SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) January 1, 1998
TMS Auto Holdings, Inc. (as Seller) under a Sale and Servicing
Agreement dated as of November 30, 1997 in connection with the
issuance of The Money Store Auto Trust Asset Backed Securities.
TMS Auto Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-14075 22-3405381
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
1625 West North Market Blvd., Sacramento, California 95834
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (916) 928-4400
N/A
(Former name or former address, if changed since last report)
Item 5. Other Event
TMS Auto Holdings, Inc. (the "Seller") registered issuances of up to
$1,100,000,000 principal amount of The Money Store Auto Trust Asset Backed
Securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Act"), by a Registration Statement on
Form S-3 (Registration File No. 333-14075)(as amended, the "Registration
Statement"). Pursuant to the Registration Statement, the Seller caused The Money
Store Auto Trust 1997-4 (the "Trust") to issue $17,500,000 aggregate principal
amount of its Class A-1 5.90875% Asset Backed Notes (the "Class A-1 Notes"),
$44,500,000 aggregate principal amount of its Class A-2 6.35% Asset Backed Notes
(the "Class A-2 Notes") and $28,000,000 aggregate principal amount of its Class
A-3 6.46% Asset Backed Notes (the "Class A-3 Notes" and, together with the Class
A-1 Notes and the Class A-2 Notes, the "Notes") on December 30, 1997, (the
"Closing Date"). This Current Report on Form 8-K is being filed to file a copy
of the Indenture, Trust Agreement and Sale and Servicing Agreement referred to
below and the Underwriting Agreement and Pricing Agreement, each dated December
16, 1997 by and among The Money Store Inc., the Seller and Salomon Brothers Inc.
The Notes were issued pursuant to an Indenture dated as of November 30,
1997, between the Trust and The Chase Manhattan Bank, as Trustee and Indenture
Collateral Agent (the "Indenture"). The Trust was formed, pursuant to a Trust
Agreement dated as of November 30, 1997 between the Seller and Bankers Trust
(Delaware), as Owner Trustee (the "Trust Agreement"). The Initial Receivables
were conveyed to the Trust pursuant to a Sale and Servicing Agreement dated as
of November 30, 1997 by and among the Seller, The Money Store Inc., the Trust
and The Money Store Auto Finance Inc. (the "Sale and Servicing Agreement").
On the Closing Date, the Seller delivered to the Trust Initial Receivables
in the amount of $68,514,248.92. On the Closing Date, the Seller also caused to
be deposited an aggregate cash amount (the "Pre-Funded Amount") into the
Pre-Funding Account in the amount of $21,485,751.08. The Pre-Funded Amount may
be used during the Funding Period (as defined below) only (i) to acquire
Subsequent Receivables and (ii) to make accelerated payments of principal on the
Securities as described in the Indenture, Trust Agreement and Sale and Servicing
Agreement. The Funding Period is defined in the Sale and Servicing Agreement as
the period commencing on the Closing Date and terminating on the earliest of (i)
the date on which the amount on deposit in the Pre-Funding Account is less than
$200,000, (ii) a Servicer Default occurs under the Sale and Servicing Agreement
or (iii) February 20, 1998, after giving effect to the purchase of Subsequent
Receivables on such date.
Capitalized terms not defined herein have the meanings assigned in the Sale
and Servicing Agreement attached hereto as Exhibit 4.1.
Certain Characteristics
The final characteristics of the Initial Receivables was filed by an 8K on
January 14, 1998.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No.
1.1 Underwriting Agreement, dated December 16, 1997, among The Money Store
Inc., TMS Auto Holdings, Inc. and Salomon Brothers Inc
1.2 Pricing Agreement, dated December 16, 1997, between The Money Store Inc.,
TMS Auto Holdings, Inc. and Salomon Brothers Inc
4.1 Sale and Servicing Agreement, dated as of November 30, 1997, among The
Money Store Inc., TMS Auto Holdings, Inc., The Money Store Auto Finance
Inc. and The Money Store Auto Trust 1997-4.
4.2 Indenture, dated as of November 30, 1997, between The Money Store Auto
Trust 1997-4 and The Chase Manhattan Bank.
4.3 Trust Agreement, dated as of November 30, 1997, by and between TMS Auto
Holdings, Inc. and Bankers Trust (Delaware).
99.1 Form of Financial Guaranty Insurance Policy covering the Notes to be issued
by MBIA Insurance Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TMS AUTO HOLDINGS, INC.
By: /s/ Michael H. Benoff
----------------------
Name: Michael H. Benoff
Title: Executive Vice President
Dated: January 14, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No.
Description of Exhibit
1.1 Underwriting Agreement, dated December 16, 1997, among The Money Store
Inc., TMS Auto Holdings, Inc. and Salomon Brothers Inc
1.2 Pricing Agreement, dated December 16, 1997, between The Money Store Inc.,
TMS Auto Holdings, Inc. and Salomon Brothers Inc
4.1 Sale and Servicing Agreement, dated as of November 30, 1997, among The
Money Store Inc., TMS Auto Holdings, Inc., The Money Store Auto Finance
Inc. and The Money Store Auto Trust 1997-4.
4.2 Indenture, dated as of November 30, 1997, between The Money Store Auto
Trust 1997-4 and The Chase Manhattan Bank.
4.3 Trust Agreement, dated as of November 30, 1997, by and between TMS Auto
Holdings, Inc. and Bankers Trust (Delaware).
99.1 Form of Financial Guaranty Insurance Policy covering the Notes to be issued
by MBIA Insurance Corporation.
THE MONEY STORE INC.
TMS AUTO HOLDINGS, INC.
The Money Store Auto Trust 1997-4
$17,500,000 Class A-1 5.90875% Asset Backed Notes
$44,500,000 Class A-2 6.35% Asset Backed Notes
$28,000,000 Class A-3 6.46% Asset Backed Notes
UNDERWRITING AGREEMENT
December 16, 1997
SALOMON BROTHERS INC
as Representative (the "Representative")
of the several Underwriters named
herein
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation ("TMSI") and TMS Auto
Holdings, Inc., a Delaware corporation (the "Seller") propose to cause THE MONEY
STORE AUTO TRUST 1997-4 (the "Trust") to issue and sell $17,500,000 principal
amount of its Class A-1 5.90875% Asset Backed Notes (the "Class A-1 Notes"),
$44,500,000 principal amount of its Class A-2 6.35% Asset Backed Notes (the
"Class A-2 Notes") and $28,000,000 principal amount of its Class A-3 6.46% Asset
Backed Notes (the "Class A-3 Notes" and, together with the Class A-1 Notes and
the Class A-2 Notes, the "Notes") to the several underwriters named in Schedule
I attached hereto (the "Underwriters"). The assets of the Trust include, among
other things, a pool of non-prime receivables generated pursuant to motor
vehicle retail installment sale contracts (the "Initial Receivables") acquired
by the Seller pursuant to a purchase agreement dated as of November 30, 1997
(the "Purchase Agreement") between the Seller and TMS Auto Finance, Inc., all
monies received under the Initial Receivables after, with respect to each
Initial Receivable, the later of (x) November 30, 1997 and (y) the date of its
origination (the "Initial Cutoff Date"), additional receivables generated
pursuant to motor vehicle retail installment sale contracts (the "Subsequent
Receivables," and together with the Initial Receivables, the "Receivables") to
be conveyed to the Trust subsequent to the date of issuance of the Notes and all
monies received under the Subsequent Receivables after their respective
subsequent cutoff dates (each, a "Subsequent Cutoff Date"), an assignment of the
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, a note guaranty insurance policy issued by MBIA Insurance
Corporation (the "Insurer") to the Indenture Trustee (as defined below) for the
benefit of the Noteholders (the "Note Policy"), and certain other property and
the proceeds thereof to be conveyed to the Trust pursuant to the Sale and
Servicing Agreement to be dated as of November 30, 1997 (the "Sale and Servicing
Agreement") among the Trust, the Seller, TMSI and TMS Auto Finance Inc., as
servicer (the "Servicer"). Pursuant to the Sale and Servicing Agreement, the
Seller will sell the Receivables to the Trust and the Servicer will service the
Receivables on behalf of the Trust. In addition, pursuant to the Sale and
Servicing Agreement, the Servicer will agree to perform certain administrative
tasks imposed on the Trust under the Indenture. The Notes will be issued
pursuant to the Indenture to be dated as of November 30, 1997 (as amended and
supplemented from time to time, the "Indenture"), between the Trust and The
Chase Manhattan Bank, a New York banking corporation (the "Indenture Trustee"
and in its capacity as collateral agent, the "Indenture Collateral Agent"). The
Trust also will issue one or more certificates representing the ownership
interest in the Trust (the "Certificates"). The Note Policy will be issued
pursuant to the Insurance Agreement dated as of November 30, 1997 by and among
the Insurer, TMSI, the Seller, the Servicer, the Trust, the Indenture Trustee
and Bankers Trust (Delaware), as owner trustee (the "Owner Trustee"). In
connection with the transactions contemplated hereby, the Representative, the
Insurer and TMSI will enter into an Indemnification Agreement dated as of
December 16, 1997 (the "Indemnification Agreement").
Prior to the delivery of the Notes by the Seller, and the public
offering thereof by the Underwriters, the Representative, the Seller and TMSI
shall enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"), which shall specify such applicable information as is
indicated in, and be in substantially the form of, Exhibit A hereto. The
offering of the Notes will be governed by this Agreement, as supplemented by the
Pricing Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement. Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
The Seller and TMSI understand that the Underwriters propose to make a
public offering of the Notes as soon as the Underwriters deem advisable after
the Pricing Agreement has been executed and delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF TMSI AND THE SELLER.
(a) TMSI and the Seller represent and warrant to each of the
Underwriters as of the date hereof and, if the Pricing Agreement is executed on
a date other than the date hereof, as of the date of the Pricing Agreement (such
latter date being hereinafter referred to as the "Representation Date") as
follows:
(i) TMSI and the Seller have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-14075) including a prospectus, and such amendments thereto as may
have been required to the date hereof, relating to the Notes and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and such registration
statement, as amended, has become effective. Such registration statement,
as amended, and the prospectus relating to the sale of the Notes
constituting a part thereof as from time to time amended or supplemented
(including any prospectus supplement (the "Prospectus Supplement") filed
with the Commission pursuant to Rule 424 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") and any
information incorporated therein by reference are respectively referred to
herein as the "Registration Statement" and the "Prospectus." The conditions
of Rule 415 under the 1933 Act have been satisfied with respect to TMSI,
the Seller and the Registration Statement.
(ii) At the time the Registration Statement became effective and
at the Representation Date, the Registration Statement complied and will
comply in all material respects with the requirements of the 1933 Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
1933 Act Regulations, and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the Representation Date (unless the term "Prospectus" refers
to a prospectus which has been provided to the Underwriters by TMSI and the
Seller for use in connection with the offering of the Notes which differs
from the Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case at the time it is first provided
to the Underwriters for such use) and at Closing Time referred to in
Section 2 hereof, will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to TMSI and the Seller in writing by
any Underwriter through the Representative expressly for use in the
Registration Statement or Prospectus and provided further, that TMSI and
the Seller make no representations or warranties as to any information in
any Computational Materials (as defined in Section 11 below) provided by
any Underwriter to TMSI and the Seller pursuant to Section 11, except to
the extent of any errors in the Computational Materials that are caused by
errors in the pool information provided by TMSI and the Seller to the
applicable Underwriter. The conditions to the use by TMSI and the Seller of
a registration statement on Form S-3 under the 1933 Act, as set forth in
the General Instructions to Form S-3, have been satisfied with respect to
the Registration Statement and the Prospectus.
(iii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Seller, the Servicer, TMSI and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, which would have a material adverse effect on the ability of
each of TMSI, the Seller and the Servicer to perform its obligations under
the Basic Documents (as defined below) to which it is a party and (B) there
have been no transactions entered into by the Seller, the Servicer, TMSI or
any of its subsidiaries, other than those in the ordinary course of
business, which would have a material adverse effect on the ability of the
Seller, the Servicer or TMSI to perform its obligations under this
Agreement, the Pricing Agreement, the Sale and Servicing Agreement, the
Trust Agreement, the Purchase Agreement, the Indemnification Agreement and
the Insurance Agreement (this Agreement, the Pricing Agreement, the Sale
and Servicing Agreement, the Trust Agreement, the Purchase Agreement, the
Indemnification Agreement and the Insurance Agreement being herein referred
to, collectively, as the "Basic Documents") to which it is a party.
(iv) Each of TMSI, the Seller and the Servicer has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation with all requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Basic Documents to which it is a party; and each is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on, (A) the ability of any of TMSI, the Seller or the
Servicer to perform its obligations under the Basic Documents to which it
is a party, or (B) the business, properties, financial position, operations
or results of operations of TMSI, the Seller or the Servicer.
(v) Any person who signed this Agreement on behalf of TMSI or the
Seller was, as of the time of such signing and delivery, and is now duly
elected or appointed, qualified and acting, and the Agreement, as so
executed, is duly and validly authorized, executed, and constitutes the
valid, legal and binding agreement of each of TMSI and the Seller,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity regardless of whether such enforcement is considered
in a proceeding in equity or at law.
(vi) Each Basic Document to which it is a party has been duly and
validly authorized by TMSI, the Seller and the Servicer and, when executed
and delivered by TMSI, the Seller and the Servicer, as the case may be, and
duly and validly authorized, executed and delivered by the other parties
thereto, will constitute, the valid and binding agreement of TMSI, the
Seller and the Servicer, as the case may be, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights in general and by general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law; and such Basic Documents and the Policies conform in all
material respects to the statements relating thereto contained in the
Prospectus.
(vii) The Notes, when duly and validly executed by the Indenture
Trustee, authenticated and delivered in accordance with the Indenture, and
delivered and paid for pursuant hereto will be validly issued and
outstanding and entitled to the benefits of the Indenture. The Notes
conform in all material respects to all statements relating thereto
contained in the Prospectus.
(viii) Neither the grant of the security interest in the
Collateral to the Indenture Collateral Agent pursuant to the Indenture, nor
the issuance or delivery of the Notes, nor the consummation of any other of
the transactions herein contemplated or in any other Basic Document, nor
the execution and delivery by each of TMSI, the Seller and the Servicer of
the Basic Documents to which it is a party, nor the fulfillment of the
terms of the Notes or each such Basic Document will result in the breach of
any term or provision of the charter or by-laws of TMSI, the Seller or the
Servicer, and none of TMSI, the Seller and the Servicer is in breach or
violation of or in default (nor has an event occurred which with notice or
lapse of time or both would constitute a default) under the terms of (A)
any material obligation, agreement, covenant or condition contained in any
material contract, indenture, loan agreement, note, lease or other material
instrument to which it is a party or by which it may be bound, or to which
any of its property or assets is subject, or (B) any law, decree, order,
rule or regulation applicable to TMSI, the Seller, the Servicer or the
Receivables of any court or supervisory, regulatory, administrative or
governmental agency, body or authority, or arbitrator having jurisdiction
over any such entity or its properties or the Receivables, the default in
or the breach or violation of which would have a material adverse effect on
TMSI, the Seller or the Servicer or the ability of any such entity to
perform its obligations under the Basic Documents to which it is a party;
and neither the issuance or delivery of the Notes, nor the consummation of
any other of the transactions herein contemplated, nor the fulfillment of
the terms of the Notes or the Basic Documents will result in such a breach,
violation or default which would have such a material adverse effect.
(ix) Except as described in the Prospectus, there is no action,
suit or proceeding against or investigation of TMSI, the Seller or the
Servicer now pending, or, to the knowledge of TMSI or the Seller,
threatened against TMSI, the Seller or the Servicer, before any court,
governmental agency or body (A) which is required to be disclosed in the
Prospectus (other than as disclosed therein) or (B) (1) asserting the
invalidity of any Basic Document or the Notes, (2) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by the Basic Documents, (3) which would materially and
adversely affect the performance by any of TMSI, the Seller or the Servicer
of its obligations under the Basic Documents to which it is a party, or the
validity or enforceability of any Basic Document or the Notes or (4)
seeking to adversely affect the federal income tax attributes of the Notes
described in the Prospectus; all pending legal or governmental proceedings
to which TMSI, the Seller or the Representative is a party or of which any
of their respective property or assets is the subject which are not
described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material
to TMSI's, the Seller's and the Servicer's ability to perform their
respective obligations under the Basic Documents to which each is a party.
(x) Each of TMSI, the Seller and the Servicer possesses such
licenses, certificates, authorities or permits issued by the appropriate
state or federal regulatory agencies or governmental bodies necessary to
conduct the businesses now conducted by it (except where the failure to
possess any such license, certificate, authority or permit would not
materially and adversely affect the holders of the Notes) and none has
received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which,
singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would materially and adversely affect the ability of
such entity to perform its obligations under the Basic Documents to which
it is a party.
(xi) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
issuance or sale of the Notes hereunder, except such as may be required
under the 1933 Act, the Trust Indenture Act or the 1933 Act Regulations or
state securities laws.
(xii) At the time of execution and delivery of the Sale and
Servicing Agreement by TMSI, the Seller, the Servicer and the Trust, the
Trust will have acquired good title to the Initial Receivables (including
an assignment of the security interests in the Financed Vehicles securing
the Initial Receivables and the proceeds of each of the foregoing), free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, and, upon delivery to the Underwriters of the Notes, the
Underwriters will have good and marketable title to the Notes free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. At each Subsequent Transfer Date, the Trust will have acquired
good title to the Subsequent Receivables (including an assignment of the
security interests in the Financed Vehicles securing the Subsequent
Receivables and the proceeds of each of the foregoing), free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xiii) The transfer of the Initial Receivables by TMS Auto
Finance to the Seller, and by the Seller to the Trust at Closing Time will
be treated by TMS Auto Finance and the Seller for financial accounting and
reporting purposes as a sale of assets and not as a pledge of assets to
secure debt. The transfer of the Subsequent Receivables by TMS Auto Finance
to the Seller, and by the Seller to the Trust at the applicable Subsequent
Transfer Date will be treated by TMS Auto Finance and the Seller for
financial accounting and reporting purposes as a sale of assets and not as
a pledge of assets to secure debt.
(xiv) Any taxes, fees and other governmental charges that are
assessed and due in connection with the execution, delivery and issuance of
the Basic Documents and the Notes which have become due or will become due
on or prior to Closing Time shall have been paid at or prior to Closing
Time.
(xv) The Trust is not required to be registered as an "investment
company" under the Investment Company Act of 1940 (the "1940 Act").
(xvi) The Receivables are chattel paper as defined in the UCC as
in effect in the State of California.
(b) Any certificate signed by any officer of TMSI, the Seller or the
Servicer and delivered to the Representative on behalf of the Underwriters or
counsel for the Underwriters shall be deemed a representation and warranty by
TMSI, the Seller and the Servicer as to the matters covered thereby.
Section 2. DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Seller
agrees to cause the Trust to sell the Notes to the Underwriters. In the event
that the initial remittance rates and prices for the Notes have not been agreed
upon and the Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourth business day following
the date of this Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, unless otherwise agreed upon by the
Representative, TMSI and the Seller.
(b) Delivery of the Certificates shall be made at the offices of
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038, or at
such other place as shall be agreed upon by the Representative, TMSI and the
Seller, at 10:00 A.M., New York City time, on December 30, 1997, or such other
time not later than ten business days after such date as shall be agreed upon by
the Representative, TMSI and the Seller (such time and date of payment and
delivery being herein called "Closing Time").
(c) The Notes to be delivered will be initially represented by one or
more Class A-1 Notes, one or more Class A-2 Notes and one or more Class A-3
Notes registered in the name of Cede & Co., the nominee of the Depository Trust
Company ("DTC").
For purposes of this Agreement, all Notes initially represented by one
or more certificates registered in the name of Cede & Co., the nominee of DTC,
shall be referred to herein, collectively, as the "DTC Securities."
The interests of beneficial owners of the DTC Securities will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes will be available in exchange for DTC Notes only under
the limited circumstances specified in the Indenture and Trust Agreement. The
DTC Notes to be purchased by the Underwriters will be delivered by the Seller to
the Underwriters (which delivery shall be made through the facilities of DTC)
against payment of the purchase price therefor. Each of the Underwriters hereby
agrees, severally and not jointly, subject to the terms, conditions and
provisions hereof, to purchase from the Trust the Notes in the principal amounts
set forth opposite its name on Schedule I at the prices specified in the Pricing
Agreement. The purchase price shall be paid by the Representative by a same day
federal funds wire payable to the order of the Seller or its designee. The Notes
will be made available for examination by the Representative not later than
10:00 A.M. on the last business day prior to Closing Time.
(d) The Notes shall be offered to the public from time to time for
sale in negotiated transactions or otherwise, at prices determined at the time
of sale.
Section 3. COVENANTS OF TMSI AND THE SELLER. TMSI and the Seller
covenant with each of the Underwriters as follows:
(a) Either TMSI or the Seller will promptly notify the
Representative, and confirm the notice in writing, (i) of any
amendment to the Registration Statement; (ii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceedings for that purpose; and
(iv) of the receipt by either of any notification with respect to the
suspension of the qualification of the Notes or the Certificates for
sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose. TMSI and the Seller will make every
reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Either TMSI or the Seller will give the Representative notice
of their intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus (including any revised prospectus which they propose for
use by the Underwriters in connection with the offering of the Notes
which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations), will furnish the Representative with copies
of any such amendment or supplement a reasonable amount of time prior
to such proposed filing or use, as the case may be, and, unless
required by law to do so, will not file any such amendment or
supplement or use any such prospectus to which the Representative or
counsel for the Underwriters shall reasonably object.
(c) TMSI and the Seller will deliver to the Representative as
many signed and as many conformed copies of the Registration Statement
as originally filed and of each amendment thereto (in each case
including exhibits filed therewith) as the Representative may
reasonably request.
(d) TMSI and the Seller will furnish to the Representative, from
time to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the Securities Exchange Act of 1934,
as amended (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as the Representative may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act
or the respective applicable rules and regulations of the Commission
thereunder.
(e) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters,
to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, TMSI and the Seller will forthwith
amend or supplement the Prospectus (in form and substance satisfactory
to counsel for the Underwriter) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading,
and TMSI and the Seller will furnish to the Representative a
reasonable number of copies of such amendment or supplement. Neither
the consent of the Representative of, nor the delivery by the
Representative of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 5.
(f) TMSI and the Seller will endeavor, in cooperation with the
Underwriter, to qualify the Notes for offering and sale under the
applicable securities laws of such states and other jurisdictions of
the United States as the Representative may designate; provided,
however, that neither TMSI nor the Seller shall be obligated to
qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. In each jurisdiction in which the Notes have been so
qualified, TMSI and the Seller will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from
the date hereof.
(g) TMSI and the Seller will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the
1933 Act.
(h) So long as any Notes shall be outstanding, TMSI and the
Seller will deliver to the Underwriters, as promptly as practicable,
such information concerning TMSI, the Seller, the Servicer or the
Notes as the Representative may reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES. TMSI and the Seller will pay all
expenses incident to the performance of their obligations under this Agreement,
including (i) the printing (or other reproducing) and filing of the Registration
Statement as originally filed and of each amendment thereto (other than
amendments relating to the filing of Computational Materials pursuant to Section
11); (ii) the reproducing of the Basic Documents and the Indenture; (iii) the
preparation, printing, issuance and delivery of the DTC Securities to the
Underwriters; (iv) the fees and disbursements of (A) the Underwriters' counsel,
(B) accountants for TMSI and the Seller and issuer of the comfort letter, (C)
the Indenture Trustee and its counsel, (D) the Owner Trustee and its counsel,
and (E) DTC in connection with the book-entry registration of the DTC
Securities; (v) the qualification of the Notes under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey; (vi)
the printing (or other reproducing) and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
of each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto; (vii) the fees charged by the Insurer; (viii) the fees
charged by each of Standard & Poor's Structured Ratings Group, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's") for rating the Notes; and (ix) the reproducing and delivery to the
Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representative in accordance
with the provisions of Section 5 or Section 9(a)(i) (unless, in the case of
Section 9(a)(i), such termination arises from a change or development involving
a prospective change in or affecting the business or properties of the Insurer),
TMSI and the Seller shall reimburse the Representative for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of TMSI and the Seller herein contained or in any
of the Basic Documents, to the performance by TMSI and the Seller of their
respective obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective and,
at Closing Time, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. As of
the Closing Time, the Prospectus shall have been filed with the
Commission in accordance with Rule 424 of the 1933 Act Regulations.
(b) At Closing Time, the Representative shall have received:
(i) The favorable opinion, dated as of Closing Time, of
Stroock & Stroock & Lavan LLP, counsel for the Underwriters, to the
effect that:
(A) The Registration Statement is effective under the
1933 Act, and, to the best of their knowledge and information, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(B) At the time the Registration Statement became
effective and at the Representation Date, the Registration
Statement (other than the financial, numerical, statistical and
quantitative information included therein, as to which no opinion
need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the Rules and
Regulations thereunder.
(C) The information in the Prospectus under "The
Notes," and "Description of the Purchase Agreements and the Trust
Documents" and the information in the Prospectus Supplement under
"Description of the Notes" insofar as they constitute summaries
of certain provisions of the Notes, the Indenture and the Trust
Agreement, summarizes fairly such provisions.
(D) The information in the Prospectus under "Prospectus
Summary -- Tax Status," "Prospectus Summary -- ERISA
Considerations" "Federal Income Tax Consequences," and "ERISA
Considerations" and in the Prospectus Supplement under "Summary
of Terms -- Tax Status," "Summary of Terms -- ERISA
Considerations," "Certain Federal Income Tax Consequences," and
"ERISA Considerations," to the extent that they constitute
matters of federal, New York or California law, summaries of
legal matters, documents or proceedings or legal conclusions, has
been reviewed by them and is correct in all material respects.
(E) The Seller and the Servicer have been duly
incorporated and are validly existing and in good standing under
the laws of the State of Delaware.
(F) The Seller has the power to engage in the
transactions contemplated by each of this Agreement, the Pricing
Agreement, the Indemnification Agreement and the Trust Agreement,
and the Seller and the Servicer have the power to engage in the
transactions contemplated by each of the Sale and Servicing
Agreement, the Insurance Agreement and the Purchase Agreement,
and have all requisite power, authority and legal right to
execute and deliver this Agreement, the Pricing Agreement, the
Sale and Servicing Agreement, the Purchase Agreement, the
Indemnification Agreement, the Insurance Agreement and the Trust
Agreement, as the case may be (and any other documents delivered
in connection therewith) and to perform and observe the terms and
conditions of such instruments.
(G) Each of the Sale and Servicing Agreement, the
Insurance Agreement and the Purchase Agreement has been duly
authorized, executed and delivered by the Seller and the
Servicer, and each of the Trust Agreement, the Indemnification
Agreement, the Pricing Agreement and this Agreement has been duly
authorized, executed and delivered by the Seller. Assuming due
authorization, execution and delivery by the other parties
thereto, the Sale and Servicing Agreement, the Purchase
Agreement, the Indemnification Agreement, the Insurance
Agreement, the Trust Agreement, the Pricing Agreement and this
Agreement are legal, valid and binding agreements enforceable in
accordance with their respective terms against the Seller and the
Servicer, as the case may be, subject (a) to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, (b) to the understanding
that no opinion is expressed as to the application of equitable
principles in any proceeding, whether at law or in equity, and
(c) to limitations of public policy under applicable securities
laws as to rights of indemnity and contribution thereunder.
(H) The Receivables are chattel paper as defined in the
UCC as in effect in the State of California.
(I) The Seller is not, and will not as a result of the
offer and sale of the Notes as contemplated in the Prospectus and
this Agreement become, an "investment company" as defined in the
Investment Company Act of 1940, as amended (the "Investment
Company Act"), or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act.
(J) All actions required to be taken and all filings
required to be made by the Seller or the Trust under the 1933 Act
and the 1934 Act prior to the sale of the Notes have been duly
taken or made.
(K) The Trust Agreement need not be qualified under the
Trust Indenture Act and the Trust is not required to register
under the Investment Company Act.
(L) The Indenture has been duly qualified under the
Trust Indenture Act.
Stroock & Stroock & Lavan LLP shall additionally
provide an opinion, in form and substance satisfactory to Moody's
and S & P, that if a court concludes that the transfer of the
Receivables from the Seller to the Owner Trustee on behalf of the
Trust is a sale, the interest of the Trust in the Receivables,
the interest of the Trust in the Seller's security interests in
the Financed Vehicles securing the Receivables and the proceeds
of each of the foregoing will be perfected upon the filing of
appropriate UCC-1 financing statements and, if a court concludes
that such transfer is not a sale, the Sale and Servicing
Agreement constitutes a grant by the Seller to the Trust of a
valid security interest in the Receivables, the interest of the
Trust in the Seller's security interests in the Financed Vehicles
securing the Receivables and the proceeds of each of the
foregoing, which security interest will be perfected upon the
filing of appropriate UCC-1 financing statements.
Stroock & Stroock & Lavan LLP shall additionally
provide an opinion, in form and substance satisfactory to Moody's
and S&P, regarding the creation and attachment of a security
interest in the Collateral (including, without limitation, the
Trust Estate, as to which such opinion shall also cover the
perfection and priority of the Indenture Collateral Agent's
interest therein) in favor of the Indenture Trustee on behalf of
the Noteholders. Such opinions may contain such assumptions,
qualifications and limitations as are customary in opinions of
this type and are reasonably acceptable to counsel to the
Underwriters. In rendering such opinion, such counsel may state
that they express no opinion as to the laws of any jurisdiction
other than the federal law of the United States of America and
the laws of the States of New York and California.
In rendering its opinion, Stroock & Stroock & Lavan LLP
shall additionally state that nothing has come to its attention
that has caused it to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus which has
been provided to the Underwriters by TMSI for use in connection
with the offering of the Notes which differs from the Prospectus
on file at the Commission at the Representation Date, in which
case at the time it is first provided to the Underwriters for
such use) or at Closing Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other
than (i) the financial, numerical, statistical and quantitative
information contained therein and (ii) the information under the
heading "The Insurer," as to which such counsel need express no
view).
In rendering its opinions, Stroock & Stroock & Lavan
LLP may rely on certificates of responsible officers of the
Seller, the Indenture Trustee, the Owner Trustee, and public
officials or, as to matters of law other than New York,
California or Federal law or the General Corporation Law of the
State of Delaware, on opinions of other counsel (copies of which
opinions shall be delivered to you). Such opinion may contain
such assumptions, qualifications and limitations as are customary
in opinions of this type and are reasonably acceptable to the
Representative.
(ii) The favorable opinion of Stroock & Stroock & Lavan LLP, special
California counsel for the Seller and the Servicer, dated as of the Closing Time
to the effect that (i) noting the assignee's name on a certificate of title,
where a validly perfected security interest in a motor vehicle, registered in
California and for which a certificate of title has been issued by the
Department of Motor Vehicles of the State of California, is not necessary to
continue the perfection of the security interest assigned as against the debtor
on the Contract, creditors and transferees of the debtor on the Contract, and
(ii) the Indenture Collateral Agent has acquired a perfected first priority
security interest in the Financed Vehicles located in the State of California
and subject to the statutes, laws and regulations governing motor vehicles
located in the State of California. Such opinion may contain such assumptions,
qualifications and limitations as are customary in opinions of this type and are
reasonably acceptable to counsel to the Underwriters. In rendering such opinion,
such counsel may state that they express no opinion as to the laws of any
jurisdiction other than the federal law of the United States of America and the
laws of the State of California.
(iii) The favorable opinion, dated as of Closing Time, of corporate
counsel for the Seller, the Servicer and TMSI, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(A) TMSI has been duly organized and is validly
existing and is in good standing under the laws of the State of
New Jersey.
(B) TMSI has the power to engage in the transactions
contemplated by this Agreement, the Pricing Agreement, the Sale
and Servicing Agreement, the Indemnification Agreement and the
Insurance Agreement and has all requisite power, authority and
legal right to execute and deliver this Agreement, the Pricing
Agreement, the Sale and Servicing Agreement, the Indemnification
Agreement and the Insurance Agreement (and any other documents
delivered in connection therewith) and to perform and observe the
terms and conditions of such instruments.
(C) This Agreement, the Pricing Agreement, the Sale and
Servicing Agreement, the Indemnification Agreement and the
Insurance Agreement have been duly authorized, executed and
delivered by TMSI and, assuming due authorization, execution and
delivery by the other parties thereto, are legal, valid and
binding agreements of TMSI and assuming such agreements were
governed by the laws of the State of New Jersey, would be
enforceable in accordance with their respective terms against
TMSI subject (a) to the effect of bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no opinion is
expressed as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to limitations
of public policy under applicable securities laws as to rights of
indemnity and contribution thereunder.
(D) Neither the transfer of the Receivables by the
Seller to the Owner Trustee on behalf of the Trust, nor the
assignment by the Seller of the Trust Estate to the Trust, nor
the consummation of the transactions contemplated by, nor the
fulfillment of the terms of, the Sale and Servicing Agreement,
the Indemnification Agreement, the Insurance Agreement, the
Purchase Agreement, this Agreement and the Pricing Agreement, in
the case of the Seller and TMSI, and the Sale and Servicing
Agreement, the Insurance Agreement and the Purchase Agreement, in
the case of the Servicer, and the Trust Agreement, in the case of
the Seller, conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default
under (a) the Certificate of Incorporation or Bylaws of TMSI, the
Seller or the Servicer, as applicable, (b) the terms of any
material indenture or other material agreement or instrument of
which counsel has knowledge to which TMSI, the Seller or the
Servicer, as applicable, is a party or by which it is bound or to
which it is subject or (c) any statute or order, rule,
regulation, writ, injunction or decree of which counsel has
knowledge, or of any court, governmental authority or regulatory
body to which TMSI, the Seller or the Servicer, as applicable, is
subject or by which it is bound, or results in, or will result in
the creation or imposition of any lien or encumbrance upon the
Trust Estate or upon the related Notes, except as otherwise
contemplated by the Indenture.
(E) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by TMSI or the Seller of, or
compliance by TMSI or the Seller with, this Agreement, the
Pricing Agreement, the Sale and Servicing Agreement, the
Indemnification Agreement or the Insurance Agreement, or the
offer, issuance, sale or delivery of the Notes, or, in the case
of the Servicer, by the Servicer of, or compliance by the
Servicer with, the Sale and Servicing Agreement, the Insurance
Agreement or the Purchase Agreement, or, in the case of the
Seller, by the Seller of, or compliance of the Seller with, the
Trust Agreement or the consummation of any other transactions by
TMSI, the Seller or the Servicer contemplated by the Sale and
Servicing Agreement, the Purchase Agreement, this Agreement, the
Indemnification Agreement, the Insurance Agreement, the Trust
Agreement and the Pricing Agreement, as the case may be, except
as may be required under the blue sky laws of any jurisdiction
(as to which such counsel need not opine) and such other
approvals as have been obtained.
(F) Except as set forth in the Prospectus Supplement,
there is no action, suit, proceeding or investigation pending or,
to the best of such counsel's knowledge, threatened against the
Seller, the Servicer or TMSI which, in such counsel's judgment,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operation, financial
condition, properties or assets of the Seller, the Servicer or
TMSI or in any material impairment of the right or ability of the
Seller, the Servicer or TMSI to carry on its business
substantially as now conducted or result in any material
liability on the part of the Seller, the Servicer or TMSI or
which would draw into question the validity of this Agreement,
the Pricing Agreement, the Certificates, the Purchase Agreement,
the Indemnification Agreement, the Insurance Agreement, the Trust
Agreement, the Sale and Servicing Agreement or of any action
taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of any of the Seller, the Servicer or TMSI
to perform under the terms of this Agreement, the Pricing
Agreement, the Purchase Agreement, the Indemnification Agreement,
the Insurance Agreement, the Sale and Servicing Agreement or the
Trust Agreement, as applicable.
In rendering its opinions, such counsel may rely on
certificates of responsible officers of the Seller, the Servicer and
TMSI, and public officials or, as to matters of law other than New
Jersey or the Federal law, on opinions of other counsel (copies of
which opinions shall be delivered to you). Such opinion may contain
such assumptions, qualifications and limitations as are customary in
opinions of this type and are reasonably acceptable to the
Representative.
(iv) The favorable opinion of in-house counsel to the
Servicer, or such other counsel acceptable to counsel for the
Underwriters, dated as of Closing Time, satisfactory in form and
substance to counsel for the Underwriters, to the effect that:
Such counsel has been advised of the Servicer's standard
operating procedures relating to the Servicer's acquisition of a
perfected first priority security interest in the vehicles financed by
the Servicer pursuant to the retail installment sale contracts in the
ordinary course of the Servicer's business. Assuming that the
Servicer's standard procedures are followed with respect to the
perfection of security interests in the Financed Vehicles (such
counsel having no reason to believe that the Servicer has not or will
not continue to follow its standard procedures in connection with the
perfection of security interests in the Financed Vehicles), the
Servicer has acquired or will acquire a perfected first priority
security interest in the Financed Vehicles.
Such opinion may contain such assumptions, qualifications
and limitations as are customary in opinions of this type and are
reasonably acceptable to counsel to the Underwriters.
(v) The favorable opinion, dated as of Closing Time, of
counsel for the Insurer, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(A) The Insurer is a stock insurance company duly
organized, validly existing and authorized to transact financial
guaranty insurance business under the laws of the State of New
York.
(B) The Note Policy, the Indemnification Agreement and
the Insurance Agreement have been duly authorized, executed and
delivered by the Insurer.
(C) The Note Policy, the Indemnification Agreement and
the Insurance Agreement constitute valid and binding obligations
of the Insurer, enforceable against the Insurer in accordance
with their terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, rehabilitation,
moratorium and other similar laws affecting the enforceability of
creditors' rights generally applicable in the event of the
bankruptcy or insolvency of the Insurer and to the application of
general principles of equity and subject, in the case of the
Insurance Agreement, to principles of public policy limiting the
right to enforce the indemnification provisions contained therein
insofar as such provisions relate to indemnification for
liabilities arising under the securities law.
(D) The Note Policy is exempt from registration under
the Securities Act of 1933, as amended (the "Act").
(E) Neither the execution nor the delivery by the
Insurer of the Note Policy, the Indemnification Agreement or the
Insurance Agreement, nor the performance by it of its obligations
thereunder, will conflict with any provision of the certificate
of incorporation or the by-laws of the Insurer or, to the best of
such counsel's knowledge, result in a breach of, or constitute a
default under, any agreement or other instrument to which the
Insurer is a party or by which it or any of its property is bound
or, to the best of such counsel's knowledge, violate any
judgment, order or decree applicable to the Insurer of any
governmental or regulatory body, administrative agency, court or
arbitrator having jurisdiction over the Insurer (except that in
the published opinion of the Securities and Exchange Commission
the indemnification provisions of the Indemnification Agreement,
insofar as they relate to indemnification for liabilities arising
under the Act, are against public policy as expressed in the
Securities Act of 1933, as amended, and are therefore
unenforceable).
Such counsel shall additionally state that nothing has
come to its attention that has caused it to believe that, as of
the date of the Prospectus Supplement, relating to the offer and
sale of the Notes, to the Prospectus forming a part of the
Registration Statement on Form S-3 (No. 333-14075) filed by the
Company with the Securities and Exchange Commission and declared
effective on December 9, 1996, or as of the date of counsel's
opinion, the information set forth under the captions "The
Insurer" and "The Note Policy" in the Prospectus Supplement,
insofar as such statements constitute a description of the Note
Policy, accurately summarize the Note Policy (such counsel not
being required to express an opinion with respect to any
financial statements or other financial information contained or
referred to therein). Such statement may be given with the
understanding that such information is limited and does not
purport to provide the scope of disclosure required to be
included in a prospectus with respect to a Registrant under the
Securities Act of 1933, as amended, in connection with the public
offer and sale of securities of such registrant.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the
Insurer, the Trustee and public officials. Such opinion may
assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties
thereto other than the Insurer.
(vi) The favorable opinion, dated as of Closing Time, of
Richards, Layton & Finger, in form and substance satisfactory, to
counsel for the Underwriters, to the effect that:
(A) The Owner Trustee is a Delaware banking corporation
duly incorporated and organized and validly existing under the
laws of the State of Delaware.
(B) The Owner Trustee has the full corporate trust
power to accept the office of owner trustee under the Trust
Agreement and to enter into and perform its obligations under the
Trust Agreement, the Sale and Servicing Agreement and, on behalf
of the Trust, under the Indenture and the Sale and Servicing
Agreement.
(C) The execution and delivery of the Trust Agreement,
the Sale and Servicing Agreement and, on behalf of the Trust, of
the Indenture and the Sale and Servicing Agreement, and the
performance by the Owner Trustee of its obligations under the
Trust Agreement and the Sale and Servicing Agreement, as well as
the performance by the Owner Trustee of its obligations on behalf
of the Trust under the Indenture and the Sale and Servicing
Agreement have been duly authorized by all necessary action of
the Owner Trustee and each has been duly executed and delivered
by the Owner Trustee.
(D) The Trust Agreement constitutes the valid and
binding obligations of the Owner Trustee enforceable against the
Owner Trustee in accordance with its terms.
(E) The execution and delivery by the Owner Trustee of
the Trust Agreement, the Sale and Servicing Agreement and, on
behalf of the Trust, of the Indenture and the Sale and Servicing
Agreement do not require any consent, approval or authorization
of, or any registration or filing with, any applicable
governmental authority.
(F) Each of the Notes has been duly executed and
delivered by the Owner Trustee, on behalf of the Trust.
(G) Neither the consummation by the Owner Trustee of
the transactions contemplated in the Sale and Servicing
Agreement, the Indenture or the Trust Agreement, nor the
fulfillment of the terms thereof by the Owner Trustee will
conflict with, result in a breach or violation of, or constitute
a default under any law or the charter, by-laws or other
organizational documents of the Owner Trustee or the terms of any
indenture or other agreement or instrument known to such counsel
and to which the Owner Trustee or any of its subsidiaries is a
party or is bound or any judgment, order or decree known to such
counsel to be applicable to the Owner Trustee or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over
the Owner Trustee or any of its subsidiaries.
(H) There are no actions, suits or proceedings pending
or, to the best of such counsel's knowledge, threatened against
the Owner Trustee (as owner trustee under the Trust Agreement or
in its individual capacity) before or by any governmental
authority that might materially and adversely affect the
performance by the Owner Trustee of its obligations under, or the
validity or enforceability of, the Trust Agreement or the Sale
and Servicing Agreement, as applicable.
(I) The execution, delivery and performance by the
Owner Trustee of the Sale and Servicing Agreement, the Indenture
or the Trust Agreement will not subject any of the property or
assets of the Trust or any portion thereof, to any lien created
by or resulting from any actions of the Owner Trustee that are
unrelated to the transactions contemplated in such agreements.
(J) The Trust has been duly formed and is validly
existing as a business trust under the Business Trust Statute.
The Trust Agreement authorizes the Trust to execute and deliver
the Trust Agreement, the Indenture and the Sale and Servicing
Agreement, to issue the Notes and the Certificates and to grant
the Trust Estate to the Trustee as security for the Notes.
(K) To the extent that Article 9 of the Uniform
Commercial Code as in effect in the State of Delaware (the
"Delaware UCC") is applicable (without regard to conflicts of
laws principles), and assuming that the security interest created
by the Indenture in the Receivables has been duly created and has
attached, upon the filing of a UCC-1 financing statement with the
Secretary of State of the State of Delaware the Indenture Trustee
will have a perfected security interest in such Receivables and
the proceeds thereof, and such security interest will be prior to
any other security interest that is perfected solely by the
filing of financing statements under the Delaware UCC, excluding
purchase money security interests under Section 9-312(4) of the
UCC and temporarily perfected security interests in proceeds
under Section 9-306(3) of the Delaware UCC.
(L) No re-filing or other action is necessary under the
Delaware UCC in order to maintain the perfection of such security
interest except for the filing of continuation statements at five
year intervals.
(M) Under Section 3805(b) of the Business Trust
Statute, no creditor of any Certificateholder shall have any
right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of the Trust
except in accordance with the terms of the Trust Agreement.
(N) Under Section 3805(c) of the Business Trust
Statute, and assuming that the Sale and Servicing Agreement
conveys good title to the Receivables to the Trust as a true sale
and not as a security arrangement, the Trust rather than the
Certificateholders is the owner of the Receivables.
