SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
------------- ----------------
Commission File Number 33-82040
MAIN PLACE REAL ESTATE INVESTMENT TRUST
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 56-1996001
- ------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 North Tryon Street, 23rd Floor, Charlotte, NC 28255
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(704) 388-7436
----------------------------------------------------
(Registrant's telephone number, including area code)
Main Place Funding Corporation, 1201 Main Street, 29th
-----------------------------------------------------
Floor, Dallas, Texas 75202 (Former name and former
--------------------------
address, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes x No___
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) (a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
On November 14, 1996, there were 100,000 shares of the registrant's common stock
outstanding, all of which shares are held by Main Place Holdings Corporation, an
indirect, wholly owned subsidiary of NationsBank Corporation.
<PAGE>
Main Place Real Estate Investment Trust
September 30, 1996 Form 10-Q
Index
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheet on September 30, 1996 and December 31, 1995 3
Statement of Income for the Three Months and Nine Months
Ended September 30, 1996 and 1995 4
Statement of Cash Flows for the Nine Months Ended
September 30, 1996 and 1995 5
Statement of Changes in Shareholders' Equity for the
Nine Months Ended September 30, 1996 and 1995 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 9
Part II. Other Information
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
Signature 13
Index to Exhibits 14
<PAGE>
PART I. FINANCIAL
ITEM 1. FINANCIAL STATEMENTS
MAIN PLACE REAL ESTATE INVESTMENT TRUST
BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
September 30 December 31
1996 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents......................... $ 4,743 $ 4,870
Securities available for sale..................... 75,111 -
Amount due from Trustee.......................... 74,790 106,531
Mortgage loans, net of unearned income........... 4,681,776 4,523,744
Allowance for credit losses...................... (19,149) (17,805)
Interest receivable............................. 26,855 21,907
Other assets..................................... 7,554 9,199
----------- --------------
$ 4,851,680 $ 4,648,446
LIABILITIES =========== ==============
Accrued expenses................................. $ 39,540 $ 22,137
Mortgage-backed bonds............................ 2,999,493 2,999,342
Subordinated notes............................... 1,072,733 1,320,183
----------- -------------
4,111,766 4,341,662
----------- -------------
SHAREHOLDER'S EQUITY
Common stock, $.01 par value:
authorized - 1,000 shares; issued - 100 shares.. - -
Additional paid-in capital............................ 718,515 299,648
Retained earnings..................................... 22,244 7,136
Net unrealized losses on securities available for sale. (845) -
----------- ------------
Total shareholder's equity.................... 739,914 306,784
------------ ------------
$ 4,851,680 $ 4,648,446
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MAIN PLACE REAL ESTATE INVESTMENT TRUST
STATEMENT OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Income
Interest and fees on mortgage loans......... $ 85,472 $ 55,915 $ 259,390 $ 116,079
Interest on securities available for sale... 1,365 - 1,365 -
------------- --------- ---------- ----------
Total income............................. 86,837 55,915 260,755 116,079
------------- --------- ---------- ----------
Expenses
Interest..................................... 64,509 38,281 197,804 90,260
Other operating expenses..................... 3,166 2,711 9,806 4,972
------------- --------- ---------- ----------
Total expenses............................ 67,675 40,992 207,610 95,232
------------- --------- ---------- ----------
Income before income taxes...................... 19,162 14,923 53,145 20,847
Income tax expense.............................. 7,281 5,223 20,195 7,296
------------- --------- ---------- ----------
Net income...................................... $ 11,881 $ 9,700 $ 32,950 $ 13,551
============= ========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MAIN PLACE REAL ESTATE INVESTMENT TRUST
STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................... $ 32,950 $ 13,551
Reconciliation of net income to net cash provided
(used) by operating activities
Net increase in interest receivable.................... (1,047) (17,588)
Net increase/(decrease) in accrued expenses............ 17,403 (16,898)
Other operating activities............................. 5,648 (2,239)
------------ ----------
Net cash provided (used) by
operating activities........................... 54,954 (23,174)
------------ ----------
INVESTING ACTIVITIES
Net decrease/(increase) in amount due from
Trustee................................................ 31,741 (41,786)
Net reduction of mortgage loans outstanding.............. 677,220 194,562
------------ ----------
Net cash provided by investing
activities.................................... 708,961 152,776
------------ ----------
FINANCING ACTIVITIES
Net increase/(decrease) in long-term debt............... (247,450) 794,143
Distribution of capital to NationsBank Texas............ (498,750) (981,915)
Cash dividends paid to NationsBank Texas................ (17,842) (4,601)
------------ ----------
Net cash used by financing
activities...................................... (764,042) (192,373)
------------ ----------
Net decrease in cash and cash equivalents................... (127) (62,771)
Cash and cash equivalents at beginning of period............ 4,870 66,933
------------ ----------
Cash and cash equivalents at end of period.................. $ 4,743 $ 4,162
============ ==========
Supplemental cash flow disclosure
Cash paid for interest.................................. $ 212,452 $ 114,455
============ ==========
Cash paid for income taxes.............................. 2,111 -
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MAIN PLACE REAL ESTATE INVESTMENT TRUST
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid-In Retained Shareholder's
Shares Amount Capital Earnings Other Equity
<S> <C> <C> <C> <C> <C> <C>
BALANCE ON DECEMBER 31, 1994........... 100 $ - $ 270,566 $ 3,549 $ - $ 274,115
Net income.......................... 13,551 13,551
Cash dividends paid to
NationsBank Texas................. (4,601) (4,601)
Net assets contributed by
NationsBank Texas................. 3,362,985 3,362,985
Distribution of capital to
NationsBank Texas................. (981,915) (981,915)
--------- ------ ------------- --------- --------- -----------
BALANCE ON SEPTEMBER 30, 1995.......... 100 $ - 2,651,636 $ 12,499 $ - $ 2,664,135
========= ====== ============= ========= ========= ===========
BALANCE ON DECEMBER 31, 1995........... 100 $ - 299,648 $ 7,136 $ - $ 306,784
Net income.......................... 32,950 32,950
Cash dividends paid to
NationsBank Texas................. (17,842) (17,842)
Net assets contributed by
NationsBank South................. 421,934 421,934
Net assets contributed by
NationsBank Texas................. 502,486 502,486
Distribution of capital to
NationsBank Texas................. (505,553) (505,553)
Net change in unrealized gains/(losses)
on securities available for
sale............................ (845) (845)
--------- ------ ------------- --------- --------- -----------
BALANCE ON SEPTEMBER 30, 1996.......... 100 $ - 718,515 $ 22,244 $ (845) $ 739,914
========= ====== ============= ========= ========= ===========
</TABLE>
<PAGE>
Main Place Real Estate Investment Trust
Notes to Financial Statements
Note 1 - Accounting Policies
Basis of Presentation
Main Place Real Estate Investment Trust (MPREIT) is an indirect, wholly owned
subsidiary of NationsBank Corporation (the Corporation) and is the successor by
merger of Main Place Funding Corporation (MPFC) on November 1, 1996. MPREIT was
established on October 24, 1996 as a Maryland real estate investment trust to
consolidate the acquisition, holding and management of certain closed-end
residential mortgage loans owned by the Corporation and certain of its
affiliates. As a result of the merger of MPFC into MPREIT on November 1, 1996,
MPREIT will issue and sell mortgage-backed bonds and subordinated indebtedness
and acquire, own, hold and pledge the related mortgage notes and other assets
serving as collateral in connection therewith. Additional information regarding
the merger is set forth in Part II., Item 5.
The accompanying financial statements reflect the results of operations and
financial condition of MPFC (now MPREIT) prior to the merger. References herein
to MPREIT refer to MPFC prior to November 1, 1996 and to the combined entity on
and after November 1, 1996.
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles and reflect all normal recurring
adjustments which are, in the opinion of management, necessary for the fair
presentation of the results for the interim periods presented. Certain prior
period amounts have been reclassified to conform to current period
classifications.
Accounting policies followed in the presentation of interim financial results
are presented on pages F-7 and F-8 of the Annual Report on Form 10-K for the
year ended December 31, 1995, as updated by the following.
Securities
Securities are classified based on management's intention on the date of
purchase. Securities which management has the intent and ability to hold to
maturity are classified as held for investment and reported at amortized cost.
All other securities are classified as available for sale and carried at fair
value with net unrealized gains and losses included in shareholder's equity on
an after-tax basis.
Interest and dividends on securities, including amortization of premiums and
accretion of discounts, are included in interest income. Realized gains and
losses from the sales of securities are determined using the specific
identification method.
Note 2 - Mortgage Loans
Mortgage loans were composed of (dollars in thousands):
September 30 December 31
1996 1995
Fixed-Rate loans...................... $1,240,101 $1,292,457
Adjustable-rate loans................. 3,441,675 3,231,287
----------- -----------
Total Loans......................... $4,681,776 $4,523,744
<PAGE>
Transactions in the allowance for credit losses were (dollars in thousands):
1996 1995
Balance on January 1 ................. $17,805 $10,993
Residential mortgage loans
charged-off.......................... -- (104)
Allowance applicable to contributed
loans................................ 1,344 6,756
----------- --------
Balance on September 30............... $19,149 $17,645
=========== ========
MPREIT had $3.5 million of nonperforming loans on September 30, 1996 and $.2
million on December 31, 1995.
Other real estate owned amounted to $.5 million on September 30, 1996 compared
to $.8 million on December 31, 1995.
Note 3 - Affiliate Transactions
MPREIT has entered into agreements with NationsBanc Mortgage Corporation, a
subsidiary of NationsBank of Texas, N.A. (NationsBank Texas), and with
NationsBank, N.A. for the servicing and administration of its mortgage
portfolio. Servicing fees paid to NationsBanc Mortgage Corporation under the
agreement in existence with MPREIT prior to November 1, 1996 approximated $9.7
million and $3.9 million for the nine months ended September 30, 1996 and 1995,
respectively.
MPREIT maintains its cash and cash equivalent accounts primarily with
NationsBank Texas.
During the first quarter of 1996, NationsBank Texas contributed an additional
$502 million of mortgage loans including accrued interest and net of an
allowance for credit losses of $1.3 million, to MPREIT.
During the second quarter of 1996, NationsBank, N.A. (South) (NationsBank South)
contributed approximately $79 million of Federal National Mortgage Association
(FNMA) certificates to MPREIT.
During the third quarter of 1996, NationsBank South contributed additional
collateral of approximately $342 million of real estate mortgage loans to
MPREIT.
On October 31, 1996, NationsBank South contributed additional collateral of $450
million of real estate mortgage loans to MPREIT.
During October 1996, MPREIT paid a cash dividend of $35 million to NationsBank
South and returned $45 million of low quality assets to NationBank South.
On November 1, 1996, NationsBank, N.A., NationsBank Texas and NationsBank South
contributed an aggregate of approximately $10.9 billion of mortgage loans to
MPREIT.
MPREIT has entered into an agreement with NationsBank, N.A. under which MPREIT
will pay an annual fee of $500,000 to NationsBank, N.A. for advisory services.
Note 4 - Long-Term Debt
On July 18, 1995, MPREIT issued $1.5 billion of Mortgage-Backed Bonds, Series
1995-1, due 1998 (Series 1995-1 Bonds), bearing interest at the one-month London
interbank offered rate (LIBOR) plus 21 basis points with a maximum interest rate
of 12 percent. On October 31, 1995, MPREIT issued $1.5 billion of
Mortgage-Backed Bonds, Series 1995-2, due 2000 (Series 1995-2 Bonds), bearing
interest at the three-month LIBOR plus 17 basis points. On September 30, 1996,
all of the Series 1995-1 and 1995-2 Bonds were outstanding with interest rates
of 5.710 percent and 5.795 percent, respectively, based on the rates in effect
on September 30, 1996. On September 30, 1996, the Series 1995-1 Bonds were
collateralized by mortgage loans with a book value of approximately $2.3 billion
<PAGE>
and the Series 1995-2 Bonds were collateralized by mortgage loans and FNMA
certificates with an aggregate book value of approximately $2.5 billion. On
October 5, 1996, the discounted value of the eligible collateral for the Series
1995-1 and 1995-2 Bonds, as computed by the Trustee, was approximately $1.7
billion and $1.6 billion, respectively, and exceeded the amount required by the
terms of the related indentures by approximately $194 million and $23 million,
respectively.
On September 30, 1996, $629 million was owed on a subordinated note from
NationsBank South dated May 20, 1996 (the May 1996 note). In addition, $443
million was owed under a subordinated note from NationsBank Texas dated November
30, 1995 (the November 1995 note). MPREIT may repay amounts, from time to time,
owed under the May 1996 note and the November 1995 note from funds which are not
subject to the lien of any indenture relating to any senior debt.
Interest expense on the Series 1995-1 and 1995-2 Bonds for the three and nine
months ended September 30, 1996 was $44.4 million and $132.4 million,
respectively. Interest expense on the Series 1995-1 Bonds for the three months
ended September 30, 1995 was $19.5 million. Interest expense on the subordinated
notes for the three and nine months ended September 30, 1996 was $20.1 million
and $65.4 million, respectively, and $18.8 million and $70.8 million,
respectively, for the same periods in 1995.
As of November 14, 1996, MPREIT had $1 billion of capacity available to issue
additional mortgage-backed bonds under its existing registration statement.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Net income for the three and nine months ended September 30, 1996 was $11.9
million and $33.0 million, respectively, compared to $9.7 million and $13.6
million, respectively, for the same periods in 1995. Net income reflects the
impact of several factors such as the levels and the average interest rates of
the mortgage loan portfolio and the issuance of the Series 1995-1 and 1995-2
Bonds and the subordinated notes, including the effects of securities market
conditions and the volatility of interest rates. The results of operations for
any particular interim period may not be indicative of results to be expected
for a full year.
Interest income increased $30.9 million and $144.7 million in the three and nine
months ended September 30, 1996, respectively, compared to the same periods in
1995 due primarily to an increase in year-to-date average loans outstanding of
$2.5 billion. Interest expense increased $26.2 million and $107.5 million in the
three and nine months ended September 30, 1996, respectively, compared to the
same periods in 1995 due primarily to a $2.6-billion increase in year-to-date
average outstanding mortgage-backed bonds. Other operating expenses increased
$4.8 million to $9.8 million in the first nine months of 1996 compared to the
same period in 1995 due primarily to higher mortgage servicing costs associated
with the increase in year-to-date average loans outstanding as discussed above.
The average yield on the mortgage loans for the three and nine months ended
September 30, 1996 was 7.61 percent and 7.48 percent, respectively, compared to
7.13 percent and 7.22 percent in the same periods in 1995. Changes in such
average yield are primarily related to the mix between fixed- and
adjustable-rate loans, the repricing terms of adjustable rate loans, the impact
of the general level of interest rates, the levels of prepayments of mortgage
loans and normal scheduled amortization of the portfolio as a whole.
The average interest rates on the outstanding mortgage-backed bonds for the
three months ended September 30, 1996 and 1995 were 5.93 percent and 6.32
percent, respectively, and were 5.88 percent for the first nine months of 1996.
The average interest rates on the outstanding subordinated notes for the three
and nine months ended September 30, 1996 were 6.01 percent and 6.46 percent,
respectively, compared to 7.99 percent and 8.01 percent for the respective
periods in 1995.
<PAGE>
Nonperforming loans were $3.5 million and $.2 million on September 30, 1996 and
December 31, 1995, respectively. The increase is due primarily to the maturation
of the mortgage loan portfolio.
Part II. OTHER INFORMATION
Item 5. Other Information
The following information is disclosed in lieu of filing a Current Report on
Form 8-K:
Change in Control of Registrant
MPREIT, a Maryland real estate investment trust, was established on October 24,
1996 as the Corporation's principal affiliate responsible for consolidating the
acquisition, holding and management of certain closed-end residential mortgage
loans owned by the Corporation and certain of its affiliates. Through a series
of transactions effective November 1, 1996, MPFC was merged (the "Merger") with
and into MPREIT. MPREIT is a wholly owned subsidiary of Main Place Holdings
Corporation (MP Holdings). MP Holdings is a Delaware corporation and a wholly
owned subsidiary of NationsBank, N.A., which is an indirect wholly owned
subsidiary of the Corporation. In order to effect the Merger, NationsBank South
sold all of the outstanding stock of MPFC to NationsBank, N.A. for aggregate
cash of approximately $1.1 billion, then NationsBank, N.A. contributed all of
such shares to MP Holdings in exchange for 25 shares of MP Holdings common
stock. Thereafter, MP Holdings merged MPFC into MPREIT with MPREIT as the
survivor.
On November 1, 1996, NationsBank, N.A., NationsBank Texas, and NationsBank
South, all wholly owned subsidiaries of the Corporation, contributed an
aggregate of approximately $10.9 billion of mortgage loans to MPREIT. On
November 13, 1996, MPREIT had assets of approximately $16.1 billion.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2 (a) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank, N.A. (South).
2 (b) Contribution Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and Main Place Holdings Corporation ("MP
Holdings").
2 (c) Agreement of Merger, dated November 1, 1996, between MP Holdings,
Main Place Funding Corporation ("MPFC") and Main Place Real Estate
Investment Trust ("MPREIT").
2 (d) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank, N.A. (South).
2 (e) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank of Texas, N.A.
2 (f) Contribution Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and MP Holdings.
3 (a) Declaration of Trust of MPREIT.
3 (b) Bylaws of MPREIT.
4 (a) First Supplemental Indenture dated as of November 1, 1996 to
Indenture dated as of July 18, 1995 between MPFC and First Trust
National Association, as Trustee.
<PAGE>
4 (b) First Supplemental Indenture dated as of November 1, 1996 to
Indenture dated as of October 31, 1995 between MPFC and First
Trust National Association, as Trustee.
10 (a) Contribution Agreement dated as of September 20, 1996 between MPFC
and NationsBank, N.A. (South).
10 (b) Mortgage Loan Contribution Agreement, dated October 30, 1996, by
and between NationsBank of Texas, N.A. and MPREIT. *
10 (c) Mortgage Loan Assignment, dated as of November 1, 1996, among
MPREIT, NationsBank of Texas, N.A. and NationsBanc Mortgage
Corporation.
10 (d) Mortgage Loan Contribution Agreement, dated October 30, 1996, by
and between NationsBank, N.A. (South) and MPREIT. *
10 (e) Mortgage Loan Assignment, dated as of November 1, 1996, among
MPREIT, NationsBank, N.A. (South) and NationsBanc Mortgage
Corporation.
10 (f) Mortgage Loan Contribution Agreement, dated October 30, 1996, by
and between NationsBank, N.A. and MPREIT. *
10 (g) Mortgage Loan Assignment, dated as of November 1, 1996, among
MPREIT, NationsBank, N.A. and NationsBanc Mortgage Corporation.
10 (h) Assignment, as of November 1, 1996, by MPFC to MPREIT of Amended
and Restated Credit Agreement dated as of October 31, 1995.
10 (i) Consent of NationsBank of Texas, N.A., dated November 1, 1996, to
assignment of Amended and Restated Credit Agreement dated as of
October 31, 1995.
10 (j) Assignment as of November 1, 1996 by MPFC to MPREIT of Credit
Agreement dated as of October 31, 1995.
10 (k) Consent of NationsBank of Texas, N.A., dated November 1, 1996, to
assignment of Credit Agreement dated as of October 31, 1995.
10 (l) Servicing Agreement, dated November 1, 1996, between MPREIT and
NationsBanc Mortgage Corporation.
10 (m) Servicing Agreement, dated November 1, 1996, between MPREIT and
NationsBank, N.A.
10 (n) Advisory Agreement, dated November 1, 1996, between MPREIT and
NationsBank, N.A.
10 (o) Contribution Agreement dated as of October 31, 1996 between
MPFC and NationsBank, N.A. (South).
27 Financial Data Schedule.
<PAGE>
* The registrant agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Commission upon request.
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURE
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.
Main Place Real Estate Investment Trust
Date: November 14, 1996
/s/ Karin Hirtler-Garvey
______________________________
Karin Hirtler-Garvey
Senior Vice President--Accounting
(Principal Financial and Duly
Authorized Officer)
<PAGE>
Main Place Real Estate Investment Trust
Form 10-Q
Index to Exhibits
Exhibit Description
2 (a) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank, N.A. (South).
2 (b) Contribution Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and Main Place Holdings Corporation ("MP
Holdings").
2 (c) Agreement of Merger, dated November 1, 1996, between MP Holdings, Main
Place Funding Corporation ("MPFC") and Main Place Real Estate
Investment Trust ("MPREIT").
2 (d) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank, N.A. (South).
2 (e) Stock Purchase Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and NationsBank of Texas, N.A.
2 (f) Contribution Agreement, dated as of November 1, 1996, by and
between NationsBank, N.A. and MP Holdings.
3 (a) Declaration of Trust of MPREIT.
3 (b) Bylaws of MPREIT.
4 (a) First Supplemental Indenture dated as of November 1, 1996 to Indenture
dated as of July 18, 1995 between MPFC and First Trust National
Association, as Trustee.
4 (b) First Supplemental Indenture dated as of November 1, 1996 to Indenture
dated as of October 31, 1995 between MPFC and First Trust National
Association, as Trustee.
10 (a) Contribution Agreement dated as of September 20, 1996 between MPFC and
NationsBank, N.A. (South).
10 (b) Mortgage Loan Contribution Agreement, dated October 30, 1996, by and
between NationsBank of Texas, N.A. and MPREIT. *
10 (c) Mortgage Loan Assignment, dated as of November 1, 1996, among MPREIT,
NationsBank of Texas, N.A. and NationsBanc Mortgage Corporation.
10 (d) Mortgage Loan Contribution Agreement, dated October 30, 1996, by and
between NationsBank, N.A. (South) and MPREIT. *
10 (e) Mortgage Loan Assignment, dated as of November 1, 1996, among MPREIT,
NationsBank, N.A. (South) and NationsBanc Mortgage Corporation.
10 (f) Mortgage Loan Contribution Agreement, dated October 30, 1996, by and
between NationsBank, N.A. and MPREIT. *
10 (g) Mortgage Loan Assignment, dated as of November 1, 1996, among MPREIT,
NationsBank, N.A. and NationsBanc Mortgage Corporation.
10 (h) Assignment, as of November 1, 1996, by MPFC to MPREIT of Amended and
Restated Credit Agreement dated as of October 31, 1995.
10 (i) Consent of NationsBank of Texas, N.A., dated November 1, 1996, to
assignment of Amended and Restated Credit Agreement dated as of October
31, 1995.
10 (j) Assignment as of November 1, 1996 by MPFC to MPREIT of Credit
Agreement dated as of October 31, 1995.
<PAGE>
10 (k) Consent of NationsBank of Texas, N.A., dated November 1, 1996, to
assignment of Credit Agreement dated as of October 31, 1995.
10 (l) Servicing Agreement, dated November 1, 1996, between MPREIT
and NationsBanc Mortgage Corporation.
10 (m) Servicing Agreement, dated November 1, 1996, between MPREIT
and NationsBank, N.A.
10 (n) Advisory Agreement, dated November 1, 1996, between MPREIT and
NationsBank, N.A.
10 (o) Contribution Agreement dated as of October 31, 1996 between MPFC and
NationsBank, N.A. (South).
27 Financial Data Schedule.
* The registrant agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Commission upon request.
Exhibit 2(a)
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of November 1, 1996, is entered into by
and between NATIONSBANK, N.A., a National banking association ("Buyer") and
NATIONSBANK, N.A. (SOUTH), a national banking association ("Seller").
WHEREAS, Seller is the record and beneficial owner of 27,895
Class A shares of beneficial interest, $1.00 par value per share, of Main Place
Real Estate Investment Trust (the "Trust"), a Maryland real estate investment
trust (the "Class A Shares");
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Class A Shares on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, the parties
agree as follows:
1. Purchase and Sale of Shares.
Seller hereby sells, assigns and transfers to Buyer, and Buyer hereby
purchases from Seller, the Class A Shares at a purchase price of $108,967.22 per
share, for an aggregate consideration of $3,039,640,652.53. Concurrently with
the execution of this agreement, Seller is delivering to Buyer a share
certificate representing the Class A Shares, duly endorsed in blank or
accompanied by proper instruments of transfer duly signed by Seller in blank and
accompanied by necessary transfer tax stamps or funds therefor, against payment
of such consideration by delivery to Seller of $3,039,640,652.53.
2. Representations and Warranties of Seller. As a material
inducement to Buyer to enter into and perform its obligations under this
Agreement, Seller represents and warrants to Buyer as follows:
(a) Seller is the beneficial and record owner of the Class A
Shares and has valid and marketable title to the Class A Shares, free and clear
of any lien, pledge and encumbrance or any claim of any third party.
(b) Upon delivery of the share certificate representing the
Class A Shares in accordance with the terms hereof, valid and marketable title
to the Class A Shares will pass to Buyer free and clear of any lien, pledge and
encumbrance or any claim of any third party.
(c) Seller has full legal right, power and authority, and
all approvals required by law, to enter into this Agreement, to sell, assign,
transfer and deliver the Class A Shares in the manner provided in this Agreement
and to perform all of its obligations hereunder. This Agreement has been duly
executed and delivered by Seller and constitutes a legal, valid and binding
obligation of Seller enforceable in accordance with its terms.
(d) Seller has had full access to any and all information
relating to Buyer, and has had the opportunity to learn of all the developments
in Buyer, its business and its affairs, and has made such investigation of and
has had access to any and all information relating to the Buyer as Seller has
deemed necessary or appropriate for entering into this Agreement and carrying
out the transactions contemplated hereby.
3. Representations and Warranties of the Buyer. As a material
inducement to Seller to enter into and perform its obligations under this
Agreement, Buyer represents and warrants to Seller as follows:
(a) Buyer has full legal right, power and authority, and all
approvals required by law, to enter into this Agreement and to perform all of
its obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action.
<PAGE>
(b) This Agreement constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.
(c) Buyer is acquiring the Class A Shares of the Trust for its
own account, for investment and not with a view to the sale or distribution
thereof or with any present intention of selling or distributing any thereof,
except in conformity with the Securities Act. Buyer understands and acknowledges
that the Class A Shares of the Trust are not registered under the Securities Act
and will not be transferable except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144 or any successor
rule under the Securities Act, (iii) pursuant to a no-action letter issued by
the SEC to the effect that a proposed transfer of the Class A Shares may be made
without registration under the Securities Act or (iv) pursuant to an opinion of
counsel for or reasonably acceptable to the Trust to the effect that the
proposed transfer is exempt from registration or qualification under the
Securities Act and relevant state securities laws.
4. Share Legend. Buyer understands that all Class A Shares of the Trust
sold in connection with this Agreement will bear the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of the Trust."
5. Miscellaneous.
(c) This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors and
assigns.
(d) The representations and warranties contained herein
shall survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby and remain in full force and effect,
notwithstanding any investigation at any time made by or on behalf of the
parties.
(e) All questions concerning the construction, validity and
interpretation of this Agreement and the performance of obligations hereunder
will be governed by the internal laws, not the laws of conflicts, of the State
of New York.
(f) This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof and
cannot be changed or terminated orally.
(g) This Agreement may be signed in any number of
counterparts, each of which together shall constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, Buyer and Seller have duly executed this
Agreement as of the date first above written.
NATIONSBANK, N.A.
By: /s/ Gary S. Williams.
--------------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A. (SOUTH)
By: /s/ Gary S. Williams.
-----------------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
CONTRIBUTION AGREEMENT
This Contribution Agreement, dated as of November 1, 1996, is by and
between NATIONSBANK, N.A., a national banking association ("NationsBank, N.A."),
and MAIN PLACE HOLDINGS CORPORATION, a Delaware corporation ("Main Place
Holdings").
RECITALS
NationsBank, N.A. owns all of the issued and outstanding Class A Shares
of Beneficial Interest of Main Place Real Estate Investment Trust (the "Class A
Shares"), a Maryland business trust (the "Trust"), and Main Place Holdings.
NationsBank, N.A. desires to contribute, and Main Place Holdings
desires to accept from NationsBank, N.A. all of the issued and outstanding Class
A Shares of the Trust in consideration for the issuance by Main Place Holdings
to NationsBank, N.A. of twenty-five (25) shares of common stock, no par value
per share (the "Shares"), of Main Place Holdings, subject to the terms and
conditions of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
<PAGE>
CONTRIBUTION OF SECURITIES
1.1 Contribution of the Trust Shares. NationsBank, N.A. hereby
agrees to transfer, assign, convey and deliver to Main Place Holdings, and Main
Place Holdings hereby agrees to accept from NationsBank, N.A., on the date
hereof, all right, title and interest of NationsBank, N.A., legal or equitable,
in and to all of the issued and outstanding Class A Shares of the Trust (the
"Trust Shares") owned by NationsBank, N.A.
1.2 Consideration to NationsBank, N.A.. On the date hereof,
Main Place Holdings shall deliver the Shares to NationsBank, N.A., in
consideration of the contribution, transfer, assignment, conveyance and delivery
of the Trust Shares.
CLOSING
2.1 Closing. The closing of the transactions contemplated
herein (the "Closing") shall be held at 10:00 a.m. on November 1, 1996, unless
otherwise agreed by the parties hereto, at the offices of Stroock & Stroock &
Lavan, Seven Hanover Square, New York, New York.
2.2 Deliveries at the Closing. At the Closing:
(a) NationsBank, N.A. shall deliver to Main Place
Holdings the Trust Shares, together with stock powers or other appropriate
powers or evidence of transfer in favor of Main Place Holdings or in blank.
(b) Main Place Holdings shall deliver to NationsBank,
N.A. the Shares as provided for in Section 1.2.
(c) Main Place Holdings and NationsBank, N.A. shall
deliver the certificates and other matters described in Articles VI and VII
herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NATIONSBANK, N.A.
NationsBank, N.A. hereby represents and warrants to
Main Place Holdings as follows:
<PAGE>
3.1 Organization. The Trust is duly organized, validly existing and
in good standing under the laws of its state of organization, has full power and
authority to conduct its business as it is presently being conducted and to own,
lease and operate its properties and assets.
3.2 Subsidiaries. The Trust has no subsidiaries.
3.3 Organizational Documents, Etc. True, complete and accurate copies
of the declaration of trust and bylaws, each of the foregoing as amended to the
date hereof, and the minute books and all stock books and stock transfer records
of the Trust, each current to the date hereof, have been furnished to Main Place
Holdings, and there will be no amendments or changes to such declaration of
trust or bylaws prior to the Closing.
3.4 Capital Stock, Etc. All of the issued and outstanding Class A
Shares of the Trust, which constitute all of the issued and outstanding capital
stock of the Trust, is held by NationsBank, N.A. All the shares of Trust's
capital stock are, and from the date hereof through the Closing, will be,
validly issued and outstanding, fully paid and non-assessable. There are no
outstanding options, warrants, rights (including preemptive rights),
subscriptions, calls, commitments, conversion rights, rights of exchange, plans
or other agreements of any character providing for the purchase, issuance or
sale of any Class A Shares of the capital stock of the Trust; however, as
disclosed to Main Place Holdings, the Trust will issue a series of non-voting
Class B Shares of Beneficial Interest (the "Class B Shares").
3.5 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in (i) a violation or breach of, conflict with or default under any term
or provision of any contract, agreement, indebtedness, lease, encumbrance,
commitment, license, franchise, permit, authorization or concession to which
either of the Trust or NationsBank, N.A. is a party or by which either of the
Trust or NationsBank, N.A. is bound or affected or (ii) a violation by the Trust
or by NationsBank, N.A. of any statute, rule, regulation, ordinance, code,
action or award applicable to the Trust or to NationsBank, N.A., as the case may
be.
3.6 Restrictive Documents. Neither NationsBank, N.A. or the Trust is
subject to, or a party to, any mortgage, lien, lease, license, permit,
agreement, contract or instrument, or to any law, rule, ordinance, regulation,
action or any other restriction of any kind or character, which would have a
material adverse effect on the execution, delivery and performance of this
Agreement by the Trust or NationsBank, N.A. and consummation by the Trust of the
transactions contemplated hereby.
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<PAGE>
3.7 Consents and Approvals; Licenses. No consent, approval,
authorization, license, order or permit of, or declaration, filing or
registration with, any governmental entity, or any other person or entity, is
required to be made or obtained by the Trust or by NationsBank, N.A. in
connection with the execution, delivery and performance by the Trust and by
NationsBank, N.A., as the case may be, of this Agreement and the consummation by
the Trust and by NationsBank, N.A., as the case may be, of the transactions
contemplated hereby.
3.8 Compliance with Law. The Trust has complied with, and has not
violated, any judgments, rulings, orders, writs, injunctions, awards, decrees,
statutes, laws, ordinances, codes, rules or regulations of any governmental
entity applicable to it or to its assets, properties, business or operations. No
consent, approval, authorization, license, order or permit of, or declaration,
filing or registration with, any governmental entity which has not been obtained
is material to or necessary for the conduct of the business of the Trust. No
violations are or have been recorded in respect of any consent, approval,
authorization, license, order or permit of, or declaration, filing or
registration with, any governmental entity, and no proceeding is pending, or to
the knowledge of the Trust threatened, to revoke or limit any consent, approval,
authorization, license, order or permit of, or declaration, filing or
registration with, any governmental entity.
3.9 Litigation. There is no litigation, arbitration, claim,
governmental or other proceeding or investigation (domestic or foreign, formal
or informal) pending or, to the knowledge of NationsBank, N.A. threatened or in
prospect (or any basis therefor known to NationsBank, N.A.), with respect to the
Trust or any of its operations, business, properties or assets except as,
individually or in the aggregate, do not now have and are not reasonably
expected in the future to have a material adverse effect upon the financial
condition, results of operations, business, prospects, properties or assets of
the Trust.
3.10 Authorization. NationsBank, N.A. has the legal right, power and
authority to execute, deliver and perform its obligations under this Agreement
and each other agreement, document or instrument contemplated hereby to which it
is a party. This Agreement has been duly executed and delivered by NationsBank,
N.A. and is a legal, valid and binding obligation of NationsBank, N.A.,
enforceable against NationsBank, N.A. in accordance with its terms, except as
limited by the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto.
3.11 No Other Agreements to Sell Securities. NationsBank, N.A. has no
legal obligation, absolute or contingent, to any person or entity other than
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<PAGE>
Main Place Holdings to transfer, assign, convey and deliver the Trust Shares.
3.12 Investment Representations. NationsBank, N.A. is acquiring the
Shares for its own account, for investment and not with a view to the sale or
distribution thereof or with any present intention of selling or distributing
any thereof, except in conformity with the Securities Act of 1933, as amended
(the "Securities Act"). NationsBank, N.A. understands and acknowledges that the
Shares are not registered under the Securities Act and will not be transferable
except (i) pursuant to an effective registration statement under the Securities
Act, (ii) pursuant to Rule 144 or any successor rule under the Securities Act,
(iii) pursuant to a no-action letter issued by the Securities and Exchange
Commission to the effect that a proposed transfer of the Shares may be made
without registration under the Securities Act or (iv) pursuant to an opinion of
counsel for or reasonably acceptable to Main Place Holdings to the effect that
the proposed transfer is exempt from registration or qualification under the
Securities Act and relevant state securities laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MAIN PLACE HOLDINGS
Main Place Holdings hereby represents and warrants to NationsBank,
N.A. as follows:
4.1 Organization of Main Place Holdings. Main Place Holdings is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full corporate power and authority to conduct its business as it
is presently being conducted and to own, lease and operate its properties and
assets. Main Place Holdings is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership of
property or nature of its business requires such qualification and where failure
to be so qualified would have a material adverse effect on Main Place. Main
Place Holdings was incorporated on September 23, 1996 and has done no business
and incurred no obligations except with respect to the transactions contemplated
hereby.
4.2 Authorization. Main Place Holdings has all necessary corporate
power and authority and has taken all corporate action necessary to enter into
this Agreement to consummate the transactions contemplated hereby and to perform
its obligations hereunder. This Agreement has been duly executed and delivered
by Main Place Holdings and is a legal, valid and binding obligation of Main
Place Holdings enforceable against Main Place Holdings in accordance with its
terms, except as limited by the effect of bankruptcy, insolvency, moratorium,
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<PAGE>
fraudulent conveyance and similar laws relating to or affecting creditors rights
generally and court decisions with respect thereto.
4.3 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in (i) a violation of or a conflict with any provision of the certificate
of incorporation or bylaws of Main Place Holdings, (ii) a breach of, or a
default under, any term or provision of any contract, agreement, indebtedness,
lease, encumbrance, commitment, license, franchise, permit, authorization or
concession to which Main Place Holdings is a party or by which Main Place
Holdings is bound or affected which breach or default would have a material
adverse effect on the business or financial condition of Main Place Holdings or
its ability to consummate the transactions contemplated hereby or (iii) a
violation by Main Place Holdings of any statute, rule, regulation, ordinance,
code, order, judgment, writ, injunction, decree, action or award applicable to
Main Place Holdings, which violation would have a material adverse effect on the
business or financial condition of Main Place Holdings or its ability to
consummate the transactions contemplated hereby.
4.4 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental entity, or any
other person or entity is required to be made or obtained by Main Place Holdings
in connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby.
4.5 Issuance of Main Place Holdings Common Stock. The authorized
capital stock of Main Place Holdings consists of 200 shares of common stock, no
par value per share. As of the date hereof, 50 shares of Main Place Holdings
Common Stock are outstanding. Upon the issuance of the Shares as provided
herein, the Main Place Holdings Common Stock will be duly and validly issued,
fully paid and non-assessable. There are no outstanding options, warrants,
rights, calls, commitments, conversion rights, rights of exchange, plans or
other agreements of any character providing for the purchase, issuance or sale
of any shares of the capital stock of Main Place Holdings.
4.6 Investment Representations. Main Place Holdings is acquiring
the Trust Shares for its own account for investment and not with a view to the
sale or distribution thereof or with any present intention of selling or
distributing any thereof. Main Place Holdings understands and acknowledges that
the Trust Shares are not registered under the Securities Act and will not be
transferable except (i) pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to Rule 144 or any successor rule under the
Securities Act, (iii) pursuant to a no-action letter issued by the Securities
and Exchange Commission to the effect that a proposed transfer of the Trust
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<PAGE>
Shares may be made without registration under the Securities Act or (iv)
pursuant to an opinion of counsel for the Trust to the effect that the proposed
transfer is exempt from registration or qualification under the Securities Act
and relevant state securities laws.
ARTICLE V
COVENANTS OF NATIONSBANK, N.A. AND MAIN PLACE HOLDINGS
NationsBank, N.A., on the one hand, and Main Place Holdings, on the
other hand, covenant with each other as follows:
5.1 Maintenance of Business Prior to Closing. During the period from
the date hereof through the Closing Date, NationsBank, N.A. shall cause the
Trust to continue to carry on its business in the ordinary course and in
accordance with past practice and not to take any action inconsistent therewith
or with the consummation of the Closing.
5.2 Share Legend. The certificates representing the Shares shall bear
the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and are "restricted securities" as that term is
defined in Rule 144A under the Act. The Shares may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration
under the Act, the availability of which is to be established
to the satisfaction of the Trust.
ARTICLE VI
CONDITIONS TO NATIONSBANK N.A.'S OBLIGATIONS
The obligations of NationsBank, N.A. to consummate the transactions
provided for hereby are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions:
6.1 Representations, Warranties and Covenants. All representations
and warranties of Main Place Holdings contained in or made pursuant to this
Agreement shall be true and correct in all material respects at and as of the
Closing Date (and such representations and warranties shall be deemed to be
repeated by Main Place Holdings at and as of the Closing Date), except as and to
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<PAGE>
the extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms hereof, and Main Place Holdings shall have performed in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
6.2 Consents. All consents, approvals and waivers from third parties,
governmental entities and other parties necessary to permit Main Place Holdings
to transfer the Trust Shares to NationsBank, N.A. as contemplated hereby shall
have been obtained.
6.3 No Governmental Proceedings or Litigation. No action by any
governmental entity shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected materially to damage NationsBank, N.A. if the
transactions contemplated hereunder are consummated.
6.4 Corporate Documents. NationsBank, N.A. shall have received from
Main Place Holdings resolutions adopted by the board of directors of Main Place
Holdings approving this Agreement and the transactions contemplated hereby
certified by Main Place Holdings' corporate secretary or assistant secretary.
6.5 Certificates. Main Place Holdings shall have furnished
NationsBank, N.A. with such certificates of Main Place Holdings officers and
others to evidence compliance with the conditions set forth in this Article VI
as may be reasonably requested by NationsBank, N.A.
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<PAGE>
ARTICLE VII
CONDITIONS TO MAIN PLACE HOLDINGS' OBLIGATIONS
The obligations of Main Place Holdings to consummate the transactions
provided for hereby are subject, in the discretion of Main Place Holdings, to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions:
7.1 Representations, Warranties and Covenants. All representations
and warranties of NationsBank, N.A. contained in or made pursuant to this
Agreement shall be true and correct in all material respects at and as of the
Closing Date (and such representations and warranties shall be deemed to be
repeated by NationsBank, N.A. at and as of the Closing Date), except as and to
the extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms hereof, and NationsBank, N.A. shall have performed in all material
respects all agreements and covenants required hereby to be performed by them
prior to or on the date of the Closing.
7.2 Consents. All consents, approvals and waivers from third parties,
governmental entities and other parties necessary to permit NationsBank, N.A. to
transfer, and Main Place Holdings to accept the Trust Shares as contemplated
hereby shall have been obtained.
7.3 No Governmental Proceedings or Litigation. No action by any
governmental entity shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to affect materially the right or ability of Main Place
Holdings to own the Trust Shares after the Closing or materially to damage Main
Place Holdings or the Trust if the transactions contemplated hereunder are
consummated.
7.4 Certificates. NationsBank, N.A. shall have furnished Main Place
Holdings with such certificates to evidence compliance with the conditions set
forth in this Article VII as may be reasonably requested by Main Place Holdings.
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<PAGE>
MISCELLANEOUS
8.1 Termination. If any condition precedent to NationsBank, N.A.'s
obligations hereunder is not satisfied and such condition is not waived by
NationsBank, N.A. on or prior to the date of the Closing, or if any condition
precedent to Main Place Holdings' obligations hereunder is not satisfied and
such condition is not waived by Main Place Holdings on or prior to the date of
the Closing, NationsBank, N.A. or Main Place Holdings, as the case may be, may
terminate this Agreement at their or its option by notice to the other party.
This Agreement may be terminated by the mutual agreement of the parties hereto.
8.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party; except that Main Place
Holdings may assign all its rights and obligations hereunder to a subsidiary or
subsidiaries of Main Place Holdings or to a successor to the business of Main
Place Holdings; provided, however, that such assignment shall not release Main
Place Holdings with respect to any such obligations or liabilities. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. No other person
shall have any right, benefit or obligation hereunder.
8.3 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to any other
party shall be in writing and shall be deemed to have been given (a) if mailed,
at the time when mailed in any general or branch office of the United States
Postal Service, enclosed in a registered or certified postage-paid envelope, (b)
if sent by facsimile transmission, when so sent and receipt acknowledged by an
appropriate telephone or facsimile receipt or (c) if sent by other means, when
actually received by the party to which such notice has been directed, in each
case at the respective addresses or numbers set forth below or such other
address or number as such party may have fixed by notice:
If to NationsBank, N.A. addressed to:
NationsBank, N.A.
c/o NationsBank Corporation, Legal Department
100 North Tryon Street, 20th Floor
Charlotte, North Carolina 28255
Attention: George Walls, Esq.
Fax: (704) 386-6453
If to Main Place Holdings addressed to:
Main Place Holdings Corporation
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: John E. Mack
Fax: (704) 386-0270
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<PAGE>
8.4 Governing Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
New York (without reference to the choice of law provisions of New York law)
except with respect to matters of law concerning the internal corporate affairs
of Main Place Holdings, and as to those matters the law of the State of Delaware
shall govern.
