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) June 29, 1999
The Money Store Commercial Mortgage Inc., as seller, under a
Sale and Servicing Agreement, dated as of May 31, 1999,
pursuant to which a portfolio of business loans have been sold
to The Money Store Business Loan Backed Trust 1999-1, which
has issued those certain Business Loan Backed Notes, Series
1999-1, under that certain Indenture dated as of May 31, 1999.
The Money Store Commercial Mortgage Inc.
Exact name of registrant as specified in its charter)
New Jersey 333-60771 22-2378261
(State or other (Commission File (IRS Employer ID
jurisdiction of Number) Number)
incorporation)
707 3rd Street, West Sacramento, California 95605
(Address of principal executive offices) (Zip Code)
Registrants' Telephone Number,
including area code: (916) 617-1000
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
This Current Report on Form 8-K is being filed with respect to certain
agreements entered into in connection with the issuance by The Money Store
Business Loan Backed Trust 1999-1 of The Money Store Business Loan Backed
Notes, Series 1999-1.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS
EXHIBIT NO.
1.1 Underwriting Agreement, dated June 24, 1999, among The Money Store
Inc. ("TMS"), The Money Store Commercial Mortgage Inc. (the "Seller"),
The Money Store Business Loan Backed Trust 1999-1 (the "Trust"), and
First Union Capital Markets Corp. ("First Union"), as representative
of the Underwriters named therein (the "Underwriters").
1.2 Pricing Agreement, dated June 24, 1999, among TMS, the Seller, the
Trust and First Union, as representative of the Underwriters.
4.1 Sale and Servicing Agreement, dated as of May 31, 1999, among TMS, the
Seller and the Trust.
4.2 Trust Agreement, dated as of May 31, 1999 between the Seller and Chase
Manhattan Bank Delaware, as Owner Trustee.
4.3 Indenture, dated as of May 31, 1999, between the Trust and HSBC Bank
USA, as Indenture Trustee (the "Indenture Trustee").
4.4 Interest Rate Services Agreement, dated as of June 29, 1999, between
First Union, as representative of TMS, and the Indenture Trustee.
<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.
THE MONEY STORE COMMERCIAL MORTGAGE INC.
By: /s/ Bruce Hurwitz
----------------------------------
Name: Bruce Hurwitz
Title: Senior Vice President
Dated: July 6, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT
1.1 Underwriting Agreement, dated June 24, 1999, among The Money Store
Inc. ("TMS"), The Money Store Commercial Mortgage Inc. (the "Seller"),
The Money Store Business Loan Backed Trust 1999-1 (the "Trust"), and
First Union Capital Markets Corp. ("First Union"), as representative
of the Underwriters named therein (the "Underwriters").
1.2 Pricing Agreement, dated June 24, 1999, among TMS, the Seller, the
Trust and First Union, as representative of the Underwriters.
4.1 Sale and Servicing Agreement, dated as of May 31, 1999, among TMS, the
Seller and the Trust.
4.2 Trust Agreement, dated as of May 31, 1999 between the Seller and Chase
Manhattan Bank Delaware, as Owner Trustee.
4.3 Indenture, dated as of May 31, 1999, between the Trust and HSBC Bank
USA, as Indenture Trustee (the "Indenture Trustee").
4.4 Interest Rate Services Agreement, dated as of June 29, 1999, between
First Union, as representative of TMS, and the Indenture Trustee.
EXHIBIT 1.1
EXECUTION COPY
$137,788,000 Class AS-1 Notes
$141,057,000 Class AS-2 Notes
$190,443,000 Class AS-3 Notes $
22,084,000 Class MS-1 Notes
$ 23,463,000 Class M-2 Notes
$ 12,423,000 Class BS Notes
$ 55,395,000 Class AN Notes
$ 2,229,000 Class MN Notes
$ 4,457,000 Class BN Notes
THE MONEY STORE INC.