(O) The Delaware Trustee is not required to hold legal
title to the Trust Estate in order for the Trust to qualify as a
business trust under the Act.
(P) The execution and delivery by the Owner Trustee of
the Trust Agreement and, on behalf of the Trust, the Indenture
and the Sale and Servicing Agreement do not require any consent,
approval or authorization of, or any registration or filing with,
any governmental authority of the State of Delaware, except for
the filing of the Certificate of Trust with the Secretary of
State.
(Q) Neither the consummation by the Owner Trustee of
the transactions contemplated in the Trust Agreement or, on
behalf of the Trust, the transactions contemplated in the Trust
Agreement, the Indenture and the Sale and Servicing Agreement nor
the fulfillment of the terms thereof by the Owner Trustee will
conflict with or result in a breach or violation of any law of
the State of Delaware.
Such opinion may contain such assumptions, qualifications
and limitations as are customary in opinions of this type and are
reasonably acceptable to counsel to the Underwriters. In rendering
such opinion, such counsel may state that they express no opinion as
to the laws of any jurisdiction other than the federal law of the
United States of America and the laws of the State of Delaware.
(vii) The favorable opinion, dated as of Closing Time, of
Dewey Ballantine, counsel for the Indenture Trustee, the Indenture
Collateral Agent, in form and substance satisfactory to counsel for
the Underwriters.
(viii) Such other opinions as may be requested by (i)
Moody's and S & P, which opinions shall also be for the benefit of the
Insurer and the Underwriters and (ii) the Insurer, which opinions
shall also be for the benefit of the Underwriters.
(c) At Closing Time there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Seller, the
Servicer or TMSI and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate signed by one or more
duly authorized officers of TMSI and the Seller, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change; (ii) the representations and warranties in Section 1(a) hereof
are true and correct in all material respects with the same force and
effect as though expressly made at and as of Closing Time; (iii) each
of TMSI and the Seller has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to
Closing Time; and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
(d) At or prior to the delivery of the Prospectus
Supplement, the Representative shall have received from KPMG Peat
Marwick a letter dated as of such date and in form and substance
satisfactory to the Representative, to the effect that they have
carried out certain specified procedures, not constituting an audit,
with respect to (i) certain amounts, percentages and financial
information relating to the Servicer's servicing portfolio which are
included in the Prospectus Supplement and which are specified by the
Underwriter, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Servicer, (ii) certain information regarding
the Receivables and the Receivables Files which are specified by the
Representative and contained in the Prospectus Supplement and setting
forth the results of such specified procedures and (iii) certain
information regarding the Receivables and the Receivables Files which
are specified by the Representative, as representative of the
Underwriters, and contained in the Current Report on Form 8-K
described in Section 5(1) hereof and setting forth the results of such
specified procedures.
(e) At Closing Time, the Representative shall have received
from the Trustee a certificate signed by one or more duly authorized
officers of the Indenture Trustee, dated as of Closing Time, as to the
due acceptance of the Indenture by the Indenture Trustee and the due
authentication of the Notes by the Indenture Trustee and such other
matters as the Representative shall request.
(f) At Closing Time, the Representative shall have received
a certificate signed by one or more duly authorized officers of the
Seller, the Servicer and TMSI dated as of Closing Time to the effect
that:
(i) the representations and warranties of TMSI, the
Seller and the Servicer in each of the Basic Documents to which
it is a party are true and correct in all material respects at
and on the Closing Date, with the same effect as if made on the
Closing Date;
(ii) each of TMSI, the Seller and the Servicer has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied in connection with the
sale and delivery of the Notes;
(iii) all statements and information contained in the
Prospectus Supplement under the caption "The Receivables" and
contained in the Prospectus under the captions "The Receivables,"
"The Seller," "TMS Auto Finance," and "The Money Store" are true
and accurate in all material respects and nothing has come to
such officer's attention that would lead him to believe that any
of the specified sections contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements and information therein, in the
light of the circumstances under which they were made, not
misleading;
(iv) the information set forth in the Schedule of
Receivables required to be furnished pursuant to the Sale and
Servicing Agreement is true and correct in all material respects;
(v) the copies of the Charter and By-laws of the
Seller, the Servicer and TMSI attached to such certificate are
true and correct and, are in full force and effect on the date
thereof;
(vi) except as may otherwise be disclosed in the
Prospectus, there are no actions, suits or proceedings pending
(nor, to the best knowledge of such officers, are any actions,
suits or proceedings threatened), against or affecting the
Seller, the Servicer or TMSI, which if adversely determined,
individually or in the aggregate, would adversely affect the
Seller's or Servicer's obligations under any of the Basic
Documents to which it is a party;
(vii) each person who, as an officer or representative
of the Seller, the Servicer or TMSI, as the case may be, signed
(a) this Agreement, (b) the Sale and Servicing Agreement, (c) the
Trust Agreement, (d) the Purchase Agreement, (e) the Pricing
Agreement, (f) the Insurance Agreement, or (g) the
Indemnification Agreement or (h) any other document delivered
prior hereto or on the date hereof in connection with the
purchase described in this Agreement and the Sale and Servicing
Agreement, was, at the respective times of such signing and
delivery, and is now duly elected or appointed, qualified and
acting as such officer or representative;
(viii) except as otherwise set forth in the Sale and
Servicing Agreement, each of the Receivables referred to in the
Sale and Servicing Agreement was purchased by the Seller from TMS
Auto Finance, which acquired it from a Dealer;
(ix) a certified true copy of the resolutions of the
board of directors of TMSI and the Seller with respect to the
sale of the Notes subject to this Agreement and the Sale and
Servicing Agreement, which resolutions have not been amended and
remain in full force and effect are attached to such certificate;
(x) all payments received with respect to the Initial
Receivables after the Initial Cutoff Date, and certain payments
received with respect to the Precomputed Receivables on or prior
to the Initial Cutoff Date that relate to Scheduled Payments due
after the Cutoff Date, as set forth in the Sale and Servicing
Agreement, have been deposited in the Collection Account, and
are, as of the Closing Date, in the Collection Account;
(xi) each of TMSI, the Seller and the Servicer has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied in connection with the
issuance, sale and delivery of the Receivables and the Notes;
(xii) all statements contained in the Prospectus with
respect to TMSI, the Seller and the Servicer are true and
accurate in all material respects and nothing has come to such
officer's attention that would lead such officer to believe that
the Prospectus contains any untrue statement of a material fact
or omits to state any material fact;
(g) On or before the Closing Time the Seller shall have
delivered to the Trustee, to hold in trust for the benefit of the
holders of the Notes, Initial Receivables with an aggregate Principal
Balance as of the Initial Cutoff Date of approximately $68,500,000.
TMSI and the Seller shall, immediately following the sale of the
Notes, cause to be deposited with the Indenture Trustee, as collateral
agent, for deposit (i) in the Pre-Funding Account (as defined in the
Prospectus Supplement), cash in an amount equal to the sum of
approximately $21,500,000 and (ii) in the Capitalized Interest Account
(as defined in the Prospectus Supplement), cash in an amount equal to
a sum satisfactory to the Insurer.
(h) The Note Policy shall have been delivered to the
Trustee.
(i) At Closing Time, the Class A-1 Notes shall have been
rated "A-1+" by S&P and "P-1" by Moody's, and the Class A-2 Notes, the
Class A-3 Notes, shall have been rated "AAA" by S & P and "AAA" by
Moody's and neither S&P nor Moody's shall have placed the Notes under
surveillance or review with possible negative implications.
(j) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
delivery of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by TMSI, the
Seller and the Servicer in connection with the issuance and sale of
the Notes as herein contemplated shall be satisfactory in form and
substance to TMSI and counsel for the Underwriters.
(k) On or before the Closing Time TMSI shall have delivered
to the Representative a Current Report on Form 8-K containing a
detailed description of the Receivables actually being delivered to
the Owner Trustee and pledged to the Indenture Trustee at Closing
Time, in form and substance satisfactory to the Representative.
(l) The Representative shall have received evidence
satisfactory to it that, on or before the Closing Date, UCC-1
financing statements have been or are being filed in the appropriate
filing offices reflecting the transfer of the interest in the
Receivables to the Owner Trustee on behalf of the Trust and the
proceeds thereof to the Trust and the grant of the security interest
by the Trust in the Receivables and the proceeds thereof to the
Indenture Trustee.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representative by notice to the Seller at any time at or prior to Closing
time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.
Section 6. INDEMNIFICATION.
(a) TMSI and the Seller jointly and severally agree to indemnify and
hold harmless each of the Underwriters and each person, if any, who controls
either of the Underwriters within the meaning of Section 15 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any untrue statement
or omission described in clause (i) above, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of TMSI; and
(iii) against any and all expense whatsoever, as reasonably
incurred (including, subject to Section 6(c) hereof, the reasonable
fees and disbursements of counsel chosen by such Underwriter) in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any untrue
statement or omission described in clause (i) above, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with the information referred to in clauses (w), (x), (y)
and (z) of the immediately following paragraph; provided, further, such
indemnity with respect to any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with the
information referred to in clauses (w), (x), (y) and (z) of the immediately
following paragraph and contained in the Prospectus or any preliminary
prospectus shall not inure to the benefit of either Underwriter (or person
controlling such Underwriter) from whom the person suffering any such loss,
claim, damage or liability purchased the Notes which are the subject thereof if
such person did not receive a copy of the Prospectus at or prior to the
confirmation of the sale of such Notes or to such person in any case where such
delivery is required by the 1933 Act and the untrue statement or omission of a
material fact contained in any preliminary prospectus was corrected in the
Prospectus and the Prospectus was delivered to such Underwriter in a timely
manner in accordance with Section 3(d).
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless TMSI and the Seller, their directors, each of TMSI's and
Seller's officers who signed the Registration Statement, and each person, if
any, who controls TMSI or the Seller within the meaning of Section 15 of the
1933 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, contained in written information furnished by
such Underwriter through the Representative specifically for use in the
Prospectus Supplement, it being understood and agreed that the only such
information is contained in (w) the seventh paragraph on the inside cover
(discussing the risk of a lack of secondary trading) of the Prospectus
Supplement (or any amendment or supplement thereto), (x) the first paragraph
under "Risk Factors--Limited Liquidity" of the Prospectus, (y) the information
contained under "Underwriting" of the Prospectus Supplement, and (z) any
Computational Materials prepared by such Underwriter, except to the extent of
any errors in the Computational Materials that are caused by errors in the pool
information provided by the Company to the applicable Underwriter. The parties
hereto agree that no Underwriter shall be under any liability to the Company,
the Originators or any other person identified in this paragraph (b) for
Computational Materials prepared by any other Underwriter.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have otherwise than under this Section
6. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses other than the reasonable costs of investigation subsequently
incurred in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). After such notice from the indemnifying party to
such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, which consent shall
not be unreasonably withheld, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, TMSI and the Seller
jointly and severally, on the one hand, and the Underwriters, on the other hand,
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by TMSI
and the Seller jointly and severally, on the one hand, and the Underwriters, on
the other hand (i) in such proportion as is appropriate to reflect the relative
benefits received by TMSI and the Seller on the one hand and the Underwriters on
the other from the sale of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of TMSI and the Seller on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by TMSI and
the Seller on the one hand and the Underwriters on the other shall be deemed to
be in such proportion that the Underwriters are responsible for that portion
represented by the excess, if any, of the purchase price received by the
Underwriters for the sale of the Notes over the purchase price paid by the
Underwriters for the Notes (the "Spread") (or, with respect to Computational
Materials furnished by an Underwriter, the Spread received by such Underwriter
with respect to the principal amount of Notes set forth next to such
Underwriter's name on Schedule I hereto; and TMSI and the Seller shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by TMSI or the Seller or by any Underwriter
through the Representative and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this Section 7. Notwithstanding the
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the Spread exceeds the
amount of any damages which the Underwriters have otherwise been required to pay
in respect of such losses, liabilities, claims, damages and expenses. For
purposes of this Section 7, each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Underwriters and each respective director of the Seller,
each officer of the Seller who signed the Registration Statement, and each
respective person, if any, who controls the Seller within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as the Seller.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
TMSI and the Seller submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriters or any controlling person thereof, or by or on behalf of TMSI
or the Seller, and shall survive delivery of the Notes to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative may terminate this Agreement, by notice to TMSI
and the Seller, at any time at or prior to Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Registration Statement or Prospectus, any
change, or any development involving a prospective change, in or affecting
particularly the business or properties of TMSI, the Servicer or the Seller
considered as one entity or the Insurer which, in the Representative's
reasonable judgment, materially impairs the investment quality of the Notes;
(ii) if there has occurred any downgrading in the rating of the claims-paying
ability of the Insurer by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the 1933 Act) which,
in the reasonable judgment of the Representative, materially impairs the
investment quality or marketability of the Notes or if the claims-paying ability
of the Notes or the Insurer has been put on the "watch list" of any such rating
organization with negative implications; (iii) if there has occurred any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange or
by any governmental authority; (iv) if any banking moratorium has been declared
by Federal or New York authorities; (v) any suspension or limitation of trading
of any securities of TMSI on any exchange or in the over-the-counter market; or
(vi) if there has occurred any outbreak or escalation of major hostilities in
which the United States of America is involved, any declaration of war by
Congress, or any other substantial national or international calamity or
emergency if, in the Representatives judgment, the effects of any such outbreak,
escalation, declaration, calamity, or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the Notes
or the Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. COMPUTATIONAL MATERIALS. (a) It is understood that any
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Notes, subject to the following conditions:
(i) Each Underwriter shall comply with all applicable laws and
regulations in connection with the use of Computational Materials including the
No-Action Letter of May 20, 1994 issued by the Commission to Kidder, Peabody
Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder
Structured Asset Corporation, as made applicable to other issuers and
underwriters by the Commission in response to the request of the Public
Securities Association dated May 24, 1994, and the No-Action Letter of February
17, 1995 issued by the Commission to the Public Securities Association
(collectively, the "Kidder/PSA Letters").
(ii) As used herein, "Computational Materials" and the term "ABS Term
Sheets" shall have the meanings given such terms in the Kidder/PSA Letters, but
shall include only those Computational Materials that have been prepared or
delivered to prospective investors by or at the direction of an Underwriter.
(iii) Each Underwriter shall provide TMSI and the Seller with
representative forms of all Computational Materials prior to their first use, to
the extent such forms have not previously been approved by TMSI and the Seller
for use by such Underwriter. The Underwriter shall provide to TMSI and the
Seller, for filing on Form 8-K as provided in Section 11(b), copies of all
Computational Materials that are to be filed with the Commission pursuant to the
Kidder/PSA Letters. The Underwriter may provide copies of the foregoing in a
consolidated or aggregated form. All Computational Materials described in this
subsection (a)(iii) must be provided to TMSI and the Seller not later than 10:00
a.m. New York time one business day before filing thereof is required pursuant
to the terms of this Agreement.
(iv) If an Underwriter does not provide any Computational Materials to
TMSI and the Seller pursuant to subsection (a)(iii) above, such Underwriter
shall be deemed to have represented, as of the Closing Date, that it did not
provide any prospective investors with any information in written or electronic
form in connection with the offering of the Certificates that is required to be
filed with the Commission in accordance with the Kidder/PSA Letters.
(v) In the event of any delay in the delivery by any Underwriter to
TMSI and the Seller of all Computational Materials required to be delivered in
accordance with subsection (a)(iii) above, TMSI and the Seller shall have the
right to delay the release of the Prospectus to investors or to any Underwriter,
to delay the Closing Date and to take other appropriate actions in each case as
necessary in order to allow TMSI and the Seller to comply with is agreement set
forth in Section 11(b) to file the Computational Materials by the time specified
therein.
(b) TMSI and the Seller shall file the Computational Materials (if
any) provided to it by each Underwriter under Section 11(a)(iii) with the
Commission pursuant to a Current Report on Form 8-K no later than 10:00 a.m. on
the date required pursuant to the Kidder/PSA Letters.
Section 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representative shall be directed to Salomon Brothers Inc [390 Greenwich Street,
New York, New York 10013, Attention: Asset Finance Group (fax: (212) 783-3848);
and notices to TMSI or the Seller shall be directed to it at 2840 Morris Avenue,
Union, New Jersey 07083, Attention: Executive Vice President (fax: (908)
686-2649).
Section 12. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriters, TMSI, the
Seller and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, TMSI, the Seller and
their respective successors and the controlling persons and officers and
directors referred to in Section 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or with
respect to this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters, TMSI, the Seller and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes from any Underwriter shall be deemed to be a
successor by reason merely of such purchase. TMSI and the Seller shall be
jointly and severally liable for all obligations incurred under this Agreement
and the Pricing Agreement. Section 13. GOVERNING LAW AND TIME. This Agreement
and the Pricing Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to principles of conflicts of
laws, applicable to agreements made and to be performed in said State. Unless
otherwise set forth herein, specified times of day refer to New York time.
Section 14. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to TMSI and the Seller a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Seller and TMSI in accordance with its
terms.
Very truly yours,
TMS AUTO HOLDINGS, INC.
By:/s/ Michael H. Benoff
Name: Michael H. Benoff
Title: Senior Vice President
THE MONEY STORE INC.
By: /s/ Michael H. Benoff
Name: Michael H. Benoff
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
SALOMON BROTHERS INC
FIRST UNION CAPITAL MARKETS CORP.
By: SALOMON BROTHERS INC
By:________________________
Name:
Title:
<PAGE>
SCHEDULE I
PRINCIPAL INITIAL
UNDERWRITER CLASS AMOUNT OF NOTES
Salomon Brothers Inc A-1 $9,722,222
First Union Capital Markets Corp. A-1 $7,777,778
Salomon Brothers Inc A-2 $24,722,222
First Union Capital Markets Corp. A-2 $19,777,778
Salomon Brothers Inc A-3 $15,555,556
First Union Capital Markets Corp. A-3 $12,444,444
<PAGE>
Exhibit A
THE MONEY STORE INC.
TMS AUTO HOLDINGS, INC.
The Money Store Auto Trust 1997-4
$17,500,000 Class A-1 5.90875% Asset Backed Notes
$44,500,000 Class A-2 6.35% Asset Backed Notes
$28,000,000 Class A-3 6.46% Asset Backed Notes
PRICING AGREEMENT
December 16, 1997
SALOMON BROTHERS INC
as Representative ("Representative")
of the several Underwriters
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated December 16,
1997 (the "Underwriting Agreement"), relating to $17,500,000 aggregate principal
amount of Class A-1 5.90875% Asset Backed Notes (the "Class A-1 Notes")
$44,500,000 aggregate principal amount of Class A-2 6.35% Asset Backed Notes
(the "Class A-2 Notes"), $28,000,000 aggregate principal amount of Class A-3
6.46% Asset Backed Notes (the "Class A-3 Notes" and, with the Class A-1 Notes
and the Class A-2 Notes the "Notes"), all issued by The Money Store Auto Trust
1997-4 (the "Trust".)
Pursuant to Section 2 of the Underwriting Agreement, The Money Store
Inc. ("TMSI") and TMS Auto Holdings, Inc. (the "Seller") agree with the
Representative on behalf of the Underwriters identified in Schedule I of the
Underwriting Agreement as follows:
1. The Class A-1 Interest Rate shall be 5.90875% per annum.
2. The Class A-2 Interest Rate shall be 6.35% per annum.
3. The Class A-3 Interest Rate shall be 6.46% per annum.
4. The purchase price for the Class A-1 Notes shall be 99.75% of the
initial principal amount of the Class A-1 Notes.
5. The purchase price for the Class A-2 Notes shall be 99.75% of the
initial principal amount of the Class A-2 Notes.
6. The purchase price for the Class A-3 Notes shall be 99.75% of the
initial principal amount of the Class A-3 Notes.
7. The Notes shall be offered from time to time in negotiated
transactions or otherwise, at prices determined at the time of sale.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Seller a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, TMSI and the Seller in accordance with its terms.
Very truly yours,
TMS AUTO HOLDINGS, INC.
By:
Name:
Title:
THE MONEY STORE INC.
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
SALOMON BROTHERS INC
FIRST UNION CAPITAL MARKETS CORP.
By: SALOMON BROTHERS INC
By:
Name:
Title:
THE MONEY STORE INC.
TMS AUTO HOLDINGS, INC.
The Money Store Auto Trust 1997-4
$17,500,000 Class A-1 5.90875% Asset Backed Notes
$44,500,000 Class A-2 6.35% Asset Backed Notes
$28,000,000 Class A-3 6.46% Asset Backed Notes
PRICING AGREEMENT
December 16, 1997
SALOMON BROTHERS INC
as Representative ("Representative")
of the several Underwriters
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated December 16,
1997 (the "Underwriting Agreement"), relating to $17,500,000 aggregate principal
amount of Class A-1 5.90875% Asset Backed Notes (the "Class A-1 Notes")
$44,500,000 aggregate principal amount of Class A-2 6.35% Asset Backed Notes
(the "Class A-2 Notes"), $28,000,000 aggregate principal amount of Class A-3
6.46% Asset Backed Notes (the "Class A-3 Notes" and, with the Class A-1 Notes
and the Class A-2 Notes the "Notes"), all issued by The Money Store Auto Trust
1997-4 (the "Trust".)
Pursuant to Section 2 of the Underwriting Agreement, The Money Store
Inc. ("TMSI") and TMS Auto Holdings, Inc. (the "Seller") agree with the
Representative on behalf of the Underwriters identified in Schedule I of the
Underwriting Agreement as follows:
1. The Class A-1 Interest Rate shall be 5.90875% per annum.
2. The Class A-2 Interest Rate shall be 6.35% per annum.
3. The Class A-3 Interest Rate shall be 6.46% per annum.
4. The purchase price for the Class A-1 Notes shall be 99.75% of the
initial principal amount of the Class A-1 Notes.
5. The purchase price for the Class A-2 Notes shall be 99.75% of the
initial principal amount of the Class A-2 Notes.
6. The purchase price for the Class A-3 Notes shall be 99.75% of the
initial principal amount of the Class A-3 Notes.
7. The Notes shall be offered from time to time in negotiated
transactions or otherwise, at prices determined at the time of sale.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Seller a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, TMSI and the Seller in accordance with its terms.
Very truly yours,
TMS AUTO HOLDINGS, INC.
By:/s/ Michael H. Benoff
Name: Michael H. Benoff
Title:
THE MONEY STORE INC.
By:/s/ Michael H. Benoff
Name: Michael H. Benoff
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
SALOMON BROTHERS INC
FIRST UNION CAPITAL MARKETS CORP.
By: SALOMON BROTHERS INC
By:_________________________
Name:
Title:
SALE AND SERVICING
AGREEMENT
among
THE MONEY STORE AUTO TRUST 1997-4
Issuer,
TMS AUTO HOLDINGS, INC.
Seller,
THE MONEY STORE AUTO FINANCE INC.
Servicer, and
THE MONEY STORE INC.
Representative
Dated as of November 30, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
SECTION 1.1 Definitions............................................ 1
SECTION 1.2 Other Definitional Provisions ......................... 21
ARTICLE II
Conveyance of Receivables
SECTION 2.1 Conveyance of Initial Receivables...................... 22
SECTION 2.2 Conveyance of Subsequent Receivables................... 23
ARTICLE III
The Receivables
SECTION 3.1 Representations and Warranties of Seller.............. 26
SECTION 3.2 Repurchase upon Breach................................ 30
SECTION 3.3 Custody of Receivables Files.......................... 31
SECTION 3.4 Duties of Servicer as Custodian....................... 32
SECTION 3.5 Instructions; Authority To Act........................ 33
SECTION 3.6 Custodian's Indemnification........................... 33
SECTION 3.7 Effective Period and Termination...................... 34
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1 Duties of Servicer.................................... 34
SECTION 4.2 Collection and Allocation of Receivable Payments..... 35
SECTION 4.3 Realization upon Receivables......................... 35
SECTION 4.4 Physical Damage Insurance............................ 36
SECTION 4.5 Maintenance of Security Interests in Financed
Vehicles............................................. 36
SECTION 4.5-A. Segregation of Receivables Files..................... 37
SECTION 4.6 Covenants of Servicer................................ 37
SECTION 4.7 Purchase of Receivables upon Breach.................. 37
SECTION 4.8 Servicing Fee........................................ 38
SECTION 4.9 Servicer's Certificate............................... 38
SECTION 4.10 Annual Statement as to Compliance; Notice of Default. 39
SECTION 4.11 Annual Independent Certified Public Accountants'
Report............................................... 39
SECTION 4.12 Access to Certain Documentation and Information
Regarding Receivables................................ 40
SECTION 4.13 Servicer Expenses.................................... 40
SECTION 4.14 Appointment of Subservicer........................... 40
SECTION 4.15 Obligations under Basic Documents.................... 40
ARTICLE V
Distributions;Statements to Certificateholders
and Noteholders
SECTION 5.1 Establishment of Trust Accounts..................... 41
SECTION 5.1-A Capitalized Interest Account........................ 43
SECTION 5.2 Collections......................................... 44
SECTION 5.3 Application of Collections.......................... 44
SECTION 5.4 Deficiency Notice................................... 45
SECTION 5.5 Additional Deposits................................. 45
SECTION 5.6 Distributions....................................... 45
SECTION 5.7 Pre-Funding Account................................. 47
SECTION 5.8 Statements to Certificateholders and Noteholders.... 48
SECTION 5.9 Net Deposits........................................ 49
SECTION 5.10 Optional Deposits by the Security Insurer........... 49
ARTICLE VI
The Seller
SECTION 6.1 Representations of the Seller...................... 50
SECTION 6.2 Corporate Existence................................ 51
SECTION 6.3 Liability of Seller; Indemnities................... 52
SECTION 6.4 Merger or Consolidation of, or Assumption of the
Obligations of, Seller............................. 53
SECTION 6.5 Limitation on Liability of Seller and Others....... 54
SECTION 6.6 Seller May Own Certificates or Notes............... 54
ARTICLE VII
The Servicer
SECTION 7.1 Representations of Servicer........................ 54
SECTION 7.2 Indemnities of Servicer............................ 56
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer........................... 57
SECTION 7.4 Limitation on Liability of Servicer and Others..... 58
SECTION 7.5 Servicer Not To Resign............................. 58
ARTICLE VIII
Default
SECTION 8.1 Servicer Default................................... 59
SECTION 8.2 Appointment of Successor........................... 60
SECTION 8.3 [RESERVED]......................................... 61
SECTION 8.4 Notification to Noteholders and Certificateholders. 61
SECTION 8.5 Waiver of Past Defaults............................ 61
ARTICLE IX
Termination
SECTION 9.1 Optional Purchase of All Receivables............... 61
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1 Administrative Duties.............................. 63
SECTION 10.2 Records............................................ 65
SECTION 10.3 Additional Information to be Furnished to the Issuer 65
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1 Amendment.......................................... 65
SECTION 11.2 Protection of Title to Trust....................... 66
SECTION 11.3 Notices............................................ 69
SECTION 11.4 Assignment......................................... 69
SECTION 11.5 Limitations on Rights of Others.................... 70
SECTION 11.6 Severability....................................... 70
SECTION 11.7 Separate Counterparts.............................. 70
SECTION 11.8 Headings........................................... 70
SECTION 11.9 Governing Law...................................... 70
SECTION 11.10 Assignment to Trustee.............................. 70
SECTION 11.11 Nonpetition Covenants.............................. 70
SECTION 11.12 Limitation of Liability of Owner Trustee, Trustee
and Indenture Collateral Agent..................... 71
SECTION 11.13 Independence of the Servicer....................... 71
SECTION 11.14 No Joint Venture................................... 72
SECTION 11.15 Third-Party Beneficiaries.......................... 72
SECTION 11.16 Disclaimer by Security Insurer..................... 72
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A - Form of Subsequent Transfer Agreement
Exhibit B - [Intentionally Left Blank]
Exhibit C - Form of Monthly Noteholder Statement
Exhibit D - Form of Servicer's Certificate
Exhibit E - Form of Note Policy
Exhibit F - Form of Stamp
<PAGE>
SALE AND SERVICING AGREEMENT dated as of
November 30, 1997, among THE MONEY STORE AUTO TRUST
1997-4, a Delaware business trust (the "Issuer"), TMS
AUTO HOLDINGS, INC., a Delaware corporation (the
"Seller"), THE MONEY STORE AUTO FINANCE INC., a
Delaware corporation (the "Servicer"), and THE MONEY
STORE INC., a New Jersey corporation (the
"Representative").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
acquired by The Money Store Auto Finance Inc. through motor vehicle dealers;
WHEREAS the Seller has purchased such receivables from The Money Store
Auto Finance Inc. and is willing to sell such receivables to the Issuer;
WHEREAS the Issuer desires to purchase additional receivables arising
in connection with motor vehicle retail installment sale contracts to be
acquired by The Money Store Auto Finance Inc. through motor vehicle dealers;
WHEREAS the Seller has an agreement to purchase such additional
receivables from The Money Store Auto Finance Inc. and is willing to sell such
receivables to the Issuer;
WHEREAS the Servicer is willing to service all such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.2 of the Agreement, notice of the
Seller's election to transfer Subsequent Receivables to the Trust, such notice
to designate the related Subsequent Transfer Date and the approximate principal
amount of Subsequent Receivables to be transferred on such Subsequent Transfer
Date.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be an
Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that became a Liquidated Receivable during the related
Monthly Period and (ii) any Receivable that was purchased or repurchased by any
Person pursuant to the Agreement during the related Monthly Period) as of the
date of determination.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the Financed
Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service, car club and warranty contracts, other
items customarily financed as part of retail automobile installment sale
contracts or promissory notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the related
Contract.
"Available Funds" means, with respect to any Determination Date, the
sum of (i) the Collected Funds for such Determination Date, (ii) all Purchase
Amounts deposited in the Collection Account during the related Monthly Period,
and proceeds of any repurchase by a Dealer pursuant to Dealer Agreement, (iii)
the Monthly Capitalized Interest Amount with respect to the related Distribution
Date and all Pre-Funding Earnings deposited in the Collection Account pursuant
to Section 5.6(a), (iv) following the acceleration of the Notes pursuant to
Section 5.2 of the Indenture, the amount of money or property collected pursuant
to Section 5.4 of the Indenture since the preceding Determination Date by the
Trustee or Controlling Party for distribution pursuant to Section 5.6 of the
Indenture, and (v) any Insolvency Proceeds received pursuant to Section 9.1(b)
hereof.
"Base Servicing Fee" means, with respect to any Monthly Period, the
fee payable to the Servicer for services rendered during such Monthly Period,
which shall be equal to one- twelfth of the Servicing Fee Rate multiplied by the
Pool Balance as of the first day of such Monthly Period.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Sale and Servicing Agreement, the Indenture, the Insurance Agreement, the
Depository Agreement and other documents and certificates delivered in
connection therewith.
"Business Day" means a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of California, Delaware, New
Jersey, North Carolina or New York are authorized or obligated to be closed.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.1-A.
"Capitalized Interest Account Initial Deposit" means $142,470.84
deposited on the Closing Date.
"Certificate" means a Trust Certificate (as defined in the Trust
Agreement).
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificateholder" each person in whose name a Certificate is
registered.
"Class" means the Class A-1 Notes, the Class A-2 Notes or the Class
A-3 Notes, as the context requires.
"Class A-1 Deficiency Claim Amount" means, with respect to the
Determination Date relating to the Class A-1 Final Scheduled Distribution Date,
the excess, if any, of (i) the sum of the amounts payable on the Class A-1 Final
Scheduled Distribution Date pursuant to clauses (i) and (ii) of Section 5.6(c)
of the Agreement over (ii) the Available Funds for such Determination Date.
"Class A-1 Distribution Amount" means, with respect to the Class A-1
Final Scheduled Distribution Date, the sum of (i) the Available Funds for the
immediately preceding Determination Date plus (ii) the Class A-1 Deficiency
Claim Amount, if any, received and deposited in the Collection Account (from an
Insurer Optional Deposit or otherwise other than from draws under the Note
Policy).
"Class A-1 Final Scheduled Distribution Date" means January 8, 1999.
"Class A-1 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-2 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-3 Notes" has the meaning assigned to such term in the
Indenture.
"Closing Date" means December 30, 1997.
"Collected Funds" means, with respect to any Determination Date, the
amount of funds in or to be deposited in the Collection Account representing
collections on the Receivables during the related Monthly Period, including all
Net Liquidation Proceeds and proceeds of any Insurance Policy collected during
the related Monthly Period (but excluding any Purchase Amounts).
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Agreement.
"Computer Tape" means the computer tapes or other electronic media
furnished by TMS Auto Holdings, Inc. to the Issuer and its assigns and the
Security Insurer describing certain characteristics of the Initial Receivables
as of the Cutoff Date and of Subsequent Receivables as of the related Subsequent
Cutoff Date.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means (i) with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee, which at the time of
execution of this Agreement is 1011 Centre Road Suite 200, Wilmington, Delaware
19805, Attention: Lisa Wilkins, and (ii) with respect to the Trustee and the
Indenture Collateral Agent, the principal corporate trust office of the Trustee,
which at the time of execution of this Agreement is 450 West 33rd Street, 10th
Floor, New York, New York 10001-2697, Attention: Corporate Trust Department.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
the scheduled payments to be made on a Receivable, an amount equal to (i) the
excess of the principal balance of such Receivable immediately prior to such
order over the principal balance of such Receivable as so reduced and/or (ii) if
such court shall have issued an order reducing the effective rate of interest on
such Receivable, the net present value of such reduction (using as the discount
rate the higher of the APR on such Receivable or the rate of interest, if any,
specified by the court in such order) of the scheduled payments as so modified
or restructured. A "Cram Down Loss" shall be deemed to have occurred on the date
of issuance of such order.
"Dealer" means a dealer who sold a Financed Vehicle and who originated
and assigned the respective Receivable to the Seller under an existing agreement
between such Dealer and the Seller.
"Dealer Agreement" means any agreement between a Dealer and TMS Auto
Finance relating to the acquisition of Receivables from a Dealer by TMS Auto
Finance.
"Defaulted Receivable" means a Receivable with respect to which: (i)
ten percent or more of a Scheduled Payment is 120 or more days delinquent, (ii)
the Servicer has repossessed the related Financed Vehicle (and any applicable
redemption period has expired) or (iii) such Receivable is in default and the
Servicer has determined in good faith that payments thereunder are not likely to
be resumed.
"Deficiency Claim Amount" shall have the meaning set forth in Section
5.4 of the Agreement.
"Deficiency Claim Date" means, with respect to any Distribution Date
or the Class A-1 Final Scheduled Distribution Date, as applicable, the fourth
Business Day immediately preceding such Distribution Date or the Class A-1 Final
Scheduled Distribution Date, as applicable.
"Deficiency Notice" shall have the meaning set forth in Section 5.4 of
the Agreement.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the
Trustee, endorsed to, or registered in the name of,
the Trustee or its nominee or endorsed in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the
Indenture Collateral Agent; or
(ii) delivery thereof in registered form to the
Indenture Collateral Agent and
(A) the certificate is endorsed to the
Indenture Collateral Agent or in blank by effective
endorsement; or
(B) the certificate is registered in the
name of the Indenture Collateral Agent, upon original issue or
registration of transfer by the Issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security
to the Indenture Collateral Agent; or
(ii) the issuer has agreed that it will comply with
instructions originated by the Indenture Collateral Agent
without further consent by the registered owner;
(d) with respect to any security issued by the U.S. Treasury that is a
book- entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the
book-entry security to the securities account (as defined in
31 CFR Part 357) of a participant (as defined in 31 CFR Part
357) which is also a securities intermediary; and
(ii) the participant indicates by book entry that the
book-entry security has been credited to the Indenture
Collateral Agent securities account;
(e) with respect to a security entitlement:
(i) the Indenture Collateral Agent becomes the
entitlement holder; or
(ii) the securities intermediary has agreed that it
will comply with entitlement orders originated by the
Indenture Collateral Agent without further consent by the
entitlement holder;
(f) for the purpose of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Collateral Agent acquires
possession thereof;
(B) another person (other than a securities
intermediary) either acquires possession thereof on behalf of
the Indenture Collateral Agent or, having previously acquired
possession thereof, acknowledges that it holds for the
Indenture Collateral Agent; or
(C) a securities intermediary acting on
behalf of the Indenture Collateral Agent acquires possession
of thereof, only if the certificate is in registered form and
has been specially endorsed to the Indenture Collateral Agent
by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture
Collateral Agent as the registered owner, upon original issue
or registration of transfer; or
(B) another person (other than a securities
intermediary) either becomes the registered owner thereof on
behalf of the Indenture Collateral Agent or, having previously
become the registered owner, acknowledges that it holds for
the Indenture Collateral Agent;
(g) for purposes of this definition, except as otherwise indicated,
the following terms shall have the meaning assigned to each such term in the
UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture
Collateral Agent shall make appropriate notations on its records, and shall
cause same to be made on the records of its nominees, indicating that securities
are held in trust pursuant to and as provided in this Agreement.
"Depositor" shall mean the Seller in its capacity as Depositor under
the Trust Agreement.
"Depository Agreement" means the Note Depository Agreement.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day prior to the related Distribution Date or, in the case of the
Class A-1 Final Scheduled Distribution Date if any distributions are required to
be made on the Class A-1 Final Scheduled Distribution Date, the fifth Business
Day prior to such Class A-1 Scheduled Distribution Date.
"Distribution Amount" means, with respect to a Distribution Date, the
sum of (i) the Available Funds for the immediately preceding Determination Date,
plus (ii) the Deficiency Claim Amount, if any, received (from an Insurer
Optional Deposit or otherwise other than from draws under the Note Policy) by
the Trustee with respect to such Distribution Date.
"Distribution Date" means, with respect to each Monthly Period, the
twentieth day of the following calendar month, or if such day is not a Business
Day, the immediately following Business Day, commencing in January, 1998.
"Draw Date" means, with respect to any Distribution Date and the Class
A-1 Final Scheduled Distribution Date, the second Business Day immediately
preceding such Distribution Date, or the Class A-1 Final Scheduled Distribution
Date, as applicable.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment
grade.
"Eligible Institution" means (a) the corporate trust department of the
Trustee or any other entity specified in the Agreement or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of AAA
or better by Standard & Poor's and Aaa or better by Moody's or (B) a certificate
of deposit rating of A-1+ by Standard & Poor's and P-1 or better by Moody's or
any other short-term or certificate of deposit rating acceptable to the Rating
Agencies and to the Security Insurer and (ii) whose deposits are insured by the
FDIC. If so qualified under clause (b) above, the Owner Trustee or the Trustee
may be considered an Eligible Institution.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof or the District of Columbia (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); PROVIDED, HOWEVER, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Distribution Date), the commercial paper or
other short-term senior unsecured debt obligations (other than such obligations
the rating of which is based on the credit of a Person other than such
depository institution or trust company) of such depository institution or trust
company shall have a credit rating from Standard & Poor's of A-1+ and from
Moody's of P-1;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard & Poor's of
A-1+ and from Moody's of P- 1;
(d) investments in money market funds (including funds for which the
Trustee or the Owner Trustee or any of their respective Affiliates is investment
manager or advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G
and from Moody's of Aaa and having been approved by the Security Insurer;
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above;
(g) any demand deposit in a trust account maintained by the Chase
Manhattan bank; provided that such deposits shall consist of direct obligations
of, and obligations guaranteed as to timely payment by, The Chase Manhattan
Bank; and
(h) any other investment which would satisfy the Rating Agency
Condition and is consistent with the ratings of the Securities and which, so
long as no Insurer Default shall have occurred and be continuing, has been
approved by the Security Insurer.
Any of the foregoing Eligible Investments may be purchased by or
through the Owner Trustee or the Trustee or any of its Affiliates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means with respect to (i) the
Class A-1 Notes, January 8, 1999, (ii) the Class A-2 Notes, the March 2004
Distribution Date and (iii) the Class A-3 Notes, the March 2004 Distribution
Date.
"Final Scheduled Maturity Date" means March 2004.
"Financed Vehicle" means an automobile, light-duty truck, van or
minivan, together with all accessions thereto, securing an Obligor's
indebtedness under the respective Receivable.
"Funding Period" means the period beginning on and including the
Closing Date and ending on the first to occur of (a) the Distribution Date on
which the amount on deposit in the Pre-Funding Account (after giving effect to
any transfers therefrom in connection with the transfer of Subsequent
Receivables to the Issuer on such Distribution Date) is less than $200,000, (b)
the date on which an Event of Default or a Servicer Default occurs, an Event of
Default under the Indenture occurs or the date on which an Insolvency Event
occurs with respect to the Holder of the GP Interest and (c) the close of
business on the February 1998 Distribution Date.
"GP Interest": The 1% interest in the Trust held by TMS Auto Holdings,
Inc., Delaware corporation, pursuant to the Trust Agreement.
"Indenture" means the Indenture dated as of November 30, 1997, among
the Issuer, the Indenture Collateral Agent and the Trustee, as the same may be
amended and supplemented from time to time.
"Indenture Collateral Agent" means the Person acting as Indenture
Collateral Agent under the Indenture, its successors in interest and any
successor Indenture Collateral Agent under the Indenture.
"Initial Cutoff Date" means as to any Initial Receivable, the later of
November 30, 1997 and the date of origination of such Initial Receivable.
"Initial Receivables" means any Receivable conveyed to the Trust on
the Closing Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Insurance Agreement" means the Insurance Agreement, dated as of
November 30, 1997, among the Security Insurer, the Indenture Trustee, the Trust,
the Servicer, the Representative, the Owner Trustee and the Seller.
"Insurance Agreement Event of Default" means an "Insurance Agreement
Event of Default" as defined in the Insurance Agreement.
"Insurance Policy" means, with respect to a Receivable, any insurance
policy (including the insurance policies described in Section 4.4 of the
Agreement) benefiting the holder of the Receivable providing loss or physical
damage, credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.
"Insurer's Agent" means The Chase Manhattan Bank.
"Insurer Default" means the occurrence and continuance of any of the
following events:
(a) the Security Insurer shall have failed to make a payment required
under the Note Policy in accordance with its terms;
(b) The Security Insurer shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United States
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made
a general assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the United States Bankruptcy Code or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Security Insurer or for all or any material portion of
its property or (ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of the Security Insurer (or the taking of possession
of all or any material portion of the property of the Security Insurer);
provided, however, that the Security Insurer's rights shall be immediately
reinstated upon cure of such Insurer Default.
"Insurer Optional Deposit" means, with respect to any Distribution
Date or the Class A-1 Final Scheduled Distribution Date, as applicable, an
amount delivered by the Insurer pursuant to Section 5.10 of the Agreement, at
its sole option, to the Trustee for deposit into the Collection Account for any
of the following purposes: (i) to provide funds in respect of the payment of
fees or expenses of any provider of services to the Trust with respect to such
Distribution Date or the Class A-1 Final Scheduled Distribution Date, as
applicable; or (ii) to include such amount as part of the Distribution Amount or
Class A-1 Distribution Amount for such Distribution Date or Class A-1 Final
Scheduled Distribution Date, as applicable, to the extent that without such
amount a draw would be required to be made on the Note Policy.
"Interest Rate" means, with respect to (i) the Class A-1 Notes,
5.90875% per annum (computed on the basis of the actual number of days elapsed
in a 360-day year), (ii) the Class A-2 Notes, 6.35% per annum (computed on the
basis of a 360-day year of twelve 30-day months) and (iii) the Class A-3 Notes,
6.46% per annum (computed on the basis of a 360-day year of twelve 30-day
months).
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts and the Certificate Distribution Account.
"Issuer" means The Money Store Auto Trust 1997-4.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
"Liquidated Receivable" means, with respect to any Determination Date,
a Receivable as to which, as of the last day of the related Monthly Period, (i)
90 days have elapsed since the Servicer repossessed the Financed Vehicle, (ii)
the Servicer has determined in good faith that all amounts it expects to recover
have been received, (iii) 10% or more of a Scheduled Payment shall have become
150 or more days delinquent, or (iv) the Financed Vehicle has been sold and the
proceeds received.
"Mandatory Redemption Date" means the Distribution Date in February
1998.