8.5 Entire Agreement; Modifications and Waivers. This Agreement,
together with all exhibits and schedules hereto, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the party or
parties to be bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other rights, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement or
any other such instrument and, to the extent enforceable, such provisions shall
be replaced by substitute provisions similar thereto, or other provisions, so as
to provide to the Existing Stockholders and Main Place Holdings, to the fullest
extent permitted by applicable law, the benefits intended by such provisions.
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<PAGE>
8.8 Titles. The titles, captions or headings of the Articles and
Sections herein are for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MAIN PLACE HOLDINGS CORPORATION
By: /s/ Gary S. Williams
-----------------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ Gary S. Williams.
----------------------------
Name: Gary S Williams
Title: Senior Vice President
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Exhibit 2(c)
AGREEMENT OF MERGER
AGREEMENT OF MERGER, dated this first day of November, 1996, pursuant
to Section 254 of the General Corporation Law of Delaware, between MAIN PLACE
HOLDINGS CORPORATION, a Delaware corporation ("Parent"), MAIN PLACE FUNDING
CORPORATION, a Delaware corporation (the "Company") and wholly-owned subsidiary
of Parent, and MAIN PLACE REAL ESTATE INVESTMENT TRUST, a Maryland business
trust (the "Trust") and wholly-owned subsidiary of Parent.
WITNESSETH that:
WHEREAS, the Company is a wholly-owned subsidiary of Parent; and
WHEREAS, the Trust is a newly formed Maryland real estate investment
trust and a wholly-owned subsidiary of Parent; and
WHEREAS, the parties desire to merge the Company with and into the
Trust with the Trust as the surviving entity;
WHEREAS, the parties understand and intend that at the Effective Time,
as more fully set forth herein, (i) the Company will be merged with and into the
Trust which shall be the surviving entity, on the terms and conditions contained
herein, and (ii) all of the shares of the Company Common Stock (as hereinafter
defined) outstanding at the Effective Time will be cancelled and the capital of
the Company shall be contributed to the Trust as provided in Section 3.1; and
WHEREAS, the Boards of Directors of the Parent and the Company and the
Board of Trustees of the Trust have approved the merger of the Company into the
Trust (the "Merger") pursuant to the terms and conditions set forth in this
Agreement, and the sole stockholder of the Company and the Trust has approved
the Merger;
NOW, THEREFORE, the Parent, the Company and the Trust, in consideration
of the mutual covenants, agreements and provisions hereinafter contained do
hereby prescribe the terms and conditions of said merger and mode of carrying
the same into effect as follows:
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ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined below) in accordance with the
Corporations and Associations Article of the Annotated Code of Maryland and the
Delaware General Corporation Law:
The Company shall merge with and into the Trust (the "Merger") in
accordance with this Agreement and upon the filing of the appropriate
articles of merger (the "Articles of Merger). The separate existence of
the Company shall thereupon cease and the Trust (the "Surviving Trust")
shall be the surviving entity.
Section 1.2 Effective Time of the Merger. The Merger shall become
effective at such time (the "Effective Time") after the Closing as (i) a copy of
the duly completed and executed Articles of Merger is delivered to the State
Department of Assessments and Taxation of the State of Maryland and is accepted
for filing by the State Department of Assessments and Taxation of the State of
Maryland or (ii) at such later time as the parties may agree to specify in the
Articles of Merger. However, for all accounting purposes the Effective Time of
this merger shall be as of the close of business on October 31, 1996.
Section 1.3 Effects of the Merger. At the Effective Time, all the
property, rights, privileges, franchises, patents, trademarks, licenses,
registrations, and other assets of every kind and description of the Company
shall be transferred to, vested in and devolve upon the Surviving Trust without
further act or deed and all property, rights, and every other interest of the
Trust and the Company shall be as effectively the property of the Surviving
Trust as they were of the Trust and the Company, respectively. The Company
hereby agrees from time to time, as and when requested by the Surviving Trust or
by its successors or assigns, to execute and deliver or cause to be executed and
delivered all such deeds and instruments and to take or cause to be taken such
further or other action as the Surviving Trust may deem necessary or desirable
in order to vest in and confirm to the Surviving Trust title to and possession
of any property of the Company acquired or to be acquired by reason of or as a
result of the Merger and otherwise to carry out the intent and purposes hereof
and the proper officers and directors of the Company and the proper officers and
directors of the Surviving Trust are fully authorized in the name of the Company
or otherwise to take any and all such action.
Section 1.4 Closing. The closing (the "Closing ") of the transactions
contemplated by this Agreement shall take place at the offices of Stroock &
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<PAGE>
Stroock & Lavan, Seven Hanover Square, New York, New York, at 10:00 A.M. Eastern
Standard Time on November 1, 1996.
Section 1.5 The Surviving Trust may be served with process in the State
of Delaware in any proceeding for enforcement of any obligation of the Company
as well as for enforcement of any obligation of the Surviving Trust arising from
the Merger, including any suit or other proceeding to enforce the right of any
stockholder as determined in appraisal proceedings pursuant to the provisions of
Section 262 of the General Corporation Law of Delaware; and it does hereby
irrevocably appoint the Secretary of State of Delaware as its agent to accept
service of process in any such suit or other proceeding. The address to which a
copy of such process shall be mailed by the Secretary of State of Delaware is
1209 Orange Street, Wilmington, Delaware 19801 until the Surviving Trust shall
have hereafter designated in writing to the said Secretary of State a different
address for such purpose. Service of such process may be made by personally
delivering to and leaving with the Secretary of State of Delaware duplicate
copies of such process, one of which copies the Secretary of State of Delaware
shall forthwith send by registered mail to the above address.
ARTICLE II
THE SURVIVING TRUST
Section 2.1 Declaration of Trust; Bylaws. The Declaration of Trust and
the Bylaws of the Trust as heretofore amended and as in effect on the date of
the Merger, shall continue in full force and effect as the Declaration of Trust
and Bylaws of the Surviving Trust.
Section 2.2 Directors and Officers.
(a) At the Effective Time, the Board of Trustees of the Trust
shall continue to serve as the Board of Trustees of the Surviving Trust.
(b) At the Effective Time, the officers of the Trust shall
continue to be the officers of the Surviving Trust.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Cancellation of Company Shares in the Merger.
At the Effective Time, by virtue of the Merger and without any action on the
part of any holder of any capital stock of the Company, each share of common
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<PAGE>
stock, par value $0.01 per share, of the Company ("Company Common Stock") issued
and outstanding immediately prior to the Effective Time shall be treated as
follows:
(a) Each share of the Company Common Stock which shall be
outstanding at the Effective Time, and all rights in respect thereof shall
forthwith be cancelled and any registered owner of uncertificated shares of
Company Common Stock, if any, shall have said shares cancelled; such that the
capital of the Company shall be contributed to the Trust.
(b) Each common share of beneficial interest of the Trust,
which shall be issued and outstanding at the Effective Time, shall remain
outstanding and unaffected by the Merger.
[Signature page follows]
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<PAGE>
IN WITNESS WHEREOF, the Parent, the Company and the Trust have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
MAIN PLACE HOLDINGS CORPORATION
/s/ Gary S. Williams.
------------------------------------
By:
MAIN PLACE FUNDING CORPORATION
/s/ Gary S. Williams.
-------------------------------
By:
MAIN PLACE REAL ESTATE INVESTMENT TRUST
/s/ Gary S. Williams.
---------------------------
By:
<PAGE>
Exhibit 2(d)
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of November 1, 1996, is entered into by
and between NATIONSBANK, N.A., a National banking association ("Buyer") and
NATIONSBANK, N.A. (SOUTH), a national banking association ("Seller").
WHEREAS, Seller is the record and beneficial owner of 100
shares of common stock, $.01 par value per share, of Main Place Funding
Corporation (the "Corporation"), a Delaware corporation (the "Shares");
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Shares on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, the parties
agree as follows:
4. Purchase and Sale of Shares.
Seller hereby sells, assigns and transfers to Buyer, and Buyer
hereby purchases from Seller, the Shares at a purchase price of $11,152,270 per
share, for an aggregate consideration of $1,115,227,000. Concurrently with the
execution of this agreement, Seller is delivering to Buyer a share certificate
representing the Shares, duly endorsed in blank or accompanied by proper
instruments of transfer duly signed by Seller in blank and accompanied by
necessary transfer tax stamps or funds therefor, against payment of such
consideration by delivery to Seller of $1,115,227,000.
5. Representations and Warranties of Seller. As a material inducement
to Buyer to enter into and perform its obligations under this Agreement, Seller
represents and warrants to Buyer as follows:
(a) Seller is the beneficial and record owner of the Shares
and has valid and marketable title to the Shares, free and clear of any lien,
pledge and encumbrance or any claim of any third party.
(b) Upon delivery of the share certificate representing the
Shares in accordance with the terms hereof, valid and marketable title to the
Shares will pass to Buyer free and clear of any lien, pledge and encumbrance or
any claim of any third party.
(c) Seller has full legal right, power and authority, and all
approvals required by law, to enter into this Agreement,
<PAGE>
to sell, assign, transfer and deliver the Shares in the manner provided in this
Agreement and to perform all of its obligations hereunder. This Agreement has
been duly executed and delivered by Seller and constitutes a legal, valid and
binding obligation of Seller enforceable in accordance with its terms.
(d) Seller has had full access to any and all information
relating to Buyer, and has had the opportunity to learn of all the developments
in Buyer, its business and its affairs, and has made such investigation of and
has had access to any and all information relating to the Buyer as Seller has
deemed necessary or appropriate for entering into this Agreement and carrying
out the transactions contemplated hereby.
6. Representations and Warranties of the Buyer. As a material
inducement to Seller to enter into and perform its obligations under this
Agreement, Buyer represents and warrants to Seller as follows:
(a) Buyer has full legal right, power and authority, and all
approvals required by law, to enter into this Agreement and to perform all of
its obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action.
(b) This Agreement constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.
(c) Buyer is acquiring the shares of the Corporation for its
own account, for investment and not with a view to the sale or distribution
thereof or with any present intention of selling or distributing any thereof,
except in conformity with the Securities Act. Buyer understands and acknowledges
that the Shares are not registered under the Securities Act and will not be
transferable except (i) pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to Rule 144 or any successor rule under the
Securities Act, (iii) pursuant to a no-action letter issued by the SEC to the
effect that a proposed transfer of the Shares may be made without registration
under the Securities Act or (iv) pursuant to an opinion of counsel for or
reasonably acceptable to the Corporation to the effect that the proposed
transfer is exempt from registration or qualification under the Securities Act
and relevant state securities laws.
4. Buyer understands that all Shares sold in connection with this
Agreement will bear the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for
<PAGE>
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Corporation."
5. Miscellaneous.
(c) This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors and assigns.
(d) The representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and remain in full force and effect,
notwithstanding any investigation at any time made by or on behalf of the
parties.
(e) All questions concerning the construction, validity and
interpretation of this Agreement and the performance of obligations hereunder
will be governed by the internal laws, not the laws of conflicts, of the State
of New York.
(f) This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof and
cannot be changed or terminated orally.
(g) This Agreement may be signed in any number of
counterparts, each of which together shall constitute one and the same
instrument.
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<PAGE>
IN WITNESS WHEREOF, Buyer and Seller have duly executed this
Agreement as of the date first above written.
NATIONSBANK, N.A.
By:/s/ Gary S. Williams
Name: Gary S. Williams
Title:Senior Vice President
NATIONSBANK, N.A. (SOUTH)
By:/s/ Gary S. Williams
Name: Gary S. Williams
Title:Senior Vice President
<PAGE>
Exhibit 2(e)
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of November 1, 1996, is entered into by
and between NATIONSBANK, N.A., a National banking association ("Buyer") and
NATIONSBANK OF TEXAS, N.A., a National banking association ("Seller").
WHEREAS, Seller is the record and beneficial owner of 53,787
Class A shares of beneficial interest, $1.00 par value per share, of Main Place
Real Estate Investment Trust (the "Trust"), a Maryland real estate investment
trust (the "Class A Shares");
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Class A Shares on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, the parties
agree as follows:
1. Purchase and Sale of Shares.
Seller hereby sells, assigns and transfers to Buyer, and Buyer
hereby purchases from Seller, the Class A Shares at a purchase price of
$108,994.79 per share, for an aggregate consideration of $5,862,502,929.52.
Concurrently with the execution of this agreement, Seller is delivering to Buyer
a share certificate representing the Class A Shares, duly endorsed in blank or
accompanied by proper instruments of transfer duly signed by Seller in blank and
accompanied by necessary transfer tax stamps or funds therefor, against payment
of such consideration by delivery to Seller of $5,862,502,929.52.
2. Representations and Warranties of Seller. As a material inducement
to Buyer to enter into and perform its obligations under this Agreement, Seller
represents and warrants to Buyer as follows:
(a) Seller is the beneficial and record owner of the Class A
Shares and has valid and marketable title to the Class A Shares, free and clear
of any lien, pledge and encumbrance or any claim of any third party.
(b) Upon delivery of the share certificate representing the
Class A Shares in accordance with the terms hereof, valid and marketable title
to the Class A Shares will pass to Buyer free and clear of any lien, pledge and
encumbrance or any claim of any third party.
(c) Seller has full legal right, power and authority, and all
approvals required by law, to enter into this Agreement, to sell, assign,
transfer and deliver the Class A Shares in the
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<PAGE>
manner provided in this Agreement and to perform all of its obligations
hereunder. This Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller enforceable in
accordance with its terms.
(d) Seller has had full access to any and all information
relating to Buyer, and has had the opportunity to learn of all the developments
in Buyer, its business and its affairs, and has made such investigation of and
has had access to any and all information relating to the Buyer as Seller has
deemed necessary or appropriate for entering into this Agreement and carrying
out the transactions contemplated hereby.
3. Representations and Warranties of the Buyer. As a material
inducement to Seller to enter into and perform its obligations under this
Agreement, Buyer represents and warrants to Seller as follows:
(a) Buyer has full legal right, power and authority, and all
approvals required by law, to enter into this Agreement and to perform all of
its obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action.
(b) This Agreement constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.
(c) Buyer is acquiring the Class A Shares of the Trust for its
own account, for investment and not with a view to the sale or distribution
thereof or with any present intention of selling or distributing any thereof,
except in conformity with the Securities Act. Buyer understands and acknowledges
that the Class A Shares of the Trust are not registered under the Securities Act
and will not be transferable except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144 or any successor
rule under the Securities Act, (iii) pursuant to a no-action letter issued by
the SEC to the effect that a proposed transfer of the Shares may be made without
registration under the Securities Act or (iv) pursuant to an opinion of counsel
for or reasonably acceptable to the Trust to effect that the proposed transfer
is exempt from registration or qualification under the Securities Act and
relevant state securities laws.
4. Share Legend. Buyer understands that all Class A Shares of the Trust
sold in connection with this Agreement will bear the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for
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<PAGE>
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Trust."
5. Miscellaneous.
(c) This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors and assigns.
(d) The representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and remain in full force and effect,
notwithstanding any investigation at any time made by or on behalf of the
parties.
(e) All questions concerning the construction, validity and
interpretation of this Agreement and the performance of obligations hereunder
will be governed by the internal laws, not the laws of conflicts, of the State
of New York.
(f) This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof and
cannot be changed or terminated orally.
(g) This Agreement may be signed in any number of
counterparts, each of which together shall constitute one and the same
instrument.
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<PAGE>
IN WITNESS WHEREOF, Buyer and Seller have duly executed this
Agreement as of the date first above written.
NATIONSBANK, N.A.
By:/s/ Gary S. Williams
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.
By:/s/ Gary S. Williams
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
STOCK CONTRIBUTION AGREEMENT
by and among
NATIONSBANK, N.A.
and
MAIN PLACE HOLDINGS CORPORATION
Dated: November 1, 1996
<PAGE>
EXHIBIT 2F
CONTRIBUTION AGREEMENT
This Contribution Agreement, dated as of November 1, 1996, is by and
between NATIONSBANK, N.A., a national banking association ("NationsBank, N.A."),
and MAIN PLACE HOLDINGS CORPORATION, a Delaware corporation ("Main Place
Holdings").
RECITALS
NationsBank, N.A. owns all of the issued and outstanding shares of
capital stock of Main Place Funding Corporation, a Delaware corporation (the
"Corporation") and Main Place Holdings.
NationsBank, N.A. desires to contribute, and Main Place Holdings
desires to accept from NationsBank, N.A. all of the issued and outstanding
capital stock of the Corporation in consideration for the issuance by Main Place
Holdings to NationsBank, N.A. of twenty-five (25) shares of common stock, no par
value per share (the "Shares"), of Main Place Holdings, subject to the terms and
conditions of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
CONTRIBUTION OF SECURITIES
Section 1.1 Contribution of the Corporation Shares. NationsBank, N.A.
hereby agrees to transfer, assign, convey and deliver to Main Place Holdings,
and Main Place Holdings hereby agrees to accept from NationsBank, N.A., on the
date hereof, all right, title and interest of NationsBank, N.A., legal or
equitable, in and to all of the issued and outstanding shares of capital stock
of the Corporation (the "Corporation Shares") owned by NationsBank, N.A.
Consideration to NationsBank, N.A.. On the date hereof, Main Place
Holdings shall deliver the Shares to NationsBank, N.A., in consideration of the
contribution, transfer, assignment, conveyance and delivery of the Corporation
Shares.
ARTICLE II
CLOSING
<PAGE>
Section 2.1 Closing. The closing of the transactions contemplated
herein (the "Closing") shall be held at 10:00 a.m. on November 1, 1996, unless
otherwise agreed by the parties hereto, at the offices of Stroock & Stroock &
Lavan, Seven Hanover Square, New York, New York.
Section 2.2 Deliveries at the Closing. At the Closing:
(a) NationsBank, N.A. shall deliver to Main Place Holdings the
Corporation Shares, together with stock powers or other appropriate powers or
evidence of transfer in favor of Main Place Holdings or in blank.
(b) Main Place Holdings shall deliver to NationsBank, N.A. the
Shares as provided for in Section 1.2.
(c) Main Place Holdings and NationsBank, N.A. shall deliver
the certificates and other matters described in Articles VI and VII herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NATIONSBANK, N.A.
NationsBank, N.A. hereby represents and warrants to Main Place Holdings
as follows:
Section 3.1 Organization. The Corporation is duly organized, validly existing
and in good standing under the laws of its state of organization, has full power
and authority to conduct its business as it is presently being conducted and to
own, lease and operate its properties and assets.
Section 3.2 Subsidiaries. The Corporation has no subsidiaries.
Organizational Documents, Etc. True, complete and accurate copies of the
certificate of incorporation and bylaws, each of the foregoing as amended to the
date hereof, and the minute books and all stock books and stock transfer records
of the Corporation, each current to the date hereof, have been furnished to Main
Place Holdings, and there will be no amendments or changes to such declaration
of trust or bylaws prior to the Closing.
Section 3.4 Capital Stock, Etc. All of the issued and outstanding capital stock
of the Corporation is held by NationsBank, N.A. All the shares of Corporation's
capital stock are, and from the date hereof through the Closing, will be,
validly issued and outstanding, fully paid and non-assessable. There are no
outstanding options, warrants, rights (including preemptive rights),
subscriptions, calls, commitments, conversion rights, rights of exchange, plans
or other agreements of any
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<PAGE>
character providing for the purchase, issuance or sale of any shares of the
capital stock of the Corporation.
Section 3.5 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in (i) a violation or breach of, conflict with or default under any term
or provision of any contract, agreement, indebtedness, lease, encumbrance,
commitment, license, franchise, permit, authorization or concession to which
either of the Corporation or NationsBank, N.A. is a party or by which either of
the Corporation or NationsBank, N.A. is bound or affected or (ii) a violation by
the Corporation or by NationsBank, N.A. of any statute, rule, regulation,
ordinance, code, action or award applicable to the Corporation or to
NationsBank, N.A., as the case may be.
Section 3.6 Restrictive Documents. Neither NationsBank, N.A. or the Corporation
is subject to, or a party to, any mortgage, lien, lease, license, permit,
agreement, contract or instrument, or to any law, rule, ordinance, regulation,
action or any other restriction of any kind or character, which would have a
material adverse effect on the execution, delivery and performance of this
Agreement by the Corporation or NationsBank, N.A. and consummation by the
Corporation of the transactions contemplated hereby.
Consents and Approvals; Licenses. No consent, approval, authorization,
license, order or permit of, or declaration, filing or registration with, any
governmental entity, or any other person or entity, is required to be made or
obtained by the Corporation or by NationsBank, N.A. in connection with the
execution, delivery and performance by the Corporation and by NationsBank, N.A.,
as the case may be, of this Agreement and the consummation by the Corporation
and by NationsBank, N.A., as the case may be, of the transactions contemplated
hereby.
Section 3.8 Compliance with Law. The Corporation has complied with, and has not
violated, any judgments, rulings, orders, writs, injunctions, awards, decrees,
statutes, laws, ordinances, codes, rules or regulations of any governmental
entity applicable to it or to its assets, properties, business or operations. No
consent, approval, authorization, license, order or permit of, or declaration,
filing or registration with, any governmental entity which has not been obtained
is material to or necessary for the conduct of the business of the Corporation.
No violations are or have been recorded in respect of any consent, approval,
authorization, license, order or permit of, or declaration, filing or
registration with, any governmental entity, and no proceeding is pending, or to
the knowledge of the Corporation threatened, to revoke or limit any consent,
approval, authorization, license, order or permit of, or declaration, filing or
registration with, any governmental entity.
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<PAGE>
Section 3.9 Litigation. There is no litigation, arbitration, claim,
governmental or other proceeding or investigation (domestic or foreign, formal
or informal) pending or, to the knowledge of NationsBank, N.A. threatened or in
prospect (or any basis therefor known to NationsBank, N.A.), with respect to the
Corporation or any of its operations, business, properties or assets except as,
individually or in the aggregate, do not now have and are not reasonably
expected in the future to have a material adverse effect upon the financial
condition, results of operations, business, prospects, properties or assets of
the Corporation.
Section 3.10 Authorization. NationsBank, N.A. has the legal right, power and
authority to execute, deliver and perform its obligations under this Agreement
and each other agreement, document or instrument contemplated hereby to which it
is a party. This Agreement has been duly executed and delivered by NationsBank,
N.A. and is a legal, valid and binding obligation of NationsBank, N.A.,
enforceable against NationsBank, N.A. in accordance with its terms, except as
limited by the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto.
Section 3.11 No Other Agreements to Sell Securities. NationsBank, N.A.
has no legal obligation, absolute or contingent, to any person or entity other
than Main Place Holdings to transfer, assign, convey and deliver the Corporation
Shares.
Section 3.12 Investment Representations. NationsBank, N.A. is acquiring the
Shares for its own account, for investment and not with a view to the sale or
distribution thereof or with any present intention of selling or distributing
any thereof, except in conformity with the Securities Act of 1933, as amended
(the "Securities Act"). NationsBank, N.A. understands and acknowledges that the
Shares are not registered under the Securities Act and will not be transferable
except (i) pursuant to an effective registration statement under the Securities
Act, (ii) pursuant to Rule 144 or any successor rule under the Securities Act,
(iii) pursuant to a no-action letter issued by the Securities and Exchange
Commission to the effect that a proposed transfer of the Shares may be made
without registration under the Securities Act or (iv) pursuant to an opinion of
counsel for or reasonably acceptable to Main Place Holdings to the effect that
the proposed transfer is exempt from registration or qualification under the
Securities Act and relevant state securities laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MAIN PLACE HOLDINGS
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<PAGE>
Main Place Holdings hereby represents and warrants to NationsBank, N.A.
as follows:
Section 4.1 Organization of Main Place Holdings. Main Place Holdings is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full corporate power and authority to conduct its business as it
is presently being conducted and to own, lease and operate its properties and
assets. Main Place Holdings is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership of
property or nature of its business requires such qualification and where failure
to be so qualified would have a material adverse effect on Main Place. Main
Place Holdings was incorporated on September 23, 1996 and has done no business
and incurred no obligations except with respect to the transactions contemplated
hereby.
Section 4.2 Authorization. Main Place Holdings has all necessary corporate
power and authority and has taken all corporate action necessary to enter into
this Agreement to consummate the transactions contemplated hereby and to perform
its obligations hereunder. This Agreement has been duly executed and delivered
by Main Place Holdings and is a legal, valid and binding obligation of Main
Place Holdings enforceable against Main Place Holdings in accordance with its
terms, except as limited by the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors rights
generally and court decisions with respect thereto.
Section 4.3 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in (i) a violation of or a conflict with any provision of the certificate
of incorporation or bylaws of Main Place Holdings, (ii) a breach of, or a
default under, any term or provision of any contract, agreement, indebtedness,
lease, encumbrance, commitment, license, franchise, permit, authorization or
concession to which Main Place Holdings is a party or by which Main Place
Holdings is bound or affected which breach or default would have a material
adverse effect on the business or financial condition of Main Place Holdings or
its ability to consummate the transactions contemplated hereby or (iii) a
violation by Main Place Holdings of any statute, rule, regulation, ordinance,
code, order, judgment, writ, injunction, decree, action or award applicable to
Main Place Holdings, which violation would have a material adverse effect on the
business or financial condition of Main Place Holdings or its ability to
consummate the transactions contemplated hereby.
Section 4.4 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental entity, or any
other person or entity is required to be made or obtained by Main Place Holdings
in
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<PAGE>
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby.
Section 4.5 Issuance of Main Place Holdings Common Stock. The authorized
capital stock of Main Place Holdings consists of 200 shares of common stock, no
par value per share. As of the date hereof, 100 shares of Main Place Holdings
Common Stock are outstanding. Upon the issuance of the Shares as provided
herein, the Main Place Holdings Common Stock will be duly and validly issued,
fully paid and non-assessable. There are no outstanding options, warrants,
rights, calls, commitments, conversion rights, rights of exchange, plans or
other agreements of any character providing for the purchase, issuance or sale
of any shares of the capital stock of Main Place Holdings.
Section 4.6 Investment Representations. Main Place Holdings is
acquiring the Corporation Shares for its own account for investment and not with
a view to the sale or distribution thereof or with any present intention of
selling or distributing any thereof. Main Place Holdings understands and
acknowledges that the Corporation Shares are not registered under the Securities
Act and will not be transferable except (i) pursuant to an effective
registration statement under the Securities Act, (ii) pursuant to Rule 144 or
any successor rule under the Securities Act, (iii) pursuant to a no-action
letter issued by the Securities and Exchange Commission to the effect that a
proposed transfer of the Corporation Shares may be made without registration
under the Securities Act or (iv) pursuant to an opinion of counsel for the
Corporation to the effect that the proposed transfer is exempt from registration
or qualification under the Securities Act and relevant state securities laws.
ARTICLE V
COVENANTS OF NATIONSBANK, N.A. AND MAIN PLACE HOLDINGS
NationsBank, N.A., on the one hand, and Main Place Holdings, on the
other hand, covenant with each other as follows:
Section 5.1 Maintenance of Business Prior to Closing. During the period from
the date hereof through the Closing Date, NationsBank, N.A. shall cause the
Corporation to continue to carry on its business in the ordinary course and in
accordance with past practice and not to take any action inconsistent therewith
or with the consummation of the Closing.
Section 5.2 Share Legend. The certificates representing the Shares shall
bear the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for
-6-
<PAGE>
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Corporation."
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<PAGE>
ARTICLE VI
CONDITIONS TO NATIONSBANK N.A.'S OBLIGATIONS
The obligations of NationsBank, N.A. to consummate the transactions
provided for hereby are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions:
Section 6.1 Representations, Warranties and Covenants. All representations and
warranties of Main Place Holdings contained in or made pursuant to this
Agreement shall be true and correct in all material respects at and as of the
Closing Date (and such representations and warranties shall be deemed to be
repeated by Main Place Holdings at and as of the Closing Date), except as and to
the extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms hereof, and Main Place Holdings shall have performed in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
Section 6.2 Consents. All consents, approvals and waivers from third parties,
governmental entities and other parties necessary to permit NationsBank, N.A. to
transfer the Corporation Shares to Main Place Holdings as contemplated hereby
shall have been obtained.
Section 6.3 No Governmental Proceedings or Litigation. No action by any
governmental entity shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected materially to damage NationsBank, N.A. if the
transactions contemplated hereunder are consummated.
Section 6.4 Corporate Documents. NationsBank, N.A. shall have received from
Main Place Holdings resolutions adopted by the board of directors of Main Place
Holdings approving this Agreement and the transactions contemplated hereby
certified by Main Place Holdings' corporate secretary or assistant secretary.
Certificates. Main Place Holdings shall have furnished NationsBank, N.A. with
such certificates of Main Place Holdings officers and others to evidence
compliance with the conditions set forth in this Article VI as may be reasonably
requested by NationsBank, N.A.
ARTICLE VII
CONDITIONS TO MAIN PLACE HOLDINGS' OBLIGATIONS
The obligations of Main Place Holdings to consummate the transactions
provided for hereby are subject, in the discretion
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of Main Place Holdings, to the satisfaction, on or prior to the Closing Date, of
each of the following conditions:
Section 7.1 Representations, Warranties and Covenants. All representations and
warranties of NationsBank, N.A. contained in or made pursuant to this Agreement
shall be true and correct in all material respects at and as of the Closing Date
(and such representations and warranties shall be deemed to be repeated by
NationsBank, N.A. at and as of the Closing Date), except as and to the extent
that the facts and conditions upon which such representations and warranties are
based are expressly required or permitted to be changed by the terms hereof, and
NationsBank, N.A. shall have performed in all material respects all agreements
and covenants required hereby to be performed by them prior to or on the date of
the Closing.
Section 7.2 Consents. All consents, approvals and waivers from third parties,
governmental entities and other parties necessary to permit NationsBank, N.A. to
transfer, and Main Place Holdings to accept the Corporation Shares as
contemplated hereby shall have been obtained.
Section 7.3 No Governmental Proceedings or Litigation. No action by any
governmental entity shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to affect materially the right or ability of Main Place
Holdings to own the Corporation Shares after the Closing or materially to damage
Main Place Holdings or the Corporation if the transactions contemplated
hereunder are consummated.
Certificates. NationsBank, N.A. shall have furnished Main Place Holdings with
such certificates to evidence compliance with the conditions set forth in this
Article VII as may be reasonably requested by Main Place Holdings.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Termination. If any condition precedent to NationsBank, N.A.'s
obligations hereunder is not satisfied and such condition is not waived by
NationsBank, N.A. on or prior to the date of the Closing, or if any condition
precedent to Main Place Holdings' obligations hereunder is not satisfied and
such condition is not waived by Main Place Holdings on or prior to the date of
the Closing, NationsBank, N.A. or Main Place Holdings, as the case may be, may
terminate this Agreement at their or its option by notice to the other party.
This Agreement may be terminated by the mutual agreement of the parties hereto.
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Section 8.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party; except that Main Place
Holdings may assign all its rights and obligations hereunder to a subsidiary or
subsidiaries of Main Place Holdings or to a successor to the business of Main
Place Holdings; provided, however, that such assignment shall not release Main
Place Holdings with respect to any such obligations or liabilities. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. No other person
shall have any right, benefit or obligation hereunder.
Section 8.3 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to any other
party shall be in writing and shall be deemed to have been given (a) if mailed,
at the time when mailed in any general or branch office of the United States
Postal Service, enclosed in a registered or certified postage-paid envelope, (b)
if sent by facsimile transmission, when so sent and receipt acknowledged by an
appropriate telephone or facsimile receipt or (c) if sent by other means, when
actually received by the party to which such notice has been directed, in each
case at the respective addresses or numbers set forth below or such other
address or number as such party may have fixed by notice:
If to NationsBank, N.A. addressed to:
NationsBank, N.A.
c/o NationsBank Corporation, Legal Department
100 North Tryon Street, 20th Floor
Charlotte, North Carolina 28255
Attention: George Walls, Esq.
Fax: (704) 386-6453
If to Main Place Holdings addressed to:
Main Place Holdings Corporation
100 North Tryon Street, 23rd Floor
Charlotte, North Caroling 28255
Attention: John E. Mack
Fax: (704) 386-0270
Section 8.4 Governing Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
New York (without reference to the choice of law provisions of New York law)
except with respect to matters of law concerning the internal corporate affairs
of Main Place Holdings, and as to those matters the law of the State of Delaware
shall govern.
Section 8.5 Entire Agreement; Modifications and Waivers. This Agreement,
together with all exhibits and schedules hereto,
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constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party or parties to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other rights, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity.
Section 8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 8.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement or
any other such instrument and, to the extent enforceable, such provisions shall
be replaced by substitute provisions similar thereto, or other provisions, so as
to provide to NationsBank, N.A. and Main Place Holdings, to the fullest extent
permitted by applicable law, the benefits intended by such provisions.
Section 8.8 Titles. The titles, captions or headings of the Articles and
Sections herein are for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MAIN PLACE HOLDINGS CORPORATION
By:________________________________
Name:
Title:
NATIONSBANK, N.A.
By:________________________________
Name:
Title:
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Exhibit 3(a)
MAIN PLACE REAL ESTATE INVESTMENT TRUST
DECLARATION OF TRUST
Dated October 24, 1996
This DECLARATION OF TRUST ("Declaration of Trust" or "Declaration") is
made as of the date set forth above by the undersigned trustees.
WHEREAS, the Trustees desire to create a real estate investment trust
under the laws of the State of Maryland; and
WHEREAS, the Trustees desire that this trust qualify as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code"), so long as such qualification, in the opinion of the Trustees, is
advantageous to the Shareholders; and
WHEREAS, the Trustees desire that this trust qualify as a "real estate
investment trust" under Title 8 of the Corporations and Associations Article of
the Annotated Code of Maryland, as the same may amended from time to time (the
"Maryland REIT Law"); and
WHEREAS, the beneficial interest in the Trust shall be divided into
transferrable units designated herein as Shares which shall be of one or more
classes and evidenced by certificates;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all property which they have or may hereafter acquire as such Trustees,
together with the proceeds thereof, and manage the Trust Property (as
hereinafter defined) for the benefit of the Shareholders as provided by this
Declaration of Trust.
ARTICLE I
THE TRUST; DEFINITIONS
Section 1.1 Name. The name of the trust (the "Trust") is MAIN PLACE
REAL ESTATE INVESTMENT TRUST. So far as may be practicable, the business of the
Trust shall be conducted and transacted under that name, which name (and the
word "Trust" wherever issued in this Declaration of Trust, except where the
context otherwise requires) shall not refer to the Trustees, individually or
personally or to the beneficiaries or Shareholders of the Trust or to any
officers, employees or agents of the Trust or of such Trustees.
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Under circumstances in which the Trustees determine that the use of the
name "Main Place Real Estate Investment Trust" is not practicable, legal or
convenient, and subject to the restrictions hereof, they may use any other
designation or name for the Trust. The Trust shall have the authority to file
such assumed name certificates or other instruments in such places as may be
required by applicable law to operate under such assumed name or names.
Section 1.2 Resident Agent. The name of the resident agent of the
Trust in the State of Maryland is Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. The Trust may have such offices or places of
business within or without the State of Maryland as the Trustees may from time
to time determine.
Section 1.3 Nature of Trust. The Trust is a real estate investment
trust within the meaning of the Maryland REIT Law. The Trust shall not be deemed
to be a general partnership, limited partnership, joint venture, joint stock
company or, except as provided in Section 11.4, a corporation (however, no
provisions contained herein shall preclude the Trust from being treated for tax
purposes as an association under the Code).
Section 1.4 Powers. The Trust shall have all of the powers granted
to real estate investment trusts generally by the Maryland REIT Law or any
successor statute and shall have any other and further powers as are not
inconsistent with and are appropriate to promote and attain the purposes set
forth in this Declaration of Trust. In addition, it is intended that the
business of the Trust will be conducted so that the Trust will qualify (so long
as such qualification, in the opinion of the Trustees, is advantageous to the
Shareholders) as a "real estate investment trust" as defined in the Code.
Section 1.5 Purpose. The purpose for which the Trust is organized is
(a) to purchase or otherwise acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) mortgage loans, certificates or
other securities guaranteed by the Government National Mortgage Association,
(ii) mortgage loans, certificates or other securities issued or guaranteed by
the Federal National Mortgage Association, (iii) mortgage loans, certificates or
other securities issued or guaranteed by the Federal Home Loan Mortgage
Corporation, (iv) deeds of trust, mortgage loans, mortgage pass-through
certificates or collateralized mortgage obligations issued by any person or
entity or other types of mortgage-related securities including residual
interests, (v) direct obligations of, and obligations fully guaranteed by, the
United States of America or any agency or instrumentality of the United States
the obligations of which are backed by the full faith and credit of the United
States of America, (vi) certificates representing interests in the principal
and/or interest payable on any of the foregoing and (vii) such other securities
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and investments as may be permitted by or acceptable to the applicable
nationally-recognized statistical rating agency or agencies in connection with
issuance, offer and sale by the Trust of one or more series of Mortgage-Backed
Bonds (the "Bonds") collateralized by any of the foregoing, related property
and/or collections and proceeds in respect thereof; (b) to issue debt
subordinated to the Bonds in connection with the acquisition of collateral for
the Bonds; provided, however, that the acts and activities and exercise of any
powers permitted in subsections (a) and (b) of this Section 1.5 require the
prior written consent of the nationally-recognized statistical rating agency or
agencies which rate any outstanding series of Bonds that any such activities
will not result in a downgrade, qualification or withdrawal; and (c) to engage
in any activity and to exercise any powers permitted to real estate investment
trusts under the laws of the State of Maryland that are incident to the
foregoing and necessary or convenient to accomplish the foregoing.
Section 1.6 Conditions of Operation of the Trust. The Trustees shall
operate the Trust pursuant to the powers delineated herein, subject to the
following conditions:
(a) The Trust shall maintain a separate principal office
from which its business shall be conducted, which office may be located in
identifiable space within the headquarters of NationsBank Corporation pursuant
to a lease on commercially reasonable terms.
(b) The Trust shall maintain corporate records and books
of account and shall not commingle its corporate records and books of account
with the corporate records and books of account of any other entity.
(c) The Board of Trustees of the Trust shall hold appropriate
meetings to authorize all of its actions.
(d) The funds and other assets of the Trust shall not be
commingled with those of any other entity.
(e) The Trust shall pay its own expenses, including salaries
for its employees, if any, and shall not guarantee or hold itself out as being
liable for the debts of any other party.
(f) The Trust shall not form, or cause to be formed, any
subsidiaries.
(g) The Trust shall act solely in the name designated under
this Declaration of Trust and through its duly authorized officers or agents in
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the conduct of its business, and shall conduct its business so as not to mislead
others as to the identity of the entity with which they are concerned.
(h) The Trust shall operate in such a manner that it will
qualify as a real estate investment trust under the Code.
(i) The Trust will conduct its business in its own name.
(j) The Trust will maintain separate financial statements.
(k) The Trust shall pay its own liabilities out of its own
funds.
(l) The Trust will observe all corporate formalities.
(m) The Trust shall maintain an arm's length relationship with
affiliates, as further detailed in Article VIII.
(n) The Trust shall not acquire obligations or securities of
its Trustees or Shareholders.
(o) The Trust shall use its own separate stationery, invoices
and checks.
(p) The Trust shall not pledge its assets for the benefit of
any other entity or make any loans or advances to any entity.
(q) The Trust shall hold itself out as a separate entity.
(r) The Trust shall correct any known misunder-standing
regarding its separate identity.
(s) The Trust shall maintain adequate capital in light of its
contemplated business operations.
Section 1.7 Definitions. As used in this Declaration of Trust, the
following terms shall have the following meanings unless the context otherwise
requires:
"Adviser" means the Person, if any, appointed, employed or contracted
with or by the Trust pursuant to Section 4.1.
"Affiliate" or "Affiliated" means, as to any corporation, partnership,
trust or other association (other than the Trust), any Person (i) that holds
beneficially, directly or indirectly, 1% or more of the outstanding stock or
equity interests thereof or (ii) who is an officer, director, partner or trustee
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thereof or of any Person which controls, is controlled by, or is under common
control with, such corporation, partnership, trust or other association or (iii)
which controls, is controlled by, or under common control with, such
corporation, partnership, trust or other association.
"Bylaws" means the Bylaws of the Trust, as amended from time to time.
"Mortgages" means mortgages, deeds of trust, participations in
mortgages or other security interests on or applicable to Real Property.
"Person" means an individual, corporation, partnership, estate, trust
(including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, or any government or agency or political subdivision thereof,
and also includes a group as that term is used for purposes of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended.
"Real Property" or "Real Estate" means land, rights in land (including
leasehold interests), and any buildings, structures, improvements, located on or
used in connection with land and rights or interests in land.
"REIT Provisions of the Code" means Sections 856 through 860 of the
Code and any successor or other provisions of the Code relating to real estate
investment trusts (including provisions as to the attribution of ownership of
beneficial interests therein) and the regulations promulgated thereunder.
"Securities" means any stock, shares or other evidences of equity or
beneficial or other interests, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in,
temporary or interim certificates for, receipts for, guarantees of, or warrants,
options or rights to subscribe to, purchase or acquire, any of the foregoing.
"Securities of the Trust" means any Securities issued by the Trust.
"Shareholders" means holders of record of outstanding Shares.
"Shares" means units of beneficial interest in the Trust and shall
include Class A Trust Shares or Class B Trust Shares (each as defined in Section
6.1), and any other securities issued by the Trust that are designated as
Shares.
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"Trustees" or "Board of Trustees" means, collectively, the individuals
named in Section 2.2 of this Declaration of Trust so long as they continue in
office and all other individuals who have been duly elected and qualify as
Trustees of the Trust hereunder.
"Trust Property" means any and all property, real, personal or
otherwise, tangible or intangible, which is transferred or conveyed to the Trust
or the Trustees (including all rents, income, profits, and gains therefrom),
which is owned or held by, or for the account of, the Trust or the Trustees.
ARTICLE II
TRUSTEES
Section 2.1 Number. The number of Trustees initially shall be no
less than 3 nor more than 15, which number may thereafter be increased or
decreased from time to time by resolution of the Trustees then in office, in
accordance with the Bylaws of Trust; however, the total number of Trustees shall
not be more than 15. No reduction in the number of Trustees shall cause the
removal of any Trustee from office prior to the expiration of his term. At least
one trustee of the Trust (the "Outside Trustee") and at least one officer of the
Trust (the "Outside Officer") shall not be, and for at least eighteen months
prior thereto shall not have been, a director, officer or employee of, or direct
or indirect beneficial owner of any of the voting securities of, or member of
the immediate family of any such director, officer, employee or beneficial owner
of, or independent contractor or consultant to, NationsBank Corporation or any
corporate affiliate of NationsBank Corporation; provided, however, that the
Outside Trustee and the Outside Officer may be the same person. Notwithstanding
the foregoing, both the Outside Trustee and the Outside Officer may be a
director or officer of one or more other corporations that is an affiliate or
are affiliates of NationsBank Corporation, provided that (i) each such
corporation is or was formed with limited purposes similar to the Trust and (ii)
such person does not earn, in the aggregate, material compensation for serving
in such positions. For the purposes of the foregoing, an "affiliate" of an
entity is an entity controlling, controlled by, or under common control with
such entity. Notwithstanding any other provision of this Declaration of Trust or
any other provision of law that so empowers the Trust, in the event of the
death, incapacity, or resignation of the Outside Trustee or the Outside Officer,
or such position is otherwise vacated, a successor Outside Trustee or Outside
Officer, as applicable, shall be appointed by the remaining trustees of the
Trust and, in the case of an Outside Trustee, no action requiring the vote of
the Outside Trustee of the Trust shall be taken until a successor Outside
Trustee is elected and qualified and approves such action.
Section 2.2 Initial Board: Term. The name and address of the
Trustees who shall serve until the earlier of the first annual meeting or until
their successors are duly elected and qualify shall be:
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Name Address
G. Patrick Phillips c/o NationsBank Corporation
John E. Mack 100 North Tryon Street
William L. Maxwell Charlotte, North Carolina
28255
James H. Luther 3739 Bon Rea Drive
(Outside Trustee) Charlotte, North Carolina
28226
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Trustees shall serve for a term of one year. Each Trustee will hold
office during such term until the next annual meeting of Shareholders entitled
to vote for the election of Trustees and until his or her successor is duly
elected and qualifies.