The Money Store Business Loan Backed Trust 1999-1
(Series 1999-1 Notes)
UNDERWRITING AGREEMENT
June 24, 1999
First Union Capital Markets Corp.,
as Representative of the Several
Underwriters named herein
One First Union Center
301 South College Street, DC-8
Charlotte, North Carolina 28288-0600
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), as
Representative of the Seller, and the Seller proposes to cause The Money Store
Business Loan Backed Trust 1999-1 (the "Trust") to issue: Class AS-1 Notes in
the aggregate original principal amount of $137,788,000 (the "Class AS-1
Notes"), Class AS-2 Notes in the aggregate original principal amount of
$141,057,000 (the "Class AS-2 Notes"), Class AS-3 Notes in the aggregate
original principal amount of $190,443,000 (the "Class AS-3 Notes"), Class MS-1
Notes in the aggregate amount of $22,084,000 (the "Class MS-1 Notes"), Class
MS-2 Notes in the aggregate original principal amount of $23,463,000 (the "Class
MS-2 Notes"), the Class BS Notes in the aggregate original principal amount of
$12,423,000 (the "Class BS Notes"), the Class AN Notes in the aggregate original
principal amount of $55,395,000 (the "Class AN Notes"), the Class MN Notes in
the aggregate original principal amount of $2,229,000 (the "Class MN Notes"),
and the Class BN Notes in the aggregate original principal amount of $4,457,000
(the "Class BN Notes" and together with the Class AS-1, Class AS-2, Class AS-3,
Class MS-1, Class MS-2, Class BS, Class AN, and Class MN Notes, the "Notes")
and, the Company, the Seller and the Trust hereby confirm their agreement with
First Union Capital Markets Corp. ("First Union" or the "Representative") on
behalf of one or more Underwriters listed on Annex B hereto (the
"Underwriters"), to sell the Notes to the Underwriters on the terms and
conditions hereof. The Trust will be formed pursuant to the Trust Agreement (the
"Trust Agreement"), dated as of May 31, 1999 between the Seller and Chase
Manhattan Bank Delaware, as owner trustee (the "Owner Trustee"). The Notes will
be issued pursuant to an Indenture (the "Indenture"), dated as of May 31, 1999,
between the Trust and the Bank of New York, as trustee (the "Indenture
Trustee"). The primary assets of the Trust will consist of two pools ("Pool I"
and "Pool II," respectively, and collectively, the "Pools") of loans (the
"Loans") having the characteristics described in the Prospectus Supplement (as
defined below).
Simultaneously with the issuance and delivery of the Notes as
contemplated herein, the Trust Agreement provides for the issuance of trust
certificates entitled The Money Store Business Loan Backed Trust 1999-1, Class
I, Class II and Class R Certificates (collectively, the "Certificates"). The
Certificates will evidence fractional interests in the Trust (the Notes and the
Certificates are collectively referred to as the "Securities"). The Certificates
are not being delivered to the Underwriters hereunder.
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Sale and Servicing Agreement dated as
of May 31, 1999 among the Seller, as seller and servicer, the Company, as
representative, and the Trust (the "Sale and Servicing Agreement").
Prior to the delivery of the Notes by the Trust, and the public
offering thereof by the Underwriters, Seller, the Company, the Trust and the
Representative, as representative of the Underwriters, shall enter into an
agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). 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.
The Company, the Trust and the Seller 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 THE COMPANY AND THE
SELLER.
