac G063 Certificate, (ii)
$14,755,033.87 aggregate principal amount of the Pooled Fannie Mae Certificate,
(iii) the Pooled Freddie Mac 2043 Certificate and (iv) the Pooled FAIT 1993-2
Certificate.
Independent: When used with respect to any specified Person,
such a Person who (i) is in fact independent of the Seller and any Affiliate of
the Seller, (ii) does not have any direct financial interest in the Seller or
in any Affiliate of the Seller, and (iii) is not connected with the Seller or
any Affiliate of the Seller as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
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Interest Accrual Period: The one month period beginning on
the first day and ending on the last day of the month preceding the month of a
Distribution Date.
Investment Company Act: The Investment Company Act of 1940,
as amended from time to time, and the rules and regulations promulgated
thereunder.
LIBOR: London interbank offered quotations for one month
Eurodollar deposits.
Majority Certificateholders: The Holders of Certificates
evidencing in the aggregate greater than 50% of the Aggregate Principal Balance
of all the Certificates.
Monthly Distribution Amount: With respect to any Distribution
Date, the aggregate of (i) the interest distribution amount for such
Distribution Date, and (ii) the principal distribution amount for such
Distribution Date.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
Non-Agency Trustee: With respect to any Pooled Non-Agency
Certificate, the trustee under the Underlying Agreement pursuant to which such
Pooled Non-Agency Certificate was issued.
Notice of Final Distribution: With respect to the Pooled
Certificates, any notice provided pursuant to the related Underlying Agreement
to the effect that final distribution on a Pooled Certificate shall be made
only upon presentment and surrender thereof. With respect to the Certificates,
the notice to be provided pursuant to Section 7.01(b) to the effect that final
distribution on the Certificates shall be made only upon presentment and
surrender thereof.
Officers' Certificate: A certificate signed by the Chairman
of the Board, the President, a Senior Vice President, a Vice President or an
Assistant Vice President and by the Treasurer, the Secretary, an Assistant
Treasurer or an Assistant Secretary of the Seller or the Trustee, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, which opinion is addressed to the Trustee and is
reasonably acceptable to the Trustee.
Option Exercise Fee: The fee set forth in Section 4.05(c).
Option Exercise Notice: A notice, substantially in the form
of Exhibit B, delivered by a Holder or Security Owner holding not less than 10%
of the outstanding principal amount of the Certificate of a Class.
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<PAGE> 10
Original Class 1A Balance: $23,500,002, minus the initial
principal amount of all Class 1A Certificates exchanged pursuant to Section
4.05 determined as of the respective dates of exchange.
Original Class 2A Balance: $36,873,851, minus the initial
principal amount of all Class 2A Certificates exchanged pursuant to Section
4.05 determined as of the respective dates of exchange.
Original Principal Balance: The sum of the Original Class 1A
Balance and the Original Class 2A Balance.
Percentage Interest: With respect to any Certificate, the
portion of the Certificates represented by such Certificate, expressed as a
percentage, the numerator of which is the initial outstanding principal amount
of such Certificate as of the Closing Date, as specified on the face thereof,
and the denominator of which is the Original Principal Balance.
Permitted Investments: Any one or more of the following
obligations or securities:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) demand and time deposits in, certificates of
deposit of, or bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more
than 30 days) denominated in United States dollars issued by,
any depository institution or trust company (including the
Trustee or any agent of the Trustee, acting in its 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 banking
authorities, so long as at the time of such investment or
contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution which is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) have a credit rating of
"A-1+" and P-1 from S&P and Moody's, respectively;
(iii) repurchase obligations with respect to any
security described in clause (i) above where such security has
a remaining maturity of one year or less and where such
repurchase obligation has been entered into with a depository
institution or trust company (acting as principal) described
in clause (ii) above;
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(iv) 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
securities are rated "AAA" and "Aaa" by S&P and Moody's,
respectively, at the time of such investment or contractual
commitment providing for such investment; provided, however,
that securities issued by any particular corporation will not
be Permitted Investments to the extent that investment therein
will cause the then outstanding principal amount of securities
issued by such corporation and held as part of the Trust Fund
to exceed 10% of the sum of the aggregate outstanding
principal balance of all Pooled Certificates and the aggregate
principal amount of all Permitted Investments in the Asset
Proceeds Account;
(v) commercial paper (having original maturities
of not more than 365 days) of any corporation incorporated
under the laws of the United States or any state thereof which
on the date of acquisition has been rated by each Rating
Agency in its highest short-term rating available, provided
that such commercial paper shall have a remaining maturity of
not more than 30 days;
(vi) certificates or receipts representing
ownership interests in future principal payments on
obligations of the United States of America or its agencies or
instrumentalities (which obligations are backed by the full
faith and credit of the United States of America) held by a
custodian on behalf of the holders of such receipts; and
(vii) money market funds which are rated by Moody's
at the time at which the investment is made in its highest
long-term rating category, any such money market funds which
provide for demand withdrawals being conclusively deemed to
satisfy any maturity requirements for Permitted Investments
set forth in the Certificates or this Agreement, including
money market funds of the Trustee and any such funds that are
managed by the Trustee or its affiliates or for which the
Trustee or any affiliate acts as advisor (as long as such
funds otherwise meet the criteria described in this clause
(vii));
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal
and interest payments derived from obligations underlying such instrument and
the principal payments with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan: Any employee benefit Plan or retirement arrangement,
including individual retirement accounts and annuities, Keogh Plans and
collective investment funds in which such
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Plans, accounts, annuities or arrangements are invested, that are described in
or subject to the Plan Asset Regulations, ERISA or corresponding provisions of
the Code.
Plan Asset Regulations: The Department of Labor regulations
set forth in 29 C.F.R. Section 2510.3-101.
Plan Investor: A Plan, persons acting on behalf of a Plan, or
persons using the assets of a Plan.
Pooled Certificate Class Percentage: Means, for each class of
Pooled Certificates, the percentage which the Pooled Certificate constitutes of
its entire class as set forth in Schedule A attached hereto under the caption
"% of Class."
Pooled Certificate Distribution Date: Each of the Pooled
Freddie Mac Certificate Distribution Date, the Pooled Fannie Mae Certificate
Distribution Date and the Pooled Non-Agency Certificate Payment Date.
Pooled Certificate Distribution Date Information: The
information provided or updated monthly by Freddie Mac, Fannie Mae and the
Non-Agency Trustee in respect of Pooled Certificates in connection with each
Pooled Certificate Distribution Date.
Pooled Certificate Principal Balance: The principal balance
or notional principal balance of any Pooled Certificate.
Pooled Certificates: The Pooled Freddie Mac Certificates, the
Pooled Fannie Mae Certificates and the Pooled Non-Agency Certificate sold by
the Seller to, and registered in the name of, or held for the benefit of, the
Trustee pursuant to Section 2.01 or 2.04 and as more particularly described in
Schedule A hereto, minus the original principal balance of the Pooled
Certificates issued to a Certificateholder in exchange for Certificates
pursuant to Section 4.05.
Pooled FAIT 1993-2 Certificate: Fund America Investors Trust
I, Collateral Mortgage Obligations, Series 1993-2, Class A-1.
Pooled Fannie Mae Certificate Distribution Date: With respect
to the Pooled Fannie Mae Certificate, the 25th day of each month or, if any
such day is not a business day as defined in the applicable Underlying
Agreement, the next succeeding business day as so defined.
Pooled Fannie Mae Certificates: Guaranteed REMIC Pass-Through
Certificates issued by Fannie Mae and identified as the Pooled Fannie Mae
Certificates in Schedule A hereto.
Pooled Fannie Mae 1994-6 Certificate: Fannie Mae Guaranteed
REMIC Pass-Through Certificates, Fannie Mae REMIC Trust 1994-6, Class F.
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Pooled Freddie Mac Certificate Distribution Date: With
respect to the Pooled Freddie Mac Pooled 2043 Certificate, the 15th day of each
month and with respect to the Pooled Freddie Mac G063 Certificate, the 17th day
of each month, or, if any such day is not a business day as defined in the
applicable Underlying Agreement, the next succeeding business day as so
defined.
Pooled Freddie Mac Certificates: Freddie Mac Multiclass
Mortgage Securities, issued by Freddie Mac and identified as the Pooled Freddie
Mac Certificates in Schedule A hereto.
Pooled Freddie Mac G063 Certificate: Freddie Mac Multiclass
Mortgage Securities Certificates, Series G063, Class A.
Pooled Freddie Mac 2043 Certificate: Freddie Mac Multiclass
Mortgage Securities Certificates, Series 2043, Class B.
Pooled Floating Rate Certificates: Pooled Fannie Mae 1994-6
Certificates.
Pooled Non-Agency Certificate Payment Date: With respect to
the Pooled Non-Agency Certificate, the 25th day of each month or, if any such
day is not a business day as defined in the applicable Underlying Agreement,
the next succeeding business day as so defined.
Pooled Non-Agency Certificate: Pooled FAIT 1993-2
Certificate.
Pooled Non-Agency Certificate Reallocation Amount: With
respect to any Distribution Date occurring after a Pooled Non-Agency
Certificate Payment Date on which the principal balance of the Underlying FAIT
Certificates is less than the outstanding principal balance of the Pooled
Non-Agency Certificate as reported din the related Pooled Certificate
Distribution Date Information, an amount equal to the interest received on the
related Pooled Non-Agency Certificate Payment Date; provided, however, that
that accumulated aggregate amount of such "Pooled Non-Agency Certificate
Reallocation Amount" paid to the Class 2A Certificateholders plus the
accumulated aggregate amount of principal paid on the Pooled Non-Agency
Certificate shall not exceed a maximum amount of $2,268,817.89. After the
Distribution Date on which the accumulated aggregate amount of such Pooled
Non-Agency Certificate Reallocation Amount paid to the Class 2A
Certificateholders plus the aggregate amount of principal paid on the
Non-Agency Certificate exceeds such maximum amount, the Pooled Non-Agency
Certificate Reallocation Amount shall be $0.
Pooled PEC/IO Certificate: Pooled Freddie Mac 2043
Certificates.
Pooled Certificateholder: The Trustee or its Depository
Participant for the benefit of the Certificateholders.
PTC: Participants Trust Company, or any successors thereto.
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Purchase Agreement: The Purchase Agreement dated April 28,
1998 between Bear, Stearns & Co., Inc. and the Seller relating to the Pooled
Certificates and the Treasury Securities
Rating Agency or Rating Agencies: Moody's and Fitch or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be deemed to refer to such nationally recognized
statistical rating agencies, or other comparable Persons, designated by the
Seller, notice of which designation shall be given to the Trustee, and specific
ratings of Moody's and Fitch shall be deemed to refer to the equivalent ratings
of the parties so designated.
Record Date: With respect to any Distribution Date, the last
Business Day of the month preceding the month in which such Distribution Date
occurs; provided, however, that for this purpose the Distribution Date is
deemed to occur on the 26th of each month, without regard to whether such day
is a Business Day.
Remaining Pooled Certificate: With respect to either the
Class 1A or Class 2A Certificates, any class of the Group 1A or Group 2A Pooled
Certificates, respectively, following the date on which the principal balance
or notional principal balance of all other classes of the class of the Group 1A
or Group 2A Pooled Certificates and Treasury Securities, as applicable, is
reduced to zero.
REMIC: A "real estate mortgage investment conduit" for
Federal income tax purposes.
Repurchase Price: In connection with the repurchase of (i)
any Pooled Certificate that is not a Pooled PEC/IO Certificate pursuant to
Section 2.03(c) or Section 7.01(a)(i), (ii)(A) or (iii) (A) a price equal to
the outstanding Pooled Certificate principal balance thereof as of the date of
repurchase plus accrued interest thereon in accordance with the applicable
Underlying Agreements plus, in the case of the Pooled Fannie Mae 1994-6
Certificate or the Pooled Non-Agency certificate, any Interest Deficiency (as
defined in the applicable underlying Agreement) and interest thereon in
accordance with the applicable Underlying Agreement. (ii) any Pooled PEC/IO
Certificate pursuant to Section 2.03(c), a price equal to the highest bid
obtained by the Trustee from three dealers then active in the market for such
Pooled PEC/IO Certificate (or such lesser number as may then be active);
provided, however, if the Trustee is able to obtain a bid from only one active
dealer, then the Trustee may obtain a FMV Opinion to determine whether such bid
is at least equal to the fair market value of such Pooled PEC/IO Certificate
and the Repurchase Price shall be the higher of the bid or the fair market
value of such Pooled PEC/IO Certificate as stated in any such FMV Opinion;
provided further, however, if the Trustee is unable to obtain a bid from any
active dealer, then the Trustee shall obtain a FMV Opinion and the Repurchase
Price shall be equal to the fair market value of such Pooled PEC/IO Certificate
as stated in such FMV Opinion, (iii) any Pooled PEC/IO Certificate pursuant to
Section 7.01(a)(i), (ii)(A) or (iii) (A), a price equal to the portion of the
interest distribution amount allocable to
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<PAGE> 15
such Pooled PEC/IO Certificate for such date of repurchase and (iv) any
Treasury Security pursuant to Section 2.03(c) or Section 7.01(a)(i), a price
equal to the amount payable on such Treasury Security at its maturity.
Responsible Officer: When used with respect to the Trustee,
any officer of the Trustee assigned to and working in its Corporate Trust
Office or similar group administering the Trust Fund hereunder and also, with
respect to a particular matter, any other officer of the Trustee to whom a
particular matter is referred by the Trustee because of such officer's
knowledge of and familiarity with the particular subject.
Reserve Fund: The portion of the Trust Fund constituting the
Treasury Securities.
S&P: Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
Securities Act: The Securities Act of 1933, as amended.
Security Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Seller: Fund America Investment Corporation II, a Delaware
corporation, or its successor in interest.
Single Certificate: A Certificate with an original principal
amount of $1,000.
Substitute Pooled Certificate: One or more mortgage related
securities tendered to the Trustee pursuant to Section 2.04, issued by Ginnie
Mae, Fannie Mae or Freddie Mac, which meet the following criteria: (i) such
substitution shall be (a) in the case of the Z Certificates, with one or more
accrual certificates bearing a coupon no less than the coupon of the Z
Certificate being substituted for or (b) in the case of the Pooled Floating
Rate Certificates, one or more inverse floating rate certificates based on
LIBOR whose combined coupon will be at least equal to the coupon of the Pooled
Certificates being substituted for at all levels of LIBOR, (ii) the sum of the
outstanding principal amounts or notional principal amounts, as applicable, of
the Substitute Pooled Certificates equals the sum of the outstanding principal
amounts or notional principal amounts, as applicable of the Deleted Pooled
Certificates being substituted for, (iii) the Substitute Pooled Certificates as
the date of substitution ultimately are backed by mortgage loans (a) with a
weighted average pass-through rate no more than 50 basis points below and no
more than 50 basis points above the weighted average pass-through rate of the
mortgage loans ultimately backing the Deleted Pooled Certificate and (b) which
are conventional, fixed rate, one- to four-family, fully amortizing, level
payment, first mortgage loans with original maturities of up to 30 years, (iv)
the inclusion of which in the Trust Fund will not result in a withdrawal or
downgrading in the rating assigned to the Certificates by the Rating Agencies,
written confirmation of which shall be provided by the Rating Agencies to the
Trustee
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and (v) will not cause the Trust Fund to lose its status as a grantor trust for
federal income tax purposes as indicated in an Opinion of Counsel to be
provided to the Trustee.