Section 2.3 Resignation, Removal or Death. Any Trustee may resign by
written notice to the remaining Trustees, effective upon execution and delivery
to the Trust of such written notice or upon any future date specified in the
notice. A Trustee may be removed, with or without cause at a meeting of the
Shareholders called for that purpose, by the affirmative vote of the holders of
not less than a majority of the Shares then outstanding and entitled to vote in
the election of Trustees. Upon the resignation or removal of any Trustee, or
upon his or her otherwise ceasing to be a Trustee, such Trustee shall (i)
automatically cease to have any right, title, or interest in and to the Trust
Property, (ii) execute and deliver such documents as the remaining Trustees
require for the conveyance of any Trust Property held in such Trustee's name, if
any, and (iii) shall account to the remaining Trustees as they require for all
property which he or she holds as Trustee. Upon the incapacity or death of any
Trustee, the Trustee's legal representative shall perform the aforementioned
acts. Notwithstanding the failure of any Trustee or his or her representative to
execute and deliver any such document, each Trustee, by agreeing to serve as
such, hereby assigns, conveys and transfers to the remaining Trustees, upon
ceasing to act as a Trustee, all of his or her right, title and interest in and
to any Trust Property, and hereby constitutes and appoints each of the remaining
Trustees as his or her attorney in fact to execute, acknowledge, deliver and
record any and all documents and instruments, in his or her name, place and
stead and on his or her behalf, to effectuate and/or evidence such assignments,
conveyance and transfer, with such power and authority as such Trustee may
exercise personally if he or she were present in person.
Section 2.4 Legal Title. Legal title to all Trust Property shall be
vested in the Trust in its own name or the Trustees' name, and the Trustees may
cause legal title to any Trust Property to be held by or in the name of any
Trustee or any other Person as nominee. The right, title, and interest of the
Trustees in and to the Trust Property shall automatically vest in successor and
additional Trustees upon qualification and acceptance of election or appointment
as Trustees, and they shall thereupon have all the rights and obligations of
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Trustees, whether or not conveyancing documents have been executed and delivered
pursuant to Section 2.3 or otherwise. Written evidence of the qualification and
acceptance of election or appointment of successor and additional Trustees may
be filed with the records of the Trust and in such other offices, agencies or
places as the Trustees may deem necessary or desirable.
Section 2.5 Fiduciary Duties of Trustees.
(a) In General. A Trustee shall perform his or her duties as a
Trustee, including his or her duties as a member of a committee of the Board of
Trustees on which he or she serves:
(i) In good faith;
(ii) In a manner he or she reasonably believes to be in the
best interest of the Trust; and
(iii) With the care that an ordinarily prudent person in a
like position would use under similar circumstances.
(b) Reliance on Information from Others. In performing his or
her duties, a Trustee is entitled to rely on any information, opinion, report or
statement, including any financial statement or other financial data, prepared
or presented by:
(i) An officer or employee of the Trust whom the Trustee
reasonably believes to be reliable and competent in the
matters presented;
(ii) A lawyer, certified public accountant or other person,
as to a matter which the Trustee reasonably believes to be
within the person's professional or expert competence; or
(iii) A committee of the Board of Trustees on which the
Trustees does not serve, as to a matter within its
designated authority, if the Trustee reasonably believes the
committee to merit confidence.
A Trustee is not acting in good faith if he or she has any knowledge concerning
the matter in questions which would cause such reliance to be unwarranted.
(c) Limited Liability. A person who performs his or her duties
in accordance with the standard provided in this section 2.5 shall have the
immunity from liability described under Section 5-348 of the Courts and Judicial
Proceedings Article or any successor provision of the Maryland Code.
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ARTICLE III
POWERS OF TRUSTEES
Section 3.1 General. Subject to the express limitations herein or in
the Bylaws, (1) the business and affairs of the Trust shall be managed under the
direction of the Board of Trustees and (2) the Trustees shall have full,
exclusive and absolute power, control and authority over the Trust Property and
over the business of the Trust as if they, in their own right, were the sole
owners thereof. The Trustees may take any actions in their sole judgment and
discretion as are necessary or desirable to conduct the business of the Trust.
This Declaration of Trust shall be construed with a presumption in favor of the
grant of power and authority to the Trustees. Any construction of this
Declaration of Trust or determination made in good faith by the Trustees
concerning their powers and authority hereunder shall be conclusive and binding.
The enumeration and definition of particular powers of the Trustees included in
this Article III shall in no way be limited or restricted by reference to or
inference from the terms of this or any other provision of this Declaration of
Trust or construed or deemed by inference or otherwise in any manner to exclude
or limit the powers conferred upon the Trustees under the general laws of the
State of Maryland as now or hereafter in force.
Section 3.2 Specific Powers and Authority. Subject only to the
express limitations herein, and those in Sections 1.5, 2.1 and 3.3, and in
addition to all other powers and authority conferred by this Declaration of
Trust, by the Maryland REIT Law and by any other provisions of applicable law,
the Trustees, without any vote, action or consent by the Shareholders, shall
have and may exercise, at any time or times, in the name of the Trust or on its
behalf the following powers and authorities:
(a) Investments. Subject to Section 8.5, to invest in,
purchase or otherwise acquire and to hold real, personal or mixed, tangible or
intangible, property of any kind wherever located, or rights or interests
therein or in connection therewith, all without regard to whether such property,
interests or rights are authorized by law for the investment of funds held by
trustees or other fiduciaries, or whether obligations the Trust acquires have a
term greater or lesser than the term of office of the Trustees or the possible
termination of the Trust, for such consideration as the Trustees may deem proper
(including cash, property of any kind or Securities of the Trust), provided,
however, that the Trustees shall take such actions as they deem necessary and
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desirable to comply with any requirements of the Maryland REIT Law and the Code
relating to types of assets held by the Trust.
(b) Sale, Disposition and Use of Property. Subject to
Article V and Sections 8.5 and 9.3, to sell, rent, lease, hire, exchange,
release, partition, mortgage, grant security interests in, encumber, negotiate,
dedicate, grant easements in and options with respect to, convey, transfer
(including transfers to entities wholly or partially owned by the Trust or the
Trustees) or otherwise dispose of any or all of the Trust Property by deeds
(including deeds in lieu of foreclosure with or without consideration), trust
deeds, assignments, bills of sale, transfers, leases, mortgages, financing
statements, security agreements and other instruments for any of such purposes
executed and delivered for and on behalf of the Trust or the Trustees by one or
more of the Trustees or by duly authorized officer, employee, agent or nominee
of the Trust, on such terms as they deem appropriate; to give consents and make
contracts relating to the Trust Property and its use or other property or
matters; to develop, improve, manage, use, alter, and otherwise deal with the
Trust Property; and to rent, lease or hire from others property of any kind;
provided, however, that the Trust may not use or apply land for any purposes not
permitted by applicable law.
(c) Financing. Subject to Section 1.5, to borrow or in
any other manner raise money for the purposes and on the terms they determine,
and to evidence the same by issuance of Securities of the Trust, which may have
such provisions as the Trustees determine; to reacquire such securities of the
Trust; to enter into other contracts or obligations on behalf of the Trust; to
guarantee, indemnify or act as surety with respect to payment or performance of
obligations of any Person; to mortgage, pledge, assign, grant security interests
in or otherwise encumber the Trust Property to secure any such securities of the
Trust, contracts or obligations (including guarantees, indemnifications and
suretyships); and to renew, modify, release, compromise, extend, consolidate or
cancel, in whole or in part, any obligation to or of the Trust or participate in
any reorganization of obligors to the Trust.
(d) Loans. Subject to the provisions of Section 8.5, to
lend money or other Trust Property on such terms, for such purposes and to such
Persons as they may determine.
(e) Issuance of Securities. Subject to the provisions of
Article VI, to create and authorize the issuance, in shares, units or amounts of
one or more types, series or classes, of Securities of the Trust, which may have
such voting rights, dividend or interest rates, preferences, subordinations,
conversion or redemption prices or rights, maturity dates, distribution,
exchange, or liquidation rights or other rights as the Trustees may determine,
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without vote of or other action by the Shareholders; to issue any type of
Securities of the Trust, and any options, warrants, or rights to subscribe
therefor, all without vote of or other action by the Shareholders, to such
Persons for such consideration, at such time or times and in such manner and on
such terms as the Trustees determine; to list any of the Securities of the Trust
on any securities exchange or quotation system; and to purchase or otherwise
acquire, hold, cancel, reissue, sell and transfer any Securities of the Trust.
(f) Expenses and Taxes. To pay any charges, expenses or
liabilities necessary or desirable, in the sole discretion of the Trustees, for
carrying out the purposes of this Declaration of Trust and conducting the
business of the Trust, including compensation or fees to Trustees, officers,
employees and agents of the Trust, and to the Persons contracting with the
Trust, and any taxes, levies, charges and assessments of any kind imposed upon
or chargeable against the Trust, the Trust Property, or the Trustees in
connection therewith; and to prepare and file any tax returns, reports or other
documents and take any other action relating to the payment of any such charges,
expenses or liabilities. In connection with the preparation and filing of tax
returns, the Trustees shall elect on any tax return to be treated as a
corporation if such election is necessary under the Code in order to maintain
the status of the Trust as a real estate investment trust.
(g) Collection and Enforcement. To collect, sue for and
receive money or other property due to the Trust; to consent to extensions of
the time for payment, or to the renewal of any Securities or obligations; to
engage or to intervene in, prosecute, defend, compound, enforce, compromise,
release, abandon or adjust any actions, suits, proceedings, disputes, claims,
demands, security interests, or things relating to the Trust, the Trust
Property, or the Trust's affairs; to exercise any rights and enter into any
agreements, and take any other action necessary or desirable in connection with
the foregoing.
(h) Deposits. To deposit funds or Securities constituting
part of the Trust Property in banks, trust companies, savings and loan
associations, financial institutions and other depositories, whether or not such
deposits will draw interest, subject to withdrawal on such terms and in such
manner as the Trustees determine.
(i) Allocation Accounts. To determine whether moneys,
profits or other assets of the Trust shall be charged or credited to, or
allocated between, income and capital, including whether or not to amortize any
premium or discount and to determine in what manner any expenses or
disbursements are to be borne as between income and capital (regardless of how
such items would normally or otherwise be charged to or allocated between income
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and capital without such determination); to treat any dividend or other
distribution on any investment as, or apportion it between, income and capital,
in their discretion to provide reserves for depreciation, amortization,
obsolescence or other purposes in respect of any Trust Property in such amounts
and by such methods as they determine; to determine what constitutes net
earnings, profits or surplus; to determine the method or form in which the
accounts and records of the Trust shall be maintained; and to allocate to the
shareholders' equity account less than all of the consideration paid for Shares
and to allocate the balance to paid-in capital or capital surplus.
(j) Valuation of Property. To determine the value of all
or any part of the Trust Property and of any services, Securities, property or
other consideration to be furnished to or acquired by the Trust, and to revalue
all or any part of the Trust Property, all in accordance with such appraisals or
other information as are reasonable, in their sole judgment.
(k) Ownership and Voting Powers. To exercise all of the
rights, powers, options and privileges pertaining to the ownership of any
Mortgages, Securities, Real Estate and other Trust Property to the same extent
that an individual owner might, including without limitation to vote or give any
consent, request or notice or waive any notice, either in person or by proxy or
power of attorney, which proxies and powers of attorney may be for any general
or special meetings or action, and may include the exercise of discretionary
powers.
(l) Officers, Etc.; Delegation of Powers. To elect,
appoint or employ such officers for the Trust and such committees of the Board
of Trustees with such powers and duties as the Trustees may determine or the
Trust's Bylaws provide; to engage, employ or contract with and pay compensation
to any Person (including, subject to Section 8.5, any Trustee, any officer,
employee or agent of the Trust and any Person who is an Affiliate of any
Trustee) as agent, representative, Adviser, member of an advisory board,
employee or independent contractor (including advisers, consultants, transfer
agents, registrars, underwriters, accountants, attorneys at law, real estate
agents, property and other managers, appraisers, brokers, architects, engineers,
construction managers, general contractors or otherwise) in one or more
capacities, to perform such services on such terms as the Trustees may
determine; to delegate to one or more Trustees, officers or other Persons
engaged or employed as aforesaid or to committees of Trustees or to the Adviser,
the performance of acts or other things (including granting of consents), the
making of decisions and the execution of such deeds, contracts or other
instruments, either in the names of the Trust, the Trustees or as their
attorneys or otherwise, as the Trustees may determine; and to establish such
committees as they deem appropriate.
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(m) Reorganization, Etc. Subject to Sections 3.3, 9.2 and
9.3, to cause to be organized or assist in organizing any Person under the laws
of any jurisdiction to acquire all or any part of the Trust Property or carry on
any business in which the Trust shall have an interest; to merge or consolidate
the Trust with any Person; to sell, rent, lease, hire, convey, negotiate,
assign, exchange or transfer all or any part of the Trust Property to or with
any Person in exchange for Securities of such Person or otherwise; and to lend
money to, subscribe for and purchase the Securities of, and enter into any
contracts with, any Person in which the Trust holds, or is about to acquire,
Securities or any other interests.
(n) Insurance. To purchase, and pay for out of Trust
Property, insurance policies insuring the Trust and the Trust Property against
any and all risks, and insuring the Shareholders, Trustees, officers, employees
and agents of the Trust (or any one or more of them) individually against all
claims and liabilities of every nature arising by reason of holding or having
held any such status, office or position or by reason of any action alleged to
have been taken or omitted (including those alleged to constitute misconduct,
gross negligence, reckless disregard of duty or bad faith) by any such Person in
such capacity, whether or not the Trust would have the power to indemnify such
Person against such claim or liability.
(o) Executive Compensation, Pension and Other Plans. To
adopt and implement executive compensation, pension, profit sharing, stock
option, stock bonus, stock purchase, stock appreciation rights, savings, thrift,
retirement, incentive or benefit plans, trusts or provisions, applicable to any
or all Trustees, officers, employees or agents of the Trust, or to other Persons
who have benefitted the Trust, all on such terms and for such purposes as the
Trustees may determine. (For purposes of these plans the term "stock" shall
refer to Shares or other Securities of the Trust.)
(p) Distributions. To declare and pay dividends or other
distributions to Shareholders, subject to the provisions of Section 6.4.
(q) Indemnification. In addition to the indemnification
provided for in Section 8.4, to indemnify any Person, including any Adviser or
independent contractor, with whom the Trust has dealings.
(r) Charitable Contributions. To make donations for the
public welfare or for community, charitable, religious, educational, scientific,
civic or similar purposes, regardless of any direct benefit to the Trust.
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(s) Discontinue Operations: Bankruptcy. To discontinue
the operations of the Trust (subject to Sections 3.3 and 10.2); to petition or
apply for relief under any provision of federal or state bankruptcy, insolvency
or reorganization laws or similar laws for the relief of debtors; to permit any
Trust Property to be foreclosed upon without raising any legal or equitable
defenses that may be available to the Trust or the Trustees or otherwise
defending or responding to such foreclosure; to confess judgment against the
Trust; or to take such other action with respect to indebtedness or other
obligations of the Trustees, in such capacity, the Trust Property or the Trust
as the Trustees in their discretion may determine.
(t) Termination of Status. To terminate the status of the
Trust as a real estate investment trust under the REIT Provisions of the Code.
(u) Fiscal Year. Subject to the Code, to adopt, and from
time to time change, the fiscal year of the Trust.
(v) Seal. To adopt and use a seal, provided that the use
of a seal shall not be required for the execution of instruments or obligations
of the Trust.
(w) Bylaws. To adopt, implement and, from time to time,
amend Bylaws of the Trust relating to the business and organization of the Trust
which are not inconsistent with the provisions of this Declaration of Trust.
(x) Voting Trust. To participate in and accept Securities
issued under, or subject to, any voting trust.
(y) Proxies. To solicit proxies of the Shareholders at
the expense of the Trust.
(z) Further Powers. To do all acts and things and
execute and deliver all instruments incident to the foregoing powers,
and to exercise all powers which they deem necessary, useful or desirable to
carry on the business of the Trust or to carry out the provisions of this
Declaration of Trust, even if such powers are not specifically provided hereby.
Section 3.3 Restrictions on Powers and Authority.
Notwithstanding any other provision of this Declaration of Trust and any
provision of law that otherwise so empowers the Trust, the Trust shall not,
without the approval of a majority of the Board of Trustees of the Trust
institute proceedings to be adjudicated a bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against it, or file
a petition or answer or consent seeking reorganization or relief under the
Federal bankruptcy laws, or consent
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to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, conservator sequestrator (or any other similar
official) of the Trust or of any substantial part of the Trust's property, or
make an assignment for the benefit of creditors, or admit in writing its
inability to pay its debts generally as they become due, or take corporate
action in furtherance of any such action. The Trust shall not, for so long as
any Bonds are outstanding, without the prior written consent of the
nationally-recognized statistical rating agency or agencies which rate such
Bonds, do any of the following:
(i) dissolve or liquidate, in whole or in part;
(ii) merge or consolidate with any other corporation or
association other than a corporation wholly owned,
directly or indirectly, by any entity owning 100% of
the voting stock of the Trust and having a
certificate of incorporation or other organizational
document containing provisions identical to the
provisions of Sections 1.5, 2.1 and this Section 3.3;
(iii) sell all or substantially all of the assets of the
Trust; and
(iv) amend this Declaration of Trust to alter in any
manner or delete Sections 1.5, 2.1, 7.1 or this
Section 3.3.
ARTICLE IV
ADVISER
Section 4.1 Appointment. The Trustees are responsible for setting
the general policies of the Trust and for the general supervision of its
business conducted by officers, agents, employees, advisers or independent
contractors of the Trust. However, the Trustees are not required personally to
conduct the business of the Trust, and they may (but need not) appoint, employ
or contract with any Person (including a Person Affiliated with any Trustee) as
an Adviser and may grant or delegate such authority to the Adviser as the
Trustees may, in their sole discretion, deem necessary or desirable. The
Trustees may determine the terms of retention and the compensation of the
Adviser and may exercise broad discretion in allowing the Adviser to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trust and to make executive decisions which
conform to general policies and principles established by the Trustees.
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Section 4.2 Affiliation and Functions. The Trustees, by resolution
or in the Bylaws, may provide guidelines, provisions, or requirements concerning
the action and functions of the Adviser.
ARTICLE V
INVESTMENT POLICY
The fundamental investment policy of the Trust is to make investments
in such a manner as to comply with the REIT Provisions of the Code and with the
requirements of the Maryland REIT law, with respect to the composition of the
Trust's investments and the derivation of its income. Subject to Section 3.2(t),
the Trustees will use their best efforts to carry out this fundamental
investment policy and to conduct the affairs of the Trust in such a manner as to
continue to qualify the Trust for the tax treatment provided in the REIT
Provisions of the Code; however, no Trustee, officer, employee or agent of the
Trust shall be liable for any act or omission resulting in the loss of tax
benefits under the Code, except to the extent provided in Section 8.2. The
Trustees may change from time to time, by resolution or in the Bylaws of the
Trust, such investment policies as they determine to be in the best interests of
the Trust, including prohibitions or restrictions upon certain types of
investments.
ARTICLE VI
SHARES
Section 6.1 Authorized Shares. The total number of shares of
beneficial interest which the Trust is authorized to issue is 200,200 shares,
all of which shall be common shares ("Common Shares"). Of the 200,200 shares
designated as Common Shares, 200,000 shall be designated Class A Trust Shares,
par value $1.00 per share, and 200 shall be designated Class B Trust Shares, par
value $10,000 per share. The Class A Trust Shares and the Class B Trust Shares
shall have varying rights and preferences as described in Section 6.2. The Board
of Trustees shall have the power from time to time, (a) to classify or
reclassify, in one or more series, any unissued Common Shares and (b) to
reclassify any unissued Common Shares of any series, in the case of either (a)
or (b) by setting or changing the number of shares constituting such series and
the designation, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of such shares; and, in such event, the Trust shall
file for record with the State Department of Assessments and Taxation of
Maryland articles supplementary in substance and form as prescribed by the
Maryland REIT Law. Shares may be issued for such consideration as the Trustees
determine, or if issued as a result of a Share dividend or Share split, without
any consideration, in which case all Shares so issued shall be fully paid and
non-assessable by the Trust.
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Section 6.2 Common Shares.
(a) Class A Trust Shares. The Class A Trust Shares shall
be entitled to the following rights and preferences:
(i) Dividend Rights. Subject to the preferential
dividend rights of the Class B Trust Shares, the holders of Class A Trust Shares
shall be entitled to receive such dividends as may be declared by the Board of
Trustees.
(ii) Rights Upon Liquidation. Subject to the
preferential rights of the Class B Trust Shares, in the event of any voluntary
or involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Trust, each holder of Class A Trust Shares or Excess Class A
Trust Shares shall receive out of the net assets of the Trust all assets of the
Trust available for distribution to the holders of Common Shares or Excess
Common Shares so long as the net assets of the Trust exceed $10,000 per Class B
Trust Share outstanding; thereafter, the holders of Class A Trust Shares shall
receive a distribution of any assets available for distribution after any Class
B Trust Share liquidating distributions; provided, however, that if any
distributions in respect of Excess Class A Trust Shares exceed the Market Price
(as defined in Section 6.5) of the Class A Trust Shares converted into such
Excess Class A Trust Shares on the date of such conversion, then the cumulative
amounts distributable in respect of such Excess Class A Trust Shares shall not
exceed an amount equal to such Market Price, and the excess shall be distributed
to the holders of Class A Trust Shares other than the Excess Class A Trust
Shares.
(iii) Voting Rights. The holders of Class A Trust
Shares shall be entitled to vote on all matters (for which a common shareholder
shall be entitled to vote thereon) at all meetings of the shareholders of the
Trust, and shall be entitled to one vote for each Class A Trust Share entitled
to vote at such meeting.
(b) Class B Trust Shares. The Class B Trust Shares shall
be entitled to the following rights and preferences:
(i) Dividend Rights. The holders of Class B Trust
Shares shall be entitled to receive a stated cumulative dividend established by
the Board of Trustees based upon a market rate to be determined at the time of
issuance.
(ii) Rights Upon Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Trust, each holder of Class B Trust Shares or
Excess Class B Trust Shares shall be entitled to receive out of the net assets
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of the Trust upon liquidation a stated distribution of $10,000 plus any
accumulated but unpaid dividends for each share of their holdings of Class B
Trust Shares or Excess Class B Trust Shares.
(iii) Voting Rights. The holders of Class B Trust
Shares shall not be entitled to vote on any matters.
Section 6.3 Dividends or Distributions. The Board of Trustees may
from time to time declare, designate and pay to Shareholders such dividends or
distributions in cash, property or other assets of the Trust or in Securities of
the Trust or from any other source as the Board of Trustees in their discretion
shall determine. The Board of Trustees shall endeavor to declare, designate and
pay such dividends and distributions as shall be necessary for the Trust to
qualify as a real estate investment trust under the REIT Provisions of the Code;
however, Shareholders shall have no right to any dividend or distribution unless
and until declared by the Board of Trustees. The exercise of the powers and
rights of the Board of Trustees pursuant to this Section shall be subject to the
provisions of any class or series of Shares at the time outstanding. The receipt
of dividends or distributions by any Person in whose name any Shares are
registered on the records of the Trust or by his duly authorized agent shall be
a sufficient discharge for all dividends or distributions payable or deliverable
in respect of such Shares and from all liability to see to the application
thereof.
Section 6.4 General Nature of Shares. All Shares shall be personal
property entitling the Shareholders only to those rights provided in this
Declaration of Trust or in the resolution creating any class or series of Shares
and as provided by law. The legal ownership of the Trust Property and the right
to conduct the business of the Trust are vested exclusively in the Trustees; the
Shareholders shall have no interest therein other than a beneficial interest in
the Trust conferred by their Shares and shall have no right to compel any
partition, division, dividend or distribution of the Trust or any of the Trust
Property. The death of a Shareholder shall not terminate the Trust or give his
legal representative, heirs or legatees any rights against other Shareholders,
the Trustees or the Trust Property, except the right, exercised in accordance
with applicable provisions of the Bylaws, to receive a new certificate for
Shares in exchange for the certificate held by the deceased Shareholder. Neither
the Trust nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind any Shareholder or Trustee personally or to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder at any time personally may agree
to pay by way of subscription for any Shares or otherwise.
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Section 6.5 Restrictions on Ownership and Transfer; Excess Shares.
(a) Definitions. For the purposes of Sections 6.5, 6.6,
6.7 and 6.8, the following terms shall have the following meanings:
"Adoption Date" shall mean the effective date of the Trust.
"Beneficial Ownership" shall mean ownership of Shares either
directly or constructively through the application of Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Beneficial Ownership Limit" shall mean Beneficial Ownership
of a number of Shares equal to the Ownership Limit.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Common Equity Shares" shall mean outstanding Shares that are
either Class A Trust Shares, Class B Trust Shares, Excess Class A Trust Shares
or Excess Class B Trust Shares.
"Constructive Ownership" shall mean ownership of Shares either
directly or constructively through the application of Section 318(a) of the
Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have the
correlative meanings.
"Constructive Ownership Limit" shall mean Constructive
Ownership of a number of Shares equal to the Ownership Limit.
"Excess Shares" shall mean Shares owned in excess of an
applicable Ownership Limit (rounded up to the nearest whole Share) which are
automatically transferred to the Special Trust in accordance with Section 6.5(c)
hereof.
"Market Price" shall mean the last reported sales price
reported on the stock exchange on which the Shares of the relevant class are
listed or regularly traded, on the trading day immediately preceding the
relevant date, or if the Shares of the relevant class are not then traded on a
stock exchange, the last reported sales price of Shares of the relevant class on
the trading day immediately preceding the relevant date as reported on any
quotation system on which the Shares of the relevant class may be traded, or if
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the Shares of the relevant class are not then traded over any quotation system,
then the market price of the Shares of the relevant class on the relevant date
as determined in good faith by the Board of Trustees of the Trust.
"Ownership Limit" shall mean Beneficial or Constructive
Ownership of 9.9%, in number or value, either of all outstanding Shares or of a
class of outstanding Shares of the Trust. For purposes of calculating the
Ownership Limit, (i) all rights to acquire Shares of any class, and all
Securities convertible into or exchangeable for Securities of any class, which
are held by such Shareholder shall be deemed to have been exercised, converted
or exchanged, as the case may be, and shall be counted in calculating whether
the Ownership Limit has been reached; and (ii) Shares not owned directly shall
be deemed to be owned indirectly by a person if that person or a group of which
he is a member would be the beneficial owner of such Shares, as defined in Rule
13d-3 under the Securities Exchange Act of 1934, and/or would be considered to
own such Shares by reason of the REIT Provisions of the Code.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 5O1(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity or any government or agency or
political subdivision thereof and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Prohibited Transfer" shall mean a Transfer of a nature
described in Section 6.5(b) hereof.
"Purported Beneficial Holder" shall mean, with respect to any
event other than a purported Transfer which results in Excess Shares, the person
for whom the Purported Record Holder of the Shares that were, pursuant to
Section 6.5(c), automatically exchanged for Excess Shares upon the occurrence of
such event held such Shares.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Shares, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired Shares,
if such Transfer had been valid under Section 6.5(b).
"Purported Record Holder" shall mean, with respect to any
purported Transfer which results in Excess Shares, the record holder of the
Shares if such Transfer had been valid under Section 6.5(b).
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"REIT" shall mean a real estate investment trust under Section
856 of the Code.
"Special Trust" shall mean the trust created pursuant to
Section 6.7(a).
"Subsidiary" shall mean any corporation, partnership, trust or
other association (other than the Trust) of which NationsBank Corporation
possesses, directly or indirectly, at least 80% of the total voting power and
has an ownership interest that has a value equal to at least 80% of the total
ownership of such corporation, partnership, trust or other association.
"Tenant" shall mean any Person that leases (or subleases) real
property of the Trust.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Shares or any other transaction (including (i)
the granting of any option or entering into any agreement for the sale, transfer
or other disposition of Shares or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or exchangeable for
Shares), whether voluntary or involuntary, whether of record or beneficial and
whether by operation of law or otherwise.
"Trustee" shall mean, for purposes of Article VI only, the
Trust as trustee for the Special Trust, and any successor trustee appointed by
the Trust.
(b) Restrictions on Ownership and Transfer. The following
restrictions and rules apply to the ownership and transfer of Shares at any and
all times that the Trust intends to qualify as a REIT for Federal income tax
purposes, and shall become effective as of the Adoption Date; provided that,
such restrictions shall not apply to the transfer of shares to NationsBank
Corporation or any Subsidiary thereof or any other entity that the Board of
Trustees, in its sole discretion, shall designate:
(1) Except as provided in Section 6.5(i), no Person
shall Beneficially or Constructively Own any Shares in excess of the applicable
Ownership Limit.
(2) No Transfer shall be effected (directly or
indirectly, by operation of law or otherwise) by any Person which, if effective,
would result in the Beneficial or Constructive Ownership by any Person in excess
of the applicable Ownership Limit.
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(3) No Transfer shall be effected (directly or
indirectly, by operation of law or otherwise) which, if effective, would result
in the Shares being beneficially owned by fewer than 100 Persons (determined
without reference to any rules of attribution), or would result in the Trust
being "closely held" within the meaning of Section 856(h) of the Code (a
"Prohibited Transfer").
(4) Any Person attempting to make any Transfer shall
first ascertain that such Transfer is not a Prohibited Transfer. Any Prohibited
Transfer or other event which, if effective, would result in the Shares being
Beneficially Owned by fewer than 100 persons, or would result in the Trust being
"closely held", shall be void ab initio and of no force or effect, and the
transferor or original owner shall automatically retain ownership of such Shares
notwithstanding any purported assignment or transfer on the books of the Trust.
(5) No transfer shall be effected (directly or
indirectly, by operation of law or otherwise) while any Bonds are outstanding
without the prior consent of the nationally recognized statistical rating agency
or agencies which rare such Bonds if as a result of such Transfer an entity
which Beneficially or Constructively Owned less than 49% of the capital stock of
the Trust would as a result of the contemplated transfer Beneficially or
Constructively Own greater than 49% of the capital stock of the Trust.
(c) Conversion to Excess Shares.
(1) In the event of any purported Prohibited
Transfer, such Transfer shall be void ab initio as to the purported Transfer of
the Excess Shares and the intended transferee shall acquire no rights to such
Excess Shares. Instead, such Excess Shares shall be automatically transferred to
the Special Trust pursuant to Section 6.7 hereof, effective as of the close of
business on the business day prior to the date of the purported Transfer.
(2) If any Person other than NationsBank Corporation
or any Subsidiary thereof (a "Purchaser") purchases or otherwise acquires an
interest in a Person (other than NationsBank Corporation or any Subsidiary)
which Beneficially or Constructively Owns Shares (a "Purchase") and, as a
result, the Purchaser would Beneficially or Constructively Own Shares in excess
of the applicable Ownership Limit, then such Excess Shares shall be
automatically transferred to the Special Trust pursuant to Section 6.7 hereof
effective as of the close of business on the business day prior to the date of
the Purchase. In determining which Shares shall be the Excess Shares, Shares of
the relevant class Beneficially or Constructively Owned by the Purchaser prior
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to the Purchase shall be treated as Excess Shares before any Shares Beneficially
or Constructively Owned by the Person as a result of the Purchase are so
treated.
(3) If there is a redemption, repurchase,
restructuring or similar transaction with respect to a Person other than
NationsBank Corporation or any Subsidiary thereof that Beneficially or
Constructively Owns Shares (the "Entity") and, as a result, a person holding an
interest in the Entity would Beneficially or Constructively Own Shares in excess
of the applicable Ownership Limit, then such Excess Shares shall be
automatically transferred to the Special Trust pursuant to section 6.7 hereof
effective as of the close of business on the business day prior to the date of
the redemption, repurchase, restructuring or similar transaction. In determining
which Shares shall be the Excess Shares, Shares of the relevant class
Beneficially Or Constructively Owned by the Entity shall be treated as Excess
Shares before any Shares Beneficially or Constructively Owned by the Person
holding an interest in the Entity (independently of such Person's interest in
the Entity) are so treated.
(4) In addition, if a Person other than
NationsBank Corporation or any Subsidiary thereof (the "nonreporting Person")
who Beneficially Owns more than 9.9% of the outstanding Shares, in the aggregate
or of any class, on the Adoption Date does not provide all of the information
required by Section 6.5(f)(2) hereof and, as a result, five or fewer Persons
would, but for the transfer required by this paragraph, Beneficially Own, in the
aggregate, more than 49.9% of the outstanding Shares, either in the aggregate or
of any class, then, as of the day prior to the date on which such aggregate
ownership would have come to exceed 49.9%, Shares Beneficially Owned by such
nonreporting Person in excess of 9.9% of the outstanding Common Equity Shares,
to the extent not described on the written notice, if any, provided by such
nonreporting Person pursuant to Section 6.5(f)(2) hereof, shall be Excess Shares
automatically transferred to the Special Trust pursuant to Section 6.7 hereof to
the extent necessary to prevent such aggregate ownership from exceeding 49.9%.
(5) If an event other than an event described in
this Section 6.5(c) occurs which would, if effective, result in any Person other
than NationsBank Corporation or any Subsidiary thereof Beneficially or
Constructively Owning Shares in excess of the applicable Ownership Limit, then
such Excess Shares shall be automatically transferred to the Special Trust
pursuant to Section 6.7 hereof effective as of the close of business on the
business day prior to the date of the event.
(d) Remedies For Breach. If the Board of
Trustees or its designees shall at any time determine in good faith that a
Transfer has taken place in violation of Section 6.5(b) or that a Person intends
to acquire or has attempted to acquire Beneficial Ownership or Constructive
Ownership of any Shares in violation of Section 6.5(b) (determined without
reference to any rules of attribution), the Board of Trustees or its designees
shall take such action as it deems advisable to refuse to give effect or to
prevent such Transfer (or any Transfer related to such intent), including, but
not limited to, refusing to give effect to such Transfer on the books of the
Trust or instituting proceedings to enjoin such Transfer; provided, however,
that any Transfers or attempted Transfers in violation of Section 6.6(b) shall
automatically result in the transfer of Shares to the Special Trust as described
in Section 6.5(c), irrespective of any action (or non-action) by the Board of
Trustees.
(e) Notice of Ownership or Attempted Ownership in
Violation of Section 6.5(b). Any Person other than NationsBank Corporation or
any Subsidiary thereof who acquires or attempts to acquire Beneficial or
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Constructive Ownership of Shares in violation of Section 6.5(b), shall
immediately give written notice to the Trust of such event and shall provide to
the Trust such other information as the Trust may request in order to determine
the effect, if any, of such acquisition or attempted acquisition on the Trust's
status as a REIT.
(f) Owners Required to Provide Information.
(1) At all times that the restrictions and
rules set forth herein are in effect:
(a) every Beneficial Owner of Shares other than
NationsBank Corporation or any Subsidiary thereof in
excess of the Beneficial Ownership Limitation shall,
within 30 days after January 1 of each year, give
written notice to the Trust stating the name and
address of such Beneficial Owner, the number of
Shares Beneficially Owned, and a description of how
such Shares are held. Each such Beneficial Owner
shall provide to the Trust such additional
information as the Trust may request in order to
determine the effect, if any, of such Beneficial
Ownership on the Trust's status as a REIT.
(b) each Person other than NationsBank Corporation or
any Subsidiary thereof who is a Beneficial Owner or
Constructive Owner of Shares and each Person
(including the shareholder of record) who is holding
Shares for a Beneficial Owner or Constructive Owner
shall provide to the Trust such information as the
Trust may request, in good faith, in order to
determine the Trust's status as a REIT or to comply
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with regulations promulgated under the REIT
provisions of the Code.
(2) every Beneficial Owner other than
NationsBank Corporation or any Subsidiary thereof of Shares in excess of the
Beneficial Ownership Limitation on the Adoption Date shall, within 60 days of
the Adoption Date, give written notice to the Trust, and shall deliver to the
Trust a form which will be made available to such Person after such notice is
given, stating the name and address of such Beneficial Owner, the number of
Shares Beneficially Owned, and a description of how such Shares are held.
(g) Remedies Not Limited. Nothing contained in this Article VI
shall limit the authority of the Board of Trustees to take such other action as
it deems necessary or advisable to protect the Trust and the interests of its
Shareholders by preservation of the Trust's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of this Article VI, including any definition contained
in Section 6.5(a) and any ambiguity with respect to which Shares are to be
exchanged for Excess Shares in a given situation, the Board of Trustees shall
have the power to determine the application of the provisions of this Article VI
with respect to any situation based on the facts known to it.
(i) Exceptions. The Board of Trustees, with a ruling
from the Internal Revenue Service or an opinion of counsel, may exempt a Person
from the Ownership Limit with respect to any Shares if such Person is not an
individual for purposes of Section 542(a)(2) of the Code and the Board of
Trustees obtains such representations and undertakings from such Person as are
reasonably necessary to ascertain that no individual's Beneficial Ownership of
such Shares will violate the Ownership Limit, and such Person agrees that any
violation or attempted violation will result in, to the extent necessary, the
transfer of such Shares to the Special Trust in accordance with Section 6.5(c).
The Ownership Limit shall not apply to an underwriter which participates in a
public offering of Shares for a period of 25 days following the purchase by such
underwriter of those Shares.
Section 6.6 Legend. Each certificate for Shares shall bear a legend
substantially in the following form:
"No Person may Beneficially Own or Constructively Own Shares in excess of 9.9%
of the outstanding Shares of the Trust, either in the aggregate or of any class,
provided that such restriction shall not apply to NationsBank Corporation or any
Subsidiary thereof. Any Person who attempts to Beneficially Own or
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Constructively Own Shares in excess of the above limitations must immediately
notify the Trust. All capitalized terms used in this legend have the meanings
set forth in the Declaration of Trust, a copy of which, including the
restrictions on ownership and transfer, will be sent without charge to each
shareholder who so requests in writing. If the restrictions on ownership and
transfer are violated, the Shares represented hereby will be deemed Excess
Shares and will be automatically transferred to and be held in a Special Trust
by the Trust."
Section 6.7 Excess Shares.
(a) Ownership in Trust. Upon any event that results in
the conversion of Shares into Excess Shares pursuant to Section 6.5(c), such
Excess Shares shall be deemed to have been transferred to the Trust, as Trustee
of a Special Trust for the exclusive benefit of the next permissible charitable
organization listed in Schedule A hereto and described in Section
170(b)(1)(A)(vi) and 170(c) of the Code, in a manner which ensures compliance
with Sections 856(a)(5) and 856(a)(6) of the Code (the "Designated Charities").
The Purported Beneficial Transferee shall have no rights in such Excess Shares.
(1) The Trust, as Trustee of the Special Trust, may
transfer the shares held in such trust to a Person whose ownership of the shares
will not result in a violation of the ownership restrictions (a "Permitted
Transferee"). If such a transfer is made, the interest of the Designated
Charities will terminate and proceeds of the sale will be payable to the
Purported Beneficial Transferee and to the Designated Charities. The Purported
Beneficial Transferee will receive the lesser of (1) the price paid by the
Purported Beneficial Transferee for the shares or, if the Purported Beneficial
Transferee did not give value for the shares, the Market Price of the shares on
the day of the event causing the shares to be held in trust, and (2) the price
per share received by the Trust, as Trustee, from the sale or other disposition
of the shares held in trust. The Designated Charities will receive any proceeds
in excess of the amount payable to the Purported Beneficial Transferee. The
Purported Beneficial Transferee will not be entitled to designate a Permitted
Transferee.
(2) All shares held in the Special Trust will be
deemed to have been offered for sale to the Trust or its designee for a 90-day
period, at the lesser of the price paid for those shares by the Purported
Beneficial Transferee and the Market Price on the date that the Trust accepts
the offer. This period will commence on the date of the prohibited transfer, if
the Purported Beneficial Transferee gives notice to the Trust of the transfer,
or the date that the Board of Directors of the Trust determines that a violative
transfer occurred, if no such notice is provided.
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(3) Any dividend or distribution paid prior to the discovery
by the Trust that Shares have been transferred in violation of the transfer
restriction, shall be repaid to the Trust upon demand and shall be held in trust
for the Designated Charities. Any dividend or distribution declared but unpaid
shall be rescinded as void ab initio with respect to such Shares.
(b) Rights Upon Liquidation. In the event of any
voluntary liquidation, dissolution or winding up of, or any distribution of the
assets of, the Trust, the Designated Charities as the holder of the Excess Class
A Shares or Excess Class B Shares shall be entitled to receive that portion of
the assets which a holder of the Class A Trust Shares or Class B Trust Shares
would have been entitled to receive had such Common Shares remained outstanding,
subject to the preferences stated in Sections 6.2(a)(ii) and 6.2(b)(ii).
(c) The Purported Beneficial Transferee will not be
entitled to vote any Shares it attempts to acquire, and any shareholder vote
will be rescinded if a Purported Beneficial Transferee votes and the shareholder
vote would have been decided differently if such Purported Beneficial
Transferee's vote was not counted.
Section 6.8 Severability. If any provision of this Article VI or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
Section 6.9 Stock Exchange Transactions. Nothing in this Article VI,
shall preclude the settlement of any transaction entered into through the
facilities of any stock exchange on which the Shares are listed.
ARTICLE VII
SHAREHOLDERS
Section 7.1 Meetings of Shareholders. There shall be an annual
meeting of the Shareholders, to be held at such time following the delivery of
the annual report to Shareholders, and at such place as shall be determined by
or in the manner prescribed in the Bylaws, at which the Trustees shall be
elected and any other business which may properly come before the meeting may be
transacted. Meetings of the shareholders of the Trust shall be held not less
frequently than one time per annum. Except as otherwise provided in this
Declaration of Trust, special meetings of Shareholders may be called in the
manner provided in the Bylaws. If there are no Trustees, the officers of the
Trust shall promptly call
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a special meeting of the Shareholders entitled to vote for the election of
Trustees at which meeting successor Trustees shall be elected. Any meeting may
be adjourned and reconvened as the Trustees determine or as provided in the
Bylaws.
Section 7.2 Voting Rights of Shareholders. Subject to the provisions
of any class or series of Shares then outstanding, the Shareholders shall be
entitled to vote only on the following matters: (a) election or removal of
Trustees as provided in Sections 7.1 and 2.3; (b) amendment of this Declaration
of Trust as provided in Section 9.1; (c) termination of the Trust as provided in
Section 10.2; (d) reorganization of the Trust as provided in Section 9.2; and
(e) merger, consolidation or share exchange of the Trust, or the sale or
disposition of all or substantially all of the Trust Property, as provided in
Section 9.3. Except with respect to the foregoing matters, no action taken by
the Shareholders at any meeting shall in any way bind the Trustees.
ARTICLE VIII
LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS,
EMPLOYEES AND AGENTS AND TRANSACTIONS
BETWEEN THEM AND THE TRUST
Section 8.1 Limitation of Shareholder Liability. No Shareholder
shall be liable for any debt, claim, demand, judgment or obligation of any kind,
of, against or with respect to the Trust solely by reason of his or her being a
Shareholder, nor shall any Shareholder be subject to any personal liability
whatsoever, whether in tort, contract or otherwise, to any Person in connection
with the Trust Property or the affairs of the Trust solely by reason of his or
her being a Shareholder.