(a) The Company 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) The Company, on behalf of the Seller, has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-32775) including a prospectus, and such
amendments thereto as may have been required to the date hereof,
relating to the Certificates and the offering thereof from time to
time in accordance with Rule 415 under the Securities Act of 1933, as
amended (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 Certificates 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 the Company 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 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 Representative, as representative of the Underwriters,
by the Company for use in connection with the offering of the
Certificates 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 Representative, as
representative of the Underwriters, for such use) and at Closing Date
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 the Company in writing by any Underwriter through the
Representative expressly for use in the Registration Statement or
Prospectus; and provided further, that neither the Company nor the
Seller makes any representations or warranties as to any information
in any Computational Materials (as defined in Section 11 below)
provided by any Underwriter to the Company 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 the Company
to the applicable Underwriter. The conditions to the use by the
Company 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 Company, the Seller and their
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 the Company and the Seller to perform their
obligations under the Basic Documents (as defined below) and (B) there
have been no transactions entered into by the Company or the Seller or
any of their subsidiaries, other than those in the ordinary course of
business, which would have a material adverse effect on the ability of
the Company and the Seller to perform their obligations under this
Agreement, the Pricing Agreement, the Sale and Servicing Agreement,
the Indenture and the Trust Agreement, as applicable (this Agreement,
the Pricing Agreement, the Sale and Servicing Agreement, the Indenture
and the Trust Agreement being herein referred to, collectively, as the
"Basic Documents").
iv) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of New
Jersey 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 the Company 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 Company's ability to
perform its obligations under the Basic Documents, or (B) the
business, properties, financial position, operations or results of
operations of the Company.
v) The Seller 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 the Seller 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 Seller's ability to perform
its obligations under the Basic Documents, or (B) the business,
properties, financial position, operations or results of operations of
the Seller.
vi) Any person who signed this Agreement on behalf of the Company
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 the Company
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.
vii) Each Basic Document to which it is a party has been duly and
validly authorized by the Company and the Seller, as the case may be,
and, when executed and delivered by the Company and the Seller and
duly and validly authorized, executed and delivered by the other
parties thereto, will constitute, the valid and binding agreement of
the Company and the Seller, 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 conform in all material respects to the statements relating
thereto contained in the Prospectus.
viii) 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
Certificates, when duly and validly executed by the Owner Trustee,
authenticated and delivered in accordance with the Trust Agreement,
and delivered and paid for pursuant thereto will be validly issued and
outstanding and entitled to the benefits of the Trust Agreement. The
Securities conform in all material respects to all statements relating
thereto contained in the Prospectus.
ix) Neither the issuance or delivery of the Notes or the
Certificates, nor the consummation of any other of the transactions
herein contemplated or in any other Basic Document to which it is a
party nor the execution and delivery by the Company and the Seller of
the Basic Documents to which it is a party nor the fulfillment of the
terms of each Basic Document to which it is a party will result in the
breach of any term or provision of the charter or by-laws of the
Company and the Seller, and the Company and the Seller are not 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 the
Company or the Seller is a party or by which it may be bound, or to
which any of the property or assets of the Company or the Seller are
subject, or (B) any law, decree, order, rule or regulation applicable
to the Company and the Seller of any court or supervisory, regulatory,
administrative or governmental agency, body or authority, or
arbitrator having jurisdiction over the Company or the Seller or their
properties, the default in or the breach or violation of which would
have a material adverse effect on the Company or the Seller or the
ability of the Company and the Seller to perform their obligations
under the Basic Documents to which it is a party; and neither the
issuance or delivery of the Notes or Certificates nor the consummation
of any other of the transactions herein contemplated, nor the
fulfillment of the terms of the Notes or the Certificates or the Basic
Documents will result in such a breach, violation or default which
would have such a material adverse effect.
x) Except as described in the Prospectus, there is no action,
suit or proceeding against or investigation of the Company or the
Seller, now pending, or, to the knowledge of the Company and the
Seller, threatened against the Company or the Seller, 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, the Notes or the
Certificates, (2) seeking to prevent the issuance of the Notes or the
Certificates, Certificates or the consummation of any of the
transactions contemplated by the Basic Documents, (3) which would
materially and adversely affect the performance by the Company or the
Seller 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 the Certificates, or (4) seeking to adversely affect the
federal income tax attributes of the Certificates described in the
Prospectus; all pending legal or governmental proceedings to which the
Company or the Seller is a party or of which any of its 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 the Company's or the
Seller's ability to perform its obligations under the Basic Documents
to which it is a party.