"Monthly Capitalized Interest Amount" means in the case of the January
and February 1998 Distribution Dates, an amount equal to the product of (x) a
fraction the numerator of which is one and the denominator of which is twelve,
(y) the weighted average of each Interest Rate and the Certificate Rate, less
2.5% and (z) the difference between the sum of the aggregate principal amount of
the Notes immediately prior to the applicable Distribution Date and the Pool
Balance as of the last day of the second preceding Monthly Period, or in the
case of the January Distribution Date, as of the Closing Date.
"Monthly Period" means with respect to each Distribution Date and the
Class A-1 Final Scheduled Distribution Date, the calendar month preceding the
month in which such Distribution Date or Class A-1 Final Scheduled Distribution
Date, as applicable, occurs.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Net Liquidation Proceeds" means as to any Liquidated Receivable, all
amounts realized with respect to such Receivable (other than amounts paid
pursuant to this Agreement and drawings under the Note Policy) net of (i)
reasonable expenses incurred by the Servicer in connection with the collection
of such Receivable and the repossession and disposition of the Financed Vehicle
and (ii) amounts that are required to be refunded to the Obligor on such
Receivable; PROVIDED, HOWEVER, that the Net Liquidation Proceeds with respect to
any Receivable shall in no event be less than zero.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Agreement.
"Note Insured Payment" has the meaning as defined in the Note Policy.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Distribution Date and any outstanding Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that was actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rate borne by
each Class of Notes from such preceding Distribution Date to but excluding the
current Distribution Date.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. Interest on the Class A-1 Notes
shall be calculated on the basis of a 360 day year and the actual number of days
elapsed in the related interest period. Interest on the Class A-2 Notes and the
Class A-3 Notes shall be computed on the basis of a 360-day year of twelve
30-day months. Notwithstanding the foregoing, the Noteholder's Interest
Distributable Amount with respect to the Class A-1 Notes on the Distribution
Date following the Class A-1 Final Scheduled Distribution Date will only include
amounts in respect thereof due but unpaid on the Class A-1 Final Scheduled
Distribution Date together with interest thereon, to the extent permitted by
law, at the Interest Rate.
"Noteholders' Monthly Interest Distributable Amount" means, (A) with
respect to any Distribution Date, the product of (i) (X) in the case of the
Class A-1 Notes, the product of the Interest Rate for such Class and a fraction,
the numerator of which is the number of days elapsed from and including the
prior Distribution Date (or, in the case of the first Distribution Date, from
and including the Closing Date) to but excluding such Distribution Date and the
denominator of which is 360 and (Y) in the case of the Class A-2 Notes and the
Class A-3 Notes, one-twelfth of the Interest Rate for such Class (or, in the
case of the first Distribution Date, the Interest Rate for such Class multiplied
by a fraction, the numerator of which is the number of days elapsed from and
including December 20, 1997 to but excluding such Distribution Date and the
denominator of which is 360) and (ii) the outstanding principal amount of the
Notes of such Class immediately preceding such Distribution Date and (B) with
respect to the Class A-1 Notes and the Class A-1 Final Scheduled Distribution
Date, the product of (i) the Interest Rate for the Class A-1 Notes multiplied by
a fraction, the numerator of which is the actual number of days elapsed from and
including the preceding Distribution Date to but excluding the Class A-1 Final
Scheduled Distribution Date and the denominator of which is 360 and (ii) the
outstanding principal amount of the Class A-1 Notes immediately preceding the
Class A-1 Final Scheduled Distribution Date.
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Noteholders' Percentage of the Principal
Distributable Amount.
"Noteholders' Percentage" means with respect to any Determination Date
(i) relating to a Distribution Date prior to the Distribution Date on which the
principal amount of the Class A-3 Notes is reduced to zero, 100%; (ii) relating
to the Distribution Date on which the principal amount of the Class A-3 Notes is
reduced to zero, the percentage equivalent of a fraction, the numerator of which
is the principal amount of the Class A-3 Notes immediately prior to such
Distribution Date, and the denominator of which is the Principal Distributable
Amount; and (iii) relating to any other Distribution Date, 0%.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall for the preceding Distribution Date over the amount in respect of
principal that was actually deposited in the Note Distribution Account on such
preceding Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, (other than the Final Scheduled Distribution Date for any
Class of Notes), the lesser of (i) the outstanding principal balance on the
Notes on such Distribution Date prior to making any distribution thereon and
(ii) the sum of the Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and the Noteholders' Principal Carryover Shortfall as of the
close of the preceding Distribution Date. The Noteholders' Principal
Distributable Amount on the Final Scheduled Distribution Date for any Class of
Notes will equal the sum of (i) the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date, (ii) the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date, and (iii) the
excess of the outstanding principal amount of such Class of Notes, if any, over
the amounts described in clauses (i) and (ii). Notwithstanding the foregoing,
the Noteholder's Principal Distributable Amount with respect to the Class A-1
Notes on the Distribution Date following the Class A-1 Final Scheduled
Distribution Date will only include the amount thereof due but unpaid on the
Class A-1 Notes on the Class A-1 Final Scheduled Distribution Date.
"Note Policy" means the note guaranty insurance policy issued by the
Security Insurer to the Trustee for the benefit of the Noteholders with respect
to the Notes, including any endorsements thereto, in the form of Exhibit E to
the Indenture.
"Note Pool Factor" for each Class of Notes as of the close of business
on a Distribution Date means a seven-digit decimal figure equal to the
outstanding principal amount of such Class of Notes as of such Distribution Date
after giving effect to principal distributions on such date divided by the
original outstanding principal amount of such Class of Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the (a) chairman
of the board, the president, any executive vice president or any vice president
and (b) any treasurer, assistant treasurer, secretary or assistant secretary of
the Representative, the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the Representatives, the Seller or the
Servicer, which counsel shall be acceptable to the Trustee, the Owner Trustee,
the Security Insurer or the Rating Agencies, as applicable, and which shall be
addressed to the Security Insurer.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Subsequent Cutoff Dates.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means Bankers Trust (Delaware), not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, its successors
in interest or any successor Owner Trustee under the Trust Agreement.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of any date of determination, the aggregate
Principal Balance of the Receivables (excluding Purchased Receivables and
Liquidated Receivables).
"Precomputed Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Rule of 78s Method.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account, (exclusive of Pre-Funding
Earnings) which initially shall be $21,485,751.08.
"Pre-Funding Account" has the meaning specified in Section
5.1(a)(iii).
"Pre-Funding Earnings" means any investment earnings (net of losses)
on amounts on deposit in the Pre-Funding Account.
"Prepayment Amount" means, as of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Receivables on such date, an amount equal to the
Pre-Funded Amount on deposit in the Pre- Funding Account as of such Distribution
Date.
"Principal Balance" means, with respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received on or
prior to such date and allocable to principal in accordance with (x) in the case
of Simple Interest Receivables, the terms of the Receivable and (y) in the case
of Precomputed Receivables, the actuarial method, and (ii) any Cram Down Loss in
respect of such Receivable.
"Principal Carryover Shortfall" means, as of the close of business on
any Distribution Date, the excess of the Principal Distributable Amount plus any
outstanding Principal Carryover Shortfall from the preceding Distribution Date
over the amount of principal deposited in the Note Distribution Account with
respect to such current Distribution Date.
"Principal Distributable Amount" means, with respect to any
Distribution Date, without duplication, the sum of (i) the principal portion
(calculated in the case of Precomputed Receivables on the basis of the actuarial
method and in the case of Simple Interest Receivables, calculated on the basis
of the Simple Interest Method) of all Collected Funds received during the
immediately preceding Monthly Period (other than Liquidated Receivables and
Purchased Receivables) including the principal portion of all prepayments, (ii)
the Principal Balance of all Receivables that became Liquidated Receivables
during the related Monthly Period (other than Purchased Receivables), (iii)
(without duplication of amounts in clause (ii) hereof) the principal portion of
the Purchase Amounts received with respect to all Receivables that became
Purchased Receivables during the related Monthly Period, (iv) in the sole
discretion of the Security Insurer, the Principal Balance of all the Receivables
that were required to be purchased pursuant to Sections 3.2 and 4.7, during such
Monthly Period but were not purchased, (v) the aggregate amount of Cram Down
Losses that shall have occurred during the related Monthly Period; and (vi)
following the acceleration of the Notes pursuant to Section 5.2 of the
Indenture, the amount of money or property collected pursuant to Section 5.4 of
the Indenture since the preceding Determination Date by the Trustee or
Controlling Party for distribution pursuant to Section 5.6 of the Indenture.
"Purchase Agreement" means the Purchase Agreement between the Seller
and TMS Auto Finance, dated as of November 30, 1997, pursuant to which the
Seller acquired the Initial Receivables, as such Agreement may be amended from
time to time.
"Purchase Amount" means, with respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on the Principal Balance of such
Receivable (including one month's interest thereon, in the month of payment, at
the APR less, so long as TMS Auto Finance is the Servicer, the Servicing Fee),
after giving effect to the receipt of any moneys collected (from whatever
source) on such Receivable, if any.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Monthly Period by the Servicer or the
Representative pursuant to Section 4.7 of the Agreement or repurchased by the
Seller, TMS Auto Finance or the Representative pursuant to Section 3.2 of the
Agreement.
"Rating Agency" means Moody's and Standard & Poor's. If no such
organization or successor maintains a rating on the Securities, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Seller and acceptable to the Security
Insurer (so long as an Insurer Default shall not have occurred and be
continuing), notice of which designation shall be given to the Trustee, the
Owner Trustee, the Security Insurer and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Security
Insurer, the Owner Trustee and the Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of any Class of
Notes.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Net Liquidation Proceeds to the extent allocable to principal.
"Receivable" means any Contract listed on Schedule A, as such Schedule
shall be amended to reflect the transfer of Subsequent Receivables to the Trust
(which Schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3.3.
"Record Date" with respect to each Distribution Date means the day
immediately preceding such Distribution Date, unless otherwise specified in the
Agreement.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.
"Rule of 78s Method" means the method under which a portion of a
payment allocated to earned interest and the portion allocable to principal is
determined according to the sum of the month's digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Rule of 78s Receivable" means a Receivable which by its terms
calculates interest and principal with respect to each scheduled payment in
accordance with the Rule of 78s method.
"Scheduled Payment" on a Precomputed Receivable means that portion of
the payment required to be made by the Obligor during the respective Monthly
Period sufficient to amortize the Principal Balance thereof under the actuarial
method over the term of the Receivable and to provide interest at the APR.
"Security Insurer" means MBIA Insurance Corporation, a stock insurance
company incorporated under the laws of the State of New York, or any successor
thereto, as issuer of the Policies.
"Seller" means TMS Auto Holdings, Inc., a Delaware corporation, and
its successors in interest to the extent permitted hereunder.
"Service Contract" means, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle.
"Servicer" means The Money Store Auto Finance Inc., as the servicer of
the Receivables, and each successor Servicer pursuant to Section 7.3 or 8.2 of
the Agreement.
"Servicer Default" means an event specified in Section 8.1 of the
Agreement.
"Servicer's Certificate" means an Officer's Certificate of the
Servicer delivered pursuant to Section 4.9 of the Agreement, substantially in
the form of Exhibit D to the Agreement.
"Servicing Fee" has the meaning specified in Section 4.8 of the
Agreement.
"Servicing Fee Rate" means 1.5% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made (in some states
assuming 30 day months), divided by the actual number of days in a year (360
days in states which assume 30 day months) and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Standard & Poor's" means Standard & Poor's Ratings Services, or its
successor.
"Subsequent Cutoff Date" means (i) the last day of the month preceding
the month in which particular Subsequent Receivables are conveyed to the Trust
pursuant to this Agreement or (ii) if any such Subsequent Receivable is
originated in the month of the related Subsequent Transfer Date, the date of
origination.
"Subsequent Purchase Agreement" means an agreement by and between the
Seller and TMS Auto Finance pursuant to which the Seller will acquire Subsequent
Receivables.
"Subsequent Receivables" means the Receivables transferred to the
Issuer pursuant to Section 2.2 of the Agreement, which shall be listed on
Schedule A to the related Subsequent Transfer Agreement.
"Subsequent Transfer Agreement" has the meaning assigned thereto in
Section 2.2(b) of the Agreement.
"Subsequent Transfer Date" means, with respect to Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Funding Period on which Subsequent Receivables are to be transferred to the
Trust pursuant to this Agreement, and a Subsequent Transfer Agreement is
executed and delivered to the Trust.
"Supplemental Servicing Fee" means charges collected (from whatever
source) on the Receivables during the related Monthly Period including, in the
case of a Precomputed Receivable that is prepaid in full, the difference between
the Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the Rule of 78s, and other late fees, prepayment fees, administrative fees and
expenses or similar charges allowed by applicable law with respect to
Receivables, plus reinvestment proceeds on any payments received in respect of
Receivables during the related Monthly Period.
"TMS Auto Finance" means The Money Store Auto Finance Inc., a Delaware
corporation.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.1 of
the Agreement.
"Trust Agreement" means the Trust Agreement dated as of November 30,
1997, between the Seller and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Officer" means, (i) in the case of the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, and (ii) in the case of the Owner Trustee, any officer in
the corporate trust office of the Owner Trustee with direct responsibility for
the administration of this Agreement or any of the Basic Documents on behalf of
the Owner Trustee.
"Trust Property" has the meaning assigned thereto in Section 2.1 of
the Agreement.
"Trustee" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
"Voting Interest" means the interest in the Trust issued pursuant to
the Trust Agreement entitling the holder thereof to exercise sole voting control
over actions requiring the approval or disapproval of Certificateholders.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York on the date of the Agreement.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture, or, if not defined therein,
in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 CONVEYANCE OF INITIAL RECEIVABLES. In consideration of the
Issuer's delivery to or upon the order of the Seller on the Closing Date of the
net proceeds from the sale of the Notes and the Certificates and the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the obligations
set forth herein), all right, title and interest of the Seller in and to:
(a) the Initial Receivables, and all moneys received thereon after the
Initial Cutoff Date;
(b) an assignment of the security interests in the Financed Vehicles
granted by Obligors pursuant to the Initial Receivables and any other interest
of the Seller in such Financed Vehicles;
(c) any proceeds with respect to the Initial Receivables from claims
on any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors and any proceeds from the liquidation of the
Initial Receivables;
(d) any proceeds from any Initial Receivable repurchased by a Dealer,
pursuant to a Dealer Agreement, as a result of a breach of representation or
warranty in the related Dealer Agreement;
(e) all rights under any Service Contracts on the related Financed
Vehicles;
(f) the related Receivables Files;
(g) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement,
including the Seller's rights under the Purchase Agreement, and the delivery
requirements, the representations and warranties and the cure and repurchase
obligations of TMS Auto Finance under the Purchase Agreement; and
(h) the proceeds of any and all of the foregoing (the items specified
in clauses (a) through (h) are referred to herein as the "Trust Property").
It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Trust Property from the Seller to the Trust and the beneficial interest in
and title to the Receivables and the other Trust Property shall not be part of
the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the transfer and assignment contemplated hereby is
held not to be a sale, this Agreement shall constitute a grant of a security
interest in the property referred to in this Section 2.1 for the benefit of the
Noteholders, the Certificateholders and the Security Insurer.
SECTION 2.2 CONVEYANCE OF SUBSEQUENT RECEIVABLES. (a) Subject to the
conditions set forth in paragraph (b) below, in consideration of the Issuer's
delivery on each related Subsequent Transfer Date to or upon the order of the
Seller of the amount described in Section 5.7(a) to be delivered to the Seller,
the Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Issuer without recourse (subject to the obligations set forth herein), all
right, title and interest of the Seller in and to:
(i) the Subsequent Receivables listed on Schedule A to the
related Subsequent Transfer Agreement;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent Receivables
from claims on any physical damage, credit life or disability
insurance policies covering the related Financed Vehicles or Obligors
and any proceeds from the liquidation of such Subsequent Receivables;
(iv) any proceeds from any Subsequent Receivable repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement;
(v) all rights under any Service Contracts on the related
Financed Vehicles:
(vi) the related Receivables Files;
(vii) all of the Seller's right, title and interest in its rights
and benefits, but none of its obligations or burdens, under each of
the Subsequent Purchase Agreements, including the Seller's rights
under each of the Subsequent Purchase Agreements, and the delivery
requirements, representations and warranties and the cure and
repurchase obligations of TMS Auto Finance under each of the
Subsequent Purchase Agreements, on or after the related Subsequent
Cutoff Date; and
(viii) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Subsequent Receivables
and the other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions on or prior
to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee, the Owner
Trustee, the Security Insurer and the Rating Agencies with an Addition
Notice not later than one day prior to the first Subsequent Transfer
Date and five days prior to any other Subsequent Transfer Date and
shall have provided any information reasonably requested by any of the
foregoing with respect to the Subsequent Receivables;
(ii) the Seller shall have delivered to the Owner Trustee, the
Security Insurer and the Trustee a duly executed Subsequent Transfer
Agreement which shall include supplements to Schedule A, listing the
Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section 5.2,
have deposited in the Collection Account all collections in respect of
the Subsequent Receivables;
(iv) as of each Subsequent Transfer Date, (A) the Seller shall
not be insolvent and shall not become insolvent as a result of the
transfer of Subsequent Receivables on such Subsequent Transfer Date,
(B) the Seller shall not intend to incur or believe that it shall
incur debts that would be beyond its ability to pay as such debts
mature, (C) such transfer shall not have been made with actual intent
to hinder, delay or defraud any Person and (D) the assets of the
Seller shall not constitute unreasonably small capital to carry out
its business as conducted;
(v) the Funding Period shall not have terminated;
(vi) after giving effect to any transfer of Subsequent
Receivables on a Subsequent Transfer Date, the Receivables transferred
to the Trust pursuant hereto shall meet the following criteria (based
on the characteristics of the Initial Receivables on the Initial
Cutoff Date and the Subsequent Receivables on the related Subsequent
Cutoff Dates): (i) the weighted average APR of the Receivables
transferred to the Trustee shall not be less than approximately
18.80%; (ii) the weighted average remaining term of the Receivables
transferred to the Trust shall not be greater than approximately 60
months; (iii) not more than approximately 35.0% of the Aggregate
Principal Balance of the Receivables shall consist of Obligors whose
mailing addresses are in California; (iv) no more than 10.0% the
Receivables shall have a remaining term to maturity of more than 66
months and no Receivable shall have an original term to maturity of
more than 73 months, (v) not more than 20.0% of the Aggregate
Principal Balance of the Receivables shall have Obligors whose mailing
addresses are in any one state other than California unless an Opinion
of Counsel acceptable to the Rating Agencies and the Security Insurer
with respect to the security interest in the related Financed Vehicles
is furnished by the Seller on or prior to such Subsequent Transfer
Date and (vi) each Subsequent Receivable has a final maturity date not
later than January 2004.
(vii) each of the representations and warranties made by the
Seller pursuant to Section 3.1 with respect to the Subsequent
Receivables to be transferred on such Subsequent Transfer Date shall
be true and correct as of the related Subsequent Transfer Date, and
the Seller shall have performed all obligations to be performed by it
hereunder on or prior to such Subsequent Transfer Date;
(viii) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date indicate in its computer files that the
Subsequent Receivables identified in the Subsequent Transfer Agreement
have been sold to the Trust pursuant to this Agreement;
(ix) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Trust in the Owner Trust
Estate and the first perfected security interest of the Indenture
Collateral Agent in the Collateral;
(x) no selection procedures adverse to the interests of the
Noteholders, or the Security Insurer shall have been utilized in
selecting the Subsequent Receivables;
(xi) the addition of any such Subsequent Receivables shall not
result in a material adverse tax consequence to the Trust, the
Noteholders, or the Security Insurer;
(xii) the Seller shall have delivered (A) to the Rating Agencies
and the Security Insurer an Opinion of Counsel with respect to the
transfer of such Subsequent Receivables substantially in the form of
the Opinion of Counsel delivered to the Rating Agencies and the
Security Insurer on the Closing Date and any other opinions so
required by the Security Insurer, including, without limitation, an
Opinion of Counsel to the effect that in a bankruptcy of the
Representative a court would not consolidate the assets of the Seller
with those of the Representative and (B) to the Trustee the Opinion of
Counsel required by Section 11.2(i)(1);
(xiii) Intentionally omitted;
(xiv) the Security Insurer (so long as no Insurer Default shall
have occurred and be continuing), in its absolute and sole discretion,
shall have approved in writing the transfer of such Subsequent
Receivables to the Trust; and
(xv) the Seller shall have delivered to the Security Insurer and
the Trustee an Officers' Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b).
The Seller and the Representative jointly and severally covenant that in the
event any of the foregoing conditions precedent are not satisfied with respect
to any Subsequent Receivable on the date required as specified above, the Seller
will immediately repurchase such Subsequent Receivable from the Trust, at a
price equal to the Purchase Amount thereof, in the manner specified in Section
4.7.
ARTICLE III
THE RECEIVABLES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. The
Representative and the Seller, jointly and severally, make the following
representations and warranties as to the Receivables on which the Issuer is
deemed to have relied in acquiring the Receivables and upon which the Security
Insurer shall be deemed to rely in issuing the Note Policy. Such representations
and warranties speak as of the execution and delivery of this Agreement and as
of the Closing Date in the case of the Initial Receivables, and as of the
related Subsequent Transfer Date in case of the Subsequent Receivables, but
shall survive the sale, transfer and assignment of the Receivables to the Issuer
and the pledge thereof to the Trustee pursuant to the Indenture.
(a) TITLE. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Trust and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
petition for receivership by or against the Seller under any bankruptcy law.
Immediately prior to the transfer and assignment herein contemplated, the Seller
had good and marketable title to each Receivable, free and clear of all Liens
and, immediately upon the transfer thereof, the Trust shall have good and
marketable title to each such Receivable, free and clear of all Liens; and the
transfer of the Receivables to the Trust has been perfected under the UCC. No
Dealer or any other Person has any right to receive proceeds of any Receivables.
(b) ALL FILINGS MADE. All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Trust a first priority
perfected ownership interest in the Receivables, and to give the Trustee a first
priority perfected security interest therein, shall have been made.
(c) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) shall have
been originated in the United States of America by a Dealer in connection with
the retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties thereto,
shall have been purchased by the Seller from TMS Auto Finance which in turn
shall have purchased such Receivable from such Dealer under an existing dealer
agreement with TMS Auto Finance and shall have been validly assigned by TMS Auto
Finance to the Seller in accordance with its terms, (ii) shall have created or
shall create a valid, subsisting and enforceable first priority security
interest in favor of TMS Auto Finance in the Financed Vehicle, which security
interest has been assigned by TMS Auto Finance to the Seller, which in turn
shall be assignable by the Seller to the Trust, (iii) shall contain customary
and enforceable provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the collateral of the benefits
of the security, (iv) shall provide for level monthly payments (provided that
the payment in the first or last month in the life of the Receivable may be
minimally different from the level payment) that fully amortize the Amount
Financed by maturity, (v) in the case of a Precomputed Receivable, shall provide
for, in the event that such Contract is prepaid, a prepayment that fully pays
the Principal Balance and includes a full months interest to the date of payment
in the month of prepayment at the Annual Percentage Rate, and (vi) has not been
amended or collections with respect to which have been waived, other than as
evidenced in the Receivable File relating thereto.
(d) SCHEDULE OF RECEIVABLES. The information set forth in Schedule A
to this Agreement is true and correct in all material respects as of the close
of business on the Initial Cutoff Date or, with respect to any Subsequent
Receivables, as of the close of business on the related Subsequent Cutoff Date,
and no selection procedures believed by the Seller to be adverse to the
Noteholders or the Security Insurer were utilized in selecting the Receivables.
The Computer Tape regarding the Receivables is true and correct in all material
respects as of the Initial Cutoff Date and will be true and correct as of each
Subsequent Cutoff Date.
(e) COMPLIANCE WITH LAW. Each Initial Receivable complied at the time
it was originated or made and complies at the execution of this Agreement or,
with respect to any Subsequent Receivables conveyed on a Subsequent Transfer
Date, such Subsequent Receivables shall comply in all material respects with all
requirements of applicable Federal, state and local laws and regulations
thereunder, including, without limitation, usury laws, the Federal Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Rees-Levering Act, the Federal Reserve Board's
Regulations B and Z, state adaptations of the National Consumer Act and other
consumer credit laws and equal credit opportunity and disclosure laws.
(f) BINDING OBLIGATION. Each Receivable represents the legal, valid
and binding payment obligation in writing of the Obligor thereunder, enforceable
by the holder thereof in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect related
to or affecting creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity); and all parties to
each Receivable had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby.
(g) NO GOVERNMENT OBLIGOR. None of the Receivables are due from the
United States of America or any State or from any agency, department or
instrumentality of the United States of America or any state.
(h) SECURITY INTEREST IN FINANCED VEHICLE. Immediately prior to the
sale, assignment and transfer thereof to the Trust, each Receivable is secured
by a validly perfected first priority security interest in the Financed Vehicle
in favor of TMS Auto Finance as secured party or all necessary and appropriate
actions have been commenced that would result in the valid perfection of a first
priority security interest in the Financed Vehicle in favor of TMS Auto Finance
as secured party. Immediately after the sale, assignment and transfer thereof to
the Trust, although the Lien Certificate will not indicate the Trust or Owner
Trustee as secured party, each Receivable will be secured by an enforceable and
perfected security interest in the Financed Vehicle in favor of the Trust as
secured party for the benefit of the Noteholders and the Security Insurer, which
security interest is prior to all other Liens in such Financed Vehicle.
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from the
Lien granted by the related Receivable in whole or in part unless another
vehicle has been substituted as collateral securing the Receivable without any
other modification to such Receivable.
(j) NO WAIVER. No provision of a Receivable has been waived except as
reflected in the Receivable File relating to such Receivable.
(k) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable.
(l) NO LIENS. There are no Liens or claims, including Liens for work,
labor, materials or unpaid state or federal taxes relating to any Financed
Vehicle securing the related Receivable, that are or may be prior to or equal to
the Lien granted by such Receivable.
(m) NO DEFAULT. No Initial Receivable has a payment that is more than
30 days delinquent as of the Initial Cutoff Date or, with respect to any
Subsequent Receivables, of not more than 30 days delinquent as of the related
Subsequent Cutoff Date and, except as permitted in this paragraph, no default,
breach, violation or event (in any such case) permitting acceleration under the
terms of any Receivable has occurred; and no continuing condition that with
notice or the lapse of time would constitute a default, breach, violation or
event (in any such case) permitting acceleration under the terms of any
Receivable shall have arisen as of the Cutoff Date; and the Seller has not
waived and shall not waive any of the foregoing. For purposes of this clause
(m), a Receivable is considered 30 days delinquent as of the end of the month
following the date on which a second consecutive Scheduled Payment has not been
made. As of the Closing Date, no Receivable has had an uncured first payment
default.
(n) NO BANKRUPTCIES. No Obligor on any Receivable was the subject of a
bankruptcy proceeding commenced following the execution of the related Contract.
(o) NO REPOSSESSIONS. As of the Initial Cutoff Date, no Financed
Vehicle securing any Receivable is in repossession status and, as of the related
Subsequent Cutoff Date, no Financed Vehicle securing any Subsequent Receivable
will be in repossession status.
(p) ADVERSE SELECTION. No selection procedures adverse to the
Noteholders or the Security Insurer were utilized in selecting the Receivables
from those owned by the Servicer which met the selection criteria contained in
this Agreement.
(q) CHATTEL PAPER. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(r) INSURANCE. The Seller, in accordance with its customary
procedures, has determined that the Obligor, at the time the Receivable was
originated, obtained physical damage insurance covering the Financed Vehicle and
under the terms of the Receivable the Obligor is required to maintain such
insurance.
(s) LAWFUL ASSIGNMENT. No Receivable was originated in, as of the
Initial Cutoff Date or, with respect to any Subsequent Receivables, as of the
related Subsequent Cutoff Date, is subject to the laws of, any jurisdiction
under which the sale, transfer and assignment of such Receivable or this
Agreement is unlawful, void or voidable).
(t) NO INSURANCE PREMIUMS. No portion of the Principal Balance of any
Receivable includes amounts attributable to the payment of any physical damage
or theft insurance premium.
(u) ONE ORIGINAL. There is only one original executed copy of each
Receivable.
(v) LOCATION OF RECEIVABLE FILES. The Receivable Files shall be kept
at one or more of the locations listed in Schedule B and each item required to
be in a Receivable File is in such Receivable File.
(w) COMPUTER RECORDS. As of the Closing Date, the accounting and
computer records relating to the Initial Receivables of the Seller have been
marked to show the absolute ownership by the Owner Trustee on behalf of the
Trust of the Initial Receivables, and, as of any Subsequent Transfer Date the
accounting and computer records relating to the Subsequent Receivables will be
marked to show the absolute ownership by the Owner Trustee on behalf of the
Trust of the Subsequent Receivables.
(x) TAXES. To the best knowledge of the Representative and the Seller,
there are no state or local taxing jurisdictions which have asserted that
nonresident holders of notes issued by, a trust which holds assets similar to
the assets to be held by the Trust are subject to the jurisdiction's income or
other taxes solely by reason of the location in the jurisdiction of the Owner
Trustee, the Seller, the Servicer, the Representative, the obligors on or the
assets securing the Receivables held by the Trust, or the issuer of a financial
guaranty insurance policy.
(y) MATURITY OF RECEIVABLES. Each Initial Receivable has a final maturity
date not later than January 2004; each Receivable has an original term to
maturity of not more than 73 months; the weighted average original term of the
Initial Receivables is approximately 57.76 months; the weighted average
remaining term of the Initial Receivables is approximately 56.75 months as of
the Initial Cutoff Date. No Initial Receivable shall have a remaining term to
maturity in excess of 60 months except 19.9% of the Aggregate Principal Balance
of the Initial Receivables represent Initial Receivables with remaining terms to
maturity of up to 73 months.
(z) FINANCING. Approximately 15.66% of the aggregate principal balance
of the Initial Receivables, represent new vehicles; the remainder of the Initial
Receivables represent used vehicles; approximately 26.89% of the aggregate
Principal Balance of the Initial Receivables represent Precomputed Receivables
and the remainder of the Initial Receivables represent Simple Interest
Receivables; all of the Initial Receivables which are Precomputed Receivables
are Rule of 78s Receivables. The aggregate Principal Balance of the Initial
Receivables, is $68,514,248.92.
(aa) APR. The weighted average Annual Percentage Rate of the Initial
Receivables is approximately 18.92%. Each Initial Receivable has an APR equal to
or greater than 12.25%.
(bb) NUMBER. There are 5,864 Initial Receivables.
(cc) BALANCE. Each Initial Receivable has a remaining principal
balance of not less than $1,175.67 and not more than $36,025.00, the average
Principal Balance of the Initial Receivables is $11,683.88.
SECTION 3.2 REPURCHASE UPON BREACH. (a) The Representative, the
Seller, the Servicer, the Security Insurer or the Owner Trustee, as the case may
be, shall inform the other parties to this Agreement and the Trustee promptly,
in writing, upon the discovery of any breach of the Representative's or the
Seller's representations and warranties made pursuant to Section 3.1. As of the
last day of the second (or, if the Representative or the Seller so elects, the
first) month following the discovery by the Representative or the Seller or
receipt by the Representative or the Seller of notice from any of the
Representative, the Seller, the Servicer, the Security Insurer or the Owner
Trustee of such breach, unless such breach is cured by such date, the
Representative and the Seller shall jointly and severally have an obligation to
repurchase any Receivable in which the interests of the Noteholders or the
Security Insurer are materially and adversely affected by any such breach as of
such date. The "second month" shall mean the month following the month in which
discovery occurs or notice is given, and the "first month" shall mean the month
in which discovery occurs or notice is given. In consideration of and
simultaneously with the repurchase of the Receivable, the Representative and/or
the Seller shall remit, or cause TMS Auto Finance to remit, to the Collection
Account the Purchase Amount in the manner specified in Section 5.5 and the
Issuer shall execute such assignments and other documents reasonably requested
by such person in order to effect such repurchase. The sole remedy of the
Issuer, the Owner Trustee, the Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be the
repurchase of Receivables pursuant to this Section, subject to the conditions
contained herein or to enforce the obligation of TMS Auto Finance to the Seller
to repurchase such Receivables pursuant to the Purchase Agreement. Neither the
Owner Trustee nor the Trustee shall have a duty to conduct any affirmative
investigation as to the occurrence of any conditions requiring the repurchase of
any Receivable pursuant to this Section.
(b) Pursuant to Section 2.1 of this Agreement, the Seller conveyed to
the Trust all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement
including the Seller's rights under the Purchase Agreement and the delivery
requirements, the representations and warranties and the cure or repurchase
obligations of TMS Auto Finance thereunder. The Seller hereby represents and
warrants to the Trust that such assignment is valid, enforceable and effective
to permit the Trust to enforce such obligations of TMS Auto Finance under the
Purchase Agreement.
SECTION 3.3 CUSTODY OF RECEIVABLES FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Issuer and the Trustee as custodian of
the following documents or instruments which are hereby constructively delivered
to the Trustee, as of the Initial Cutoff Date (in the case of Initial
Receivables) and as of each Subsequent Transfer Date (in the case of Subsequent
Receivables transferred on such Subsequent Transfer Date) as pledgee of the
Issuer with respect to each Receivable:
(a) the original Receivable;
(b) a record of the information supplied by the Obligor in the
original credit application;
(c) the original certificate of title or such documents that the
Servicer shall keep on file, in accordance with its customary procedures,
evidencing the security interest of TMS Auto Finance in the Financed Vehicle (it
being understood that the original certificates of title generally are not
delivered to the Seller for 120 days but that promptly upon delivery they shall
be delivered to the Servicer as custodian hereunder); and
(d) any and all other documents that the Servicer shall keep on file,
in accordance with its customary procedures, relating to a Receivable, an
Obligor or a Financed Vehicle.
SECTION 3.4 DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING. The
Servicer shall hold the Receivables Files on behalf of the Issuer and the
Trustee and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others, and in any event with no less degree of skill and care than would be
exercised by a prudent servicer or custodian of non-prime motor vehicle retail
installment sales contracts, except that the Servicer shall not be obligated,
and does not currently intend, to (i) pay any premium of force-placed insurance
concerning any Financed Vehicle or (ii) monitor any Obligor's maintenance of
such insurance. The Servicer shall conduct, or cause to be conducted, periodic
audits of the Receivables Files held by it under this Agreement and of the
related accounts, records and computer systems, in such a manner as shall enable
the Owner Trustee, the Security Insurer or the Trustee to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the Issuer,
the Security Insurer and the Trustee any failure on its part to hold the
Receivables Files and maintain its accounts, records and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
(b) MAINTENANCE OF RECORDS. The Servicer shall maintain each
Receivable File at its office specified in Schedule B to the Agreement or at
such other office as shall be specified to the Issuer, the Trustee and the
Security Insurer by written notice not later than 10 days after any change in
location. The Servicer shall (i) at all times maintain the original of the fully
executed Receivable and store such original Receivable in a fireproof cabinet;
and (ii) stamp each Receivable on both the first and the signature page (if
different) as of the Closing Date or the related Subsequent Transfer Date, as
applicable, and in accordance with the instructions from time to time provided
by the Security Insurer, in the form attached hereto as Exhibit F, or such other
form as shall be acceptable to the Security Insurer.
(c) ACCESS TO RECORDS. The Servicer will provide, on the Closing Date,
an Officer's Certificate stating that the Receivables Files contain all
materials which are required to be kept therein by Section 3.3(a), (b), (c) and
(d). At any time following the Closing Date, the Security Insurer may conduct a
review of the Receivables Files, or a sample thereof as it may specify, at its
own expense but with the cooperation of the Servicer. Should the Security
Insurer find any documents missing or any other irregularities, then the Trustee
shall perform a review, for the benefit of the Security Insurer and at the
expense of the Servicer, of all the Receivables Files.
Upon reasonable prior notice, the Servicer shall make available to the
Issuer, the Trustee, the Security Insurer, or any duly authorized
representatives, attorneys or auditors of any of the foregoing, a list of
locations of, and access to, the Receivables Files and records and computer
systems maintained by the Servicer at such times during normal business hours as
the Issuer, the Trustee or the Security Insurer shall instruct.
(d) RELEASE OF DOCUMENTS. Upon written instruction from the Trustee or
the Security Insurer, at any time following a Servicer Default or termination of
the Servicer's appointment pursuant to Section 3.7 the Servicer shall release
any Receivable File to the Trustee, the Trustee's agent, or the Trustee's
designee, as the case may be, or the Security Insurer, as the case may be, at
such place or places as the Trustee or the Security Insurer, as the case may be,
may designate, as soon as practicable.
SECTION 3.5 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivables
Files upon its receipt of written instructions signed by a Trust Officer of the
Trustee. A copy of such instructions shall be furnished by the Trustee to the
Security Insurer. The Trustee shall not have any duty or obligation to provide
the Servicer with any such instructions with respect to the Receivables Files.
SECTION 3.6 CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify and hold harmless the Trust, the Security Insurer, the Owner
Trustee and the Trustee and each of their officers, directors, employees and
agents for any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including reasonable attorneys' fees and expenses)
that may be imposed on, incurred by or asserted against the Trust, the Owner
Trustee or the Trustee or any of their officers, directors, employees and agents
as the result of any improper act or omission in any way relating to the
maintenance and custody by the Servicer as custodian of the Receivables Files;
PROVIDED, HOWEVER, that the Servicer shall not be liable to the Trust, the Owner
Trustee, the Trustee or the Security Insurer, as the case may be, for any
portion of any such amount resulting from the willful misfeasance, bad faith or
negligence of the Owner Trustee, the Trustee or the Security Insurer, as the
case may be. This provision shall not be considered to limit the Servicer's or
any other party's rights, obligations, liabilities, claims or defenses which
arise as a matter of law or pursuant to any other provision of this Agreement.
SECTION 3.7 EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect until terminated pursuant to this
Section 3.7. If TMS Auto Finance shall resign as Servicer in accordance with the
provisions of this Agreement or if all of the rights and obligations of any
Servicer shall have been terminated under Section 8.1, the appointment of such
Servicer as custodian shall be terminated, in the same manner as the Servicer
may be terminated under Section 8.1. The Trustee or, with the consent of the
Trustee, the Owner Trustee may, in each case, with the consent of the Security
Insurer, and the Security Insurer may terminate the Servicer's appointment as
custodian (i) with cause or (ii) upon the occurrence of an Insurance Agreement
Event of Default, upon written notification to the Servicer and the Trustee or
Security Insurer, as the case may be. As soon as practicable after any
termination of such appointment, the Servicer shall deliver the Receivables
Files to the Trustee or the Trustee's agent at such place or places as the
Trustee, with the consent of the Security Insurer, or the Trustee shall, at the
direction of the Security Insurer, reasonably designate in writing. If the
Servicer shall be terminated as custodian hereunder for any reason but shall
continue to serve as Servicer, the Trustee shall, or shall cause its agent to,
make the Receivables Files available to the Servicer during normal business
hours upon reasonable notice so as to permit the Servicer to perform its
obligations as Servicer hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 DUTIES OF SERVICER. The Servicer, as agent for the Issuer
and the Security Insurer (to the extent provided herein), shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to all comparable automotive receivables
that it services for itself or others, and in any event with no less degree of
skill and care than would be exercised by a prudent servicer of non-prime motor
vehicle retail installment sales contracts, except that the Servicer shall not
be obligated, and does not currently intend, to (i) pay any premium of
force-placed insurance concerning any Financed Vehicle or (ii) monitor any
Obligor's maintenance of such insurance. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors on
such Receivables, investigating delinquencies, sending payment statements to
Obligors, accounting for collections and furnishing monthly and annual
statements to the Owner Trustee, the Trustee and the Security Insurer with
respect to distributions. Subject to the provisions of Section 4.2, the Servicer
shall follow its customary standards, policies and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer, the Owner Trustee, the Trustee, the Security Insurer, the
Certificateholders and the Noteholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Issuer (in the case of a
Receivable other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable to
the Servicer. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce such Receivable the
Owner Trustee shall, at the Servicer's expense and direction, take steps to
enforce such Receivable, including bringing suit in its name or the name of the
Trust, the Trustee, the Certificateholders or the Noteholders. The Owner Trustee
and the Security Insurer shall upon the written request of the Servicer furnish
the Servicer with any powers of attorney and other documents reasonably
necessary or appropriate (as certified to the Owner Trustee and/or the Security
Insurer by the Servicer) to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.2 COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others, and
in any event with no less degree of skill and care than would be exercised by a
prudent servicer of non-prime motor vehicle retail installment sales contracts.
The Servicer shall allocate collections between principal and interest in
accordance with its customary servicing procedures.
(b) The Servicer may grant extensions, rebates or adjustments on a
Receivable which shall not, for the purposes of this Agreement, modify the
original due dates (other than to permit payment on a different date in the
month) or amounts of the Scheduled Payments (unless the Obligor is in default
or, in the judgment of the Servicer, such default is imminent) on a Precomputed
Receivable or the original due dates (other than to permit payment on a
different date in the month) or amounts of the originally scheduled payments of
interest (unless the Obligor is in default or, in the judgment of the Servicer,
such default is imminent) on Simple Interest Receivables; PROVIDED, HOWEVER,
that if the Servicer extends the date for final payment by the Obligor of any
Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase such Receivable from the Trust in accordance with Section 4.7. The
Servicer may in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any alteration of the interest rate on any
Receivable.
SECTION 4.3 REALIZATION UPON RECEIVABLES. On behalf of the Issuer and
the Security Insurer, the Servicer shall use its best efforts, consistent with
its customary servicing procedures, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Receivable as to which the
Servicer shall have determined eventual payment in full is unlikely. From time
to time, as appropriate for servicing or foreclosing upon any Receivable, the
Owner Trustee shall, upon written request of the Servicer, execute such
documents as shall be reasonably necessary to prosecute any such proceedings.
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of automotive receivables,
which may include reasonable efforts to realize proceeds from Receivables
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement or a default by an
Obligor resulting in the repossession of the Financed Vehicle under such Dealer
Agreement. The foregoing shall be subject to the provision that, in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its reasonable discretion that such repair
and/or repossession will increase the Net Liquidation Proceeds by an amount
greater than the amount of such expenses.
SECTION 4.4 PHYSICAL DAMAGE INSURANCE. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained and shall maintain fire, theft and collision insurance or
comprehensive and collision insurance covering the Financed Vehicle as of the
execution of the Receivable. The Servicer shall enforce its rights under the
Receivables to require the Obligors to maintain fire, theft and collision
insurance or comprehensive and collision insurance, in accordance with the
Servicer's customary practices and procedures, and in any event with no less
degree of skill and care than would be exercised by a prudent servicer of
non-prime motor vehicle retail installment sales contracts, and in any event
with no less degree of skill and care than would be exercised by a prudent
servicer of non-prime motor vehicle retail installment sales contracts, with
respect to comparable new or used motor vehicle receivables that it services for
itself or others, except that the Servicer shall not be obligated, and does not
currently intend, to (i) pay any premium of force-placed insurance concerning
any Financed Vehicle or (ii) monitor any Obligor's maintenance of such
insurance.
SECTION 4.5 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
(a) The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle in favor of the
Seller. The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer and the Indenture
Collateral Agent in the event of the relocation of a Financed Vehicle or for any
other reason.
(b) Upon the occurrence of an Insurance Agreement Event of Default,
and subject to the other provisions of this Agreement, the Security Insurer may
(so long as an Insurer Default shall not have occurred and be continuing)
instruct the Owner Trustee and the Servicer to take or cause to be taken, or, if
an Insurer Default shall have occurred, upon the occurrence of a Servicer
Default, the Owner Trustee and the Servicer shall take or cause to be taken such
action as may, in the opinion of counsel to the Security Insurer (or, if an
Insurer Default shall have occurred and be continuing, counsel to the Owner
Trustee), be necessary to perfect or reperfect the security interests in the
Financed Vehicles securing the Receivables in the name of the Trust by amending
the title documents of such Financed Vehicles or by such other reasonable means
as may, in the opinion of counsel to the Security Insurer or the Owner Trustee
(as applicable), be necessary or prudent. The Servicer hereby agrees to pay all
expenses related to such perfection or reperfection and to take all action
necessary therefor.