Section 8.2 Limitation of Trustee and Officer Liability. To the
maximum extent that Maryland law in effect from time to time permits limitation
of the liability of trustees and officers of a real estate investment trust, no
Trustee or officer of the Trust shall be liable to the Trust or to any
Shareholder for money damages. Neither the amendment nor repeal of this Section,
nor the adoption or amendment of any other provision of this Declaration of
Trust inconsistent with this Section, shall apply to or affect in any respect
the applicability of the preceding sentence with respect to any act or failure
to act which occurred prior to such amendment, repeal or adoption. In the
absence of any Maryland statute limiting the liability of trustees and officers
of a Maryland real estate investment trust for money damages in a suit by or on
behalf of the Trust or by any Shareholder, no Trustee or officer of the Trust
shall be liable to the Trust or to any Shareholder for money damages except to
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the extent that (i) the Trustee or officer actually received an improper benefit
in money, property, or services, for the amount of the benefit or profit in
money, property, or services actually received; or (ii) a judgment or other
final adjudication adverse to the Trustee or officer is entered in a proceeding
based on a finding in the proceeding that the Trustee's or officer's action or
failure to act was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding.
Section 8.3 Express Exculpatory Clauses in Instruments. Neither the
Shareholders nor the Trustees, officers, employees or agents of the Trust shall
be liable under any written instrument creating an obligation of the Trust, and
all Persons shall look solely to the Trust Property for the payment of any claim
under or for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity or
enforceability of such instrument and shall not render any Shareholder, Trustee,
officer, employee or agent liable thereunder to any third party, nor shall the
Trustees or any officer, employee or agent of the Trust be liable to anyone for
such omission.
Section 8.4 Indemnification. The Bylaws of the Trust shall require
that, to the maximum extent permitted by Maryland law, the Trust shall
indemnify, and pay reasonable expenses to, as such expenses are incurred by,
each Shareholder, Trustee, officer, employee or agent (including any person who,
while a Trustee of the Trust, is or was serving at the request of the Trust as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan) from all claims and liabilities to which such person may
become subject by reason of his being or having been a Shareholder, Trustee,
officer, employee or agent.
Section 8.5 Transactions Between the Trust and its Trustees,
Officers, Employees and Agents. Subject to any express restrictions in this
Declaration of Trust or adopted by the Trustees in the Bylaws or by resolution,
the Trust may enter into any contract or transaction of any kind (including
without limitation for the purchase or sale of property or for any type of
services, including those in connection with underwriting or the offer or sale
of Securities of the Trust) with any Person, including any Trustee, officer,
employee or agent of the Trust or any Person Affiliated with a Trustee, officer,
employee or agent of the Trust, whether or not any of them has a financial
interest in such transaction. Notwithstanding the foregoing, the Bylaws shall
establish reasonable procedures for screening transactions with Trustees,
officers, employees and agents and Persons Affiliated with any of the foregoing.
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ARTICLE IX
AMENDMENT; MERGER, ETC.
Section 9.1 Amendment.
(a) Subject to the limitations in subsection (b) of
this Section 9.1, subsection (e) of Section 3.2 and subsection (v) of Section
3.3, this Declaration of Trust may be amended by the affirmative vote of the
holders of not less than two-thirds of the Shares then outstanding and entitled
to vote thereon.
(b) Notwithstanding the foregoing, the Trustees, by a
two-thirds vote, may amend provisions of this Declaration of Trust from time to
time to enable the Trust to qualify as a real estate investment trust under the
REIT Provisions of the Code or under the Maryland REIT Law.
(c) An amendment to this Declaration of Trust shall
become effective as provided in Section 11.5.
(d) This Declaration of Trust may not be amended
except as provided in this Section 9.1.
Section 9.2 Reorganization. Subject to the provisions of any class
or series of Shares at the time outstanding and Section 3.3 hereof, the Trustees
shall have the power to (a) cause the organization of a corporation,
association, trust or other entity to take over the Trust Property and carry on
the affairs of the Trust; (b) merge the Trust into, or sell, convey and transfer
the Trust Property to, any such corporation, association, trust or entity in
exchange for Securities thereof or beneficial interests therein, and the
assumption by the transferee of the liabilities of the Trust; and (c) thereupon
terminate the Trust and deliver such Securities or beneficial interests ratably
among the Shareholders according to the respective rights of the class or series
of Shares held by them; provided that any such action shall have been approved,
at a meeting of the Shareholders called for the purpose, by the affirmative vote
of the holders of not less than two-thirds of the Shares then outstanding and
entitled to vote thereon.
Section 9.3 Merger, Consolidation or Sale of Trust Property. Subject
to the provisions of any class or series of Shares at the time outstanding and
Section 3.3 hereof, the Trustees shall have the power to (a) merge the Trust
into
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another entity, (b) consolidate the Trust with one or more other entities into a
new entity or (c) sell or otherwise dispose of all or substantially all of the
Trust Property; provided, that such action shall have been approved, at a
meeting of the Shareholders called for the purpose, by the affirmative vote of
the holders of not less than two-thirds of the Shares then outstanding and
entitled to vote thereon. However, subject to Section 3.3, if a merger or
consolidation does not result in a reclassification or other change in the
outstanding Shares or in an amendment to the Declaration of Trust, and the
number of Shares to be issued or delivered in the merger is not more than
fifteen percent (15%) of the number of Shares of the same class or series
already outstanding immediately prior to the effective date of the merger or
consolidation, then such merger shall only require the approval of a majority of
the Board of Trustees of a successor Maryland real estate investment trust.
Section 9.4 Business Combinations with Interested Shareholders.
Pursuant to Section 3-603(e)(1)(iii) of Title 3 of the Corporations and
Associations Article of the Annotated Code of Maryland, the Trust hereby elects
that the provisions of Section 3-603 and any successor provision of that same
article, limiting the ability of corporations and associations under Maryland to
engage in transactions with affiliates and interested shareholders, shall not
apply to the Trust.
Section 9.5 Acquisition of Control Shares. Notwithstanding any other
provision of this Declaration of Trust, the Trust hereby elects that the
provision of Section 3-702 of any successor provisions relating to the
acquisition of control shares, shall not apply to any acquisition by any person
of shares of beneficial interest in the Trust.
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ARTICLE X
DURATION AND TERMINATION OF TRUST
Section 10.1 Duration of Trust. The Trust shall continue perpetually unless
terminated pursuant to Section 10.2 or pursuant to any applicable provision of
the Maryland REIT Law.
Section 10.2 Termination of Trust.
(a) Subject to the provisions of any class or series of Shares at the
time outstanding and Section 3.3 hereof, the Trust may be terminated at any
meeting of Shareholders called for that purpose, by the affirmative vote of the
holders of not less than two-thirds of the Shares outstanding. Upon the
termination of the Trust:
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust and
all of the powers of the Trustees under this Declaration of Trust shall
continue, including the power to fulfill or discharge the Trust's contracts,
collect its assets, sell, convey, assign, exchange, transfer or otherwise
dispose of all or any part of the remaining Trust Property to one or more
Persons at public or private sale for consideration which may consist in whole
or in part of cash, Securities or other property of any kind, discharge or pay
its liabilities and do all other acts appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all liabilities,
and upon receipt of such releases, indemnities and agreements as they deem
necessary for their protection, the Trustees may distribute the remaining Trust
Property, in cash or in kind or partly each, among the Shareholders in
accordance with the terms of Section 6.2 and Section 6.3.
(b)After termination of the Trust, the liquidation of its business, and
the distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and file with the Trust's records a document certifying
that the Trust has been duly terminated, and the Trustees shall be discharged
from all liabilities and duties hereunder, and the rights and interests of all
Shareholders shall cease.
ARTICLE XI
MISCELLANEOUS
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Section 11.1 Governing Law. This Declaration of Trust is executed by the
undersigned Trustees and delivered in the State of Maryland with reference to
the laws thereof, and the rights of all parties and the validity, construction
and effect of every provision hereof shall be subject to and construed according
to the laws of the State of Maryland without regard to conflicts of laws
provisions thereof.
Section 11.2 Reliance by Third Parties. Any certificate shall be final and
conclusive as to any Persons dealing with the Trust if executed by an individual
who, according to the records of the Trust or of any recording office in which
this Declaration of Trust may be recorded, appears to be the Secretary or any
Assistant Secretary of the Trust or a Trustee, and if certifying to: (a) the
number or identity of Trustees, officers of the Trust or Shareholders; (b) the
due authorization of the execution of any document; (c) the action or vote
taken, and the existence of a quorum, at a meeting of Trustees or Shareholders;
(d) a copy of this Declaration or of the Bylaws as a true and complete copy as
then in force; (e) an amendment to this Declaration; (f) the termination of the
Trust; or (g) the existence of any fact or facts which relate to the affairs of
the Trust. No purchaser, lender, transfer agent or other Person shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made on behalf of the Trustees or by any officer, employee or agent of the
Trust.
Section 11.3 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and if
the Trustees shall determine, with the advice of counsel, that any one or more
of such provisions (the "Conflicting Provisions") are in conflict with the REIT
Provisions of the Code, the Maryland REIT Law or other applicable federal or
state laws, the Conflicting provisions shall be deemed never to have constituted
a part of this Declaration of Trust, even without any amendment of this
Declaration pursuant to Section 9.1; provided, however, that such determination
by the Trustees shall not affect or impair any of the remaining provisions of
this Declaration of Trust or render invalid or improper any action taken or
omitted prior to such determination. No Trustee shall be liable for making or
failing to make such a determination.
(b) If any provision of this Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such holding shall not in any manner
affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of Trust in any
jurisdiction.
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Section 11.4 Construction. In this Declaration of Trust, unless the context
otherwise requires, words used in the singular or in the plural include both the
plural and singular and words denoting any gender include all genders. The title
and headings of different parts are inserted for convenience and shall not
affect the meaning, construction or effect of this Declaration. In defining or
interpreting the powers and duties of the Trust and its Trustees and officers,
reference may be made, to the extent appropriate and not inconsistent with the
Code or the Maryland REIT Law, to Titles 1 through 3 of the Corporations and
Associations Article of the Annotated Code of Maryland. In furtherance and not
in limitation of the foregoing, in accordance with the provisions of Title 3,
Subtitles 6 and 7, of the Corporations and Associations Article of the Annotated
Code of Maryland, the Trust shall be included within the definition of
"corporation" for purposes of such provisions.
Section 11.5 Recordation. This Declaration of Trust and any amendment hereto
shall be filed for record with the State Department of Assessments and Taxation
of Maryland and may also be filed or recorded in such other places as the
Trustees deem appropriate; however, failure to file or record this Declaration
or any amendment hereto in any office other than in the State Department of
Assessments and Taxation of Maryland shall not affect or impair the validity or
effectiveness of this Declaration or any amendment hereto. A restated
Declaration shall, upon filing, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Declaration of Trust has been executed on October 24,
1996, by the undersigned Trustees, each of whom acknowledges that this document
is his act, that to the best of his knowledge, information, and belief, the
matters and facts set forth herein are true in all material respects and that
this statement is made under the penalties for perjury. This Declaration of
Trust may be executed in one or more counterparts, and each such counterpart
shall, for all purposes, be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
/s/ G. Patrick Phillips
G. Patrick Phillips
/s/ John E. Mack
John E. Mack
/s/ William L. Maxwell
William L. Maxwell
/s/ James H. Luther
James H. Luther
35
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MAIN PLACE REAL ESTATE INVESTMENT TRUST
DECLARATION OF TRUST
SCHEDULE A
1. United Way of Delaware (Wilmington, DE)
2. United Way of Hernando County (Brooksville, FL)
3. United Way of Brevard County, Inc. (Cocoa, FL)
4. United Way of Volusia Co. (Daytona Beach, FL)
5. United Way of Alachua (Gainesville, FL)
6. United Way of Central Florida (Highland City, FL)
7. United Way of Northeast Florida (Jacksonville, FL)
8. United Way of Monroe Co. (Key West, FL)
9. United Way of Citrus County (Lecanto, FL)
10. United Way of Lake and Sumter County (Leesburg, FL)
11. United Way/Santa Rosa (Milton, FL)
12. United Way of Collier County ( Naples, FL)
13. United Way of Marion County (Ocala, FL)
14. United Way of Osceola County (Orlando, FL)
15. United Way of Pasco County (Port Richey, FL)
16. United Way of Southwest Georgia (Albany, GA)
17. United Way of Northeast Georgia (Athens, GA)
18. United Way of Colquitt County (Moultrie, GA)
19. United Way of Newnan-Coweta County (Newnan, GA)
20. United Way of Rome and Floyd (Rome, GA)
21. United Way of the Coastal Empire (Savannah, GA)
22. United Way of Thomas County (Thomasville, GA)
23. United Way of Tift Co. (Tifton, GA)
24. United Way of Lowndes County (Valdosta, GA)
25. United Way of Merrimac Valley (Lawrence, GA)
26. United Way of Asheville and Buncombe County (Asheville, NC)
27. United Way of Alamance County (Burlington, NC)
28. United Way of Gr. Orange County (Chapel Hill, NC)
29. United Way of Hartnett Co. (Dunn, NC)
30. United Way of Cumberland County (Fayetteville, NC)
31. United Way of Wayne County (Goldsboro, NC)
32. United Way of Pitt Co. (Greenville, NC)
33. United Way of Lincoln Co. (Lincolnton, NC)
34. United Way of Mooresville (Mooresville, NC)
35. United Way of Wilkes County (N. Wilkesboro, NC)
36. United Way of Coastal Carolina (New Bern, NC)
37. United Way of Wake County (Raleigh, NC)
38. United Way of Reidsville (Reidsville, NC)
39. United Way of Moore County (Southern Pines, NC)
40. United Way of Wilson (Wilson, NC)
MAIN PLACE REAL ESTATE INVESTMENT TRUST
DECLARATION OF TRUST
SCHEDULE A
41. United Way of Forsyth Co. (Winston-Salem, NC)
42. United Way of Abbeyville-Foothills (Anderson, SC)
43. United Way of Kershaw County (Camden, SC)
44. United Way of Horry County (Conway, SC)
45. United Way of Florence Co. (Florence, SC)
<PAGE>
46. United Way of Fort Mill (Fort Mill, SC)
47. United Way of Cherokee County (Gaffney, SC)
48. United Way of Greenwood (Greenwood, SC)
49. United Way of Sumter Co., Inc. (Sumter, SC)
50. United Way of Bristol (Bristol, TN)
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Exhibit 3(b)
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
BYLAWS
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the Trust shall
be located at such place or places as the Trustees may designate.
Section 2. Additional Offices. The Trust may have additional offices
at such places as the Trustees may from time to time determine or the business
of the Trust may require.
MEETINGS OF SHAREHOLDERS
Section 1. Place. All meetings of shareholders shall be held at the
principal office of the Trust or at such other place within the United States as
shall be stated in the notice of the meeting.
Section 2. Annual Meeting. An annual meeting of the shareholders for
the election of Trustees and the transaction of any business within the powers
of the Trust shall be held on the date and at the time fixed, from time to time,
by the Board of Trustees.
Section 3. Special Meetings. A special meeting of the shareholders
may be called by the president or by a majority of the Board of Trustees.
Special meetings of shareholders shall also be called by the secretary upon the
written request of holders of not less than 25% of the outstanding Shares. Such
request shall also state the purpose of such meeting and the matters proposed to
be acted on at such meeting. A special meeting need not be called to consider
any matter which is substantially the same as a matter voted on at any special
meeting of the shareholders held during the preceding twelve months.
Section 4. Notice. Not less than ten nor more than 90 days before
each meeting of shareholders, the secretary shall give to each shareholder
entitled to vote at such meeting and to each shareholder not entitled to vote
who is entitled to notice of the meeting written or printed notice stating the
time and place of the meeting and, in the case of a special meeting or as
otherwise may be required by statute, the purpose for which the meeting is
called, either by mail or by presenting it to such shareholder personally or by
leaving it at his
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residence or usual place of business. If mailed, such notice shall be deemed to
be given when deposited in the United States mail addressed to the shareholder
at his post office address as it appears on the records of the Trust, with
postage thereon prepaid.
Section 5. Scope of Notice. Any business of the Trust may be
transacted at an annual meeting of shareholders without being specifically
designated in the notice, except such business as is required by statute to be
stated in such notice. No business shall be transacted at a special meeting of
shareholders except as specifically designated in the notice.
Section 6. Quorum. At any meeting of shareholders, the presence in
person or by proxy of shareholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this Section
shall not affect any requirement under any statute or the Declaration of Trust
for the vote necessary for the adoption of any measure. If, however, such quorum
shall not be present at any meeting of the shareholders, the shareholders
entitled to vote at such meeting, present in person or by proxy, shall have the
power to adjourn the meeting from time to time to a date not more than 120 days
after the original record date without notice other than announcement at the
meeting. At such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 7. Voting. A plurality of all the votes at a meeting of
shareholders duly called and at which a quorum is present shall be sufficient to
elect a Trustee. Each share may be voted for as many individuals as there are
Trustees to be elected and for whose election the share is entitled to be voted.
A majority of the votes cast at a meeting of shareholders duly called and at
which a quorum is present shall be sufficient to approve any other matter which
may properly come before the meeting, unless more than a majority of the votes
cast is required by statute or by the Declaration of Trust. Unless otherwise
provided in the Declaration, each outstanding share, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.
Section 8. Proxies. A shareholder may vote the shares owned of
record by him, either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney in fact. Such proxy shall be
filed with the secretary of the Trust before or at the time of the meeting. No
proxy shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
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Section 9. Voting of Shares by Certain Holders. Shares registered in
the name of a corporation, partnership, trust or other entity, if entitled to be
voted, may be voted by the chief executive officer or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed by
any of the foregoing individuals, unless some other person who has been
appointed to vote such shares pursuant to a bylaw or a resolution of the board
of directors of such corporation or other entity presents a certified copy of
such bylaw or resolution, in which case such person may vote such shares. Any
trustee or other fiduciary may vote shares registered in his name as such
fiduciary, either in person or by proxy.
Shares of the Trust directly owned by it shall not be voted at any
meeting and shall not be counted in determining the total number of outstanding
shares entitled to be voted at any given time, unless they are held by it in a
fiduciary capacity, in which case they may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
The Trustees may adopt by resolution a procedure by which a shareholder
may certify in writing to the Trust that any Shares registered in the name of
the shareholder are held for the account of a specified person other than the
shareholder. The resolution shall set forth the class of shareholders who may
make the certification, the purpose for which the certification may be made, the
form of certification and the information to be contained in it; if the
certification is with respect to a record date or closing of the share transfer
books, the time after the record date or closing of the share transfer books
within which the certification must be received by the Trust; and any other
provisions with respect to the procedure which the Trustees consider necessary
or desirable. On receipt of such certification, the person specified in the
certification shall be regarded as, for the purposes set forth in the
certification, the shareholder of record of the specified shares in place of the
shareholder who makes the certification.
Section 10. Inspectors. At any meeting of shareholders, the chairman
of the meeting may, or upon the request of any shareholder shall, appoint one or
more persons as inspectors for such meeting. Such inspectors shall ascertain and
report the number of shares represented at the meeting based upon their
determination of the validity and effect of proxies, count all votes, report the
results and perform such other acts as are proper to conduct the election and
voting with impartiality and fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or by
a majority of them if there is more than one inspector acting at such meeting.
If there is more than one inspector, the report of a majority shall be the
report of the inspectors. The report of the inspector on the number of shares
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represented at the meeting and the results of the voting shall be prima facie
evidence thereof.
Section 11. Reports to Shareholders.
At or before the annual meeting of shareholders, the Trustees
shall deliver or cause to be delivered a report of the business and operations
of the Trust during such fiscal year to the shareholders, containing a balance
sheet and a statement of income and surplus of the Trust, accompanied by the
certification of an independent certified public accountant, and such further
information as the Trustees may determine is required pursuant to any law or
regulation to which the Trust is subject. A signed copy of the annual report and
the accountant's certificate shall be filed by the Trustees with the State
Department of Assessments and Taxation of Maryland, and with such other
governmental agencies as may be required by law and as the Trustees may deem
appropriate.
Section 12. Nominations and Shareholders Business.
(a) Annual Meeting of Shareholders.
(1) Nominations of persons for election to the Board
of Trustees and the proposal of business to be considered by the shareholders
may be made at an annual meeting of shareholders (i) pursuant to the Trust's
notice of meeting, (ii) by or at the direction of the Trustees or (iii) by any
shareholder of the Trust who was a shareholder of record at the time of giving
of notice provided for in this Section 12(a), who is entitled to vote at the
meeting and who complied with the notice procedures set forth in this Section
12(a).
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to clause (iii) of
paragraph (a)(1) of this Section 12, the shareholder must give timely notice
thereof in writing to the secretary of the Trust. To be timely, a shareholder's
notice shall be delivered to the secretary at the principal executive offices of
the Trust not later than a date 30 days prior to the date of such annual meeting
nor earlier than 60 days prior to such date.
(3) The shareholder's notice shall set forth (i) as
to each person whom the shareholder proposes to nominate for election or
reelection as a Trustee all information relating to such person that is required
to be disclosed in solicitations of proxies for election of Trustees (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Trustee if elected); (ii) as to any other business that the
shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
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such business at the meeting and any material interest in such business of such
shareholder and of the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the name
and address of such shareholder, as they appear on the Trust's books, and of
such beneficial owner and (y) the class and number of shares of the Trust which
are owned beneficially and of record by such shareholder and such beneficial
owner.
(b) Special Meetings of Shareholders. Only such business
shall be conducted at a special meeting of shareholders as shall have been
brought before the meeting pursuant to the Trust's notice of meeting.
Nominations of persons for election to the Board of Trustees may be made at a
special meeting of shareholders at which Trustees are to be elected (i) pursuant
to the Trust's notice of meeting by or at the direction of the Board of
Trustees, provided that the Board of Trustees has determined that Trustees shall
be elected at such special meeting or (ii) by any shareholder of the Trust who
is a shareholder of record at the time of giving of notice provided for in this
Section 12(b), who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section 12(b). In the event the Trust calls
a special meeting of shareholders for the purpose of electing one or more
Trustees to the Board of Trustees, any such shareholder may nominate a person or
persons (as the case may be) for election to such position as specified in the
Trust's notice of meeting, if the shareholders notice required by paragraph
(a)(2) of this Section 12(b) shall be delivered to the secretary at the
principal executive offices of the Trust not earlier than the 90th day prior to
such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the tenth day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Trustees to be elected at such meeting.
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(c) General.
(1) Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to serve as
Trustees and only such business shall be conducted at a meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 12. The presiding officer of the meeting shall have
the power and duty to determine whether a nomination or any business proposed to
be brought before the meeting was made in accordance with the procedures set
forth in this Section 12 and, if any proposed nomination or business is not in
compliance with this Section 12, to declare that such defective nomination or
proposal be disregarded.
(2) For purposes of this Section 12, "public
announcement" shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable news service or in a document
publicly filed by the Trust with the Securities and Exchange Commission pursuant
to Sections 13 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
Section 12, a shareholder shall also comply with all applicable requirements of
state law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 12.
Section 13. Informal Action by Shareholders. Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting if a consent in writing, setting forth such action, is signed by each
shareholder entitled to vote on the matter and any other shareholder entitled to
notice of a meeting of shareholders (but not to vote thereat) has waived in
writing any right to dissent from such action, and such consent and waiver are
filed with the minutes of proceedings of the shareholders.
Section 14. Voting by Ballot. Voting on any question or in any
election may be viva voce unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
ARTICLE III
TRUSTEES
Section 1. General Powers; Qualifications. The business and affairs
of the Trust shall be managed under the direction of its Board of Trustees. A
Trustee shall be an individual at least 21 years of age who is not legally
incompetent.
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Section 2. Annual and Regular Meetings. An annual meeting of the
Trustees shall be held immediately after and at the same place as the annual
meeting of shareholders, no notice other than this Bylaw being necessary. The
Trustees may provide, by resolution, the time and place, either within or
without the State of Maryland, for the holding of regular meetings of the
Trustees without other notice than such resolution.
Section 3. Special Meetings. Special meetings of the Trustees may be
called by or at the request of the president or by a majority of the Trustees
then in office. The person or persons authorized to call special meetings of the
Trustees may fix any place, either within or without the State of Maryland, as
the place for holding any special meeting of the Trustees called by them.
Section 4. Notice. Notice of any special meeting shall be given by
written notice delivered personally, transmitted by facsimile, telegraphed or
mailed to each Trustee at his business or residence address. Personally
delivered, facsimile transmitted or telegraphed notices shall be given at least
two days prior to the meeting. Notice by mail shall be given at least three days
prior to the meeting. If mailed, such notice shall be deemed to be given when
deposited in the United States mail properly addressed, with postage thereon
prepaid. If given by telegram, such notice shall be deemed to be given when the
telegram is delivered to the telegraph company. Neither the business to be
transacted at, nor the purpose of, any annual, regular or special meeting of the
Trustees need be stated in the notice, unless otherwise specifically required by
statute or these Bylaws.
Section 5. Quorum. A majority of the Trustees shall constitute a
quorum for transaction of business at any meeting of the Trustees, provided
that, if less than a majority of such Trustees are present at said meeting, a
majority of the Trustees present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the
Declaration of Trust or these Bylaws, the vote of a majority of a particular
group of Trustees is required for action, a quorum must also include a majority
of such group.
The Trustees present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Trustees to leave less than a quorum.
Section 6. Voting. The action of the majority of the Trustees
present at a meeting at which a quorum is present shall be the action of the
Trustees, unless the concurrence of a greater proportion is required for such
action by the Declaration of Trust or by applicable statute.
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Section 7. Telephone Meetings. Trustees may participate in a meeting
by means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.
Section 8. Informal Action by Trustees. Any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting, if a consent in writing to such action is signed by each Trustee and
such written consent is filed with the minutes of proceedings of the Trustees.
Section 9. Vacancies. If for any reason any or all the Trustees
cease to be Trustees, such event shall not terminate the Trust or affect these
Bylaws or the powers of the remaining Trustees hereunder (even if fewer than
three Trustees remain). Any vacancy (including a vacancy created by an increase
in the number of Trustees) shall be filled, at any regular meeting or at any
special meeting called for that purpose, by a majority of the Trustees. Any
individual so elected as Trustee shall hold office for the unexpired term of the
Trustee he is replacing.
Section 10. Compensation. Trustees shall not receive any stated
salary for their services as Trustees but, by resolution of the Trustees, fixed
sums per year and/or per meeting. Expenses of attendance, if any, may be allowed
to Trustees for attendance at each annual, regular or special meeting of the
Trustees or of any committee thereof; but nothing herein contained shall be
construed to preclude any Trustees from serving the Trust in any other capacity
and receiving compensation therefor.
Section 11. Removal of Trustees. The shareholders may, at any time,
remove any Trustee in the manner provided in the Declaration of Trust.
Section 12. Loss of Deposits. No Trustee shall be liable for any
loss which may occur by reason of the failure of the bank, trust company,
savings and loan association, or other institution with whom moneys or shares
have been deposited.
Section 13. Surety Bonds. Unless required by law, no Trustee shall
be obligated to give any bond or surety or other security for the performance of
any of his duties.
Section 14. Reliance. Each Trustee, officer, employee and agent of
the Trust shall, in the performance of his duties with respect to the Trust, be
fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the Trust,
upon an
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opinion of counsel or upon reports made to the Trust by any of its officers or
employees or by the adviser, accountants, appraisers or other experts or
consultants selected by the Trustees or officers of the Trust, regardless of
whether such counsel or expert may also be a Trustee.
Section 15. Certain Rights of Trustees, Officers, Employees and
Agents. The Trustees shall have no responsibility to devote their full time to
the affairs of the Trust. Any Trustee or officer, employee or agent of the
Trust, in his personal capacity or in a capacity as an affiliate, employee, or
agent of any other person, or otherwise, may have business interests and engage
in business activities to or in addition to those of or relating to the Trust.
ARTICLE IV
COMMITTEES
Section 1. Number, Tenure and Qualifications. The Board of Trustees
may appoint from among its members an Audit Committee, an Executive Compensation
Committee and other committees, composed of two or more Trustees, to serve at
the pleasure of the Board of Trustees.
Section 2. Powers. The Trustees may delegate to committees appointed
under Section 1 of this Article any of the powers of the Board of Trustees,
except as prohibited by law.
Section 3. Meetings. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another Trustee to act in the place of such
absent member.
Section 4. Telephone Meetings. Members of a committee of the
Trustees may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 5. Informal Act by Committees. Any action required or
permitted to be taken at any meeting of a committee of the Trustees may be taken
without a meeting, if a consent in writing to such action is signed by each
member of the committee and such written consent is filed with the minutes of
proceedings of such committee.
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ARTICLE V
OFFICERS
Section 1. General Provisions. The officers of the Trust may consist
of a president, an executive vice president, one or more vice presidents, a
treasurer, one or more assistant treasurers, a secretary, and one or more
assistant secretaries. In addition, the Trustees may from time to time appoint
such other officers with such powers and duties as they shall deem necessary or
desirable. The officers of the Trust shall be elected annually by the Trustees
at the first meeting of the Trustees held after each annual meeting of
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as may be convenient. Each
officer shall hold office until his successor is elected and qualifies or until
his death, resignation or removal in the manner hereinafter provided. Any two or
more offices may be held by the same person. In their discretion, the Trustees
may leave unfilled any office except that of president, treasurer and secretary.
Election of an officer or agent shall not of itself create contract rights
between the Trust and such officer or agent.
Section 2. Removal and Resignation. Any officer or agent of the
Trust may be removed by the Trustees if in their judgment the best interests of
the Trust would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any officer of the
Trust may resign at any time by giving written notice of his resignation to the
Trustees, the president or the secretary. Any resignation shall take effect at
any time subsequent to the time specified therein or, if the time when it shall
become effective is not specified therein, immediately upon its receipt. The
acceptance of a resignation shall not be necessary to make it effective unless
otherwise stated in the resignation.
Section 3. Vacancies. A vacancy in any office may be filled by the
Trustees for the balance of the term.
Section 4. President. The president shall be a Trustee and chief
executive officer of the Trust and shall preside at all meetings of the Board of
Trustees and shareholders of the Trust. The president shall exercise general
supervisory powers over the officers and management of the Trust, and shall have
general responsibility for implementation of the policies of the Trust, as
determined by the Board of Trustees, and for the management of the business
affairs of the Trust subject at all times to the control of the Board of
Trustees. He may execute any deed, mortgage, bond, contract or other instrument,
except in cases where the execution thereof shall be expressly delegated by the
Trustees or by these bylaws to some other officer or agent of the Trust or shall
be required by
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law to be otherwise executed; and in general shall perform all duties incident
to the office of president and such other duties as may be prescribed by the
Board of Trustees from time to time.
Section 5. Vice Presidents. In the absence of the president or in
the event of a vacancy in such office, the vice president (or in the event there
is more than one vice president, the vice presidents in the order designated at
the time of their election or, in the absence of any designation, then in the
order of their election) shall perform the duties of the president and when so
acting shall have all the powers of and be subject to all the restrictions upon
the president and shall perform such other duties as from time to time may be
assigned to him by the chairman of the board, the president or by the Trustees.
The Trustees may designate one or more vice presidents as executive vice
president or as vice president for particular areas of responsibility.
Section 6. Secretary. The secretary shall (a) keep the minutes of
the proceedings of the shareholders, the Trustees and committees of the Trustees
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Bylaws or as required by
law; (c) be custodian of the Trust records and of the seal of the Trust; (d)
keep a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) have general charge of the
share transfer books of the Trust; and (f) in general perform such other duties
as from time to time may be assigned to him by the president or by the Trustees.
Section 7. Treasurer. The treasurer shall have the custody of the
funds and securities of the Trust, shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit all
moneys and other valuable effects in the name and to the credit of the Trust in
such depositories as may be designated by the Trustees.
The treasurer shall disburse the funds of the Trust as may be ordered
by the Trustees, taking proper vouchers for such disbursements, and shall render
to the president and the Trustees, at the regular meetings of the Trustees or
whenever they may require it, an account of all his transactions as treasurer
and of the financial condition of the Trust.
If required by the Trustees, he shall give the Trust a bond in such sum
and with such surety or sureties as shall be satisfactory to the Trustees for
the faithful performance of the duties of his office and for the restoration to
the Trust, in case of his death, resignation, retirement or removal from office,
all books, papers, vouchers, moneys and other property of whatever kind in his
possession or under his control belonging to the Trust.
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Section 8. Assistant Officers. The assistant secretary or
secretaries and the assistant treasurer or treasurers, if any, shall perform all
the duties of the secretary and of the treasurer, respectively, in the absence
of those officers, and shall have such other powers and perform such other
duties as may be assigned to them respectively by the Board of Trustees or the
president.
Section 9. Salaries. The salaries of the officers shall be fixed
from time to time by the Trustees and no officers shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE VI.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Trustees may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in the
name of and on behalf of the Trust and such authority may be general or confined
to specific instances. Any agreement, deed, mortgage, lease or other document
executed by one or more of the Trustees or by an authorized person shall be
deemed valid and binding upon the Trustees and upon the Trust when so authorized
or ratified by action of the Trustees.
Section 2. Checks and Drafts. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Trust shall be signed by such officer or officers, agent or agents,
of the Trust and in such manner as shall from time to time be determined by the
Trustees.
Section 3. Deposits. All funds of the Trust not otherwise employed
shall be deposited from time to time to the credit of the Trust in such banks,
trust companies or other depositories as the Trustees may designate.
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ARTILE VII
SHARES
Section 1. Certificates. Each shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of beneficial interest held by him in the Trust. Each
certificate shall be signed by the president or a vice president and
countersigned by the secretary or an assistant secretary or the treasurer or an
assistant treasurer and may be sealed with the seal, if any, of the Trust. The
signatures may be either manual or facsimile. Certificates shall be
consecutively numbered; and if the Trust shall, from time to time, issue several
classes of shares, each class may have its own number series. A certificate is
valid and may be issued whether or not an officer who signed it is still an
officer when it is issued. Each certificate representing shares which are
restricted as to their transferability or voting powers, which are preferred or
limited as to their dividends or as to their allocable portion of the assets
upon liquidation or which are redeemable at the option of the Trust, shall have
a statement of such restriction, limitation, preference or redemption provision,
or a summary thereof, plainly stated on the certificate. In lieu of such
statement or summary, the Trust may set forth upon the face or back of the
certificate a statement that the Trust will furnish to any shareholder, upon
request and without charge, a full statement of such information.
Section 2. Transfers. Certificates shall be treated as negotiable and
title thereto and to the shares they represent shall be transferred by delivery
thereof to the same extent as those of a Maryland stock corporation. Upon
surrender to the Trust or the transfer agent of the Trust of a share certificate
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Trust shall issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books.
The Trust shall be entitled to treat the holder of record of any share
or shares as the holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of the State of Maryland.
Section 3. Lost Certificate. The Trustees may direct a new
certificate to be issued in place of any certificate previously issued by the
Trust alleged to have been lost, stolen or destroyed upon the making of
affidavit of that fact by the person claiming the certificate to be lost, stolen
or destroyed. When authorizing the issuance thereof, the Trustees may require
the owner of such
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lost, stolen or destroyed certificate or his legal representative to advertise
the same in such manner as they shall require and/or to give bond, with
sufficient surety, to the Trust to indemnify it against any loss or claim which
may arise as a result of the issuance of a new certificate.
Section 4. Closing of Transfer Books or Fixing of Record Date. The
Trustees may set, in advance, a record date for the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders, or
shareholders entitled to receive payment of any dividend or the allotment of any
other rights, or in order to make a determination of shareholders for any other
proper purpose. Such date, in any case, shall not be prior to the close of
business on the day the record date is fixed and shall be not more than 90 days
and, in the case of a meeting of shareholders not less than ten days, before the
date on which the meeting or particular action requiring such determination of
shareholders is to be held or taken.
In lieu of fixing a record date, the Trustees may provide that the
share transfer books shall be closed for a stated period but no longer than 20
days. If the share transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days before the date of such meeting.
If no record date is fixed and the share transfer books are not closed
for the determination of shareholders (a) the record date for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the day on which the notice of meeting is
mailed or the 30th day before the meeting, whichever is the closer date to the
meeting; and (b) the record date for the determination of shareholders entitled
to receive payment of a dividend or an allotment of any other rights shall be
the close of business on the day on which the resolution of the Trustees,
declaring the dividend or allotment of rights, is adopted.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, except where the determination has been made
through the closing of the transfer books and the stated period of closing has
expired.
Section 5. Share Ledger. The Trust shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
shareholder and the number of shares of each class held by such shareholder.
Section 6. Fractional Shares: Issuance of Units. Trustees may issue
fractional shares or provide for the issuance of scrip, all on such terms and
under such conditions as they may determine. Notwithstanding any other provision
of the
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Declaration or these Bylaws, the Trustees may issue units consisting of
different securities of the Trust. Any security issued in a unit shall have the
same characteristics as any identical securities issued by the Trust, except
that the Trustees may provide that for a specified period securities of the
Trust issued in such unit may be transferred on the books of the Trust only in
such unit.
ARTICLE VIII
ACCOUNTING YEAR
The fiscal year of the Trust shall be fixed by, and subject to change
by, the Board of Trustees, by duly adopted resolution.
ARTICLE IX
DIVIDENDS
Section 1. Declaration. Dividends upon the shares of the Trust may
be declared by the Trustees, subject to the provisions of law and the
Declaration of Trust. Dividends may be paid in cash, property or shares of the
Trust, subject to the provisions of law and the Declaration of Trust.
Section 2. Contingencies. Before payment of any dividends, there may
be set aside out of any funds of the Trust available for dividends such sum or
sums as the Board of Trustees may from time to time, in its absolute discretion,
think proper as a reserve fund for contingencies, for equalizing dividends, for
repairing or maintaining any property of the Trust or for such other purpose as
the Trustees shall determine to be in the best interest of the Trust, and the
Trustees may modify or abolish any such reserve in the manner in which it was
created.
ARTICLE X
INVESTMENT POLICY
Section 1. General. Subject to the provisions of the Declaration of
Trust, the Trustees may from time to time adopt, amend, revise or terminate any
policy or policies with respect to investments by the Trust as they shall deem
appropriate in their sole discretion.
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<PAGE>
ARTICLE XI
SEAL
Section 1. Seal. The Trustees may authorize the adoption of a seal
by the Trust. The seal shall have inscribed thereon the name of the Trust and
the year of its organization. The Trustees may authorize one or more duplicate
seals and provide for the custody thereof.
Section 2. Affixing Seal. Whenever the Trust is required to place
its seal to a document, it shall be sufficient to meet the requirements of any
law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent
to the signature of the person authorized to execute the document on behalf of
the Trust.
ARTICLE XII
INDEMNIFICATION
To the maximum extent permitted by Maryland law in effect from time to
time, the Trust, without requiring a preliminary determination of the ultimate
entitlement to indemnification, shall indemnify (a) any Trustee, officer or
shareholder or any former Trustee, officer or shareholder (including among the
foregoing, for all purposes of this Article XII and without limitation, any
individual who, while a Trustee and at the request of the Trust, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise), who has been successful, on the merits or otherwise, in the defense
of a proceeding to which he was made a party by reason of such status, against
reasonable expenses incurred by him in connection with the proceeding, (b) any
Trustee or officer or any former trustee or officer against any claim or
liability to which he may become subject by reason of such status unless it is
established that (i) his act or omission was committed in bad faith or was the
result of active and deliberate dishonesty, (ii) he actually received an
improper personal benefit in money, property or services or (iii) in the case of
a criminal proceeding, he had reasonable cause to believe that his act or
omission was unlawful and (c) each shareholder or former shareholder against any
claim or liability to which he may become subject by reason of his status as a
shareholder or former shareholder. In addition, the Trust shall pay or
reimburse, in advance of final disposition of a proceeding, reasonable expenses
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<PAGE>
incurred by a Trustee, officer or shareholder or former Trustee, officer or
shareholder made a party to a proceeding by reason of his status as a Trustee,
officer or shareholder provided that, in the case of a Trustee or officer, the
Trust shall have received (i) a written affirmation by the Trustee or officer of
his good faith belief that he has met the applicable standard of conduct
necessary for indemnification by the Trust as authorized by these Bylaws and
(ii) a written undertaking by or on his behalf to repay the amount paid or
reimbursed by the Trust if it shall ultimately be determined that the applicable
standard of conduct was not met. The Trust may, with the approval of its
Trustees, provide such indemnification and payment or reimbursement of expenses
to any Trustee, officer or shareholder or any former Trustee, officer or
shareholder who served a predecessor of the Trust and to any employee or agent
of the Trust or a predecessor of the Trust. Neither the amendment nor repeal of
this Section, nor the adoption or amendment of any other provision of the
Declaration of Trust or these Bylaws inconsistent with this Section, shall apply
to or affect in any respect the applicability of this paragraph with respect to
any act or failure to act which occurred prior to such amendment, repeal or
adoption. Any indemnification or payment or reimbursement of the expenses
permitted by these Bylaws shall be furnished in accordance with the procedures
provided for indemnification and payment or reimbursement of expenses under
Section 2-418 of the Maryland General Corporation Law (the "MGCL") for directors
of Maryland corporations. The Trust may provide to Trustees, officers and
shareholders such other and further indemnification or payment or reimbursement
of expenses as may be permitted by MGCL as in effect from time to time for
directors of Maryland corporations.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Declaration
of Trust or Bylaws or pursuant to applicable law, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice. Neither the business to be transacted at nor the purpose of any meeting
need to be set forth in the waiver of notice, unless specifically required by
statute. The attendance of any person at any meeting shall constitute a waiver
of notice of such meeting, except where such person attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Trustees shall have the exclusive power to adopt, alter or repeal
any provision of these Bylaws and to make new Bylaws.
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Exhibit 4(a)
FIRST SUPPLEMENTAL INDENTURE
Dated as of November 1, 1996
to
INDENTURE
Dated as of July 18, 1995
between
MAIN PLACE FUNDING CORPORATION
and
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
--------------------------
$1,500,000,000
Mortgage-Backed Bonds, Series 1995-1 Due 1998
--------------------------
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of November 1, 1996
between Main Place Real Estate Investment Trust, a Maryland real estate
investment trust (the "Trust"), as successor in interest to Main Place Funding
Corporation, a Delaware corporation (the "Issuer"), and First Trust National
Association (the "Trustee") to that certain Indenture, dated as of July 18,
1995, between the Issuer and the Trustee (the "Indenture").
WHEREAS, the Issuer and the Trustee previously entered into
the Indenture which provides for the issuance by the Issuer of $1,500,000,000
aggregate principal amount Mortgage-Backed Bonds, Series 1995-1 Due 1998; and
WHEREAS, pursuant to an Agreement of Merger dated October 31,
1996 by and among the Trust, the Issuer and Main Place Holdings Corporation, a
Delaware corporation (the "Parent"), the Issuer was merged by the Parent with
and into the Trust, with the Trust as the surviving entity of the merger; and
WHEREAS, the Trust, as successor in interest to the Issuer
wishes to enter into this First Supplemental Indenture pursuant to Sections
7.01(1) and (2) of the Indenture to evidence the succession of the Trust to the
Issuer and the assumption by the Trust of the covenants of the Issuer under the
Indenture and the Securities issued pursuant to the Indenture; and
WHEREAS, all acts necessary to constitute this First
Supplemental Indenture as a valid, binding and legal obligation of the Trust
have been done and performed.
NOW, THEREFORE, witnesseth that, in consideration of the
premises and of the covenants contained herein, it is hereby agreed as follows:
1. All references to the Issuer in the Indenture shall
hereinafter refer to Main Place Real Estate Investment Trust, as successor in
interest to Main Place Funding Corporation.
2. The Trust hereby expressly assumes all obligations of the
Issuer under the Indenture in respect of the Securities and the Collateral and
expressly assumes every covenant of the Indenture on the part of the Issuer to
be performed or observed.
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<PAGE>
3. The Trust hereby expressly confirms that the Collateral
shall secure its obligations under the Securities and the Indenture.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
MAIN PLACE REAL ESTATE INVESTMENT TRUST
By: /s/ Gary S. Williams.
---------------------------------
Name: Gary S. Williams
Title: Senior Vice President
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Sherri Christopherson.