Substitute Treasury Security: One or more United States
Treasury Securities tendered to the Trustee pursuant to Section 2.04 which meet
the following criteria: (i) the Substitute Treasury Security results in the
same aggregate payment amount of principal or interest, as the case may be, on
the same Distribution Date as the Deleted Treasury Security being substituted
for; (ii) the inclusion of which in the Trust Fund will not result in a
withdrawal or downgrading in the rating assigned to the Certificates by the
Rating Agencies, written confirmation of which shall be provided by the Rating
Agencies to the Trustee and (iii) will not cause the Trust Fund to lose its
status as a grantor trust for federal income tax purposes as indicated in an
Opinion of Counsel to be provided to the Trustee.
Treasury Securities: The United States Treasury Securities
sold by Seller to, and registered in the name of, or held for the benefit of,
the Trustee pursuant to Section 2.01 or 2.04 and as more particularly described
in Schedule A hereto, minus the original principal balance or interest due at
maturity of the Treasury Securities issued to a Certificateholder in exchange
for Certificates pursuant to Section 4.05.
Treasury Security Distribution Date: With respect to the
Treasury Securities delivered to the Trustee on the Closing Date, the
respective Due Date set forth on Schedule A hereto, or the respective maturity
dates of Substitute Treasury Securities.
Trustee: State Street Bank and Trust Company, in its capacity
as trustee, or its successor in interest.
Trustee Fee: With respect to any Distribution Date, the
monthly fee equal to one-twelfth of the product of 0.025% and the Aggregate
Principal Balance immediately prior to such Distribution Date, but not less
than $125.00 with respect to any Distribution Date.
Trust Fund: The segregated pool of assets subject hereto,
constituting the corpus of the trust created hereby and to be administered
hereunder, consisting of:
(i) the Pooled Certificates;
(ii) the Treasury Securities constituting the Reserve
Fund;
(iii) all amounts payable on the Pooled Certificates
following the Closing Date pursuant to the Underlying Agreements;
(iv) the Asset Proceeds Account and such funds or assets
as are from time to time deposited in the Asset Proceeds Account other
than the amounts described in Section 3.04(iv) hereof;
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<PAGE> 17
(v) the Seller's rights under the Purchase Agreement; and
(vi) the income, payments and proceeds of each of the
foregoing.
Underlying Agreements: The agreements pursuant to which the
related Pooled Certificates were issued, as in effect on the Closing Date.
Underlying FAIT Certificates: The certificates and other
securities described in Schedule B hereto.
Underlying Series: Each series of securities which includes
one of the Pooled Certificates.
Z Certificates: Pooled Freddie Mac 2043 Certificates.
ARTICLE II
CONVEYANCE OF THE POOLED SECURITIES AND TREASURY SECURITIES;
ORIGINAL ISSUANCE OF SECURITIES
Section 2.01. Conveyance of the Pooled Certificates.
(a) The Seller, concurrently with the execution and
delivery hereof, does hereby sell, transfer, assign, set-over and otherwise
convey to the Trustee, in trust, for the use and benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Seller (i) in and to the Pooled Certificates, (ii) in and to the Treasury
Securities, (iii) in and to the Purchase Agreement and (iv) in and to all other
assets constituting the Trust Fund. Such assignment includes, without
limitation, all amounts payable on the Pooled Certificates pursuant to the
Underlying Agreements and on the Treasury Securities following the Closing
Date. The Group 1A and the Group 2A Pool shall each constitute separate
sub-trusts of the Trust Fund.
(b) In connection with such transfer and assignment, and
concurrently with its execution and delivery of this Agreement, the Seller
shall have caused the Pooled Certificates and the Treasury Securities to be
registered in the book-entry records of the Federal Reserve Bank of Boston, PTC
or DTC, as applicable, in the name of the Trustee.
(c) The transfer of the Pooled Certificates and the
Treasury Securities and all other assets constituting the Trust Fund is
absolute and is intended by the parties hereto as a sale.
(d) It is intended that the conveyances by the Seller to
the Trustee of the Pooled Certificates and the Treasury Securities as provided
for in this Section 2.01 be construed as a sale by the Seller to the Trustee of
the Pooled Certificates and the Treasury Securities for the benefit of the
Certificateholders. Further, it is not intended that any such conveyance be
deemed to be a pledge of the Pooled Certificates and the Treasury Securities by
the Seller to the Trustee
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<PAGE> 18
to secure a debt or other obligation of the Seller. However, in the event that
the Pooled Certificates and the Treasury Securities are held to be property of
the Seller, or if for any reason this Agreement is held or deemed to create a
security interest in the Pooled Certificates and the Treasury Securities, then
it is intended that (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in Section 2.01 shall be deemed
to be a grant by the Seller to the Trustee of a security interest in all of the
Seller's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (1) the Pooled
Certificates and the Treasury Securities, (2) all amounts payable pursuant to
the Pooled Certificates and the Treasury Securities in accordance with the
terms thereof and (3) any and all general intangibles consisting of, arising
from or relating to any of the foregoing, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property, including without limitation all amounts from time to time
held in the Asset Proceeds Account, whether in the form of cash, instruments,
securities or other property, other than the amounts described in Section
3.04(iv) hereof; (c) the possession by the Trustee or any agent of the Trustee
of such items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be possession, or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Section 9-305 and 8-301 thereof); and (d)
notifications to persons holding such property, and acknowledgments, receipts
or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the
purpose of perfecting such security interest under applicable law.
The Seller and the Trustee, at the Seller's or the Majority
Certificateholders' direction, shall, to the extent consistent with this
Agreement, take such reasonable actions as may be determined to be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Pooled Certificates and the Treasury Securities, and the other property
described above, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.
Section 2.02. Acceptance of Trust Fund by Trustee; Initial
Issuance of Securities.
The Trustee acknowledges receipt of the Underlying Agreements
and the transfer and assignment to it of the Pooled Certificates and the
Treasury Securities as evidenced by the written confirmation of the
registration or the crediting of such Pooled Certificates and Treasury
Securities in the name or for the account of the Trustee, in good faith and
without notice of any adverse claim, and the assignment to it of all other
assets included in the Trust Fund and declares that it holds and will hold its
interest in the Pooled Certificates and the Treasury Securities and all other
assets included in the Trust Fund in trust for the exclusive use and benefit of
all present and future Certificateholders in accordance with the terms of this
Agreement. Concurrently with
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<PAGE> 19
such transfer and assignment and in exchange therefor, pursuant to the written
request of the Seller executed by an officer of the Seller, the Trustee has
executed and caused to be authenticated and delivered to or upon the order of
the Seller, the Certificates in authorized denominations evidencing the entire
beneficial ownership of the Trust Fund.
Until the Trust Fund is terminated in accordance with Section
7.01, except as provided herein, the Trustee shall not assign, sell, dispose of
or transfer any interest in the Pooled Certificates and the Treasury Securities
or any other asset constituting the Trust Fund or permit the Pooled
Certificates and the Treasury Securities or any other asset constituting the
Trust Fund to be subjected to any lien, claim or encumbrance arising by,
through or under the Trustee or any person claiming by, through or under the
Trustee.
Section 2.03. Representations and Warranties of the Seller
and the Trustee.
(a) The Seller hereby represents and warrants to the
Trustee and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, and the Seller is possessed of all licenses
necessary to carry on its business.
(ii) The execution and delivery of this Agreement
by the Seller, and the performance and compliance with the
terms of this Agreement by the Seller, will not violate the
Seller's certificate of incorporation or bylaws or constitute
a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which
it is a party or which is applicable to it or any of its
assets.
(iii) The Seller has the full right, power and
authority to enter into and consummate all transactions
contemplated by this Agreement, including but not limited to
selling the Pooled Certificates and the Treasury Securities to
the Trustee, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid,
legal and binding obligation of the Seller, enforceable
against the Seller in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law.
(v) The Seller is not in violation of, and its
execution and delivery of this Agreement and its performance
and compliance with the terms of this Agreement will not
constitute a violation of, any law, any order or decree of any
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court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority,
which violation is likely to affect materially and adversely
either the ability of the Seller to perform its obligations
under this Agreement or the financial condition of the Seller.
(vi) No litigation is pending or, to the best of
the Seller's knowledge, threatened against the Seller which,
if determined adversely to the Seller, would prohibit the
Seller from entering into this Agreement or is likely to
materially and adversely affect either the ability of the
Seller to perform its obligations under this Agreement or the
financial condition of the Seller.
(vii) The Seller was, immediately prior to the
transfer of the Pooled Certificates and the Treasury
Securities to the Trustee, the sole owner thereof free and
clear of any lien, pledge, charge or encumbrance of any kind
(except any lien created by this Agreement).
(viii) The Seller acquired the Pooled Certificates
and the Treasury Securities in good faith without notice of
any adverse claim, lien, charge, encumbrance or security
interest (including without limitation, federal tax liens or
liens arising under ERISA).
(ix) The Seller has not assigned any interest in
the Pooled Certificates and the Treasury Securities or any
distributions or payments thereon, except as contemplated
herein.
(x) The Trustee, in its capacity as the holder of
the Pooled Certificates, will be entitled to distributions
under the Underlying Agreements equal to all distributions of
interest and principal made on the Pooled Certificates, and in
its capacity as the holder of the Treasury Securities, will be
entitled to all payments made on the Treasury Securities.
(xi) As of the Closing Date, collectively, the
Pooled Certificates which have principal balances, have an
aggregate principal balance and the Treasury Securities have
an aggregate amount payable at maturity, greater than or equal
to the Original Principal Balance. As of the Closing Date,
collectively, the Group 1A Pooled Certificates which have
principal balances have an aggregate principal balance,
greater than or equal to the Original Class 1A Balance. As of
the Closing Date, collectively, the Group 2A Pooled
Certificates which have principal balances have an aggregate
principal balance and the Treasury Securities have an
aggregate amount payable at maturity, greater than or equal to
the Original Class 2A Balance.
(xii) The information relating to the Pooled
Certificates and the Treasury Securities set forth in Schedule
A is true and correct in all material respects.
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(xiii) Each Pooled Certificate and Treasury Security
is an Uncertificated Security (as such term is defined in
Article 8 of the Uniform Commercial Code) registered on the
books of the Federal Reserve Banks, PTC or the Depository in
the name of the Trustee or its financial intermediary on
behalf of the Trustee.
(xiv) The Pooled Fannie Mae Certificates and Pooled
Freddie Mac Certificates are REMIC regular interests.
(xv) The Seller has no actual knowledge after
reasonable inquiry that (a) each trust issuing a Pooled
Certificate was not duly created and is not validly existing
and (b) such Pooled Certificate (1) was not validly issued by
such trust and (2) is not outstanding, (3) is not the legal,
valid, binding and enforceable obligation of such trust and
(4) is not entitled to the benefits of the pooling and
servicing agreement, indenture, trust agreement or other
document pursuant to which such Pooled Certificate was issued
(except as limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally
or to the extent that such enforceability may be subject to
the exercise of judicial discretion in accordance with general
equitable principles).
(b) The Trustee hereby represents and warrants to the
Seller and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) The Trustee is a trust company duly organized
and validly existing under the laws of the Commonwealth of
Massachusetts.
(ii) The execution and delivery of this Agreement
by the Trustee, and the performance and compliance with the
terms of this Agreement by the Trustee, will not violate the
Trustee's charter or bylaws or constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party
or which is applicable to it or any of its assets which
default is likely to affect materially and adversely either
the ability of the Trustee to perform its obligations
hereunder or its financial condition.
(iii) The Trustee has the full power and authority
to enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery
and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by the Seller, constitutes a valid,
legal and binding obligation of the Trustee, enforceable
against the Trustee in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general
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principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law or in an
administrative proceeding.
(v) The Trustee is not in violation of, and its
execution and delivery of this Agreement and its performance
and compliance with the terms of this Agreement will not
constitute a violation of, any law, any order or decree of any
court or arbiter, or any order or regulation of any federal,
state or local governmental or regulatory authority, which
violation is likely to affect materially and adversely either
the ability of the Trustee to perform its obligations under
this Agreement or the financial condition of the Trustee.
(vi) No litigation is pending or, to the best of
the Trustee's knowledge, threatened against the Trustee which
would prohibit the Trustee from entering into this Agreement
or is likely to materially and adversely affect either the
ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
(vii) The Pooled Certificates and the Treasury
Securities will be held in the Trustee's account at the
Federal Reserve Bank of Boston, PTC or DTC, as applicable, as
evidenced by the written confirmation of the registration or
the crediting of such Pooled Certificates and Treasury
Securities in the name or for the account of the Trustee; it
has acquired the Pooled Certificates and the Treasury
Securities on behalf of the Certificateholders from the Seller
in good faith, for value, and, to the best of the Trustee's
knowledge, without notice or actual knowledge of any adverse
claim, lien, charge, encumbrance or security interest
(including, without limitation, federal tax liens or liens
arising under ERISA); it has not and will not, in any capacity
other than as Trustee, assert any claim or interest in the
Pooled Certificates and the Treasury Securities and will hold
its interest in such Pooled Certificates and the Treasury
Securities and the proceeds thereof in trust pursuant to the
terms of this Agreement; and it has not encumbered or
transferred its right, title or interest in the Pooled
Certificates and the Treasury Securities.
(c) It is understood and agreed that the representations
and warranties set forth in Section 2.03(a) shall survive the execution and
delivery of this Agreement. Upon discovery by either party hereto of a breach
of any of the foregoing representations and warranties which materially and
adversely affects the interests of the Certificateholders or either party
hereto, the party discovering such breach will give prompt written notice
thereof to the other party hereto and to the Certificateholders. Within thirty
(30) days of the earlier of either discovery by or notice to the Seller of any
breach of a representation or warranty of the Seller that materially and
adversely affects the interests of the Certificateholders, the Seller shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, the Seller shall, at the election of the Majority
Certificateholders, repurchase each Pooled Certificate and Treasury Security
affected by the breach at the Repurchase Price. If the Seller is to repurchase
Pooled Certificates, the Trustee shall promptly determine the Repurchase Price
in
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accordance with the definition thereof. Repurchase of any of the Pooled
Certificates or Treasury Securities pursuant to the foregoing provisions of
this Section 2.03(c) shall be accomplished by (i) deposit in the Asset Proceeds
Account on the Business Day prior to the next succeeding Distribution Date of
the amount of the Repurchase Prices of the Deleted Pooled Certificates and
Deleted Treasury Securities and (ii) amending Schedule A hereto to remove the
related Deleted Pooled Certificates and Deleted Treasury Securities.