SECTION 4.5-A. SEGREGATION OF RECEIVABLES FILES. The Servicer shall
maintain the Receivables Files (containing the original Receivable and Lien
Certificate, when such Lien Certificate has been returned from the appropriate
recording office) physically segregated from other files of automotive
receivables owned or serviced by it at the location where the Receivables Files
are kept.
SECTION 4.6 COVENANTS OF SERVICER. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or payment in full less a deficiency which the Servicer
would not attempt to collect in accordance with its customary procedures or in
connection with repossession or except as may be required by an insurer in order
to receive proceeds from insurance covering such Financed Vehicle, nor shall the
Servicer impair the rights of the Issuer, the Trustee, the Indenture Collateral
Agent, the Security Insurer, the Certificateholders or the Noteholders in such
Receivables (it being understood that no action of the Servicer taken in
compliance with the terms of this Agreement shall be deemed to impair such
rights), nor shall the Servicer increase the number of scheduled payments due
under a Receivable.
SECTION 4.7 PURCHASE OF RECEIVABLES UPON BREACH. The Representative,
the Seller, the Servicer, the Security Insurer or the Owner Trustee shall inform
the other parties and the Trustee promptly, in writing, upon the discovery of
any breach of the Servicer's covenants pursuant to Section 4.2(b), 4.4, 4.5 or
4.6, or of any breach of the Servicer's representations and warranties made
pursuant to Section 7.1(b). As of the last day of the second (or, if the
Representative or the Servicer so elects, the first) month following the
discovery by the Representative or the Servicer or receipt by the Representative
or the Servicer of notice from any of the Representative, the Seller, the
Servicer, the Security Insurer, the Owner Trustee or the Trustee of such breach,
unless such breach is cured by such date, the Representative and the Servicer
jointly and severally shall be obligated to purchase any Receivable in which the
interests of the Noteholders, the Certificateholders or the Security Insurer are
materially and adversely affected by such breach as of such date. The "second
month" shall mean the month following the month in which discovery occurs or
notice is given, and the "first month" shall mean the month in which discovery
occurs or notice is given. In consideration of the purchase of any such
Receivable pursuant to the preceding sentence, the Servicer shall remit (or, if
the Servicer shall fail to so remit, the Representative shall remit) the
Purchase Amount in the manner specified in Section 5.5. The sole remedy of the
Issuer, the Trustee, the Noteholders or the Certificateholders with respect to a
breach pursuant to Section 4.2(b), 4.4, 4.5 or 4.6, or to a breach of
representations and warranties pursuant to Section 7.1(b), shall be limited to
the purchase of Receivables in accordance with this Section 4.7. The Trustee and
the Owner Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the purchase of any Receivable
pursuant to this Section 4.7.
SECTION 4.8 SERVICING FEE. The Servicing Fee for a Distribution Date
shall equal the sum of the Base Servicing Fee, the Supplemental Servicing Fee,
all Investment Earnings on the Collection Account plus any reimbursement
pursuant to Section 7.2. The Servicer also shall be entitled to retain from
collections the Base Servicing Fee and the Supplemental Servicing Fee, as
provided herein. The Servicer, in its discretion at its election, may defer
receipt of all or any portion of the Servicing Fee for any Monthly Period to and
until a later Monthly Period for any reason, including in order to avoid a
shortfall in any payments due on any Notes. Any such deferred amount shall be
payable to (or may be retained from subsequent collections by) the Servicer on
demand.
SECTION 4.9 SERVICER'S CERTIFICATE. (a) No later than 12:00 noon New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Trustee, the Security Insurer or its fiscal agent, the
Indenture Collateral Agent and each Rating Agency a Servicer's Certificate
containing, among other things, (i) all information necessary to enable the
Trustee to make any withdrawal and deposit required by Section 5.6(a), 5.6(b),
5.6(c) and 5.6(d), to give any notice required by Section 5.4 or 5A.1 and make
the distributions required by Section 5.6 and 5.7, (ii) all information
necessary to enable the Trustee to send the statements required by Section 5.8
to the Owner Trustee, the Noteholders, each Rating Agency and the Security
Insurer, (iii) a listing of all Receivables purchased during the related Monthly
Period, identifying the Receivables so purchased, and (iv) all information
necessary to enable the Trustee to reconcile all deposits to, and withdrawals
from, the Collection Account for the related Monthly Period and Distribution
Date, including the accounting required by Section 5.9. Receivables purchased by
the Servicer, the Seller or the Representative and each receivable which became
a Liquidated Receivable or which was paid in full during the related Monthly
Period shall be identified by account number (as set forth in the Schedule of
Receivables). A copy of such certificate may be obtained by any Noteholder or
Certificateholder by a request in writing to the Trustee or the Owner Trustee
addressed to the applicable Corporate Trust Office. The Trustee shall not be
under any obligation to confirm or reconcile the information provided pursuant
to Section 4.9(a)(iv).
(b) If the Servicer's Certificate contains a manifest error, the
Security Insurer's written notice to the Servicer, the Owner Trustee and the
Trustee containing the corrected information shall be deemed to amend such
Servicer's Certificate.
SECTION 4.10 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a)
The Servicer shall deliver to the Owner Trustee, the Trustee and the Security
Insurer, on or before April 30 of each year beginning April 30, 1999 an
Officer's Certificate, dated as of the preceding December 31, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
and of its performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Trustee shall send a copy of such certificate and
the report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee addressed to the
Corporate Trust Office or by any Noteholder by a request in writing to the
Trustee addressed to the Corporate Trust Office. Upon the telephone request of
the Owner Trustee, the Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee. Each Noteholder, by
its acceptance of a Note, shall be deemed to agree that the Trustee shall be
under no liability for providing the list of Noteholders to the Owner Trustee as
described in the immediately preceding sentence.
(b) The Servicer shall deliver to the Owner Trustee, the Trustee, the
Security Insurer and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
8.1(a) or (b).
SECTION 4.11 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer or the Seller, to deliver
to the Seller, the Owner Trustee, the Trustee and the Security Insurer on or
before April 30 of each year beginning April 30, 1999, an agreed- upon
procedures report addressed to the Servicer, the Seller, the Owner Trustee, the
Trustee and the Security Insurer and each Rating Agency, expressing a summary of
findings, (based on certain procedures performed on the documents, records and
accounting records that such accountants considered appropriate under the
circumstances) relating to the servicing of the Receivables, or the
administration of the Receivables and of the Trust, as the case may be, during
the preceding calendar year and that, on the basis of the accounting and
auditing procedures considered appropriate under the circumstances, such firm is
of the opinion that such servicing or administration was conducted in compliance
with the terms of this Agreement, except for (i) such exceptions as such firm
shall believe to be immaterial and (ii) such other exceptions as shall be set
forth in such report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Trustee, the
Owner Trustee and the Security Insurer reasonable access to the Receivable
Files. The Servicer shall provide to the Certificateholders and Noteholders
access to the Receivable Files in such cases where the Certificateholders or
Noteholders shall be required by applicable statutes or regulations to review
such documentation as demonstrated by evidence satisfactory to the Servicer in
its reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.13 SERVICER EXPENSES. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder and
under any of the Basic Documents, including fees and disbursements of
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Certificateholders and Noteholders.
SECTION 4.14 APPOINTMENT OF SUBSERVICER. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; PROVIDED, HOWEVER, that the Rating Agency Condition shall
have been satisfied in connection therewith; PROVIDED FURTHER that the Servicer
shall remain obligated and be liable to the Issuer, the Owner Trustee, the
Trustee, the Security Insurer, the Certificateholders and the Noteholders for
the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Receivables. The fees and expenses of the subservicer shall be as agreed
between the Servicer and its subservicer from time to time and none of the
Issuer, the Owner Trustee, the Trustee, the Security Insurer, the
Certificateholders or the Noteholders shall have any responsibility therefor.
Any such subservicer shall perform its duties with the same standard of care
applicable to the Servicer pursuant to Section 4.1 of this Agreement.
SECTION 4.15 OBLIGATIONS UNDER BASIC DOCUMENTS. The Servicer shall
perform all of its obligations under the Basic Documents.
ARTICLE V
DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1 ESTABLISHMENT OF TRUST ACCOUNTS.
(a)(i) The Servicer, for the benefit of the Trustee on
behalf of the Noteholders, the Owner Trustee on behalf of the
Certificateholders, and the Security Insurer, shall establish and
maintain in the name of the Indenture Collateral Agent an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Trustee on behalf of the Noteholders, the Owner Trustee
on behalf of the Certificateholders and the Security Insurer.
Investment Earnings on funds in the Collection Account shall be paid
to the Servicer.
(ii) The Servicer, for the benefit of the Trustee on behalf
of the Noteholders, shall establish and maintain in the name of the
Indenture Collateral Agent an Eligible Deposit Account (the "Note
Distribution Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Trustee on
behalf of the Noteholders and the Security Insurer. The Note
Distribution Account shall initially be established with the Trustee.
(iii) The Servicer, for the benefit of the Trustee on behalf
of the Noteholders, the Owner Trustee on behalf of the
Certificateholders, and the Security Insurer, shall establish and
maintain in the name of the Indenture Collateral Agent an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Trustee on behalf of the Noteholders, the Owner Trustee
on behalf of the Certificateholders and the Security Insurer.
(b) Funds on deposit in the Collection Account, the Pre-Funding
Account, the Note Distribution Account (collectively, along with the Capitalized
Interest Account, the "Trust Accounts") and the Certificate Distribution Account
shall be invested by the Indenture Collateral Agent with respect to Trust
Accounts and by the Owner Trustee with respect to the Certificate Distribution
Account (or any custodian with respect to funds on deposit in any such account)
in Eligible Investments selected in writing by the Servicer (pursuant to
standing instructions or otherwise); PROVIDED, HOWEVER, it is understood and
agreed that neither the Indenture Collateral Agent nor the Owner Trustee shall
be liable for any loss arising from such investment in Eligible Investments. All
such Eligible Investments shall be held by or on behalf of the Indenture
Collateral Agent or the Owner Trustee, as applicable, for the benefit of the
Noteholders and/or the Certificateholders, as applicable and the Security
Insurer. Other than as permitted by the Rating Agencies and the Security
Insurer, funds on deposit in the Collection Account, the Pre- Funding Account,
the Capitalized Interest Account, the Note Distribution Account and the
Certificate Distribution Account shall be invested in Eligible Investments that
will mature so that such funds will be available at the close of business on the
Business Day immediately preceding the following Distribution Date or, if the
Class A-1 Notes have not been paid in full prior to such date, at the close of
business on the Business Day prior to the Class A-1 Final Scheduled Distribution
Date. Funds deposited in a Trust Account or the Certificate Distribution Account
on the day immediately preceding a Distribution Date upon the maturity of any
Eligible Investments are not required to be invested overnight.
(c)(i) The Indenture Collateral Agent shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (excluding all Investment Earnings on the Collection
Account) and all such funds, investments, proceeds and income shall be part of
the Owner Trust Estate. Except as otherwise provided herein, the Trust Accounts
shall be under the sole dominion and control of the Indenture Collateral Agent
for the benefit of the Noteholders and the Certificateholders, or the
Noteholders, as the case may be, and the Security Insurer. If, at any time, any
of the Trust Accounts or the Certificate Distribution Account ceases to be an
Eligible Deposit Account, the Indenture Collateral Agent (or the Servicer on its
behalf) or the Owner Trustee, as applicable, shall within 10 Business Days (or
such longer period as to which each Rating Agency and the Security Insurer may
consent) establish a new Trust Account or a new Certificate Distribution
Account, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account or a new Certificate
Distribution Account, as applicable. In connection with the foregoing, the
Servicer agrees that, in the event that any of the Trust Accounts are not
accounts with the Trustee, the Servicer shall notify the Trustee in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit
Account.
(ii) With respect to the Trust Account Property, the
Indenture Collateral Agent, and with respect to the Certificate
Distribution Account, the Owner Trustee agrees, by its respective
acceptance hereof, that:
A any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit
accounts shall be held solely in the Eligible Deposit
Accounts subject to the penultimate sentence of Section
5.1(c)(i); and, except as otherwise provided herein, each
such Eligible Deposit Account shall be subject to the
exclusive custody and control of the Indenture Collateral
Agent with respect to the Trust Accounts and the Owner
Trustee with respect to the Certificate Distribution
Account, and the Indenture Collateral Agent or the Owner
Trustee, as applicable, shall have sole signature authority
with respect thereto;
B any Trust Account Property shall be Delivered to the
Indenture Collateral Agent in accordance with the definition
of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Collateral Agent or
such other Person acting solely for the Indenture Collateral
Agent as required for Delivery;
C In the event that the Indenture Collateral Agent, in
its capacity as securities intermediary has or subsequently
obtains by agreement, operation of law or otherwise a
security interest in the Trust Accounts or any security
entitlement credited thereto, the Indenture Collateral
Agent, in its capacity as securities intermediary hereby
agrees that such security interest shall be subordinate to
the security interest of the Indenture Collateral Agent. The
financial assets and other items deposited to the Trust
Accounts will not be subject to deduction, set-off, banker's
lien, or any other right in favor of any person (except that
the Indenture Collateral Agent, in its capacity as
securities intermediary may set off the face amount of any
checks which have been credited to the Trust Accounts but
are subsequently returned unpaid because of uncollected or
insufficient funds).
(d) The Servicer shall have the power, revocable by the Security
Insurer or, with the consent of the Security Insurer by the Trustee or by the
Owner Trustee with the consent of the Trustee, to instruct the Indenture
Collateral Agent to make withdrawals and payments from the Trust Accounts for
the purpose of permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Trustee to carry out its duties
under the Indenture.
(e) [RESERVED]
SECTION 5.1-A CAPITALIZED INTEREST ACCOUNT. (a) With respect to
amounts on deposit in the Pre-Funding Account, in order to assure that
sufficient amounts to make required distributions of interest to Noteholders and
Certificateholders will be available during the Funding Period, the Servicer
shall establish and maintain an Eligible Deposit Account (the "Capitalized
Interest Account") with the Indenture Collateral Agent, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Noteholders, Certificateholders and the Security Insurer.
On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Capitalized Interest Account Initial Deposit into the Capitalized
Interest Account.
(b) On the Distribution Date occurring in January and February of 1998
the Trustee shall withdraw from the Capitalized Interest Account the Monthly
Capitalized Interest Amount for such Distribution Date as further provided in
Section 5.6. Any amounts remaining in the Capitalized Interest Account after
taking into account such transfer shall be remitted by the Trustee to the Seller
as set forth in Section 5.6. Upon any such distribution to the Seller, the
Noteholders, the Certificateholders and the Security Insurer will have no
further rights in, or claims to, such amounts.
SECTION 5.2 COLLECTIONS. (a) The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the Monthly
Period less any payments owed thereon to the Servicer. Notwithstanding the
foregoing, for so long as (i) TMS Auto Finance remains the Servicer, (ii) no
Servicer Default shall have occurred and be continuing, (iii) there exists no
Insurer Default and the Security Insurer has furnished its prior written consent
and (iv) the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection therewith
are complied with), the Servicer may remit such collections with respect to the
preceding calendar month to the Collection Account on the Determination Date
immediately preceding the related Distribution Date or Class A-1 Final Scheduled
Distribution Date, as applicable. For purposes of this Article V the phrase
"payments by or on behalf of Obligors" shall mean payments made with respect to
the Receivables by Persons other than the Servicer or the Seller.
(b) The Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Monthly Period for amounts
previously deposited in the Collection Account but later determined by the
Servicer to have resulted from mistaken deposits or postings or checks returned
for insufficient funds. The amount to be reimbursed hereunder shall be paid to
the Servicer on the related Distribution Date pursuant to Section 5.6(b)(ii)
upon certification by the Servicer of such amounts and the provision of such
information to the Trustee and the Security Insurer as may be necessary in the
opinion of the Security Insurer to verify the accuracy of such certification. In
the event that the Security Insurer has not received evidence satisfactory to it
of the Servicer's entitlement to reimbursement pursuant to Section 5.2(b), the
Security Insurer shall (unless an Insurer Default shall have occurred and be
continuing) give the Trustee notice to such effect, following receipt of which
the Trustee shall not make a distribution to the Servicer in respect of such
amount pursuant to Section 5.6, or if the Servicer prior thereto has been
reimbursed pursuant to Section 5.6 or Section 5.9, the Trustee shall withhold
such amounts from amounts otherwise distributable to the Servicer on the next
succeeding Distribution Date.
SECTION 5.3 APPLICATION OF COLLECTIONS. All collections for the
Monthly Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor, (other than Supplemental Servicing Fees
with respect to such Receivable, to the extent collected) shall be applied
first, in the case of Precomputed Receivables, to the Scheduled Payment and, in
the case of Simple Interest Receivables, to interest and principal in accordance
with the Simple Interest Method. With respect to any Precomputed Receivable, any
remaining excess shall be applied to prepay the principal of the Precomputed
Receivable.
All amounts collected that are payable to the Servicer as Supplemental
Servicing Fees hereunder shall, other than as provided in Section 5.9, be
deposited in the Collection Account and paid to the Servicer in accordance with
Section 5.6(b).
SECTION 5.4 DEFICIENCY NOTICE. (a) In the event that the Servicer's
Certificate with respect to any Determination Date shall state that the amount
of the Available Funds with respect to such Determination Date is less than the
sum of the amounts payable on (x) the related Distribution Date pursuant to
clauses (i) through (v) of Section 5.6(b) or (y) on the Class A-1 Final
Scheduled Distribution Date pursuant to clause (i) and (ii) of Section 5.6(c)
(in each case, such deficiency being a "Deficiency Claim Amount") then on the
Deficiency Claim Date immediately preceding such Distribution Date or the Class
A-1 Final Scheduled Distribution Date, as applicable, the Trustee shall deliver
to the Indenture Collateral Agent, the Security Insurer, the Owner Trustee, the
Insurer's Agent and the Servicer, by hand delivery, telex or facsimile
transmission, a written notice (a "Deficiency Notice") specifying the Deficiency
Claim Amount for such Distribution Date.
(b) Any Deficiency Notice shall be delivered by 10:00 am., New York
City time, on the related Deficiency Claim Date. The amounts distributed to the
Trustee pursuant to a Deficiency Notice shall be deposited by the Trustee into
the Collection Account pursuant to Section 5.5.
SECTION 5.5 ADDITIONAL DEPOSITS. The Servicer and the Seller, TMS Auto
Finance and the Representative, as applicable, shall deposit or cause to be
deposited in the Collection Account on the Determination Date following the date
on which such obligations are due the aggregate Purchase Amount with respect to
Purchased Receivables. On or before each Draw Date, the Trustee shall remit to
the Collection Account any amounts delivered to the Trustee pursuant to a
Deficiency Notice.
SECTION 5.6 DISTRIBUTIONS. (a) No later than 12:00 noon New York City
time on each Distribution Date, the Trustee shall (based solely on the
information contained in the Servicer's Certificate delivered on the related
Determination Date) cause to be made the following transfers and distributions
in the amounts set forth in the Servicer's Certificate for such Distribution
Date:
(i) During the Funding Period, from the Capitalized Interest
Account (a) to the Collection Account, in immediately available funds,
the Monthly Capitalized Interest Amount for such Distribution Date and
(b) to the Seller, in immediately available funds, all Investment
Earnings on funds in the Capitalized Interest Account with respect to
the Monthly Period related to such Distribution Date or, if such
Distribution Date is the Mandatory Redemption Date, all remaining
funds in the Capitalized Interest Account after distribution of
interest on the Notes on such date; and
(ii) During the Funding Period from the Pre-Funding Account
(a) if such Distribution Date is the Mandatory Redemption Date, to the
Collection Account, in immediately available funds, the Pre-Funded
Amount (exclusive of Pre-Funding Earnings) after giving effect to the
purchase of Subsequent Receivables, if any, on the Mandatory
Redemption Date (b) to the Collection Account, all Prefunding Earnings
up to 2.5% of the Pre-Funded Amount with respect to the Monthly Period
related to such Distribution Date, and to the Seller, in immediately
available funds, all Pre-Funding Earnings over 2.5% of the Pre-Funding
Account with respect to the Monthly Period related to such
Distribution Date or, if such Distribution Date is the Mandatory
Redemption Date, all remaining funds in the Pre-Funding Account over
and above the Pre-Funded Amount.
(b) On each Distribution Date other than the Distribution Date on
which Insolvency Proceeds are to be distributed, the Trustee shall (based solely
on the information contained in the Servicer's Certificate delivered with
respect to the related Determination Date) distribute the following amounts and
in the following order of priority:
(i) from the Distribution Amount, to each of the Trustee and
the Owner Trustee, their respective accrued and unpaid trustees' fees
and any accrued and unpaid fees of the Indenture Collateral Agent (in
each case, to the extent such fees have not been previously paid by
the Servicer or the Representative);
(ii) from the Distribution Amount, to the Servicer, the Base
Servicing Fee for the related Monthly Period, any Supplemental
Servicing Fees for the related Monthly Period, and any amounts
specified in Section 5.2(b), to the extent the Servicer has not
reimbursed itself in respect of such amounts pursuant to Section 5.9
and to the extent not retained by the Servicer;
(iii) from the Distribution Amount, to the Note Distribution
Account, the Noteholders' Interest Distributable Amount;
(iv) from the Distribution Amount, to the Note Distribution
Account, the Noteholders' Principal Distributable Amount;
(v) from the Distribution Amount, to the Security Insurer,
any premium amounts and any overdue premium amounts payable pursuant
to the Insurance Agreement, and, any payments made on the Note Policy
and any other amounts owing to the Security Insurer under the
Insurance Agreement and not paid;
(vi) from the Available Funds, to the Certificate
Distribution Account for distribution to the Certificateholders or
their designees, any remaining funds.
PROVIDED, HOWEVER, that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing, following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iii),
5.1(v) or 5.1(vi) of the Indenture, or (C) following the receipt of Insolvency
Proceeds pursuant to Section 9.1(b), amounts deposited in the Note Distribution
Account shall be applied to the Noteholders to the extent necessary to pay
accrued and unpaid interest on the Notes and then, to the extent funds are
available therefore, principal on the Notes until the principal balance of the
Notes has been reduced to zero, in accordance with the provisions of Section 5.6
of the Indenture.
(c) On the Class A-1 Final Scheduled Distribution Date, the Trustee
shall (based solely on the information contained in the Servicer's Certificate
delivered with respect to the related Determination Date) distribute the
following amounts and in the following order of priority:
(i) from the Class A-1 Distribution Amount, to the Note
Distribution Account, the sum of (x) the Noteholders' Monthly Interest
Distributable Amount for the Class A-1 Notes (calculated as if the
Class A-1 Final Scheduled Distribution Date were a Distribution Date)
and (y) the Noteholders' Interest Carryover Shortfall for the Class
A-1 Notes (calculated as if the Class A-1 Final Scheduled Distribution
Date were a Distribution Date); and
(ii) from the Class A-1 Distribution Amount, to the Note
Distribution Account, the Noteholders' Principal Distributable Amount
for the Class A-1 Notes.
(d) In the event that the Collection Account is maintained with an
institution other than the Indenture Collateral Agent, the Servicer shall
instruct and cause such institution to make all deposits and distributions
pursuant to Section 5.6(b) and Section 5.6(c) on the related Distribution Date
or Class A-1 Final Scheduled Distribution Date, as applicable.
SECTION 5.7 PRE-FUNDING ACCOUNT. (a) On the Closing Date, the Trustee
will deposit, on behalf of the Seller, in the Pre-Funding Account $21,485,751.08
from the proceeds of the sale of the Notes. On each Subsequent Transfer Date,
the Servicer shall instruct the Trustee to withdraw from the Pre-Funding Account
an amount equal to the Principal Balance of the Subsequent Receivables
transferred to the Issuer on such Subsequent Transfer Date and to distribute
such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in this Agreement with respect to such transfer.
(b) If the Pre-Funded Amount has not been reduced to zero on the date
on which the Funding Period ends after giving effect to any reductions in the
Pre-Funded Amount on such date, the Servicer shall instruct the Trustee to
withdraw from the Pre-Funding Account on the Mandatory Redemption Date the
Pre-Funded Amount (exclusive of any Pre-Funding Earnings) and deposit an amount
equal to the Prepayment Amount in the Note Distribution Account.
SECTION 5.8 STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On or
prior to each Determination Date, the Servicer shall provide to the Trustee
(with a copy to the Security Insurer and the Rating Agencies) for the Trustee to
forward to each Noteholder of record, to each Paying Agent, if any, and to the
Owner Trustee for the Owner Trustee to forward to each Certificateholder of
record, a statement substantially in the form of Exhibit B and Exhibit C,
respectively, setting forth at least the following information with respect to
distributions on the related Distribution Date as to the Notes and the
Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
of each Class of Notes;
(ii) the amount of such distribution allocable to interest
on or with respect to each Class of Notes;
(iii) the amount of such distribution payable pursuant to a
claim on the Note Policy and any remaining outstanding balance
available to be drawn under the applicable Note Policy;
(iv) the Pool Balance as of the close of business on the
last day of the preceding Monthly Period;
(v) the aggregate outstanding principal amount of each Class
of the Notes, the Note Pool Factor for each such Class, after giving
effect to payments allocated to principal reported under (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer
with respect to the related Monthly Period and/or due but unpaid with
respect to such Monthly Period or prior Monthly Periods, as the case
may be;
(vii) the Noteholders' Interest Carryover Shortfall and the
Noteholders' Principal Carryover Shortfall;
(viii) the amount of the aggregate Realized Losses, if any,
for the second preceding Monthly Period;
(ix) the aggregate Purchase Amounts for Receivables, if any,
that were repurchased in such period;
(x) for Distribution Dates during the Funding Period (if
any), the remaining Pre-Funded Amount, the amount in the Pre-Funding
Account and the amount remaining in the Capitalized Interest Account;
(xi) for the final Subsequent Transfer Date, the amount of
any remaining Pre-Funded Amount that has not been used to fund the
purchase of Subsequent Receivables and is passed through as principal
to Noteholders;
(xii) the amounts which were collected by the Servicer;
(xiii) the aggregate amount which was received by the Trust
from the Servicer;
(xiv) any reimbursements to the Security Insurer;
(xv) delinquency information relating to Receivables which
are 30, 60 or 90 days delinquent, and
(xvi) the aggregate amount distributed to the
Certificateholders.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (vii), (x) and
(xi) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof).
SECTION 5.9 NET DEPOSITS. As an administrative convenience, unless the
Servicer is required to remit collections within two Business Days of receipt
thereof, the Servicer will be permitted to make the deposit of collections on
the Receivables and Purchase Amounts for or with respect to each Monthly Period
net of distributions to be made to the Servicer with respect to such Monthly
Period. The Servicer, however, will account to the Owner Trustee, the Trustee,
the Indenture Collateral Agent, the Noteholders and the Certificateholders as if
all deposits, distributions and transfers were made individually.
SECTION 5.10 OPTIONAL DEPOSITS BY THE SECURITY INSURER. The Security
Insurer shall at any time, and from time to time, with respect to a Distribution
Date or the Class A-1 Final Scheduled Distribution Date, as applicable, have the
option (but shall not be required, except in accordance with the terms of the
Note Policy) to deliver amounts to the Trustee for deposit into the Collection
Account for any of the following purposes: (i) to provide funds in respect of
the payment of fees or expenses of any provider of services to the Trust with
respect to such Distribution Date or the Class A-1 Final Scheduled Distribution
Date, as applicable, or (ii) to include such amount to the extent that without
such amount a draw would be required to be made on the Note Policy.
ARTICLE VI
THE SELLER
SECTION 6.1 REPRESENTATIONS OF THE SELLER. The Seller makes the
following representations on which the Security Insurer shall be deemed to have
relied in executing and delivering the Note Policy and on which the Issuer is
deemed to have relied in acquiring the Receivables. The representations speak as
of the execution and delivery of this Agreement and as of the Closing Date, in
the case of Initial Receivables, and as of the applicable Subsequent Transfer
Date, in the case of Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Seller is duly organized and
validly existing as a corporation in good standing under the laws of the State
of Delaware with the corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property,
including the Receivables, or the conduct of its business shall require such
qualifications.
(c) POWER AND AUTHORITY OF THE SELLER. The Seller has the corporate
power and authority to execute and deliver this Agreement and to perform its
obligations under each of the Basic Documents to which the Seller is a party;
the Seller has full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited with the Issuer and the Seller
has duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of each of the
Basic Documents to which the Seller is a party and of each Subsequent Transfer
Agreement has been duly authorized by the Seller by all necessary corporate
action.
(d) BINDING OBLIGATION. This Agreement, each Subsequent Transfer
Agreement and each of the Basic Documents to which the Seller is a party
constitute legal, valid and binding obligations of the Seller, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws now or
hereafter in effect relating to creditors' rights generally and subject to
general principles of equity (whether applied in a proceeding at law or in
equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and by each Subsequent Transfer Agreement and the fulfillment of
the terms hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or both)
a default under, the articles of association or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or by
which it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of its knowledge, any order, rule or regulation applicable
to the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Seller or, to its best knowledge, threatened against the Seller,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement or any of the Basic Documents, the
Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes or
the Certificates or the consummation of any of the transactions contemplated by
this Agreement or any of the Basic Documents, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse effect
on the performance by the Seller of its obligations under, or the validity or
enforceability of, the Basic Documents, the Notes or the Certificates or (iv)
that might adversely affect the federal income tax attributes of the Issuer, the
Notes or the Certificates.
(g) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Seller in connection with the execution and delivery by the Seller
of this Agreement, any Subsequent Transfer Agreement or any of the Basic
Documents to which it is a party and the performance by the Seller of the
transactions contemplated by this Agreement, any Subsequent Transfer Agreement
or any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material and adverse effect upon the rights of
the Issuer, the Noteholders or the Certificateholders.
(h) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller
is at 1625 West North Market Boulevard, Suite 210, Sacramento, California 95834.
SECTION 6.2 CORPORATE EXISTENCE. (a) During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, any Subsequent
Transfer Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain corporate records and books of
account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the
Seller shall not commingle its assets and funds with those of its
Affiliates;
(iii) the Seller shall hold such appropriate meetings of its
Board of Directors as are necessary to authorize all the Seller's
corporate actions required by law to be authorized by the Board of
Directors, shall keep minutes of such meetings and of meetings of its
stockholder(s) and observe all other customary corporate formalities
(and any successor Seller not a corporation shall observe similar
procedures in accordance with its governing documents and applicable
law);
(iv) the Seller shall at all times hold itself out to the
public under the Seller's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's-length basis.
SECTION 6.3 LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust, the Security Insurer, the Trustee and the
Indenture Collateral Agent from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
in this Agreement and any of the Basic Documents (except any income taxes
arising out of fees paid to the Owner Trustee or the Trustee and except any
taxes to which the Owner Trustee or the Trustee may otherwise be subject to),
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, federal or other income taxes
arising out of distributions on the Certificates and the Notes) and costs and
expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trustee, the Indenture Collateral Agent, the Security
Insurer, and the Noteholders from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement and
(ii) the Seller's or the Issuer's violation of Federal or state securities laws
in connection with the offering and sale of the Notes.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and its officers, directors, employees and agents from and against any
and all costs, expenses, losses, claims, damages and liabilities arising out of,
or incurred in connection with the acceptance or performance of the trusts and
duties set forth herein and in the Basic Documents except to the extent that
such cost, expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Trustee or the Indenture Collateral Agent and
the termination of this Agreement, the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and other
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.4 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) the Seller shall have received the
written consent of the Security Insurer prior to entering into any such
transaction, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 shall have been breached
and no Servicer Default, and no event which, after notice or lapse of time, or
both, would become a Servicer Default shall have happened and be continuing,
(iii) the Seller shall have delivered to the Owner Trustee, the Trustee and the
Security Insurer an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Owner Trustee, the
Trustee and the Security Insurer an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 6.5 LIMITATION ON LIABILITY OF SELLER AND Others. The Seller
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document. The Seller shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 6.6 SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document. Notes or Certificates so owned by the Seller or such
Affiliate shall have an equal and proportionate benefit under the provisions of
the Basic Documents, without preference, priority, or distinction as among all
of the Notes or Certificates, PROVIDED, HOWEVER, that any Notes or Certificates
owned by the Seller or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of the
Note Policy. The Seller shall notify the Owner Trustee, the Trustee and the
Security Insurer promptly after it or any of its Affiliates become the owner of
a Certificate or a Note. The Seller hereby notifies the Owner Trustee that
immediately following the issuance of the Certificates that it and the
Representative will own all the Certificates.
ARTICLE VII
THE SERVICER
SECTION 7.1 REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Security Insurer shall be deemed to have
relied in executing and delivering the Note Policy and on which the Issuer is
deemed to have relied in acquiring the Receivables. The representations speak as
of the execution and delivery of this Agreement and as of the Closing Date, in
the case of the Initial Receivables, and as of the applicable Subsequent
Transfer Date, in the case of the Subsequent Receivables, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Trustee
pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer is duly organized and
validly existing as a corporation in good standing under the laws of the state
of its incorporation, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire, own, sell and service the
Receivables and to hold the Receivable Files as custodian.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business
and has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
(including the servicing of the Receivables as required by this Agreement) shall
require such qualifications, and was duly qualified and had all licenses in all
relevant jurisdictions required for the origination of the Receivables.
(c) POWER AND AUTHORITY OF THE SERVICER. The Servicer has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement have been duly authorized by the Servicer by all necessary
corporate action. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Servicer in connection with the execution and delivery by the
Servicer of this Agreement or any of the Basic Documents to which it is a party
and the performance by the Servicer of the transactions contemplated by this
Agreement or any of the Basic Documents to which it is a party, have been duly
obtained, effected or given and are in full force and effect, except where
failure to obtain the same would not have a material adverse effect upon the
rights of the Issuer or the Noteholders.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally, and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under the articles of incorporation or
by-laws of the Servicer, or any indenture, agreement or other instrument to
which the Servicer is a party or by which it shall be bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than pursuant
to the Basic Documents); or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Servicer, or, to its best knowledge, threatened against the
Servicer, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any of
the Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of this Agreement or any of
the Basic Documents or the Notes or (iv) relating to the Servicer and which
might adversely affect the federal income tax or ERISA attributes of the Issuer
or the Notes.
(g) NO INSOLVENT OBLIGORS. As of the Initial Cutoff Date, no Obligor
on an Initial Receivable, and as of each Subsequent Cutoff Date, no Obligor on a
Subsequent Receivable being transferred on the related Subsequent Transfer Date,
shall be shown on the related Receivable Files as the subject of a bankruptcy
proceeding commenced following the execution of the related Contract.
SECTION 7.2 INDEMNITIES OF SERVICER. (a) The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.
(b) The Servicer shall defend, indemnify and hold harmless the Owner
Trustee, the Trustee, the Trust, the Indenture Collateral Agent, the Security
Insurer, the Noteholders and the Seller from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate thereof of
a Financed Vehicle.
(c) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Trustee, the Seller, the Trust, the Indenture Collateral Agent, the
Security Insurer, their respective officers, directors, agents and employees and
the Noteholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon any such Person through,
the negligence, willful misfeasance or bad faith of the Servicer in the
performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and its officers, directors, employees and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein and in the Trust Agreement contained, except to the extent that
such costs, expense, loss, claim, damage or liability shall be due to the
willful misfeasance, bad faith or negligence (except for errors in judgment) of
the Owner Trustee.
For purposes of this Section, in the event of the termination of the
rights and obligations of TMS Auto Finance (or any successor thereto pursuant to
Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 8.2.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Trustee or the termination of this
Agreement, the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this Section and
the recipient thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
SECTION 7.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party or (c) which may succeed to the properties and
assets of the Servicer, substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by The Money Store Inc.,
which Person executed an agreement of assumption to perform every obligation of
the Servicer hereunder shall be the successor to the Servicer under the
Agreement without further act on the part of any of the parties to the
Agreement; PROVIDED, HOWEVER, that (i) the Servicer shall have received the
written consent of the Security Insurer prior to entering into any such
transaction; (ii) immediately after giving effect to such transaction, no
Servicer Default and no event which, after notice or lapse of time, or both,
would become a Servicer Default shall have happened and be continuing, (iii) the
Servicer shall have delivered to the Owner Trustee and the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with, (iv) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (v) the Servicer shall
have delivered to the Owner Trustee and the Trustee an Opinion of Counsel
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and the Trustee in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b), (c) or (d) above.
SECTION 7.4 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer or any subservicer and any of their respective
directors, officers, employees or agents may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Servicer, may (but shall not be required to)
undertake any reasonable action that it may deem necessary or desirable to
protect the interests of the Certificateholders under the Trust Agreement and
the Noteholders under the Indenture.
SECTION 7.5 SERVICER NOT TO RESIGN. Subject to the provisions of
Section 7.3, the Servicer may not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on the Servicer and the
Security Insurer does not elect to waive the obligations of the Servicer to
perform the duties which render it legally unable to act or does not elect to
delegate those duties to another Person. Notice of any such determination
permitting the resignation of the Servicer shall be communicated to the Owner
Trustee, the Trustee and the Security Insurer at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to and satisfactory to the Owner
Trustee, the Trustee and the Security Insurer concurrently with or promptly
after such notice. No such resignation of the Servicer shall become effective
until a successor servicer shall have assumed the responsibilities and
obligations of TMS Auto Finance in accordance with Section 8.2 of this
Agreement.
ARTICLE VIII
DEFAULT
SECTION 8.1 SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Owner Trustee or
Trustee for deposit in any of the Trust Accounts or the Certificate Distribution
Account any payment required to be so delivered under the terms of the Notes,
the Certificates or this Agreement that shall continue unremedied for a period
of five Business Days after written notice of such failure is received by the
Servicer from the Security Insurer, the Owner Trustee or the Trustee or after
discovery of such failure by an Officer of the Servicer; or
(b) Failure by the Servicer duly to observe or to perform in any
material respect any other covenants or agreements of the Servicer or the Seller
(as the case may be) set forth in the Notes, the Certificates, this Agreement or
any other Basic Document, which failure shall (i) materially and adversely
affect the rights of either the Certificateholders or the Noteholders and (ii)
continue unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
(A) to the Servicer by the Security Insurer, the Owner Trustee or the Trustee or
(B) to the Servicer, the Owner Trustee and the Trustee by the Holders of Notes
evidencing not less than 25% of the outstanding principal amount of the Notes or
the Holder of the Voting Interest, as applicable (or for such longer period, not
in excess of 120 days, as may be reasonably necessary to remedy such default;
provided that such default is capable of remedy within 120 days and the Servicer
delivers an Officers' Certificate to the Security Insurer, the Owner Trustee and
the Trustee to such effect and to the effect that the Servicer has commenced or
will promptly commence, and will diligently pursue, all reasonable efforts to
remedy such default); or
(c) An Insolvency Event occurs with respect to the Servicer or any
successor; or
(d) So long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Event of Default described in Section 5.01 of
the Insurance Agreement shall have occurred;
then, and in each and every case, (i) so long as no Insurer Default shall have
occurred and be continuing, the Trustee may, with the consent of the Security
Insurer and at the direction of the Security Insurer, the Trustee shall, subject
to subsection (b) of this Section 8.1, except in the case of an event arising
under Section 5.01(c) of the Insurance Agreement or (ii) if an Insurer Default
shall have occurred and be continuing, any of the Trustee or the Holders of
Notes evidencing not less than a majority of the principal amount of the Notes
then outstanding, or the Holder of the Voting Interest (as defined in the Trust
Agreement), as applicable, in the case of any default that does not adversely
affect the Trustee or the Noteholders, in any case by notice given in writing to
the Servicer (and to the Trustee if given by the Security Insurer or, as
applicable, the Noteholders or the Certificateholders) may terminate all of the
rights and obligations of the Servicer under this Agreement. For purposes of
Section 8.1(d), any determination of an adverse effect on the interest of the
Certificateholders or the Noteholders pursuant to Section 8.1(b) shall be made
without consideration of the availability of funds under the Policies. On or
after the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Notes, the Certificates or the Receivables or otherwise,
automatically shall pass to, be vested in and become obligations and
responsibilities of the Trustee provided that the Trustee is not unwilling or
unable to act; PROVIDED, HOWEVER, that the Trustee shall have no liability with
respect to any obligation which was required to be performed by the prior
Servicer prior to the date that the Trustee becomes the Servicer or any claim of
a third party based on any alleged action or inaction of the prior Servicer. The
Trustee is authorized and empowered by this Agreement, as successor Servicer to
execute and deliver, on behalf of the prior Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Receivables and the other Trust Property and related documents, to show the
Owner Trustee as lienholder or secured party on the related Lien Certificates,
or otherwise. The prior Servicer agrees to cooperate with the successor Servicer
in effecting the termination of the responsibilities and rights of the prior
Servicer under this Agreement, including, without limitation, the transfer to
the successor Servicer for administration by it of all cash amounts that shall
at the time be held by the prior Servicer for deposit, or have been deposited by
the prior Servicer, in the Collection Account or thereafter received with
respect to the Receivables and the delivery to the successor Servicer of all
Receivables Files, records and a computer tape in readable form containing all
information necessary to enable the successor Servicer to service the
Receivables and the other Trust Property. The terminated Servicer shall grant
the Trustee, (in its capacity as Trustee and/or successor Servicer), the Owner
Trustee and the Security Insurer reasonable access to the terminated Servicer's
premises at the Servicer's expense.
SECTION 8.2 APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's receipt
of notice of termination, pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee and the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer's
termination hereunder, the Trustee shall, provided it is not unwilling or unable
to act, assume the obligations of Servicer hereunder, and shall accept its
appointment by a written assumption in form acceptable to the Security Insurer.
Notwithstanding the above, the Trustee, with the prior written consent of the
Security Insurer, or the Security Insurer shall, if the Trustee shall be
unwilling or legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established institution having a net worth of not
less than $50,000,000 and whose regular business shall include the servicing of
automotive receivables as the successor to the Servicer under the Agreement. Any
successor Servicer shall be acceptable to the Security Insurer.
(b) Upon appointment, the successor Servicer (including the Trustee
acting as successor Servicer) shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the responsibilities, duties
and liabilities arising thereafter relating thereto placed on the predecessor
Servicer, subject to the exceptions set forth in Section 8.2(a) hereof, and
shall be entitled to the Servicing Fee and all the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement.
SECTION 8.3 [RESERVED]
SECTION 8.4 NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders, the Security Insurer and the Trustee shall give prompt
written notice thereof to Noteholders and to the Rating Agencies.
SECTION 8.5 WAIVER OF PAST DEFAULTS. So long as no Insurer Default
shall have occurred and be continuing, the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, the Holders of Notes evidencing
not less than a majority of the outstanding principal amount of the Notes, or
the Holder of the Voting Interest as applicable, in the case of any default
which does not adversely affect the Trustee or the Noteholders) may, on behalf
of all Noteholders and Certificateholders, waive any default by the Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from any of the Trust
Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer 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 thereto.
ARTICLE IX
TERMINATION
SECTION 9.1 OPTIONAL PURCHASE OF ALL RECEIVABLES. (a) On the last day
of any Monthly Period as of which the Pool Balance shall be less than or equal
to 10% of the Original Pool Balance, the Servicer shall have the option to
purchase the Owner Trust Estate, other than the Trust Accounts and the
Certificate Distribution Account (with the consent of the Security Insurer if
such purchase would result in a claim on the Note Policy or would result in any
amount owing to the Security Insurer under the Insurance Agreement remaining
unpaid); PROVIDED, HOWEVER, that the amount to be paid for such purchase (as set
forth in the following sentence) shall be sufficient to pay the full amount of
principal, premium, if any, and interest then due and payable on the Notes. To
exercise such option, the Servicer shall deposit pursuant to Section 5.5 in the
Collection Account an amount equal to the aggregate Purchase Amount for the
Receivables (including Defaulted Receivables), plus any amounts then due and
owing to the Security Insurer plus the appraised value of any other property
held by the Trust, such value to be determined by an appraiser mutually agreed
upon by the Servicer, the Security Insurer, the Owner Trustee and the Trustee,
and shall succeed to all interests in and to the Trust.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.2
of the Trust Agreement, the Servicer shall instruct the Trustee to deposit the
proceeds from such sale after all payments and reserves therefrom (including the
expenses of such sale) have been made (the "Insolvency Proceeds") in the
Collection Account. On the Distribution Date on which the Insolvency Proceeds
are deposited in the Collection Account (or, if such proceeds are not so
deposited on a Distribution Date, on the Distribution Date immediately following
such deposit), the Servicer shall instruct the Trustee to make, and the Trustee
shall make, the following deposits and distributions (after the application on
such Distribution Date of the Distribution Amount pursuant to Section 5.6(b))
from the Insolvency Proceeds and the Distribution Amount for such Distribution
Date:
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date; and
(ii) to the Note Distribution Account, the outstanding
principal amount of the Notes (after giving effect to the reduction in
the outstanding principal amount of the Notes to result from the
deposits made in the Note Distribution Account on such Distribution
Date).