------------------------------
Authorized Signatory
Exhibit 4(b)
FIRST SUPPLEMENTAL INDENTURE
Dated as of November 1, 1996
to
INDENTURE
Dated as of October 31, 1995
between
MAIN PLACE FUNDING CORPORATION
and
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
--------------------------
$1,500,000,000
Mortgage-Backed Bonds, Series 1995-2 Due 2000
--------------------------
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of November 1, 1996
between Main Place Real Estate Investment Trust, a Maryland real estate
investment trust (the "Trust"), as successor in interest to Main Place Funding
Corporation, a Delaware corporation (the "Issuer"), and First Trust National
Association (the "Trustee") to that certain Indenture, dated as of October 31,
1995, between the Issuer and the Trustee (the "Indenture").
WHEREAS, the Issuer and the Trustee previously entered into
the Indenture which provides for the issuance by the Issuer of $1,500,000,000
aggregate principal amount Mortgage-Backed Bonds, Series 1995-2 Due 2000; and
WHEREAS, pursuant to an Agreement of Merger dated October 31,
1996 by and among the Trust, the Issuer and Main Place Holdings Corporation, a
Delaware corporation (the "Parent"), the Issuer was merged by the Parent with
and into the Trust, with the Trust as the surviving entity of the merger; and
WHEREAS, the Trust, as successor in interest to the Issuer
wishes to enter into this First Supplemental Indenture pursuant to Sections
7.01(1) and (2) of the Indenture to evidence the succession of the Trust to the
Issuer and the assumption by the Trust of the covenants of the Issuer under the
Indenture and the Securities issued pursuant to the Indenture; and
WHEREAS, all acts necessary to constitute this First
Supplemental Indenture as a valid, binding and legal obligation of the Trust
have been done and performed.
NOW, THEREFORE, witnesseth that, in consideration of the
premises and of the covenants contained herein, it is hereby agreed as follows:
1. All references to the Issuer in the Indenture shall
hereinafter refer to Main Place Real Estate Investment Trust, as successor in
interest to Main Place Funding Corporation.
2. The Trust hereby expressly assumes all obligations of the
Issuer under the Indenture in respect of the Securities and the Collateral and
expressly assumes every covenant of the Indenture on the part of the Issuer to
be performed or observed.
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<PAGE>
3. The Trust hereby expressly confirms that the Collateral
shall secure its obligations under the Securities and the Indenture.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
MAIN PLACE REAL ESTATE INVESTMENT
TRUST
By: /s/ Gary S. Williams
-----------------------------
Name: Gary S. Williams
Title: Senior Vice President
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Sherri Christopherson
-------------------------
Authorized Signatory
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<PAGE>
<PAGE>
CONTRIBUTION AGREEMENT
DATED AS OF SEPTEMBER 20, 1996
This Contribution Agreement (the "Agreement") dated as of
September 20, 1996, is between Main Place Funding Corporation, a Delaware
corporation (the "Issuer"), and NationsBank, N.A. (South), a national banking
association ("NationsBank South").
WITNESSETH THAT:
WHEREAS, NationsBank South desires to transfer legal and
equitable title to certain of the mortgage notes which are listed in Exhibit A
attached hereto (the "Mortgage Notes") to the Issuer pursuant to the terms of
this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter contained, it is mutually covenanted and agreed as follows:
1. CONTRIBUTION OF MORTGAGE NOTES. NationsBank South does
hereby transfer, assign, set over and otherwise convey to the Issuer all of its
right, title and interest in and to the Mortgage Notes, including all interest
and principal received or receivable by it on or with respect to the Mortgage
Notes after the date of this Agreement, together with all of its right, title
and interest in and to the proceeds of any related title, hazard, private
mortgage or other insurance policies.
At the direction of the Issuer, NationsBank South hereby
delivers to the Trustee or the Custodian all documents, instruments and
agreements required to be delivered by the Issuer to the Trustee or the
Custodian, respectively, under the Indenture of Trust dated as of October 31,
1995, (the "Indenture"), between the issuer and First Trust National
Association, as trustee (the "Trustee"), relating to the issuance by the Issuer
of its Mortgage-Backed Bonds, Series 1995-2 Due 2000. Terms used without
definition herein shall have the respective meanings assigned to them in the
Indenture.
2. REPRESENTATIONS AND WARRANTIES. NationsBank South hereby
represents and warrants to the Issuer as of the date of this Agreement (unless
otherwise indicated) that:
(i) the information set forth with respect to the
Mortgage Notes in Exhibit A hereto is true and correct in all
material respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) NationsBank South is the sole owner and holder
of each Mortgage Note, free and clear of any and all liens,
pledges, charges or security interests of any nature and has
full right and authority to sell and assign the same;
(iii) each Mortgage Note is either an Eligible
Adjustable-Rate Mortgage Note or an Eligible Fixed-Rate
Mortgage Note, as applicable, and all of the Mortgage Notes,
individually and collectively, are Eligible Mortgage Notes;
<PAGE>
(iv) to the best of NationsBank South's knowledge,
all taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges previously due and owing
have been paid, or an escrow of funds in an amount sufficient
to pay for every such item which remains unpaid has been
established to the extent permitted by law; and NationsBank
South has not advanced funds, directly or indirectly, for the
payment of any amount required by any Mortgage, except for
interest accruing from the date of related Mortgage note or
date of disbursement of any Mortgage Note proceeds, whichever
is later, to the date which precedes by 30 days the first due
date under any related Mortgage Note;
(v) to the best of NationsBank South's knowledge,
there is no proceeding pending or threatened for the total or
partial condemnation of any Mortgaged Property and any
Mortgaged Property is undamaged by water, fire, earthquake or
earth movement, windstorm, flood, tornado or similar casualty
(excluding casualty from the presence of hazardous wastes or
hazardous substances, as to which NationsBank South makes no
representation), so as to affect adversely the value of any
Mortgaged Property as security for any Mortgage Note or the
use for which such premises were intended;
(vi) each Mortgage Note meets, or is exempt from,
applicable state or federal laws, regulations and other
requirements pertaining to usury, and such Mortgage Note is
not usurious; any and all requirements of any federal, state
or local law with respect to the origination of the Mortgage
Notes including, without limitation, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage notes have been complied with;
(vii) each Mortgage Note, related Mortgage and other
agreements executed in connection therewith are genuine, and
each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and, to the
best of NationsBank South's knowledge, all parties to each
Mortgage Note had legal capacity to execute each such Mortgage
Note and each such Mortgage Note has been duly and properly
executed by the mortgagor;
(viii) the Mortgaged Property securing each Mortgage
Note is insured by an insurer acceptable to FNMA or FHLMC
against loss by fire and such hazards as are covered under a
standard extended coverage endorsement, in an amount which is
not less than the lesser of 100% of the insurable value of the
Mortgaged Property and the outstanding principal balance of
the Mortgage Note, but in no event less than the minimum
amount necessary to fully compensate for any damage or loss on
a replacement cost basis; if the Mortgaged Property is a
condominium
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<PAGE>
unit, it is included under the coverage afforded by a blanket
policy for the project; if upon origination of the Mortgage
Note, the improvements on the Mortgaged Property were in an
area indemnified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a
flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in
effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Note, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act of 1973; and each Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the
mortgagor's cost and expense;
(ix) to the best of the NationsBank South's
knowledge, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of
acceleration; NationsBank South has not waived any default,
breach, violation or event of acceleration; no foreclosure
action is threatened or has been commenced by NationsBank
South with respect to any Mortgage Note;
(x) each Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including
realization by judicial foreclosure (subject to any limitation
arising from any bankruptcy, insolvency or other law for the
relief of debtors), and there is no homestead or other law for
the relief of debtors), and there is no homestead or other
exemption available to the mortgagor which would interfere
with such right of foreclosure; and
(xi) to the best of NationsBank South's knowledge, no
mortgagor is a debtor in any state or federal bankruptcy or
insolvency proceeding.
No representations or warranties are made by NationsBank South
as to the absence or effect of hazardous wastes or hazardous substances on any
of the Mortgaged Properties or on the lien of any Mortgage or with respect to
the absence or effect of fraud in the origination of any Mortgage Note, and any
loss or liability resulting from the presence or effect of such hazardous
wastes, hazardous substances or fraud will be borne solely by the Issuer.
3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to principles of conflicts of law.
4. COUNTERPARTS. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one Agreement.
-3-
<PAGE>
IN WITNESS WHEREOF, the Issuer and NationsBank South have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
MAIN PLACE FUNDING CORPORATION
By: /s/ John E. Mack
Name: John E. Mack
Title: President and Treasurer
NATIONSBANK, N.A. (SOUTH)
By: /s/ John E. Mack
Name: John E. Mack
Title: Senior Vice President
-4-
<PAGE>
Exhibit 10(b)
MORTGAGE LOAN CONTRIBUTION AGREEMENT
This Mortgage Loan Contribution Agreement, is made this 30th
day of October, 1996 (this "Agreement"), by and between NationsBank of Texas,
N.A., a national banking association (the "Bank"), and Main Place Real Estate
Investment Trust, a Maryland real estate investment trust (the "Trust").
WHEREAS, the Bank owns 50% of the issued and outstanding Class
A Common Shares of Beneficial Interest, par value $1.00 per share (the "Class A
Trust Shares"), of the Trust;
WHEREAS, the Bank owns the residential mortgage loans
identified on Exhibit A hereto (the "Mortgage Loans" and the "Mortgage Loan
Schedule," respectively);
WHEREAS, the Bank desires to contribute the Mortgage Loans to
the Trust in exchange for the issuance by the Trust of 53,786 Class A Trust
Shares (the "Shares") to the Bank upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Trust desires to accept the contribution of the
Mortgage Loans by the Bank and issue the Shares to the Bank in consideration for
such contribution;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Contribution; Issuance of Shares.
(a) The Bank hereby agrees to contribute (the "Contribution")
to the Trust, on November 1, 1996 (the "Closing Date"), subject to the terms and
conditions of this Agreement, all the right, title and interest of the Bank in
and to the Mortgage Loans, including all servicing rights and all interest and
principal due on or with respect to the Mortgage Loans together with all of the
Bank's right, title and interest in and to the proceeds of any related title,
hazard, primary mortgage or other insurance policies (collectively, the
"Contributed Assets"). The Contribution shall be effected pursuant to a Mortgage
Loan Assignment in the form attached hereto as Exhibit B. The closing of the
Contribution shall take place at the offices of Stroock & Stroock & Lavan at
10:00 a.m. (eastern standard time) on the Closing Date.
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<PAGE>
(b) In consideration of the Contribution by the Bank to the
Trust, the Trust hereby agrees to issue to the Bank, on the Closing Date,
subject to the terms and conditions of this Agreement, the Shares, receipt of
which by the Bank shall be deemed to constitute full and adequate consideration
from the Trust for the Bank's interest in the Contributed Assets to be
contributed by the Bank pursuant to Section 1(a) hereof.
(c) In the event any mortgage loan is or becomes an Ineligible
Mortgage Loan (as defined below), the Bank shall, upon the Trust's request, made
at any time prior to or after the Closing Date, replace such Mortgage Loan with
a substitute Mortgage Loan meeting the selection criteria established by the
Trust in which case the Bank shall cause the Mortgage Loan Schedule to be
amended. The term "Ineligible Mortgage Loan" means a mortgage loan which has any
of the following characteristics as of the Cutoff Date (as hereinafter defined):
(i) the Mortgage Loan is 30 days past due; (ii) a default, breach, violation or
event of acceleration has occurred with respect to the mortgage loan; (iii) a
foreclosure action has been commenced; or (iv) the related mortgagor is a debtor
in a state or federal bankruptcy or insolvency proceeding. On the Closing Date,
the Bank shall deliver the final Mortgage Loan Schedule to the Trust.
(d) The Bank and the Trust hereby agree that the aggregate
book value of the Mortgage Loans at September 30, 1996 (the "Cutoff Date") is
$5,862,502,429.52 and that the aggregate fair market value of the Mortgage Loans
at the Cutoff Date is approximately equal to the aggregate book value thereof.
2. Representations and Warranties of the Bank.
(a) The Bank hereby represents and warrants to the Trust as of
the date hereof and as of Closing Date as follows:
(i) The Bank is a national banking association duly
organized, validly existing and in good standing under the
laws of the United States, with full corporate power and
authority to own its assets and conduct its business, and the
Bank has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby, including, but not limited to, the power and authority
to convey, assign and transfer the Contributed Assets in
accordance with this Agreement;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
all of the obligations of the Bank hereunder are the legal,
valid and binding obligations of the Bank, enforceable against
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<PAGE>
the Bank in accordance with the terms of this Agreement,
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iii) The execution and delivery of this Agreement by
the Bank and the performance of its obligations hereunder will
not conflict with any provision of any law or regulation to
which the Bank is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Bank's organizational
documents or any agreement or instrument to which the Bank is
a party or by which it is bound, or any order or decree
applicable to the Bank, or result in the creation or
imposition of any lien on any of the Bank's assets or
property, in each case which would materially and adversely
affect the ability of the Bank to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Bank,
threatened against the Bank in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the value of the Contributed
Assets or the ability of the Bank to carry out the
transactions contemplated by this Agreement;
(v) The Bank is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
other) or operations of the Bank or its properties or might
have consequences that would materially and adversely affect
its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Bank of or
compliance by the Bank with this Agreement or the consummation
of the transactions contemplated by this Agreement, other than
those which have been obtained by the Bank;
(vii) The Bank is acquiring the Shares for its own
account, for investment and not with a view to the sale or
distribution thereof or with any present intention of selling
-62-
<PAGE>
or distributing any thereof, except in conformity with the
Securities Act of 1933, as amended (the "Securities Act"). The
Bank understands and acknowledges that the Shares are not
registered under the Securities Act and will not be
transferable except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144
or any successor rule under the Securities Act, (iii) pursuant
to a no-action letter issued by the Securities and Exchange
Commission to the effect that a proposed transfer of the
Shares may be made without registration under the Securities
Act or (iv) pursuant to an opinion of counsel for or
reasonably acceptable to the Trust to the effect that the
proposed transfer is exempt from registration or qualification
under the Securities Act and relevant state securities laws;
and
(viii) The transfer, assignment and conveyance of the
Contributed Assets by the Bank to the Trust is not subject to
bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(b) The Bank hereby represents and warrants with respect to
each Mortgage Loan that, as of the date specified below or, if no such date is
specified, as of the Closing Date:
(i) the information set forth with respect
to the Mortgage Loans is true and correct in all material
respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) the Bank is the sole owner and holder
of each Mortgage Loan, free and clear of any and all liens,
pledges, charges or security interest of any nature and has
full right and authority to transfer and assign the same;
(iii) the Bank has not advanced funds,
directly or indirectly, for the payment of any amount required
by any Mortgage, except for interest accruing from the date of
related Mortgage Loan or date of disbursement of any Mortgage
Loan proceeds, whichever is later, to the date which precedes
by 30 days the first due date under any related Mortgage Loan;
(iv) the Bank has no knowledge of any
proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property and any Mortgaged
Property is undamaged by water, fire, earthquake or earth
movement, windstorm, flood, tornado or similar casualty
(excluding casualty from the presence of hazardous wastes or
hazardous substances, as
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<PAGE>
to which the Bank makes no representation), so as to affect
adversely the value of any Mortgaged Property as security for
any Mortgage Loan or the use for which such premises were
intended;
(v) each Mortgage Loan meets, or is exempt
from, applicable state or federal laws, regulations and other
requirements pertaining to usury, and such Mortgage Note is
not usurious; any and all requirements of any federal, state
or local law with respect to the origination of the Mortgage
Loans including, without limitation, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage Loans have been complied with;
(vi) each Mortgage Note, related Mortgage
and other agreements executed in connection therewith are
genuine, and each is the legal, valid and binding obligation
of the maker thereof, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general
equity principles (regardless of whether such enforcement is
considered in a proceedings in equity or at law); and, to the
best of the Bank's knowledge, all parties to each Mortgage
Note had legal capacity to execute each such Mortgage Note and
each such Mortgage Note has been duly and properly executed by
the mortgagor;
(vii) the Mortgaged Property securing each
Mortgage Note is insured by an insurer against loss by fire
and such hazards as are covered under a standard extended
coverage endorsement, in an amount which is not less than the
lesser of 100% of the insurable value of the Mortgage Property
and the outstanding principal balance of the Mortgage Note,
but in no event less than the minimum amount necessary to
fully compensate for any damage or loss on a replacement cost
basis; if the Mortgaged Property is a condominium unit, it is
included under the coverage afforded by a blanket policy for
the project;
(viii) the Bank has no knowledge of any
default, breach, violation or event of acceleration existing
under any Mortgage or the related Mortgage Note or any event
which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; the Bank
has not waived any default, breach, violation or event of
acceleration; no foreclosure action is threatened or has been
commenced by the Bank with respect to any Mortgage Note;
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<PAGE>
(ix) each Mortgage contains customary and
enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the
security, including realization by judicial foreclosure
(subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there
is no homestead or other exemption available to the mortgagor
which would interfere with such right of foreclosure; and
(x) the Bank has no knowledge that any
mortgagor is a debtor in any state or federal bankruptcy or
insolvency proceeding.
No representations or warranties are made by the Bank as to
the absence or effect of hazardous wastes or hazardous substances on any of the
Mortgaged Properties or on the lien of any Mortgage or with respect to the
absence or effect of fraud in the origination of any Mortgage Note, and any loss
or liability resulting from the presence or effect of such hazardous wastes,
hazardous substances or fraud will be borne solely by the Trust.
3. Notice of Breach: Cure and Repurchase.
(a) The Trust shall give the Bank notice of any breach of any
representation or warranty regarding the Mortgage Loans (a "Breach") or any
defect thereof (a "Defect") that materially and adversely affects the value of
such Mortgage Loan.
(b) Upon notice pursuant to Section 3(a) herein, the Bank
shall, not later than the earlier of 90 days from the Bank's receipt of the
notice or the Bank's discovery of such Breach, cure such Defect or Breach, as
the case may be, in all material respects or reacquire the affected Mortgage
Loan at the applicable Reacquisition Price (as defined below). If the affected
Mortgage Loan is to be reacquired, the Bank shall remit the Reacquisition Price
to the Trust.
The "Reacquisition Price" with respect to any Mortgage Loan to
be reacquired pursuant to this Agreement shall be the book value of any such
Mortgage Loan as of the Cutoff Date.
(c) Upon any reacquisition of a Mortgage Loan contemplated by
this Section 3(b), any servicer of the Mortgage Loans, at the instruction of the
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Trust, shall tender to the Bank or any person designated by the Bank, all
portions of the mortgage file, as such term is defined in the applicable
servicing agreement, and other documents pertaining to such Mortgage Loan
possessed by it, and each document that constitutes a part of the mortgage file
that was endorsed or assigned to the Trust shall be endorsed or assigned, as the
case may be, to the Bank or any person designated by the Bank.
(d) This Section 3 of this Agreement provides the sole remedy
available to the Trust respecting any Defect in a mortgage file or any Breach of
any representation or warranty set forth in or required to be made pursuant to
Section 2 of this Agreement.
4. Representations, Warranties and Agreements of the
Trust.
(a) The Trust hereby represents and warrants to the Bank,
as of the date hereof and as of the Closing Date, as follows:
(i) The Trust is a real estate investment trust duly
organized, validly existing and in good standing under the
laws of the State of Maryland, with full corporate power and
authority to own its assets and conduct its business, and the
Trust has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
all of the obligations of the Trust hereunder are the legal,
valid and binding obligations of the Trust, enforceable
against the Trust in accordance with the terms of this
Agreement, except as such enforcement may be limited by
bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law);
(iii) The execution and delivery of this Agreement by
the Trust and the performance of its obligations hereunder
will not conflict with any provision of any law or regulation
to which the Trust is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Trust's organizational
documents or any agreement or instrument to which the Trust is
a party or by which it is bound, or any order or decree
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applicable to the Trust, or result in the creation or
imposition of any lien on any of the Trust's assets or
property, in each case which would materially and adversely
affect the ability of the Trust to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Trust,
threatened against the Trust in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement
or any action taken in connection with the obligations of the
Trust contemplated herein, or which would be likely to impair
materially the ability of the Trust to perform under the terms
of this Agreement;
(v) The Trust is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
otherwise) or operations of the Trust or its properties or
might have consequences that would materially and adversely
affect its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Trust of or
compliance by the Trust with this Agreement or the
consummation of the transactions contemplated by this
Agreement other than those that have been obtained by the
Trust; and
(vii) Upon the issuance of the Shares as provided
herein, the Shares will be duly and validly issued, fully paid
and non-assessable. The Shares, when issued and delivered to
the Bank, will not be subject to preemptive rights.
5. Trust's Conditions to Closing.
The obligations of the Trust under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Bank required to be performed by it
at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Bank under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
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(b) The Trust or its designee shall have received all of the
following closing documents, in such forms as are agreed upon and acceptable to
the Trust and in form and substance satisfactory to the Trust and the Trust's
counsel, duly executed by all signatories other than the Trust as required
pursuant to the respective terms thereof:
(i) with respect to each Mortgage Loan, the related
mortgage file, which mortgage files shall be held by the
servicer on behalf of the Trust pursuant to the terms of the
servicing agreement between the Trust and Servicer dated as of
the Closing Date; and
(ii) the final Mortgage Loan Schedule.
(c) The Bank hereby agrees to furnish such other information,
documents, certificates, letters or opinions with respect to the Mortgage Loans
or itself as may be reasonably requested by the Trust in order for the Trust to
perform any of its obligations or satisfy any of the conditions on its part to
be performed or satisfied pursuant to this Agreement.
7. Bank's Conditions to Closing.
The obligations of the Bank under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Trust required to be performed by
it at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Trust under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
(b) The Bank or its designee shall have received a certificate
representing the Shares duly executed by the authorized officers of the Trust.
8. Share Legend. All Shares to be issued to the Bank
pursuant to this Agreement shall be subject to the provisions of this Agreement,
and the certificates representing such Shares shall bear the following legend:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
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"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of the Trust."
9. Notices. All communications hereunder shall be in writing
and effective only upon receipt and, if sent to the Trust, will be mailed, hand
delivered, couriered or sent by facsimile transmission to it at 100 North Tryon
Street, 23rd Floor, NC1-007-23-01 Charlotte, North Carolina 28255, attention of
John E. Mack, President, fax number (704) 386-0270 or, if sent to the Bank, will
be mailed, hand delivered or sent by facsimile transmission to it c/o
NationsBank Corporation, Legal Department, at 100 North Tryon Street, 20th
Floor, Charlotte, North Carolina 28255 attention of George Walls, Esq., fax
number (704)386-6453.
10. Miscellaneous. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of laws principles. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated except by a writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be executed in any number of counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
together constitute but one and the same instrument. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, and no other person will have any right or obligation
hereunder, other than as provided herein. Notwithstanding the immediately
preceding sentence, neither party hereto may assign this Agreement without the
prior written consent of the other party hereto.
11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Bank and the Trust submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive conveyance, assignment and transfer of the Contributed Assets to the
Trust notwithstanding any language to the contrary contained in any endorsement
of any Mortgage Loan.
12. Severability. If any provision of this Agreement shall
be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
13. Further Assurances. The Bank and the Trust agree to
execute and deliver such instruments and take such actions as the other party
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
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[Signature page follows]
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IN WITNESS WHEREOF, the Trust and the Bank have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gary S. Williams
----------------------------------
Name: Gary S. Williams
Title: Senior Vice President
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
---------------------------------
Name: Gary S. Williams
Title: Senior Vice President
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EXHIBIT A
MORTGAGE LOAN SCHEDULE
[DELIVERED TO THE TRUST]
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EXHIBIT B
MORTGAGE LOAN ASSIGNMENT
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Exhibit 10(c)
MORTGAGE LOAN ASSIGNMENT
Dated as of November 1, 1996
This Mortgage Loan Assignment (the "Assignment") dated as of November
1, 1996, is among Main Place Real Estate Investment Trust, a Maryland business
trust (the "Trust"), NationsBank of Texas, N.A., a national banking association
(the "Transferor"), and NationsBanc Mortgage Corporation, a Texas corporation
("NationsBanc Mortgage").
WITNESSETH THAT:
WHEREAS, the Transferor and the Trust have entered into a Mortgage Loan
Contribution Agreement, dated as of October 30, 1996 (the "Contribution
Agreement"), providing for the contribution of certain mortgage loans by the
Transferor to the Trust and the receipt by the Trust of such mortgage loans;
WHEREAS, Transferor holds one of the following types of interest in
each mortgage loan (each, a "Mortgage Loan" and collectively, "Mortgage Loans")
described on Exhibit A to the Contribution Agreement: (i) 100% of all legal and
beneficial ownership interests in the related promissory note, bond or other
evidence of indebtedness (each, a "Mortgage Note"), mortgage, deed of trust,
deed to secure debt or other security interest (each, a "Mortgage") and all
other documents executed and delivered by the related Mortgage Loan Borrower
("Borrower") or any other person in favor of the owner and holder of the related
Mortgage Loan (together with the Mortgage Loan and Mortgage, the "Mortgage Loan
Documents"), or (ii) a 100% undivided participation interest in the related
Mortgage Loan and Mortgage Loan Documents pursuant to a Loan Participation
Agreement dated as of January 1, 1991 between NationsBanc Mortgage and the
Transferor, as amended through the date hereof (the "Loan Participation
Agreement"). Each Mortgage Loan falling within the description of clause (i)
above shall hereinafter be referred to as a "Purchased Mortgage Loan." Each
Mortgage Loan falling within the description of clause (ii) above shall
hereinafter be referred to as a "Participation Mortgage Loan."
WHEREAS, pursuant to Section 4 of the Loan Participation Agreement,
Transferor has the power to cause NationsBanc Mortgage to transfer legal title
to such Mortgage Loans in accordance with Transferor's instructions;
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<PAGE>
WHEREAS, Transferor desires to terminate its participation interest in
the Participation Mortgage Loans and to have NationsBanc Mortgage transfer legal
title to the Participation Mortgage Loans to Transferor; and
WHEREAS, Transferor desires to assign, convey and transfer legal and
equitable title to the Participation Mortgage Loans and the Purchased Mortgage
Loans to the Trust pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter contained, it is mutually covenanted and agreed as follows
(all capitalized terms no defined herein shall have the meanings ascribed to
them in the Contribution Agreement):
1. Termination of Participation and Transfer of Legal Title.
Pursuant to Section 4 of the Loan Participation Agreement, Transferor hereby
instructs NationsBanc Mortgage to transfer, and NationsBanc Mortgage does hereby
transfer, to Transferor all of NationsBanc Mortgage's right, title and interest
in and to the Participation Mortgage Loans.
2. Assignment of Mortgage Loans. For and in consideration of
the Consideration, the receipt and sufficiency of which is hereby acknowledged
by the Transferor, Transferor does hereby assign, transfer, set over and
otherwise convey to the Trust, its successors and assigns, all of its right,
title and interest in and to the Mortgage Loans as provided for in the
Contribution Agreement.
NationsBanc Mortgage hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which NationsBanc Mortgage is the
named holder and further agrees to deliver possession of such Mortgage Notes and
any related files to the Trust or to any other person upon the instruction of
the Trust.
Transferor also hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which Transferor is the named holder
and further agrees to deliver possession of such Mortgage Note and any related
files to the Trust or to any other person upon the instruction of the Trust.
At the Trust's request, NationsBanc Mortgage and Transferor
shall execute and deliver in addition to the foregoing any other documents to
further evidence the transfers contemplated herein, including but not limited to
assignments in recordable form, to the Trust or any person upon the instruction
of the Trust.
Each party hereto represents, warrants and covenants to each
other party that it is their intent that the foregoing transactions result in
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the irrevocable transfer of all legal and equitable ownership interest in the
Mortgage Loans to the Trust and its successors and assigns forever as of the
date hereof in accordance with all applicable law. To the extent the foregoing
is insufficient under any applicable law or otherwise to constitute a transfer,
however, each party hereby expressly declares that it is their intention that
Transferor irrevocably grant to the Trust a 100% undivided participation
interest in Transferor's interest in the Mortgage Loans and Transferor does
hereby irrevocably grant to the Trust a 100% undivided participation interest in
the Transferor's interest in the Mortgage Loans to the Trust and its successors
and assigns forever.
All transfers, assignments, grants and conveyances set forth
herein are made without recourse to or representation or warranty by Transferor
except to the extent specifically set forth herein and in the Contribution
Agreement.
3. Representations and Warranties. Transferor hereby
represents and warrants to the Trust as of the date of this Agreement that the
representations and warranties made by the Transferor to the Trust in that
certain Contribution Agreement are true and correct as of the date hereof.
4. Custody of Loan Documents. It is agreed that NationsBanc
Mortgage shall retain physical possession of the Mortgage Loan Documents and
shall hold the Mortgage Loan Documents in trust for the benefit of the Trust and
its successors and assigns in accordance with the terms of that certain
Servicing Agreement dated as of November 1, 1996 between NationsBanc Mortgage
and the Trust.
5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
6. Counterparts. This Agreement may be executed in a number
of counterparts, each of which shall be deemed an original for all purposes and
all of which constitute, collectively, one Agreement.
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IN WITNESS WHEREOF, the Trust and Transferor have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
-------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANC MORTGAGE CORPORATION
By: /s/ Frederick Wark
------------------
Name: Frederick Wark
Title: Senior Vice President
<PAGE>
Exhibit 10(d)
MORTGAGE LOAN CONTRIBUTION AGREEMENT
This Mortgage Loan Contribution Agreement, is made this 30th
day of October, 1996 (this "Agreement"), by and between NationsBank, N.A.
(South), a national banking association (the "Bank"), and Main Place Real Estate
Investment Trust, a Maryland real estate investment trust (the "Trust").
WHEREAS, the Bank owns 50% of the issued and outstanding Class
A Common Shares of Beneficial Interest, par value $1.00 per share (the "Class A
Trust Shares"), of the Trust;
WHEREAS, the Bank owns the residential mortgage loans
identified on Exhibit A hereto (the "Mortgage Loans" and the "Mortgage Loan
Schedule," respectively);
WHEREAS, the Bank desires to contribute the Mortgage Loans to
the Trust in exchange for the issuance by the Trust of 27,894 Class A Trust
Shares (the "Shares") to the Bank upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Trust desires to accept the contribution of the
Mortgage Loans by the Bank and issue the Shares to the Bank in consideration for
such contribution;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Contribution; Issuance of Shares.
(a) The Bank hereby agrees to contribute (the "Contribution")
to the Trust, on November 1, 1996 (the "Closing Date"), subject to the terms and
conditions of this Agreement, all the right, title and interest of the Bank in
and to the Mortgage Loans, including all servicing rights and all interest and
principal due on or with respect to the Mortgage Loans together with all of the
Bank's right, title and interest in and to the proceeds of any related title,
hazard, primary mortgage or other insurance policies (collectively, the
"Contributed Assets"). The Contribution shall be effected pursuant to a Mortgage
Loan Assignment in the form attached hereto as Exhibit B. The closing of the
Contribution shall take place at the offices of Stroock & Stroock & Lavan at
10:00 a.m. (eastern standard time) on the Closing Date.
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(b) In consideration of the Contribution by the Bank to the
Trust, the Trust hereby agrees to issue to the Bank, on the Closing Date,
subject to the terms and conditions of this Agreement, the Shares, receipt of
which by the Bank shall be deemed to constitute full and adequate consideration
from the Trust for the Bank's interest in the Contributed Assets to be
contributed by the Bank pursuant to Section 1(a) hereof.
(c) In the event any mortgage loan is or becomes an Ineligible
Mortgage Loan (as defined below), the Bank shall, upon the Trust's request, made
at any time prior to or after the Closing Date, replace such Mortgage Loan with
a substitute Mortgage Loan meeting the selection criteria established by the
Trust in which case the Bank shall cause the Mortgage Loan Schedule to be
amended. The term "Ineligible Mortgage Loan" means a mortgage loan which has any
of the following characteristics as of the Cutoff Date (as hereinafter defined):
(i) the Mortgage Loan is 30 days past due; (ii) a default, breach, violation or
event of acceleration has occurred with respect to the mortgage loan; (iii) a
foreclosure action has been commenced; or (iv) the related mortgagor is a debtor
in a state or federal bankruptcy or insolvency proceeding. On the Closing Date,
the Bank shall deliver the final Mortgage Loan Schedule to the Trust.
(d) The Bank and the Trust hereby agree that the aggregate
book value of the Mortgage Loans at September 30, 1996 (the "Cutoff Date") is
$3,039,640,152.53 and that the aggregate fair market value of the Mortgage Loans
at the Cutoff Date is approximately equal to the aggregate book value thereof.
2. Representations and Warranties of the Bank.
(a) The Bank hereby represents and warrants to the Trust as of
the date hereof and as of Closing Date as follows:
(i) The Bank is a national banking association duly
organized, validly existing and in good standing under the
laws of the United States, with full corporate power and
authority to own its assets and conduct its business, and the
Bank has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby, including, but not limited to, the power and authority
to convey, assign and transfer the Contributed Assets in
accordance with this Agreement;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
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<PAGE>
all of the obligations of the Bank hereunder are the legal,
valid and binding obligations of the Bank, enforceable against
the Bank in accordance with the terms of this Agreement,
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iii) The execution and delivery of this Agreement by
the Bank and the performance of its obligations hereunder will
not conflict with any provision of any law or regulation to
which the Bank is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Bank's organizational
documents or any agreement or instrument to which the Bank is
a party or by which it is bound, or any order or decree
applicable to the Bank, or result in the creation or
imposition of any lien on any of the Bank's assets or
property, in each case which would materially and adversely
affect the ability of the Bank to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Bank,
threatened against the Bank in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the value of the Contributed
Assets or the ability of the Bank to carry out the
transactions contemplated by this Agreement;
(v) The Bank is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
other) or operations of the Bank or its properties or might
have consequences that would materially and adversely affect
its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Bank of or
compliance by the Bank with this Agreement or the consummation
of the transactions contemplated by this Agreement, other than
those which have been obtained by the Bank;
(vii) The Bank is acquiring the Shares for its own
account, for investment and not with a view to the sale or
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<PAGE>
distribution thereof or with any present intention of selling
or distributing any thereof, except in conformity with the
Securities Act of 1933, as amended (the "Securities Act"). The
Bank understands and acknowledges that the Shares are not
registered under the Securities Act and will not be
transferable except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144
or any successor rule under the Securities Act, (iii) pursuant
to a no-action letter issued by the Securities and Exchange
Commission to the effect that a proposed transfer of the
Shares may be made without registration under the Securities
Act or (iv) pursuant to an opinion of counsel for or
reasonably acceptable to the Trust to the effect that the
proposed transfer is exempt from registration or qualification
under the Securities Act and relevant state securities laws;
and
(viii) The transfer, assignment and conveyance of the
Contributed Assets by the Bank to the Trust is not subject to
bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(b) The Bank hereby represents and warrants with respect to
each Mortgage Loan that, as of the date specified below or, if no such date is
specified, as of the Closing Date:
(i) the information set forth with respect
to the Mortgage Loans is true and correct in all material
respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) the Bank is the sole owner and holder
of each Mortgage Loan, free and clear of any and all liens,
pledges, charges or security interest of any nature and has
full right and authority to transfer and assign the same;
(iii) the Bank has not advanced funds,
directly or indirectly, for the payment of any amount required
by any Mortgage, except for interest accruing from the date of
related Mortgage Loan or date of disbursement of any Mortgage
Loan proceeds, whichever is later, to the date which precedes
by 30 days the first due date under any related Mortgage Loan;
(iv) the Bank has no knowledge of any
proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property and any Mortgaged
Property is undamaged by water, fire, earthquake or earth
movement, windstorm,
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flood, tornado or similar casualty (excluding casualty from
the presence of hazardous wastes or hazardous substances, as
to which the Bank makes no representation), so as to affect
adversely the value of any Mortgaged Property as security for
any Mortgage Loan or the use for which such premises were
intended;
(v) each Mortgage Loan meets, or is exempt
from, applicable state or federal laws, regulations and other
requirements pertaining to usury, and such Mortgage Note is
not usurious; any and all requirements of any federal, state
or local law with respect to the origination of the Mortgage
Loans including, without limitation, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage Loans have been complied with;
(vi) each Mortgage Note, related Mortgage
and other agreements executed in connection therewith are
genuine, and each is the legal, valid and binding obligation
of the maker thereof, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general
equity principles (regardless of whether such enforcement is
considered in a proceedings in equity or at law); and, to the
best of the Bank's knowledge, all parties to each Mortgage
Note had legal capacity to execute each such Mortgage Note and
each such Mortgage Note has been duly and properly executed by
the mortgagor;
(vii) the Mortgaged Property securing each
Mortgage Note is insured by an insurer against loss by fire
and such hazards as are covered under a standard extended
coverage endorsement, in an amount which is not less than the
lesser of 100% of the insurable value of the Mortgage Property
and the outstanding principal balance of the Mortgage Note,
but in no event less than the minimum amount necessary to
fully compensate for any damage or loss on a replacement cost
basis; if the Mortgaged Property is a condominium unit, it is
included under the coverage afforded by a blanket policy for
the project;
(viii) the Bank has no knowledge of any
default, breach, violation or event of acceleration existing
under any Mortgage or the related Mortgage Note or any event
which, with the passage of time or with notice and the
expiration of any grace
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or cure period, would constitute a default, breach, violation
or event of acceleration; the Bank has not waived any default,
breach, violation or event of acceleration; no foreclosure
action is threatened or has been commenced by the Bank with
respect to any Mortgage Note;
(ix) each Mortgage contains customary and
enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the
security, including realization by judicial foreclosure
(subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there
is no homestead or other exemption available to the mortgagor
which would interfere with such right of foreclosure; and
(x) the Bank has no knowledge that any
mortgagor is a debtor in any state or federal bankruptcy or
insolvency proceeding.
No representations or warranties are made by the Bank as to
the absence or effect of hazardous wastes or hazardous substances on any of the
Mortgaged Properties or on the lien of any Mortgage or with respect to the
absence or effect of fraud in the origination of any Mortgage Note, and any loss
or liability resulting from the presence or effect of such hazardous wastes,
hazardous substances or fraud will be borne solely by the Trust.
3. Notice of Breach: Cure and Repurchase.
(a) The Trust shall give the Bank notice of any breach of any
representation or warranty regarding the Mortgage Loans (a "Breach") or any
defect thereof (a "Defect") that materially and adversely affects the value of
such Mortgage Loan.
(b) Upon notice pursuant to Section 3(a) herein, the Bank
shall, not later than the earlier of 90 days from the Bank's receipt of the
notice or the Bank's discovery of such Breach, cure such Defect or Breach, as
the case may be, in all material respects or reacquire the affected Mortgage
Loan at the applicable Reacquisition Price (as defined below). If the affected
Mortgage Loan is to be reacquired, the Bank shall remit the Reacquisition Price
to the Trust.
The "Reacquisition Price" with respect to any Mortgage Loan to
be reacquired pursuant to this Agreement shall be the book value of any such
Mortgage Loan as of the Cutoff Date.
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<PAGE>
(c) Upon any reacquisition of a Mortgage Loan contemplated by
this Section 3(b), any servicer of the Mortgage Loans, at the instruction of the
Trust, shall tender to the Bank or any person designated by the Bank, all
portions of the mortgage file, as such term is defined in the applicable
servicing agreement, and other documents pertaining to such Mortgage Loan
possessed by it, and each document that constitutes a part of the mortgage file
that was endorsed or assigned to the Trust shall be endorsed or assigned, as the
case may be, to the Bank or any person designated by the Bank.
(d) This Section 3 of this Agreement provides the sole remedy
available to the Trust respecting any Defect in a mortgage file or any Breach of
any representation or warranty set forth in or required to be made pursuant to
Section 2 of this Agreement.
4. Representations, Warranties and Agreements of the
Trust.
(a) The Trust hereby represents and warrants to the Bank,
as of the date hereof and as of the Closing Date, as follows:
(i) The Trust is a real estate investment trust duly
organized, validly existing and in good standing under the
laws of the State of Maryland, with full corporate power and
authority to own its assets and conduct its business, and the
Trust has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
all of the obligations of the Trust hereunder are the legal,
valid and binding obligations of the Trust, enforceable
against the Trust in accordance with the terms of this
Agreement, except as such enforcement may be limited by
bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law);
(iii) The execution and delivery of this Agreement by
the Trust and the performance of its obligations hereunder
will not conflict with any provision of any law or regulation
to which the Trust is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Trust's organizational
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<PAGE>
documents or any agreement or instrument to which the Trust is
a party or by which it is bound, or any order or decree
applicable to the Trust, or result in the creation or
imposition of any lien on any of the Trust's assets or
property, in each case which would materially and adversely
affect the ability of the Trust to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Trust,
threatened against the Trust in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement
or any action taken in connection with the obligations of the
Trust contemplated herein, or which would be likely to impair
materially the ability of the Trust to perform under the terms
of this Agreement;
(v) The Trust is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
otherwise) or operations of the Trust or its properties or
might have consequences that would materially and adversely
affect its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Trust of or
compliance by the Trust with this Agreement or the
consummation of the transactions contemplated by this
Agreement other than those that have been obtained by the
Trust; and
(vii) Upon the issuance of the Shares as provided
herein, the Shares will be duly and validly issued, fully paid
and non-assessable. The Shares, when issued and delivered to
the Bank, will not be subject to preemptive rights.
5. Trust's Conditions to Closing.
The obligations of the Trust under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Bank required to be performed by it
at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
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<PAGE>
warranties of the Bank under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
(b) The Trust or its designee shall have received all of the
following closing documents, in such forms as are agreed upon and acceptable to
the Trust and in form and substance satisfactory to the Trust and the Trust's
counsel, duly executed by all signatories other than the Trust as required
pursuant to the respective terms thereof:
(i) with respect to each Mortgage Loan, the related
mortgage file, which mortgage files shall be held by the
servicer on behalf of the Trust pursuant to the terms of the
servicing agreement between the Trust and Servicer dated as of
the Closing Date; and
(ii) the final Mortgage Loan Schedule.
(c) The Bank hereby agrees to furnish such other information,
documents, certificates, letters or opinions with respect to the Mortgage Loans
or itself as may be reasonably requested by the Trust in order for the Trust to
perform any of its obligations or satisfy any of the conditions on its part to
be performed or satisfied pursuant to this Agreement.
6. Bank's Conditions to Closing.
The obligations of the Bank under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Trust required to be performed by
it at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Trust under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
(b) The Bank or its designee shall have received a certificate
representing the Shares duly executed by the authorized officers of the Trust.
7. Share Legend. All Shares to be issued to the Bank
pursuant to this Agreement shall be subject to the provisions of this Agreement,
and the certificates representing such Shares shall bear the following legend:
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<PAGE>
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144A under the Act. The
Shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of the Trust."
8. Notices. All communications hereunder shall be in writing
and effective only upon receipt and, if sent to the Trust, will be mailed, hand
delivered, couriered or sent by facsimile transmission to it at 100 North Tryon
Street, 23rd Floor, NC1-007-23-01 Charlotte, North Carolina 28255, attention of
John E. Mack, President, fax number (704) 386-0270 or, if sent to the Bank, will
be mailed, hand delivered or sent by facsimile transmission to it c/o
NationsBank Corporation, Legal Department, at 100 North Tryon Street, 20th
Floor, Charlotte, North Carolina 28255 attention of George Walls, Esq., fax
number (704)386-6453.
9. Miscellaneous. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of laws principles. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated except by a writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be executed in any number of counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
together constitute but one and the same instrument. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, and no other person will have any right or obligation
hereunder, other than as provided herein. Notwithstanding the immediately
preceding sentence, neither party hereto may assign this Agreement without the
prior written consent of the other party hereto.
10. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Bank and the Trust submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive conveyance, assignment and transfer of the Contributed Assets to the
Trust notwithstanding any language to the contrary contained in any endorsement
of any Mortgage Loan.