xi) The Company and the Seller possess 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 them (except where the failure
to possess any such license, certificate, authority or permit would
not materially and adversely affect the holders of the Notes or the
Certificates) and neither the Company nor the Seller 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 the
Company to perform its obligations under the Basic Documents.
xii) 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 have been
obtained or will be obtained prior to the Closing Date and except as
may be required under state securities laws.
xiii) At the time of execution and delivery of the Indenture, the
Trust will have acquired good title to the related Loans, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, and, upon delivery to the Underwriters of the Notes
which they purchase, the Underwriters will have good and marketable
title to such Notes free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
xiv) The transfer of the Loans to the Trust at Closing Date will
be treated by the Company and the Seller for financial accounting and
reporting purposes as a contribution of assets and not as a pledge of
assets to secure debt.
xv) Each assignment of Mortgage required to be prepared pursuant
to the Sale and Servicing Agreement is based on forms recently
utilized by the Seller with respect to mortgaged properties located in
the appropriate jurisdiction and used in the regular course of the
Seller's business. Upon execution each such assignment will be in
recordable form, and it is reasonable to believe that it will be
sufficient to effect the assignment of the Mortgage to which it
relates as provided in the Pooling and Servicing Agreement.
xvi) 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 Securities which have become
due or will become due on or prior to Closing Date shall have been
paid at or prior to Closing Date.
xvii) The Trust is not required to be registered as an
"investment company" under the Investment Company Act of 1940 (the
"1940 Act").
(b) Any certificate signed by any officer of the Company or the Seller
and delivered to the Representative, as representative of the Underwriters, or
counsel for the Underwriters shall be deemed a representation and warranty by
the Company and the Seller 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 to each Underwriter, severally and not
jointly, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Trust, the Notes set forth below its name in Annex B hereto at
the price set forth in the Pricing Agreement. In the event that the interest
rates for each Class of 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, as
representative of the Underwriters, and the Company.
(b) Delivery of the Securities 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 Underwriters and the Company, at
11:00 A.M., New York City time, on June 29, 1999, or such other time not later
than ten business days after such date as shall be agreed upon by The
Representative, as representative of the Underwriters, and the Company (such
time and date of payment and delivery being herein called "Closing Date").
Each Class of Notes will initially be represented by one note
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC") (the "DTC Notes"). The interests of beneficial owners of the DTC
Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive certificates evidencing the Notes will
be available only under the limited circumstances specified in the Sale and
Servicing Agreement. The interest in the DTC Notes to be purchased by the
applicable Underwriter will be delivered by the Trust to the applicable
Underwriter (which delivery shall be made through the facilities of DTC) against
payment of the purchase price therefor as set forth in the Pricing Agreement.
The Notes will be made available for examination and packaging by the
Representative, as representative of the Underwriters, not later than 10:00 A.M.
on the last business day prior to Closing Date.
Section 3. COVENANTS OF THE COMPANY AND THE SELLER. The Company and
the Seller covenant with each of the Underwriters as follows:
(a) The Company will promptly notify the Representative, as
representative of the Underwriters, 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 the Company of any notification with
respect to the suspension of the qualification of the Certificates for
sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose. The Company 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) The Company will give the Representative, as representative
of the Underwriters, notice of its intention to file or prepare any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus (including any revised prospectus which the Company
proposes 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, as representative of the Underwriters, 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, as representative of
the Underwriters, or counsel for the Underwriters shall reasonably
object.
(c) The Company will deliver to the Representative, as
representative of the Underwriters, 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) The Company will furnish to the Representative, as
representative of the Underwriters, 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, the Company will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to
counsel for the Underwriters) 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 the Company
will furnish to the Representative, as representative of the
Underwriters, a reasonable number of copies of such amendment or
supplement.