Any Insolvency Proceeds remaining after the deposits described above shall be
paid first to the Security Insurer to the extent of any amounts owing to the
Security Insurer under the Insurance
Agreement and not paid, and second, to the extent of any remaining funds, to
the Holder of the GP Interest.
(c) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Trustee, the Security Insurer and the Rating
Agencies as soon as practicable after the Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trustee pursuant to this Agreement.
ARTICLE X
ADMINISTRATIVE DUTIES OF THE SERVICER
SECTION 10.1 ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO THE
INDENTURE AND DEPOSITORY AGREEMENTS. The Servicer shall perform all its duties
and the duties of the Issuer under the Indenture and the Depository Agreements.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Indenture and the
Depository Agreements. The Servicer shall monitor the performance of the Issuer
and shall advise the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture and the Depository Agreements. The Servicer
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture and the Depository Agreements. In
furtherance of the foregoing, the Servicer shall take all necessary action that
is the duty of the Issuer to take pursuant to the Indenture and the Depository
Agreements, including, without limitation, pursuant to Sections 2.7, 3.5, 3.6,
3.7, 3.9, 7.2, 7.3, 11.1 and 11.15 of the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall
perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to
this Agreement or any of the Basic Documents, and at the request of
the Owner Trustee shall take all appropriate action that it is the
duty of the Issuer to take pursuant to this Agreement or any of the
Basic Documents, including, without limitation, pursuant to Sections
2.6 and 2.11 of the Trust Agreement. In accordance with the directions
of the Issuer or the Owner Trustee, the Servicer shall administer,
perform or supervise the performance of such other activities in
connection with the Collateral (including the Basic Documents) as are
not covered by any of the foregoing provisions and as are expressly
requested by the Issuer or the Owner Trustee and are reasonably within
the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of
the Basic Documents to the contrary, the Servicer shall be responsible
for promptly notifying the Owner Trustee in the event that any
withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as
contemplated in Section 5.2(f) of the Trust Agreement. Any such notice
shall be in writing and specify the amount of any withholding tax
required to be withheld by the Owner Trustee pursuant to such
provision.
(iii) Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Issuer or the Owner Trustee and the
General Partner set forth in Section 5.6(a), (b), (c) and (d) of the
Trust Agreement with respect to, among other things, accounting and
reports to Owners (as defined in the Trust Agreement); PROVIDED,
HOWEVER, that once prepared by the Servicer the Owner Trustee shall
retain responsibility for the distribution of the Schedule K-1s
necessary to enable each Certificateholder to prepare its federal and
state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by
the Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer
and shall be, in the Servicer's opinion, no less favorable to the
Issuer in any material respect.
(c) TAX MATTERS. The Servicer shall prepare and file, on behalf of the
Holder of the GP Interest, all tax returns, tax elections, financial statements
and such annual or other reports of the Issuer as are necessary for preparation
of tax reports as provided in Article V of the Trust Agreement, including
without limitation Forms 1099 and 1066. All tax returns will be signed by the
Holder of the GP Interest.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner Trustee and, with
respect to items (A), (B), (C) and (D) below, the Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Receivables);
(C) the amendment, change or modification of this Agreement
or any of the Basic Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Trustees pursuant to the Indenture or the
appointment of Successor Servicers or the consent to the assignment by
the Note Registrar, Paying Agent or Trustee of its obligations under
the Indenture; and
(E) the removal of the Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Owner Trust Estate pursuant to Section 5.5 of the
Indenture, (3) take any other action that the Issuer directs the Servicer not to
take on its behalf or (4) in connection with its duties hereunder assume any
indemnification obligation of any other Person.
SECTION 10.2 RECORDS. The Servicer shall maintain appropriate books
of account and records relating to services performed under this Agreement,
which books of account and records shall be accessible for inspection by the
Issuer at any time during normal business hours.
SECTION 10.3 ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 AMENDMENT. This Agreement may be amended from time to
time by the Representative, the Seller, the Servicer and the Owner Trustee, with
the consent of the Trustee (which consent may not be unreasonably withheld),
with the prior written consent of the Security Insurer (so long as no Insurer
Default has occurred and is continuing) but without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee and the Trustee, adversely affect in any material respect the interests
of any Noteholder or Certificateholder; provided further that if an Insurer
Default has occurred and is continuing, such action shall not materially
adversely affect the interests of the Security Insurer in the Trust.
This Agreement may also be amended from time to time by the
Representative, the Seller, the Servicer and the Owner Trustee, with the consent
of the Security Insurer (so long as no Insurer Default has occurred and is
continuing), the consent of the Trustee, the consent of the Holders of Notes
evidencing not less than a majority of the outstanding principal amount of the
Notes and the consent of the Holder of the Voting Interest (as defined in the
Trust Agreement) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the outstanding principal amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holder
of the Voting Interest (as defined in the Trust Agreement), of each class
affected thereby; provided further, that if an Insurer Default has occurred and
is continuing, such action shall not materially adversely affect the interest of
the Security Insurer.
Promptly after the execution of any such amendment or consent pursuant
to either of the preceding paragraphs, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Noteholders or Certificateholders provided for in this
Agreement) and of evidencing the authorization of any action by Noteholders or
Certificateholders shall be subject to such reasonable requirements as the
Trustee or the Owner Trustee, as applicable, may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee, the Trustee and the Security Insurer shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 11.2(i)(1) has been delivered. The Owner Trustee and the Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Issuer's, the Owner Trustee's or the Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 11.2 PROTECTION OF TITLE TO TRUST. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Indenture Collateral Agent on behalf of the
Noteholders, the Certificateholders and the Security Insurer in the Receivables
and in the proceeds thereof. The Seller shall deliver (or cause to be delivered)
to the Security Insurer, the Owner Trustee and the Indenture Collateral Agent
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Security Insurer, the Owner Trustee
and the Trustee at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements. Promptly upon such filing, the Seller or
the Servicer, as the case may be, shall deliver an Opinion of Counsel in form
and substance reasonably satisfactory to the Security Insurer, stating either
(A) all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the Trust
and the Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or (B)
no such action shall be necessary to preserve and protect such interest.
(c) Each of the Seller and the Servicer shall have an obligation to
give the Security Insurer, the Owner Trustee and the Trustee at least 60 days'
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Issuer,
the Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer and the
Trustee on behalf of the Certificateholders, the Noteholders and the Security
Insurer in such Receivable and that such Receivable is owned by the Issuer and
has been pledged to the Trustee. Indication of the Issuer's and the Trustee's
interest in a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the related Receivable shall have been
paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Trustee on behalf of the Certificateholders,
the Noteholders and the Security Insurer.
(g) The Servicer shall permit the Trustee and the Security Insurer and
their respective agents at any time during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Receivable or any other portion of the Trust Property. The preceding sentence
shall not create any duty or obligation on the part of the Trustee to perform
any such acts.
(h) Upon request, the Servicer shall furnish to the Security Insurer,
the Owner Trustee or to the Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Security Insurer, the Owner
Trustee and the Trustee:
(1) promptly after the execution and delivery of the
Agreement and, if required pursuant to Section 11.1, of each
amendment, an Opinion of Counsel stating that, in the opinion of such
Counsel, in form and substance reasonably satisfactory to the Security
Insurer, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Trust and the Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest;
and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Trust and the Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (l) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 11.3 NOTICES. All demands, notices and communications upon or
to the Seller, the Servicer, the Owner Trustee, the Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered, or
mailed by certified mail, return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Seller to TMS Auto Holdings,
Inc., 1625 West North Market Blvd., Suite 210, Sacramento, California 95834,
Attention: Executive Vice President with a copy to: The Money Store Inc., 2840
Morris Ave., Union, New Jersey, 07083, Attention: Executive Vice President (b)
in the case of the Servicer to The Money Store Auto Finance Inc., 1625 West
North Market Blvd., Suite 210, Sacramento, California 95834, Attention:
President, with a copy to: The Money Store Inc., 2840 Morris Ave., Union, New
Jersey, 07083, Attention: Executive Vice President (c) in the case of the Issuer
or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, with a
copy to Bankers Trust Company, 4 Albany Street, New York, New York 10006,
Attention: Corporate Trust Agency, Structured Finance, 10th floor, (d) in the
case of the Trustee or the Indenture Collateral Agent, at the Corporate Trust
Office, (e) in the case of the Security Insurer, to MBIA Insurance Corporation,
113 King Street, Armonk, New York 10504, Attention: Insured Portfolio
Management-SF; (f) in the case of Moody's, to Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007; and (g)
in the case of Standard & Poor's, to Standard & Poor's Ratings Group, 25
Broadway - 15th Floor, New York, New York 10004, Attention: Asset Backed
Surveillance Department. Any notice required or permitted to be mailed to a
Noteholder or Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register or
Note Register, as applicable. Any notice so mailed within the time prescribed in
the Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder or Noteholder shall receive such notice.
SECTION 11.4 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Trustee and the Security Insurer
(or if an Insurer Default shall have occurred and be continuing the Holders of
Notes evidencing not less than 66% of the principal amount of the outstanding
Notes.)
SECTION 11.5 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee and for the benefit of the Certificateholders (including the
General Partner), the Trustee, the Security Insurer and the Noteholders, as
third-party beneficiaries. Nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person, other than express
third-party beneficiaries, any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.6 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7 SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.9 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10 ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the benefit
of the Issuer Secured Parties (as defined in the Indenture) of all right, title
and interest of the Issuer in, to and under the Receivables and/or the
assignment of any or all of the Issuer's rights and obligations hereunder to the
Trustee.
SECTION 11.11 NONPETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
parties hereto shall not, prior to the date that is one year and one day after
the termination of this Agreement with respect to the Seller, acquiesce to,
petition or otherwise invoke or cause the Seller to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or similar
law, appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of the Seller or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 11.12 LIMITATION OF LIABILITY OF OWNER TRUSTEE, TRUSTEE AND
INDENTURE COLLATERAL AGENT. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Bankers Trust (Delaware) not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Bankers Trust (Delaware) in its individual capacity
or, except as expressly provided in the Trust Agreement, as Owner Trustee have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its individual
capacity but solely as Trustee and as Indenture Collateral Agent, and in no
event shall The Chase Manhattan Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
SECTION 11.13 INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 11.14 NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Servicer and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 11.15 THIRD-PARTY BENEFICIARIES. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Security Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions of
this Agreement so long as no Insurer Default shall have occurred and be
continuing. Except as expressly stated otherwise herein or in the Basic
Documents, any right of the Security Insurer to direct, appoint, consent to,
approve of, or take any action under this Agreement, shall be a right exercised
by the Security Insurer in its sole and absolute discretion.
SECTION 11.16 DISCLAIMER BY SECURITY INSURER. The Security Insurer may
disclaim any of its rights and powers under this Agreement (but not its duties
and obligations under the Note Policy) upon delivery of a written notice to the
Owner Trustee and the Trustee.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and year first above written.
THE MONEY STORE AUTO TRUST 1997-4
By BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Owner Trustee on behalf
of the Trust,
By_____________________________________
Name:
Title:
TMS AUTO HOLDINGS, INC.,
Seller,
By_____________________________________
Name: Michael H. Benoff
Title: Senior Vice President
THE MONEY STORE AUTO FINANCE INC.,
Servicer,
By_____________________________________
Name: Michael H. Benoff
Title: Senior Vice President
THE MONEY STORE INC.,
Representative,
By_____________________________________
Name: Michael H. Benoff
Title: Executive Vice President
<PAGE>
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Trustee,
By___________________________
Name:
Title:
Acknowledged and Accepted:
BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee,
By____________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Indenture Collateral
Agent
By____________________________
Name:
Title:
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
<PAGE>
SCHEDULE B
LOCATION OF RECEIVABLES
The Money Store Inc.
625 West North Market Boulevard
Suite 210
Sacramento, CA 95834
<PAGE>
EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
TRANSFER No. OF SUBSEQUENT RECEIVABLES dated as of _________, 1998,
among THE MONEY STORE AUTO TRUST 1997-4, a Delaware business trust (the
"Issuer"), TMS AUTO HOLDINGS, INC., a Delaware corporation (the "Seller"), THE
MONEY STORE AUTO FINANCE INC. a Delaware corporation (the "Servicer"), and THE
MONEY STORE INC., a New Jersey corporation (the "Representative") pursuant to
the Sale and Servicing Agreement referred to below.
W I T N E S E T H:
WHEREAS the Issuer, the Seller, the Servicer and the Representative
are parties to the Sale and Servicing Agreement, dated as of November 30, 1997
(as amended or supplemented, the "Sale and Servicing Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller
wishes to convey the Subsequent Receivables to the Issuer; and
WHEREAS, the Issuer is willing to accept such conveyance subject to
the terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller and the Servicer hereby agree
as follows:
l. DEFINED TERMS. Capitalized terms used herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.
"SUBSEQUENT CUTOFF DATE" shall mean, with respect to the Subsequent
Receivables conveyed hereby, ____________, 1998.
"SUBSEQUENT TRANSFER DATE" shall mean, with respect to the Subsequent
Receivables conveyed hereby, , 1998.
2. SCHEDULE OF RECEIVABLES. Annexed hereto is a supplement to Schedule
A to the Sale and Servicing Agreement listing the Receivables that constitute
the Subsequent Receivables to be conveyed pursuant to this Agreement on the
Subsequent Transfer Date.
3. CONVEYANCE OF SUBSEQUENT RECEIVABLES. In consideration of the
Issuer's delivery to or upon the order of the Seller of $ , the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse (except as expressly provided in the Sale and Servicing
Agreement), all right, title and interest of the Seller in and to:
(a) the Subsequent Receivables, and all moneys due thereon, on or
after the related Subsequent Cutoff Date;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any other interest of
the Seller in such Financed Vehicles;
(c) any proceeds with respect to the Subsequent Receivables from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors;
(d) any proceeds with respect to the Subsequent Receivables from
recourse to Dealers in respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment in
full is unlikely;
(e) the related Receivables Files;
(f) its rights and benefits, but none of its obligations or burdens,
under the Subsequent Transfer Agreement, including the delivery
requirements, representations and warranties and the cure and repurchase
obligations of TMS Auto Finance under the Subsequent Purchase Agreement, on
or after the Subsequent Cutoff Date; and
(g) the proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Issuer as of the date of this Agreement and as of
the Subsequent Transfer Date that:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Agreement constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or equity).
(b) ORGANIZATION AND GOOD STANDING. The Seller is duly organized and
validly existing as a corporation in good standing under the laws of the
State of Delaware, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has,
the power, authority and legal right to acquire and own the Receivables.
(c) DUE QUALIFICATION. The Seller is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such
qualifications.
(d) POWER AND AUTHORITY. The Seller has the power and authority to
execute and deliver this Agreement and to carry out its terms; the Seller
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer and the Seller and shall have
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Seller by all necessary corporate
action.
(e) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Seller enforceable in accordance with its terms.
(f) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party or by which it
shall be bound; nor result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of the Seller's knowledge, any order,
rule or regulation applicable to the Seller of any court or of any federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(g) NO PROCEEDINGS. To the Seller's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement, the Indenture or any of the
other Basic Documents or the Notes, (ii) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents or the Notes or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes.
(h) PRINCIPAL BALANCE. The aggregate Principal Balance of the
Receivables listed on the supplement to Schedule A annexed hereto and
conveyed to the Issuer pursuant to this Agreement as of the Subsequent
Cutoff Date is $_____________.
5. CONDITIONS PRECEDENT. The obligation of the Issuer to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Subsequent Transfer Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section
3.1 of the Sale and Servicing Agreement shall be true and correct as of the
date of this Agreement and as of the Subsequent Transfer Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions
set forth in Section 2.2(b) to the Sale and Servicing Agreement shall have
been satisfied.
(c) ADDITIONAL INFORMATION. The Seller shall have delivered to the
Issuer such information as was reasonably requested by the Issuer to
satisfy itself as to (i) the accuracy of the representations and warranties
set forth in Section 4 of this Agreement and in Section 3.1 of the Sale and
Servicing Agreement and (ii) the satisfaction of the conditions set forth
in this Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. THIRD PARTY BENEFICIARY. The Security Insurer is an express third
party beneficiary of this Agreement.
IN WITNESS WHEREOF, the Issuer, the Seller and the Servicer have
caused this Agreement to be duly executed and delivered by their respective duly
authorized officers as of the day and the year first above written.
THE MONEY STORE AUTO TRUST 1997-4
by BANKERS TRUST (DELAWARE)
not in its individual
capacity but solely as Owner
Trustee on behalf of the Trust,
by___________________________
Title:
TMS AUTO HOLDINGS, INC.
Seller,
by_________________________
Title:
THE MONEY STORE AUTO
FINANCE INC.
Servicer,
by_________________________
Title:
THE MONEY STORE INC.,
Representative
by_________________________
Title:
<PAGE>
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Trustee and Indenture
Collateral Agent
by__________________________________
Title:
<PAGE>
Exhibit B
[Intentionally Left Blank]
<PAGE>
Exhibit C
FORM OF MONTHLY NOTEHOLDER STATEMENT
THE MONEY STORE AUTO TRUST 1997-4
Class A-1 5.90875% Asset Backed Notes
Class A-2 6.35% Asset Backed Notes
Class A-3 6.46% Asset Backed Notes
Distribution Date:
Monthly Period:
Under the Sale and Servicing Agreement dated as of November 30, 1997
among The Money Store Auto Finance, as Servicer, TMS Auto Holdings, Inc., as
seller, The Money Store Auto Trust 1997-4, as issuer, and The Money Store Inc.,
as representative, the Servicer is required to prepare certain information each
month regarding current distributions to Noteholders and the performance of the
Trust during the previous month. The information that is required to be prepared
with respect to the Distribution Date and Monthly Period listed above is set
forth below. Certain of the information is presented on the basis of an original
principal amount of $1,000 per Note, and certain other information is presented
based upon the aggregate amounts for the Trust as a whole.
A. Information Regarding the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the
distribution with respect to:
the Class A-1 Notes..............................$________
the Class A-2 Notes..............................$________
the Class A-3 Notes..............................$________
(b) The amount of the distribution set forth in paragraph A.1.(a)
above in respect of interest on:
the Class A-1 Notes..............................$________
the Class A-2 Notes..............................$________
the Class A-3 Notes..............................$________
(c) The amount of the distribution set forth in paragraph A.1.(a)
above in respect of principal of:
the Class A-1 Notes..............................$________
the Class A-2 Notes..............................$________
the Class A-3 Notes..............................$________
(d) The amount of the distribution in A.1.(a) payable pursuant to a
claim on the Note Policy with respect to:
the Class A-1 Notes..............................$_______
the Class A-2 Notes..............................$_______
the Class A-3 Notes..............................$________
(e) The remaining outstanding balance
available to be drawn under the
Note Policy.........................................$_______
(f) The amount of the distribution set forth in paragraph A.1.(a)
above per $1,000 interest in:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
(g) The amount of the distribution set forth in paragraph A.1.(b)
above per $1,000 interest in:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
(h) The amount of the distribution set forth in paragraph A.1.(c)
above per $1,000 interest in:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
(i) The amount of the distribution set forth in paragraph A.1.(d)
above per $1,000 interest in:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Note Principal Balance.
(a) The Pool Balance at the close of business on
the last day of the Monthly Period.................$_____
(b) The aggregate outstanding principal amount of each Class of
Notes after giving effect to payments allocated to principal as
set forth in Paragraph A.1(c) above with respect to:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
(c) The Note Pool Factor for each Class of Notes after giving affect
to the payments set forth in paragraph A.1(c) with respect to:
the Class A-1 Notes..............................________
the Class A-2 Notes..............................________
the Class A-3 Notes.............................$________
(d) The amount of aggregate Realized Losses for
the second preceding Monthly Period...............$________
(e) The aggregate Purchase Amount for
all Receivables that were repurchased
in the Monthly Period..............................$________
2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Monthly Period....................$_______
3. Payment Shortfalls.
(a) The amount of the Noteholders' Interest Carryover Shortfall
after giving effect to the payments set forth in paragraph
A.1(b) above with respect to:
the Class A-1 Notes............................$________
the Class A-2 Notes............................$________
the Class A-3 Notes............................$________
(b) The amount of the Noteholders' Interest Carryover Shortfall set
forth in paragraph B.3.(a) above per $1,000 interest with
respect to:
the Class A-1 Notes............................$________
the Class A-2 Notes............................$________
the Class A-3 Notes............................$________
(c) The amount of the Noteholders' Principal Carryover Shortfall
after giving effect to the payments set forth in paragraph
A.1(b) above with respect to:
the Class A-1 Notes............................$________
the Class A-2 Notes............................$________
the Class A-3 Notes............................$________
(d) The amount of the Noteholders' Principal Carryover Shortfall set
forth in paragraph B.3.(a) above per $1,000 interest with
respect to:
the Class A-1 Notes.............................$________
the Class A-2 Notes.............................$________
the Class A-3 Notes.............................$________
4. (a) The aggregate amount of collections by
the Servicer during the preceding
Monthly Period.....................................$______
(b) The aggregate amount which was received by
the Trust from the Servicer during the
preceding Monthly Period...........................$______
(c) The aggregate amount of reimbursements to
the Security Insurer during the preceding
Monthly Period.....................................$______
(d) The number of Receivables that are delinquent
for over:
30 days...........................................______
60 days...........................................______
90 days...........................................______
<PAGE>
Exhibit D
Form of Servicer's Certificate
<PAGE>
Exhibit E
Form of Note Policy
<PAGE>
Exhibit F
Form of Stamp
THIS CONTRACT/NOTE IS SUBJECT TO A SECURITY INTEREST
GRANTED TO THE CHASE MANHATTAN BANK, AS TRUSTEE, FOR
WHICH UCC-1 FINANCING STATEMENTS HAVE BEEN FILED WITH
THE SECRETARY OF STATE OF DELAWARE. AS THE LIEN WILL
BE RELEASED ONLY BY FILINGS IN SUCH OFFICES, PURCHASE
DOCUMENTS MUST REFER TO SUCH FILINGS TO DETERMINE
WHETHER THE LIEN HAS BEEN RELEASED.
THE MONEY STORE AUTO TRUST 1997-4
$17,500,000 CLASS A-1 5.90875% Asset Backed Notes
$44,500,000 CLASS A-2 6.35% Asset Backed Notes
$28,000,000 CLASS A-3 6.46% Asset Backed Notes
--------------------------------
INDENTURE
Dated as of November 30, 1997
------------------------------
THE CHASE MANHATTAN BANK
Trustee and Indenture Collateral Agent
<PAGE>
CROSS REFERENCE TABLE
TIA Indenture
Section Section
310 (a) (1) ................................................ 6.11
(a) (2) ................................................ 6.11
(a) (3) ................................................ 6.10; 6.11
(a) (4) ................................................ N.A.
(a) (5) ................................................ 6.11
(b) ................................................ 6.8; 6.11
(c) ................................................ N.A.
311 (a) ................................................ 6.12
(b) ................................................ 6.12
(c) ................................................ N.A.
312 (a) ................................................ 7.1
(b) ................................................ 7.2
(c) ................................................ 7.2
313 (a) ................................................ 7.4
(b) (1) ................................................ 7.4
(b) (2) ................................................ 7.4
(c) ................................................ 11.5
(d) ................................................ 7.3
314 (a) ................................................ 3.9; 7.3
(b) ................................................ 11.15
(c) (1) ................................................ 11.1
(c) (2) ................................................ 11.1
(c) (3) ................................................ 11.1
(d) ................................................ 11.1
(e) ................................................ 1.1; 11.1
(f) ................................................ 11.1
315 (a) ................................................ 6.1
(b) ................................................ 6.5; 11.5
(c) ................................................ 6.1
(d) ................................................ 6.1
(e) ................................................ 5.14
316 (a) (last sentence) ....................................... 1.1
(a) (1)(A)................................................. 5.12
(a) (1)(B)................................................. 5.13
(a) (2) ................................................ N.A.
(b) ................................................ 5.7; 5.8
(c) ................................................ N.A
317 (a) (1) ................................................ 5.3
(a) (2) ................................................ 5.3
(b) ................................................ 3.3
318 (a) ................................................ 11.7
(b) ................................................ N.A.
(c) ................................................ 11.7
- -------------------
1 Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
2. N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions.................................................1
SECTION 1.2 Incorporation by Reference of Trust
Indenture Act..............................................11
SECTION 1.3 Rules of Construction......................................11
ARTICLE II
The Notes
SECTION 2.1. Form.......................................................12
SECTION 2.2. Execution, Authentication and Delivery.....................12
SECTION 2.3. Temporary Notes............................................13
SECTION 2.4. Registration; Registration of Transfer
and Exchange...............................................13
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen
Notes......................................................14
SECTION 2.6. Persons Deemed Owner.......................................15
SECTION 2.7. Payment of Principal and Interest;
Defaulted Interest.........................................15
SECTION 2.8. Cancellation...............................................17
SECTION 2.9. Release of Collateral......................................17
SECTION 2.10. Book-Entry Notes...........................................17
SECTION 2.11. Notices to Clearing Agency.................................18
SECTION 2.12. Definitive Notes...........................................18
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest..........................19
SECTION 3.2. Maintenance of Office or Agency............................19
SECTION 3.3. Money for Payments To Be Held in Trust.....................19
SECTION 3.4. Existence..................................................21
SECTION 3.5. Protection of Trust Estate.................................21
SECTION 3.6. Opinions as to Trust Estate................................22
SECTION 3.7. Performance of Obligations; Servicing of
Receivables................................................23
SECTION 3.8. Negative Covenants.........................................24
SECTION 3.9. Annual Statement as to Compliance..........................25
SECTION 3.10. Issuer May Consolidate, Etc. Only on
Certain Terms..............................................25
SECTION 3.11. Successor or Transferee....................................27
SECTION 3.12. No Other Business..........................................27
SECTION 3.13. No Borrowing...............................................28
SECTION 3.14. Servicer's Obligations.....................................28
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities................................................28
SECTION 3.16. Capital Expenditures.......................................28
SECTION 3.17 Compliance with Laws.......................................28
SECTION 3.18. Restricted Payments........................................28
SECTION 3.19. Notice of Events of Default................................29
SECTION 3.20. Further Instruments and Acts...............................29
SECTION 3.21. Amendments of Sale and Servicing
Agreement and Trust Agreement..............................29
SECTION 3.22. Income Tax Characterization................................29
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture....................29
SECTION 4.2. Application of Trust Money.................................31
SECTION 4.3. Repayment of Moneys Held by Paying
Agent......................................................31
ARTICLE V
Remedies
SECTION 5.1. Events of Default..........................................31
SECTION 5.2. Rights Upon Event of Default...............................33
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.....................................34
SECTION 5.4. Remedies...................................................37
SECTION 5.5. Optional Preservation of the
Receivables................................................38
SECTION 5.6. Priorities.................................................38
SECTION 5.7. Limitation of Suits........................................39
SECTION 5.8. Unconditional Rights of Noteholders To
Receive Principal and Interest.............................40
SECTION 5.9. Restoration of Rights and Remedies.........................40
SECTION 5.10. Rights and Remedies Cumulative.............................41
SECTION 5.11. Delay or Omission Not a Waiver.............................41
SECTION 5.12. Control by Noteholders.....................................41
SECTION 5.13. Waiver of Past Defaults....................................42
SECTION 5.14. Undertaking for Costs......................................42
SECTION 5.15. Waiver of Stay or Extension Laws...........................42
SECTION 5.16. Action on Notes............................................43
SECTION 5.17. Performance and Enforcement of Certain
Obligations................................................43
SECTION 5.18. Claims Under Note Policy...................................43
SECTION 5.19. Preference Claims..........................................45
ARTICLE VI
The Trustee and the Indenture Collateral Agent
SECTION 6.1. Duties of Trustee..........................................46
SECTION 6.2. Rights of Trustee..........................................48
SECTION 6.3. Individual Rights of Trustee...............................49
SECTION 6.4. Trustee's Disclaimer.......................................49
SECTION 6.5. Notice of Defaults.........................................49
SECTION 6.6. Reports by Trustee to Holders..............................49
SECTION 6.7. Compensation and Indemnity.................................49
SECTION 6.8. Replacement of Trustee.....................................50
SECTION 6.9. Successor Trustee by Merger................................52
SECTION 6.10. Appointment of Co-Trustee or Separate
Trustee....................................................52
SECTION 6.11. Eligibility; Disqualification..............................53
SECTION 6.12. Preferential Collection of Claims
Against Issuer.............................................54
SECTION 6.13. Appointment and Powers.....................................54
SECTION 6.14. Performance of Duties......................................54
SECTION 6.15. Limitation on Liability....................................54
SECTION 6.16. Reliance Upon Documents....................................55
SECTION 6.17. Successor Indenture Collateral Agent.......................55
SECTION 6.18. Compensation...............................................57
SECTION 6.19. Representations and Warranties of the
Indenture Collateral Agent.................................57
SECTION 6.20. Waiver of Setoffs..........................................57
SECTION 6.21. Control by the Controlling Party...........................58
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Trustee Names and
Addresses of Noteholders...................................58
SECTION 7.2. Preservation of Information;
Communications to Noteholders..............................58
SECTION 7.3. Reports by Issuer..........................................59
SECTION 7.4. Reports by Trustee.........................................59
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money........................................59
SECTION 8.2. Trust Accounts.............................................60
SECTION 8.3. General Provisions Regarding Accounts......................61
SECTION 8.4. Release of Trust Estate....................................62
SECTION 8.5. Opinion of Counsel.........................................62
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent
of Noteholders.............................................63
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders................................................64
SECTION 9.3. Execution of Supplemental Indentures.......................65
SECTION 9.4. Effect of Supplemental Indenture...........................66
SECTION 9.5. Conformity With Trust Indenture Act........................66
SECTION 9.6. Reference in Notes to Supplemental
Indentures.................................................66
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption.................................................65
SECTION 10.2 Form of Redemption Notice..................................65
SECTION 10.3. Notes Payable on Redemption Date...........................66
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions,
etc........................................................66
SECTION 11.2. Form of Documents Delivered to Trustee.....................68
SECTION 11.3. Acts of Noteholders........................................69
SECTION 11.4. Notices, etc., to Trustee, Issuer and
Rating Agencies............................................70
SECTION 11.5. Notices to Noteholders; Waiver.............................70
SECTION 11.6. Alternate Payment and Notice Provisions....................71
SECTION 11.7. Conflict with Trust Indenture Act..........................71
SECTION 11.8. Effect of Headings and Table of
Contents...................................................71
SECTION 11.9. Successors and Assigns.....................................72
SECTION 11.10. Separability...............................................72
SECTION 11.11. Benefits of Indenture......................................72
SECTION 11.12. Legal Holidays.............................................72
SECTION 11.13. GOVERNING LAW..............................................72
SECTION 11.14. Counterparts...............................................72
SECTION 11.15. Recording of Indenture.....................................72
SECTION 11.16. Trust Obligation...........................................73
SECTION 11.17. No Petition................................................73
SECTION 11.18. Inspection.................................................73
<PAGE>
EXHIBITS
EXHIBIT A - SCHEDULE OF RECEIVABLES
EXHIBIT B - SALE AND SERVICING AGREEMENT
EXHIBIT C - NOTE DEPOSITORY AGREEMENT
EXHIBIT D-1 - FORM OF CLASS A-1 NOTES
EXHIBIT D-2 - FORM OF CLASS A-2 NOTES
EXHIBIT D-3 FORM OF CLASS A-3 NOTES
EXHIBIT E FORM OF NOTE POLICY
<PAGE>
INDENTURE dated as of November 30,
1997, between THE MONEY STORE AUTO TRUST 1997-4, a
Delaware business trust (the "Issuer"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as
trustee (the "Trustee") and Indenture Collateral
Agent (as defined below)
Each party agrees as follows for the benefit of the other party and
for the Security Insurer and the equal and ratable benefit of the Holders of the
Issuer's Class A-1 5.90875% Asset Backed Notes (the "Class A-1 Notes"), Class
A-2 6.35% Asset Backed Notes (the "Class A-2 Notes") and the Class A-3 6.46%
Asset Backed Notes (the "Class A-3 Notes", and, together with the Class A-1
Notes and the Class A-2 Notes, the "Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Indenture Collateral (as defined below) as collateral to the Indenture
Collateral Agent for the benefit of the Trustee on behalf of the Noteholders and
the Security Insurer.
MBIA Insurance Corporation (the "Security Insurer") has issued and
delivered a note guaranty insurance policy, dated the Closing Date (with
endorsements, if any, the "Note Policy"), pursuant to which the Security Insurer
guarantees Note Insured Payments, as defined in the Note Policy.
As an inducement to the Security Insurer to issue and deliver the Note
Policy, the Issuer and the Security Insurer have executed and delivered the
Insurance Agreement, dated as of November 30, 1997 (as amended from time to
time, the "Insurance Agreement"), among the Security Insurer, the Servicer, the
Indenture Trustee, the Owner Trustee, the Issuer, The Money Store Inc., and TMS
Auto Holdings Inc.
As an additional inducement to the Security Insurer to issue the Note
Policy, and as security for the performance by the Issuer of the Insurer Issuer
Secured Obligations and as security for the performance by the Issuer of the
Trustee Issuer Secured Obligations, the Issuer has agreed to assign the
Collateral (as defined below) as collateral to the Indenture Collateral Agent
for the benefit of the Issuer Secured Parties, as their respective interests may
appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Collateral Agent at the
Closing Date, for the benefit of the Issuer Secured Parties to secure the Issuer
Secured Parties, all of the Issuer's right, title and interest in and to (a) the
Initial Receivables, and all moneys due thereon after the Initial Cutoff Date;
(b) the Subsequent Receivables and all moneys due thereon or in respect thereof
after the related Subsequent Cutoff Date; (c) an assignment of the security
interests in the Financed Vehicles granted by Obligors pursuant to the Initial
Receivables and any Subsequent Receivables and any other interest of the Issuer
in the Financed Vehicles; (d) any proceeds with respect to the Initial
Receivables and the Subsequent Receivables repurchased by a Dealer, pursuant to
a Dealer Agreement, as a result of a breach of representation or warranty in the
related Dealer Agreement; (e) all rights under any Service Contracts on the
related Financed Vehicles; (f) any proceeds with respect to the Initial
Receivables and the Subsequent Receivables from claims on any physical damage,
theft, credit life or disability insurance policies covering Financed Vehicles
or Obligors; (g) all funds on deposit from time to time in the Trust Accounts,
and in all investments and proceeds thereof and all rights of the Issuer therein
(including all income thereon); (h) the Issuer's rights and benefits, but none
of its obligations or burdens, under the Purchase Agreement and each Subsequent
Purchase Agreement, including the delivery requirements, representations and
warranties and the cure and repurchase obligations of TMS Auto Finance under the
Purchase Agreement; (i) all items contained in the Receivables Files and any and
all other documents that TMS Auto Finance keeps on file in accordance with its
customary procedures relating to the Receivables, the Obligors or the Financed
Vehicles, (j) the Issuer's rights and benefits, but none of its obligations or
burdens, under the Sale and Servicing Agreement (including all rights of the
Seller under the Purchase Agreement, any Subsequent Purchase Agreement and any
Subsequent Transfer Agreement assigned to the Issuer pursuant to the Sale and
Servicing Agreement); and (k) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in respect of any
or all of the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction except as
set forth herein, and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The Indenture Collateral Agent, for the benefit of the Trustee on
behalf of the Holders of the Notes and for the benefit of the Security Insurer
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the end that the interests of
the Holders of the Notes and the Security Insurer may be adequately and
effectively protected.
<PAGE>
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture.
"ACT" has the meaning specified in Section 11.3(a).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.
"AUTHORIZED OFFICER" means, with respect to the Issuer and the
Servicer, any officer of the Owner Trustee or the Servicer, as applicable, who
is authorized to act for the Owner Trustee or the Servicer, as applicable, in
matters relating to the Issuer or the Servicer and who is identified on the list
of Authorized Officers delivered by each of the Owner Trustee and the Servicer
to the Trustee on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
"BASIC DOCUMENTS" means the Certificate of Trust, the Trust Agreement,
the Sale and Servicing Agreement, the Indenture, the Depository Agreements, the
Purchase Agreement, the Insurance Agreement and other documents and certificates
delivered in connection therewith.
"BOOK ENTRY NOTES" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10.
"BUSINESS DAY" means (i) with respect to the Note Policy, any day
other than a Saturday, Sunday, legal holiday or other day on which the Insurer
or commercial banking institutions in Wilmington, Delaware or the City of New
York or any other location of any successor Servicer, successor Owner Trustee or
successor Indenture Collateral Agent are authorized or obligated by law,
executive order or governmental decree to be closed and (ii) otherwise, a day
other than a Saturday, a Sunday or other day on which commercial banks located
in the states of California, Delaware, New Jersey or New York are authorized or
obligated to be closed.
"CERTIFICATE OF TRUST" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"CLASS A-1 NOTES" means the Class A-1 5.90875% Asset Backed Notes,
substantially in the form of Exhibit D-1.
"CLASS A-1 INTEREST RATE" means 5.90875% per annum (computed on the
basis of the actual number of days elapsed in a 360-day year).
"CLASS A-2 NOTES" means the Class A-2 6.35% Asset Backed Notes,
substantially in the form of Exhibit D-2.
"CLASS A-2 INTEREST RATE" means 6.35% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
"CLASS A-3 NOTES" means the Class A-3 6.46% Asset Backed Notes,
substantially in the form of Exhibit D-3.
"CLASS A-3 INTEREST RATE" means 6.46% per annum (computed on the basis
of a 360-day year of twelve 30-day months).
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means December 30, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of this
Indenture.
"CONTROLLING PARTY" means the Security Insurer, so long as no Insurer
Default shall have occurred and be continuing, and the Trustee, for so long as
an Insurer Default shall have occurred and be continuing.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at date of the execution of this Agreement is located at 450 West
33rd Street, 10th Floor, New York, New York 10001-2697, Attention: Corporate
Trust Department or at such other address as the Trustee may designate from time
to time by notice to the Noteholders, the Security Insurer, the Servicer and the
Issuer, or the principal corporate trust office of any successor Trustee (the
address of which the successor Trustee will notify the Noteholders and the
Issuer).
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in Section 2.10.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"HOLDER OF THE GP INTEREST" shall have the meaning given such term in
the Trust Agreement.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon or a
security interest in or right of set-off against, deposit, or set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
"INDEBTEDNESS" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"INDENTURE" means this Indenture as amended and supplemented from time
to time.
"INDENTURE COLLATERAL AGENT" means, initially, The Chase Manhattan
Bank, in its capacity as collateral agent on behalf of the Issuer Secured
Parties, including its successors in interest, until and unless a successor
Person shall have become the Indenture Collateral Agent pursuant to Section 6.17
hereof, and thereafter "Indenture Collateral Agent" shall mean such successor
Person.
"INDEPENDENT" means, when used with respect to any specified Person,
that the person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Collateral Agent under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.1,
prepared by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Collateral Agent in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"INSURANCE AGREEMENT EVENT OF DEFAULT" has the meaning specified
therefor in the Insurance Agreement.
"INSURER ISSUER SECURED OBLIGATIONS" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Security Insurer
under this Indenture, the Insurance Agreement or any other Basic Document.
"INTEREST RATE" means, with respect to the (i) Class A-1 Notes, the
Class A-1 Interest Rate, (ii) Class A-2 Notes, the Class A-2 Interest Rate and
(iii) Class A-3 Notes, the Class A-3 Interest Rate.
"ISSUER" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"ISSUER SECURED OBLIGATIONS" means the Insurer Issuer Secured
Obligations and the Trustee Issuer Secured Obligations.
"ISSUER SECURED PARTIES" means each of the Trustee in respect of the
Trustee Issuer Secured Obligations and the Security Insurer in respect of the
Insurer Issuer Secured Obligations.
"NOTE" means a Class A-1 Note, a Class A-2 Note and a Class A-3 Note.
"NOTE DEPOSITORY AGREEMENT" means the agreement among the Issuer, the
Trustee, the Servicer and The Depository Trust Company, as the initial Clearing
Agency, dated December 30, 1997, substantially in the form of Exhibit C.
"NOTE INSURED PAYMENTS" has the meaning specified in the Note Policy.
"NOTE POLICY" means the note guaranty insurance policy issued by the
Security Insurer with respect to the Notes, including any endorsements thereto,
if any, in the form of Exhibit E.
"NOTE OWNER" means, with respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.4.
"NOTICE" has the meaning specified in Section 5.18.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and TIA
ss. 314, and delivered to the Trustee. Unless otherwise specified, any reference
in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Trustee and
addressed to the Security Insurer and satisfactory to the Security Insurer, and
which shall comply with any applicable requirements of Section 11.01, and shall
be in form and substance satisfactory to the Trustee, and shall be addressed to
the Security Insurer and satisfactory to the Security Insurer.
"OUTSTANDING" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
bona fide purchaser;
PROVIDED, HOWEVER, that Notes which have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Security Insurer has been paid as subrogee hereunder or reimbursed pursuant
to the Insurance Agreement as evidenced by a written notice from the Security
Insurer delivered to the Trustee, and the Security Insurer shall be deemed to be
the Holder thereof to the extent of any payments thereon made by the Security
Insurer; PROVIDED, FURTHER, that in determining whether the Holders of the
requisite Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer of
the Trustee either actually knows to be so owned or has received written notice
thereof shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon the Notes,
the Seller or any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"PAYING AGENT" means the Trustee or any other Person acceptable to the
Security Insurer that meets the eligibility standards for the Trustee specified
in Section 6.11 and is authorized by the Issuer to make the payments to and
distributions from the Collection Account and the Note Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
"PAYMENT DATE" means a Distribution Date or the Class A-1 Final
Scheduled Distribution Date, as applicable.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PREFERENCE CLAIM" has the meaning specified in Section 5.19.
"PREPAYMENT AMOUNT" means, as of the Payment Date on or immediately
following the last day of the Funding Period, after giving effect to any
transfer of Subsequent Receivables on such date, an amount equal to the
Pre-Funded Amount as of such Payment Date.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"RATING AGENCY" means each of Moody's and Standard & Poor's, so long
as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization selected by the Seller and
(so long as an Insurer Default shall not have occurred and be continuing)
acceptable to the Security Insurer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Security
Insurer, the Trustee, the Owner Trustee and the Issuer in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes.
"RECORD DATE" means, with respect to a Payment Date or Redemption
Date, the close of business on the last Business Day immediately preceding such
Payment Date or Redemption Date.
"REDEMPTION DATE" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) or a payment to Noteholders pursuant to Section
10.1(b), the Payment Date specified by the Servicer or the Issuer pursuant to
Section 10.1(a) or (b) as applicable.
"REDEMPTION PRICE" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a), an amount equal to the unpaid principal amount of
the then outstanding principal amount of each class of Notes being redeemed plus
accrued and unpaid interest thereon to but excluding the Redemption Date and any
amounts then owing to Security Insurer or (b) in the case of a payment made to
Noteholders pursuant to Section 10.1(b), the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause (a)
above.
"RESPONSIBLE OFFICER" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of November 30, 1997, among the Issuer, the Representative, the Seller
and the Servicer, substantially in the form of Exhibit B as the same may be
amended or supplemented from time to time.
"SCHEDULE OF RECEIVABLES" means the listing of the Receivables set
forth in Exhibit A (which Exhibit may be in the form of microfiche); as
supplemented on each Subsequent Transfer Date to reflect the sale to the Issuer
of Subsequent Receivables.
"STATE" means any one of the 50 states of the United States of America
or the District of Columbia.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.7(e).