11. Severability. If any provision of this Agreement shall
be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
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<PAGE>
12. Further Assurances. The Bank and the Trust agree to
execute and deliver such instruments and take such actions as the other party
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
[Signature page follows]
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<PAGE>
IN WITNESS WHEREOF, the Trust and the Bank have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
NATIONSBANK, N.A. (SOUTH)
By: /s/ Gary S. Williams
----------------------
Name: Gary S. Williams
Title: Senior Vice President
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
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<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[DELIVERED TO THE TRUST]
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<PAGE>
EXHIBIT B
MORTGAGE LOAN ASSIGNMENT
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<PAGE>
Exhibit 10(e)
MORTGAGE LOAN ASSIGNMENT
Dated as of November 1, 1996
This Mortgage Loan Assignment (the "Assignment") dated as of November
1, 1996, is among Main Place Real Estate Investment Trust, a Maryland business
trust (the "Trust"), NationsBank, N.A. (South), a national banking association
(the "Transferor"), and NationsBanc Mortgage Corporation, a Texas corporation
("NationsBanc Mortgage").
WITNESSETH THAT:
WHEREAS, the Transferor and the Trust have entered into a Mortgage Loan
Contribution Agreement, dated as of October 30, 1996 (the "Contribution
Agreement"), providing for the contribution of certain mortgage loans by the
Transferor to the Trust and the receipt by the Trust of such mortgage loans;
WHEREAS, Transferor holds one of the following types of interest in
each mortgage loan (each, a "Mortgage Loan" and collectively, "Mortgage Loans")
described on Exhibit A to the Contribution Agreement: (i) 100% of all legal and
beneficial ownership interests in the related promissory note, bond or other
evidence of indebtedness (each, a "Mortgage Note"), mortgage, deed of trust,
deed to secure debt or other security interest (each, a "Mortgage") and all
other documents executed and delivered by the related Mortgage Loan Borrower
("Borrower") or any other person in favor of the owner and holder of the related
Mortgage Loan (together with the Mortgage Loan and Mortgage, the "Mortgage Loan
Documents"), or (ii) a 100% undivided participation interest in the related
Mortgage Loan and Mortgage Loan Documents pursuant to a Loan Participation
Agreement dated as of January 1, 1991 between NationsBanc Mortgage and the
Transferor, as amended through the date hereof (the "Loan Participation
Agreement"). Each Mortgage Loan falling within the description of clause (i)
above shall hereinafter be referred to as a "Purchased Mortgage Loan." Each
Mortgage Loan falling within the description of clause (ii) above shall
hereinafter be referred to as a "Participation Mortgage Loan."
WHEREAS, pursuant to Section 4 of the Loan Participation Agreement,
Transferor has the power to cause NationsBanc Mortgage to transfer legal title
to such Mortgage Loans in accordance with Transferor's instructions;
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<PAGE>
WHEREAS, Transferor desires to terminate its participation interest in
the Participation Mortgage Loans and to have NationsBanc Mortgage transfer legal
title to the Participation Mortgage Loans to Transferor; and
WHEREAS, Transferor desires to assign, convey and transfer legal and
equitable title to the Participation Mortgage Loans and the Purchased Mortgage
Loans to the Trust pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter contained, it is mutually covenanted and agreed as follows
(all capitalized terms no defined herein shall have the meanings ascribed to
them in the Contribution Agreement):
1. Termination of Participation and Transfer of Legal Title.
Pursuant to Section 4 of the Loan Participation Agreement, Transferor hereby
instructs NationsBanc Mortgage to transfer, and NationsBanc Mortgage does hereby
transfer, to Transferor all of NationsBanc Mortgage's right, title and interest
in and to the Participation Mortgage Loans.
2. Assignment of Mortgage Loans. For and in consideration of
the Consideration, the receipt and sufficiency of which is hereby acknowledged
by the Transferor, Transferor does hereby assign, transfer, set over and
otherwise convey to the Trust, its successors and assigns, all of its right,
title and interest in and to the Mortgage Loans as provided for in the
Contribution Agreement.
NationsBanc Mortgage hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which NationsBanc Mortgage is the
named holder and further agrees to deliver possession of such Mortgage Notes and
any related files to the Trust or to any other person upon the instruction of
the Trust.
Transferor also hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which Transferor is the named holder
and further agrees to deliver possession of such Mortgage Note and any related
files to the Trust or to any other person upon the instruction of the Trust.
At the Trust's request, NationsBanc Mortgage and Transferor
shall execute and deliver in addition to the foregoing any other documents to
further evidence the transfers contemplated herein, including but not limited to
assignments in recordable form, to the Trust or any person upon the instruction
of the Trust.
Each party hereto represents, warrants and covenants to each
other party that it is their intent that the foregoing transactions result in
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<PAGE>
the irrevocable transfer of all legal and equitable ownership interest in the
Mortgage Loans to the Trust and its successors and assigns forever as of the
date hereof in accordance with all applicable law. To the extent the foregoing
is insufficient under any applicable law or otherwise to constitute a transfer,
however, each party hereby expressly declares that it is their intention that
Transferor irrevocably grant to the Trust a 100% undivided participation
interest in Transferor's interest in the Mortgage Loans and Transferor does
hereby irrevocably grant to the Trust a 100% undivided participation interest in
the Transferor's interest in the Mortgage Loans to the Trust and its successors
and assigns forever.
All transfers, assignments, grants and conveyances set forth
herein are made without recourse to or representation or warranty by Transferor
except to the extent specifically set forth herein and in the Contribution
Agreement.
3. Representations and Warranties. Transferor hereby
represents and warrants to the Trust as of the date of this Agreement that the
representations and warranties made by the Transferor to the Trust in that
certain Contribution Agreement are true and correct as of the date hereof.
4. Custody of Loan Documents. It is agreed that NationsBanc
Mortgage shall retain physical possession of the Mortgage Loan Documents and
shall hold the Mortgage Loan Documents in trust for the benefit of the Trust and
its successors and assigns in accordance with the terms of that certain
Servicing Agreement dated as of November 1, 1996 between NationsBanc Mortgage
and the Trust.
5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
6. Counterparts. This Agreement may be executed in a number
of counterparts, each of which shall be deemed an original for all purposes and
all of which constitute, collectively, one Agreement.
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<PAGE>
IN WITNESS WHEREOF, the Trust and Transferor have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A. (SOUTH)
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANC MORTGAGE CORPORATION
By: /s/ Frederick Wark
------------------
Name: Frederick Wark
Title: Senior Vice President
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<PAGE>
Exhibit 10(f)
MORTGAGE LOAN CONTRIBUTION AGREEMENT
This Mortgage Loan Contribution Agreement, is made this 30th
day of October, 1996 (this "Agreement"), by and between NationsBank, N.A., a
national banking association (the "Bank"), and Main Place Real Estate Investment
Trust, a Maryland real estate investment trust (the "Trust").
WHEREAS, the Bank owns all of the issued and outstanding Class
A Common Shares of Beneficial Interest, par value $1.00 per share (the "Class A
Trust Shares"), of the Trust;
WHEREAS, the Bank owns the residential mortgage loans
identified on Exhibit A hereto (the "Mortgage Loans" and the "Mortgage Loan
Schedule," respectively);
WHEREAS, the Bank desires to contribute the Mortgage Loans to
the Trust in exchange for the issuance by the Trust of 18,318 Class A Trust
Shares (the "Shares") to the Bank upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Trust desires to accept the contribution of the
Mortgage Loans by the Bank and issue the Shares to the Bank in consideration for
such contribution;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Contribution; Issuance of Shares.
(a) The Bank hereby agrees to contribute (the "Contribution")
to the Trust, on November 1, 1996 (the "Closing Date"), subject to the terms and
conditions of this Agreement, all the right, title and interest of the Bank in
and to the Mortgage Loans, including all servicing rights and all interest and
principal due on or with respect to the Mortgage Loans together with all of the
Bank's right, title and interest in and to the proceeds of any related title,
hazard, primary mortgage or other insurance policies (collectively, the
"Contributed Assets"). The Contribution shall be effected pursuant to a Mortgage
Loan Assignment in the form attached hereto as Exhibit B. The closing of the
Contribution shall take place at the offices of Stroock & Stroock & Lavan at
10:00 a.m. (eastern standard time) on the Closing Date.
<PAGE>
(b) In consideration of the Contribution by the Bank to the
Trust, the Trust hereby agrees to issue to the Bank, on the Closing Date,
subject to the terms and conditions of this Agreement, the Shares, receipt of
which by the Bank shall be deemed to constitute full and adequate consideration
from the Trust for the Bank's interest in the Contributed Assets to be
contributed by the Bank pursuant to Section 1(a) hereof.
(c) In the event any mortgage loan is or becomes an Ineligible
Mortgage Loan (as defined below), the Bank shall, upon the Trust's request, made
at any time prior to or after the Closing Date, replace such Mortgage Loan with
a substitute Mortgage Loan meeting the selection criteria established by the
Trust in which case the Bank shall cause the Mortgage Loan Schedule to be
amended. The term "Ineligible Mortgage Loan" means a mortgage loan which has any
of the following characteristics as of the Cutoff Date (as hereinafter defined):
(i) the Mortgage Loan is 30 days past due; (ii) a default, breach, violation or
event of acceleration has occurred with respect to the mortgage loan; (iii) a
foreclosure action has been commenced; or (iv) the related mortgagor is a debtor
in a state or federal bankruptcy or insolvency proceeding. On the Closing Date,
the Bank shall deliver the final Mortgage Loan Schedule to the Trust.
(d) The Bank and the Trust hereby agree that the aggregate
book value of the Mortgage Loans at September 30, 1996 (the "Cutoff Date") is
$1,997,260,579.09 and that the aggregate fair market value of the Mortgage Loans
at the Cutoff Date is approximately equal to the aggregate book value thereof.
2. Representations and Warranties of the Bank.
(a) The Bank hereby represents and warrants to the Trust as of
the date hereof and as of Closing Date as follows:
(i) The Bank is a national banking association duly
organized, validly existing and in good standing under the
laws of the United States, with full corporate power and
authority to own its assets and conduct its business, and the
Bank has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby, including, but not limited to, the power and authority
to convey, assign and transfer the Contributed Assets in
accordance with this Agreement;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
all of the obligations of the Bank hereunder are the legal,
valid and binding obligations of the Bank, enforceable against
the Bank in accordance with the terms of this Agreement,
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
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<PAGE>
(iii) The execution and delivery of this Agreement by
the Bank and the performance of its obligations hereunder will
not conflict with any provision of any law or regulation to
which the Bank is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Bank's organizational
documents or any agreement or instrument to which the Bank is
a party or by which it is bound, or any order or decree
applicable to the Bank, or result in the creation or
imposition of any lien on any of the Bank's assets or
property, in each case which would materially and adversely
affect the ability of the Bank to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Bank,
threatened against the Bank in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the value of the Contributed
Assets or the ability of the Bank to carry out the
transactions contemplated by this Agreement;
(v) The Bank is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
other) or operations of the Bank or its properties or might
have consequences that would materially and adversely affect
its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Bank of or
compliance by the Bank with this Agreement or the consummation
of the transactions contemplated by this Agreement, other than
those which have been obtained by the Bank;
(vii) The Bank is acquiring the Shares for its own
account, for investment and not with a view to the sale or
distribution thereof or with any present intention of selling
or distributing any thereof, except in conformity with the
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<PAGE>
Securities Act of 1933, as amended (the "Securities Act"). The
Bank understands and acknowledges that the Shares are not
registered under the Securities Act and will not be
transferable except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144
or any successor rule under the Securities Act, (iii) pursuant
to a no-action letter issued by the Securities and Exchange
Commission to the effect that a proposed transfer of the
Shares may be made without registration under the Securities
Act or (iv) pursuant to an opinion of counsel for or
reasonably acceptable to the Trust to the effect that the
proposed transfer is exempt from registration or qualification
under the Securities Act and relevant state securities laws;
and
(viii) The transfer, assignment and conveyance of the
Contributed Assets by the Bank to the Trust is not subject to
bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(b) The Bank hereby represents and warrants with respect
to each Mortgage Loan that, as of the date specified below
or, if no such date is specified, as of the Closing Date:
(i) the information set forth with respect
to the Mortgage Loans is true and correct in all material
respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) the Bank is the sole owner and holder
of each Mortgage Loan, free and clear of any and all liens,
pledges, charges or security interest of any nature and has
full right and authority to transfer and assign the same;
(iii) the Bank has not advanced funds,
directly or indirectly, for the payment of any amount required
by any Mortgage, except for interest accruing from the date of
related Mortgage Loan or date of disbursement of any Mortgage
Loan proceeds, whichever is later, to the date which precedes
by 30 days the first due date under any related Mortgage Loan;
(iv) the Bank has no knowledge of any
proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property and any Mortgaged
Property is undamaged by water, fire, earthquake or earth
movement, windstorm, flood, tornado or similar casualty
(excluding casualty from the presence of hazardous wastes or
hazardous substances, as
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<PAGE>
to which the Bank makes no representation), so as to affect
adversely the value of any Mortgaged Property as security for
any Mortgage Loan or the use for which such premises were
intended;
(v) each Mortgage Loan meets, or is exempt
from, applicable state or federal laws, regulations and other
requirements pertaining to usury, and such Mortgage Note is
not usurious; any and all requirements of any federal, state
or local law with respect to the origination of the Mortgage
Loans including, without limitation, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage Loans have been complied with;
(vi) each Mortgage Note, related Mortgage
and other agreements executed in connection therewith are
genuine, and each is the legal, valid and binding obligation
of the maker thereof, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general
equity principles (regardless of whether such enforcement is
considered in a proceedings in equity or at law); and, to the
best of the Bank's knowledge, all parties to each Mortgage
Note had legal capacity to execute each such Mortgage Note and
each such Mortgage Note has been duly and properly executed by
the mortgagor;
(vii) the Mortgaged Property securing each
Mortgage Note is insured by an insurer against loss by fire
and such hazards as are covered under a standard extended
coverage endorsement, in an amount which is not less than the
lesser of 100% of the insurable value of the Mortgage Property
and the outstanding principal balance of the Mortgage Note,
but in no event less than the minimum amount necessary to
fully compensate for any damage or loss on a replacement cost
basis; if the Mortgaged Property is a condominium unit, it is
included under the coverage afforded by a blanket policy for
the project;
(viii) the Bank has no knowledge of any
default, breach, violation or event of acceleration existing
under any Mortgage or the related Mortgage Note or any event
which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; the Bank
has not waived any default, breach, violation or event of
acceleration; no foreclosure action is threatened or has been
commenced by the Bank with respect to any Mortgage Note;
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<PAGE>
(ix) each Mortgage contains customary and
enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the
security, including realization by judicial foreclosure
(subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there
is no homestead or other exemption available to the mortgagor
which would interfere with such right of foreclosure; and
(x) the Bank has no knowledge that any
mortgagor is a debtor in any state or federal bankruptcy or
insolvency proceeding.
No representations or warranties are made by the Bank as to
the absence or effect of hazardous wastes or hazardous substances on any of the
Mortgaged Properties or on the lien of any Mortgage or with respect to the
absence or effect of fraud in the origination of any Mortgage Note, and any loss
or liability resulting from the presence or effect of such hazardous wastes,
hazardous substances or fraud will be borne solely by the Trust.
3. Notice of Breach: Cure and Repurchase.
(a) The Trust shall give the Bank notice of any breach of any
representation or warranty regarding the Mortgage Loans (a "Breach") or any
defect thereof (a "Defect") that materially and adversely affects the value of
such Mortgage Loan.
(b) Upon notice pursuant to Section 3(a) herein, the Bank
shall, not later than the earlier of 90 days from the Bank's receipt of the
notice or the Bank's discovery of such Breach, cure such Defect or Breach, as
the case may be, in all material respects or reacquire the affected Mortgage
Loan at the applicable Reacquisition Price (as defined below). If the affected
Mortgage Loan is to be reacquired, the Bank shall remit the Reacquisition Price
to the Trust.
The "Reacquisition Price" with respect to any Mortgage Loan to
be reacquired pursuant to this Agreement shall be the book value of any such
Mortgage Loan as of the Cutoff Date.
(c) Upon any reacquisition of a Mortgage Loan contemplated by
this Section 3(b), any servicer of the Mortgage Loans, at the instruction of the
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Trust, shall tender to the Bank or any person designated by the Bank, all
portions of the mortgage file, as such term is defined in the applicable
servicing agreement, and other documents pertaining to such Mortgage Loan
possessed by it, and each document that constitutes a part of the mortgage file
that was endorsed or assigned to the Trust shall be endorsed or assigned, as the
case may be, to the Bank or any person designated by the Bank.
(d) This Section 3 of this Agreement provides the sole remedy
available to the Trust respecting any Defect in a mortgage file or any Breach of
any representation or warranty set forth in or required to be made pursuant to
Section 2 of this Agreement.
4. Representations, Warranties and Agreements of the
Trust.
(a) The Trust hereby represents and warrants to the Bank,
as of the date hereof and as of the Closing Date, as follows:
(i) The Trust is a real estate investment trust duly
organized, validly existing and in good standing under the
laws of the State of Maryland, with full corporate power and
authority to own its assets and conduct its business, and the
Trust has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby;
(ii) Assuming the due authorization, execution and
delivery of this Agreement by the Trust, this Agreement and
all of the obligations of the Trust hereunder are the legal,
valid and binding obligations of the Trust, enforceable
against the Trust in accordance with the terms of this
Agreement, except as such enforcement may be limited by
bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law);
(iii) The execution and delivery of this Agreement by
the Trust and the performance of its obligations hereunder
will not conflict with any provision of any law or regulation
to which the Trust is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any of the Trust's organizational
documents or any agreement or instrument to which the Trust is
a party or by which it is bound, or any order or decree
-7-
<PAGE>
applicable to the Trust, or result in the creation or
imposition of any lien on any of the Trust's assets or
property, in each case which would materially and adversely
affect the ability of the Trust to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Trust,
threatened against the Trust in any court or by or before any
other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement
or any action taken in connection with the obligations of the
Trust contemplated herein, or which would be likely to impair
materially the ability of the Trust to perform under the terms
of this Agreement;
(v) The Trust is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
otherwise) or operations of the Trust or its properties or
might have consequences that would materially and adversely
affect its performance hereunder;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Trust of or
compliance by the Trust with this Agreement or the
consummation of the transactions contemplated by this
Agreement other than those that have been obtained by the
Trust; and
(vii) Upon the issuance of the Shares as provided
herein, the Shares will be duly and validly issued, fully paid
and non-assessable. The Shares, when issued and delivered to
the Bank, will not be subject to preemptive rights.
5. Trust's Conditions to Closing.
The obligations of the Trust under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Bank required to be performed by it
at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Bank under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
-8-
<PAGE>
(b) The Trust or its designee shall have received all of the
following closing documents, in such forms as are agreed upon and acceptable to
the Trust and in form and substance satisfactory to the Trust and the Trust's
counsel, duly executed by all signatories other than the Trust as required
pursuant to the respective terms thereof:
(i) with respect to each Mortgage Loan, the related
mortgage file, which mortgage files shall be held by the
servicer on behalf of the Trust pursuant to the terms of the
servicing agreement between the Trust and Servicer dated as of
the Closing Date; and
(ii) the final Mortgage Loan Schedule.
(c) The Bank hereby agrees to furnish such other information,
documents, certificates, letters or opinions with respect to the Mortgage Loans
or itself as may be reasonably requested by the Trust in order for the Trust to
perform any of its obligations or satisfy any of the conditions on its part to
be performed or satisfied pursuant to this Agreement.
6. Bank's Conditions to Closing.
The obligations of the Bank under this Agreement shall be
subject to the satisfaction, on the Closing Date, of the following conditions:
(a) The obligations of the Trust required to be performed by
it at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Trust under this Agreement shall be true and correct as of the
date hereof and as of the Closing Date, and no event shall have occurred which,
with notice or the passage of time, or both, would constitute a default under
this Agreement.
(b) The Bank or its designee shall have received a certificate
representing the Shares duly executed by the authorized officers of the Trust.
7. Share Legend. All Shares to be issued to the Bank
pursuant to this Agreement shall be subject to the provisions of this Agreement,
and the certificates representing such Shares shall bear the following legend:
-9-
<PAGE>
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are "restricted
securities" as that term is defined in Rule 144A under the Act. The Shares may
not be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Trust."
8. Notices. All communications hereunder shall be in writing
and effective only upon receipt and, if sent to the Trust, will be mailed, hand
delivered, couriered or sent by facsimile transmission to it at 100 North Tryon
Street, 23rd Floor, NC1-007-23-01 Charlotte, North Carolina 28255, attention of
John E. Mack, President, fax number (704) 386-0270 or, if sent to the Bank, will
be mailed, hand delivered or sent by facsimile transmission to it c/o
NationsBank Corporation, Legal Department, at 100 North Tryon Street, 20th
Floor, Charlotte, North Carolina 28255 attention of George Walls, Esq., fax
number (704)386-6453.
9. Miscellaneous. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of laws principles. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated except by a writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be executed in any number of counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
together constitute but one and the same instrument. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, and no other person will have any right or obligation
hereunder, other than as provided herein. Notwithstanding the immediately
preceding sentence, neither party hereto may assign this Agreement without the
prior written consent of the other party hereto.
10. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Bank and the Trust submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive conveyance, assignment and transfer of the Contributed Assets to the
Trust notwithstanding any language to the contrary contained in any endorsement
of any Mortgage Loan.
11. Severability. If any provision of this Agreement shall be
prohibited or invalid under applicable law, this Agreement shall be ineffective
only to such extent, without invalidating the remainder of this Agreement.
-10-
<PAGE>
12. Further Assurances. The Bank and the Trust agree to
execute and deliver such instruments and take such actions as the other party
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
[Signature page follows]
-11-
<PAGE>
IN WITNESS WHEREOF, the Trust and the Bank have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
NATIONSBANK, N.A.
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[DELIVERED TO THE TRUST]
-13-
<PAGE>
EXHIBIT B
MORTGAGE LOAN ASSIGNMENT
<PAGE>
Exhibit 10(g)
MORTGAGE LOAN ASSIGNMENT
Dated as of November 1, 1996
This Mortgage Loan Assignment (the "Assignment") dated as of November
1, 1996, is among Main Place Real Estate Investment Trust, a Maryland business
trust (the "Trust"), NationsBank, N.A., a national banking association (the
"Transferor"), and NationsBanc Mortgage Corporation, a Texas corporation
("NationsBanc Mortgage").
WITNESSETH THAT:
WHEREAS, the Transferor and the Trust have entered into a Mortgage Loan
Contribution Agreement, dated as of October 30, 1996 (the "Contribution
Agreement"), providing for the contribution of certain mortgage loans by the
Transferor to the Trust and the receipt by the Trust of such mortgage loans;
WHEREAS, Transferor holds one of the following types of interest in
each mortgage loan (each, a "Mortgage Loan" and collectively, "Mortgage Loans")
described on Exhibit A to the Contribution Agreement: (i) 100% of all legal and
beneficial ownership interests in the related promissory note, bond or other
evidence of indebtedness (each, a "Mortgage Note"), mortgage, deed of trust,
deed to secure debt or other security interest (each, a "Mortgage") and all
other documents executed and delivered by the related Mortgage Loan Borrower
("Borrower") or any other person in favor of the owner and holder of the related
Mortgage Loan (together with the Mortgage Loan and Mortgage, the "Mortgage Loan
Documents"), or (ii) a 100% undivided participation interest in the related
Mortgage Loan and Mortgage Loan Documents pursuant to a Loan Participation
Agreement dated as of January 1, 1991 between NationsBanc Mortgage and the
Transferor, as amended through the date hereof (the "Loan Participation
Agreement"). Each Mortgage Loan falling within the description of clause (i)
above shall hereinafter be referred to as a "Purchased Mortgage Loan." Each
Mortgage Loan falling within the description of clause (ii) above shall
hereinafter be referred to as a "Participation Mortgage Loan."
WHEREAS, pursuant to Section 4 of the Loan Participation Agreement,
Transferor has the power to cause NationsBanc Mortgage to transfer legal title
to such Mortgage Loans in accordance with Transferor's instructions;
<PAGE>
WHEREAS, Transferor desires to terminate its participation interest in
the Participation Mortgage Loans and to have NationsBanc Mortgage transfer legal
title to the Participation Mortgage Loans to Transferor; and
WHEREAS, Transferor desires to assign, convey and transfer legal and
equitable title to the Participation Mortgage Loans and the Purchased Mortgage
Loans to the Trust pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter contained, it is mutually covenanted and agreed as follows
(all capitalized terms no defined herein shall have the meanings ascribed to
them in the Contribution Agreement):
1. Termination of Participation and Transfer of Legal Title.
Pursuant to Section 4 of the Loan Participation Agreement, Transferor hereby
instructs NationsBanc Mortgage to transfer, and NationsBanc Mortgage does hereby
transfer, to Transferor all of NationsBanc Mortgage's right, title and interest
in and to the Participation Mortgage Loans.
2. Assignment of Mortgage Loans. For and in consideration of
the Consideration, the receipt and sufficiency of which is hereby acknowledged
by the Transferor, Transferor does hereby assign, transfer, set over and
otherwise convey to the Trust, its successors and assigns, all of its right,
title and interest in and to the Mortgage Loans as provided for in the
Contribution Agreement.
NationsBanc Mortgage hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which NationsBanc Mortgage is the
named holder and further agrees to deliver possession of such Mortgage Notes and
any related files to the Trust or to any other person upon the instruction of
the Trust.
Transferor also hereby agrees to endorse or cause to be
endorsed in blank each Mortgage Note as to which Transferor is the named holder
and further agrees to deliver possession of such Mortgage Note and any related
files to the Trust or to any other person upon the instruction of the Trust.
At the Trust's request, NationsBanc Mortgage and Transferor
shall execute and deliver in addition to the foregoing any other documents to
further evidence the transfers contemplated herein, including but not limited to
assignments in recordable form, to the Trust or any person upon the instruction
of the Trust.
Each party hereto represents, warrants and covenants to each
other party that it is their intent that the foregoing transactions result in
-2-
<PAGE>
the irrevocable transfer of all legal and equitable ownership interest in the
Mortgage Loans to the Trust and its successors and assigns forever as of the
date hereof in accordance with all applicable law. To the extent the foregoing
is insufficient under any applicable law or otherwise to constitute a transfer,
however, each party hereby expressly declares that it is their intention that
Transferor irrevocably grant to the Trust a 100% undivided participation
interest in Transferor's interest in the Mortgage Loans and Transferor does
hereby irrevocably grant to the Trust a 100% undivided participation interest in
the Transferor's interest in the Mortgage Loans to the Trust and its successors
and assigns forever.
All transfers, assignments, grants and conveyances set forth
herein are made without recourse to or representation or warranty by Transferor
except to the extent specifically set forth herein and in the Contribution
Agreement.
3. Representations and Warranties. Transferor hereby
represents and warrants to the Trust as of the date of this Agreement that the
representations and warranties made by the Transferor to the Trust in that
certain Contribution Agreement are true and correct as of the date hereof.
4. Custody of Loan Documents. It is agreed that NationsBanc
Mortgage shall retain physical possession of the Mortgage Loan Documents and
shall hold the Mortgage Loan Documents in trust for the benefit of the Trust and
its successors and assigns in accordance with the terms of that certain
Servicing Agreement dated as of November 1, 1996 between NationsBanc Mortgage
and the Trust.
5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
6. Counterparts. This Agreement may be executed in a number
of counterparts, each of which shall be deemed an original for all purposes and
all of which constitute, collectively, one Agreement.
-3-
<PAGE>
IN WITNESS WHEREOF, the Trust and Transferor have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANC MORTGAGE CORPORATION
By: /s/ Frederick Wark
------------------
Name: Frederick Wark
Title: Senior Vice President
<PAGE>
Exhibit 10(h)
MAIN PLACE FUNDING CORPORATION
Main Place Funding Corporation (the "Corporation"), as borrower under
that certain Amended and Restated Credit Agreement (the "Amended and Restated
Credit Agreement") dated as of October 31, 1995 with NationsBank of Texas, N.A.
("NationsBank Texas") for the benefit of First Trust National Association, as
trustee under the indenture of trust dated July 18, 1995, hereby assigns all of
its rights, duties and obligations under the Amended and Restated Credit
Agreement to Main Place Real Estate Investment Trust (the "Trust"), as successor
in interest to the Corporation pursuant to the Agreement of Merger by and among
the Corporation, the Trust and Main Place Holdings Corporation dated November 1,
1996.
IN WITNESS WHEREOF, the undersigned has executed this consent on this
1st day of November, 1996.
MAIN PLACE FUNDING CORPORATION
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
Exhibit 10(i)
NATIONSBANK OF TEXAS, N.A.
NationsBank of Texas, N.A. ("NationsBank Texas"), as lender under that
certain Amended and Restated Credit Agreement (the "Amended and Restated Credit
Agreement") dated as of October 31, 1995 with Main Place Funding Corporation
("Main Place Funding") for the benefit of First Trust National Association as
trustee under indenture of trust dated July 18, 1995 hereby consents to the
assignment of all of its rights, duties and obligations under the Amended and
Restated Credit Agreement by Main Place Funding to Main Place Real Estate
Investment Trust, pursuant to the requirements of Section 9.8 of said Amended
and Restated Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this consent on this
1st day of November, 1996.
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
Exhibit 10(j)
MAIN PLACE FUNDING CORPORATION
Main Place Funding Corporation (the "Corporation"), as borrower under
that certain Credit Agreement (the "Credit Agreement") dated as of October 31,
1995 with NationsBank of Texas, N.A. ("NationsBank Texas") for the benefit of
First Trust National Association, as trustee under the indenture of trust dated
October 31, 1995, hereby assigns all of its rights, duties and obligations under
the Credit Agreement to Main Place Real Estate Investment Trust (the "Trust"),
as successor in interest to the Corporation pursuant to the Agreement of Merger
by and among the Corporation, the Trust and Main Place Holdings Corporation
dated November 1, 1996.
IN WITNESS WHEREOF, the undersigned has executed this consent on this
1st day of November, 1996.
MAIN PLACE FUNDING CORPORATION
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
Exhibit 10(k)
NATIONSBANK OF TEXAS, N.A.
NationsBank of Texas, N.A. ("NationsBank Texas"), as lender under that
certain Credit Agreement (the "Credit Agreement") dated as of October 31, 1995
with Main Place Funding Corporation ("Main Place Funding") for the benefit of
First Trust National Association as trustee under indenture of trust dated
October 31, 1995 hereby consents to the assignment of all of its rights, duties
and obligations under the Credit Agreement by Main Place Funding to Main Place
Real Estate Investment Trust, pursuant to the requirements of Section 9.8 of
said Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this consent on this
1st day of November, 1996.
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
Exhibit 10(l)
SERVICING AGREEMENT
Dated as of November 1, 1996
between
MAIN PLACE REAL ESTATE INVESTMENT TRUST
Owner
and
NATIONSBANC MORTGAGE CORPORATION
Servicer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS................................................................................................... 1
ARTICLE II
ADMINISTRATION AND SERVICING OF THE MORTGAGE NOTES............................................................ 7
Section 2.01. Contract for Servicing; Possession of Servicing Files.............................. 7
-----------------------------------------------------
Section 2.02. Commencement of Servicing Responsibilities......................................... 7
------------------------------------------
Section 2.03. The Servicer to Act as Servicer.................................................... 7
-------------------------------
Section 2.04. Collection of Mortgage Note Payments............................................... 9
------------------------------------
Section 2.05. Foreclosure........................................................................ 9
-----------
Section 2.06. Sub-Servicing Agreements........................................................... 10
------------------------
Section 2.07. Maintenance of Hazard Insurance.................................................... 10
-------------------------------
Section 2.08. Maintenance of PMI Policy.......................................................... 11
-------------------------
Section 2.09. Fidelity Bond and Errors and
Omissions Insurance ............................................................... 12
------------------------------
Section 2.10. Establishment of and Deposits to Collection Account................................ 12
---------------------------------------------------
Section 2.11. Permitted Withdrawals from Collection Account...................................... 13
---------------------------------------------
Section 2.12. Establishment of and Deposits to Escrow Account.................................... 14
-----------------------------------------------
Section 2.13. Permitted Withdrawals from Escrow Account.......................................... 15
-----------------------------------------
Section 2.14. Maintenance of FHA Mortgage Insurance and VA Guaranty.............................. 16
-----------------------------------------------------
Section 2.15. Notification of Adjustments........................................................ 16
---------------------------
Section 2.16. Completion and Recordation of Assignment of Mortgage and FHA and VA Change
--------------------------------------------------------------------------
Notices............................................................................ 17
Section 2.17. Protection of Accounts; Eligible Investments....................................... 17
--------------------------------------------
Section 2.18. Servicing Compensation............................................................. 17
----------------------
Section 2.19. Withdrawals and Substitutions of Mortgage Notes.................................... 18
-----------------------------------------------
ARTICLE III
REMITTANCES AND REPORTING BY THE SERVICER..................................................................... 18
Section 3.01. Remittances to Owner............................................................... 18
--------------------
Section 3.02. Reporting by the Servicer.......................................................... 19
-------------------------
Section 3.03. Annual Certificate................................................................. 19
------------------
Section 3.04. Annual Accountants' Report......................................................... 20
--------------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................................................ 20
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 4.01. Representations and Warranties of the Servicer..................................... 20
----------------------------------------------
Section 4.02. Remedies for Breach of Representations and Warranties of the Servicer.............. 22
---------------------------------------------------------------------
ARTICLE V
THE SERVICER.................................................................................................. 23
Section 5.01. Corporate Existence of the Servicer; Status as Servicer; Merger.................... 23
---------------------------------------------------------------
Section 5.02. Performance of Obligations......................................................... 24
--------------------------
Section 5.03. The Servicer Not to Resign; Assignment............................................. 24
--------------------------------------
ARTICLE VI
DEFAULT....................................................................................................... 25
Section 6.01. Events of Default.................................................................. 25
-----------------
Section 6.02. No Effect on Other Parties......................................................... 26
--------------------------
Section 6.03. Rights Cumulative.................................................................. 26
-----------------
ARTICLE VII
MISCELLANEOUS................................................................................................. 27
Section 7.01 Successor to the Servicer.......................................................... 27
-------------------------
Section 7.02. Termination of Agreement........................................................... 28
------------------------
Section 7.03. Amendment.......................................................................... 28
---------
Section 7.04. Governing Law...................................................................... 28
-------------
Section 7.05. Notices............................................................................ 28
-------
Section 7.06. Severability of Provisions......................................................... 29
--------------------------
Section 7.07. Inspection and Audit Rights........................................................ 29
---------------------------
Section 7.08. Binding Effect..................................................................... 30
--------------
Section 7.09. Article and Section Headings....................................................... 30
----------------------------
Section 7.10. Counterparts....................................................................... 30
------------
</TABLE>
ii
<PAGE>
SERVICING AGREEMENT
Servicing Agreement, dated November 1, 1996, between MAIN
PLACE REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust
(herein, together with its successors and assigns, called the "Owner"), and
NATIONSBANC MORTGAGE CORPORATION, a Texas corporation (herein, together with its
successors and assigns, called the "Servicer")
PRELIMINARY STATEMENT
The Owner is the holder and/or owner of all of the beneficial
ownership interests in the Mortgage Notes. The Servicer is an independent
contractor in the business of servicing mortgage loans.
The Servicer and the Owner desire to enter into this Agreement
to provide, among other things, for the servicing by the Servicer of the
Mortgage Notes.
ARTICLE I
DEFINITIONS
The following terms have the respective meanings set forth
below for all purposes of this Agreement, and the definitions of such terms are
applicable to the singular as well as to the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms:
Accepted Servicing Practices: With respect to any Mortgage
Notes, the services and duties customary to the servicing by prudent mortgage
lending institutions of mortgages of the same type as such Mortgage Notes in the
jurisdictions where the related Mortgaged Properties are located.
Act: The National Housing Act, as amended from time to time.
Agreement: This Servicing Agreement and all amendments hereof
and supplements hereto.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
<PAGE>
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the party indicated therein, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Notes secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
Available Amount: The amount defined as such in Section 3.01
hereof.
Best Efforts: Efforts determined to be reasonably diligent by
the Owner or Servicer, as the case may be, in its sole discretion. Such efforts
do not require the Owner or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Owner or Servicer, as the case may be, to advance or expend fees or
sums of money in addition to those specifically set forth in this Agreement.
Business Day: Any day other than (i) a Saturday, (ii) a
Sunday, or (iii) a day that is either a legal holiday or a day on which banking
institutions are authorized or obligated by law or regulation to close in the
States of Maryland or Texas, or any other state in which the Servicer is located
(or, for purposes of remittances by the Servicer, any state in which functions
relating to the Collection Account are performed).
Collection Account: The separate account or accounts created
and maintained pursuant to Section 2.10.
Collection Period: With respect to a Servicer Remittance
Date, the calendar month preceding the month in which such Servicer Remittance
Date occurs.
Condemnation Proceeds: All awards of settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Note documents.
Determination Date: A date not more than three Business Days
prior to the applicable Servicer Remittance Date.
Eligible Mortgage Note: Any Mortgage Note meeting the
requirements of ss. 856 of the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
2
<PAGE>
Escrow Account: The separate account or accounts operated and
maintained pursuant to Section 2.12.
Escrow Payments: With respect to any Mortgage Note, the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any event set forth in Section 6.01.
FHA Approved Mortgagee: A corporation or institution approved
as a mortgagee by FHA under the Act, and applicable HUD regulations, and
eligible to own and service mortgage loans such as the FHA Loans.
FHA Insurance Contract: The contractual obligation of FHA
respecting the insurance of a Mortgage Note.
FHA Loan: A residential Mortgage Note which is the subject of
an FHA Insurance Contract as evidenced by a mortgage insurance certificate.
FHA Mortgage Insurance: Mortgage insurance authorized under
the Act and provided by the FHA.
FHA Regulations: Regulations promulgated by HUD under the Act,
codified in 24 Code of Federal Regulations, and other HUD issuances relating to
FHA Loans, including the related handbooks, circulars, notices and mortgagee
letters.
Independent Accountant: Any accountant, who may also be the
accountant who audits the books of the Servicer, who is independent with respect
to the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
Insurance Proceeds: With respect to each Mortgage Note,
proceeds of insurance policies insuring the Mortgage Note or the related
Mortgaged Property including FHA insurance proceeds and/or VA guaranty proceeds.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Note, whether through the sale or assignment
3
<PAGE>
of such Mortgage Note, trustee's sale, foreclosure sale or otherwise, or the
sale of the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Note.
Monthly Payment: The scheduled monthly payment of principal
and interest on a Mortgage Note.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien on an unsubordinated estate
in real property securing such Mortgage Note.
Mortgage Interest Rate: The annual rate of interest borne at
any time by a Mortgage Note.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage, each Mortgage Note subject to this
Agreement being identified on the Mortgage Note Schedule.
Mortgage Note Schedule: The schedule of Mortgage Notes
delivered by the Owner to the Servicer setting forth information with respect to
such Mortgage Notes, which schedule shall be amended from time to time to
reflect the addition of Mortgage Notes to, or the withdrawal of Mortgage Notes
from, the terms of this Agreement.
Mortgaged Property: The real property securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
NationsBank, N.A.: NationsBank, N.A., a national banking
association.
NationsBank South: NationsBank, N.A. (South), a national
banking association.
NationsBank Texas: NationsBank of Texas, N.A., a national
banking association.
NRSRO: Any nationally recognized statistical rating
organization.
Officer's Certificate: A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or any Vice President
of the Servicer, and delivered to the Owner as required by this Agreement.
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Opinion of Counsel: A written opinion of counsel, who may be
an employee of the Servicer, and who is reasonably acceptable to the Owner.
PMI Policy: A policy of private mortgage insurance issued by a
Qualified Insurer.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Note which is received in advance of its scheduled due
date, including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Qualified Depository: NationsBank, N.A. or another depository
the accounts of which are insured by the FDIC and the short-term debt
obligations of which are rated in at least one of the two highest rating
categories by an NRSRO.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by FNMA and FHLMC and rated in at
least one of the two highest rating categories by an NRSRO.
REO Disposition: The final sale by the Servicer, on behalf of
the Owner, of any REO Property.
REO Disposition Proceeds: All amounts received with respect
to an REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf and in the name of the Owner through foreclosure or by deed in lieu of
foreclosure.
Servicer Remittance Date: The 19th day of any month (or, if
such day is not a Business Day, the first Business Day immediately preceding
such 19th day), commencing the month of the date of this Agreement.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations. including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
administrative or judicial proceedings, including foreclosures, (c) the
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management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, (d) taxes, assessments, water
rates, sewer rates and other charges which are or may become a lien upon the
Mortgaged Property, and PMI Policy premiums and fire and hazard insurance
coverage and (e) any losses sustained by the Servicer with respect to the
liquidation of the Mortgaged Property.
Servicing Fee:
(a) With respect to each Mortgage Note which was owned by
NationsBank of Texas, N.A., NationsBank, N.A. (South) or NationsBank, N.A. or by
any of their bank affiliates prior to January l, 1992, and is serviced
hereunder, the monthly fee the Owner shall pay to the Servicer, which shall be
equal to one-twelfth of the product of (a)(i) three-eighths of one percent
(3/8%) for each such fixed rate Mortgage Note, and (ii) one-half of one percent
(1/2%) for each such adjustable rate Mortgage Note and (b) the outstanding
principal balance of such Mortgage Note.
(b) With respect to each Mortgage Note which was owned by
NationsBank of Texas, N.A., NationsBank, N.A. (South) or NationsBank, N.A. or by
any of their bank affiliates after January l, 1992, and is serviced hereunder,
the monthly fee the Owner shall pay to the Servicer, which shall be equal to
one-twelfth of the product of (a)(i) one-half of one percent (1/2%) for each
such fixed rate or adjustable rate FHA and VA Loan serviced hereunder, (ii)
three-eighths of one percent (3/8%) for each such adjustable rate Mortgage Note
(other than FHA and VA Loans) the interest rate of which adjusts every month,
every 6 months, every year or every 3 years and (iii) one-quarter of one percent
(1/4%) for all other such Mortgage Notes serviced hereunder, and (b) the
outstanding principal balance of such Mortgage Note.
Notwithstanding the foregoing, the Servicing Fee payable hereunder for any
Mortgage Note shall not be less than $10.00 per month.
Servicing File: The items pertaining to a particular Mortgage
Note including, but not limited to, the original Mortgage Note, the computer
files, data disks, books, records, data tapes, notes, and all additional
documents generated as a result of or utilized in originating and/or servicing
each Mortgage Note, which are held in trust for the Owner by the Servicer.
VA Approved Lender: Those lenders which are approved by the
VA to act as a lender in connection with the origination of VA loans.
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VA Loan: A Mortgage Loan which is the subject of a VA Loan
Guaranty Agreement as evidenced by a Loan Guaranty Certificate, or a Mortgage
Loan which is a vendee loan sold by the VA.
VA Loan Guaranty Agreement: The obligation of the United
States to pay a specific percentage of a Mortgage (subject to a maximum amount)
upon default of the Mortgagor pursuant to the Servicemen's Readjustment Act, as
amended.
VA Loan Guaranty Certificate: The certificate evidencing a VA
Loan Guaranty Agreement.
VA Regulations: Regulations promulgated by the VA pursuant to
the Servicemen's Readjustment Act, as amended, codified in 38 Code of Federal
Regulations, and other VA issuances relating to VA Loans, including related
Handbooks, Circulars and Notices.
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ARTICLE II
ADMINISTRATION AND SERVICING OF THE MORTGAGE NOTES
Section 2.01. Contract for Servicing; Possession of Servicing Files.