(f) The Company and the Seller will endeavor, in cooperation with
the Representative, as representative of the Underwriters, 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, as representative of the Underwriters, may designate;
provided, however, that neither the Company 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, the Company 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) So long as any Notes shall be outstanding, the Company and
the Seller will deliver to the Representative, as representative of
the Underwriters, as promptly as practicable, such information
concerning the Company, the Seller or the Certificates as the
Representative may reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES. The Company 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; (iii) the preparation,
printing, issuance and delivery of the certificates for the DTC Notes to the
Underwriters; (iv) the fees and disbursements of (A) the Company's counsel, (B)
the Underwriters' counsel, (C) KPMG Peat Marwick, accountants for the Company
and issuer of the comfort letters, (D) the Owner Trustee and its counsel, (E)
the Indenture Trustee and its counsel, and (F) DTC in connection with the
book-entry registration of the DTC Notes; (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 any of Duff
& Phelps Credit Rating Co. ("DCR") or Moody's Investors Service, Inc.
("Moody's," and together with DCR, the "Rating Agencies") for rating the Notes;
and (viii) the reproducing and delivery to the Underwriters of copies of the
Blue Sky Survey.
If this Agreement is terminated by the Representative, as
representative of the Underwriters, in accordance with the provisions of Section
5 or Section 9(a)(i), the Company and the Seller shall reimburse the
Underwriters severally for all of their 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, in the Representative's
sole discretion, to the accuracy of the representations and warranties of the
Company and the Seller herein contained, to the performance by the Company 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 Date, 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 Date, the Prospectus shall have been filed with the
Commission in accordance with Rule 424 of the 1933 Act Regulations.
(b) At Closing Date, the Representative, as representative of the
Underwriters, shall have received:
i) The favorable opinion, dated as of Closing Date, of Stroock &
Stroock & Lavan LLP, counsel for the Underwriters, to the effect that:
(A) To the best of their knowledge and information, the
Registration Statement is effective under the 1933 Act and 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 or incorporated 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 "Description of
the Securities" and "The Agreements" and the information in the
Prospectus Supplement under "The Transfer and Servicing Agreements"
and "Description of The Notes," insofar as they constitute
summaries of certain provisions of the Notes and the Certificates,
the Indenture, the Trust Agreement and the Sale and Servicing
Agreement, summarizes fairly such provisions.
(D) The information in the Prospectus under "Summary of
Terms - Federal Income Tax Consequences," "Summary of Terms - ERISA
Considerations," "Certain Legal Aspects of the Mortgage Loans"
Federal Income Tax Consequences," "ERISA Considerations" and "Risk
Factors - The Status of the Mortgage Loans in the Event of
Bankruptcy of The Representative or an Originator" and in the
Prospectus Supplement under "Summary of Terms - Tax
Considerations," "Summary of Terms - ERISA Considerations,"
"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) [Reserved].
(F) Assuming due authorization, execution and delivery by
the other parties thereto (including but not limited to the
Seller), (i) the Sale and Servicing Agreement, the Pricing
Agreement and this Agreement are legal, valid and binding
agreements enforceable in accordance with their respective terms
against the Company and (ii) the Indenture is a legal, valid and
binding Agreement enforceable in accordance with its terms against
the Trust, 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.
(G) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of, or compliance by the
Company with, this Agreement, the Sale and Servicing Agreement and
the Pricing Agreement or the offer, issuance, sale or delivery of
the Notes, or the consummation of any other transactions by the
Company contemplated by this Agreement, the Sale and Servicing
Agreement and the Pricing Agreement, 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.
(H) Neither the consummation of the transactions
contemplated by, nor the fulfillment of the terms of, this
Agreement, the Sale and Servicing Agreement, the Pricing Agreement,
and the Notes, conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default
under (a) the terms of any material indenture or other material
agreement or instrument of which counsel has knowledge to which the
Company is a party or by which it is bound or to which it is
subject or (b) any statute or order, rule, regulation, writ,
injunction or decree of which counsel has knowledge of any court,
governmental authority or regulatory body to which the Company is
subject or by which it is bound.