"TERMINATION DATE" means the latest of (i) the expiration of the Note
Policy and the return of the Note Policy to the Security Insurer for
cancellation, (ii) the date on which the Security Insurer shall have received
payment and performance of all Insurer Issuer Secured Obligations and (iii) the
date on which the Trustee shall have received payment and performance of all
Trustee Issuer Secured Obligations.
"TRUST ESTATE" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Noteholders and the Security Insurer
(including all property and interests Granted to the Indenture Collateral
Agent), including all proceeds thereof.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"TRUSTEE" means The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.
"TRUSTEE ISSUER SECURED OBLIGATIONS" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Trustee for the
benefit of the Noteholders and the Security Insurer under this Indenture or the
Notes.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
(a) Except as otherwise specified herein, the following terms have the
respective meanings set forth in the Sale and Servicing Agreement as in effect
on the Closing Date for all purposes of this Indenture, and the definitions of
such terms are equally applicable both to the singular and plural forms of such
terms:
Section of Sale and
TERM SERVICING AGREEMENT
Accelerated Principal Distributable Amount.............. Section 1.1
Annual Percentage Rate or APR........................... Section 1.1
Capitalized Interest Account............................ Section 1.1
Certificateholders...................................... Section 1.1
Closing Date............................................ Section 1.1
Collection Account...................................... Section 1.1
Collection Period....................................... Section 1.1
Contract................................................ Section 1.1
Depositor............................................... Section 1.1
Depository Agreements................................... Section 1.1
Distribution Date....................................... Section 1.1
Eligible Deposit Account................................ Section 1.1
Eligible Investments.................................... Section 1.1
Final Scheduled Distribution Date....................... Section 1.1
Final Scheduled Maturity Date........................... Section 1.1
Financed Vehicle........................................ Section 1.1
Funding Period.......................................... Section 1.1
Initial Receivables..................................... Section 1.1
Interest Period......................................... Section 1.1
Note Distribution Account............................... Section 1.1
Insurance Agreement..................................... Section 1.1
Insurance Agreement Event of Default.................... Section 1.1
Insurer Default......................................... Section 1.1
Interest Period......................................... Section 1.1
Monthly Period.......................................... Section 1.1
Note Distribution Account............................... Section 1.1
Noteholders' Distributable Amount....................... Section 1.1
Noteholders' Interest Distributable Amount.............. Section 1.1
Noteholders' Percentage................................. Section 1.1
Noteholders' Principal Distributable Amount............. Section 1.1
Obligor................................................. Section 1.1
Original Pool Balance................................... Section 1.1
Owner Trustee........................................... Section 1.1
Parity Date............................................. Section 1.1
Person.................................................. Section 1.1
Pool Balance............................................ Section 1.1
Precomputed Receivable.................................. Section 1.1
Pre-Funded Amount....................................... Section 1.1
Pre-Funding Account..................................... Section 1.1
Purchase Agreement...................................... Section 1.1
Purchased Receivable.................................... Section 1.1
Rating Agency........................................... Section 1.1
Rating Agency Condition................................. Section 1.1
Receivable.............................................. Section 1.1
Security Insurer........................................ Section 1.1
Seller.................................................. Section 1.1
Servicer................................................ Section 1.1
Servicer Default........................................ Section 1.1
Simple Interest Receivable.............................. Section 1.1
Subsequent Purchase Agreement........................... Section 1.1
Subsequent Receivables.................................. Section 1.1
Subsequent Transfer Date................................ Section 1.1
Total Distribution Amount............................... Section 1.1
Trust Accounts.......................................... Section 1.1
Trust Agreement......................................... Section 1.1
(b) Capitalized terms used herein and not otherwise defined herein or
in the Sale and Servicing Agreement have the meanings assigned to them in the
Trust Agreement.
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
ARTICLE II.
THE NOTES
SECTION 2.1. FORM. The Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, in each case together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit D-1, D-2
and D-3, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit D is part of the terms of this Indenture.
SECTION 2.2. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall upon receipt of the Note Policy and Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $17,500,000 Class A-2 Notes for original issue in the
aggregate principal amount of $44,500,000 and Class A-3 Notes for original
issue in the aggregate principal amount of $28,000,000. Class A-1 Notes, Class
A-2 Notes and Class A-3 Notes outstanding at any time may not exceed such
amounts except as provided in Section 2.5.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.3. TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.4. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute and
upon its request the Trustee shall authenticate and the Noteholder shall obtain
from the Trustee, in the name of the designated transferee or transferees, one
or more new Notes, in any authorized denominations, of the same class and a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of the same class and a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute and upon its
request the Trustee shall authenticate and the Noteholder shall obtain from the
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("Stamp") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Trustee may
require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.5. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and the Security Insurer (unless an Insurer
Default shall have occurred and be continuing) such security or indemnity as may
be required by it to hold the Issuer, the Trustee and the Security Insurer
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the requirements of Section 8-405 of the UCC are met, the Issuer
shall execute and upon its request the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; PROVIDED, HOWEVER, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or within seven days
shall be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer,
the Trustee and the Security Insurer shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee, any agent of the
Issuer or the Trustee, the Security Insurer may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Security Insurer, the Trustee nor any agent
of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.7. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note, the Class A-2 Note and the Class A-3 Note set forth in Exhibits D-1, D-2
and D-3, respectively, and such interest shall be payable on each Payment Date
as specified therein. Any installment of interest or principal, if any, payable
on any Note which is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date or on the Final Scheduled Distribution Date (and except for the Redemption
Price for any Note called for redemption pursuant to Section 10.1(a)) which
shall be payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Class A-1 Note, the Class A-2
Note and the Class A-3 Note set forth in Exhibits D-1, D-2 and D-3,
respectively. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable, if not previously paid, on the date on
which an Event of Default shall have occurred and be continuing, if the Trustee
or the Holders of the Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on
each class of Notes shall be made pro rata to the Noteholders of such class
entitled thereto. The Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the Payment
Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Interest Rate in any lawful manner. The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder and the Trustee a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
(d) Promptly following the date on which all principal of and interest
on the Notes has been paid in full and the Notes have been surrendered to the
Trustee, the Trustee shall, if the Security Insurer has paid any amount in
respect of the Notes under the Note Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Security Insurer.
SECTION 2.8. CANCELLATION. Subject to Section 2.7(d), all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to Section 2.7(d), the
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.7(d), all canceled Notes may
be held or disposed of by the Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; PROVIDED that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Trustee.
SECTION 2.9. RELEASE OF COLLATERAL. The Indenture Collateral Agent
shall, on or after the Termination Date, release any remaining portion of the
Trust Estate from the lien created by this Indenture and deposit in the
Collection Account any funds then on deposit in any other Trust Account. The
Indenture Collateral Agent shall release property from the lien created by this
Indenture pursuant to this Section 2.9 only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Trustee shall be entitled to deal with
the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Note Depository Agreement,
unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Trustee; and
(vi) Note Owners may receive copies of any reports sent to Noteholders
pursuant to this Indenture, upon written request, together with a
certification that they are Note Owners and payment of reproduction and
postage expenses associated with the distribution of such reports, from the
Trustee at the Corporate Trust Office.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes, and the
Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Note Owners representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Notes advise the Trustee through the
Clearing Agency in writing that the continuation of a book entry system through
the Clearing Agency is no longer in the best interests of the Note Owners, then
the Clearing Agency shall notify all Note Owners and the Trustee of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Trustee of the typewritten
Note or Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Trustee shall recognize
the Holders of the Definitive Notes as Note-holders.
ARTICLE III.
COVENANTS
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on a Payment Date deposited therein pursuant to the Sale
and Servicing Agreement (i) for the benefit of the Class A-l Notes, to Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to Class A-2
Noteholders and (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Trustee to
serve as its agent for the foregoing purposes. The Issuer will give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Trustee with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Sections 8.2(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection Account
and the Note Distribution Account shall be made on behalf of the Issuer by the
Trustee or by another Paying Agent, and no amounts so withdrawn from the
Collection Account and the Note Distribution Account for payments of Notes shall
be paid over to the Issuer except as provided in this Section.
On or before each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto and (unless the
Paying Agent is the Trustee) shall promptly notify the Trustee of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee and the Security Insurer an instrument in
which such Paying Agent shall agree with the Trustee (and if the Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such a
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request with the consent of the Security Insurer
(unless an Insurer Default shall have occurred and be continuing), and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; PROVIDED, HOWEVER, that if
such money or any portion thereof had been previously deposited by the Security
Insurer or the Indenture Collateral Agent with the Trustee for the payment of
principal or interest on the Notes, to the extent any amounts are owing to the
Security Insurer, such amounts shall be paid promptly to the Security Insurer
upon receipt of a written request by the Security Insurer to such effect, and
PROVIDED, FURTHER, that the Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in moneys
due and payable but not claimed is determinable from the records of the Trustee
or of any Paying Agent, at the last address of record for each such Holder).
SECTION 3.4. EXISTENCE. Except as otherwise permitted by the
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. PROTECTION OF TRUST ESTATE. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Issuer
Secured Parties to be prior to all other liens in respect of the Trust Estate,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Indenture Collateral Agent, for the benefit of the Issuer Secured
Parties, a first lien on and a first priority, perfected security interest in
the Trust Estate. The Issuer will from time to time prepare (or shall cause to
be prepared), execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Collateral Agent for the
benefit of the Issuer Secured Parties created by this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights of
the Indenture Collateral Agent in such Trust Estate against the claims of
all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Indenture Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Collateral Agent pursuant to this
Section.
SECTION 3.6. OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Trustee, the Indenture Collateral Agent and the
Security Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the first priority lien and security interest in favor of the
Indenture Collateral Agent, for the benefit of the Issuer Secured Parties,
created by this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than three months after
the Closing Date, the Issuer shall furnish to the Trustee, Indenture Collateral
Agent and the Security Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
are necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until January 30 in the following calendar year.
SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES. (a)
The Issuer will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of such
Person's material covenants or obligations under any instrument or agreement
included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing) to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Trustee and the
Security Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including but
not limited to preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing statements and continuation statements required to
be filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Trustee, the Security Insurer or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d) If a responsible officer of the Owner Trustee shall have actual
knowledge of the occurrence of a Servicer Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Trustee, the Security Insurer
and the Rating Agencies thereof in accordance with Section 11.4, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Sale and Servicing
Agreement with respect to the Receivables, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) If an Insurer Default shall have occurred and be continuing and if
the Issuer has given notice of termination to the Servicer of the Servicer's
rights and powers pursuant to Section 8.1 of the Sale and Servicing Agreement,
as promptly as possible thereafter, the Issuer shall appoint a successor
servicer in accordance with Section 8.2 of the Sale and Servicing Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a Successor Servicer (other than the Trustee) is appointed,
the Issuer shall notify the Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) The Issuer agrees that it will not waive timely performance or
observance by the Servicer, the Seller or the Representative of their respective
duties under the Basic Documents (x) without the prior consent of the Security
Insurer (unless an Insurer Default shall have occurred and be continuing) or (y)
if the effect thereof would adversely affect the Holders of the Notes.
SECTION 3.8. NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the Trust
Estate, unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied
or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien in favor of the Indenture Collateral Agent
created by this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax, mechanics'
or other lien) security interest in the Trust Estate or (D) amend, modify
or fail to comply with the provisions of the Basic Documents without the
prior written consent of the Controlling Party.
SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Trustee and the Security Insurer, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 1998), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any state and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing), the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing)) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, the Security Insurer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Security Insurer written notice
of such consolidation or merger at least 20 Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Security Insurer of such consolidation or merger and the
Issuer or the Person (if other than the Issuer) formed by or surviving such
consolidation or merger has a net worth, immediately after such
consolidation or merger, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to such
consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate, to
any Person, unless
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any state, (B)
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, and the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture and each of the Basic Documents on the part of
the Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person
(or if a group of persons, then one specified Person) shall prepare (or
cause to be prepared) and make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection with
the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing)) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, the Security Insurer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be continuing,
the Issuer shall have given the Security Insurer written notice of such
conveyance or transfer at least 20 Business Days prior to the consummation of
such action and shall have received the prior written approval of the Security
Insurer of such consolidation or merger and the Issuer or the Person (if other
than the Issuer) formed by or surviving such consolidation or merger has a net
worth, immediately after such consolidation or merger, that is (a) greater than
zero and (b) not less than the net worth of the Issuer immediately prior to
giving effect to such consolidation or merger.
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10 (b), The Money Store Auto Trust 1997-4 will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the Trustee stating that The Money Store
Auto Trust 1997-4 is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto. After the Funding Period, the Issuer shall
not fund the purchase of any additional Receivables.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Security Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Basic Documents or the Issuer's
compliance therewith. The proceeds of the Notes shall be used exclusively to
fund the Issuer's purchase of the Receivables and the other assets specified in
the Sale and Servicing Agreement to fund the Pre-Funding Account and the
Capitalized Interest Account and to pay the Issuer's organizational,
transactional and start-up expenses.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.8 of the Sale and
Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.
SECTION 3.18. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose;
PROVIDED, HOWEVER, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Security Insurer, the Trustee, the
Indenture Collateral Agent, the Holder of the GP Interest, and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or Trust Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.
SECTION 3.19. NOTICE OF EVENTS OF DEFAULT. Upon a responsible officer
of the Owner Trustee having actual knowledge thereof, the Issuer agrees to give
the Trustee, the Security Insurer and the Rating Agencies prompt written notice
of each Event of Default hereunder and each default on the part of the Servicer
or the Seller of its obligations under the Sale and Servicing Agreement.
SECTION 3.20. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee or the Security Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.21. AMENDMENTS OF SALE AND SERVICING AGREEMENT AND TRUST
AGREEMENT. The Issuer shall not agree to any amendment to Section 11.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee, the Security Insurer or the
Holders of the Notes consent to amendments thereto as provided therein.
SECTION 3.22. INCOME TAX CHARACTERIZATION. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness of the Issuer.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Section 6.7 and the obligations of the Trustee under Section 4.2) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.5 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.3) have been
delivered to the Trustee for cancellation and the Note Policy has
expired and been returned to the Security Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective Final
Scheduled Distribution Dates within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Collateral Agent cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation when due to the Final Scheduled Distribution Date or
Redemption Date (if Notes shall have been called for redemption
pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Insurer Issuer
Secured Obligations and all Trustee Issuer Secured Obligations; and
(C) the Issuer has delivered to the Trustee, the Indenture
Collateral Agent and the Security Insurer an Officer's Certificate, an
Opinion of Counsel and, if required by the TIA, the Trustee, the
Indenture Collateral Agent or the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) an
Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1(a) and each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with the
Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it,
in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.3. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
3.3 and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
ARTICLE V.
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days after receipt of notice thereof from the Trustee (solely for
purposes of this clause, a payment on the Notes funded by the Security
Insurer shall be deemed to be a payment made by the Issuer); or
(ii) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable on the
related Final Scheduled Distribution Date (solely for purposes of this
clause, a payment on the Notes funded by the Security Insurer shall be
deemed to be a payment made by the Issuer); or
(iii) so long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Event of Default shall have occurred;
provided, however, that the occurrence of an Insurance Agreement Event of
Default may not form the basis of an Event of Default unless the Security
Insurer shall, upon prior written notice to the Rating Agencies, have
delivered to the Issuer and the Trustee and not rescinded a written notice
specifying that such Insurance Agreement Event of Default constitutes an
Event of Default under the Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days (or for such longer period, not in excess of 90
days, as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 90 days or less and the Servicer
on behalf of the Owner Trustee delivers an Officer's Certificate to the
Trustee to the effect that the Issuer has commenced, or will promptly
commence and diligently pursue, all reasonable efforts to remedy such
default) after there shall have been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% of the Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(v) so long as an Insurer Default shall have occurred and be
continuing, the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(vi) so long as an Insurer Default shall have occurred and be
continuing, the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Trustee and the Security Insurer,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2. RIGHTS UPON EVENT OF DEFAULT. (a) If an Insurer Default
shall not have occurred and be continuing and an Event of Default shall have
occurred and be continuing, the Notes shall become immediately due and payable
at par, together with accrued interest thereon. If an Event of Default shall
have occurred and be continuing, the Controlling Party may exercise any of the
remedies specified in Section 5.4(a). In the event of any acceleration of any
Notes by operation of this Section 5.2, the Trustee shall continue to be
entitled to make claims under the Note Policy pursuant to Section 5.18 hereof
for Note Insured Payments on the Notes. Payments under the Note Policy following
acceleration of any Notes shall be applied by the Trustee:
FIRST: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for interest; and
SECOND: to Noteholders for amounts due and unpaid on
the Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for principal.
(b) In the event any Notes are accelerated due to an Event of Default,
the Security Insurer shall have the right (in addition to its obligation to pay
Note Insured Payments on the Notes in accordance with the Note Policy), but not
the obligation, to make payments under the Note Policy or otherwise of interest
and principal due on such Notes, in whole or in part, on any date or dates
following such acceleration as the Security Insurer, in its sole discretion,
shall elect.
(c) If an Insurer Default shall have occurred and be continuing and an
Event of Default shall have occurred and be continuing, the Trustee in its
discretion may, or if so requested in writing by Holders holding Notes
representing not less than a majority of the Outstanding Amount of the Notes,
declare by written notice to the Issuer that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon.
(d) If an Insurer Default shall have occurred and be continuing, then
at any time after such declaration of acceleration of maturity has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article V provided, the Holders of Notes
representing a majority of the Outstanding Amount of the Notes, by written
notice to the Issuer and the Trustee, may rescind and annul such declaration and
its consequences if:
(i) the Issuer has paid or deposited with the Trustee a sum sufficient
to pay
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and
counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE (a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer will, upon demand of the Trustee, pay to it,
for the benefit of the Holders of the Notes, the whole amount then due and
payable on such Notes for principal and interest, with interest upon the overdue
principal, and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest, at the applicable Interest
Rate and in addition thereto such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Controlling Party, with full power of substitution, to execute, acknowledge and
deliver any notice, document, certificate, paper, pleading or instrument and to
do in the name of the Controlling Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the name of such Issuer Secured Party under this Indenture (including
specifically under Section 5.4) and under the Basic Documents which such Issuer
Secured Party could or might do or which may be necessary, desirable or
convenient in such Controlling Party's sole discretion to effect the purposes
contemplated hereunder and under the Related Documents and, without limitation,
following the occurrence of an Event of Default, exercise full right, power and
authority to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Trust Estate.
(c) If an Event of Default occurs and is continuing, the Trustee may
in its discretion but with the consent of the Controlling Party and shall, at
the direction of the Controlling Party (except as provided in Section 5.3(d)
below), proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee or the Controlling
Party shall deem most effective to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Trustee by this
Indenture or by law.
(d) Notwithstanding anything to the contrary contained in this
Indenture (including without limitation Sections 5.4(a), 5.12, 5.13 and 5.17)
and regardless of whether an Insurer Default shall have occurred and be
continuing, if the Issuer fails to perform its obligations under Section 10.1(b)
hereof when and as due, the Trustee may in its discretion (and without the
consent of the Controlling Party) proceed to protect and enforce its rights and
the rights of the Noteholders by such appropriate proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law;
provided that the Trustee shall only be entitled to take any such actions
without the consent of the Controlling Party to the extent such actions (x) are
taken only to enforce the Issuer's obligations to redeem the principal amount of
Notes and (y) are taken only against the portion of the Collateral, if any,
consisting of the Pre-Funding Account, the Capitalized Interest Account, any
investments therein and any proceeds thereof.
(e) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence, bad faith or willful misconduct) and of the
Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or person performing similar functions in any such
proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
(f) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
(g) All rights of action and of asserting claims under this Indenture
or under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(h) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such proceedings.
SECTION 5.4. REMEDIES. (a) If an Event of Default shall have occurred
and be continuing, the Controlling Party may do one or more of the following
(subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Trustee and the Holders of the Notes; and
(iv) direct the Indenture Collateral Agent to sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner
permitted by law; PROVIDED, however, that
(A) if the Security Insurer is the Controlling Party,
the Security Insurer may not sell or otherwise liquidate the
Trust Estate following an Insurance Agreement Event of Default
unless
(I) such Insurance Agreement Indenture
Cross Default arises from a claim being made on the
Note Policy or from the insolvency of the Trust or
the Seller, or
(II) the proceeds of such sale or
liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due
and unpaid upon such Notes for principal and
interest; or
(B) if the Trustee is the Controlling Party, the
Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default unless
(I) such Event of Default is of the type
described in Section 5.01(i) or (ii), or
(II) either
(x) the Holders of 100% of the
Outstanding Amount of the Notes consent
thereto,
(y) the proceeds of such sale or
liquidation distributable to the Noteholders
are sufficient to discharge in full all
amounts then due and unpaid upon such Notes
for principal and interest, or
(z) the Trustee determines that the
Trust Estate will not continue to provide
sufficient funds for the payment of
principal of and interest on the Notes as
they would have become due if the Notes had
not been declared due and payable, and the
Trustee provides prior written notice to the
Rating Agencies and obtains the consent of
Holders of 66-2/3% of the Outstanding Amount
of the Notes.
In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
SECTION 5.5. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Trustee
is the Controlling Party and if the Notes have been declared to be due and
payable under Section 5.2 following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, the Trustee may, but need
not, elect to maintain possession of the Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Trustee shall
take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain possession of
the Trust Estate, the Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.6. PRIORITIES.
(a) Following (1) the acceleration of the Notes pursuant to Section
5.2 or (2) if an Insurer Default shall have occurred and be continuing, the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iii),
5.1(v) or 5.1(vi) of the Indenture or (3) the receipt of Insolvency Proceeds
pursuant to Section 9.1(b) of the Sale and Servicing Agreement, the Distribution
Amount, including any money or property collected pursuant to Section 5.4 of the
Indenture any such Insolvency Proceeds, shall be applied by the Trustee on the
related Payment Date in the following order of priority:
FIRST: amounts due and owing and required to be distributed to
the Servicer, the Owner Trustee, the Trustee and the Indenture
Collateral Agent, respectively, pursuant to priorities (i) and (ii) of
Section 5.6(b) of the Sale and Servicing Agreement and not previously
distributed, in the order of such priorities and without preference or
priority of any kind within such priorities;
SECOND: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for interest;
THIRD: to Noteholders for amounts due and unpaid on
the Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for principal;
FOURTH: amounts due and owing and required to be
distributed to the Security Insurer pursuant to priority
(v) of Section 5.6(b) of the Sale and Servicing Agreement
and not previously distributed; and
FIFTH: to or upon the order of the Owner Trustee for
distribution pursuant to Section 5.2(a) of the Trust
Agreement,
provided that any amounts collected from the Pre-Funding Account or the
Capitalized Interest Account shall be paid, FIRST, for amounts due and unpaid on
the Notes for principal, for distribution to Noteholders in accordance with
Section 10.1(b) and, SECOND in accordance with priorities ONE through FIFTH
above.
(b) The Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date the Issuer shall mail to each Noteholder and the Trustee a notice that
states the record date, the payment date and the amount to be paid.
SECTION 5.7. LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be
continuing;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee shall proceed in accordance with the request of the greater majority of
the Outstanding Amount of the Notes, as determined by reference to such
requests.
SECTION 5.8. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES. If the Controlling
Party or any Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Controlling Party or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Controlling Party or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.12. CONTROL BY NOTEHOLDERS. If the Trustee is the
Controlling Party, the Holders of a majority of the Outstanding Amount of the
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to the Notes
or exercising any trust or power conferred on the Trustee; PROVIDED that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate shall be
by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to
sell or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to Section 6.1, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. WAIVER OF PAST DEFAULTS. If an Insurer Default shall
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.4, the Holders of Notes of not
less than a majority of the Outstanding Amount of the Notes may waive any past
Default or Event of Default and its consequences except a Default (a) in payment
of principal of or interest on any of the Notes or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
the Holder of each Note. In the case of any such waiver, the Issuer, the Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.16. ACTION ON NOTES. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
SECTION 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Trustee to do so and at the Servicer's
expense, the Issuer agrees to take all such lawful action as the Trustee may
request to compel or secure the performance and observance by the
Representative, the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Trustee, including the transmission of notices of default
on the part of the Seller or the Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by the Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If the Trustee is a Controlling Party and if an Event of Default
has occurred and is continuing, the Trustee may, and, at the direction (which
direction shall be in writing or by telephone (confirmed in writing promptly
thereafter)) of the Holders of 66-2/3% of the Outstanding Amount of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Servicer under or in connection with the Sale
and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
SECTION 5.18 CLAIMS UNDER NOTE POLICY.
(a) In the event that the Trustee has delivered a Deficiency Notice
with respect to any Determination Date pursuant to Section 5.4 of the Sale and
Servicing Agreement, the Trustee shall on the related Draw Date determine the
Note Insured Payment (as defined below), if any, for the related Payment Date.
If the Note Insured Payment, if any, for such Payment Date is greater than zero,
the Trustee shall furnish to the Security Insurer on the related Draw Date a
completed notice form set forth as Exhibit A to the Note Policy in accordance
with the terms of the Note Policy in the amount of the Note Insured Payment, if
any. Amounts paid by the Security Insurer pursuant to a claim submitted under
this Section 5.18(a) shall be deposited by the Trustee into the Note
Distribution Account for payment to Noteholders on the related Payment Date. The
"Note Insured Payment" shall have the meaning as set forth in the Note Policy.
(b) Any notice delivered by the Trustee to the Security Insurer
pursuant to subsection 5.18(a) shall specify the Note Insured Payment claimed
under the Note Policy and subject to the terms of the Note Policy, shall
constitute a "Notice" under the Note Policy. The Security Insurer is required to
pay to the Trustee the Note Insured Payment in accordance with the terms of the
Note Policy. Any payment made by the Security Insurer under the Note Policy
shall be applied solely to the payment of the Notes, and for no other purpose.
(c) The Trustee shall (i) receive as attorney-in-fact of each
Noteholder any Note Insured Payment from the Security Insurer and (ii) deposit
the same in the Note Distribution Account for distribution to Noteholders as
provided in Section 3.1 or Section 5.2 of this Indenture. Any and all Note
Insured Payments disbursed by the Trustee from claims made under the Note Policy
shall not be considered payment by the Trust with respect to such Notes, and
shall not discharge the obligations of the Trust with respect thereto. The
Security Insurer shall, to the extent it makes any payment with respect to the
Notes, become subrogated to the rights of the recipients of such payments to the
extent of such payments. Subject to and conditioned upon any payment with
respect to the Notes by or on behalf of the Security Insurer, the Trustee shall
assign to the Security Insurer all rights to the payment of interest or
principal with respect to the Notes which are then due for payment to the extent
of all payments made by the Security Insurer, and the Security Insurer may
exercise any option, vote, right, power or the like with respect to the Notes to
the extent that it has made payment pursuant to the Note Policy. To evidence
such subrogation, the Note Registrar shall note the Security Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Security Insurer
of proof of payment by the Security Insurer of any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount. The
foregoing subrogation shall in all cases be subject to the rights of the
Noteholders to receive all Note Insured Payments in respect of the Notes.
(d) The Trustee shall keep a complete and accurate record of all funds
deposited by the Security Insurer into the Collection Account and the allocation
of such funds to payment of interest on and principal paid in respect of any
Note. The Security Insurer shall have the right to inspect such records at
reasonable times upon one Business Day's prior notice to the Trustee.
(e) The Trustee shall be entitled to enforce on behalf of the
Noteholders the obligations of the Security Insurer under the Note Policy.
Notwithstanding any other provision of this Agreement or any Related Document,
the Noteholders are not entitled to institute proceedings directly against the
Security Insurer.
SECTION 5.19. PREFERENCE CLAIMS. (a) In the event that the Trustee has
received a certified copy of a final non-appealable order of the court of
applicable jurisdiction that any Noteholders' Interest Distributable Amount,
Noteholders' Principal Distributable Amount or Accelerated Principal
Distributable Amount paid on a Note has been avoided in whole or in part as a
preference payment under the United States Bankruptcy Code (11 U.S.C.), (a "Note
Preference Amount") the Trustee shall so notify the Security Insurer, shall
comply with the provisions of the Note Policy to obtain payment by the Security
Insurer of such Note Preference Amount and shall, at the time it provides notice
to the Security Insurer, notify Holders of the Notes by mail that, in the event
that any Noteholder's payment is so recoverable, such Noteholder will be
entitled to payment pursuant to the terms of the Note Policy. The Trustee shall
furnish to the Security Insurer its records evidencing the payments of principal
of and interest on Notes, if any, which have been made by the Trustee and
subsequently recovered from Noteholders, and the dates on which such payments
were made. Pursuant to the terms of the Note Policy, the Security Insurer will
make such payment on behalf of the Noteholder in the manner set forth in the
Note Policy.
(b) The Trustee shall promptly notify the Security Insurer of any
proceeding or the institution of any action (of which the Trustee has actual
knowledge) seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a
"Preference Claim") of any distribution made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Trustee hereby agree that so long as
an Insurer Default shall not have occurred and be continuing, the Security
Insurer may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim including,
without limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal at the expense of the Security Insurer, but subject
to reimbursement as provided in the Insurance Agreement. In addition, and
without limitation of the foregoing, as set forth in Section 5.18(c), the
Security Insurer shall be subrogated to, and each Noteholder and the Trustee
hereby delegate and assign, to the fullest extent permitted by law, the rights
of the Trustee and each Noteholder in the conduct of any proceeding with respect
to a Preference Claim, including, without limitation, all rights of any party to
an adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.
ARTICLE VI.
THE TRUSTEE AND THE INDENTURE COLLATERAL AGENT
SECTION 6.1. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture and, if applicable, the Trustee's other Basic
Documents.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
(d) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(h) The Trustee shall, upon reasonable prior notice to the Trustee,
permit any representative of the Security Insurer, at the Security Insurer's
expense, during the Trustee's normal business hours, to examine all books of
account, records, reports and other papers of the Trustee relating to the Notes,
to make copies and extracts therefrom and to discuss the Trustee's affairs and
actions, as such affairs and actions relate to the Trustee's duties with respect
to the Notes, with the Trustee's officers and employees responsible for carrying
out the Trustee's duties with respect to the Notes.
(i) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.
(j) The Trustee shall, and hereby agrees that it will, hold the Note
Policy in trust, and will hold any proceeds of any claim on the Note Policy in
trust solely for the use and benefit of the Noteholders.
(k) Without limiting the generality of this Section 6.1, the Trustee
shall have no duty (i) to see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Financed Vehicles, or to see to the
maintenance of any such recording or filing or depositing or to any recording,
refiling or redepositing of any thereof, (ii) to see to any insurance of the
Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii)
to see to the payment or discharge of any tax, assessment or other governmental
charge or any Lien or encumbrance of any kind owing with respect to, assessed or
levied against any part of the Trust, (iv) to confirm or verify the contents of
any reports or certificates delivered to the Trustee pursuant to this Indenture
or the Sale and Servicing Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or parties, or (v) to inspect
the Financed Vehicles at any time or ascertain or inquire as to the performance
or observance of any of the Issuer's, the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Receivable Files under the Sale
and Servicing Agreement.
(l) Whenever any action under the Basic Documents requires the
approval or disapproval of Certificateholders, the Trustee shall, in accordance
with, and subject to, Section 2.13 of the Trust Agreement, instruct the Holder
of the Voting Interest to act in accordance with the written directions,
received from Holders of a majority of the Outstanding Amount of the Notes.
SECTION 6.2. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, The
Money Store Auto Finance Inc., or any other such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of any of the Holders of Notes or the
Controlling Party, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Controlling Party shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; PROVIDED, HOWEVER, that the Trustee
shall, upon the occurrence of an Event of Default (that has not been cured),
exercise the rights and powers vested in it by this Indenture with reasonable
care and skill.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing) or (if an
Insurer Default shall have occurred and be continuing) by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount thereof; PROVIDED,
HOWEVER, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Estate or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is either known by, or written notice of the existence thereof has
been delivered to, a Responsible Officer of the Trustee, the Trustee shall mail
to each Noteholder notice of the Default within 90 days after such knowledge or
notice occurs and to the Security Insurer such notice promptly after such
knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6. REPORTS BY TRUSTEE TO HOLDERS. The Trustee shall deliver
to each Noteholder such information as may be reasonably required to enable such
Holder to prepare its Federal and state income tax returns.
SECTION 6.7. COMPENSATION AND INDEMNITY. (a) Pursuant to Section
5.6(b) of the Sale and Servicing Agreement, the Issuer shall, or shall cause the
Servicer to, pay to the Trustee from time to time compensation for its services
in accordance with a separate agreement between the Servicer and the Trustee.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall or shall cause the Servicer to
reimburse the Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall or shall cause the Servicer to indemnify the Trustee,
the Indenture Collateral Agent and their respective officers, directors,
employees and agents against any and all loss, liability or expense (including
attorneys' fees and expenses) incurred by it in connection with the acceptance
or the administration of this trust and the performance of its duties hereunder.
The Trustee shall notify the Issuer and the Servicer promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Issuer and
the Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under Article X of the Sale and Servicing Agreement.
The Issuer shall or shall cause the Servicer to defend the claim, the Trustee
may have separate counsel and the Issuer shall or shall cause the Servicer to
pay the fees and expenses of such counsel. Neither the Issuer nor the Servicer
need reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture subject to a satisfaction
of the Rating Agency Condition. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 5.1(iv) or (v) with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law. Notwithstanding anything else set forth
in this Indenture or the Basic Documents, the Trustee agrees that the
obligations of the Issuer (but not the Servicer) to the Trustee hereunder and
under the Basic Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of the Holder of the Voting
Interest or any Certificateholder. In addition, the Trustee agrees that its
recourse to the Issuer, the Trust Estate, The Certificateholders and the Seller
shall be limited to the right to receive the distributions referred to in
Section 5.6(b)(vii) of the Sale and Servicing Agreement.
SECTION 6.8. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Issuer and the Security Insurer. The Issuer may with
the consent of the Security Insurer and, at the request of the Security Insurer
(unless an Insurer Default shall have occurred and be continuing) shall, remove
the Trustee, if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect
of the Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the Trustee or for
any substantial part of the Trustee's property, or ordering the
winding-up or liquidation of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws,
as now or hereafter in effect, or another present or future federal or
state bankruptcy, insolvency or similar law is commenced with respect
to the Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal
or state banking or bankruptcy laws, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency or
other similar law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Trustee
or for any substantial part of the Trustee's property, or makes any
assignment for the benefit of creditors or fails generally to pay its
debts as such debts become due or takes any corporate action in
furtherance of any of the foregoing; or
(v) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing). If the Issuer fails to appoint such a
successor Trustee, the Security Insurer may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer and the Security Insurer
(provided that no Insurer Default shall have occurred and be continuing).
Thereupon the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture subject to satisfaction of the Rating
Agency Condition. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 6.8 and payment of all fees and expenses owed to the
outgoing Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
Issuer's and the Servicer's obligations under Section 6.7 shall continue for the
benefit of the retiring Trustee.
SECTION 6.9. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee with the consent of the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or a separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder, including
acts or omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
invest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it shall have a long term debt
rating of BBB- or better by the Rating Agencies. The Trustee shall provide
copies of such reports to the Security Insurer upon request. The Trustee shall
comply with TIA Section 310(b), including the optional provision permitted by
the second sentence of TIA Section 310(b)(9); PROVIDED, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints The Chase
Manhattan Bank as the Indenture Collateral Agent with respect to the Collateral,
and The Chase Manhattan Bank hereby accepts such appointment and agrees to act
as Indenture Collateral Agent with respect to the Collateral for the Issuer
Secured Parties, to maintain custody and possession of such Collateral (except
as otherwise provided hereunder) and to perform the other duties of the
Indenture Collateral Agent in accordance with the provisions of this Indenture.
Each Issuer Secured Party hereby authorizes the Indenture Collateral Agent to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Controlling Party may direct and as are
specifically authorized to be exercised by the Indenture Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Indenture Collateral Agent
shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Indenture Collateral
Agent shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Indenture Collateral Agent has not received reasonable indemnity. Receipt of
such instructions shall not be a condition to the exercise by the Indenture
Collateral Agent of its express duties hereunder, except where this Indenture
provides that the Indenture Collateral Agent is permitted to act only following
and in accordance with such instructions.
SECTION 6.14. PERFORMANCE OF DUTIES. The Indenture Collateral Agent
shall have no duties or responsibilities except those expressly set forth in
this Indenture and the other Basic Documents to which the Indenture Collateral
Agent is a party or as directed by the Controlling Party in accordance with this
Indenture. The Indenture Collateral Agent shall not be required to take any
discretionary actions hereunder except at the written direction and with the
indemnification of the Controlling Party. The Indenture Collateral Agent shall,
and hereby agrees that it will, perform all of the duties and obligations
required of it under the Sale and Servicing Agreement.
SECTION 6.15. LIMITATION ON LIABILITY. Neither the Indenture
Collateral Agent nor any of its directors, officers or employees shall be liable
for any action taken or omitted to be taken by it or them hereunder, or in
connection herewith, except that the Indenture Collateral Agent shall be liable
for its negligence, bad faith or willful misconduct; nor shall the Indenture
Collateral Agent be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Issuer of this Indenture or any of the
Collateral (or any part thereof). Notwithstanding any term or provision of this
Indenture, the Indenture Collateral Agent shall incur no liability to the Issuer
or the Issuer Secured Parties for any action taken or omitted by the Indenture
Collateral Agent in connection with the Collateral, except for the negligence,
bad faith or willful misconduct on the part of the Indenture Collateral Agent,
and, further, shall incur no liability to the Issuer Secured Parties except for
negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer Secured Parties. Subject to Section 6.16, the Indenture Collateral Agent
shall be protected and shall incur no liability to any such party in relying
upon the accuracy, acting in reliance upon the contents, and assuming the
genuineness of any notice, demand, certificate, signature, instrument or other
document reasonably believed by the Indenture Collateral Agent to be genuine and
to have been duly executed by the appropriate signatory, and (absent actual
knowledge to the contrary) the Indenture Collateral Agent shall not be required
to make any independent investigation with respect thereto. The Indenture
Collateral Agent shall at all times be free independently to establish to its
reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Related
Documents. The Indenture Collateral Agent may consult with counsel, and shall
not be liable for any action taken or omitted to be taken by it hereunder in
good faith and in accordance with the written advice of such counsel. The
Indenture Collateral Agent shall not be under any obligation to exercise any of
the remedial rights or powers vested in it by this Indenture or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Indenture Collateral Agent against the
costs, expenses and liabilities which might be incurred by it.
SECTION 6.16. RELIANCE UPON DOCUMENTS. In the absence of negligence,
bad faith or willful misconduct on its part, the Indenture Collateral Agent
shall be entitled to rely on any communication, instrument, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons and shall have no liability in
acting, or omitting to act, where such action or omission to act is in
reasonable reliance upon any statement or opinion contained in any such document
or instrument.
SECTION 6.17 SUCCESSOR INDENTURE COLLATERAL AGENT. (a) MERGER. Any
Person into which the Indenture Collateral Agent may be converted or merged, or
with which it may be consolidated, or to which it may sell or transfer its trust
business and assets as a whole or substantially as a whole, or any Person
resulting from any such conversion, merger, consolidation, sale or transfer to
which the Indenture Collateral Agent is a party, shall (provided it is otherwise
qualified to serve as the Indenture Collateral Agent hereunder) be and become a
successor Indenture Collateral Agent hereunder and be vested with all of the
title to and interest in the Collateral and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, except to the extent, if any, that any such action is
necessary to perfect, or continue the perfection of, the security interest of
the Issuer Secured Parties in the Collateral; provided that any such successor
shall also be the successor Trustee under Section 6.9.
(b) RESIGNATION. The Indenture Collateral Agent and any successor
Indenture Collateral Agent may resign at any time by so notifying the Issuer and
the Security Insurer; provided that the Indenture Collateral Agent shall not so
resign unless it shall also resign as Trustee hereunder.
(c) REMOVAL. The Indenture Collateral Agent may be removed by the
Controlling Party at any time (and shall be removed at any time that the Trustee
has been removed), with or without cause, by an instrument or concurrent
instruments in writing delivered to the Indenture Collateral Agent, the other
Issuer Secured Party and the Issuer. A temporary successor may be removed at any
time to allow a successor Indenture Collateral Agent to be appointed pursuant to
subsection (d) below. Any removal pursuant to the provisions of this subsection
(c) shall take effect only upon the date which is the latest of (i) the
effective date of the appointment of a successor Indenture Collateral Agent and
the acceptance in writing by such successor Indenture Collateral Agent of such
appointment and of its obligation to perform its duties hereunder in accordance
with the provisions hereof, and (ii) receipt by the Controlling Party of an
Opinion of Counsel to the effect described in Section 3.6.
(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the sole
right to appoint each successor Indenture Collateral Agent. Every temporary or
permanent successor Indenture Collateral Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Trustee, each
Issuer Secured Party and the Issuer an instrument in writing accepting such
appointment hereunder and the relevant predecessor shall execute, acknowledge
and deliver such other documents and instruments as will effectuate the delivery
of all Indenture Collateral to the successor Indenture Collateral Agent,
whereupon such successor, without any further act, deed or conveyance, shall
become fully vested with all the estates, properties, rights, powers, duties and
obligations of its predecessor. Such predecessor shall, nevertheless, on the
written request of either Issuer Secured Party or the Issuer, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event that
any instrument in writing from the Issuer or an Issuer Secured Party is
reasonably required by a successor Indenture Collateral Agent to more fully and
certainly vest in such successor the estates, properties, rights, powers, duties
and obligations vested or intended to be vested hereunder in the Indenture
Collateral Agent, any and all such written instruments shall, at the request of
the temporary or permanent successor Indenture Collateral Agent, be forthwith
executed, acknowledged and delivered by the Trustee or the Issuer, as the case
may be. The designation of any successor Indenture Collateral Agent and the
instrument or instruments removing any Indenture Collateral Agent and appointing
a successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Indenture Collateral and,
to the extent required by applicable law, filed or recorded by the successor
Indenture Collateral Agent in each place where such filing or recording is
necessary to effect the transfer of the Indenture Collateral to the successor
Indenture Collateral Agent or to protect or continue the perfection of the
security interests granted hereunder.
SECTION 6.18. COMPENSATION. The Indenture Collateral Agent shall not
be entitled to any compensation for the performance of its duties hereunder
other than the compensation it is entitled to receive in its capacity as
Trustee.
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE INDENTURE
COLLATERAL AGENT. The Indenture Collateral Agent represents and warrants to the
Issuer and to each Issuer Secured Party as follows:
(a) DUE ORGANIZATION. The Indenture Collateral Agent is a New York
banking corporation, duly organized, validly existing and in good standing under
the laws of the United States and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Indenture Collateral Agent has all requisite
right, power and authority to execute and deliver this Indenture and to perform
all of its duties as Indenture Collateral Agent hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by the Indenture
Collateral Agent of this Indenture and the other Transaction Documents to which
it is a party, and the performance by the Indenture Collateral Agent of its
duties hereunder and thereunder, have been duly authorized by all necessary
corporate proceedings and no further approvals or filings, including any
governmental approvals, are required for the valid execution and delivery by the
Indenture Collateral Agent, or the performance by the Indenture Collateral
Agent, of this Indenture and such other Related Documents.
(d) VALID AND BINDING INDENTURE. The Indenture Collateral Agent has
duly executed and delivered this Indenture and each other Related Document to
which it is a party, and each of this Indenture and each such other Related
Document constitutes the legal, valid and binding obligation of the Indenture
Collateral Agent, enforceable against the Indenture Collateral Agent in
accordance with its terms, except as (i) such enforceability may be limited by
bankruptcy, insolvency, reorganization and similar laws relating to or affecting
the enforcement of creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
SECTION 6.20. WAIVER OF SETOFFS. The Indenture Collateral Agent and
the Trustee hereby expressly waive any and all rights of setoff that the
Indenture Collateral Agent or the Trustee may otherwise at any time have under
applicable law with respect to any Trust Account and agrees that amounts in the
Trust Accounts shall at all times be held and applied solely in accordance with
the provisions hereof.
SECTION 6.21. CONTROL BY THE CONTROLLING PARTY. The Indenture
Collateral Agent shall comply with notices and instructions given by the Issuer
only if accompanied by the written consent of the Controlling Party, except that
if any Event of Default shall have occurred and be continuing, the Indenture
Collateral Agent shall act upon and comply with notices and instructions given
by the Controlling Party alone in the place and stead of the Issuer.