The Owner, by execution and delivery of this Agreement, does hereby contract
with the Servicer, subject to the terms of this Agreement, for the servicing of
the Mortgage Notes that are from time to time subject to this Agreement. With
respect to each Mortgage Note listed on the Mortgage Note Schedule as of the
date of this Agreement for which the Servicer does not have possession of a
Servicing File as of the date hereof, the Owner shall cause to be delivered or
will use its Best Efforts to cause to be delivered the related Servicing File to
the Servicer as soon as practicable. With respect to each Mortgage Note that
becomes subject to this Agreement after the date hereof, the Owner shall cause
the Mortgage Note Schedule to be amended to reflect the Mortgage Notes then
subject to this Agreement and shall cause to be delivered or will use its Best
Efforts to cause to be delivered as soon as practicable each related Servicing
File to the Servicer. Each Servicing File delivered to the Servicer shall be
held by the Servicer in order to service the Mortgage Notes pursuant to this
Agreement and is and shall be held in trust as agent for the Owner and for the
benefit of the Owner as the owner thereof. The Servicer's possession of any
Servicing File shall be at the will of the Owner for the sole purpose of
facilitating servicing of the related Mortgage Note pursuant to this Agreement,
and such retention and possession by the Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Servicing File shall be vested in the Owner and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Servicer shall immediately vest in the
Owner and shall be retained and maintained, in trust, by the Servicer at the
will of the Owner in such custodial capacity only. The Servicer shall release
from its custody the contents of any Servicing File retained by it only in
accordance with this Agreement.
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Section 2.02. Commencement of Servicing Responsibilities.
As of the date hereof, the Servicer shall assume all servicing
responsibilities hereunder with respect to the Mortgage Notes.
Section 2.03. The Servicer to Act as Servicer.
(a) The Servicer, as an independent contractor, shall
diligently service and administer the Mortgage Notes from and after the date
hereof and shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
including taking all actions that a mortgagee is permitted or required to take
by the FHA or VA, with respect to FHA Loans and VA Loans, as the case may be.
(b) Without limiting the generality of the foregoing, the
Owner and the Servicer hereby agree as follows:
(i) The Servicer may waive any prepayment charge,
assumption fee, late payment charge or any other charge in connection
with the prepayment of a Mortgage Note;
(ii) The Servicer may arrange with a mortgagor a plan
of relief, including a modification or extension of the Mortgage Note,
when appropriate, rather than recommending liquidation; provided,
however, such arrangement will be made only upon determining that the
coverage of such Mortgage Note by any PMI Policy, FHA Insurance
Contract or VA Loan Guaranty Certificate will not be affected and that
any such modified Mortgage Note continues to be an Eligible Mortgage
Note;
(iii) The Servicer shall enforce "due-on-sale" clauses
with respect to Mortgage Notes; provided, however, where an assumption
of, or substitution of liability with respect to, a Mortgage Note is
required by law, upon receipt of assurance that the PMI Policy covering
such Mortgage Note will not be affected, the Servicer may permit the
assumption of a Mortgage Note, pursuant to which the mortgagor shall
remain liable on the Mortgage Note, or a substitution of liability with
respect to such Mortgage Note, pursuant to which the new Mortgagor
shall be substituted for the original Mortgagor as being liable on the
Mortgage Note. Notwithstanding the foregoing, the Servicer shall not
permit any modification with respect to any Mortgage Note that would
change the Mortgage Interest Rate or affect the FHA Insurance Contract
with respect to FHA Loans or the VA Loan Guaranty Agreement with
respect to VA Loans;
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(iv) The Servicer may give any consents under the
terms and provisions of any Mortgage Note, including, without
limitation, consents to the placing of easements, covenants, conditions
and restrictions on any Mortgaged Property; and
(v) The Servicer may permit the modification of an
Eligible Mortgage Note which the related Mortgagor has indicated a
desire to refinance provided that any such Mortgage Note would continue
to be Eligible Mortgage Note following such modification;
(c) The Servicer shall establish and maintain adequate and
customary books and records with respect to each Mortgage Note and, upon request
of the Owner shall, within a reasonable time following the Servicer's receipt of
such request, furnish the same (in the form of either an original document or a
certified true copy of such original document) to the Owner. In the event of a
request for any non-standard report, the Servicer and the Owner shall mutually
agree in writing to a reasonable expense reimbursement payable by the Owner to
the Servicer for such report.
In servicing and administering FHA Loans and VA Loans, if any,
the Servicer shall comply strictly with the Act and the FHA Regulations, the
Servicemen's Readjustment Act, the VA Regulations and administrative guidelines
issued thereunder or pursuant thereto, and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and under
each Mortgage, including the payment of any fees, premiums and charges and the
timely giving of notices.
Section 2.04. Collection of Mortgage Note Payments.
Continuously from the date hereof until the date each Mortgage
Note ceases to be subject to this Agreement, the Servicer shall proceed
diligently to collect all payments due under each of the Mortgage Notes when the
same shall become due and payable and shall exercise reasonable diligence in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Notes and each related
Mortgaged Property, to the end that the installments payable by the Mortgagors
will be sufficient to pay such charges as and when they become due and payable.
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Section 2.05. Foreclosure.
The Servicer shall process and manage: (i) the foreclosure or
other acquisition of the property securing any Mortgage Note; (ii) the transfer
of such property to the FHA, VA, or a private mortgage insurer, as applicable;
and (iii) the collection of any applicable mortgage insurance or guaranty
proceeds; and pending completion of these steps, the protection of the Mortgaged
Property from waste and vandalism. The Servicer will thereafter assign or convey
to the Owner any title, equity or other property or right acquired by such
proceedings. In no event shall the Servicer be required to take title in its
name to any Mortgaged Property which has, or may reasonably be deemed to have,
an environmental or similar problem or defect for which the Servicer would
become liable by reason of its holding title to such property. The Owner agrees
promptly to reimburse the Servicer for its reasonable Servicing Advances
incurred in complying with its obligations under this paragraph, including
attorney's fees. In case of a voluntary deed in lieu of foreclosure or the
purchase of any such property by the Owner or for its account, the Owner will
assume responsibility for the same. The marketing and sales of all REO
Properties will be the responsibility of the Servicer, on behalf of the Owner.
Section 2.06. Sub-Servicing Agreements.
Any provision of this Agreement notwithstanding, the Servicer
may contract with other Persons for the performance of its responsibilities,
duties and obligations under this Agreement to service and administer any of the
Mortgage Notes, provided that none of the provisions of this Section 2.06
relating to agreements or arrangements between the Servicer and other Persons,
or to actions taken through any such other Persons or otherwise, shall be deemed
to relieve the Servicer of any of its duties and obligations to the Owner with
respect to the servicing and administration of the Mortgage Notes, and the
Servicer shall be obligated with respect thereto to the same extent and under
the same terms and conditions as if it alone were performing all duties and
obligations in connection with servicing and administering the Mortgage Notes.
The Servicer shall be entitled to enter into any agreement with any Person
performing services for it related to its duties and obligations under this
Agreement for indemnification of the Servicer by such Person, and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification. Any transactions or services relating to the Mortgage Notes
involving any Person performing services for the Servicer shall be deemed to be
between such Person and the Servicer alone, and the Owner shall not be deemed to
be parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any such Person.
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Section 2.07. Maintenance of Hazard Insurance.
The Servicer will cause insurance to be maintained on the
Mortgaged Property covered by each Mortgage Note consistent with the Accepted
Servicing Practices and will make certain that each such property is insured as
provided below at all times for the benefit of the mortgagee on a standard
insurance policy form with an appropriate mortgagee payable clause. Such
insurance shall be in an amount not less than the lesser of the outstanding
principal balance of the Mortgage Note and the minimum amount necessary to
compensate fully for any damage or loss on a replacement cost basis. Such
insurance shall be of a type at least as protective as fire and extended
coverage. The Servicer shall pay the premium for such insurance as a Servicing
Advance on a timely basis in the event that the Mortgagor does not make such
payments. With respect to any Mortgaged Property located in an area identified
by the Federal Emergency Management Agency as having special flood hazards and
as to which flood insurance has been made available, the Servicer shall maintain
or cause to be maintained a flood insurance policy maintained with a generally
acceptable insurance carrier meeting the requirements of the current guidelines
of the Federal Insurance Administration. Such flood insurance policy will
provide coverage in an amount not less than the least of (i) the unpaid
principal balance of the Mortgage Note, (ii) the insurable value of the
Mortgaged Property and (iii) the maximum amount of insurance available under the
Flood Disaster Protection Act of 1973, as amended.
In the event that the Servicer chooses to maintain a blanket
policy insuring against hazard losses on certain of the Mortgage Notes, it shall
conclusively be deemed to have satisfied its obligation relating to the
maintenance of insurance under this Section 2.07. The Servicer shall maintain
accurate and complete records with respect to the insurance and insurance
premiums for each Mortgage Note and the status thereof. In the event the
Servicer receives actual notice of any loss or damage to any property securing a
Mortgage Note, the Servicer will proceed diligently to adjust any loss or damage
claim, and to protect the interest of the mortgagee under any such insurance
policy covering the incidence of damage. In the event that the Owner shall
request an inspection by an engineer or other professional construction
inspector with respect to any such repairs, the Servicer will arrange for such
inspection.
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Section 2.08. Maintenance of PMI Policy.
With respect to any Mortgage Note for which there is in effect
a PMI Policy, the Servicer shall exercise its Best Efforts to keep each such PMI
Policy (if and so long as any is required) in full force and effect. The
Servicer shall pay the premium for each PMI Policy as a Servicing Advance on a
timely basis in the event that the Mortgagor does not make such payments.
The Servicer, on behalf of the Owner, shall present claims to
the insurer under any applicable PMI Policy and shall take such reasonable steps
as are necessary to permit recovery under such insurance policies respecting
defaulted Mortgage Notes. All Insurance Proceeds received by the Servicer under
such policies that are not applied to the restoration of the related Mortgaged
Property or refunded to the Mortgagor shall be deposited in the Collection
Account.
If any property securing a defaulted Mortgage Note is damaged
and proceeds, if any, from the related hazard insurance policy are insufficient
to restore the damaged property to a condition sufficient to permit recovery
under any applicable PMI Policy, the Servicer shall be required to expend its
own funds to restore the damaged property unless the Servicer reasonably
determines (i) that such restoration will not increase the proceeds to the Owner
upon liquidation of the Mortgage Note after reimbursement of the Servicer for
its expenses and (ii) that such expenses will not be recoverable by it through
Liquidation Proceeds. In the event that the Servicer elects to restore the
damaged property and the cost of restoration exceeds the amount recovered by it
through Liquidation Proceeds, the Owner shall reimburse the Servicer for the
difference between the amount expended by the Servicer and the amount recovered
through Liquidation Proceeds.
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Section 2.09. Fidelity Bond and Errors and Omissions Insurance.
The Servicer, at no expense to the Owner, shall maintain adequate
fidelity bond coverage and adequate errors and omissions insurance, and shall
annually furnish to the Owner proof of such coverage in the form of an insurance
certificate.
Section 2.10. Establishment of and Deposits to Collection Account
The Servicer shall establish and maintain the Collection
Account in the name of the Owner for the benefit of the Owner and shall
segregate and hold all funds collected and received pursuant to the Mortgage
Notes separate and apart from any of its own funds and general assets in such
Collection Account. The Collection Account shall be established and maintained
with a Qualified Depository. The Collection Account may be maintained as an
interest-bearing account (which may include a money market savings account), or
the funds held therein may be invested from time to time in Eligible Investments
subject to the provisions of Section 2.17 hereof.
The Servicer shall deposit in or credit to the Collection
Account on a daily basis, as applicable, and retain therein, the following
collections received by the Servicer:
(i) All payments on account of principal and
interest received by the Servicer on the Mortgage Notes (which, at its
option, may be net of the Servicing Fee), including Principal
Prepayments (in whole or in part);
(ii) All Liquidation Proceeds, net of expenses
incurred in connection with any liquidation;
(iii) All Insurance Proceeds received under any PMI
Policy or title, hazard or other insurance policy covering any Mortgage
Note, other than proceeds to be applied to the restoration or repair of
the related Mortgaged Property or to be refunded to the Mortgagor;
(iv) Any amounts required to be deposited or credited
by the Servicer in connection with losses realized on investments for
the benefit of the Servicer of funds held in the Collection Account;
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(v) Any amounts required to be deposited or credited
by the Servicer in connection with interest loss or deferral as a
result of a failure to adjust a Mortgage Interest Rate or Monthly
Payment under Section 2.15 hereof;
(vi) All other amounts required to be deposited
in or credited to the Collection Account under this Agreement; and
(vii) All rents collected on REO Properties.
Any interest paid on funds deposited in the Collection Account
by the related Qualified Depository shall accrue to the benefit of the Servicer,
and the Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 2.11 hereof.
Section 2.11. Permitted Withdrawals from Collection Account.
The Servicer shall, from time to time, withdraw funds from the
Collection Account for the following purposes:
(i) To reimburse the Servicer from related Insurance
or Liquidation Proceeds for amounts expended by the Servicer in
connection with the restoration of property damaged by an uninsured
cause or the liquidation of a Mortgage Note;
(ii) To pay to the Servicer its Servicing Fee from
interest payments received on Mortgage Notes, if not previously
retained, and any earnings from the investment of funds in the
Collection Account in Eligible Investments;
(iii) To pay to the Servicer any expenses which were
incurred by the Servicer and are reimbursable pursuant to this
Agreement, including but not limited to expenses incurred by the
Servicer in respect of property repairs or maintenance on Mortgaged
Properties;
(iv) To pay to the Servicer any amounts in respect of
which the Mortgagor's check has been returned and not honored by the
Mortgagor's bank for any reason or any amounts deposited in or credited
to the Collection Account in error;
(v) To remit funds to the Owner in accordance with
Section 3.01 hereof;
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(vi) To remit funds to any Mortgagor or the designee
of any Mortgagor in respect of any payments due to the Mortgagor,
including but not limited to payments to be remitted to any Mortgagor
under any applicable insurance policy, as determined by the Servicer;
(vii) To transfer funds to another Qualified
Depository in accordance with Section 2.17 hereof;
(viii) To invest funds in certain Eligible Investments
in accordance with Section 2.17 hereof;
(ix) To remit funds to the Owner in accordance with
Section 2.19 hereof; and
(x) To clear the Collection Account upon the
termination of this Agreement.
Section 2.12. Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Note constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled in the name of the Mortgagor. The Escrow Accounts shall be
established with a Qualified Depository and may be maintained as
interest-bearing accounts.
The Servicer shall credit to the Escrow Account or Escrow
Accounts on a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the
Mortgage Notes for the purpose of effecting timely payment of any such
items as are required under the terms of this Agreement and the related
Mortgage or Mortgage Note; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property or refunded to the Mortgagor.
The Servicer shall retain any interest paid on funds deposited
in the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. To the extent
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required by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes. The Servicer shall
be responsible for the administration of the Escrow Account or Escrow Accounts
and shall be expected to make Servicing Advances to such account when a
deficiency exists therein.
Section 2.13. Permitted Withdrawals from Escrow Account.
Withdrawals from the Escrow Account or Escrow Accounts may be
made by the Servicer only:
(i) to effect timely payments of taxes; assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage Note;
(ii) to reimburse the Servicer for any Servicing
Advance made by the Servicer with respect to a related Mortgage Note,
but only from amounts received on the related Mortgage Note;
(iii) to refund to any Mortgagor any funds found to be
in excess of the amounts required under the terms of the related
Mortgage Note or funds remaining therein after the principal balance of
the related Mortgage Note has been paid in full;
(iv) for transfer to the Collection Account and
application to reduce the principal balance of the Mortgage Note in
accordance with the terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the
Mortgaged Property;
(vi) for transfer to the Collection Account of fire
and hazard insurance proceeds and Escrow Payments with respect to any
FHA Loan or VA Loan, where the FHA or the VA, respectively, has
directed application of funds as a credit against the proceeds of the
FHA Insurance Contract or VA Loan Guaranty Agreement;
(vii) to pay to the Servicer, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited
therein;
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(viii) to remit funds to the Owner in accordance with
Section 2.19 hereof;
(ix) to pay to the Mortgagor or the Servicer as
appropriate any amounts in respect of which the Mortgagor's check has
been returned and not honored by the Mortgagor's bank for any reason or
any amounts deposited or credited to the Escrow Account in error;
(x) to pay late fees to the extent permitted by the
terms of the related Mortgage and Mortgage Note; and
(xi) to clear the Escrow Account or Accounts on the
termination of this Agreement.
Section 2.14. Maintenance of FHA Mortgage Insurance and VA Guaranty.
With respect to any FHA Loans and VA Loans, the Servicer shall
maintain and keep the FHA Mortgage Insurance and the VA Guaranty Agreement,
respectively, in full force and effect throughout the term of this Agreement and
discharge its obligations arising out of FHA Mortgage Insurance and the VA Loan
Guaranty Agreement. The Servicer hereby agrees that it shall be liable to the
Owner for any loss, liability or expense incurred by the Owner by reason of any
FHA Mortgage Insurance or VA Loan Guaranty Agreement being voided, reduced,
released or adversely affected by reason of the negligence or willful misconduct
of the Servicer. The Servicer will service and administer the Mortgage Notes in
accordance with the obligations of mortgagees under the Act and the applicable
regulations thereunder and under the Servicemen's Readjustment Act and VA
Regulations and will discharge all obligations of the mortgagee under each
Mortgage Note including, with respect to FHA Loans and VA Loans, paying all FHA
and VA insurance premiums, fees or charges, as required, and, subject to the
right to assign the Mortgage Note to the FHA or VA, as the case may be, will
take all action reasonably necessary to preserve the lien of such Mortgage,
including, the defense of actions to challenge or foreclose such lien.
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Section 2.15. Notification of Adjustments.
With respect to each adjustable rate Mortgage Note the
Servicer shall adjust the Mortgage Interest Rate on the related interest rate
adjustment date and shall adjust the Monthly Payment on the related mortgage
payment adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage Note. The Servicer shall execute and
deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer or the receipt of notice
from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate
or Monthly Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall immediately deposit in or credit to the Collection Account
from its own funds the amount of any interest loss or deferral caused thereby.
Section 2.16. Completion and Recordation of Assignment of Mortgage
and FHA and VA Change Notices.
To the extent permitted by applicable law, each of the
Assignments of Mortgage is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected at the Owner's expense at the direction of the Owner. If
applicable, at the Owner's direction, the Servicer shall cause the endorsements
on the Mortgage Note, the Assignment of Mortgage, the assignment of security
agreement and the HUD form 92080 Mortgage Record Charge with respect to all FHA
Loans to be completed, and shall give notice to the VA of a transfer of
insurance credits, if applicable, with respect to VA Loans on the form
prescribed by the VA.
Section 2.17. Protection of Accounts; Eligible Investments.
The Servicer may transfer the Collection Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon obtaining the consent of the Owner, which consent shall
not be withheld unreasonably.
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The Servicer shall bear any expenses, losses or damages
sustained by the Owner if the Collection Account and/or the Escrow Account are
not demand deposit accounts.
Amounts in the Collection Account may at the option of the
Servicer be invested in Eligible Investments. Any such Eligible Investment shall
mature no later than the date two Business Days prior to the Servicer Remittance
Date next following the date of such Eligible Investment, provided, however,
that if such Eligible Investment is an obligation of a Qualified Depository that
maintains the Collection Account, then such Eligible Investment may mature on
such Servicer Remittance Date. Any such Eligible Investment shall be made in the
name of the Servicer in trust for the benefit of the Owner. All income on or
gain realized from any such Eligible Investment shall be for the benefit of the
Servicer and may be withdrawn at any time by the Servicer. Any losses incurred
in respect of any such investment shall be deposited in the Collection Account,
by the Servicer out of its own funds immediately as realized.
Section 2.18. Servicing Compensation.
As consideration for servicing the Mortgage Notes subject to
this Agreement, the Servicer shall retain the relevant Servicing Fee for each
Mortgage Note remaining subject to this Agreement during any month or part
thereof.
Such Servicing Fee shall be payable monthly. The obligation of
the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds or Insurance Proceeds) of each Monthly
Payment actually received by the Servicer. The Servicing Fee percentage shall be
computed on the same principal amount and for the same period as the interest
portion of each payment.
In addition, the Servicer shall be entitled to retain as
additional compensation the late charges and other fees and expenses related to
loan assumptions, delinquencies, modifications, partial releases of security and
releases for payment in full, if any, collected under the applicable loan
documents or customarily collected by servicers consistent with Accepted
Servicing Practices.
The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement thereof except as specifically provided for herein.
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<PAGE>
Section 2.19. Withdrawals and Substitutions of Mortgage Notes.
Upon five days prior written notice to the Servicer, the Owner
may cause Mortgage Notes to become subject to the terms of this Agreement or
remove Mortgage Notes from the terms of this Agreement. The addition of Mortgage
Notes under this Section 2.19 shall be in accordance with the provisions of
Section 2.01. In connection with the removal of any Mortgage Notes under this
Section 2.19, the Servicer shall promptly transfer any funds in the Collection
Account and the Escrow Account with respect to such Mortgage Notes not due to be
paid to the Owner or to such other Person as the Owner may direct, and the
Servicer shall take such other actions as the Owner may reasonably request to
transfer the Servicing Files with respect to such Mortgage Notes to the Owner or
at the direction of the Owner.
ARTICLE III
REMITTANCES AND REPORTING BY THE SERVICER
Section 3.01. Remittances to Owner.
Subject to the provisions of this Section 3.01, on each
Servicer Remittance Date, the Servicer shall remit to the Owner all amounts on
deposit in the Collection Account received during the preceding Collection
Period (net of charges against or withdrawals from the Collection Account
pursuant to Section 2.11(i) through (iv) and (viii)) (the "Available Amount").
Section 3.02. Reporting by the Servicer. Reporting by the Servicer
(a) On the 20th day of each month (or, in either case, if such
day is not a Business Day, the preceding Business Day), the Servicer shall
deliver to the Owner a report setting forth the following information as of the
end of the preceding day:
(i) The total amount of funds received by the
Servicer and credited to the Collection Account;
(ii) The aggregate outstanding principal balance of
all of the Eligible Mortgage Notes;
21
<PAGE>
(iii) The weighted average coupon, weighted average
maturity and outstanding principal balance of the Eligible Mortgage
Notes, grouped as follows:
(A) for the Fixed Rate Mortgage Notes, by
the following rages of original term to maturity:
(1) 15 years or less; and
(2) greater than 15 years and up to
and including 30 years; and
(B) for the Adjustable Rate Mortgage Notes,
by index and, for each index, by the length of the initial
fixed rate period and the length of the subsequent adjustable
rate period; and
(iv) With respect to Eligible Mortgage Notes as to
which there is currently a Late Payment, the number and outstanding
principal balance of such Eligible Mortgage Notes, grouped in
accordance with clause (iii) above, that are (A) one installment
delinquent, (B) two installments delinquent, (C) three installments
delinquent and (D) more than three installments delinquent.
(b) In addition, the report delivered by the Servicer shall
contain the information from time to time specified by the Owner.
Section 3.03. Annual Certificate
On or before March 31, 1997 and on or before each March 31st
thereafter, the Servicer shall deliver or cause to be delivered to the Owner an
Officer's Certificate, to the effect that a review of the activities of the
Servicer during the last calendar year (or the period since the date hereof in
the case of the first such Officer's Certificate required to be delivered) has
been made under the supervision of the officer executing such Officer's
Certificate with a view to determining whether during such period the Servicer
had performed and observed all of its obligations under this Agreement, and
either (A) stating that to the best of such officer's knowledge no default by
the Servicer under this Agreement has occurred and is continuing, or (B) if such
a default has occurred and is continuing, specifying such default and the nature
and status thereof.
22
<PAGE>
Section 3.04. Annual Accountants' Report
On or before March 31, 1997 and on or before each March 31st
thereafter, the Servicer shall deliver to the Owner a report, prepared by a firm
of Independent Accountants of recognized national standing selected by the
Servicer, to the effect that (i) they have examined certain documents and
records relating to the Mortgage Notes, in accordance with the requirements of
the Uniform Single Audit Program and (ii) their examinations disclosed no
exceptions which, in their opinion, were material, relating to such Mortgage
Notes, or, if any such exceptions were disclosed thereby, setting forth such
exceptions which, in their opinion, were material. If any of the Mortgage Notes
are being serviced by a Person other than the Servicer, as permitted by Section
2.06 hereof, the firm of Independent Accountants preparing the report with
respect to the servicing of such Mortgage Notes by the Servicer may rely, as to
matters relating to the servicing of such Mortgage Notes, upon a comparable
report (rendered with respect to the most recent fiscal year of such other
Person which ended at or prior to the end of the Servicer's fiscal year) of
another firm of Independent Accountants with respect to such other Person's
servicing of such Mortgage Notes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Servicer.
The Servicer, as a condition to the consummation of the
transactions contemplated hereby, makes the following representations and
warranties to the Owner as of the date hereof:
(a) Due Organization and Authority. The Servicer is a Texas
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Servicer, and in any event the Servicer is in compliance with
the laws of any such state to the extent necessary to ensure the enforceability
of the terms of this Agreement; the Servicer has the full corporate power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement by the
Servicer and the consummation of the transactions contemplated hereby have been
23
<PAGE>
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer and all requisite corporate action has
been taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer of
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's charter
or by-laws or any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject, or impair the ability of the Servicer to service the
Mortgage Notes, or impair the value of the Mortgage Notes;
(d) Ability to Perform. The Servicer does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(e) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to the best of the Servicer's knowledge,
threatened against the Servicer which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of this
Agreement;
(f) No Consent Required. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of or compliance by the
Servicer with this Agreement, or if required, such approval has been obtained
prior to the date hereof;
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<PAGE>
(g) Ability to Service. The Servicer is an FHA Approved
Mortgagee, a VA Approved Lender and an approved seller/servicer of conventional
residential mortgage loans for FNMA or FHLMC, with the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Notes. The Servicer is in good standing to service
mortgage loans for the FHA and the VA and either FNMA or FHLMC, and no event has
occurred, including but not limited to a change in insurance coverage, which
would make the Servicer unable to comply with FHA and VA and either FNMA or
FHLMC eligibility requirements or which would require notification to any of the
FHA, the VA, FNMA or FHLMC; and
(h) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein not misleading.
Section 4.02. Remedies for Breach of Representations and Warranties
of the Servicer.
It is understood and agreed that the representations and
warranties set forth in Section 4.01 shall survive the engagement of the
Servicer to perform the servicing responsibilities as of the date hereof
hereunder and the delivery of the Servicing Files to the Servicer and shall
inure to the benefit of the Owner. Upon discovery by either the Servicer or the
Owner of a breach of any of the foregoing representations and warranties which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Notes, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property or the interest of
the Owner, the Person discovering such breach shall give prompt written notice
to the other party to this Agreement.
Within 60 days of the earlier of either discovery by or notice
to the Servicer of any breach of a representation or warranty set forth in
Section 4.01 which materially and adversely affects the ability of the Servicer
to perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Notes, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property,
the Servicer shall use its Best Efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Servicer shall, at
the Owner's option, assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Notes) to a successor servicer,
25
<PAGE>
subject to the approval of the Owner, which approval shall be in the Owner's
sole discretion. Such assignment shall be made in accordance with Section 7.01.
In addition, the Servicer shall indemnify the Owner and hold
the Owner harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
reasonable out-of-pocket costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Servicer representations and warranties contained in this Agreement.
Any cause of action against the Servicer relating to or
arising out of the breach of any representations and warranties made in Section
4.01 shall accrue upon (i) discovery of such breach by the Servicer or notice
thereof by the Owner to the Servicer, (ii) failure by the Servicer to cure such
breach within the applicable cure period, and (iii) demand upon the Servicer by
the Owner for compliance with this Agreement.
ARTICLE V
THE SERVICER
Section 5.01. Corporate Existence of the Servicer; Status as Servicer;
Merger.
(a) Subject to Section 5.01(b) hereof, the Servicer shall keep
in full force its existence, rights and franchises as a corporation, 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 the Mortgage Notes and this
Agreement.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the properties and assets of the Servicer substantially as a whole, shall be
the successor of the Servicer 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, provided, however, that the successor or
surviving Person shall execute an agreement of assumption to perform every
obligation of the Servicer hereunder and shall be an institution (i) having a
net worth of not less than $10,000,000, and (ii) which is an approved
seller/servicer of conventional residential mortgage loans for FNMA or FHLMC and
an FHA Approved Mortgagee and a VA Approved Lender.
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<PAGE>
Section 5.02. Performance of Obligations.
(a) The Servicer shall diligently perform and observe all of
its obligations and agreements contained in this Agreement.
(b) The Servicer shall not take any action, or permit any
action to be taken by others, which would excuse any Person from any of its
covenants or obligations under any Mortgage Note, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, a Mortgage Note or any such instrument, except
as expressly provided herein or therein.
Section 5.03. The Servicer Not to Resign; Assignment.
(a) The Owner has entered into this Agreement with the
Servicer in reliance upon the status of the Servicer as a mortgage servicer, and
the representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, the Servicer shall not assign
this Agreement or the servicing responsibilities hereunder or delegate its
rights or duties hereunder or any portion hereof (to other than a Subservicer)
or sell or otherwise dispose of all or substantially all of its property or
assets without the prior written consent of the Owner, which consent shall not
be unreasonably withheld by the Owner.
(b) The Servicer shall not resign from the obligations and
duties hereby imposed on it except upon (i) the appointment of a successor
Servicer in the manner provided in Section 7.01, or (ii) the determination that
its duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Owner, which Opinion of Counsel shall be in form
and substance acceptable to the Owner.
(c) Without in any way limiting the generality of this Section
5.03, in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof (to other than a Subservicer) or sell or otherwise dispose of
all or substantially all of its property or assets, without the prior written
consent of the Owner, then the Owner shall have the right to terminate this
Agreement upon notice given as set forth in Section 6.01, without any payment of
any penalty or damages and without any liability whatsoever to the Servicer or
any third party.
27
<PAGE>
(d) Except as provided in this Section 5.03 or Sections 4.02
or 6.01 hereof, the duties and obligations of the Servicer under this Agreement
shall continue until this Agreement shall have been terminated as provided in
Section 7.02 hereof, and shall survive the exercise by the Owner of any right or
remedy under this Agreement or the enforcement by the Owner of this Agreement.
ARTICLE VI
DEFAULT
Section 6.01. Events of Default
Any of the following acts or occurrences shall constitute an
Event of Default by the Servicer under this Agreement:
(i) The Servicer shall fail to distribute any
amounts required to be distributed to the Owner or Owner's agent
pursuant to Section 3.01 hereof, which failure continues unremedied for
five days; or
(ii) The Servicer shall fail duly to observe or
perform in any material respects any covenants or agreements of this
Agreement, which failure continues for a period of 60 days after
written notice thereof shall have been given to the Servicer by the
Owner; or
(iii) The entry against the Servicer of a decree or
order of a court or agency or supervisory authority having jurisdiction
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, including bankruptcy, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, which decree or order shall have remained
in force undischarged or unstayed for a period of 60 days; or
(iv) The Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or relating to all or substantially all
of its property; or
28
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(v) The Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency, bankruptcy or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations or cease its
normal business operations for three Business Days.
If an Event of Default hereunder shall have occurred and be
continuing, the Owner may, by notice given to the Servicer, terminate all of the
rights and powers of the Servicer under this Agreement, including without
limitation all rights of the Servicer to receive the servicing compensation.
Upon the giving of such notice, all rights, powers, duties and responsibilities
of the Servicer under this agreement, whether with respect to the Mortgage
Notes, the Collection Account, any servicing compensation or otherwise, but
excluding any obligation of the Servicer under Section 3.01 hereof with respect
to the immediately preceding Servicer Remittance Date (which obligation shall
remain an obligation of the Servicer notwithstanding any termination of the
Servicer's rights and powers under this Agreement), shall vest in and be assumed
by a new Servicer as provided in Section 7.01, and the Owner is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Mortgagors deemed necessary or advisable by the Owner), and to do
or accomplish all other acts or things necessary or appropriate to effect such
vesting and assumption.
By a written notice, the Owner may waive any default by the
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.02. No Effect on Other Parties.
Upon any termination of the rights and powers of the Servicer
from time to time pursuant to Section 6.01 hereof or upon any appointment of a
successor to the Servicer, all the rights, powers, duties and obligations of the
Owner under this Agreement shall remain unaffected by such termination or
appointment and shall remain in full force and effect thereafter, except as
otherwise expressly provided in this Agreement.
29
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Section 6.03. Rights Cumulative
All rights and remedies from time to time conferred upon or
reserved to the Owner are cumulative, and none is intended to be exclusive of
another. No delay or omission in insisting upon the strict observance or
performance of any provision of this Agreement, or in exercising any right or
remedy, shall be construed as a waiver or relinquishment of such provision, nor
shall it impair such right or remedy. Every right and remedy may be exercised
from time to time and as often as deemed expedient.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Successor to the Servicer.
In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to Sections 4.02,
5.03, 6.01 or 7.02, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
servicer shall be appointed by the Owner and such resignation or removal of the
Servicer shall not relieve the Servicer of the representations and warranties
made pursuant to Sections 4.01 and the remedies available to the Owner under
Section 4.02, it being understood and agreed that the provisions of such
Sections 4.01 and 4.02 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.
The Servicer shall deliver promptly to the successor Servicer
the funds in the Collection Account and Escrow Account, and the Servicer shall
account for all of such funds. Within 30 days of the appointment of a successor
entity by the Owner, the Servicer shall prepare, execute and deliver to the
successor entity any and all documents and other instruments, place in such
successor's possession all Servicing Files and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of the notice of
termination described in Section 6.01 and to more fully and definitively vest in
the successor all such rights, powers, duties, responsibilities, obligations and
30
<PAGE>
liabilities of the Servicer. The Servicer shall cooperate with the Owner and
such successor in effecting the termination of the Servicer's responsibilities
and rights hereunder and the transfer of servicing responsibilities to the
successor servicer, including, without limitation, the transfer to such
successor for administration by it of all cash amounts received with respect to
the Mortgage Notes by the Servicer after it has received notice of termination.
With respect to all FHA Loans serviced hereunder, the Servicer shall provide
notice of such change in servicers to HUD on HUD form 92080 or such other form
as prescribed by HUD, at least 10 days prior to such transfer of servicing.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and the Owner an instrument accepting
such appointment, wherein the successor shall make the representations and
warranties set forth in Section 4.01, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the Servicer or
termination of this Agreement pursuant to Sections 4.02, 5.03, 6.01 or 7.02
shall not affect any claims that the Owner may have against the Servicer arising
out of the Servicer's actions or failure to act prior to any such termination or
resignation.
Upon a successor's acceptance of appointment as such, the
Servicer shall notify the Owner by mail of such appointment in accordance with
the procedures set forth in Section 7.04.
Section 7.02. Termination of Agreement.
This Agreement shall commence upon the date hereof and shall,
subject to earlier termination pursuant to the provisions of this Section 7.02,
terminate upon the maturity date of the last loan serviced hereunder. This
Agreement may be canceled and terminated (i) at any time hereunder by the Owner
upon 60 days notice to the Servicer, or (ii) by mutual agreement of the parties
hereto. In addition, this Agreement may be canceled and terminated by the Owner,
by notice to the Servicer, upon the occurrence of any Event of Default as
described in Section 6.01 hereof, such termination being a "Termination for
Cause."
Section 7.03. Amendment
This Agreement may not be amended except pursuant to a written
instrument executed by the Owner and the Servicer.
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Section 7.04. Governing Law
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 7.05. Notices
All demand notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by overnight
courier, delivered in person or mailed by registered or certified United States
mail, postage prepaid, addressed as follows (or such address as may hereafter be
furnished to the other party by like notice):
32
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(a) If to the Owner:
Main Place Real Estate Investment Trust
100 North Tryon Street, 23rd Floor
NC1-007-23-02
Charlotte, North Carolina 28255
Attention: Secretary
(b) If to the Servicer:
NationsBanc Mortgage Corporation
101 East Main Street, Suite 400
Louisville, Kentucky 40202-5318
Attention: Elise Boucher
All notices and communications shall be deemed to
have been received either at the time of the personal delivery thereof to any
officer of the person entitled to receive such notices and communications at the
address of such person for notices hereunder, or on the third day after the
mailing thereof to such address, as the case may be.
Section 7.06. Severability of Provisions
If one or more of the provisions of this Agreement shall be
for any reason whatever held invalid or unenforceable, such provisions shall be
deemed severable from the remaining covenants, agreements and provisions of this
Agreement and such invalidity of unenforceability shall in no way affect the
validity or enforceability of such remaining provisions or the rights of any
parties hereto. To the extent permitted by law, the parties hereto hereby waive
any provision of law which renders any provision of this Agreement invalid or
unenforceable in any respect.
33
<PAGE>
Section 7.07. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Owner, during the Servicer's normal business
hours, to examine all the books of account, records, reports and other papers of
the Servicer relating to the Mortgage Notes, to make copies and extracts
therefrom, to cause such books to be audited by Independent Accountants selected
by the Owner, and to discuss its affairs, finances and accounts relating to the
Mortgage Notes with officers, employees and Independent Accountants of the Owner
(and by this provision the Servicer hereby authorizes said accountants to
discuss with such representatives such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any expense
incident to this Section 7.07 shall be borne by the Owner, provided that if an
audit is made during the continuance of an Event of Default, the expense
incident to such audit shall be borne by the Servicer.
Section 7.08. Binding Effect
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto.
Section 7.09. 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 7.10. Counterparts
This Agreement may be executed in counterparts, each of which
shall be deemed an original for all purposes and all of which constitute,
collectively, one Agreement.
34
<PAGE>
IN WITNESS WHEREOF, the Owner and the Servicer have caused
this Agreement to be duly executed by their respective officers duly authorized
as of the day and year first above written.
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
--------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANC MORTGAGE CORPORATION
By: /s/ Frederick Wark
------------------
Name: Frederick Wark
Title: Senior Vice President
<PAGE>
Exhibit 10(m)
SERVICING AGREEMENT
Dated as of November 1, 1996
between
MAIN PLACE REAL ESTATE INVESTMENT TRUST
Owner
and
NATIONSBANK, N.A.
Servicer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS................................................................................................... 1
ARTICLE II
ADMINISTRATION AND SERVICING OF THE MORTGAGE NOTES............................................................ 5
Section 2.01. Contract for Servicing; Possession of Servicing Files.............................. 5
-----------------------------------------------------
Section 2.02. Commencement of Servicing Responsibilities......................................... 6
------------------------------------------
Section 2.03. The Servicer to Act as Servicer.................................................... 6
-------------------------------
Section 2.04. Collection of Mortgage Note Payments............................................... 7
------------------------------------
Section 2.05. Foreclosure........................................................................ 7
-----------
Section 2.06. Sub-Servicing Agreements........................................................... 7
------------------------
Section 2.07. Maintenance of Flood Insurance..................................................... 8
------------------------------
Section 2.08. Notification of Adjustments........................................................ 8
---------------------------
Section 2.09. Completion and Recordation of Assignment of Mortgage Notices....................... 9
------------------------------------------------------------
Section 2.10. Servicing Compensation............................................................. 9
----------------------
Section 2.11. Withdrawals and Substitutions of Mortgage Notes.................................... 10
-----------------------------------------------
ARTICLE III
REMITTANCES BY THE SERVICER................................................................................... 10
Section 3.01. Remittances to Owner............................................................... 10
--------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................................................ 11
Section 4.01. Representations and Warranties of the Servicer..................................... 11
----------------------------------------------
Section 4.02. Remedies for Breach of Representations and Warranties of the Servicer.............. 12
---------------------------------------------------------------------
ARTICLE V
THE SERVICER.................................................................................................. 13
Section 5.01. Corporate Existence of the Servicer; Status as Servicer; Merger.................... 13
---------------------------------------------------------------
Section 5.02. Performance of Obligations......................................................... 14
--------------------------
Section 5.03. The Servicer Not to Resign; Assignment............................................. 14
--------------------------------------
i
<PAGE>
ARTICLE VI
DEFAULT....................................................................................................... 15
Section 6.01. Events of Default.................................................................. 15
-----------------
Section 6.02. No Effect on Other Parties......................................................... 16
--------------------------
Section 6.03. Rights Cumulative.................................................................. 16
-----------------
ARTICLE VII
MISCELLANEOUS................................................................................................. 17
Section 7.01 Successor to the Servicer.......................................................... 17
-------------------------
Section 7.02. Termination of Agreement........................................................... 18
------------------------
Section 7.03. Amendment.......................................................................... 18
---------
Section 7.04. Governing Law...................................................................... 18
-------------
Section 7.05. Notices............................................................................ 18
-------
Section 7.06. Severability of Provisions......................................................... 19
--------------------------
Section 7.07. Inspection and Audit Rights........................................................ 19
---------------------------
Section 7.08. Binding Effect..................................................................... 20
--------------
Section 7.09. Article and Section Headings....................................................... 20
----------------------------
Section 7.10. Counterparts....................................................................... 20
------------
</TABLE>
ii
<PAGE>
SERVICING AGREEMENT
Servicing Agreement, dated November 1, 1996, between MAIN
PLACE REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust
(herein, together with its successors and assigns, called the "Owner"), and
NATIONSBANK, N.A., a national banking association (herein, together with its
successors and assigns, called the "Servicer").
PRELIMINARY STATEMENT
The Owner is the holder and/or owner of all of the beneficial
ownership interests in the Mortgage Notes. The Servicer is a contractor engaged
in the business of servicing mortgage loans.
The Servicer and the Owner desire to enter into this Agreement
to provide, among other things, for the servicing by the Servicer of the
Mortgage Notes.
ARTICLE I
DEFINITIONS
The following terms have the respective meanings set forth
below for all purposes of this Agreement, and the definitions of such terms are
applicable to the singular as well as to the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms:
Accepted Servicing Practices: With respect to any Mortgage
Notes, the services and duties customary to the servicing by prudent lending
institutions of mortgages of the same type as such Mortgage Notes in the
jurisdictions where the related Mortgaged Properties are located.
Agreement: This Servicing Agreement and all amendments hereof
and supplements hereto.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the party indicated therein, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Notes secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
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Best Efforts: Efforts determined to be reasonably diligent by
the Owner or Servicer, as the case may be, in its sole discretion. Such efforts
do not require the Owner or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Owner or Servicer, as the case may be, to advance or expend fees or
sums of money in addition to those specifically set forth in this Agreement.
Business Day: Any day other than (i) a Saturday, (ii) a
Sunday, or (iii) a day that is either a legal holiday or a day on which banking
institutions are authorized or obligated by law or regulation to close in the
State of North Carolina (or, for purposes of remittances by the Servicer, any
state in which functions relating to the collection of payments are performed).
Condemnation Proceeds: All awards of settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Note documents.
Eligible Mortgage Note: Any Mortgage Note meeting the
requirements of ss. 856 of the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
Event of Default: Any event set forth in Section 6.01.
Independent Accountant: Any accountant, who may also be the
accountant who audits the books of the Servicer, who is independent with respect
to the Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Note, whether through the sale or assignment
of such Mortgage Note, trustee's sale, foreclosure sale or otherwise, or the
sale of the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Note.
Lock-box: Any lock-box account maintained by the Servicer at
any financial institution for the purpose of collecting Monthly Payments on
Mortgage Notes serviced hereunder.
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Monthly Payment: The scheduled monthly payment of principal
and interest on a Mortgage Note.
Mortgage: The mortgage, deed of trust, security agreement or
other instrument securing a Mortgage Note, which creates a lien on an
unsubordinated estate in real property securing such Mortgage Note.
Mortgage Interest Rate: The annual rate of interest borne at
any time by a Mortgage Note.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage, each Mortgage Note subject to this
Agreement being identified on the Mortgage Note Schedule.
Mortgage Note Schedule: The schedule of Mortgage Notes
delivered by the Owner to the Servicer setting forth information with respect to
such Mortgage Notes, which schedule shall be amended from time to time to
reflect the addition of Mortgage Notes to, or the withdrawal of Mortgage Notes
from, the terms of this Agreement.
Mortgaged Property: The real property securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
NationsBank, N.A.: NationsBank, N.A., a national banking
association.
NationsBank South: NationsBank, N.A. (South), a national
banking association.