Section 2.04. Substitution of Pooled Certificates and Treasury
Securities.
Notwithstanding anything to the contrary in this Agreement, in
lieu of repurchasing a Pooled Certificate that is not a Pooled PEC/IO
Certificate or a Treasury Security pursuant to Section 2.03(c), the Seller may,
no later than the date by which such repurchase by the Seller would otherwise be
required, cause to be registered or credited in the book-entry records of the
Federal Reserve Bank of Boston, PTC or DTC, as applicable, in the name or for
the account of the Trustee a Substitute Pooled Certificate or Substitute
Treasury Security, as the case may be, accompanied by an Officer's Certificate
of the Seller identifying such Substitute Pooled Certificate or Substitute
Treasury Security, as the case may be, and confirming that it conforms to the
requirements set forth in the definition of "Substitute Pooled Certificate" or
"Substitute Treasury Security," as the case may be; provided, however, that
substitution pursuant to this Section 2.04 in lieu of repurchase shall not be
permitted after the termination of the 90 day period beginning on the Closing
Date. Upon receipt of such Officer's Certificate and the written confirmation
of such transfer, such Substitute Pooled Certificate or Substitute Treasury
Security, as the case may be, shall thereafter be deemed to be a Pooled
Certificate or Treasury Security hereunder. In the event of such a
substitution, payments received on the Substitute Pooled Certificate or
Substitute Treasury Security, as the case may be, for the month in which the
substitution occurs shall be the property of the Seller and payments received on
the Deleted Pooled Certificate or Deleted Treasury Security, as the case may be,
during such month shall be the property of the Trust Fund. Upon receipt of the
foregoing with respect to the Substitute Pooled Certificate or Substitute
Treasury Security, as the case may be, the Trustee shall release to the Seller
and shall execute and deliver all instruments of transfer or assignment, without
recourse, in form as provided to it as are necessary to vest in the Seller or
its designee title to and rights under the related Deleted Pooled Certificate or
Deleted Treasury Security, as the case may be, released pursuant to this Section
2.04. The Seller shall deliver the documents related to the Substitute Pooled
Certificate in accordance with the provisions of Section 2.02. The
representations and warranties set forth in 2.03(a) concerning the Pooled
Certificates or Treasury Securities, as the case may be, shall be deemed to have
been made by the Seller with respect to each Substitute Pooled Certificate or
Substitute Treasury Security, as the case may be, as of the date of acceptance
of such Substitute Pooled Certificate or Substitute Treasury Security, as the
case may be, by the Trustee. On the date of substitution, the Trustee shall (i)
amend Schedule A hereto, to reflect such substitution and shall provide a copy
of the amended Schedule A to the Seller and the Rating Agencies and (ii) provide
written acknowledgment to the Seller of the transfer and assignment to it of the
related Substitute Pooled Certificate or Substitute Treasury Security, as the
case may be, in good faith and without notice of any adverse claim, and the
assignment to it of all other related assets to be included in the Trust Fund.
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ARTICLE III
ADMINISTRATION OF THE POOLED CERTIFICATES AND TREASURY SECURITIES;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01. Administration of the Trust Fund and the
Pooled Certificates.
If at any time the Trustee, as a holder of a Pooled
Certificate, is requested in writing in such capacity, whether by a
Certificateholder, a holder of a certificate of an Underlying Series or a party
to the related Underlying Agreement or any other Person, to take any action or
to give any consent, approval or waiver, including, without limitation, in
connection with an amendment of any Underlying Agreement, the Trustee shall
promptly notify all of the Certificateholders and the Seller of such request
and of its planned course of action with respect thereto and shall, in its
capacity as a holder of Pooled Certificates, take such action in connection
with the exercise and/or enforcement of any rights and/or remedies available to
it in such capacity with respect to such request, as the Majority
Certificateholders shall direct in writing. The Trustee shall promptly furnish
to the Seller and, upon the written request of a Certificateholder, such
Certificateholder, all notices, statements, reports or other information that
it receives as holder of the Pooled Certificates.
Section 3.02. Collection of Monies.
(a) In connection with its receipt of any distribution on
the Pooled Certificates on any Pooled Certificate Distribution Date (or such
later date on which the Trustee shall receive the related Pooled Certificate
Distribution Date Information), the Trustee shall review the related Pooled
Certificate Distribution Date Information and shall confirm that the aggregate
amount of such distribution received by the Trustee is consistent with such
information (it being understood that the Trustee shall be entitled to rely on
the accuracy and correctness of such information).
(b) If the Trustee receives a Notice of Final
Distribution in respect of any of the Pooled Certificates, the Trustee shall
present and surrender any related Pooled Certificates which are in certificated
form for final payment thereon in accordance with the terms and conditions of
the related Underlying Agreement and such notice. The Trustee shall promptly
deposit in the Asset Proceeds Account the final distribution received by the
Trustee upon presentation and surrender of such Pooled Certificates for
distribution in accordance with Section 3.05 hereof on the next succeeding
Distribution Date.
Section 3.03. Establishment of Asset Proceeds Account;
Deposits Therein.
(a) The Trustee, for the benefit of the
Certificateholders, shall establish and maintain one or more interest bearing
trust accounts (collectively, the "Asset Proceeds Account"), each of which
shall be an Eligible Account, entitled "State Street Bank and Trust Company, as
trustee for the registered holders of Fund America Investment Corporation II
Pass-
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Through Certificates, Series 1998-A, Asset Proceeds Account," held in trust by
the Trustee for the benefit of the Certificateholders. The Trustee shall cause
all distributions received on the Pooled Certificates and all payments received
on the Treasury Securities by the Trustee in its capacity as holder of the
Pooled Certificates and Treasury Securities, from whatever source, and all
amounts received by it representing payment of a Repurchase Price pursuant to
Section 2.03(c) and 7.01(a)(i), subsequent to the Closing Date to be deposited
directly into the Asset Proceeds Account. The Asset Proceeds Account is
initially located at the Trustee. The Trustee shall give notice to the Seller
and to Certificateholders of any new location of the Asset Proceeds Account
prior to any change thereof.
(b) In the event that payments in respect of the Pooled
Certificates and Treasury Securities are received by the Trustee prior to the
related Distribution Date, the Trustee may invest such funds deposited in the
Asset Proceeds Account in one or more Permitted Investments held in the name of
the Trustee and shall receive as compensation, in addition to the Trustee Fee,
any interest or investment income earned on such Permitted Investments selected
by the Trustee, which may be withdrawn by the Trustee on each Distribution Date
and shall not constitute Available Funds. Notwithstanding the foregoing, no
such Permitted Investment may mature later than the day before such related
Distribution Date (unless such Permitted Investment is an obligation of the
Trustee, in which case such Permitted Investment may mature on the Distribution
Date) and no such investment shall be sold prior to its maturity date. The
amount of any losses incurred in respect of any such investments shall be
deposited in the Asset Proceeds Account by the Trustee out of its own funds
immediately as realized.
(c) The Seller shall cause all distributions received on
the Pooled Certificates or Treasury Securities by the Seller or any of its
Affiliates after the Closing Date to be deposited directly into the Asset
Proceeds Account.
Section 3.04. Permitted Withdrawals From the Asset Proceeds
Account.
The Trustee may from time to time withdraw funds from the
Asset Proceeds Account for the following purposes (without any particular order
of priority):
(i) to make distributions in the amounts and in
the manner provided for in Section 3.05;
(ii) to pay to the Person entitled thereto any
amount deposited in the Asset Proceeds Account in error;
(iii) to clear and terminate the Asset Proceeds
Account upon the termination of this Agreement; and
(iv) to pay itself, as additional compensation,
the net reinvestment income permitted to be paid to it as
provided in Section 3.03(b) and any amounts to which it is
entitled to be paid pursuant to Section 5.05.
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On each Distribution Date, the Trustee shall withdraw all
funds from the Asset Proceeds Account and shall use such funds withdrawn from
the Asset Proceeds Account only for the purposes described in this Section 3.04
and in Section 3.05.
Section 3.05. Distributions.
(a) On each Distribution Date, the Trustee shall apply
amounts in the Asset Proceeds Account representing Available Funds in the
following manner and order of priority, in each case to the extent of the
remaining Available Funds:
first, from amounts with respect to interest
received on the Pooled Certificates, to the Trustee, to pay
the Trustee Fee;
second, from amounts remaining in the Asset
Proceeds Account the Class 1A Available Distribution to the
Class 1A Certificateholders and the Class 2A Available
Distribution to the Class 2A Certificateholders in the
following manner and order of priority:
(i) The Class 1A Available Distribution shall be
applied as follows:
first, from the Class 1A Available
Distribution, the amount that represents
interest received on the Group 1A
Certificates, to the Class 1A
Certificateholders as interest; and
second, from amounts with respect to
principal received on the Group 1A Pooled
Certificates, the amount that represents
principal received to the Class 1A
Certificateholders as principal.
(ii) The Class 2A Available Distribution shall be
applied as follows:
first, from amounts with respect to principal
received on the Group 2A Pooled Certificates
and funds payable from the Reserve Fund, to
the Class 2A Certificateholders, an amount
equal to the principal received on the Group
2A Pooled Certificates, plus the Pooled
Non-Agency Certificate Reallocation Amount,
if any; provided, however, that on any
Distribution Date on which the aggregate
amount of the Pooled Non-Agency Certificate
Reallocation Amount paid to the
Certificateholders plus the aggregate amount
of principal paid on the Pooled Non-Agency
Certificate exceeds $2,268,817.89, all
principal paid on the Pooled Non-Agency
Certificate otherwise distributable to the
Class 2A Certificateholders on such
Distribution Date shall be distributable
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as interest pursuant to clause second below,
less the amount, if any, by which the
principal amount on the Z Certificate
accrues; and
second, from the remaining Class 2A Available
Distribution, to the Class 2A
Certificateholders as interest.
For accounting purposes, each Distribution Date is deemed to
occur in the same month as the concurrent or immediately preceding Pooled
Certificate Distribution Date.
(b) All distributions made to Certificateholders pursuant
to Section 3.05(a) on each Distribution Date shall be allocated pro rata among
the outstanding Certificates based upon their respective Class Percentage
Interests and, except in the case of the final distribution to the
Certificateholders, shall be made to the Holders of record on the related
Record Date. Distributions to any Certificateholder on any Distribution Date
shall be made by wire transfer of immediately available funds to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have so notified the Trustee in
writing (which wiring instructions may be in the form of a standing order
applicable to all future Distribution Dates) no less than five Business Days
prior to the related Record Date (or, in the case of the initial Distribution
Date, no later than the related Record Date) and is the registered owner of
Certificates with an aggregate initial Security Principal Balance of not less
than $1,000,000, or otherwise by check mailed by first class mail to the
address of such Certificateholder appearing in the Certificate Register. Final
distribution to each Certificateholder will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust
Office or such other location specified in the notice to Certificateholders of
such final distribution.
(c) Notwithstanding any other provision of this
Agreement, the Trustee shall comply with all federal withholding requirements
respecting payments to Certificateholders of interest or, subject to the
receipt of such information with respect to the Pooled Certificates and
Treasury Securities, the accrual of original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event
the Trustee does withhold any amount from payments to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall indicate the
amount withheld to such Certificateholders.
(d) The Trustee may conclusively rely on the Pooled
Certificate Distribution Date Information in making the calculations called for
in this Section 3.05 and in Section 3.06. If the Pooled Certificate
Distribution Date Information is insufficient to make the calculations provided
for in this Section 3.05, the Trustee shall promptly request Freddie Mac, with
respect to the Pooled Freddie Mac Certificate, Fannie Mae, with respect to the
Pooled Freddie Mac Certificates, and the Non-Agency Trustee, with respect to
the Pooled Non-Agency Certificates, to provide sufficient information in
writing, and after receipt of such information the Trustee shall make on the
following Distribution Date any necessary adjustments in the application of
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amounts in the Asset Proceeds Account. If such information is not received
from Freddie Mac or Fannie Mae or the Non-Agency Trustee, the Trustee shall not
be responsible for making any such adjustment.
Section 3.06. Statements to Certificateholders.
On each Distribution Date, the Trustee shall prepare, to the
extent it receives information regarding the distributions on the Pooled
Certificates and Treasury Securities on the Distribution Date, and shall
forward by mail, a statement to each Certificateholder, the Seller and the
Rating Agencies stating:
(i) the Class 1A Available Distribution and the
Class 2A Available Distribution for such Distribution Date;
(ii) the interest distribution amount and the
principal distribution amount for such Distribution Date for
each Class of Certificates and, with respect to each, the
components thereof as described in the definitions of such
terms and as reported in the related Pooled Certificate
Distribution Date Information or other information received by
the Trustee from Freddie Mac, Fannie Mae or the Non-Agency
Trustee pursuant to Section 3.05(d) with respect to the Pooled
Certificates and the portion thereof derived from the Treasury
Securities;
(iii) the Class Principal Balance for each Class of
Certificates before and after applying payments on such
Distribution Date;
(iv) the effective interest rate on each Class of
the Certificates for such Distribution Date;
(v) the outstanding principal and/or notional
amount, as the case may be, immediately prior to and after
taking into account distributions made on such Distribution
Date of, and the current interest rate on, each of the Pooled
Certificates for such Distribution Date;
(vi) the amount of interest received on the Pooled
Non-Agency Certificate used to pay principal to the Class 2A
Certificate in the current month;
(vii) the total amount of interest received on the
Pooled Non-Agency Certificate that has been applied to pay
principal to the Class 2A Certificates;
(viii) the outstanding amount payable at maturity
for the Class 2A Certificates, immediately prior to and after
taking into account distributions made on such Distribution
Date, of each of the Treasury Securities;
(ix) the Original Principal Amount of each Class
of the Certificates and the Original Principal Amount of each
Class of the Certificates as reduced to
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reflect any exchange of the Certificates pursuant to Section
4.05 for a pro rata portion of the Group 1A Pooled
Certificates or Group 2A Pooled Certificates, as the case may
be, and, with respect to the Class 2A Certificates, Treasury
Securities (from which Certificateholders may calculate their
respective Percentage Interests and Class Percentage
Interests); and
(x) the amount of the Trustee Fee for such
Distribution Date.