ARTICLE VII.
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after each Record Date a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; PROVIDED, HOWEVER, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Issuer shall furnish to the
Security Insurer in writing on an annual basis on each September 30 (beginning
on September 30, 1998) and at such other times as the Security Insurer may
request a copy of the list.
SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.3. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may
be required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Noteholders described in TIA Section 313(c)) such summaries
of any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.4. REPORTS BY TRUSTEE. If required by TIA Section 313(a),
within 60 days after each September 30, beginning with September 30, 1997, the
Trustee shall mail to each Noteholder as required by TIA Section 313(c) a brief
report dated as of such date that complies with TIA Section 313(a). The Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuer shall notify the Trustee if and when the
Notes are listed on any stock exchange.
ARTICLE VIII.
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Trust Estate, the Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings. Any such action shall be without prejudice to any right
to claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V.
SECTION 8.2. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Trustee, for the benefit of the Noteholders, the Certificateholders and the
Security Insurer, the Trust Accounts as provided in Section 5.1 of the Sale and
Servicing Agreement.
(b) Subject to Section 5.6 of the Sale and Servicing Agreement, on
each Payment Date (other than the Class A-1 Final Scheduled Distribution Date)
and Redemption Date, the Trustee shall distribute all amounts on deposit in the
Note Distribution Account to Noteholders in respect of the Notes to the extent
of amounts due and unpaid on the Notes for principal and interest in the
following amounts and in the following order of priority (except as otherwise
provided in Section 5.6):
(i) accrued and unpaid interest on the Notes; provided that
if there are not sufficient funds in the Note Distribution Account to
pay the entire amount of accrued and unpaid interest then due on each
class of Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on each class of Notes pro rata
on the basis of the amount of accrued and unpaid interest due on each
class of Notes;
(ii) any amounts deposited in the Note Distribution Account
with respect to the Prepayment Amount shall be distributed sequentially
to the Holders of the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, in that order, such that the Prepayment Amount will
not be distributed to the Holders of a Class of Notes until each Class
of Notes having a lower numerical Class designation has been paid in
full;
(iii) principal to the Holders of the Class A-1 Notes until
the Outstanding Amount of the Class A-1 Notes is reduced to zero;
(iv) principal to the Holders of the Class A-2 Notes until
the Outstanding Amount of the Class A-2 Notes is reduced to zero and
(v) principal to the Holders of the Class A-3 Notes, principal
until the Outstanding Amount of the Class A-3 Notes is reduced to zero.
(c) On the Class A-1 Final Scheduled Distribution Date, the Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Class A-1 Noteholders to the extent of amounts due and unpaid on the Class A-1
Notes for principal and interest in the following amounts and in the following
order of priority (except as otherwise provided in Section 5.6):
(i) to the Holders of the Class A-1 Notes, accrued and unpaid
interest on the Class A-1 Notes; and
(ii) to the Holders of the Class A-1 Notes until the
Outstanding Amount of the Class A-1 Notes is reduced to zero.
SECTION 8.3. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Trustee upon Issuer Order, subject to the
provisions of Section 5.1(b) of the Sale and Servicing Agreement. All income or
other gain from investments of moneys deposited in the Trust Accounts shall be
deposited (or caused to be deposited) by the Trustee in the Collection Account,
and any loss resulting from such investments shall be charged to such account.
The Issuer will not direct the Trustee to make any investment of any funds or to
sell any investment held in any of the Trust Accounts unless the security
interest Granted and perfected in such account will continue to be perfected in
such investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Trustee to
make any such investment or sale, if requested by the Trustee, the Issuer shall
deliver to the Trustee and the Security Insurer an Opinion of Counsel,
acceptable to the Trustee and the Security Insurer, to such effect.
(b) [Reserved]
(c) Subject to Section 6.1(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as trustee, in accordance with their terms.
(d) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Trustee by 12:00 noon
Eastern Time (or such other time as may be agreed by the Issuer and Trustee) on
any Business Day; or (ii) a Default or Event of Default shall have occurred and
be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.2, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Trust Estate are being applied in accordance with Section
5.5 as if there had not been such a declaration; then the Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the Trust Accounts in
investments of the type set forth in clause (c) of the definition of Eligible
Investments.
SECTION 8.4. RELEASE OF TRUST ESTATE. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.7, the Indenture Collateral Agent
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the, lien of this Indenture, or convey the
Indenture Collateral Agent's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Collateral Agent
as provided in this Article, VIII shall be bound to ascertain the Indenture
Collateral Agent's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(b) The Indenture Collateral Agent shall, at such time as there are no
Notes outstanding and all sums due the Trustee pursuant to Section 6.7 have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Trust Accounts. The Trustee
shall release property from the lien of this Indenture pursuant to this Section
8.4(b) only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.
SECTION 8.5. OPINION OF COUNSEL. The Indenture Collateral Agent shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Trustee shall also require as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; PROVIDED, HOWEVER, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Trustee in connection with any such action.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with the consent of the
Security Insurer (unless an Insurer Default shall have occurred and be
continuing) and with prior notice to the Rating Agencies by the Issuer, as
evidenced to the Trustee, the Issuer and the Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Collateral Agent any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Collateral Agent;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; PROVIDED that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the
TIA.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with the
prior written consent of the Security Insurer and prior notice to the Rating
Agencies by the Issuer, as evidenced to the Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies, with the consent of the Security Insurer (unless
an Insurer Default shall have occurred and be continuing) and with the consent
of the Holders of not less than a majority of the outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; PROVIDED, HOWEVER, that, subject to
the express rights of the Security Insurer under the Basic Documents, no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with respect
thereto, change the provision of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement
of the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption
Date);
(iii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vii) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein
or in any of the Basic Documents, terminate the lien of this Indenture
on any property at any time subject hereto or deprive the Holder of any
Note of the security provided by the lien of this Indenture.
The Trustee may determine whether or not any Notes would be affected
by any supplemental indenture and any such determination shall be conclusive
upon the Holders of all Notes, whether theretofore or thereafter authenticated
and delivered hereunder. The Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X.
REDEMPTION OF NOTES
SECTION 10.1. REDEMPTION. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Seller pursuant to Section
9.1(a) of the Sale and Servicing Agreement, on any Payment Date on which the
Servicer exercises its option to purchase the Trust Estate pursuant to said
Section 9.1(a), for a purchase price equal to the Redemption Price; PROVIDED,
HOWEVER, that the Issuer has available funds sufficient to pay the Redemption
Price. The Servicer or the Issuer shall furnish the Security Insurer and the
Rating Agencies notice of such redemption. If the Notes are to be redeemed
pursuant to this Section 10.1(a), the Servicer or the Issuer shall furnish
notice of such election to the Trustee not later than 35 days prior to the
Redemption Date and the Issuer shall deposit with the Trustee in the Note
Distribution Account the Redemption Price of the Notes to be redeemed whereupon
all such Notes shall be due and payable on the Redemption Date upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes.
(b) If on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period, if
the Funding Period does not end on a Payment Date), any Pre-Funded Amount
remains on deposit in the Pre-Funding Account after giving effect to the
purchase of all Subsequent Receivables, including any such purchase on such
Redemption Date, the Notes will be redeemed in whole or in part, sequentially in
an aggregate principal amount equal to the Prepayment Amount which will be
distributed to Holders of the Class Notes having the lowest numerical
designation then outstanding until paid in full, and then to the Class of Notes
bearing the next lowest numerical designation then outstanding.
(c) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon and the Security
Insurer shall receive all amounts then owing to it. If amounts are to be paid to
Noteholders pursuant to this Section 10.1(c), the Servicer or the Issuer shall,
to the extent practicable, furnish notice of such event to the Trustee and the
Security Insurer not later than 45 days prior to the Redemption Date whereupon
all such amounts shall be payable on the Redemption Date.
SECTION 10.2. FORM OF REDEMPTION NOTICE. (a) Notice of redemption
under Section 10.1(a) shall be given by the Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall be made only
upon presentation and surrender of such Notes and the place where such
Notes are to be surrendered for payment of the Redemption Price (which
shall be the office or agency of the Issuer to be maintained as
provided in Section 3.2); and
(iv) that interest on the Notes shall cease to accrue on
the Redemption Date.
Notice of redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Sections 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3. NOTES PAYABLE ON REDEMPTION DATE. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Trustee or the Indenture Collateral
Agent to take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee or the Indenture Collateral Agent, as the case may be,
and to the Security Insurer if the application or request is made to the
Indenture Collateral Agent (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Collateral Agent that is to
be made the basis for the release of any property or securities subject
to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.1(a) or elsewhere in this Indenture,
furnish to the Indenture Collateral Agent and the Security Insurer an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Collateral Agent and the Security Insurer an Officer's
Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Collateral Agent and the Security Insurer an
Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and
of all other such securities made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to
the Issuer as set forth in the related Officer's Certificate is less
than $25,000 or less than 1% percent of the Outstanding Amount of the
Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or
securities are to be released from the lien of this Indenture, the
Issuer shall also furnish to the Indenture Collateral Agent and the
Security Insurer an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Trustee and the Security Insurer an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters described
in clause (iii) above, the Issuer shall also furnish to the Indenture
Collateral Agent and the Security Insurer an Independent Certificate as
to the same matters if the fair value of the property or securities and
of all other property other than Purchased Receivables and Defaulted
Receivables, or securities released from the lien of this Indenture
since the commencement of the then current calendar year, as set forth
in the certificates required by clause (iii) above and this clause
(iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than 1%
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by
the Basic Documents and (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Basic
Documents.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.3. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4. NOTICES, ETC., TO TRUSTEE, ISSUER AND RATING AGENCIES.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:
(a) The Trustee by any Noteholder or by the Issuer shall be sufficient
for every purpose hereunder if personally delivered, delivered by overnight
courier or mailed certified mail, return receipt requested and shall be deemed
to have been duly given upon receipt to the Trustee at its Corporate Trust
Office, or
(b) The Issuer by the Trustee or by any Noteholder shall be sufficient
for every purpose hereunder if personally delivered, delivered by overnight
courier or mailed certified mail, return receipt requested and shall be deemed
to have been duly given upon receipt to the Issuer addressed to: The Money Store
Auto Trust 1997-4, in care of Bankers Trust (Delaware) 1011 Centre Road, Suite
200, Wilmington, Delaware 19805 Attention: Lisa Wilkins, with a copy to Bankers
Trust Company, 4 Albany Street, New York, New York 10006, Attention: Corporate
Trust Agency, or at any other address previously furnished in writing to the
Trustee by Issuer. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Trustee.
(c) The Security Insurer by the Issuer or the Trustee shall be
sufficient for any purpose hereunder if in writing and mailed by registered mail
or personally delivered or telexed or telecopied to the recipient as follows: to
the Security Insurer: MBIA Insurance Corporation, 113 King Street, Armonk, NY
10504, Attention: Insured Portfolio Management - SF, Fax: 914- 765-3810, Ph:
(914) 273-4545.
Notices required to be given to the Rating Agencies by the Issuer, the
Trustee or the Owner Trustee shall be in writing, personally delivered,
delivered by overnight courier or mailed certified mail, return receipt
requested to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10004 and (ii) in
the case of S&P, at the following address: Standard & Poor's Ratings Services,
26 Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.
SECTION 11.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner here
in provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of the Indenture Collateral
Agent in this Indenture shall bind its successors.
SECTION 11.10. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11 BENEFITS OF INDENTURE. The Security Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other person with an Ownership interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Security Insurer may disclaim any of its rights and powers
under this Indenture (in which case the Indenture Trustee may exercise such
right or power hereunder), but not its duties and obligations under the Note
Policy, upon delivery of a written notice to the Trustee.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee and the Security Insurer) to the effect that such recording is
necessary either for the protection of the Noteholders or any other person
secured hereunder or for the enforcement of any right or remedy granted to the
Trustee or the Indenture Collateral Agent under this Indenture.
SECTION 11.16. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Holder of the GP Interest, the Owner Trustee, the Trustee or the
Indenture Collateral Agent on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Seller, the Servicer, the Holder of the GP Interest, the
Trustee, the Indenture Collateral Agent, the Holder of the GP Interest or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Seller, the Servicer, the Holder of the GP
Interest, the Trustee, the Indenture Collateral Agent or the Owner Trustee in
its individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Holder of the GP Interest, the Owner Trustee, the
Indenture Collateral Agent or the Trustee or of any successor or assign of the
Seller, the Servicer, the Holder of the GP Interest, the Trustee, the Indenture
Collateral Agent or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Trustee, the
Indenture Collateral Agent and the Owner Trustee have no such obligations in
their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Trustee and the Indenture Collateral
Agent, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against
the Seller, the Holder of the GP Interest, or the Issuer, or join in any
institution against the Seller, the Holder of the GP Interest, or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee or of the Security
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its Obligations hereunder.
[THIS SPACE LEFT INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
THE MONEY STORE AUTO TRUST 1997-4,
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner Trustee,
By:/s/ Alfia Monastra
Name: Alfia Monastra
Title:
THE CHASE MANHATTAN BANK, not in its individual capacity
but solely as Trustee and Indenture Collateral Agent,
By:/s/ James J. Fevola
Name: James J. Fevola
Title: Second Vice President
<PAGE>
[Form of Note] EXHIBIT D-1
REGISTERED $_____________
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THE MONEY STORE AUTO TRUST 1997-4
CLASS A-1 5.90875% ASSET BACKED NOTES
The Money Store Auto Trust 1997-4, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [ ] DOLLARS payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the
denominator of which is $17,500,000 by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-1 Notes pursuant to Section 3.1 of the Indenture, provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on January
8, 1999 Payment Date (the "Class A-1 Final Scheduled Payment Date"). The Issuer
will pay interest on this Note at the rate per annum shown above on each Payment
Date until the principal of this Note is paid or made available for payment, on
the principal amount of this Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date). Interest on this Note will accrue for each Payment Date from the most
recent Payment Date on which interest has been paid to but excluding such
Payment Date or, if no interest has yet been paid, from the Closing Date.
Interest will be computed on the basis of the actual number of days elapsed in a
360-day year. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a note guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Security
Insurer"), pursuant to which the Security Insurer has unconditionally guaranteed
payments of Note Insured Payments on each Payment Date, all as more fully set
forth in the Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
THE MONEY STORE AUTO TRUST 1997-4
By: BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee under
the Trust Agreement,
By: __________________________
Name:
Title:
Date:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee,
by______________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 5.90875% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture dated as of November 30, 1997
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Chase Manhattan Bank, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture, and the
"Indenture Collateral Agent", which term includes any successor Indenture
Collateral Agent under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(together, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the twentieth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing in January 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of
the Indenture. As described above, a portion of the unpaid principal balance of
this Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.1(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default shall have occurred and be continuing so long as an
Insurer Default shall not have occurred and be continuing or (ii) if an Insurer
Default shall have occurred and be continuing, on the date on which an Event of
Default shall have occurred and be continuing and the Trustee or the Holders of
the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture. All principal payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Holder hereof
as of the Record Date preceding such Payment Date by notice mailed prior to such
Payment Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Trustee's principal Corporate
Trust Office or at the office of the Trustee's agent appointed for such purposes
located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer (with the consent of the Security Insurer under certain
circumstances), on any Payment Date on or after the date on which the Pool
Balance is less than or equal to 10% of the Original Pool Balance, and (b)
pursuant to Section 10.1(b) of the Indenture, in whole or in part, on the
Payment Date on or immediately following the last day of the Funding Period in
the event that any Pre-Funded Amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Indenture Collateral Agent or the Trustee
on the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Seller, the Servicer, the
Holder of the GP Interest, the Trustee, the Indenture Collateral Agent or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Servicer, the Holder of the GP Interest,
the Trustee, the Indenture Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Holder of the GP Interest, the Owner Trustee or the
Trustee or of any successor or assign of the Seller, the Servicer, the Holder of
the GP Interest, the Trustee, the Indenture Collateral Agent or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Trustee, the Indenture Collateral Agent and
the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Depositor, the Holder of the GP Interest, or the
Issuer or join in any institution against the Depositor, the Holder of the GP
Interest, or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings, under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of all Notes at the
time Outstanding. The Indenture also contains provisions permitting the Holders
of Notes representing specified percentages of the Outstanding Amount of the
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither Bankers Trust
(Delaware) in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: ___________ _______________________ 1
1 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
<PAGE>
REGISTERED [Form of Note] Exhibit D-2
$----------
No. R-_
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THE MONEY STORE AUTO TRUST 1997-4
CLASS A-2 6.35% ASSET BACKED NOTES
The Money Store Auto Trust 1997-4, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [_______________] DOLLARS payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $44,500,000 by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-2 Notes pursuant to Section 3.1 of the Indenture; PROVIDED, HOWEVER,
that the entire unpaid principal amount of this Note shall be due and payable on
the March 2004 Payment Date (the "Class A-2 Final Scheduled Payment Date"). The
Issuer will pay interest on this Note at the rate per annum shown above on each
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from December
20, 1997. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Such principal of and interest on this Note shall be paid
in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a note guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of Note
Insured Payments on each Payment Date, all as more fully set forth in the
Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
THE MONEY STORE AUTO TRUST 1997-4
By: BANKERS TRUST (DELAWARE), not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement,
By:__________________________
Name:
Title:
Date:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee,
By:______________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 6.35% Asset Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of November 30, 1997 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Chase Manhattan Bank, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture, and the
"Indenture Collateral Agent", which term includes any successor Indenture
Collateral Agent under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(together, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the twentieth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing in January, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of
the Indenture. As described above, a portion of the unpaid principal balance of
this Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.1(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default shall have occurred and be continuing so long as an
Insurer Default shall not have occurred and be continuing or (ii) if an Insurer
Default shall have occurred and be continuing, on the date on which an Event of
Default shall have occurred and be continuing and the Trustee or the Holders of
the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture. All principal payments on the Class A-2 Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Holder hereof
as of the Record Date preceding such Payment Date by notice mailed prior to such
Payment Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Trustee's principal Corporate
Trust Office or at the office of the Trustee's agent appointed for such purposes
located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer (with the consent of the Insurer under certain circumstances), on
any Payment Date on or after the date on which the Pool Balance is less than or
equal to 10% of the Original Pool Balance, and (b) pursuant to Section 10.1(b)
of the Indenture, in whole or in part, on the Payment Date on or immediately
following the last day of the Funding Period in the event that any Pre-Funded
Amount remains on deposit in the Pre-Funding Account after giving effect to the
purchase of all Subsequent Receivables, including any such purchase on such
Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Indenture Collateral Agent or the Trustee
on the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Seller, the Servicer, the
Holder of the GP Interest, the Trustee, the Indenture Collateral Agent or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Servicer, the Holder of the GP Interest,
the Trustee, the Indenture Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Holder of the GP Interest, the Owner Trustee, the
Indenture Collateral Agent or the Trustee or of any successor or assign of the
Seller, the Servicer, the Holder of the GP Interest, the Trustee, the Indenture
Collateral Agent or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Trustee, the
Indenture Collateral Agent and the Owner Trustee have no such obligations in
their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Depositor, the Holder of the GP Interest, or the
Issuer or join in any institution against the Depositor, the Holder of the GP
Interest, or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings, under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither Bankers Trust
(Delaware) in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: ___________ _______________________1
Signature Guaranteed:
_______________________
- --------
1 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
<PAGE>
REGISTERED [Form of Note] Exhibit D-3
$----------
No. R-_
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THE MONEY STORE AUTO OWNER TRUST 1997-4
CLASS A-3 6.46% ASSET BACKED NOTES
The Money Store Auto Owner Trust 1997-4, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [_______________] DOLLARS payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $28,000,000 by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-3 Notes pursuant to Section 3.1 of the Indenture; PROVIDED, HOWEVER,
that the entire unpaid principal amount of this Note shall be due and payable on
the Payment Date (the "Class A-3 Final Scheduled Payment Date"). The Issuer will
pay interest on this Note at the rate per annum shown above on each Payment Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Payment Date (after
giving effect to all payments of principal made on the preceding Payment Date).
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from December 20, 1997. Interest will be
computed on the basis of a 360-day year consisting of twelve 30-day months. Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a note guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of Note
Insured Payments on each Payment Date, all as more fully set forth in the
Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
THE MONEY STORE AUTO OWNER
TRUST 1997-4
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement,
By:__________________________
Name:
Title:
Date:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee,
By:______________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 6.46% Asset Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of November 30, 1997 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Chase Manhattan Bank, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture, and the
"Indenture Collateral Agent", which term includes any successor Indenture
Collateral Agent under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(together, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the twentieth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing in January 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-3 Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of
the Indenture. As described above, a portion of the unpaid principal balance of
this Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.1(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default shall have occurred and be continuing so long as an
Insurer Default shall not have occurred and be continuing or (ii) if an Insurer
Default shall have occurred and be continuing, on the date on which an Event of
Default shall have occurred and be continuing and the Trustee or the Holders of
the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture. All principal payments on the Class A-3 Notes
shall be made pro rata to the Class A-3 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Holder hereof
as of the Record Date preceding such Payment Date by notice mailed prior to such
Payment Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Trustee's principal Corporate
Trust Office or at the office of the Trustee's agent appointed for such purposes
located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer (with the consent of the Insurer under certain circumstances), on
any Payment Date on or after the date on which the Pool Balance is less than or
equal to 10% of the Original Pool Balance, and (b) pursuant to Section 10.1(b)
of the Indenture, in whole or in part, on the Payment Date on or immediately
following the last day of the Funding Period in the event that any Pre-Funded
Amount remains on deposit in the Pre-Funding Account after giving effect to the
purchase of all Subsequent Receivables, including any such purchase on such
Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Indenture Collateral Agent or the Trustee
on the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Seller, the Servicer, the
Holder of the GP Interest, the Trustee, the Indenture Collateral Agent or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Servicer, the Holder of the GP Interest,
the Trustee, the Indenture Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Holder of the GP Interest, the Owner Trustee, the
Indenture Collateral Agent or the Trustee or of any successor or assign of the
Seller, the Servicer, the Holder of the GP Interest, the Trustee, the Indenture
Collateral Agent or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Trustee, the
Indenture Collateral Agent and the Owner Trustee have no such obligations in
their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Depositor, the Holder of the GP Interest, or the
Issuer or join in any institution against the Depositor, the Holder of the GP
Interest, or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings, under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither Bankers Trust
(Delaware) in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: ___________ _______________________1
Signature Guaranteed:
_______________________
- --------
1 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
TRUST AGREEMENT
between
TMS AUTO HOLDINGS, INC.
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of November 30, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms........................................1
SECTION 1.2. Other Definitional Provisions............................4
ARTICLE II
Organization
SECTION 2.1. Name.....................................................5
SECTION 2.2. Office...................................................5
SECTION 2.3. Purposes and Powers......................................5
SECTION 2.4. Appointment of Owner Trustee.............................6
SECTION 2.5. Initial Capital Contribution of Trust Estate.............6
SECTION 2.6. Declaration of Trust.....................................6
SECTION 2.7. Transfer of Interest to the Holder of
the GP Interest; Liability of the Holder of
the GP Interest..........................................6
SECTION 2.8. Title to Trust Property..................................7
SECTION 2.9. Situs of Trust...........................................7
SECTION 2.10. Representations and Warranties of the Depositor..........7
SECTION 2.11. Covenants of the GP Interest.............................9
SECTION 2.12. Covenants of the Certificateholders.....................10
SECTION 2.13. Voting Interest.........................................11
SECTION 2.14. Federal Income Tax Allocations..........................12
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership......................................12
SECTION 3.2. The Trust Certificates.................................12
SECTION 3.3. Authentication of Trust Certificates...................12
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates...........................................13
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates...........................................14
SECTION 3.6. Persons Deemed Certificateholders......................14
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses..............................................15
SECTION 3.9. Appointment of Certificate Paying Agent................15
SECTION 3.10. Trust Certificate Transfer Restrictions................16
SECTION 3.11. Disposition by the Holder of the GP Interest...........17
SECTION 3.12. Reserved...............................................17
SECTION 3.13. Reserved...............................................17
SECTION 3.14. [Reserved].............................................17
SECTION 3.15. [Reserved].............................................17
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1. Prior Notice to Certificateholders with
Respect to Certain Matters.............................18
SECTION 4.2. Action by Holder of the Voting Interest
with Respect to Certain Matters........................19
SECTION 4.3. Action by Holder of the Voting Interest
with Respect to Bankruptcy.............................19
SECTION 4.4. Restrictions on the Holder of the Voting
Interest's Power.......................................20
SECTION 4.5. Control by Holder of the Voting Interest...............21
SECTION 4.6. Rights of Security Insurer.............................21
ARTICLE V
Application of Trust Funds:
SECTION 5.1. Establishment of Certificate Distribution Account......21
SECTION 5.2. Application of Funds in Certificate Distribution
Account................................................22
SECTION 5.3. [Reserved].............................................22
SECTION 5.4. Method of Payment......................................23
SECTION 5.5. No Segregation of Monies; No Interest..................23
SECTION 5.6. Accounting and Reports to the
Noteholders, Certificateholders, the
Internal Revenue Service and Others....................23
SECTION 5.7. Signature on Returns; Tax Matters Partner..............23
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority......................................24
SECTION 6.2. General Duties.........................................24
SECTION 6.3. Action upon Instruction................................24
SECTION 6.4. No Duties Except as Specified in this
Agreement or in Instructions...........................25
SECTION 6.5. No Action Except under Specified
Documents or Instructions..............................26
SECTION 6.6. Restrictions...........................................26
SECTION 6.7. Notice of Default Under Indenture......................26
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties........................26
SECTION 7.2. Furnishing of Documents................................28
SECTION 7.3. Representations and Warranties.........................28
SECTION 7.4. Reliance; Advice of Counsel............................28
SECTION 7.5. Not Acting in Individual Capacity......................29
SECTION 7.6. Owner Trustee Not Liable for Trust
Certificates or Receivables............................29
SECTION 7.7. Owner Trustee May Own Trust Certificates
and Notes..............................................30
SECTION 7.8. Payments from Owner Trust Estate.......................30
SECTION 7.9. Doing Business in Other Jurisdictions..................30
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses......................30
SECTION 8.2. Indemnification........................................31
SECTION 8.3. Payments to the Owner Trustee..........................31
SECTION 8.4. Non-recourse Obligations...............................31
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement........................31
SECTION 9.2. Dissolution upon Bankruptcy of the
Holder of the GP Interest.............................33
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1 Eligibility Requirements for Owner Trustee............33
SECTION 10.2 Resignation or Removal of Owner Trustee...............34
SECTION 10.3 Successor Owner Trustee...............................35
SECTION 10.4 Merger or Consolidation of Owner Trustee..............35
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.........35
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments...........................37
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders...................................38
SECTION 11.3. Limitations on Rights of Others......................38
SECTION 11.4. Notices..............................................38
SECTION 11.5. Severability.........................................39
SECTION 11.6. Separate Counterparts................................39
SECTION 11.7. Successors and Assigns...............................39
SECTION 11.8. [Reserved]...........................................39
SECTION 11.9. No Petition..........................................39
SECTION 11.10. No Recourse..........................................40
SECTION 11.11. Headings.............................................40
SECTION 11.12. GOVERNING LAW........................................40
SECTION 11.13. [Reserved]...........................................40
SECTION 11.14. Servicer.............................................40
SECTION 11.15. Third Party Beneficiary..............................40
<PAGE>
EXHIBITS
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Investment Letter
<PAGE>
TRUST AGREEMENT dated as of November
30, 1997 between TMS AUTO HOLDINGS, INC., a
Delaware corporation, and Bankers Trust
(Delaware), a Delaware banking corporation
as Owner Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.1. CAPITALIZED TERMS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Sale and Servicing
Agreement, the Indenture, the Insurance Agreement, the Indemnification
Agreement, the Note Depository Agreement and the other documents and
certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE ss. 3801 ET SEQ., as the same may be amended from
time to time.
"Certificate" means a Trust Certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 and shall initially be the Bankers Trust
Company.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
E.A. Delle Donne Corporate Center Montgomery Building, 1011 Centre Road, Suite
200, Wilmington, Delaware 19805, with a copy of all notices and other documents
to be also furnished to Bankers Trust Company, 4 Albany Street, New York, New
York 10006, Attention: Corporate Trust and Agency Group, Structured Finance,
16th floor, or at such other address as the Owner Trustee may designate by
notice to the Certificateholders and the Depositor, or the principal corporate
trust office of any successor Owner Trustee (the address of which the successor
owner trustee will notify the Certificateholders and the Depositor).
"Demand Note" shall have the meaning assigned to such term in Section
2.10(g).
"Depositor" shall mean the Seller in its capacity as Depositor
hereunder.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"GP Interest" shall mean the meaning assigned to such term in Section
2.7.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register.
"Holder of the GP Interest" means TMS Auto Holdings, Inc., a Delaware
special purpose corporation and an affiliate of The Money Store.
"Holder of the Voting Interest" means First Union Bank of Delaware and
any permitted successor, assignee or transferee thereof.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Minimum Net Worth" means at any time of determination, and with
respect to the Holder of the GP Interest, net worth equal to $945,000. For the
purpose of the determination of Minimum Net Worth: (i) the Demand Note issued to
the Holder of the GP Interest shall be valued at par, (ii) assets subject to a
lien shall be valued at zero, (iii) Certificates or any other interests in any
entity taxable as a partnership for federal income tax purposes shall be valued
at zero, (iv) investments shall be valued at their respective purchase prices
plus accrued interest, and (v) demand notes of The Money Store Inc. issued as
contributions to the Holder of the GP Interest in connection with its status as
a general partner of any other partnership formed pursuant to trust agreements
substantially similar to this Agreement shall be valued at an amount equal to
the excess, if any, of (a) the aggregate current amount of all such demand notes
over (b) $945,000.
"Ownership Percentage" shall mean with respect to any
Certificateholder, the proportion (expressed as a percentage) of the ownership
interest in the Trust held by such Certificateholder.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to any Distribution Date, the
last day of the calendar month preceding the Distribution Date.
"Representative" shall mean The Money Store Inc., a New Jersey
corporation, as Representative. "Sale and Servicing Agreement" shall mean the
Sale and Servicing Agreement among the Trust, the Representative, TMS Auto
Holdings, Inc., The Money Store Auto Finance Inc. and the Owner Trustee, dated
as of November 30, 1997, as the same may be amended and supplemented from time
to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Security Insurer" shall mean MBIA Insurance Corporation, or its
successor in interest.
"Security Act" means the Securities Act of 1933, as amended.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
"Voting Interest" shall have the meaning assigned to such term in
Section 2.13.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
<PAGE>
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME. There is hereby formed a trust to be known as "The
Money Store Auto Trust 1997-4", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.2 OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders, the
Security Insurer and the Depositor.
SECTION 2.3 PURPOSES AND POWERS. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and
the Trust Certificates pursuant to this Agreement, and to
sell the Notes;
(ii) with the proceeds of the sale of the Notes to fund the
Pre-Funding Account and the Capitalized Interest Account and to pay the
organizational, start-up and transactional expenses of the Trust and to
pay the balance to the Depositor pursuant to the Sale and Servicing
Agreement;
(iii) to acquire, receive and accept from time to time the
Owner Trust Estate and to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate (other than the Certificate Distribution
Account) to the Indenture Collateral Agent pursuant to the Indenture
for the benefit of the Security Insurer and the Trustee on behalf of
the Noteholders, and to hold, manage and distribute to the
Certificateholders and the Seller pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise.
SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a partnership. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.
SECTION 2.7. TRANSFER OF INTEREST TO THE HOLDER OF THE GP INTEREST;
LIABILITY OF THE HOLDER OF THE GP INTEREST. (a) TMS Auto Holdings, Inc., as
holder of no less than a 1% Ownership Percentage in the Trust (the "GP
Interest"), shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee. The Holder of the GP
Interest shall also be liable directly to and will indemnify the injured party
for all losses, claims, damages, liabilities and expenses of the Trust
(including Expenses, to the extent not paid out of the Owner Trust Estate) to
the extent that the Holder of the GP Interest would be liable if the Trust were
a partnership under the Delaware Revised Uniform Limited Partnership Act in
which the Holder of the GP Interest were a general partner; PROVIDED, HOWEVER,
that the Holder of the GP Interest shall not be liable for any losses incurred
by a Certificateholder in the capacity of an investor in the Trust Certificates
or a Noteholder in the capacity of an investor in the Notes. In addition, any
third party creditors of the Trust (other than in connection with the
obligations described in the preceding sentence for which the Holder of the GP
Interest shall not be liable) shall be deemed third party beneficiaries of this
paragraph. The obligations of the Holder of the GP Interest under this paragraph
shall be evidenced by the Trust Certificates described in Section 3.11, which
for purposes of the Business Trust Statute shall be deemed to be a separate
class of Trust Certificates from all other Trust Certificates issued by the
Trust. At no time shall the Holder of the GP Interest own 100% Ownership
Percentage of the Certificates.
(b) No holder of a Certificate, other than to the extent set forth in
clause (a), shall have any personal liability for any liability or obligation of
the Trust.
SECTION 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any part of
the Owner Trust Estate. The Certificateholders shall be entitled to receive
distributions with respect to their undivided Ownership Percentage therein only
in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest by any Certificateholder of its
ownership interest in the Owner Trust Estate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. Payments will be received by the Trust only in Delaware or
New York and payments will be made by the Trust only from Delaware or New York.
The Trust shall not have any employees in any state other than Delaware;
provided however, that nothing herein shall restrict or prohibit the Owner
Trustee, in its individual capacity, the Servicer or any agent of the Trust from
having employees within or without the State of Delaware. The only office of the
Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Security Insurer relies in issuing the Note
Policy.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a Delaware corporation with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted
and is proposed to be conducted pursuant to this
Agreement and the Basic Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance
of its obligations under this Agreement and the Basic Documents
requires such qualification.
(c) POWER AND AUTHORITY. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out
its terms; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Trust and the Depositor has duly authorized such sale and assignment
and deposit to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary corporate action.
(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization or registration or declaration with, any Person or with
any governmental authority, bureau or agency is required in connection
with the execution, delivery or performance of this Agreement and the
Basic Documents, except for such as have been obtained, effected or
made.
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the certificate of incorporation or by-laws of the
Depositor, or any material indenture, agreement or other instrument to
which the Depositor is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the best of the Depositor's knowledge, any order, rule
or regulation applicable to the Depositor of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or
its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over it or its
properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the
Certificates or the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might
materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any of
the Basic Documents, or (D) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the
Certificates.
(g) DEMAND NOTE. It has been duly capitalized by the delivery
of a demand note (the "Demand Note") from the Representative in the
amount of $1,000,000 which Demand Note has not been canceled, waived or
terminated. The proceeds of such Demand Note have not been used and
will not be used to pay (i) any of the expenses of the Depositor in
connection with the transactions contemplated by the Basic Documents or
(ii) the purchase price for the Certificates purchased pursuant to
Section 2.3. Such Demand Note is enforceable against the Depositor,
subject to its terms, and subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws now
or hereafter in effect relating to creditors' rights generally or the
rights of creditors of banks the deposit accounts of which are insured
by the Federal Deposit Insurance Corporation and subject to general
principles of equity (whether applied in a proceeding at law or in
equity).
SECTION 2.11. COVENANTS OF THE HOLDER OF THE GP INTEREST The Holder of
the GP Interest agrees and covenants for the benefit of each Owner, the Security
Insurer and the Owner Trustee, during the term of this Agreement, and to the
fullest extent permitted by applicable law, that:
(a) it shall not assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part;
(b) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, the interest evidenced by
its certificates acquired pursuant to Section 3.12 without the consent of the
Security Insurer;
(c) other than pursuant to Section 2.7 or in connection with routine
administrative matters, it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation and the Basic Documents;
(d) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(e) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States;
(f) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(g) it shall not (i) assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part, or (ii) make any distribution other than to the Trust or
unless the aggregate net worth of the Holder of the GP Interest following such
distribution shall be at least equal to the Minimum Net Worth unless the Holder
of the GP Interest shall deliver to the Owner Trustee, the Trustee and the
Security Insurer an Opinion of Counsel to the effect that the failure to
maintain such Minimum Net Worth shall not cause the Trust to be an association
taxable as a corporation or a publicly traded partnership.
SECTION 2.12. COVENANTS OF THE CERTIFICATEHOLDERS. Each
Certificateholder by becoming a holder of a Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates of
which such Certificateholder is the beneficial owner and of this Agreement,
including any supplements or amendments hereto and to perform the obligations of
a Certificateholder as set forth therein or herein, in all respects as if it
were a signatory hereto. This undertaking is made for the benefit of the Trust,
the Owner Trustee, the Security Insurer and all other Certificateholders present
and future;
(b) to hereby appoint the Holder of the GP Interest as such
Certificateholder's agent and attorney-in-fact to sign any federal income tax
information return filed on behalf of the Trust and agree that, if requested by
the Trust, it will sign such federal income tax information return in its
capacity as holder of an interest in the Trust. Each Certificateholder also
hereby agrees that in its tax returns it will not take any position inconsistent
with those taken in any tax returns filed by the Trust;
(c) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee of any transfer by it of a Certificate
in a taxable sale or exchange, within 30 days of the date of the transfer; and
(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or the Holder of the
GP Interest to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13. VOTING INTEREST. On the Closing Date First Union Bank of
Delaware (the "Holder of the Voting Interest") shall acquire a 100% voting
interest in the Trust (the "Voting Interest") and shall be deemed to have agreed
to be bound by the terms and conditions set forth herein concerning the Voting
Interest. Except as otherwise provided herein, the Holder of the Voting Interest
shall have the sole power and authority to approve or disapprove actions
requiring the approval or disapproval of Certificateholders in any of the Basic
Documents. Except as otherwise provided herein, any action requiring the
consent, approval or vote of the Certificateholders under any of the Basic
Documents shall be taken only upon the written consent, approval or vote of the
Holder of the Voting Interest. In exercising such power and authority to give or
withhold such consent, approval or vote, the Holder of the Voting Interest shall
act only in accordance with and upon receipt of written instructions delivered
to it by the Trustee (on which the Holder of the Voting Interest shall be fully
protected in relying). Notwithstanding any provision herein or in any other
document to the contrary, the Holder of the Voting Interest shall have no
obligation other than to exercise such power and authority in accordance with
such written instructions; provided, however, that no action may be taken that
would increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Loans or distributions required to be made
for the benefit of Certificateholders, or would adversely affect the Federal or
state tax consequences to the Certificateholders, without the consent of all
Certificateholders affected thereby. Notwithstanding any provision herein or in
any other document to the contrary, the Holder of the Voting Interest shall not
have any personal liability for any liability or obligation of the Trust, any
action taken or omitted pursuant to any written instructions of the Trustee, or
otherwise relating to the Trust or its serving as the Holder of the Voting
Interest. The Holder of the Voting Interest may not sell, transfer, assign,
pledge or otherwise convey, directly or indirectly, all or any part of the
Voting Interest without the prior written consent of the Holder of the GP
Interest and the Security Insurer. The Holder of the Voting Interest shall have
no right to receive any amounts hereunder or under any other Basic Document or
any other economic rights as a beneficial owner of the Trust and, except as
otherwise expressly set forth herein, the Voting Interest shall not be deemed a
Certificateholder and the Holder of the Voting Interest shall not be deemed a
Certificateholder (except as to benefits afforded Certificateholders). In no
event shall the Owner Trustee owe any fiduciary duties to the Holder of the
Voting Interest, nor shall the Owner Trustee be liable to the Certificateholders
for any action or omission taken or omitted to be taken at the direction of the
Holder of the Voting Interest. For purposes of the Business Trust Statute, the
Voting Interest shall be deemed a separate class of beneficial ownership
interest in the Trust from all other beneficial ownership interests in the
Trust, and the Holder of the Voting Interest, as such, shall be deemed a
separate class of beneficial owner of the Trust from all other beneficial owners
of the Trust. The Voting Interest shall not be represented by a certificate.
SECTION 2.14. FEDERAL INCOME TAX ALLOCATIONS. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated pro rata to the Certificateholders based on their Ownership
Percentage. The Holder of the GP Interest is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Holder of the GP Interest, the Certificateholders, or as otherwise
required by the Code.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust.
SECTION 3.2. THE TRUST CERTIFICATES. The Trust Certificates shall be
issued in denominations corresponding to an Ownership Percentage of 1%. The
Trust Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee, and the Owner
Trustee shall have the power and authority and it is hereby authorized and
empowered, in the name and on behalf of the Trust to authorize, execute, issue
and deliver Trust Certificates, the GP Interest and the Voting Interest. Trust
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates. A transferee of a Trust Certificate
shall become a Certificateholder, and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder, upon due
registration of such Trust Certificate in such transferee's name pursuant to
Section 3.4.
SECTION 3.3. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee in the name and on behalf of the Trust
shall cause, and shall have power and authority and is hereby authorized and
empowered to cause, the GP Interest (which shall include a 1% Ownership
Percentage) to be authenticated and issued to, and registered on the Certificate
Register in the name of, the Holder of the GP Interest and the balance of the
Trust Certificates to be executed and signed by an Authorized Officer and
authenticated, issued and delivered to and in the names of the following: (i)
98% of the Ownership Percentage to TMS Auto Holdings, Inc. and (ii) 1% of the
Ownership Percentage to The Money Store Inc. The Owner Trustee shall cause and
shall have the power and authority and is hereby authorized and empowered to
cause the uncertificated Voting Interest to be issued to, and registered on the
Certificate Register in the name of, the Holder of the Voting Interest. No Trust
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Trust
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or Bankers Trust Company as the
Owner Trustee's authentication agent, by manual signature; such authentication
shall constitute conclusive evidence that such Trust Certificate shall have been
duly authenticated and delivered hereunder. All Trust Certificates shall be
dated the date of their authentication.
SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. Bankers Trust
Company shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, and upon
satisfaction of the conditions set forth below, the Owner Trustee shall execute,
authenticate and deliver (or shall cause Bankers Trust Company as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Trust Certificates of a like
Ownership Percentage dated the date of authentication by the Owner Trustee or
any authenticating agent. At the option of a Holder, Trust Certificates may be
exchanged for other Trust Certificates of a like Ownership Percentage aggregate
amount upon surrender of the Trust Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by (i) in the case of a transfer of a
Certificate, an executed Investment Letter referred to in Section 3.10 or an
opinion of counsel (furnished at the cost of the transferee or transferor)
satisfactory to the Owner Trustee to the effect that the transfer of such
Certificate is exempt from the registration requirements of the Securities Act
and would not result in adverse tax consequences to the Trust, the Noteholders
or the Certificateholders and (ii) a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may but shall not be obligated to require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Trust Certificates.
SECTION 3.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless an Insurer Default shall have occurred and be continuing) the Security
Insurer, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate shall
have been acquired by a bona fide purchaser, the Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee, or Bankers Trust Company, as the
Owner Trustee's authenticating agent, shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like class, tenor and Ownership
Percentage. In connection with the issuance of any new Trust Certificate under
this Section, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Certificate issued
pursuant to this Section shall constitute conclusive evidence of an Ownership
Percentage in the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Trust Certificate shall be found at any time.
SECTION 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and the Security Insurer and any agent of the Owner
Trustee, the Certificate Registrar and the Security Insurer, may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the Owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar or the
Security Insurer nor any agent of the Owner Trustee, the Certificate Registrar
or the Security Insurer shall be bound by any notice to the contrary.
SECTION 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Depositor or (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer, the Representative and the Holder of the GP
Interest, within 15 days after receipt by the Owner Trustee of a request
therefor from the Servicer, the Representative or the Holder of the GP Interest
in writing, a list, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Holders of Trust Certificates or
one or more Holders of Trust Certificates evidencing not less than 25% of the
Ownership Percentage apply in writing to the Owner Trustee, and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Trust
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Owner Trustee shall, within
five Business Days after the receipt of such application, afford such applicants
access during normal business hours to the current list of Certificateholders.