NRSRO: Any nationally recognized statistical rating
organization.
Officer's Certificate: A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or any Vice President
of the Servicer, and delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
an employee of the Servicer, and who is reasonably acceptable to the Owner.
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Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Note which is received in advance of its scheduled due
date, including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
REO Disposition: The final sale by the Servicer, on behalf of
the Owner, of any REO Property.
REO Disposition Proceeds: All amounts received with respect
to an REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf and in the name of the Owner through foreclosure or by deed in lieu of
foreclosure.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
administrative or judicial proceedings, including foreclosures, (c) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, (d) where collected, taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and any flood insurance coverage and (e) any
losses sustained by the Servicer with respect to the liquidation of the
Mortgaged Property.
Servicing Fee:
(a) Subject to clause (b) hereof, the lesser of (i) the
consideration specified in Annex I or any supplemental annex (subject to
adjustment pursuant to clause (b) hereof) or (ii) such amount as would be
charged by an unaffiliated third party in an arm's-length transaction for any
relevant service. The Servicer shall invoice Owner monthly. Payment by Owner
shall be due not later than 30 days after delivery by Servicer to Owner of an
invoice detailing the services provided and calculation of the charges for such
services.
(b) The prices described in Annex I may be changed
periodically by the Servicer without notice to Owner. However, such prices shall
be evaluated yearly during a meeting between representatives of the Servicer and
the Owner, at which time Owner shall be given 30 days to reject any proposed
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pricing changes and any changes instituted since the previous annual evaluation.
In the event Owner rejects such pricing changes, Owner shall give written notice
of such rejection and this Agreement will terminated 90 days from the date of
such rejection notice. Upon receipt of written notice of rejection of pricing
changes, Servicer shall adjust Owner's pricing to reflect the previously
approved pricing and rebate any excess payment where applicable. In the event
Owner does not reject such pricing within the time specified, Owner shall be
deemed to have accepted such pricing changes. Owner shall be furnished with a
new Annex I, a copy of which will then be attached to this Agreement and thereby
supersede any previous Annex I.
(c) Payment of the Servicing Fee and all other payments
pursuant to this Agreement shall be effected by a monthly allocation of costs on
the general ledger of the Owner. The parties hereto may agree to any other
procedure to effect payment, including but not limited to changes in the
frequency of allocation.
Servicing File: The items pertaining to a particular Mortgage
Note including, but not limited to, the original Mortgage Note, the computer
files, data disks, books, records, data tapes, notes, and all additional
documents generated as a result of or utilized in originating and/or servicing
each Mortgage Note, which are held in trust for the Owner by the Servicer.
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ARTICLE II
ADMINISTRATION AND SERVICING OF THE MORTGAGE NOTES
Section 2.01. Contract for Servicing; Possession of Servicing Files.
The Owner, by execution and delivery of this Agreement, does hereby contract
with the Servicer, subject to the terms of this Agreement, for the servicing of
the Mortgage Notes that are from time to time subject to this Agreement. With
respect to each Mortgage Note listed on the Mortgage Note Schedule as of the
date of this Agreement for which the Servicer does not have possession of a
Servicing File as of the date hereof, the Owner shall cause to be delivered or
will use its Best Efforts to cause to be delivered the related Servicing File to
the Servicer as soon as practicable. With respect to each Mortgage Note that
becomes subject to this Agreement after the date hereof, the Owner shall cause
the Mortgage Note Schedule to be amended to reflect the Mortgage Notes then
subject to this Agreement and shall cause to be delivered or will use its Best
Efforts to cause to be delivered as soon as practicable each related Servicing
File to the Servicer. Each Servicing File delivered to the Servicer shall be
held by the Servicer in order to service the Mortgage Notes pursuant to this
Agreement and is and shall be held in trust as agent for the Owner and for the
benefit of the Owner as the owner thereof. The Servicer's possession of any
Servicing File shall be at the will of the Owner for the sole purpose of
facilitating servicing of the related Mortgage Note pursuant to this Agreement,
and such retention and possession by the Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Servicing File shall be vested in the Owner and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Servicer shall immediately vest in the
Owner and shall be retained and maintained, in trust, by the Servicer at the
will of the Owner in such custodial capacity only.
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Section 2.02. Commencement of Servicing Responsibilities.
As of the date hereof, the Servicer shall assume all servicing
responsibilities hereunder with respect to the Mortgage Notes.
Section 2.03. The Servicer to Act as Servicer.
(a) The Servicer, as an independent contractor, shall
diligently service and administer the Mortgage Notes from and after the date
hereof and shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
including taking all actions that a mortgagee is permitted or required to take.
(b) Without limiting the generality of the foregoing, the
Owner and the Servicer hereby agree as follows:
(i) The Servicer may waive any prepayment charge,
assumption fee, late payment charge or any other charge in connection
with the prepayment of a Mortgage Note;
(ii) The Servicer may arrange with a mortgagor a plan
of relief, including a modification or extension of the Mortgage Note,
when appropriate, rather than recommending liquidation;
(iii) The Servicer shall enforce "due-on-sale" clauses
with respect to Mortgage Notes; provided, however, where an assumption
of, or substitution of liability with respect to, a Mortgage Note is
required by law the Servicer may permit the assumption of a Mortgage
Note, pursuant to which the mortgagor shall remain liable on the
Mortgage Note, or a substitution of liability with respect to such
Mortgage Note, pursuant to which the new Mortgagor shall be substituted
for the original Mortgagor as being liable on the Mortgage Note;
(iv) The Servicer may give any consents under the
terms and provisions of any Mortgage Note, including, without
limitation, consents to the placing of easements, covenants, conditions
and restrictions on any Mortgaged Property; and
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(v) The Servicer may permit the modification of an
Eligible Mortgage Note which the related Mortgagor has indicated a
desire to refinance provided that any such Mortgage Note would continue
to be Eligible Mortgage Note following such modification;
(c) The Servicer shall establish and maintain adequate and
customary books and records with respect to each Mortgage Note and, upon request
of the Owner shall, within a reasonable time following the Servicer's receipt of
such request, furnish the same (in the form of either an original document or a
certified true copy of such original document) to the Owner. In the event of a
request for any non-standard report, the Servicer and the Owner shall mutually
agree in writing to a reasonable expense reimbursement payable by the Owner to
the Servicer for such report.
Section 2.04. Collection of Mortgage Note Payments.
Continuously from the date hereof until the date each Mortgage
Note ceases to be subject to this Agreement, the Servicer shall proceed
diligently to collect all payments due under each of the Mortgage Notes when the
same shall become due and payable.
Section 2.05. Foreclosure.
The Servicer shall process and manage the foreclosure or other
acquisition of the property securing any Mortgage Note; and pending completion
of any such foreclosure, the protection of the Mortgaged Property from waste and
vandalism. The Servicer will thereafter assign or convey to the Owner any title,
equity or other property or right acquired by such proceedings. In no event
shall the Servicer be required to take title in its name to any Mortgaged
Property which has, or may reasonably be deemed to have, an environmental or
similar problem or defect for which the Servicer would become liable by reason
of its holding title to such property. The Owner agrees promptly to reimburse
the Servicer for its reasonable Servicing Advances incurred in complying with
its obligations under this paragraph, including attorney's fees. In case of a
voluntary deed in lieu of foreclosure or the purchase of any such property by
the Owner or for its account, the Owner will assume responsibility for the same.
The marketing and sales of all REO Properties will be the responsibility of the
Servicer, on behalf of the Owner.
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Section 2.06. Sub-Servicing Agreements.
Any provision of this Agreement notwithstanding, the Servicer
may contract with other Persons for the performance of its responsibilities,
duties and obligations under this Agreement to service and administer any of the
Mortgage Notes, provided that none of the provisions of this Section 2.06
relating to agreements or arrangements between the Servicer and other Persons,
or to actions taken through any such other Persons or otherwise, shall be deemed
to relieve the Servicer of any of its duties and obligations to the Owner with
respect to the servicing and administration of the Mortgage Notes, and the
Servicer shall be obligated with respect thereto to the same extent and under
the same terms and conditions as if it alone were performing all duties and
obligations in connection with servicing and administering the Mortgage Notes.
The Servicer shall be entitled to enter into any agreement with any Person
performing services for it related to its duties and obligations under this
Agreement for indemnification of the Servicer by such Person, and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification. Any transactions or services relating to the Mortgage Notes
involving any Person performing services for the Servicer shall be deemed to be
between such Person and the Servicer alone, and the Owner shall not be deemed to
be parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any such Person.
Section 2.07. Maintenance of Flood Insurance.
With respect to any Mortgaged Property located in an area
identified by the Federal Emergency Management Agency as having special flood
hazards and as to which flood insurance has been made available, the Servicer
shall cause to be maintained a flood insurance policy maintained with a
generally acceptable insurance carrier meeting the requirements of the current
guidelines of the Federal Insurance Administration. Such flood insurance policy
will provide coverage in an amount not less than the least of (i) the unpaid
principal balance of the Mortgage Note, (ii) the insurable value of the
Mortgaged Property and (iii) the maximum amount of insurance available under the
Flood Disaster Protection Act of 1973, as amended.
In the event the Servicer receives actual notice of any loss
or damage to any property securing a Mortgage Note, the Servicer will proceed
diligently to adjust any loss or damage claim, and to protect the interest of
the mortgagee under any such flood insurance policy covering the incidence of
damage. In the event that the Owner shall request an inspection by an engineer
or other professional construction inspector with respect to any such repairs,
the Servicer will arrange for such inspection.
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Section 2.08. Notification of Adjustments.
With respect to each adjustable rate Mortgage Note the
Servicer shall adjust the Mortgage Interest Rate on the related interest rate
adjustment date and shall adjust the Monthly Payment on the related mortgage
payment adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage Note. The Servicer shall execute and
deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer or the receipt of notice
from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate
or Monthly Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall immediately remit to the Owner from its own funds the amount
of any interest loss or deferral caused thereby.
Section 2.09. Completion and Recordation of Assignment of Mortgage Notices.
To the extent permitted by applicable law, each of the
Assignments of Mortgage is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected at the Owner's expense at the direction of the Owner. If
applicable, at the Owner's direction, the Servicer shall cause the endorsements
on the Mortgage Note, the Assignment of Mortgage and the assignment of security
agreement to be completed.
Section 2.10. Servicing Compensation.
As consideration for servicing the Mortgage Notes subject to
this Agreement, the Servicer shall receive the relevant Servicing Fee for each
Mortgage Note remaining subject to this Agreement.
In addition, the Servicer shall be entitled to retain as
additional compensation the late charges and other fees and expenses related to
loan assumptions, delinquencies, modifications, partial releases of security and
releases for payment in full, if any, collected under the applicable loan
documents or customarily collected by servicers consistent with Accepted
Servicing Practices.
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The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement thereof except as specifically provided for herein.
Section 2.11. Withdrawals and Substitutions of Mortgage Notes.
Upon notice to the Servicer, the Owner may cause Mortgage
Notes to become subject to the terms of this Agreement or remove Mortgage Notes
from the terms of this Agreement. The addition of Mortgage Notes under this
Section 2.12 shall be in accordance with the provisions of Section 2.01. In
connection with the removal of any Mortgage Notes under this Section 2.12, the
Servicer shall promptly transfer any funds received with respect to such
Mortgage Notes not due to be paid to the Owner or to such other Person as the
Owner may direct, and the Servicer shall take such other actions as the Owner
may reasonably request to transfer the Servicing Files with respect to such
Mortgage Notes to the Owner or at the direction of the Owner.
ARTICLE III
REMITTANCES BY THE SERVICER
Section 3.01. Remittances to Owner.
Subject to the provisions of this Section 3.01, the Servicer
shall cause to be remitted nightly from the applicable Lock-box to the Owner all
amounts collected by the Servicer pursuant to the Mortgage Notes as follows:
(i) All payments on account of principal and
interest received by the Servicer on the Mortgage Notes
including Principal Prepayments (in whole or in part);
(ii) All Liquidation Proceeds, net of expenses
incurred in connection with any liquidation;
(iii) Any amounts required to be deposited or
credited by the Servicer in connection with interest loss or
deferral as a result of a failure to adjust a Mortgage
Interest Rate or Monthly Payment under Section 2.09 hereof.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Servicer.
The Servicer, as a condition to the consummation of the
transactions contemplated hereby, makes the following representations and
warranties to the Owner as of the date hereof:
(a) Due Organization and Authority. The Servicer is a national
banking association duly organized, validly existing and in good standing under
the laws of the United States and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Servicer, and in any event the Servicer is in compliance with
the laws of any such state to the extent necessary to ensure the enforceability
of the terms of this Agreement; the Servicer has the full corporate power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement by the
Servicer and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer and all requisite corporate action has
been taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer of
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's charter
or by-laws or any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject, or impair the ability of the Servicer to service the
Mortgage Notes, or impair the value of the Mortgage Notes;
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(d) Ability to Perform. The Servicer does not believe,
nor does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(e) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to the best of the Servicer's knowledge,
threatened against the Servicer which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of this
Agreement;
(f) No Consent Required. No consent, approval,
authorization or order of any court or governmental agency or body is required
for the execution, delivery and performance by the Servicer of or compliance by
the Servicer with this Agreement, or if required, such approval has been
obtained prior to the date hereof;
(g) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein not misleading.
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Section 4.02. Remedies for Breach of Representations and Warranties of the
Servicer.
It is understood and agreed that the representations and
warranties set forth in Section 4.01 shall survive the engagement of the
Servicer to perform the servicing responsibilities as of the date hereof
hereunder and the delivery of the Servicing Files to the Servicer and shall
inure to the benefit of the Owner. Upon discovery by either the Servicer or the
Owner of a breach of any of the foregoing representations and warranties which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Notes, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property or the interest of
the Owner, the Person discovering such breach shall give prompt written notice
to the other party to this Agreement.
Within 60 days of the earlier of either discovery by or notice
to the Servicer of any breach of a representation or warranty set forth in
Section 4.01 which materially and adversely affects the ability of the Servicer
to perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Notes, the Mortgaged
Property or the priority of the security interest on such Mortgaged Property,
the Servicer shall use its Best Efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Servicer shall, at
the Owner's option, assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Notes) to a successor servicer,
subject to the approval of the Owner, which approval shall be in the Owner's
sole discretion. Such assignment shall be made in accordance with Section 7.01.
In addition, the Servicer shall indemnify the Owner and hold
the Owner harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
reasonable out-of-pocket costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Servicer representations and warranties contained in this Agreement.
Any cause of action against the Servicer relating to or
arising out of the breach of any representations and warranties made in Section
4.01 shall accrue upon (i) discovery of such breach by the Servicer or notice
thereof by the Owner to the Servicer, (ii) failure by the Servicer to cure such
breach within the applicable cure period, and (iii) demand upon the Servicer by
the Owner for compliance with this Agreement.
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ARTICLE V
THE SERVICER
Section 5.01. Corporate Existence of the Servicer; Status as Servicer; Merger.
(a) Subject to Section 5.01(b) hereof, the Servicer shall keep
in full force its existence, rights and franchises as a corporation, 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 the Mortgage Notes and this
Agreement.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the properties and assets of the Servicer substantially as a whole, shall be
the successor of the Servicer 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, provided, however, that the successor or
surviving Person shall execute an agreement of assumption to perform every
obligation of the Servicer hereunder and shall be an institution having a net
worth of not less than $10,000,000.
Section 5.02. Performance of Obligations.
(a) The Servicer shall diligently perform and observe all
of its obligations and agreements contained in this Agreement.
(b) The Servicer shall not take any action, or permit any
action to be taken by others, which would excuse any Person from any of its
covenants or obligations under any Mortgage Note, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, a Mortgage Note or any such instrument, except
as expressly provided herein or therein.
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Section 5.03. The Servicer Not to Resign; Assignment.
(a) The Owner has entered into this Agreement with the
Servicer in reliance upon the status of the Servicer as a mortgage servicer, and
the representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, the Servicer shall not assign
this Agreement or the servicing responsibilities hereunder or delegate its
rights or duties hereunder or any portion hereof (to other than a Subservicer)
or sell or otherwise dispose of all or substantially all of its property or
assets without the prior written consent of the Owner, which consent shall not
be unreasonably withheld by the Owner.
(b) The Servicer shall not resign from the obligations and
duties hereby imposed on it except upon (i) the appointment of a successor
Servicer in the manner provided in Section 7.01, or (ii) the determination that
its duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Owner, which Opinion of Counsel shall be in form
and substance acceptable to the Owner.
(c) Without in any way limiting the generality of this Section
5.03, in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof (to other than a Subservicer) or sell or otherwise dispose of
all or substantially all of its property or assets, without the prior written
consent of the Owner, then the Owner shall have the right to terminate this
Agreement upon notice given as set forth in Section 6.01, without any payment of
any penalty or damages and without any liability whatsoever to the Servicer or
any third party.
(d) Except as provided in this Section 5.03 or Sections 4.02
or 6.01 hereof, the duties and obligations of the Servicer under this Agreement
shall continue until this Agreement shall have been terminated as provided in
Section 7.02 hereof, and shall survive the exercise by the Owner of any right or
remedy under this Agreement or the enforcement by the Owner of this Agreement.
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ARTICLE VI
DEFAULT
Section 6.01. Events of Default.
Any of the following acts or occurrences shall constitute an
Event of Default by the Servicer under this Agreement:
(i) The Servicer shall fail to distribute any
amounts required to be distributed to the Owner pursuant to Section
3.01 hereof, which failure continues unremedied for five days; or
(ii) The Servicer shall fail duly to observe or
perform in any material respects any covenants or agreements of this
Agreement, which failure continues for a period of 60 days after
written notice thereof shall have been given to the Servicer by the
Owner; or
(iii) The entry against the Servicer of a decree or
order of a court or agency or supervisory authority having jurisdiction
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, including bankruptcy, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, which decree or order shall have remained
in force undischarged or unstayed for a period of 60 days; or
(iv) The Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or relating to all or substantially all
of its property; or
(v) The Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency, bankruptcy or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations or cease its
normal business operations for three Business Days.
If an Event of Default hereunder shall have occurred and be
continuing, the Owner may, by notice given to the Servicer, terminate all of the
rights and powers of the Servicer under this Agreement, including without
17
<PAGE>
limitation all rights of the Servicer to receive the servicing compensation.
Upon the giving of such notice, all rights, powers, duties and responsibilities
of the Servicer under this agreement, whether with respect to the Mortgage
Notes, any servicing compensation or otherwise, shall vest in and be assumed by
a new Servicer as provided in Section 7.01, and the Owner is hereby authorized
and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Mortgagors deemed necessary or advisable by the Owner), and to do
or accomplish all other acts or things necessary or appropriate to effect such
vesting and assumption.
By a written notice, the Owner may waive any default by the
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.02. No Effect on Other Parties.
Upon any termination of the rights and powers of the Servicer
from time to time pursuant to Section 6.01 hereof or upon any appointment of a
successor to the Servicer, all the rights, powers, duties and obligations of the
Owner under this Agreement shall remain unaffected by such termination or
appointment and shall remain in full force and effect thereafter, except as
otherwise expressly provided in this Agreement.
Section 6.03. Rights Cumulative.
All rights and remedies from time to time conferred upon or
reserved to the Owner are cumulative, and none is intended to be exclusive of
another. No delay or omission in insisting upon the strict observance or
performance of any provision of this Agreement, or in exercising any right or
remedy, shall be construed as a waiver or relinquishment of such provision, nor
shall it impair such right or remedy. Every right and remedy may be exercised
from time to time and as often as deemed expedient.
18
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 7.01. Successor to the Servicer.
In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to Sections 4.02,
5.03, 6.01 or 7.02, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
servicer shall be appointed by the Owner and such resignation or removal of the
Servicer shall not relieve the Servicer of the representations and warranties
made pursuant to Sections 4.01 and the remedies available to the Owner under
Section 4.02, it being understood and agreed that the provisions of such
Sections 4.01 and 4.02 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.
Within 30 days of the appointment of a successor entity by the
Owner, the Servicer shall prepare, execute and deliver to the successor entity
any and all documents and other instruments, place in such successor's
possession all Servicing Files and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of the notice of
termination described in Section 6.01 and to more fully and definitively vest in
the successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer. The Servicer shall cooperate with the Owner and
such successor in effecting the termination of the Servicer's responsibilities
and rights hereunder and the transfer of servicing responsibilities to the
successor servicer, including, without limitation, the transfer to such
successor for administration by it of all cash amounts received with respect to
the Mortgage Notes by the Servicer after it has received notice of termination.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and the Owner an instrument accepting
such appointment, wherein the successor shall make the representations and
warranties set forth in Section 4.01, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
19
<PAGE>
and liabilities of the Servicer, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the Servicer or
termination of this Agreement pursuant to Sections 4.02, 5.03, 6.01 or 7.02
shall not affect any claims that the Owner may have against the Servicer arising
out of the Servicer's actions or failure to act prior to any such termination or
resignation.
Upon a successor's acceptance of appointment as such, the
Servicer shall notify the Owner by mail of such appointment in accordance with
the procedures set forth in Section 7.04.
Section 7.02. Termination of Agreement.
This Agreement shall commence upon the date hereof and shall,
subject to earlier termination pursuant to the provisions of this Section 7.02,
terminate upon the maturity date of the last loan serviced hereunder. This
agreement may be canceled and terminated (i) at any time hereunder by the Owner
upon 60 days notice by to the Servicer, or (ii) otherwise by mutual agreement of
the parties hereto. In addition, this Agreement may be canceled and terminated
by the Owner, by notice to the Servicer, upon the occurrence of any Event of
Default as described in Section 6.01 hereof, such termination being a
"Termination for Cause."
Section 7.03. Amendment
(a) This Agreement may not be amended except pursuant to
a written instrument executed by the Owner and the Servicer.
Section 7.04. Governing Law.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 7.05. Notices
All demand notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by overnight
courier, delivered in person or mailed by registered or certified United States
mail, postage prepaid, addressed as follows (or such address as may hereafter be
furnished to the other party by like notice):
20
<PAGE>
(a) If to the Owner:
Main Place Real Estate Investment Trust
100 North Tryon Street, 23rd Floor
NC1-007-23-02
Charlotte, North Carolina 28255
Attention: President
(b) If to the Servicer:
NationsBank, N.A.
c/o NationsBank Corporation,
Legal Department
100 North Tryon Street, 20th Floor
Charlotte, North Carolina 28255
Attention: George Walls, Esq.
with a copy to:
NationsBanc Services, Inc.
4161 Piedmont Parkway
Greensboro, North Carolina 27410
Attention: Charles Brummitt
All notices and communications shall be deemed to
have been received either at the time of the personal delivery thereof to any
officer of the person entitled to receive such notices and communications at the
address of such person for notices hereunder, or on the third day after the
mailing thereof to such address, as the case may be.
Section 7.06. Severability of Provisions.
If one or more of the provisions of this Agreement shall be
for any reason whatever held invalid or unenforceable, such provisions shall be
deemed severable from the remaining covenants, agreements and provisions of this
Agreement and such invalidity of unenforceability shall in no way affect the
validity or enforceability of such remaining provisions or the rights of any
parties hereto. To the extent permitted by law, the parties hereto hereby waive
any provision of law which renders any provision of this Agreement invalid or
unenforceable in any respect.
21
<PAGE>
Section 7.07. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Owner, during the Servicer's normal business
hours, to examine all the books of account, records, reports and other papers of
the Servicer relating to the Mortgage Notes, to make copies and extracts
therefrom, to cause such books to be audited by Independent Accountants selected
by the Owner, and to discuss its affairs, finances and accounts relating to the
Mortgage Notes with officers, employees and Independent Accountants of the Owner
(and by this provision the Servicer hereby authorizes said accountants to
discuss with such representatives such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any expense
incident to this Section 7.07 shall be borne by the Owner, provided that if an
audit is made during the continuance of an Event of Default, the expense
incident to such audit shall be borne by the Servicer.
Section 7.08. Binding Effect.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto.
Section 7.09. 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 7.10. Counterparts.
This Agreement may be executed in counterparts, each of which
shall be deemed an original for all purposes and all of which constitute,
collectively, one Agreement.
22
<PAGE>
IN WITNESS WHEREOF, the Owner and the Servicer have caused
this Agreement to be duly executed by their respective officers duly authorized
as of the day and year first above written.
MAIN PLACE REAL ESTATE
INVESTMENT TRUST
By: /s/ Gary S. Williams
----------------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ Gary S. Williams
------------------------
Name: Gary S. Williams
Title: Senior Vice President
Exhibit 10(n)
ADVISORY AGREEMENT
THIS AGREEMENT is made this 1st day of November between MAIN PLACE REAL
ESTATE INVESTMENT TRUST, a Maryland real estate investment trust (the "Trust"),
and NATIONSBANK, N.A., a national banking association (the "Advisor").
Capitalized terms used herein shall have the meanings set forth in Section 1 of
this Agreement.
WHEREAS, the Trust intends to qualify as a "real estate investment
trust" ("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, the Trust desires to avail itself of the experience and
assistance of the Advisor and to have the Advisor undertake, on the Trust's
behalf, the duties and responsibilities hereinafter set forth, subject to the
control and supervision of the Board of Trustees of the Trust (the "Board of
Trustees") as provided for herein; and
WHEREAS, the Advisor desires to render such services for the Trust
subject to the control and supervision of the Board of Trustees, on the terms
and conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
Section 1.
Definitions. As used herein, the following terms shall have the
respective meanings set forth below:
"Advisor" has the meaning set forth in the recitals of this Agreement.
"Advisor Termination Date" means the date on which this Agreement
terminates.
"Agreement" means this Advisory Agreement, as amended, modified and
supplemented from time to time.
"Board of Trustees" has the meaning set forth in the forepart of this
Agreement.
"Code" has the meaning set forth in the recitals of this Agreement.
"Independent Trustee" means the member or members of the Board of
Trustees of the Trust who are not current employees of the Trust, NationsBank
Corporation, the Advisor or any affiliate of the Advisor, provided that the
Independent Trustee may be an officer of the Trust.
<PAGE>
"Person" means and includes individuals, corporations, limited
partnerships, general partnerships, joint stock companies or associations,
limited liability companies, joint ventures, associations, consortia, companies,
trusts, banks, trust companies, land trusts, common law trusts, business trusts
or other entities, governments and agencies and political subdivisions thereof.
"REIT" has the meaning set forth in the recitals of this Agreement.
"Trust" has the meaning set forth in the recitals of this Agreement.
Section 2.
Duties of Advisor. The Advisor shall consult with the Board of
Trustees and the officers of the Trust and shall, at the request of the Board of
Trustees or the officers of the Trust, furnish advice and recommendations with
respect to all aspects of the business and affairs of the Trust. Subject to the
control and sole discretion and at the request of the Board of Trustees, the
Advisor shall:
(a) administer the day-to-day operations and affairs
of the Trust, including without limitation, the performance or
supervision of the functions described in this Section 2;
(b) monitor the credit quality of the mortgage loans
and other real estate mortgage assets held by the Trust;
(c) advise the Trust with respect to the acquisition,
management, financing and disposition of the Trust's mortgage loans and
other real estate mortgage assets;
(d) represent the Trust in its day-to-day dealings
with Persons with whom the Trust interacts, including without
limitation, securityholders of the Trust, transfer agents, consultants,
accountants, attorneys, servicers of the Trust's mortgage loans,
custodians, insurers and banks;
(e) establish and provide necessary services for the
Trust, including executive, administrative, accounting, shareholder
relations, secretarial, recordkeeping, copying, telephone, mailing and
distribution facilities;
(f) provide the Trust with office space, conference
room facilities, office equipment and personnel necessary for the
services to be performed by the Advisor hereunder at a reasonable
market price;
(g) arrange, schedule and coordinate the regular and
special meetings of the Board of Trustees required to conduct the
affairs of the Trust or for timely action on any matters the Trust is
required to act upon to implement all decisions of the Board of
Trustees, unless otherwise instructed, with regard to the Trust and its
assets;
<PAGE>
(h) maintain communications and relations with the
securityholders of the Trust, including but not limited to, responding
to inquiries, proxy and consent solicitations, providing reports to
securityholders and arranging and coordinating all meetings of
securityholders;
(i) arrange for the investment and management of any
short-term investments of the Trust;
(j) arrange for the services of third parties,
including but not limited to mortgage loan servicers who may be the
Advisor or affiliates of the Advisor, to collect and distribute funds
of the Trust and to perform such functions as the Board of Trustees
shall from time to time require;
(k) monitor and supervise the performance of all
parties who have contracts to perform services for the Trust, provided
that the Advisor shall have no duty to assume the obligations or
guarantee the performance of such parties under such contracts;
(l) establish and maintain such bank accounts in the
name of the Trust as may be required by the Trust and approved by the
Board of Trustees and ensure that all funds collected by the Advisor in
the name or on behalf of the Trust shall be held in trust and shall not
be commingled with the Advisor's own funds or accounts;
(m) arrange for the execution and delivery of such
documents and instruments by the officers of the Trust as may be
required in order to perform the functions herein described and to take
any other required action;
(n) arrange for insurance for the Trust to be paid for
by Trust, including liability insurance, errors and omissions policies
and officers and directors policies which shall cover and insure the
Trust, members of the Board of Trustees and the officers of the Trust
in amounts and with deductibles and insurers approved by the Board of
Trustees;
(o) maintain proper books and records of the Trust's
affairs and furnish or cause to be furnished to the Board of Trustees
such periodic reports and accounting information as may be required
from time to time by the Board of Trustees, including, but not limited
to quarterly reports of all income and expenses of and distributions of
the Trust;
(p) consult and work with legal counsel for the Trust to
implement Trust decisions and undertake measures consistent with all
pertinent Federal, state and local laws and rules or regulations of
governmental or quasi-governmental agencies, including, but not limited
to, Federal and state securities laws, the Code, as it relates to the
Trust's qualification as a REIT, a REMIC or a FASIT, and the
regulations promulgated under each of the foregoing;
<PAGE>
(q) consult and work with accountants for the Trust in
connection with the preparation of financial statements, annual reports
and tax returns;
(r) arrange for an annual audit of the books and records
of the Trust by the accounting firm designated for such purposes by the
Board of Trustees;
(s) prepare and distribute in consultation with the
accountants for the Trust, annual reports to securityholders, the
trustee under any indenture of trust to which the Trust is a party or
the Securities and Exchange Commission, which will contain audited
financial statements;
(t) furnish reports to the Board of Trustees and provide
research, economical and statistical data in connection with the
Trust's investments; and
(u) as reasonably requested by the Trust, make reports to
the Trust of its performance of the foregoing services and furnish
advice and recommendations with respect to other aspects of the
business of the Trust.
Section 3. Compensation. The Trust shall pay to the Advisor, for
services rendered by the Advisor hereunder, a management fee payable annually in
an amount equal to $500,000 per year, subject to adjustment upon 90 days' notice
by the Advisor to the Trust of the proposed change and the Trust's consent
thereto.
Expenses of the Advisor. (a) Without regard to the compensation
received pursuant to Section 3, the Advisor will bear the following expenses:
(i) employment expenses of the personnel
employed by the Advisor, including without limitation,
salaries, wages, payroll taxes and the cost of employee
benefit plans; and
(ii) rent, telephone equipment, utilities,
office furniture and equipment and machinery and other office
expenses of the Advisor incurred in connection with the
maintenance of any office facility of the Advisor.
(b) The Trust shall reimburse the Advisor within 30 days of a
written request by the Advisor for any expenses referenced in (a)
<PAGE>
above. All other expenses shall be paid by the party receiving the
benefit of the services rendered.
Section 5. Records. The Advisor shall maintain appropriate books of
account and records relating to services performed hereunder, and such books of
account and records shall be accessible for inspection by the Board of Trustees
or representatives of the Trust at all times.
Section 6. REIT Qualification and Compliance. The Advisor shall
consult and work with the Trust's legal counsel in maintaining the Trust's
qualification as a REIT. Notwith-standing any other provisions of this Agreement
to the contrary, the Advisor shall refrain from any action which, in its
reasonable judgment or in the judgment of the Board of Trustees (of which the
Advisor has received written notice), would adversely affect the qualification
of the Trust as a REIT or which would violate any law, rule or regulation of any
governmental body or agency having jurisdiction over the Trust or its
securities, or which would otherwise not be permitted by the declaration of
trust or bylaws of the Trust. Furthermore, the Advisor shall take any action
which, in its judgment or the judgment of the Board of Trustees (of which the
Advisor has received written notice), may be necessary to maintain the
qualification of the Trust as a REIT or prevent the violation of any law or
regulation of any governmental body or agency having jurisdiction over the Trust
or its securities.
Section 7. Term; Termination. This Agreement shall be in full force
and effect for a term beginning on the date hereof with an initial term of five
years, and will be renewed automatically for additional five year periods unless
the Trust delivers a notice of nonrenewal to the Advisor not less than 90 days
prior to the expiration of the initial term of this Agreement or 90 days prior
to the expiration of any renewal term. Notwithstanding the foregoing, at any
time after the initial term, the Trust may terminate this Agreement, in its sole
discretion, upon 90 days' prior notice.
Section 8. Other Activities of the Advisor.
(a) Nothing herein contained shall prevent the Advisor, an
affiliate of the Advisor or an officer, a director, employee or
stockholder of the Advisor from engaging in any activity, including
without limitation, originating, purchasing and managing mortgage loans
and other real estate assets, rendering of services and investment
advice with respect to real estate investment opportunities to any
other Person (including other REITs) and managing other investments
(including the investments of the Advisor and its affiliates);
(b) Trustees, officers, stockholders, employees and agents
of the Advisor or of the affiliates of the Advisor may serve as
directors, officers, employees or agents of the Trust but shall receive
no
<PAGE>
compensation (other than reimbursement for expenses) from the Trust for
such service.
Section 9. Binding Effect; Assignment. This Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
successors and assigns. Neither party may assign this Agreement or any of its
respective rights hereunder (other than an assignment to a successor
organization which acquires substantially all of the property of such party or,
in the case of the Advisor, to an affiliate of the Advisor) without the prior
written consent of the other party to this Agreement.
Section 10. Subcontracting. The Advisor may at any time subcontract
all or a portion of its obligations under this Agreement to any affiliate of the
Advisor without the consent of the Trust. The Advisor shall not subcontract, and
shall not permit any of its affiliates to subcontract, any of its obligations
under this Agreement to Persons who are not affiliates of the Advisor.
Notwithstanding the foregoing, the Advisor will not, in connection with
subcontracting any of its obligations under this Agreement, be relieved or
discharged in any respect from its obligations under this Agreement.
Section 11. Liability and Indemnity of the Advisor. The Advisor
assumes no responsibilities under this Agreement other than to perform the
services called for hereunder in good faith. Neither the Advisor nor any of its
affiliates, stockholders, directors, officers or employees will have any
liability to the Trust, or shareholders of the Trust, or others except by reason
of acts or omissions constituting gross negligence or wilful breach of any of
its material obligations under this agreement. The Trust shall indemnify and
reimburse (if necessary) the Advisor, its stockholders, directors, officers,
employees and agents for any and all expenses, including without limitation,
attorneys' fees, losses, damages, liabilities, demands and charges of any nature
whatsoever in respect of or arising from any acts or omissions by the Advisor
pursuant to this Agreement, provided that the conduct against which the claim is
made was determined by such person, in good faith, to be in the best interest of
the Trust and was not the result of gross negligence by such person or willful
breach of any of such person's material obligations by such person. The Advisor
agrees that any such indemnification is recoverable only from the assets of the
Trust and not from the shareholders.
Section 12. Action Upon Notice of Non-Renewal or Termination.
Forthwith upon giving of notice of non-renewal of this Agreement by the Trust or
of termination of this Agreement by the Trust, the Advisor shall not be entitled
to compensation after the Advisor Termination Date for further services under
this Agreement but shall be paid all compensation accruing to the Advisor
Termination Date and shall be reimbursed for all expenses of the Trust paid or
incurred by the Advisor as of the Advisor Termination Date which are
reimbursable by the Trust under this Agreement. The Advisor shall promptly after
the Advisor Termination Date:
<PAGE>
(i) deliver to the Trust all assets and documents of the
Trust then in the custody of the Advisor; and
(ii) cooperate with the Trust and take all reasonable steps
requested to assist the Board of Trustees in making an orderly transfer
of the administrative functions of the Trust.
Section 13. No Joint Venture or Partnership. Nothing in this
Agreement shall be deemed to create a partnership or joint venture between the
parties, whether for purposes of taxation or otherwise.
Section 14. Notices. Unless expressly provided otherwise herein, all
notices, request, demands and other communications required or permitted under
this Agreement shall be in writing and shall be made by hand delivery, certified
mail, overnight courier service, fax, telex or telecopier. Any notice shall be
duly addressed to the parties as follows:
If to the Trust:
Main Place Real Estate
Investment Trust
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: John E. Mack
Fax No.: (704) 386-0270
If to the Advisor:
NationsBank, N.A.
c/o NationsBank Corporation, Legal Department
100 North Tryon Street, 20th Floor
Charlotte, North Carolina 28255
Attention: George Walls, Esq.
Fax No.: (704) 386-6453
Either party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity with the
provisions of this Section 14 for the giving of notice.
Section 15. Severability. If any term or provision of this Agreement
or the application thereof with respect to any Person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of that term or provision to persons or circumstances other than
<PAGE>
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
Section 16. Governing Law. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of New York.
Section 17. Amendments. This Agreement shall not be amended,
changed, modified, terminated or discharged in whole or in part except by an
instrument in writing signed by both parties hereto or their respective
successors or assigns, or otherwise as provided herein.
Section 18. Headings. The section headings herein have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first above written.
MAIN PLACE REAL ESTATE INVESTMENT
TRUST
By: /s/ Gary S. Williams.
---------------------------
Name: Gary S. Williams
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ Gary S. Williams.
--------------------------
Name: Gary S. Williams
Title: Senior Vice President
<PAGE>
CONTRIBUTION AGREEMENT
DATED AS OF SEPTEMBER 20, 1996
This Contribution Agreement (the "Agreement") dated as of
September 20, 1996, is between Main Place Funding Corporation, a Delaware
corporation (the "Issuer"), and NationsBank, N.A. (South), a national banking
association ("NationsBank South").
WITNESSETH THAT:
WHEREAS, NationsBank South desires to transfer legal and
equitable title to certain of the mortgage notes which are listed in Exhibit A
attached hereto (the "Mortgage Notes") to the Issuer pursuant to the terms of
this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter contained, it is mutually covenanted and agreed as follows:
1. CONTRIBUTION OF MORTGAGE NOTES. NationsBank South does
hereby transfer, assign, set over and otherwise convey to the Issuer all of its
right, title and interest in and to the Mortgage Notes, including all interest
and principal received or receivable by it on or with respect to the Mortgage
Notes after the date of this Agreement, together with all of its right, title
and interest in and to the proceeds of any related title, hazard, private
mortgage or other insurance policies.
At the direction of the Issuer, NationsBank South hereby
delivers to the Trustee or the Custodian all documents, instruments and
agreements required to be delivered by the Issuer to the Trustee or the
Custodian, respectively, under the Indenture of Trust dated as of October 31,
1995, (the "Indenture"), between the issuer and First Trust National
Association, as trustee (the "Trustee"), relating to the issuance by the Issuer
of its Mortgage-Backed Bonds, Series 1995-2 Due 2000. Terms used without
definition herein shall have the respective meanings assigned to them in the
Indenture.
2. REPRESENTATIONS AND WARRANTIES. NationsBank South hereby
represents and warrants to the Issuer as of the date of this Agreement (unless
otherwise indicated) that:
(i) the information set forth with respect to the
Mortgage Notes in Exhibit A hereto is true and correct in all
material respects at the date or dates respecting which such
information is furnished as specified therein;
(ii) NationsBank South is the sole owner and holder
of each Mortgage Note, free and clear of any and all liens,
pledges, charges or security interests of any nature and has
full right and authority to sell and assign the same;
(iii) each Mortgage Note is either an Eligible
Adjustable-Rate Mortgage Note or an Eligible Fixed-Rate
Mortgage Note, as applicable, and all of the Mortgage Notes,
individually and collectively, are Eligible Mortgage Notes;
<PAGE>
(iv) to the best of NationsBank South's knowledge,
all taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges previously due and owing
have been paid, or an escrow of funds in an amount sufficient
to pay for every such item which remains unpaid has been
established to the extent permitted by law; and NationsBank
South has not advanced funds, directly or indirectly, for the
payment of any amount required by any Mortgage, except for
interest accruing from the date of related Mortgage note or
date of disbursement of any Mortgage Note proceeds, whichever
is later, to the date which precedes by 30 days the first due
date under any related Mortgage Note;
(v) to the best of NationsBank South's knowledge,
there is no proceeding pending or threatened for the total or
partial condemnation of any Mortgaged Property and any
Mortgaged Property is undamaged by water, fire, earthquake or
earth movement, windstorm, flood, tornado or similar casualty
(excluding casualty from the presence of hazardous wastes or
hazardous substances, as to which NationsBank South makes no
representation), so as to affect adversely the value of any
Mortgaged Property as security for any Mortgage Note or the
use for which such premises were intended;
(vi) each Mortgage Note meets, or is exempt from,
applicable state or federal laws, regulations and other
requirements pertaining to usury, and such Mortgage Note is
not usurious; any and all requirements of any federal, state
or local law with respect to the origination of the Mortgage
Notes including, without limitation, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage notes have been complied with;
(vii) each Mortgage Note, related Mortgage and other
agreements executed in connection therewith are genuine, and
each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and, to the
best of NationsBank South's knowledge, all parties to each
Mortgage Note had legal capacity to execute each such Mortgage
Note and each such Mortgage Note has been duly and properly
executed by the mortgagor;
(viii) the Mortgaged Property securing each Mortgage
Note is insured by an insurer acceptable to FNMA or FHLMC
against loss by fire and such hazards as are covered under a
standard extended coverage endorsement, in an amount which is
not less than the lesser of 100% of the insurable value of the
Mortgaged Property and the outstanding principal balance of
the Mortgage Note, but in no event less than the minimum
amount necessary to fully compensate for any damage or loss on
a replacement cost basis; if the Mortgaged Property is a
condominium
-2-
<PAGE>
unit, it is included under the coverage afforded by a blanket
policy for the project; if upon origination of the Mortgage
Note, the improvements on the Mortgaged Property were in an
area indemnified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a
flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in
effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Note, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act of 1973; and each Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the
mortgagor's cost and expense;
(ix) to the best of the NationsBank South's
knowledge, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of
acceleration; NationsBank South has not waived any default,
breach, violation or event of acceleration; no foreclosure
action is threatened or has been commenced by NationsBank
South with respect to any Mortgage Note;
(x) each Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including
realization by judicial foreclosure (subject to any limitation
arising from any bankruptcy, insolvency or other law for the
relief of debtors), and there is no homestead or other law for
the relief of debtors), and there is no homestead or other
exemption available to the mortgagor which would interfere
with such right of foreclosure; and
(xi) to the best of NationsBank South's knowledge,
no mortgagor is a debtor in any state or federal bankruptcy or
insolvency proceeding.
No representations or warranties are made by
NationsBank South as to the absence or effect of hazardous wastes or hazardous
substances on any of the Mortgaged Properties or on the lien of any Mortgage or
with respect to the absence or effect of fraud in the origination of any
Mortgage Note, and any loss or liability resulting from the presence or effect
of such hazardous wastes, hazardous substances or fraud will be borne solely by
the Issuer.
3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to principles of conflicts of law.
4. COUNTERPARTS. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one Agreement.
-3-
<PAGE>
IN WITNESS WHEREOF, the Issuer and NationsBank South have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
MAIN PLACE FUNDING CORPORATION
By: /s/ John E. Mack
Name: John E. Mack
Title: President and Treasurer
NATIONSBANK, N.A. (SOUTH)
By: /s/ John E. Mack
Name: John E. Mack
Title: Senior Vice President
-4-
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<FISCAL-YEAR-END> DEC-31-1995
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0
0
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