In the case of the information furnished pursuant to clauses
(ii) and (iii) above, the amounts shall also be expressed as a dollar amount
per $1000 of principal face amount. The Trustee's responsibility for reporting
the above information is limited to the availability, timeliness of receipt of,
and accuracy of the Pooled Certificate Distribution Date Information and any
additional written information received by the Trustee pursuant to Section
3.05(d) with respect to the Pooled Certificates. If the Trustee receives any
such additional information after preparing a statement required by this
Section, the Trustee shall report the related adjustments in a revised
statement prepared after receipt of such information.
In addition, the Trustee promptly will furnish to the Seller,
and upon the written request of a Certificateholder, to such Certificateholder,
copies of any notices, statements, reports or other communications, received by
the Trustee in its capacity as the holder of Pooled Certificates and Treasury
Securities.
On or before March 31st of each calendar year, commencing in
1999, the Trustee shall prepare and deliver by first class mail to the Seller
and to each Person who at any time during the prior calendar year was a
Certificateholder of record a statement containing the information required to
be contained in the regular monthly report to Certificateholders, as set forth
in clauses (ii) and (v) above aggregated for such prior calendar year or in the
case of a Certificateholder, the applicable portion thereof during which such
Person was a Certificateholder. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code and
regulations thereunder as from time to time are in force.
The Trustee shall be responsible for preparing, at its own
expense, signing and filing, on behalf of the Trust Fund, federal income tax
and information returns with the Internal Revenue Service ("IRS") and
Massachusetts income tax returns and the returns of any other state taxing
authority the necessity of filing of which shall have been confirmed to the
Trustee in writing either by the delivery of an Opinion of Counsel to such
effect or by the delivery to the Trustee of a written notification to such
effect by the taxing authority of any such state. The Seller shall provide the
Trustee within 10 days of the Closing Date all information deemed necessary by
the Trustee to fulfill its obligations under this paragraph. The Trustee shall
furnish to each Certificateholder at the time required by law such information
reports or returns as are required by applicable federal, state or local law
with respect to the Trust Fund to enable Certificateholders to prepare their
tax returns and will furnish comparable information to the IRS and other taxing
authorities as and when required by law to do so.
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The Trustee shall be responsible for preparing, at its own
expense, signing and filing, on behalf of the Trust Fund, all filings with the
Certificates and Exchange Commission required to be made on behalf of the Trust
Fund.
Section 3.07. Access to Certain Documentation and
Information.
The Trustee shall provide to the Seller access to all reports,
documents and records maintained by the Trustee in respect of its duties
hereunder, such access being afforded without charge but only upon three
Business Days' written request and during normal business hours at offices
designated by the Trustee.
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates.
(a) The Depository, the Seller and the Trustee have
entered into a letter agreement dated as of April 30, 1998 (the "Depository
Agreement"). Except as provided in Subsection 4.01(b), the Certificates shall
at all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of such Certificates may not be transferred by
the Trustee except to a successor to the Depository; (ii) ownership and
transfers of registration of such Certificates on the books of the Depository
shall be governed by applicable rules established by the Depository; (iii) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (iv) the Trustee shall deal with the Depository as
representative of the Security Owners for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Security Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
All transfers by Security Owners of Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Security Owners. Each
Depository Participant shall only transfer Certificates of Security Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository, the Trustee shall request that the Depository
notify all Security Owners of the
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occurrence of any such event and of the availability of definitive, fully
registered Certificates (the "Definitive Certificates") to Security Owners
requesting the same. Upon surrender to the Trustee of the Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Seller nor the 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.
(c) The Certificates shall be substantially in the forms
set forth in Exhibit A and Exhibit B hereto. The Certificates shall be
executed by manual or facsimile signature on behalf of the Trustee in its
capacity as trustee hereunder by an authorized officer. Certificates bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Trustee shall be entitled to all benefits under this
Agreement, subject to the following sentence, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there appears
on such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Certificate Registrar by manual signature,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(d) The Certificates will be registered as a single Class
1A Certificate and a single Class 2A Certificate held by a nominee of the
Depository, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of $25,000 and
increments of $1 in excess thereof, except that (i) one Class 1A Certificate
may be issued in a different amount so that the sum of the denominations of all
outstanding Class 1A Certificates shall equal the Original Class 1A Balance and
(ii) one Class 2A Certificate may be issued in a different amount so that the
sum of the denominations of all Class 2A Certificates shall equal the Original
Class 2A Balance.
(e) If the Trust is terminated pursuant to Section
7.01(a)(iii), the book-entry system through the Depository shall be terminated
by the Seller and the Trustee and the Trustee shall request that the Depository
notify the applicable Security Owners of the occurrence of such event and that,
following the Final Distribution Date, the applicable Security Owners as of the
Record Date for the Final Distribution Date will be required to hold their pro
rata portion of the Remaining Pooled Certificate in the book-entry records of
the Federal Reserve Banks, PTC or DTC, as applicable, and that the Trustee will
not release any further distributions in respect of the Remaining Pooled
Certificate to a Security Owner until such Security Owner or the Depository has
provided the Trustee with sufficient information to transfer such Security
Owner's pro rata portion of the Remaining Pooled Certificate in the book-entry
records of the Federal Reserve Banks, PTC or DTC, as applicable, from the
Trustee to such Security Owner.
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Section 4.02. Registration of Transfer and Exchange of
Certificates.
(a) At all times during the term of this Agreement, there
shall be maintained at the office of a registrar (the "Certificate Registrar")
a register (the "Certificate Register") in which, subject to such reasonable
regulations as the Certificate Registrar may prescribe, the Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee is initially
appointed (and hereby agrees to act in accordance with the terms hereof) as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided. For so long as the Trustee
acts as Certificate Registrar, its Corporate Trust Office shall constitute the
offices of the Certificate Registrar maintained for such purposes. The
Certificate Registrar may appoint, by a written instrument delivered to the
Seller, any other bank or trust company in New York to act as an additional or
co-Certificate Registrar under such conditions as the Certificate Registrar may
prescribe, provided that the predecessor Certificate Registrar shall not be
relieved of any of its duties or responsibilities hereunder by reason of such
appointment. If the Trustee resigns or is removed in accordance with the terms
hereof, the successor trustee shall immediately succeed to its predecessor's
duties as Certificate Registrar. The Seller and the Trustee shall have the
right to inspect the Certificate Register or to obtain a copy thereof at all
reasonable times, and to rely conclusively upon a certificate of the
Certificate Registrar as to the information set forth in the Certificate
Register.
Every Certificateholder agrees with the Certificate Registrar
and the Trustee that neither the Certificate Registrar, nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
(b) Subject to the preceding subsections, upon surrender
for registration of transfer of any Certificate at the offices of the
Certificate Registrar maintained for such purpose, the Trustee shall execute
and the Certificate Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of the
same Class and of a like aggregate Class Percentage Interest.
(c) At the option of any Holder, its Certificates may be
exchanged for other Certificates of the same Class and of authorized
denominations of a like aggregate Class Percentage Interest, upon surrender of
the Certificates to be exchanged at the offices of the Certificate Registrar
maintained for such purpose. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute and the Certificate Registrar shall
authenticate and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive.
(d) Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing.
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(e) No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(f) All Certificates surrendered for transfer and
exchange shall be destroyed by the Certificate Registrar without liability on
its part.
(g) No transfer of a Certificate may be made to any Plan
Investor unless an exemption granted by the Department of Labor applies to the
acquisition, holding or transfer of such Certificate. Each purchaser of a
Certificate, by virtue of its purchase of such Certificate, will be deemed to
have represented either that (i) it is not a Plan Investor or (ii) such an
exemption exists which exempts the acquisition, holding or transfer of a
Certificate by such purchaser from the prohibited transaction rules of ERISA
and the related excise tax provisions of the Code.
Section 4.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) (except in the case of a mutilated Certificate) there is
delivered to the Trustee and the Certificate Registrar such agreement, security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto. Any duplicate Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 4.04. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Seller, the Trustee, the Certificate Registrar and any agent of
the Seller, the Trustee or the Certificate Registrar may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 3.05 and for all
other purposes whatsoever, and neither the Seller, the Trustee, the Certificate
Registrar nor any agent of the Seller, the Trustee or the Certificate Registrar
shall be affected by notice to the contrary.
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Section 4.05. Exchange of Certificates.
(a) Beginning on the Distribution Date in May 1999 and on
any Distribution Date thereafter, any Holder or Security Owner holding not less
than 10% of the Original Class 1A Balance or 10% of the Original Class 2A
Balance, in each case, as of the Closing Date shall have the option to exchange
not less than 10% of the outstanding principal amount of the Certificates for a
pro rata portion of each of the Group 1A Pooled Certificates or the Group 2A
Pooled Certificates, respectively, and, with respect to the Class 2A
Certificates, Treasury Securities.
(b) Holders or Security Owners may exercise the option
set forth in Section 4.05(a) by delivering an Option Exercise Notice to the
Trustee, accompanied by the Option Exercise Fee, at least five Business Days
prior to the proposed Exchange Date, which must be a Business Day. An Option
Exercise Notice may not be revoked after delivery to the Trustee. The Trustee
may refuse to accept, or give effect to, any Option Exercise Notice that is
incomplete or defective, in its sole judgment, or not accompanied by the Option
Exercise Fee.
(c) The Trustee shall be entitled to charge a fee (the
"Option Exercise Fee"), as compensation, equal to the greater of (i) $500 and
(ii) 0.02% of the outstanding principal amount of the Certificates to be
exchanged for the Group 1A Pooled Certificates or the Group 2A Pooled
Certificates, as the case may be, and, with respect to the Class 2A
Certificates, Treasury Securities.
(d) On the Exchange Date, the Trustee shall cause the
transfer of such Holder's or Security Owner's pro rata portion of each of the
Group 1A Pooled Certificates or the Group 2A Pooled Certificates, as the case
may be, and, with respect to the Class 2A Certificates, Treasury Securities in
the book-entry records of the Federal Reserve Banks, PTC and/or the Depository,
as applicable, from the Trustee to such Holder or Certificate Owner.
ARTICLE V
THE TRUSTEE
Section 5.01. Duties of Trustee.
(a) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement and the
Underlying Agreements; provided, however, that the Trustee shall not be
responsible to determine, confirm or recalculate the accuracy or content of any
such resolution, certificate or other instrument furnished to it pursuant to
this Agreement. The Trustee shall notify the Certificateholders and the Rating
Agencies of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting of the party required to deliver
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the same, does not receive satisfactorily corrected documents or a satisfactory
explanation regarding any such nonconformities.
The Trustee shall forward or cause to be forwarded to
the Person entitled to receive the same in a timely fashion the notices,
reports and statements required to be forwarded by the Trustee pursuant to
Sections 3.01, 3.03, 3.06 and 7.01.
(b) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) The duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished by the
Seller to the Trustee and which on their face, do not
contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable
for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) The Trustee shall not be personally liable
with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of
the Majority Certificateholders in accordance with the terms
of this Agreement, as to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement;
(iv) No provision in this Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur
any personal financial liability in the performance of any of
its duties as Trustee hereunder, or in the exercise of any of
its rights or powers, if the Trustee shall have reasonable
grounds for believing that repayment of funds or adequate
indemnity against such risk or liability is not reasonably
assured to it; provided that this provision shall not be
deemed to abrogate the responsibilities undertaken by the
Trustee hereunder to perform routine administrative duties in
accordance with the terms hereof; and
(v) The Trustee shall not be deemed to have
notice of any fact or circumstance upon the occurrence of
which it may be required to take action
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hereunder unless a Responsible Officer of the Trustee has
actual knowledge of such event, fact or circumstance or
unless written notice of any such event is received by the
Trustee at its Corporate Trust Office.
Section 5.02. Certain Matters Affecting the Trustee
Except as otherwise provided in Section 5.01:
(i) The Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(iv) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to the extent reasonable under the circumstances to examine
the books, records and premises of such Person, personally or by agent
or attorney;
(v) The Trustee shall not be personally liable
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement; and
(vi) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and shall not be liable for the default
or misconduct of any such agents or attorneys if selected with
reasonable care.
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Section 5.03. Trustee Not Liable for Certificates or Pooled
Certificates or Treasury Securities.
The recitals contained herein and in the Certificates (other
than the statements attributed to, and the representations and warranties of,
the Trustee in Article II and the signature of the Trustee on each Certificate)
shall be taken as the statements of the Seller, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Agreement (other than as specifically
set forth in Section 2.03(b)) or of the Certificates (other than that the
Certificates shall be duly and validly executed by it as Trustee and
authenticated by it as Certificate Registrar) or of the Pooled Certificates or
the Treasury Securities, the Underlying Agreements or any related document.
Except as otherwise provided herein, the Trustee shall not be accountable for
the use or application by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Seller in respect of the assignment and delivery of the Pooled
Certificates or the Treasury Securities.
Section 5.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
Section 5.05. Trustee's Fees; Indemnification of the
Trustee.
(a) The Trustee shall withdraw the Trustee Fee, as
compensation, from the Asset Proceeds Account, as provided in 3.05 hereof.
(b) Subject to the provisions of this paragraph, the
Trustee and any director, officer, employee or agent of the Trustee shall be
entitled to be indemnified and held harmless by the Trust Fund against any
loss, liability or expense (including, without limitation, costs and expenses
of litigation, and of investigation, counsel fees and expenses, damages,
judgments, amounts paid in settlement and out-of-pocket expenses) arising out
of, or incurred in connection with, this Agreement, the Certificates, the
exercise and performance of any of the powers and duties of the Trustee
hereunder; provided that neither the Trustee nor any of the other above
specified Persons shall be entitled to indemnification pursuant to this Section
5.05(b) for (i) allocable overhead, (ii) expenses or disbursements incurred or
made by or on behalf of the Trustee in the normal course of the Trustee's
performing routine administrative duties in accordance with any of the
provisions hereof, (iii) any expense or liability specifically required to be
borne out of the Trustee's own funds pursuant to the terms hereof, or (iv) any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of the Trustee's obligations and duties.
The provisions of this Section 5.05(b) shall survive
any resignation or removal of the Trustee and appointment of a successor
trustee.
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Section 5.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a trust company or
banking institution organized and doing business under the laws of the United
States of America or any State thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital, surplus and undivided
profits of at least $50,000,000 (or shall be a member of a bank holding system,
the combined capital and surplus of which is at least $50,000,000) and subject
to supervision or examination by federal or state authority. If such trust
company or banking institution publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section the combined
capital, surplus and undivided profits of such trust company or banking
institution shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Trustee shall at all
times meet the requirements for a trustee under Section 26(a)(1) of the
Investment Company Act and shall in no event be an Affiliate of the Seller or
of any Person involved in the organization or operation of the Seller. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 5.07.
Section 5.07. Resignation and Removal of the Trustee.
(a) The Trustee may upon 30 days' notice resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Seller and the Certificateholders. Upon receiving such notice of
resignation, the Seller shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 5.06 and shall fail to resign
after written request therefor by the Seller or the Majority
Certificateholders, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Seller may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee.