Each Holder, by receiving and holding a Trust Certificate, shall be deemed to
have agreed not to hold any of the Depositor, the Servicer the Owner Trustee or
the Security Insurer or any agent thereof or the Representative accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.8. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in New York, an office or offices or agency or agencies where Trust
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the Trust
Certificates and the Basic Documents may be served. The Owner Trustee initially
designates Bankers Trust Company, 4 Albany Street, New York, New York 10006, as
its principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholders and (unless
an Insurer Default shall have occurred and be continuing) the Security Insurer
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.9. APPOINTMENT OF CERTIFICATE PAYING Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee. Any Certificate Paying Agent shall have
the revocable power to withdraw funds from the Certificate Distribution Account
for the purpose of making the distributions referred to above. The Owner Trustee
may revoke such power and remove the Certificate Paying Agent if the Owner
Trustee determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Certificate Paying Agent shall initially be Bankers Trust
Company, and any co-Certificate Paying Agent chosen by the Owner Trustee, and
acceptable to the Servicer and the Security Insurer. The Certificate Paying
Agent shall be permitted to resign upon 30 days' written notice to the Owner
Trustee and the Servicer. In the event that the Owner Trustee shall no longer be
the Certificate Paying Agent, the Owner Trustee shall appoint a successor to act
as Certificate Paying Agent (which shall be a bank or trust company). The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee and (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer an instrument in which such successor
Certificate Paying Agent or additional Certificate Paying Agent shall agree with
the Owner Trustee that as Certificate Paying Agent, such successor Certificate
Paying Agent or additional Certificate Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders (and the Security Insurer) entitled thereto until such sums
shall be paid to such Certificateholders or the Security Insurer. The
Certificate Paying Agent shall return all unclaimed funds to the Owner Trustee
and upon removal of a Certificate Paying Agent such Certificate Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Owner Trustee
also in its role as Certificate Paying Agent, for so long as the Owner Trustee
shall act as Certificate Paying Agent and, to the extent applicable, to any
other Certificate Paying Agent appointed hereunder. Any reference in this
Agreement to the Certificate Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION 3.10. TRUST CERTIFICATE TRANSFER RESTRICTIONS. (a) Except for
the initial issuance of Trust Certificates to TMS Auto Holdings, Inc. and The
Money Store Inc., the Trust Certificates may not be offered or sold except to
institutional "accredited investors" (as defined in Rule 501(a)(1)-(3) under the
Securities Act who are United States persons (as defined in Section 7701(a)(30)
of the Code) in reliance on an exemption from the registration requirements of
the Securities Act. No offer, sale, transfer or other disposition (including
pledge) of Trust Certificates shall be made to any Person unless such Person
executes and delivers to the Owner Trustee and the Holder of the GP Interest an
Investment Letter substantially in the form set forth as Exhibit C hereto.
(b) No offer, sale, transfer or other disposition (including pledge)
of the Trust Certificates shall be effective to any Person to which is, or is
purchasing for, or on behalf of, (1) an employee benefit plan, retirement
arrangement, individual retirement account or Keogh plan subject to either Title
I of the Employee Retirement Income Security Act of 1974, as amended, or Section
4975 of the Internal Revenue Code of 1986, as amended, or (2) an entity
(including an insurance company general account) whose underlying assets include
plan assets by reason of any such plan's arrangements or account's investment in
any such entity.
(c) Each Certificateholder must be a United States person as defined
in Section 7701(a)(30) of the Code.
(d) Each Trust Certificate will bear a legend substantially to the
following effect.
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO (A) HAS FURNISHED TO THE OWNER TRUSTEE AND HOLDER OF THE GP
INTEREST AN INVESTMENT LETTER IN THE FORM REQUIRED BY THE TRUST AGREEMENT TO THE
EFFECT THAT SUCH PURCHASER IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT OR (B) AN OPINION OF COUNSEL
SATISFACTORY TO THE OWNER TRUSTEE OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR KEOGH PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
SECTION 3.11. DISPOSITION BY THE HOLDER OF THE GP INTEREST. On and
after the Closing Date the Holder of the GP Interest shall retain beneficial and
record ownership of Trust Certificates representing at least 1% of the Ownership
Percentage. Any attempted transfer of any Trust Certificate that would reduce
such interest of the Holder of the GP Interest below 1% of the Ownership
Percentage shall be void. The Trust shall cause the Trust Certificate
representing the 1% GP Interest issued to the Holder of the GP Interest to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 3.12. [RESERVED]
SECTION 3.13. [RESERVED]
SECTION 3.14. [RESERVED]
SECTION 3.15. [RESERVED]
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders, the Security Insurer
and the Holder of the Voting Interest in writing of the proposed action and
neither the Holder of the Voting Interest nor the Security Insurer shall have
notified the Owner Trustee in writing prior to the 30th day after such notice is
given that it has withheld consent or provided alternative direction (provided
that no consent or direction of the Holder of the Voting Interest pursuant to
this Section 4.1 shall be effective without the consent of the Security
Insurer):
(a) the initiation of any material claim or lawsuit by the
Trust except claims or lawsuits brought in connection with the
collection of the Loans and the compromise of any material action,
claim or lawsuit brought by or against the Trust (except with respect
to the aforementioned claims or lawsuits for collection of the Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute or unless such amendment would not
materially and adversely affect the interests of the
Certificateholders);
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder or the Security
Insurer is required;
(d) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder or the Security
Insurer is not required and such amendment materially adversely affects
the interest of the Certificateholders; or
(e) the amendment, change or modification of the Sale and
Servicing Agreement, except to cure any ambiguity or defect or to amend
or supplement any provision in a manner that would not materially
adversely affect the interests of the Certificateholders;
(f) the consent to the calling, or waiver of any
default of any Basic Document;
(g) the consent to the assignment by the Indenture Trustee or
Servicer of their respective obligations under any Basic Document;
(h) except as provided in this Agreement dissolve, terminate
or liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the Trust's
assets to any other entity;
(j) cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement or the other
Basic Documents;
(k) perform any act that conflicts with any other
Basic Document;
(l) perform any act which would make it impossible to carry
on the ordinary business of the Trust as described in this Agreement;
(m) confess a judgment against the Trust;
(n) cause the Trust to lend any funds to any entity;
(o) change the Trust's purpose and powers from those
enumerated in this Agreement; or
(p) possess Trust assets or assign the Trust's right to
property for other than a Trust purpose.
The Owner Trustee shall notify the Certificateholders and the Security Insurer
in writing of any appointment of a successor Note Registrar, Certificate Paying
Agent or Certificate Registrar within five Business Days thereof.
SECTION 4.2. ACTION BY HOLDER OF THE VOTING INTEREST WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power, except upon the
direction of the Security Insurer in accordance with the Basic Documents and the
Holder of the Voting Interest, to (a) remove the Servicer under the Sale and
Servicing Agreement pursuant to Section 8.1 thereof or (b) except as expressly
provided in the Basic Documents, sell the Receivables after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the
Certificateholders or the Security Insurer, as the case may be, and the
furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholders.
SECTION 4.3. ACTION BY HOLDER OF THE VOTING INTEREST WITH RESPECT TO
BANKRUPTCY. The Owner Trustee shall not have the power to, and shall not,
commence a voluntary proceeding in bankruptcy relating to the Trust without the
prior written consent of the Security Insurer (unless an Insurer Default shall
have occurred and be continuing) and the approval of the Holder of the Voting
Interest and the delivery to the Owner Trustee by the Holder of the Voting
Interest of a certificate certifying that it reasonably believes that the Trust
is insolvent.
SECTION 4.4. RESTRICTIONS ON THE HOLDER OF THE VOTING INTEREST'S
POWER. (a) Any direction of the Holder of the Voting Interest shall be
ineffective if it shall direct the Owner Trustee to take or refrain from taking
any action that would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic Documents or would be contrary
to Section 2.3 nor shall the Owner Trustee or the Holder of the Voting Interest
be obligated to determine if the Holder of the Voting Interest's direction
violates this Section 4.4 or to follow any such direction, if given. Further,
any direction of the Holder of the Voting Interest shall be ineffective if it
shall direct the Owner Trustee to take or refrain from taking any action that
would increase or reduce in any manner the amount of, or accelerate or delay the
timing of collections of payments on the Receivables or distributions required
to be made for the benefit of Certificateholders, or would adversely affect the
Federal or state tax consequences to the Certificateholders, without the consent
of all Certificateholders affected thereby.
(b) The Holder of the Voting Interest shall not have any right by
virtue or by availing itself of any provisions of this Agreement to institute
any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document, unless the Holder of the Voting
Interest is the Instructing Party pursuant to Section 6.3 and unless the Holder
of the Voting Interest previously shall have given to the Owner Trustee a
written notice of default and of the continuance thereof, as provided in this
Agreement, or unless Certificateholders evidencing not less than 25% of the
Ownership Percentage shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 6.3; it being understood and intended, and being expressly covenanted
by the Holder of the Voting Interest and each Certificateholder with every other
Certificateholder, the Holder of the Voting Interest and the Owner Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb, or prejudice the rights of the Holders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 4.4, each and every
Certificateholder, the Holder of the Voting Interest and the Owner Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 4.5. CONTROL BY HOLDER OF THE VOTING Interest. Except as
otherwise specifically provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Holder of the Voting
Interest. Except as otherwise specifically provided herein, any written notice
of the Certificateholders delivered pursuant to this Agreement shall be
effective if signed by holders of Certificates evidencing not less than a
majority of the Ownership Percentage at the time of the delivery of such notice.
SECTION 4.6. RIGHTS OF SECURITY INSURER. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
business trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust.
ARTICLE V
APPLICATION OF TRUST FUNDS:
CERTAIN DUTIES
SECTION 5.1. ESTABLISHMENT OF CERTIFICATE DISTRIBUTION ACCOUNT. (a)
The Owner Trustee, for the benefit of the Certificateholders and the Security
Insurer, shall establish and maintain in the name of the Trust an Eligible
Deposit Account (the "Certificate Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders and the Security Insurer.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Deposit Account, the Owner Trustee shall within
five Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency and, so long as no Insurer Default shall have occurred
and be continuing, the Security Insurer may consent) establish a new Certificate
Distribution Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested, by
the Owner Trustee at the Servicer's written direction, in Eligible Investments
that mature not later than one Business Day prior to the Distribution Date for
the Monthly Period to which such amounts relate. Investments in Eligible
Investments shall be made in the name of the Trust, and such investments shall
not be sold or disposed of prior to their maturity. Subject to the other
provisions hereof, the Owner Trustee shall have sole control over each such
investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the Owner
Trustee. All Investment Earnings on funds in the Certificate Distribution
Account shall be distributed on the next Distribution Date pursuant to Section
5.6 of the Sale and Servicing Agreement.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT.
(a) On each Distribution Date, the Owner Trustee will, based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 4.9 of the Sale and Servicing Agreement, distribute pro
rata to Certificateholders based on Ownership Percentage, to the extent of the
funds available, amounts deposited in the Certificate Distribution Account
pursuant to Sections 5.6(b) of the Sale and Servicing Agreement on such
Distribution Date. Notwithstanding any other provision hereof, the
Certificateholders hereby authorize the Trustee on their behalf to remit all
amounts payable to the Certificate Distribution Account pursuant to Section
5.6(b)(vi) of the Sale and Servicing Agreement to the Insurer's Agent for
deposit in the Spread Account up to the amount necessary to cause the Collateral
Amount to equal the Specified Spread Account Requirement and then to the Payment
Provider for payment of the Required Amount on the previous Distribution Date
and to the extent any funds remain, to the Certificateholders. (Capitalized
terms in this Section not defined in this Agreement shall have the meaning as
set forth in the Spread Account and Payment Agreement).
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.8 of the Sale and Servicing Agreement on such Distribution
Date.
(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this
Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-US
Certificateholder), the Owner Trustee may in it sole discretion withhold such
amounts in accordance with this clause (c). In the event that an Owner wishes to
apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred. The Servicer shall facilitate compliance with
this Section 5.2(c) by performance of its duties under the Sale and Servicing
Agreement.
SECTION 5.3. [Reserved]
SECTION 5.4. METHOD OF PAYMENT. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date and such Holder's Trust Certificates in the aggregate evidence
a denomination of not less than 20% or (ii) such Certificateholder is the Holder
of the GP Interest, or an Affiliate thereof, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register, Notwithstanding the foregoing, the final distribution in respect of
any Trust Certificate (whether on the Final Scheduled Distribution Date or
otherwise) will be payable only upon presentation and surrender of such Trust
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.5. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 5.6. ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to Sections
10.1(b)(iii) and 10.1(c) of the Sale and Servicing Agreement, the Holder of the
GP Interest shall (a) maintain (or cause to be maintained) the books of the
Trust on a calendar year basis on the accrual method of accounting, (b) deliver
(or cause to be delivered) to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1) to enable each Certificateholder to prepare its Federal
and state income tax returns, (c) file or cause to be filed such tax returns
relating to the Trust (including a partnership information return, Form 1065),
and direct the Owner Trustee to make such elections as may from time to time be
required or appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
partnership for Federal income tax purposes and (d) collect or cause to be
collected any withholding tax as described in and in accordance with Section
5.2(c) with respect to income or distributions to Certificateholders. The Owner
Trustee shall make all elections pursuant to this Section as directed by the
Holder of the GP Interest. The Owner Trustee shall sign all tax information
returns furnished to it by the Holder of the GP Interest filed pursuant to this
Section 5.6 and any other returns as may be required by law and so furnished to
it by the Holder of the GP Interest, and in doing so shall rely entirely upon,
and shall have no liability for information provided by, or calculations
provided by, the Holder of the GP Interest. The Holder of the GP Interest shall
cause the Trust to elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables.
SECTION 5.7. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust the tax returns of the Trust furnished to it in execution
form by the Holder of the GP Interest, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be
signed by the Holder of the GP Interest.
(b) The Holder of the GP Interest shall be the "tax matters partner"
of the Trust pursuant to the Code.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document presented in connection
therewith attached as an exhibit to or contemplated by the Basic Documents to
which the Trust is named as a party and any amendment thereto, in each case, in
such form as the Depositor shall approve as evidenced conclusively by the Owner
Trustee's execution thereof, and on behalf of the Trust, to direct the Trustee
to authenticate and deliver Class A-1 Notes in the aggregate principal amount of
$17,500,000, Class A-2 Notes in the aggregate principal amount of $44,500,000
and Class A-3 Notes in the aggregate principal amount of $28,000,000. In
addition to the foregoing, the Owner Trustee is authorized, but shall not be
obligated, to take all actions required of the Trust pursuant to the Basic
Documents. The Owner Trustee is further authorized from time to time to take
such action as the Instructing Party recommends with respect to the Basic
Documents so long as such activities are consistent with the terms of the Basic
Documents.
SECTION 6.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Certificateholders, subject to the
Basic Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement or the Holder of the GP Interest has agreed hereunder or thereunder to
perform any act or to discharge any duty of the Owner Trustee hereunder or under
any Basic Document, and the Owner Trustee shall not be liable for the default or
failure of the Servicer or the Holder of the GP Interest to carry out its
obligations hereunder or thereunder.
SECTION 6.3. ACTION UPON INSTRUCTION. (a) Subject to Article IV, the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Holder of the Voting Interest (if an Insurer Default shall
have occurred and be continuing) (the "Instructing Party") shall have the
exclusive right to direct the actions of the Owner Trustee in the management of
the Trust. Such direction may be exercised at any time by written instruction of
the Holder of the Voting Interest pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders and the Security Insurer, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction, the
Owner Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Certificateholders and the
Security Insurer, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
SECTION 6.7. NOTICE OF DEFAULT UNDER INDENTURE. Within 10 business
days of receipt of a notice of Default under the Indenture, the Owner Trustee
shall provide notice to each Certificateholder by letter.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee in its individual capacity also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Basic Documents and this Agreement. The Owner Trustee in its individual capacity
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee, in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee in its individual capacity. In particular, but not
by way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Servicer, the Holder of the GP Interest, the
Holder of the Voting Interest or any Certificateholder;
(c) no provision of this Agreement or any Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any Basic Document if the Owner Trustee
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the
Basic Documents, other than the certificate of authentication on the
Trust Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty or obligation to the Security Insurer,
Trustee, Indenture Collateral Agent, the Collateral Agent, any
Noteholder or to any Certificateholder, other than as expressly
provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Security Insurer, the Trustee, the Servicer or the
Holder of the GP Interest or the Holder of the Voting Interest under
any of the Basic Documents or otherwise and the Owner Trustee shall
have no obligation or liability to insure compliance by the Servicer
or the Holder of the GP Interest or the Holder of the Voting Interest
with any agreement to which it is a party or to perform the
obligations of the Trust under this Agreement or the Basic Documents
that are required to be performed by the Trustee under the Indenture
or the Servicer under the Sale and Servicing Agreement or the Holder
of the GP Interest under the Agreement; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this Agreement
or otherwise or in relation to this Agreement or any Basic Document,
at the request, order or direction of any of the Certificateholders or
the Holder of the Voting Interest, unless such Certificateholders have
offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by
the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Agreement or in
any Basic Document shall not be construed as a duty, and the Owner
Trustee shall not be answerable for other than its negligence, bad
faith or willful misconduct in the performance of any such act.
SECTION 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee in its
individual capacity hereby represents and warrants to the Depositor, the
Security Insurer, the Representative, and for the benefit of the
Certificateholders, that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware state law, governmental rule
or regulation governing the banking or trust powers of the Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Basic Document herein.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
herein or in any other Basic Document, in accepting the trusts hereby created
Bankers Trust (Delaware) acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
SECTION 7.6. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES OR
RECEIVABLES. The recitals contained herein and in the Trust Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor or
the Servicer with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
SECTION 7.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Bankers Trust (Delaware), or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained to the contrary, neither Bankers Trust (Delaware) or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Bankers Trust (Delaware) (or any successor
thereto); or (iii) subject Bankers Trust (Delaware) (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee and
the Holder of the Voting Interest shall receive as compensation for their
respective services hereunder such fees as have been separately agreed upon
before the date hereof between the Representative and the Owner Trustee or the
Holder of the Voting Interest, as applicable, and the Owner Trustee and the
Holder of the Voting Interest shall be entitled to be reimbursed by the Holder
of the GP Interest for their respective other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee or the Holder
of the Voting Interest may employ in connection with the exercise and
performance of their respective rights and duties hereunder; PROVIDED, HOWEVER,
that the Owner Trustee shall only be entitled to reimbursement for expenses
hereunder to the extent such expenses (i) are fees of outside counsel engaged by
the Owner Trustee in respect of the performance of its obligations hereunder,
but up to a dollar amount not to exceed the amount previously agreed to with the
Representative or (ii) relate to the performance of its obligations pursuant to
Section 5.6 hereof.
SECTION 8.2. INDEMNIFICATION. The Holder of the GP Interest shall be
liable as primary obligor for, and shall indemnify the Owner Trustee and the
Holder of the Voting Interest and their respective successors, assigns, agents
and servants (collectively, the "Indemnified Parties") from and against, any and
all liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee or the Holder of the Voting Interest hereunder, except only
that the Holder of the GP Interest shall not be liable for or required to
indemnify the Owner Trustee from and against Expenses arising or resulting from
any of the matters described in the third sentence of Section 7.1. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Holder of the GP Interest which approval shall
not be unreasonably withheld.
SECTION 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Certificateholder.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1. TERMINATION OF TRUST AGREEMENT. (a) This Agreement and
the Trust shall terminate and be of no further force or effect upon the latest
of (i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Related Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to the
Security Insurer of all amounts payable or reimbursable to it, or (iii) at the
time provided in Section 9.2; PROVIDED, HOWEVER, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living on the date of this
Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided,
further, that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
and the Security Insurer of any prospective termination pursuant to this Section
9.1. Except as provided in Section 9.2, the bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, other than the Holder
of the GP Interest as described in Section 9.2, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Depositor nor the
Holder of the GP Interest nor any Certificateholder shall be entitled to revoke
or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender their Trust
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 9.1(c) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Certificate Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the Holder of the GP Interest.
Certificateholders shall thereafter look solely to the Holder of the GP Interest
as general unsecured creditors.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Holder of the GP Interest.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. DISSOLUTION UPON BANKRUPTCY OF THE HOLDER OF THE
GP INTEREST. In the event that an Insolvency Event shall occur with respect to
the Holder of the GP Interest, the Trust shall dissolve and this Agreement shall
be terminated in accordance with Section 9.1 90 days after the date of such
Insolvency Event, unless, before the end of such 90-day period, the Owner
Trustee shall have received written instructions from the Instructing Party to
the effect that each such party disapproves of the liquidation of the
Receivables and termination of the Trust. Promptly after the occurrence of any
Insolvency Event with respect to the Holder of the GP Interest (i) the Holder of
the GP Interest shall give the Trustee, the Owner Trustee and the Security
Insurer written notice of such Insolvency Event, (ii) the Owner Trustee shall,
upon the receipt of such written notice from the Holder of the GP Interest, give
prompt written notice to the Certificateholders and the Trustee of the
occurrence of such event and (iii) the Trustee shall, upon receipt of written
notice of such Insolvency Event from the Owner Trustee or the Holder of the GP
Interest, give prompt written notice to the Noteholders of the occurrence of
such event; PROVIDED, however, that any failure to give a notice required by
this sentence shall not prevent or delay, in any manner, a termination of the
Trust pursuant to the first sentence of this Section 9.2. Upon a termination
pursuant to this Section, the Security Insurer or, if an Insurer Default has
occurred and is continuing, the Owner Trustee shall direct the Trustee promptly
to sell the assets of the Owner Trust Estate in a commercially reasonable manner
and on commercially reasonable terms. The proceeds of such a sale of the assets
of the Trust shall be treated as collections under the Sale and Servicing
Agreement and shall be distributed in accordance with Section 9.1(b) thereof.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.
SECTION 10.2. RESIGNATION OR REMOVAL OF OWNER Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Holder of the GP Interest, the Security
Insurer and the Servicer. Upon receiving such notice of resignation, the Holder
of the GP Interest shall promptly appoint a successor Owner Trustee acceptable
to the Security Insurer by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Holder of the GP Interest shall have
received written confirmation from each of the Rating Agencies that the proposed
appointment will not result in an increased capital charge to the Security
Insurer by either of the Rating Agencies. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee or the
Security Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer with the consent of the Security Insurer (so long
as an Insurer Default shall not have occurred and be continuing) or the Security
Insurer may remove the Owner Trustee. If the Servicer shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Servicer
shall promptly appoint a successor Owner Trustee acceptable to the Security
Insurer by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Security
Insurer and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Holder of the GP Interest, the Security Insurer, the Servicer, and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under this Agreement, with
like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Servicer and the predecessor Owner Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Owner Trustee
all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Security Insurer, the Trustee, the
Noteholders and the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at the
expense of the Servicer.
SECTION 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject, unless an
Insurer Default shall have occurred and be continuing, to the approval of the
Security Insurer (which approval shall not be unreasonably withheld) alone shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 10.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing) and with prior written notice to the Rating Agencies, without
the consent of any of the Noteholders or the Certificateholders, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder or Certificateholder or the Holder of the Voting Interest.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) by the Depositor and the Owner
Trustee, with prior written notice to the Rating Agencies, with the consent of
the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and, to the extent the Certificates or the rights, benefits
or duties of the Holder of the Voting Interest are affected thereby, the consent
of the Holder of the Voting Interest for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that, subject to the express rights of
the Security Insurer under the Basic Documents, no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes
and the Ownership Percentage required to consent to any such amendment, without
the consent of the Holders of all the outstanding Notes and Holders of all
outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Holder of the Voting Interest or
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided Ownership Percentage
therein only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title or interest of the Certificateholders to
and in their Ownership Percentage in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section 2.7
and 8.2, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Security Insurer, the Depositor, the Certificateholders, the
Holder of the Voting Interest, the Servicer and, to the extent expressly
provided herein, the Trustee and the Noteholders, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.4. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to TMS Auto Holdings, Inc., 1625 West North Market Blvd., Suite 210,
Sacramento, California 95834, Attention: Executive Vice President; if to the
Security Insurer, addressed to MBIA Insurance Corporation, 113 King Street,
Armonk, NY 10504, Attention: Insured Portfolio Management - SF; if to the Holder
of the Voting Interest, addressed to First Union Bank of Delaware, 230 South
Tryon Street, 9th Floor, Charlotte, NC 28288, Attention Executive Officer or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of, the Representative, the Holder of the GP Interest, the Holder of
the Voting Interest, the Security Insurer, the Owner Trustee and its successors,
each Certificateholder and its successors and permitted assigns and the Holder
of the Voting Interest and be binding upon the parties hereto and their
respective successors and permitted assigns. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall bind
the successors and assigns of such Certificateholder. Except as otherwise
provided in this Agreement, no other Person shall have any right or obligation
hereunder. Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which confer rights upon the Security Insurer shall
be for the benefit of and run directly to the Security Insurer, and the Security
Insurer shall be entitled to rely on and enforce such covenants, subject,
however, to the limitations on such rights provided in this Agreement and the
Basic Documents. The Security Insurer may disclaim any of its rights and powers
under this Agreement (but not its duties and obligations under the Note Policy)
upon delivery of a written notice to the Owner Trustee.
SECTION 11.8. [Reserved]
SECTION 11.9. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, the Holder of the Voting
Interest and the Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any time institute
against the Holder of the GP Interest or the Trust, or join in any institution
against the Holder of the GP Interest or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, this Agreement or any of the Basic Documents.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Servicer, the Holder of the GP Interest,
the Holder of the Voting Interest, the Owner Trustee, the Trustee, the Security
Insurer or any Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Agreement, the Trust Certificates or the Basic Documents.
SECTION 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. [Reserved]
SECTION 11.14. SERVICER. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
SECTION 11.15. THIRD PARTY BENEFICIARY. The Security Insurer shall be
a third party beneficiary hereof and, so long as no Insurer Default shall have
occurred and be continuing shall be entitled to enforce the provisions hereof as
if a party hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
BANKERS TRUST (DELAWARE),
Owner Trustee
By: /s/ M. Lisa Wilkins
Name: /s/ M. Lisa Wilkins
Title:
TMS AUTO HOLDINGS, INC.,
Depositor
By: /s/ Michael H. Benoff
Name: Michael H. Benoff
Title: Senior Vice President
<PAGE>
Agreed and Accepted by:
FIRST UNION BANK OF DELAWARE,
Holder of the Voting Interest
By:/s/ Edward L. Truitt Jr.
Name: Edward L. Truitt Jr.
Title:
<PAGE>
EXHIBIT A
NUMBER
R- CUSIP NO.
- -----------
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST
CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS AND (1) TO A PERSON WHO (A) HAS FURNISHED TO THE OWNER TRUSTEE AND HOLDER
OF THE GP INTEREST AN INVESTMENT LETTER IN THE FORM REQUIRED BY THE TRUST
AGREEMENT TO THE EFFECT THAT SUCH PURCHASER IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT, OR (B) AN
OPINION OF COUNSEL SATISFACTORY TO THE OWNER TRUSTEE OR (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY
TO (1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT
ACCOUNTS OR KEOGH PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE.
[THIS CERTIFICATE IS NON-TRANSFERABLE]
1
- ---------------
1 To be inserted on the Certificate to be held by the Holder of the GP Interest
<PAGE>
THE MONEY STORE AUTO TRUST 1997-4
CERTIFICATE
evidencing an Ownership Percentage in certain distributions of the Trust, as
defined below, the property of which includes a pool of non-prime motor vehicle
retail installment sale contracts secured by new and used automobiles light
trucks and vans financed thereby, and sold to the Trust by TMS Auto Holdings,
Inc.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF TMS
AUTO HOLDINGS, INC. OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT DESCRIBED
BELOW.)
THIS CERTIFIES THAT ___________________ is the registered owner of
___% in The Money Store Auto Trust 1997-4 (the "Trust") formed by TMS Auto
Holdings, Inc., a Delaware corporation (the "Depositor").
The Trust was created pursuant to a Trust Agreement dated as of
November 30, 1997 (the "Trust Agreement"), between the Depositor and Bankers
Trust (Delaware), not in its individual capacity but solely as owner trustee
(the "Owner Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Trust Certificates
(herein called the "Trust Certificates"). Under the Indenture dated as of
November 30, 1997, between the Trust and Chase Manhattan Bank as trustee and
indenture collateral agent, the Trust issued three classes of Notes designated
as "Class A-1 5.90875% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2
6.35% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3 6.46% Asset Backed
Notes" (the "Class A-3 Notes" and, together with the Class A-1 Notes and the
Class A-2 Notes, the "Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the holder of this Trust Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes a pool of non prime motor vehicle retail installment sale contracts
secured by new and used automobiles light trucks and vans financed thereby, (the
"Receivables"), all monies received on the Receivables on or after November 30,
1997, security interests in the vehicles financed thereby, certain bank accounts
and the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement.
Under the Trust Agreement, there will be distributed on the 20th day
of each month or, if such 20th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing in January 1998 to the Person in whose
name this Trust Certificate is registered at the close of business on the last
day of the calendar month immediately preceding the Distribution Date (the
"Record Date") such Certificateholder's Percentage Interest in the amount to be
distributed to Certificateholders on such Distribution Date.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Depositor, Servicer, the Holder of the GP
Interest and Certificateholders that, for purposes of Federal income taxes, the
Trust will be disregarded as an entity apart from its owner if there is only one
owner for Federal income tax purposes, or, if there is more than one owner for
Federal income tax purposes, will be treated as a partnership and the
Certificateholders (including the Holder of the GP Interest) will be treated as
partners in the partnership. The Holder of the GP Interest and the other
Certificateholders by acceptance of a Trust Certificate, agree to treat, and to
take no action inconsistent with the treatment of, the Trust and the Trust
Certificates for such tax purposes as just described.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust or the Depositor, or join in any institution against the Trust
or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Trust Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for the purpose by the Owner Trustee in the
Borough of Manhattan, City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
Date:
THE MONEY STORE AUTO TRUST 1997-4
By: BANKERS TRUST (DELAWARE),
solely as Owner Trustee and not in its
individual capacity
By: ________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates of The Money Store Auto Trust
1997-4 referred to in the within-mentioned Trust Agreement.
Date:
BANKERS TRUST (DELAWARE),
solely as Owner Trustee and not in its
individual capacity
By:___________________________
Authorized Signatory
<PAGE>
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Owner Trustee or any Affiliates of
any of them and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated herein or in the Trust
Agreement, the Indenture or the Basic Documents. In addition, this Trust
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement. The Trust Certificates are
limited in right of payment to certain collections and recoveries respecting the
Receivables, all as more specifically set forth in the Sale and Servicing
Agreement. A copy of each of the Sale and Servicing Agreement and the Trust
Agreement may be examined during normal business hours at the principal office
of the Depositor, and at such other places, if any, designated by the Depositor,
by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the holders
of the Notes and the Trust Certificates evidencing not less than a majority of
the outstanding principal balance of the Notes and the Certificate Balance. Any
such consent by the holder of this Trust Certificate shall be conclusive and
binding on such holder and on all future holders of this Trust Certificate and
of any Trust Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Trust Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the holders of any of the
Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates in authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Bankers Trust
Company.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Trust Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Owner Trust Estate. The Servicer may at its option
purchase the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Trust Certificates; however, such right of
purchase is exercisable, subject to certain restrictions, only as of the last
day of any Monthly Period as of which the Pool Balance is 5% or less of the
Initial Pool Balance. In addition, if the Servicer does not exercise its option
to purchase the Receivables within 90 days after the last day of the Monthly
Period as of which such right can first be exercised, an auction sale shall be
conducted (as described in the Sale and Servicing Agreement) and such auction
shall effect early retirement of the Certificates.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________ Attorney to transfer said Trust
Certificate on the books of the Trust Certificate Registrar, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
- --------------------------
*NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
THE MONEY STORE AUTO TRUST 1997-4
THIS Certificate of Trust of The Money Store Auto Trust 1997-4 (the
"Trust"), dated as of __________ __, 199__, is being duly executed and filed by
__________________________, a ________________ and ________________________, an
individual, as trustees, to form a business trust under the Delaware Business
Trust Act (12 DEL. CODE, ss. 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is
The Money Store Auto Trust 1997-4.
2. This Certificate of Trust will be effective __, 199 .
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as owner trustee of the Trust.
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT C
INVESTMENT LETTER
The Money Store, Inc.
TMS Auto Holdings, Inc.
2840 Morris Avenue
Union, New Jersey 07083
Bankers Trust (Delaware)
Not in its individual capacity but
solely as Owner Trustee
E.A. Delle Donne Corporate Center
Montgomery Building, 1011 Centre Road
Suite 200
Wilmington, Delaware 19805
Bankers Trust Company
4 Albany Street
New York, New York 10006
Corporate Trust Agency,
Structured Finance, 16th Floor
Re: THE MONEY STORE AUTO TRUST 1997-4
Ladies and Gentlemen:
In connection with its purchase of certain Trust Certificates (the
"Certificates") of The Money Store Auto Trust 1997-4, the purchaser named below
(the "Purchaser") or, if an investment adviser is executing this Investment
Letter on the Purchaser's behalf, such investment adviser represents, warrants
and certifies that:
(i) it understands that the Certificates are not being and
will not be registered under the Securities Act of
1933, as amended (the "1933 Act"), and are not being
registered or qualified under any state securities or
"blue sky" laws and are being sold to the Purchaser in
a transaction that is exempt from the registration
requirements of the 1933 Act. The Purchaser is an
"accredited investor" as defined in Rule 501(a)(1)-(3)
of the 1933 Act and a sophisticated institutional
investor that is experienced in purchasing securities
similar to the Certificates. The Purchaser is able
to bear the economic risk of investment in the Certificates;
(ii) any information it desired concerning the Certificates,
the issuer thereof or any other matter it deemed
relevant to its decision to purchase the Certificates
has been made available to it. In this regard, it
has carefully reviewed with its counsel and
understands the terms of the Trust Agreement pursuant
to which the Trust was formed and agrees to be bound
by all the terms thereof, including those relating to
restrictions on transfer;
(iii) the Purchaser's purchase of the Certificates would
not cause it to fail to comply fully with all
applicable requirements of each regulatory body having
supervisory or other authority over its operations or
over its purchase of the Certificates. In reaching
its decision to purchase the Certificates, it has
conducted, with its experts and counsel, an
independent analysis of the economic and regulatory
effects of the transaction on the Purchaser based on
the Purchaser's circumstances and has concluded that
the purchase of the Certificates is appropriate for the
Purchaser's circumstances;
(iv) the Purchaser has independently confirmed the federal, state and
local tax consequences of owning the Certificates;
(v) the Purchaser is acquiring the Certificates for its own account,
not as nominee for any other person, and not with a present view
to any distribution or other disposition of the Certificates in
violation of the provisions of the 1933 Act;
(vi) the Purchaser agrees the Certificates must be held
indefinitely by it (and may not be sold, pledged,
hypothecated or in any way disposed of) unless
subsequently registered under the 1933 Act or an
exemption from the registration requirements of the
1933 Act is available and such transaction is exempt
from all applicable state securities or "blue sky"
laws;
(vii) the Purchaser agrees that in the event that at some future time
it wishes to dispose of or exchange the Certificates (such
disposition or exchange not being currently foreseen or
contemplated), it will not transfer or exchange the Certificates
unless:
(A) (1) a letter to substantially the same effect as
this letter is executed and delivered by the purchaser before
the transfer or exchange is consummated, and (2) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on the Purchaser's behalf, are limited
only to Eligible Purchasers and are not made by means of any
form of general solicitation or general advertising whatsoever;
and
(B) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and a
satisfactory opinion of counsel is furnished to the Owner
Trustee such effect;
(viii) the Purchaser is not, and is not purchasing for,
or on behalf of, (1) an employee benefit plan,
retirement arrangement, individual retirement account
or Keogh Plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended, or (2) an entity (including an
insurance company general account) whose underlying
assets include plan assets by reason of any such plan's
arrangements or account's investment in any such entity.
(ix) the Purchaser understands that the Certificates bear, and will
continue to bear, a legend to substantially the following
effect:
(x) the Purchaser is a United States Person within the meaning of
Section 7701(a)(30) of the Internal Revenue code of 1986, as
amended
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR KEOGH PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which it has reasonable grounds to believe and does believe can make
representations with respect to itself to substantially the same effect as the
representations set forth herein.
Terms not otherwise defined shall have the meanings assigned to them
in the Trust Agreement.
Very truly yours,
_________________________
By: ________________________
(Authorized Officer)
Exhibit 99.1
NOTE GUARANTY INSURANCE POLICY
OBLIGATIONS: $90,000,000 POLICY NUMBER: 25491
The Money Store Auto Trust 1997-4
Class A-1 and Class A-2 and Class A-3
Asset Backed Notes
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment
of the premium and subject to the terms of this Note Guaranty Insurance Policy
(this "Note Policy"), hereby unconditionally and irrevocably guarantees to any
Noteholder that an amount equal to each full and complete Note Insured Payment
will be received from the Insurer by The Chase Manhattan Bank, or its successor,
as Indenture Trustee for the Noteholders (the "Indenture Trustee"), on behalf of
the Noteholders, for distribution by the Indenture Trustee to each Noteholder of
each Noteholder's proportionate share of the Note Insured Payment. The Insurer's
obligations hereunder with respect to a particular Note Insured Payment shall be
discharged to the extent funds equal to the applicable Note Insured Payment are
received by the Indenture Trustee, whether or not such funds are properly
applied by the Indenture Trustee. Note Insured Payments shall be made only at
the time set forth in this Note Policy and no accelerated Note Insured Payments
shall be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Note Policy does not cover
shortfalls, if any, attributable to the liability of the Trust or the Indenture
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Note Insured Payment that is a Note Preference
Amount on the Business Day following receipt on a Business Day by the Fiscal
Agent (as described below) of (i) a certified copy of the order requiring the
return of such preference payment, (ii) an opinion of counsel satisfactory to
the Insurer that such order is final and not subject to appeal, (iii) an
assignment in such form as is reasonably required by the Insurer, irrevocably
assigning to the Insurer all rights and claims of the Noteholder relating to or
arising under the Obligations against the debtor which made such preference
payment or otherwise with respect to such preference payment and (iv)
appropriate instruments to effect the appointment of the Insurer as agent for
such Noteholder in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to the Insurer, provided that if such
documents are received after 12:00 noon New York City time on such Business Day,
they will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the final
order of the court exercising jurisdiction on behalf of the Noteholder and not
to any Noteholder directly unless such Noteholder has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy, in
which case such payment shall be disbursed to such Noteholder.
The Insurer will pay any other amount payable hereunder no later than 12:00
noon New York City time on the later of the Distribution Date or the Class A-1
Final Scheduled Distribution Date, as applicable, on which the related Note
Deficiency Amount is due or the second Business Day following receipt in New
York, New York on a Business Day by State Street Bank and Trust Company, N.A.,
as Fiscal Agent for the Insurer or any successor fiscal agent appointed by the
Insurer (the "Fiscal Agent") of a Notice (as described below), provided that if
such Notice is received after 12:00 noon New York City time on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making claim hereunder it shall be deemed not to
have been received by the Fiscal Agent for purposes of this paragraph, and the
Insurer or the Fiscal Agent, as the case may be, shall promptly so advise the
Indenture Trustee and the Indenture Trustee may submit an amended Notice.
Note Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the
Noteholders by wire transfer of immediately available funds in the amount of the
Note Insured Payment less, in respect of Note Insured Payments related to Note
Preference Amounts, any amount held by the Indenture Trustee for the payment of
such Note Insured Payment and legally available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Noteholders for any acts of the Fiscal Agent or
any failure of the Insurer to deposit or cause to be deposited, sufficient funds
to make payments due under this Note Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Noteholder to receive payments under the Obligations to the
extent of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Sale and Servicing Agreement dated as of November 30,
1997 among The Money Store Auto Trust 1997-4 as Issuer, TMS Auto Holdings, Inc.,
as Seller, The Money Store Auto Finance Inc., as Servicer and The Money Store
Inc. as Representative, without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which the Insurer or banking institutions in New York City or in the city in
which the corporate trust office of the Indenture Trustee is located are
authorized or obligated by law or executive order to close.
"Class A-1 Note Policy Claim Amount" for the Class A-1 Final Scheduled
Distribution Date, shall equal the lesser of (i) the sum of the amounts required
to be distributed pursuant to Section 5.6(c)(i) and (ii) of the Agreement on the
Class A-1 Final Scheduled Distribution Date, and (ii) the excess, if any, of the
amount specified in clause (i) over the Class A-1 Distribution Amount with
respect to the Class A-1 Final Scheduled Distribution Date.
"Note Deficiency Amount" means (i) for any Distribution Date, (a) the
excess, if any, of the Noteholders' Interest Distributable Amount over the
Distribution Amount remaining after payment of amounts pursuant to Section
5.6(b)(i) and (ii) of the Agreement and (b) the excess, if any, of the
Noteholders' Principal Distributable Amount over the Distribution Amount
remaining after payment of amounts pursuant to Section 5.6(b)(i)-(iii) of the
Agreement or (ii) for the Class A-1 Final Scheduled Distribution Date, the Class
A-1 Note Policy Claim Amount.
"Noteholder" means each holder of a Note who, on the applicable
Distribution Date, is entitled under the terms of the applicable Obligations to
payment thereunder.
"Note Insured Payment" means (i) as of any Distribution Date or for the
Class A-1 Final Scheduled Distribution Date, as applicable, any Note Deficiency
Amount and (ii) any Note Preference Amount.
"Note Preference Amount" means any amount previously distributed to a
Noteholder on the Obligations that is recoverable and sought to be recovered as
a voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time in accordance with a
final nonappealable order of a court having competent jurisdiction.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Indenture Trustee specifying the Note Insured Payment which shall be
due and owing on the applicable Distribution Date.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Note Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Indenture Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006 Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify in writing to the Indenture
Trustee in writing.
This Note Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Note Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Note Policy is not cancelable for any reason. The premium on this Note
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Note Policy to be executed
and attested this 30th day of December, 1997.
MBIA INSURANCE CORPORATION
By /s/ Richard Weill
President
Attest:
By /s/
Assistant Secretary
<PAGE>
EXHIBIT A
TO NOTE GUARANTY INSURANCE
POLICY NUMBER: 25491
NOTICE UNDER NOTE GUARANTY
INSURANCE POLICY NUMBER: 25491
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of The Chase Manhattan Bank, as
indenture trustee (the "Indenture Trustee"), hereby certifies to State Street
Bank and Trust Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation
(the "Insurer"), with reference to Note Guaranty Insurance Policy Number: 25491
(the "Note Policy") issued by the Insurer in respect of the $90,000,000 The
Money Store Auto Trust 1997-4, Class A-1, and Class A-2 Asset Baked Notes and
Class A-3 Asset Backed Notes (the "Obligations"), that:
(i) the Indenture Trustee is the indenture trustee under the
Indenture dated as of November 30, 1997 among the Trust and the
Indenture Trustee, without regard to any amendment or supplement
thereto;
(ii) the amount due under clause (i) (a) of the definition of
Note Deficiency Amount for the Distribution Date occurring on [ ] (the
"Applicable Distribution Date") is $[ ];
(iii) the amount due under clause (i) (b) of the definition of
Note Deficiency Amount for the Applicable Distribution Date is $[ ];
(iv) the amount due under clause (ii) of the definition of
Note Deficiency Amount for the Class A-1 Final Scheduled Distribution
Date is $[ ];
(v) the sum of the amounts listed in paragraphs (ii) (iii) and
(iv) above is $[ ] (the "Note Deficiency Amount");
(vi) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $[ ] (the "Note Preference
Amount");
(vii) the total Note Insured Payment due is $[ ], which
amount equals the sum of the Note Deficiency Amount and the Note
Preference Amount;
(viii) the Indenture Trustee is making a claim under and
pursuant to the terms of the Note Policy for the dollar amount of the
Note Insured Payment set forth in (iv) above to be applied to the
payment of the Note Deficiency Amount for the Applicable Distribution
Date or the Class A-1 Final Scheduled Distribution Date, as applicable
in accordance with the Agreement and for the dollar amount of the
Note Insured Payment set forth in (v) above to be applied to the
payment of any Note Preference Amount; and
(ix) the Indenture Trustee directs that payment of the
Note Insured Payment be made to the following account by bank wire
transfer of federal or other immediately available funds in accordance
with the terms of the Note Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Note Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
or Other Person Files An Application For Insurance or Statement of Claim
Containing Any Materially False Information, or Conceals For The Purpose of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this
Notice under the Note Policy as of the [ ] day of [ ].
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By_________________________
Title______________________