(c) Majority Certificateholders may at any time remove
the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
the Seller, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to
the Certificateholders by
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the Seller. All reasonable out-of-pocket costs and expenses incurred in
connection with such removal and replacement of the Trustee, including without
limitation, reasonable attorneys fees and expenses, shall be borne by the party
requesting such action.
(d) Notwithstanding anything to the contrary contained
herein, (i) any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective only upon acceptance of appointment by the successor trustee
as provided in Section 5.08 and (ii) no entity may be appointed as a successor
trustee if such appointment would result in a withdrawal or downgrading of any
then current rating assigned to the Certificates by a Rating Agency.
Section 5.08. Successor Trustee.
(a) Any successor trustee appointed as provided in
Section 5.07 shall execute, acknowledge and deliver to the Seller, the
Certificateholders and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and the appointment of such
successor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver to the successor trustee the Pooled Certificates and Treasury
Securities and related documents and statements held by it hereunder, and the
Seller, the Trustee and the predecessor trustee shall execute and deliver such
instruments and do such other things as may be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 5.06.
(c) Upon acceptance of appointment by a successor trustee
as provided in this Section, the Seller shall mail notice of the succession of
such trustee hereunder to all Certificateholders at their addresses as shown in
the Certificate Register. If the Seller fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Seller.
Section 5.09. Merger or Consolidation of Trustee.
Any trust company or banking institution into which the
Trustee may be merged or converted or with which it may be consolidated or any
trust company or banking institution resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any trust company or
banking institution succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such trust company or banking institution shall be eligible under the
provisions of Section 5.06, without the
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execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. The Trustee
shall mail notice of any such merger or consolidation to the Seller and to the
Certificateholders at their address as shown in the Certificate Register.
Section 5.10. Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions hereof, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing the same may at the time
be located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 5.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
5.06 hereunder; provided, that if the co-trustee or separate trustee does not
meet such eligibility standards, the Trustee shall remain liable for its
actions hereunder, and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 5.08
hereof.
(b) In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 5.10 all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed jointly by the Trustee and such separate
trustee or co-trustee, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article V. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any
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separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 5.11. Massachusetts Filings.
The Trustee shall make any filings required under
Massachusetts General laws, Chapter 182, Sections 2 and 12, the costs of which,
if any, shall be reimbursed as part of the administrative expenses of the Trust
Fund described in Section 5.05 hereof.
ARTICLE VI
THE SELLER
Section 6.01. Liability of the Seller.
The Seller shall be liable in accordance herewith only to the
extent of the respective obligations specifically imposed upon and undertaken
by the Seller herein.
Section 6.02. Merger, Consolidation or Conversion of the
Seller.
Subject to the following paragraph, the Seller will keep in
full effect its existence, rights and franchises as a corporation under the
laws of the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and the Certificates and to perform its duties
under this Agreement.
The Seller may be merged or consolidated with or into any
Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of the Seller and
Others.
Neither the Seller nor any of the directors, officers,
employees or agents of the Seller shall be under any liability to the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller
or any such other Person against any breach of a representation or warranty
made herein, or against any expense or liability specifically required to be
borne thereby pursuant to the terms hereof, or
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against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of obligations or
duties hereunder, or by reason of reckless disregard of such obligations and
duties. The Seller and any director, officer, employee or agent of the Seller
may rely in good faith on any document of any kind which, prima facie, is
properly executed and submitted by any Person respecting any matters arising
hereunder. Provided that such action is not related to its representations
made in or its duties under this Agreement, the Seller shall not be under any
obligation to appear in, prosecute or defend any action or proceeding unless
such action in its opinion does not involve it in any expense or liability.
ARTICLE VII
TERMINATION
Section 7.01. Termination.
(a) The respective obligations and responsibilities of the
Seller and the Trustee created hereby with respect to the Certificates (other
than the obligation to make certain payments and to send certain notices to
Certificateholders as hereinafter set forth) shall terminate upon the earlier
of (i) the repurchase by or at the direction of the Seller on any Distribution
Date of all Pooled Certificates and Treasury Securities at the Repurchase Price
therefor as of the date of such repurchase; or (ii) with respect to the Class
1A Certificates, either (A) the repurchase by or at the direction of the Seller
or its designee on any Distribution Date of all of the Group 1A Pooled
Certificates at the Repurchase Price therefor as of the date of such repurchase
or (B) on the Distribution Date following the first Distribution Date on which
the Group 1A Pooled Certificate principal balance or notional principal balance
of all or either of the Group 1A Pooled Certificates has been reduced to zero;
(iii) with respect to the Class 2A Certificates, either (A) the repurchase by
or at the direction of the Seller or its designee on any Distribution Date of
all of the Group 2A Pooled Certificates and the Treasury Securities at the
Repurchase Price therefor as of the date of such repurchase or (B) on the
Distribution Date following the first Distribution Date on which the Group 2A
Pooled Certificate principal balance or notional principal balance of all but
one of the Group 2A Pooled Certificate has been reduced to zero; (iv) the
payment (or provision for payment) to the Class 1A and Class 2A
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them hereunder on the Final Distribution Date following
receipt of the final distribution made on the Group 1A Pooled Certificates and
the Group 2A Pooled Certificates and Treasury Securities, respectively; or
provided, however, that in no event shall the trust or sub-trust created hereby
continue beyond the expiration of twenty-one years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James's, living on the date hereof. The
right of the Seller or its designee to repurchase all Pooled Certificates and
Treasury Securities pursuant to Section 7.01(a)(i) shall be exercisable only on
or after the date on which the aggregate Pooled Certificate Principal Balance
and the amount of funds payable as principal from the Reserve Fund has declined
to 10% or less of the sum of (i) the initial aggregate Pooled Certificate
Principal Balance and (ii) the amount of funds payable as principal from the
Reserve Fund on the
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<PAGE> 43
Closing Date, as such sum is reduced by the original face amount of any
Certificates exchanged for a pro rata portion of the Pooled Certificates and,
with respect to the Class 2A Certificates, the Treasury Securities. The right
of the Seller or its designee to repurchase the Group 1A Pooled Certificates
and the Group 2A Pooled Certificates and the Treasury Securities pursuant to
Sections 7.01(a) (ii) (A) and 7.01 (a) (iii) (A) shall be exercisable only if
(i) in the case of a repurchase of the Group 1A Pooled Certificates, the
aggregate Pooled Certificate Principal Balance of the Group 1A Pooled
Certificates has declined to 10% or less of the initial aggregate Group 1A
Pooled Certificate Principal Balance and (ii) in the case of a repurchase of
the Group 2A Pooled Certificates, the aggregate Pooled Certificate Principal
Balance of the Group 2A Pooled Certificates plus the amount of funds payable as
principal from the Reserve Fund has declined to 10% or less of the initial
aggregate Group 2A Pooled Certificate Principal Balance plus the amount of
funds payable as principal from the Reserve Fund on the Closing Date, in both
cases as reduced by the original face amount of any Class 1A or Class 2A
Certificates exchanged pursuant to Section 4.05 for a pro rata portion of the
Group 1A Pooled Certificates or the Group 2A Pooled Certificates and Treasury
Securities, respectively.
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<PAGE> 44
(b) The Trustee shall give a Notice of Final Distribution
to the Certificateholders of the affected Class or Classes, the Seller and the
Rating Agencies as soon as practicable prior to the Distribution Date on which
the Trustee anticipates that the final distribution will be made on the
Certificates, which notice shall:
(i) specify the Distribution Date on which the
final distribution is anticipated to be made
to Certificateholders;
(ii) specify the amount of any such final
distribution, if known; and
(iii) state that the final distribution to
Certificateholders will be made only upon
presentment and surrender of Certificates at
the office of the Trustee therein specified.
If the Trust Fund (or a portion thereof) is not terminated pursuant to Section
7.01(a) on the anticipated Distribution Date for any reason, the Trustee shall
promptly mail notice thereof to each Certificateholder, the Seller and to the
Rating Agencies.
(c) Upon presentment and surrender of the Certificates by
the Certificateholders on the applicable Final Distribution Date, the Trustee
shall distribute to the Certificateholders of the applicable Class the amounts
otherwise distributable on such Distribution Date pursuant to Section 3.05(a).
Any funds not distributed on the Final Distribution Date because of the failure
of any Certificateholders to tender their Certificates shall be set aside and
held in trust for the account of the appropriate non-tendering
Certificateholders, whereupon the Trust Fund shall terminate. If any
Certificates as to which Notice of Final Distribution has been given pursuant
to this Section 7.01 shall not have been surrendered for cancellation within
six months after the time specified in such notice, the Trustee shall mail a
second notice to the remaining Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive, from such funds held, the final distribution
with respect thereto. If within one year after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall
directly or through an agent, take reasonable steps to contact the remaining
Certificateholders concerning surrender of their Certificates. If within two
years after the second notice any Certificates shall not have been surrendered
for cancellation, the Trustee shall segregate all amounts distributable to the
Holders thereof and shall thereafter hold such amounts for the benefit of such
Holders. No interest shall accrue or be payable to any Certificateholder on
any amount held as a result of such Certificateholder's failure to surrender
its Certificate(s) for final payment thereof in accordance with this Section
7.01. The costs and expenses of maintaining such funds and of contacting
Certificateholders shall be paid out of the assets which remain held.
(d) If the option by the Seller or its designee to
repurchase or cause the repurchase of Pooled Certificates and Treasury
Securities, under Section 7.01(a)(i), (ii) (A) or (iii) (A) above is exercised,
the Seller and/or its designee shall deposit in the Asset Proceeds
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<PAGE> 45
Account, by 10:00 a.m., New York City time, on the applicable Distribution
Date, an amount equal to the Repurchase Price for the Pooled Certificates and
Treasury Securities, to be repurchased. Upon the presentation and surrender of
the Certificates, the Trustee, as paying agent, shall distribute the Repurchase
Price as follows to the extent of such amount:
first, to pay the Trustee Fee to the Trustee and any
other amounts then due and owing to the Trustee
pursuant to Section 5.05(b);
second, the amount otherwise distributable to the
affected Class or Classes of Certificateholders on
such Distribution Date but for such repurchase;
third, to the Class 1A and Class 2B
Certificateholders, as applicable, as distributions
of interest, the interest portion included in the
Repurchase Price in respect of attributable to the
Group 1A and Group2A Pooled Certificates to be
repurchased;
fourth, to the Class 1A and Class 2A
Certificateholders, as applicable, as distributions
of principal, the principal portion included in the
Repurchase Price attributable to the Class 1A Pooled
Certificates and the Class 2A Pooled Certificates and
the Treasury Securities to be repurchased, up to the
outstanding Class 1A Balance and the Class 2A
Balance, as the case may be; and
fifth, to the Class 1A and Class 2A
Certificateholders as applicable, as additional
distributions of interest, the balance, if any, of
such Repurchase Price still remaining attributable to
the Class 1A Pooled Certificates and the Class 2A
Pooled Certificates and the Treasury Securities to be
repurchased.
Upon deposit of the required Repurchase Price and delivery to the Trustee of an
Officer's Certificate from the Seller certifying that such deposit of the
Repurchase Price in the Asset Proceeds Account has been made, following such
final Distribution Date, the Trustee shall promptly release to the Seller
and/or its designee, the Pooled Certificates and Treasury Securities, subject
to the Trustee's obligation to hold any amounts payable to Certificateholders
in trust without interest pending final distributions pursuant to Section
7.01(c).
(e) If the principal balance or notional principal
balance of all but one of the Group 1A or Group 2A Pooled Certificates has been
reduced to zero as provided in Section 7.01(a)(ii)(B) or (iii)(B), the Trustee
shall arrange for the distribution in kind based on their respective Class
Percentage Interests to the Class 1A Certificateholders or the Class 2A
Certificateholders, as applicable, of the remaining Group 1A or Group 2A Pooled
Certificate and, if applicable, any remaining Treasury Securities on the
Distribution Date following the first Distribution Date on which the principal
balance of all but such remaining Pooled Certificate has been reduced to zero.
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<PAGE> 46
ARTICLE VIII
TAX PROVISIONS
Section 8.01 Trust Administration. For federal income tax
purposes, the Trust Fund formed pursuant to this Agreement will be classified
as a grantor trust under Subpart E, Part 1 of Subchapter J of the Code and not
as an association taxable as a corporation. No REMIC election has been or will
be made with respect to the Trust Fund.
(a) The Seller, the Trustee, and the Certificateholders
shall take any action or cause the Trust Fund to take any action necessary to
create and maintain the status of the Trust Fund as a grantor trust for federal
income tax purposes and shall assist each other as necessary to create or
maintain such status.
(b) The Seller, the Trustee, and the Certificateholders
shall not take any action or cause the Trust Fund to take any action that could
endanger the status of the Trust Fund as a grantor trust for federal income tax
purposes, unless the Trustee and the Seller have received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that
the contemplated action will not endanger such status.
(c) The Trustee or its designee may employ counsel,
accountants and professional assistance to aid in the performance of the
accounting necessary for federal and state tax reporting and compliance or the
performance of the above powers and duties. The expense incurred by the
Trustee or its designee in connection with the foregoing shall be reimbursed as
part of the administrative expenses of the Trust Fund described in Section 5.05
hereof.
Section 8.02 Prohibited Activities.
(a) Neither the Trustee nor the Seller shall consent to,
approve or enter into any modification of any term of any of the Pooled
Certificates or the Treasury Securities (including, but not limited to, the
interest rate, the principal balance, the amortization schedule, the remaining
term to maturity, or any other term affecting the amount or timing of payments
on the Pooled Certificates or the Treasury Securities) unless the Trustee has
received an Opinion of Counsel (as the expense of the party seeking to modify
any of the Pooled Certificates or the Treasury Securities) to the effect that
such modification would not be treated as giving rise to a new debt instrument
for federal income tax purposes.
(b) The Trustee shall not sell or dispose of the Pooled
Certificates or the Treasury Securities (except in a disposition pursuant to
(i) the default of any Pooled Certificate or Treasury Security, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of the Trust Fund (or
portion thereof) as set forth in Section 7.01 hereof, or (iv) a disposition of
a Pooled Certificate or Treasury Security pursuant to Section 2.03(c) or 2.04
hereof), nor acquire any asset for the Trust Fund unless it has received an
Opinion of Counsel that such sale, disposition or
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acquisition will not affect adversely the status of the Trust Fund as a grantor
trust under the Code.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment.
(a) This Agreement may be amended from time to time by
the Seller and the Trustee, without the prior consent of any Certificateholder:
(i) to cure any ambiguity;
(ii) to correct or supplement any provisions
herein which may be inconsistent with any other provisions
herein;
(iii) to make any other provisions with respect to
matters or questions arising under this Agreement which shall
not be materially inconsistent with the existing provisions of
this Agreement; and
(iv) to make such modifications as may be
permitted or required hereunder in connection with a
repurchase or substitution of a Pooled Certificate or Treasury
Security pursuant to Section 2.03(c) or 2.04 hereof.
provided that such amendment shall not, as evidenced by an Opinion of Counsel
(at the expense of the party seeking such amendment) delivered to the Trustee
(the expense of which shall be paid for by the Seller), adversely affect in any
material respect the interests of any Certificateholder. Counsel shall be
entitled to rely on a letter from each Rating Agency that the modification will
not cause the then-existing rating of the Certificates to be downgraded as
conclusive evidence that the modification does not adversely affect in any
material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time
by the Seller and the Trustee with the prior written consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay
the timing of, payments which are required to be distributed
on any Certificate of any Class without the consent of the
Holder of such Certificate;
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<PAGE> 48
(ii) modify the provisions of this Section 9.01
without the consent of the Holders of all Certificates; or
(iii) be made unless and until the Trustee shall
have received an Opinion of Counsel (at the expense of the
party seeking such amendment but in no event at the expense of
the Trust Fund) to the effect that such amendment shall not
adversely affect the status of the Trust as a grantor trust
for federal income tax purposes.
(c) Promptly after the execution of any such amendment
the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder. It shall not be necessary for the consent
of Certificateholders under this Section 9.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
Section 9.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 9.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder
shall not operate to terminate this Agreement or the Trust Fund, nor entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of the Trust Fund, nor otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote
(except as expressly provided for herein) or in any manner otherwise control
the operation and management of the Trust Fund, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue
of any provision of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless
such Holder previously shall have given to the Trustee and the Seller a written
notice of default hereunder, and of the continuance thereof, as herein-before
provided, and unless the Majority Certificateholders also shall have made
written request upon
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<PAGE> 49
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 30 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. For the prosecution and
enforcement of the rights granted under this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 9.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said state (without reference to the conflicts of law
provisions of such state), and the obligations, rights and remedies of the
parties hereunder and the Certificateholders shall be determined in accordance
with such laws.
Section 9.05. Notices.
All communications provided for or permitted hereunder shall
be in writing and shall be deemed to have been duly given when delivered to:
(a) in the case of the Seller, Fund America Investment Corporation II, Plaza
Tower One, Suite 1200B, 6400 South Fiddler's Green Circle, Englewood, CO 80111,
Attention: Steven B. Chotin, or such other address as may hereafter be
furnished to the Trustee in writing by the Seller; (b) in the case of the
Trustee, State Street Bank and Trust Company, Two International Place, Boston,
Massachusetts 02110, Attention: FAIC 1998-A, or such other address as may
hereafter be furnished to the Seller in writing by the Trustee; (c) in the case
of Moody's, Moody's Investors Service, Inc., 99 Church Street, New York, New
York 10007, Attention: Mortgage Pass-Through Monitoring Group; and (d) in the
case of Fitch IBCA, Inc., One State Street Plaza, 34th Floor, New York, New
York 10004.
Section 9.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 9.07. Successors and Assigns.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders.
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Section 9.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 9.09. Notices to Rating Agencies.
The Trustee shall notify each Rating Agency at such time as it
is otherwise required pursuant to this Agreement to give notice of the
occurrence of any of the events described in clauses (a), (b), (d), or (f)
below or provide a copy to each Rating Agency at such time as otherwise
required to be delivered pursuant to this Agreement of each of the statements
described in clauses (c) and (e) below:
(a) a material change or amendment to this Agreement,
(b) the termination or appointment of a successor
Trustee,
(c) the monthly distribution statement required to be
delivered to the Certificateholders pursuant to
Section 3.06,
(d) the non-conformance of any documents pursuant to
Section 5.01(a),
(e) the Notice of Final Distribution required to be
delivered pursuant to Section 7.01(b), and
(f) a change in the location of the Asset Proceeds
Account.
The Seller shall notify each Rating Agency of any change in
its identity.
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<PAGE> 51
IN WITNESS WHEREOF, the Seller and the Trustee have caused
their names to be signed hereto by their respective duly authorized officers,
all as of the day and year first above written.
FUND AMERICA INVESTORS
CORPORATION II, as Seller
By:
--------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
--------------------------------------
Name:
Title:
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<PAGE> 52
STATE OF _____________)
ss:
COUNTY OF ____________)
On the ___ day of April, 1998 before me, a notary public in
and for said State, personally appeared ________________ known to me to be the
__________________ of Fund America Investors Corporation II, the corporation
that executed the within instrument, 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] Commission Expires:
49
<PAGE> 53
COMMONWEALTH OF MASSACHUSETTS)
: ss:
COUNTY OF __________________ )
On the _____ day of April 1998 before me, a notary public in
and for said State, personally appeared _________________ known to me to be a
_________________ of State Street Bank and Trust Company, trust company that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said trust company, and acknowledged to me that such
trust company 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] Commission Expires:
50
<PAGE> 54
EXHIBIT A
FORM OF CLASS 1A CERTIFICATE
THIS CLASS 1A CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, FUND AMERICA INVESTORS CORPORATION II OR THE TRUSTEE REFERRED TO
BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THE CURRENT PRINCIPAL BALANCE OF THIS CLASS 1A CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CLASS 1A SECURITIES, THE CURRENT PRINCIPAL AMOUNT OF THIS CLASS
1A CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CLASS 1A CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE
BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CLASS 1A CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS 1A SECURITIES
ISSUED ARE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
PASS-THROUGH CERTIFICATES,
NO. 1A-1
SERIES 1998-A
EVIDENCING A BENEFICIAL INTEREST IN A TRUST
CONSISTING PRIMARILY OF THE POOLED CERTIFICATES AND TREASURY SECURITIES (AS
DEFINED IN THE AGREEMENT)
FUND AMERICA INVESTORS CORPORATION II
CUSIP NO. 36076RCG6
<TABLE>
<S> <C> <C> <C> <C>
CLASS : 1A
FIRST DISTRIBUTION DATE : MAY 26, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : JULY 26, 2027 OF THIS CLASS 1A CERTIFICATE
("DENOMINATION") : $23,500,002
APPROXIMATE ORIGINAL CLASS 1A
PRINCIPAL AMOUNT : $23,500,002
PASS-THROUGH RATE: THE EFFECTIVE PER ANNUM INTEREST RATE BORNE BY THE CERTIFICATES DURING THE INTEREST
ACCRUAL PERIOD WITH RESPECT TO A DISTRIBUTION DATE WILL EQUAL A FRACTION, EXPRESSED
AS A PERCENTAGE TRUNCATED AT THE FOURTH DECIMAL PLACE, THE NUMERATOR OF WHICH IS
EQUAL TO THE AGGREGATE AMOUNT IN RESPECT OF INTEREST PAID TO THE CLASS 1A
CERTIFICATEHOLDERS FOR THE RELATED INTEREST ACCRUAL PERIOD MULTIPLIED BY 12, AND THE
DENOMINATOR OF WHICH IS THE PRINCIPAL AMOUNT OF THE CERTIFICATES IMMEDIATELY PRIOR TO
SUCH DISTRIBUTION DATE. UNDER CERTAIN CIRCUMSTANCES, THE PRINCIPAL AMOUNT OF THE
CLASS 1A CERTIFICATES COULD BE PAID IN FULL WHERE INTEREST WOULD REMAIN PAYABLE, IN
WHICH CASE, THE CALCULATION OF THE EFFECTIVE PER ANNUM INTEREST RATE BORNE BY THE
CLASS 1A CERTIFICATES WOULD NOT BE MEANINGFUL.
</TABLE>
THIS CERTIFIES THAT__________________________________________________CEDE & CO.
_______________________________________________________________________________
IS THE REGISTERED OWNER OF THE CLASS PERCENTAGE INTEREST EVIDENCED HEREBY IN THE
BENEFICIAL OWNERSHIP INTEREST OF CERTIFICATES OF THE SAME CLASS AS THIS
CERTIFICATE IN A TRUST (THE "TRUST") CONSISTING PRIMARILY OF A PORTION OF
CERTAIN CLASSES OF SECURITIES DESCRIBED IN THE AGREEMENT (THE "POOLED
CERTIFICATES") SOLD BY FUND AMERICA INVESTORS CORPORATION II ("FAIC"). THE
TRUST WAS CREATED PURSUANT TO THE POOLING AGREEMENT DATED AS OF APRIL 1, 1998
(THE "AGREEMENT"), BETWEEN FAIC, AS SELLER, AND STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE (THE "TRUSTEE"), A SUMMARY OF CERTAIN OF THE PERTINENT
PROVISIONS OF WHICH IS SET FORTH HEREAFTER. TO THE EXTENT NOT DEFINED HEREIN,
CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN THE
AGREEMENT. THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS,
PROVISIONS AND CONDITIONS OF THE AGREEMENT, TO WHICH AGREEMENT THE HOLDER OF
THIS CLASS 1A CERTIFICATE BY VIRTUE OF ITS ACCEPTANCE HEREOF ASSENTS AND BY
WHICH SUCH HOLDER IS BOUND.
INTEREST ON THIS CLASS 1A CERTIFICATE WILL ACCRUE DURING THE ONE MONTH PERIOD
BEGINNING ON THE FIRST DAY AND ENDING ON THE LAST DAY OF THE MONTH PRECEDING THE
MONTH OF THE DISTRIBUTION DATE (AS HEREINAFTER DEFINED) AT A PER ANNUM RATE
EQUAL TO THE PASS-THROUGH RATE AS SET FORTH ABOVE. DISTRIBUTIONS OF PRINCIPAL
AND INTEREST ON THE CLASS 1A CERTIFICATES WITH RESPECT TO A MONTH WILL BE MADE
ON THE FIRST BUSINESS DAY (AS DEFINED HEREIN) AFTER THE 25TH DAY OF EACH MONTH
(EACH, A "DISTRIBUTION DATE") OR, IF SUCH 25TH DAY IS NOT A BUSINESS DAY, THEN
ON THE FIRST BUSINESS DAY AFTER THE FIRST BUSINESS DAY AFTER THE 25TH DAY OF
EACH MONTH. A "BUSINESS DAY" MEANS A DAY OTHER THAN A SATURDAY, A SUNDAY OR A
DAY ON WHICH BANKING INSTITUTIONS IN NEW YORK, NEW YORK OR THE CITY IN WHICH THE
CORPORATE TRUST OFFICE OF THE TRUSTEE IS LOCATED ARE AUTHORIZED OR OBLIGATED BY
LAW OR EXECUTIVE ORDER TO BE CLOSED. DISTRIBUTIONS WILL BE MADE ON EACH
DISTRIBUTION DATE TO HOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON THE LAST
BUSINESS DAY OF THE CALENDAR MONTH PRECEDING THE MONTH IN WHICH SUCH
DISTRIBUTION DATE OCCURS; PROVIDED THAT FOR THIS PURPOSE THE DISTRIBUTION DATE
IS DEEMED TO OCCUR ON THE 25TH OF EACH MONTH, WITHOUT REGARD TO WHETHER SUCH DAY
IS A BUSINESS DAY. THE ASSUMED FINAL DISTRIBUTION DATE IS THE DISTRIBUTION DATE
SET FORTH ABOVE.
DISTRIBUTIONS ON THIS CLASS 1A CERTIFICATE WILL BE MADE BY THE TRUSTEE BY
CHECK MAILED TO THE ADDRESS OF THE PERSON ENTITLED THERETO AS SUCH NAME AND
ADDRESS SHALL APPEAR ON THE CERTIFICATE REGISTER OR, IF SUCH PERSON SO REQUESTS
BY NOTIFYING THE TRUSTEE IN WRITING AS SPECIFIED IN THE AGREEMENT AND IF SUCH
PERSON HOLDS CLASS 1A CERTIFICATES WITH AN INITIAL AGGREGATE CERTIFICATE BALANCE
OF NOT LESS THAN $1,000,000, BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO
THE ACCOUNT SPECIFIED IN WRITING BY SUCH PERSON TO THE TRUSTEE. NOTWITHSTANDING
THE ABOVE, THE FINAL DISTRIBUTION ON THIS CLASS 1A CERTIFICATE WILL BE MADE
AFTER DUE NOTICE BY THE TRUSTEE OF THE PENDENCY OF SUCH DISTRIBUTION AND ONLY
UPON PRESENTATION AND SURRENDER OF THIS CLASS 1A CERTIFICATE AT THE OFFICE OR
AGENCY APPOINTED BY THE TRUSTEE FOR THAT PURPOSE AND DESIGNATED IN SUCH NOTICE.
IN WITNESS WHEREOF, THE TRUSTEE HAS CAUSED THIS CLASS 1A CERTIFICATE TO BE
DULY EXECUTED.
DATED: APRIL 30, 1998
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as Trustee
By:
---------------------------------------------------------
Name:
Title:
THIS IS ONE OF THE CLASS 1A CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
AGREEMENT.
STATE STREET BANK AND TRUST COMPANY, AS CERTIFICATE REGISTRAR
By:
--------------------------------------------------------------
Name:
Title:
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<PAGE> 55
FUND AMERICA INVESTORS CORPORATION II
PASS-THROUGH CERTIFICATES, SERIES 1998-A
<TABLE>
<S> <C>
THIS CLASS 1A CERTIFICATE IS ONE OF A DULY NO SERVICE CHARGE WILL BE MADE TO THE CLASS 1A
AUTHORIZED ISSUE OF PASS-THROUGH CERTIFICATES DESIGNATED AS CERTIFICATEHOLDERS FOR ANY SUCH REGISTRATION OF TRANSFER,
SET FORTH ON THE FACE HEREOF (THE "CERTIFICATES"). THE BUT THE TRUSTEE MAY REQUIRE PAYMENT OF A SUM SUFFICIENT TO
CERTIFICATES, IN THE AGGREGATE, EVIDENCE THE ENTIRE COVER ANY TAX OR OTHER GOVERNMENTAL CHARGE PAYABLE IN
BENEFICIAL OWNERSHIP INTEREST IN THE TRUST FORMED PURSUANT CONNECTION THEREWITH. THE CERTIFICATE REGISTRAR AND THE
TO THE AGREEMENT. TRUSTEE AND ANY AGENT OF ANY OF THEM MAY TREAT THE PERSON
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS IN WHOSE NAME THIS CLASS 1A CERTIFICATE IS REGISTERED AS
CLASS 1A CERTIFICATE, AGREES THAT IT WILL LOOK SOLELY TO THE OWNER HEREOF FOR ALL PURPOSES, AND NEITHER THE
THE TRUST FOR PAYMENT HEREUNDER AND THAT THE TRUSTEE IS NOT CERTIFICATE REGISTRAR, THE TRUSTEE NOR ANY SUCH AGENT SHALL
LIABLE TO THE CERTIFICATEHOLDERS FOR ANY AMOUNT PAYABLE BE AFFECTED BY NOTICE TO THE CONTRARY.
UNDER THIS SECURITY OR THE AGREEMENT OR, EXCEPT AS ANY PURCHASER OF THIS CLASS 1A CERTIFICATE, BY
EXPRESSLY PROVIDED IN THE AGREEMENT, SUBJECT TO ANY VIRTUE OF ITS PURCHASE OF THIS CLASS 1A CERTIFICATE, WILL
LIABILITY UNDER THE AGREEMENT. BE DEEMED TO HAVE REPRESENTED EITHER THAT (I) IT IS NOT A
THIS CLASS 1A CERTIFICATE DOES NOT PURPORT TO PLAN INVESTOR OR (II) AN EXEMPTION GRANTED BY THE
SUMMARIZE THE AGREEMENT AND REFERENCE IS MADE TO THE DEPARTMENT OF LABOR APPLIES THAT EXEMPTS THE ACQUISITION,
AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF HOLDING OR TRANSFER OF THIS CERTIFICATE BY SUCH PURCHASER
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED HEREBY, FROM THE PROHIBITED TRANSACTION RULES OF ERISA AND THE
AND THE RIGHTS, DUTIES AND IMMUNITIES OF THE TRUSTEE. RELATED EXCISE TAX PROVISIONS OF THE CODE.
THE AGREEMENT PERMITS, WITH CERTAIN EXCEPTIONS BEGINNING ON THE DISTRIBUTION DATE IN DECEMBER
THEREIN PROVIDED, THE AMENDMENT THEREOF AND THE 1998, HOLDERS OF A MINIMUM OF 10% OF THE OUTSTANDING
MODIFICATION OF THE RIGHTS OF THE CERTIFICATEHOLDERS UNDER PRINCIPAL AMOUNT OF THE CLASS 1A CERTIFICATES WILL BE
THE AGREEMENT FROM TIME TO TIME BY THE SELLER AND THE ENTITLED TO EXCHANGE SUCH CERTIFICATES FOR A PRO RATA
TRUSTEE WITH THE CONSENT OF THE HOLDERS OF CERTIFICATES PORTION OF EACH OF THE POOLED CERTIFICATES. HOLDERS OF
EVIDENCING MORE THAN 50% OF THE AGGREGATE PRINCIPAL BALANCE CLASS 1A CERTIFICATES TO BE EXCHANGED WILL BE CHARGED AN
OF THE CERTIFICATES. ANY SUCH CONSENT BY THE HOLDER OF EXCHANGE FEE BY THE TRUSTEE EQUAL TO THE GREATER OF (I)
THIS CLASS 1A CERTIFICATE SHALL BE CONCLUSIVE AND BINDING $500 AND (II) 0.02% OF THE OUTSTANDING PRINCIPAL AMOUNT OF
ON SUCH HOLDER AND UPON ALL FUTURE HOLDERS OF THIS SUCH CERTIFICATES. HOLDERS WILL BE REQUIRED TO PROVIDE THE
CERTIFICATE AND OF ANY CERTIFICATE ISSUED UPON THE TRANSFER TRUSTEE WITH IRREVOCABLE WRITTEN NOTICE AS PROVIDED IN THE
HEREOF OR IN LIEU HEREOF WHETHER OR NOT NOTATION OF SUCH AGREEMENT, ACCOMPANIED BY THE EXCHANGE FEE, OF ANY PROPOSED
CONSENT IS MADE UPON THIS CERTIFICATE. THE AGREEMENT ALSO EXCHANGE OF CLASS 1A CERTIFICATES AT LEAST FIVE BUSINESS
PERMITS THE AMENDMENT THEREOF, IN CERTAIN LIMITED DAYS PRIOR TO THE PROPOSED DATE OF SUCH EXCHANGE, WHICH
CIRCUMSTANCES, WITHOUT THE CONSENT OF THE HOLDERS OF ANY OF MUST BE A BUSINESS DAY.
THE CERTIFICATES. THE OBLIGATIONS CREATED BY THE AGREEMENT AND THE
AS PROVIDED IN THE AGREEMENT AND SUBJECT TO TRUST CREATED THEREBY (OTHER THAN THE OBLIGATIONS TO MAKE
CERTAIN LIMITATIONS THEREIN SET FORTH, THE TRANSFER OF THIS CERTAIN PAYMENTS AND SEND CERTAIN NOTICES TO
CLASS 1A CERTIFICATE IS REGISTRABLE WITH THE TRUSTEE UPON CERTIFICATEHOLDERS WITH RESPECT TO THE TERMINATION OF THE
SURRENDER OF THIS CERTIFICATE FOR REGISTRATION OF TRANSFER AGREEMENT) SHALL TERMINATE UPON THE EARLIER OF (I) THE
AT THE OFFICES OR AGENCIES MAINTAINED BY THE TRUSTEE IN REPURCHASE BY OR AT THE DIRECTION OF THE SELLER OF ALL
BOSTON, MASSACHUSETTS, DULY ENDORSED BY, OR ACCOMPANIED BY POOLED CERTIFICATES AND TREASURY SECURITIES, IF ANY, UNDER
A WRITTEN INSTRUMENT OF TRANSFER IN FORM SATISFACTORY TO THE CIRCUMSTANCES SET FORTH IN THE AGREEMENT; (II) THE
THE TRUSTEE DULY EXECUTED BY THE HOLDER HEREOF OR SUCH PAYMENT (OR PROVISION FOR PAYMENT) TO THE
HOLDER'S ATTORNEY DULY AUTHORIZED IN WRITING, AND THEREUPON CERTIFICATEHOLDERS OF ALL AMOUNTS HELD BY OR ON BEHALF OF
ONE OR MORE NEW CLASS 1A CERTIFICATES IN AUTHORIZED THE TRUSTEE AND REQUIRED TO BE PAID TO THEM UNDER THE
DENOMINATIONS REPRESENTING A LIKE AGGREGATE PRINCIPAL AGREEMENT ON THE FINAL DISTRIBUTION DATE FOLLOWING RECEIPT
AMOUNT WILL BE ISSUED TO THE DESIGNATED TRANSFEREE. OF THE FINAL DISTRIBUTION TO BE MADE ON THE POOLED
THE CLASS 1A CERTIFICATES ARE ISSUABLE ONLY AS CERTIFICATES AND TREASURY SECURITIES; OR (III) THE
REGISTERED CLASS 1A CERTIFICATES WITHOUT COUPONS IN THE DISTRIBUTION DATE FOLLOWING THE FIRST DISTRIBUTION DATE ON
CLASS AND DENOMINATIONS SPECIFIED IN THE AGREEMENT. AS WHICH ONLY ONE OF THE POOLED CERTIFICATES REMAINS ENTITLED
PROVIDED IN THE AGREEMENT AND SUBJECT TO CERTAIN TO PAYMENTS OF PRINCIPAL AND/OR INTEREST. IN NO EVENT,
LIMITATIONS THEREIN SET FORTH, THIS CLASS 1A CERTIFICATE IS HOWEVER, WILL THE TRUST CREATED BY THE AGREEMENT CONTINUE
EXCHANGEABLE FOR ONE OR MORE NEW CERTIFICATES OF THE SAME BEYOND THE EXPIRATION OF 21 YEARS AFTER THE DEATH OF
CLASS AND EVIDENCING THE SAME AGGREGATE CLASS PERCENTAGE CERTAIN PERSONS IDENTIFIED IN THE AGREEMENT
INTEREST, AS REQUESTED BY THE HOLDER SURRENDERING THE SAME.
</TABLE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewriter name and address including postal zip code assignee)
the within Class 1A Certificate and hereby authorizes the transfer of
registration of such interest to the assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Class 1A
Certificate of a like denomination and Class, to the above named assignee and
deliver such Class 1A Certificate to the following address:
Dated:
-------------------------------------
SIGNATURE BY OR ON BEHALF OF ASSIGNOR
-------------------------------------
SIGNATURE GUARANTEED
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution: _______________________________________________________________
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to __________________________________________________________
______________________________________________________________________________
account number __________________________, or, if mailed by check to__________
______________________________________________________________________________
Applicable statements should be mailed to_____________________________________
______________________________________________________________________________
This information is provided by_______________________________________________
the assignee named above, or__________________________________________________
as its agent.
<PAGE> 56
EXHIBIT B
FORM OF CLASS 2A CERTIFICATE
THIS CLASS 2A CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, FUND AMERICA INVESTORS CORPORATION II OR THE TRUSTEE REFERRED TO
BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THE CURRENT PRINCIPAL BALANCE OF THIS CLASS 2A CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CLASS 2A SECURITIES, THE CURRENT PRINCIPAL AMOUNT OF THIS CLASS
2A CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CLASS 2A CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE
BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CLASS 2A CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS 2A SECURITIES
ISSUED ARE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
PASS-THROUGH CERTIFICATES,
NO. 2A-1
SERIES 1998-A
EVIDENCING A BENEFICIAL INTEREST IN A
TRUST CONSISTING PRIMARILY OF THE POOLED
CERTIFICATES AND TREASURY SECURITIES (AS
DEFINED IN THE AGREEMENT)
FUND AMERICA INVESTORS CORPORATION II
CUSIP NO. 36076RCH4
<TABLE>
<S> <C> <C> <C> <C>
CLASS : 2A
FIRST DISTRIBUTION DATE : MAY 26, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : JULY 26, 2027 OF THIS CLASS 2A CERTIFICATE
("DENOMINATION") : $36,873,851
APPROXIMATE ORIGINAL CLASS 2A
PRINCIPAL AMOUNT : $36,873,851
PASS-THROUGH RATE: THE EFFECTIVE PER ANNUM INTEREST RATE BORNE BY THE CERTIFICATES DURING THE INTEREST
ACCRUAL PERIOD WITH RESPECT TO A DISTRIBUTION DATE WILL EQUAL A FRACTION, EXPRESSED
AS A PERCENTAGE TRUNCATED AT THE FOURTH DECIMAL PLACE, THE NUMERATOR OF WHICH IS
EQUAL TO THE AGGREGATE AMOUNT IN RESPECT OF INTEREST PAID TO THE CLASS 2A
CERTIFICATEHOLDERS FOR THE RELATED INTEREST ACCRUAL PERIOD MULTIPLIED BY 12, AND
THE DENOMINATOR OF WHICH IS THE PRINCIPAL AMOUNT OF THE CERTIFICATES IMMEDIATELY
PRIOR TO SUCH DISTRIBUTION DATE. UNDER CERTAIN CIRCUMSTANCES, THE PRINCIPAL AMOUNT
OF THE CLASS 2A CERTIFICATES COULD BE PAID IN FULL WHERE INTEREST WOULD REMAIN
PAYABLE, IN WHICH CASE, THE CALCULATION OF THE EFFECTIVE PER ANNUM INTEREST RATE
BORNE BY THE CLASS 2A CERTIFICATES WOULD NOT BE MEANINGFUL.
</TABLE>
THIS CERTIFIES THAT__________________________________________________CEDE & CO.
_______________________________________________________________________________
IS THE REGISTERED OWNER OF THE CLASS PERCENTAGE INTEREST EVIDENCED HEREBY IN
THE BENEFICIAL OWNERSHIP INTEREST OF CERTIFICATES OF THE SAME CLASS AS THIS
CERTIFICATE IN A TRUST (THE "TRUST") CONSISTING PRIMARILY OF A PORTION OF
CERTAIN CLASSES OF SECURITIES DESCRIBED IN THE AGREEMENT (THE "POOLED
CERTIFICATES") SOLD BY FUND AMERICA INVESTORS CORPORATION II ("FAIC"). THE
TRUST WAS CREATED PURSUANT TO THE POOLING AGREEMENT DATED AS OF APRIL 1, 1998
(THE "AGREEMENT"), BETWEEN FAIC, AS SELLER, AND STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE (THE "TRUSTEE"), A SUMMARY OF CERTAIN OF THE PERTINENT
PROVISIONS OF WHICH IS SET FORTH HEREAFTER. TO THE EXTENT NOT DEFINED HEREIN,
CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN THE
AGREEMENT. THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS,
PROVISIONS AND CONDITIONS OF THE AGREEMENT, TO WHICH AGREEMENT THE HOLDER OF
THIS CLASS 2A CERTIFICATE BY VIRTUE OF ITS ACCEPTANCE HEREOF ASSENTS AND BY
WHICH SUCH HOLDER IS BOUND.
INTEREST ON THIS CLASS 2A CERTIFICATE WILL ACCRUE DURING THE ONE MONTH
PERIOD BEGINNING ON THE FIRST DAY AND ENDING ON THE LAST DAY OF THE MONTH
PRECEDING THE MONTH OF THE DISTRIBUTION DATE (AS HEREINAFTER DEFINED) AT A PER
ANNUM RATE EQUAL TO THE PASS-THROUGH RATE AS SET FORTH ABOVE. DISTRIBUTIONS OF
PRINCIPAL AND INTEREST ON THE CLASS 2A CERTIFICATES WITH RESPECT TO A MONTH
WILL BE MADE ON THE FIRST BUSINESS DAY (AS DEFINED HEREIN) AFTER THE 25TH DAY
OF EACH MONTH (EACH, A "DISTRIBUTION DATE") OR, IF SUCH 25TH DAY IS NOT A
BUSINESS DAY, THEN ON THE FIRST BUSINESS DAY AFTER THE FIRST BUSINESS DAY AFTER
THE 25TH DAY OF EACH MONTH. A "BUSINESS DAY" MEANS A DAY OTHER THAN A
SATURDAY, A SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN NEW YORK, NEW YORK
OR THE CITY IN WHICH THE CORPORATE TRUST OFFICE OF THE TRUSTEE IS LOCATED ARE
AUTHORIZED OR OBLIGATED BY LAW OR EXECUTIVE ORDER TO BE CLOSED. DISTRIBUTIONS
WILL BE MADE ON EACH DISTRIBUTION DATE TO HOLDERS OF RECORD AS OF THE CLOSE OF
BUSINESS ON THE LAST BUSINESS DAY OF THE CALENDAR MONTH PRECEDING THE MONTH IN
WHICH SUCH DISTRIBUTION DATE OCCURS; PROVIDED THAT FOR THIS PURPOSE THE
DISTRIBUTION DATE IS DEEMED TO OCCUR ON THE 25TH OF EACH MONTH, WITHOUT REGARD
TO WHETHER SUCH DAY IS A BUSINESS DAY. THE ASSUMED FINAL DISTRIBUTION DATE IS
THE DISTRIBUTION DATE SET FORTH ABOVE.
DISTRIBUTIONS ON THIS CLASS 2A CERTIFICATE WILL BE MADE BY THE TRUSTEE BY
CHECK MAILED TO THE ADDRESS OF THE PERSON ENTITLED THERETO AS SUCH NAME AND
ADDRESS SHALL APPEAR ON THE CERTIFICATE REGISTER OR, IF SUCH PERSON SO REQUESTS
BY NOTIFYING THE TRUSTEE IN WRITING AS SPECIFIED IN THE AGREEMENT AND IF SUCH
PERSON HOLDS CLASS 2A CERTIFICATES WITH AN INITIAL AGGREGATE CERTIFICATE
BALANCE OF NOT LESS THAN $1,000,000, BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE
FUNDS TO THE ACCOUNT SPECIFIED IN WRITING BY SUCH PERSON TO THE TRUSTEE.
NOTWITHSTANDING THE ABOVE, THE FINAL DISTRIBUTION ON THIS CLASS 2A CERTIFICATE
WILL BE MADE AFTER DUE NOTICE BY THE TRUSTEE OF THE PENDENCY OF SUCH
DISTRIBUTION AND ONLY UPON PRESENTATION AND SURRENDER OF THIS CLASS 2A
CERTIFICATE AT THE OFFICE OR AGENCY APPOINTED BY THE TRUSTEE FOR THAT PURPOSE
AND DESIGNATED IN SUCH NOTICE.
IN WITNESS WHEREOF, THE TRUSTEE HAS CAUSED THIS CLASS 2A CERTIFICATE TO BE
DULY EXECUTED.
DATED: APRIL 30, 1998
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as Trustee
By:
---------------------------------------------------------
Name:
Title:
THIS IS ONE OF THE CLASS 2A CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
AGREEMENT.
STATE STREET BANK AND TRUST COMPANY, AS CERTIFICATE REGISTRAR
By:
--------------------------------------------------------------
Name:
Title:
3
<PAGE> 57
FUND AMERICA INVESTORS CORPORATION II
PASS-THROUGH CERTIFICATES, SERIES 1998-A
<TABLE>
<S> <C>
THIS CLASS 2A CERTIFICATE IS ONE OF A DULY NO SERVICE CHARGE WILL BE MADE TO THE CLASS 2A
AUTHORIZED ISSUE OF PASS-THROUGH CERTIFICATES DESIGNATED AS CERTIFICATEHOLDERS FOR ANY SUCH REGISTRATION OF TRANSFER,
SET FORTH ON THE FACE HEREOF (THE "CERTIFICATES"). THE BUT THE TRUSTEE MAY REQUIRE PAYMENT OF A SUM SUFFICIENT TO
CERTIFICATES, IN THE AGGREGATE, EVIDENCE THE ENTIRE COVER ANY TAX OR OTHER GOVERNMENTAL CHARGE PAYABLE IN
BENEFICIAL OWNERSHIP INTEREST IN THE TRUST FORMED PURSUANT CONNECTION THEREWITH. THE CERTIFICATE REGISTRAR AND THE
TO THE AGREEMENT. TRUSTEE AND ANY AGENT OF ANY OF THEM MAY TREAT THE PERSON
THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS IN WHOSE NAME THIS CLASS 2A CERTIFICATE IS REGISTERED AS
CLASS 2A CERTIFICATE, AGREES THAT IT WILL LOOK SOLELY TO THE OWNER HEREOF FOR ALL PURPOSES, AND NEITHER THE
THE TRUST FOR PAYMENT HEREUNDER AND THAT THE TRUSTEE IS NOT CERTIFICATE REGISTRAR, THE TRUSTEE NOR ANY SUCH AGENT SHALL
LIABLE TO THE CERTIFICATEHOLDERS FOR ANY AMOUNT PAYABLE BE AFFECTED BY NOTICE TO THE CONTRARY.
UNDER THIS SECURITY OR THE AGREEMENT OR, EXCEPT AS ANY PURCHASER OF THIS CLASS 2A CERTIFICATE, BY
EXPRESSLY PROVIDED IN THE AGREEMENT, SUBJECT TO ANY VIRTUE OF ITS PURCHASE OF THIS CLASS 2A CERTIFICATE, WILL
LIABILITY UNDER THE AGREEMENT. BE DEEMED TO HAVE REPRESENTED EITHER THAT (I) IT IS NOT A
THIS CLASS 2A CERTIFICATE DOES NOT PURPORT TO PLAN INVESTOR OR (II) AN EXEMPTION GRANTED BY THE
SUMMARIZE THE AGREEMENT AND REFERENCE IS MADE TO THE DEPARTMENT OF LABOR APPLIES THAT EXEMPTS THE ACQUISITION,
AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF HOLDING OR TRANSFER OF THIS CERTIFICATE BY SUCH PURCHASER
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED HEREBY, FROM THE PROHIBITED TRANSACTION RULES OF ERISA AND THE
AND THE RIGHTS, DUTIES AND IMMUNITIES OF THE TRUSTEE. RELATED EXCISE TAX PROVISIONS OF THE CODE.
THE AGREEMENT PERMITS, WITH CERTAIN EXCEPTIONS BEGINNING ON THE DISTRIBUTION DATE IN DECEMBER
THEREIN PROVIDED, THE AMENDMENT THEREOF AND THE 1998, HOLDERS OF A MINIMUM OF 10% OF THE OUTSTANDING
MODIFICATION OF THE RIGHTS OF THE CERTIFICATEHOLDERS UNDER PRINCIPAL AMOUNT OF THE CLASS 2A CERTIFICATES WILL BE
THE AGREEMENT FROM TIME TO TIME BY THE SELLER AND THE ENTITLED TO EXCHANGE SUCH CERTIFICATES FOR A PRO RATA
TRUSTEE WITH THE CONSENT OF THE HOLDERS OF CERTIFICATES PORTION OF EACH OF THE POOLED CERTIFICATES. HOLDERS OF
EVIDENCING MORE THAN 50% OF THE AGGREGATE PRINCIPAL BALANCE CLASS 2A CERTIFICATES TO BE EXCHANGED WILL BE CHARGED AN
OF THE CERTIFICATES. ANY SUCH CONSENT BY THE HOLDER OF EXCHANGE FEE BY THE TRUSTEE EQUAL TO THE GREATER OF (I)
THIS CLASS 2A CERTIFICATE SHALL BE CONCLUSIVE AND BINDING $500 AND (II) 0.02% OF THE OUTSTANDING PRINCIPAL AMOUNT OF
ON SUCH HOLDER AND UPON ALL FUTURE HOLDERS OF THIS SUCH CERTIFICATES. HOLDERS WILL BE REQUIRED TO PROVIDE THE
CERTIFICATE AND OF ANY CERTIFICATE ISSUED UPON THE TRANSFER TRUSTEE WITH IRREVOCABLE WRITTEN NOTICE AS PROVIDED IN THE
HEREOF OR IN LIEU HEREOF WHETHER OR NOT NOTATION OF SUCH AGREEMENT, ACCOMPANIED BY THE EXCHANGE FEE, OF ANY PROPOSED
CONSENT IS MADE UPON THIS CERTIFICATE. THE AGREEMENT ALSO EXCHANGE OF CLASS 2A CERTIFICATES AT LEAST FIVE BUSINESS
PERMITS THE AMENDMENT THEREOF, IN CERTAIN LIMITED DAYS PRIOR TO THE PROPOSED DATE OF SUCH EXCHANGE, WHICH
CIRCUMSTANCES, WITHOUT THE CONSENT OF THE HOLDERS OF ANY OF MUST BE A BUSINESS DAY.
THE CERTIFICATES. THE OBLIGATIONS CREATED BY THE AGREEMENT AND THE
AS PROVIDED IN THE AGREEMENT AND SUBJECT TO TRUST CREATED THEREBY (OTHER THAN THE OBLIGATIONS TO MAKE
CERTAIN LIMITATIONS THEREIN SET FORTH, THE TRANSFER OF THIS CERTAIN PAYMENTS AND SEND CERTAIN NOTICES TO
CLASS 2A CERTIFICATE IS REGISTRABLE WITH THE TRUSTEE UPON CERTIFICATEHOLDERS WITH RESPECT TO THE TERMINATION OF THE
SURRENDER OF THIS CERTIFICATE FOR REGISTRATION OF TRANSFER AGREEMENT) SHALL TERMINATE UPON THE EARLIER OF (I) THE
AT THE OFFICES OR AGENCIES MAINTAINED BY THE TRUSTEE IN REPURCHASE BY OR AT THE DIRECTION OF THE SELLER OF ALL
BOSTON, MASSACHUSETTS, DULY ENDORSED BY, OR ACCOMPANIED BY POOLED CERTIFICATES AND TREASURY SECURITIES, IF ANY, UNDER
A WRITTEN INSTRUMENT OF TRANSFER IN FORM SATISFACTORY TO THE CIRCUMSTANCES SET FORTH IN THE AGREEMENT; (II) THE
THE TRUSTEE DULY EXECUTED BY THE HOLDER HEREOF OR SUCH PAYMENT (OR PROVISION FOR PAYMENT) TO THE
HOLDER'S ATTORNEY DULY AUTHORIZED IN WRITING, AND THEREUPON CERTIFICATEHOLDERS OF ALL AMOUNTS HELD BY OR ON BEHALF OF
ONE OR MORE NEW CLASS 2A CERTIFICATES IN AUTHORIZED THE TRUSTEE AND REQUIRED TO BE PAID TO THEM UNDER THE
DENOMINATIONS REPRESENTING A LIKE AGGREGATE PRINCIPAL AGREEMENT ON THE FINAL DISTRIBUTION DATE FOLLOWING RECEIPT
AMOUNT WILL BE ISSUED TO THE DESIGNATED TRANSFEREE. OF THE FINAL DISTRIBUTION TO BE MADE ON THE POOLED
THE CLASS 2A CERTIFICATES ARE ISSUABLE ONLY AS CERTIFICATES AND TREASURY SECURITIES; OR (III) THE
REGISTERED CLASS 2A CERTIFICATES WITHOUT COUPONS IN THE DISTRIBUTION DATE FOLLOWING THE FIRST DISTRIBUTION DATE ON
CLASS AND DENOMINATIONS SPECIFIED IN THE AGREEMENT. AS WHICH ONLY ONE OF THE POOLED CERTIFICATES REMAINS ENTITLED
PROVIDED IN THE AGREEMENT AND SUBJECT TO CERTAIN TO PAYMENTS OF PRINCIPAL AND/OR INTEREST. IN NO EVENT,
LIMITATIONS THEREIN SET FORTH, THIS CLASS 2A CERTIFICATE IS HOWEVER, WILL THE TRUST CREATED BY THE AGREEMENT CONTINUE
EXCHANGEABLE FOR ONE OR MORE NEW CERTIFICATES OF THE SAME BEYOND THE EXPIRATION OF 21 YEARS AFTER THE DEATH OF
CLASS AND EVIDENCING THE SAME AGGREGATE CLASS PERCENTAGE CERTAIN PERSONS IDENTIFIED IN THE AGREEMENT
INTEREST, AS REQUESTED BY THE HOLDER SURRENDERING THE SAME.
</TABLE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewriter name and address including postal zip code assignee)
the within Class 2A Certificate and hereby authorizes the transfer of
registration of such interest to the assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Class 2A
Certificate of a like denomination and Class, to the above named assignee and
deliver such Class 2A Certificate to the following address:
Dated:
-------------------------------------
SIGNATURE BY OR ON BEHALF OF ASSIGNOR
-------------------------------------
SIGNATURE GUARANTEED
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution _________________________________________________________________
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_______________________________________________________________________________
account number __________________________, or, if mailed by check to___________
_______________________________________________________________________________
Applicable statements should be mailed to______________________________________
This information is provided by________________________________________________
the assignee named above, or_____________________________________ as its agent.
<PAGE> 58
EXHIBIT C
FORM OF OPTION EXERCISE NOTICE
Date:
State Street Bank and Trust Company
1 International Plaza
Boston, Massachusetts 02110
Re: Fund America Investors Corporation II
Pass-Through Certificates
Series 1998-A
CUSIP No.:
Ladies and Gentlemen:
Reference is made to the Pooling Agreement dated as of April 1, 1998
between Fund America Investors Corporation II, as Seller, and State Street Bank
and Trust Company, as Trustee (the "Agreement"). Terms defined in the
Agreement shall have the same meaning when used herein, except as otherwise
provided.
The undersigned desires to exchange Certificates for Pooled
Certificates and, in respect of the Class 2A Certificates, Treasury Securities
as provided in Section 4.05 of the Agreement. Set forth below is information
pertinent to the exchange:
Class of Certificates to be Exchanged:
Principal Amount of Certificates Held by the $
Undersigned:
Principal Amount of Certificates to be Exchanged: $
Participant Number in The Depository Trust Company:
Federal Reserve Bank Delivery Instructions:
Participant Number in Participants Trust Company
Proposed Exchange Date:
<PAGE> 59
[Accompanying this letter is a certified check in the amount of the
Option Exercise Fee.]
[The Option Exercise Fee will be paid by wire transfer of immediately
available funds to the amount of the Trustee at _______________________ not
later than the close of business on the date hereof.]
A copy of this letter will be delivered to The Depository Trust
Company not later than the close of business on the date hereof.
The undersigned understands that this Option Exercise Notice is
irrevocable.
Very truly yours,
[Name]
By:
-------------------------------------------
Title:
----------------------------------------
Signature Guaranteed:
2
<PAGE> 60
SCHEDULE A
POOLED CERTIFICATES
<TABLE>
<CAPTION>
Current Principal or
Full Name of Series % of Class Notional Balance
- ------------------------------------------------------- ------------------ --------------------
<S> <C> <C>
POOLED FREDDIE MAC CERTIFICATES
Multiclass Mortgage Securities, Series G063, Class A 21.25% $18,211,492.00
Multiclass Mortgage Securities, Series 2043, Class ZB 17.36% $12,150,000.00
POOLED FANNIE MAE CERTIFICATES
Guaranteed REMIC Pass-Through Certificates, 27.49% $38,216.265.00
Fannie Mae REMIC Trust 1994-6, Class F
POOLED NON-AGENCY CERTIFICATES
Fund America Investors Trust I 3.41% $2,268,817.89
Collateral Mortgage Obligations, Series 1993-2, Class
A-1
</TABLE>
TREASURY SECURITIES
<TABLE>
<CAPTION>
Amount to be Paid
Designation PT/IT at Maturity Due Date CUSIP No.
----------- ----- ----------- -------- ---------
<S> <C> <C> <C> <C>
United States Treasury Security PT $1,200,000 February 15, 2001 912820AZ0
United States Treasury Security IT $6,000,000 February 15, 1999 912833BZ2
United States Treasury Security IT $500,000 February 15, 2002 912833CF5
</TABLE>
<PAGE> 61
SCHEDULE B
UNDERLYING FAIT CERTIFICATES
2