(I) The delivery of each Business Note and the related
Mortgage, if any, by an Seller as and in the manner contemplated by
the Underwriting Agreement and the Sale and Servicing Agreement is
sufficient fully to transfer to the Trust all right, title and
interest of the Seller in and to each such Loan including, without
limitation, the right to enforce each such Loan in accordance with
its terms to the extent enforceable by the Seller at the time of
such delivery. With respect to the transfer of the Loans by the
Seller, such counsel shall express no opinion as to (i) whether the
laws of the State of New York would apply to the transfer of the
related Mortgages or (ii) the effectiveness of the transfer of the
Mortgages under the laws of the jurisdictions in which the Seller
is located (other than Mortgages relating to Mortgaged Properties
situated in California or New York) or in which the Mortgaged
Properties are situated (other than Mortgaged Properties situated
in California, Florida or New York) or the right of the Trust to
enforce such Mortgages.
(J) The Notes, assuming due execution by the Company, due
authorization by the Indenture Trustee and delivery and payment
therefore pursuant to the Underwriting Agreement, will be validly
issued and outstanding and entitled to the benefits of the
Indenture and the Sale and Servicing Agreement.
(K) The Sale and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended. The
Trust created by the Trust Agreement is not required to be
registered under the Investment Company Act of 1940, as amended.
(L) The Indenture has been duly qualified under the Trust
Indenture Act.
(M) Assuming compliance with all provisions of the Basic
Documents, for Federal income tax purposes, REMIC I and REMIC II
will each qualify as a REMIC, the Pool I Notes and the Class I
Certificates will constitute "regular interests" in a REMIC and the
Class R-I and Class R-II Interests will constitute the single class
of "residual interests" in REMIC I and REMIC II, respectively,
within the meaning of the REMIC Provisions.
(N) The Pool II Notes will be treated as debt for federal
income tax purposes, rather than equity interests in an association
or publicly traded partnership.
(O) For Federal income tax purposes, the Trust will not be
characterized as an association or a publicly traded partnership,
taxable mortgage pool or other entity taxable as a corporation.
Stroock & Stroock & Lavan LLP shall additionally provide an opinion,
in form and substance satisfactory to the Rating Agencies, regarding the
creation, attachment, perfection and priority of a security interest in the
Loans 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. 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 the Company for use in connection with the offering of the
Securities 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 on Closing Date, 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 the financial, numerical, statistical and
quantitative information contained therein as to which such counsel need express
no view).
In rendering such opinion, Stroock & Stroock & Lavan LLP may rely on
certificates of responsible officers of the Company, the Indenture Trustee, the
Owner Trustee, and public officials or, as to matters of law other than New
York, California or Federal law, on opinions of other counsel (copies of which
opinions shall be delivered to you and upon which you may rely).
ii) The favorable opinion, dated as of Closing Date, of counsel for
the Company and the Seller, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(A) The Company has been duly organized and is validly existing
and is in good standing under the laws of the State of New Jersey. The
Seller has been duly organized under the laws of New Jersey and is
qualified to transact business in the laws of the states in which all
items of Collateral underlying the Loans originated or acquired by the
Seller are located or is otherwise exempt under applicable law from
such qualification.
(B) The Company and the Seller have the power to engage in the
transactions contemplated by this Agreement, the Sale and Servicing
Agreement, in the case of the Company, the Pricing Agreement and in
the case of the Seller, the Trust Agreement, and have all requisite
power, authority and legal right to execute and deliver this
Agreement, the Sale and Servicing Agreement, and, in the case of the
Company, the Pricing Agreement and in the case of the Seller, the
Trust 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 Sale and Servicing Agreement, the Pricing
Agreement and the Certificates each have been duly authorized,
executed and delivered by the Company; this Agreement, the Trust
Agreement and the Sale and Servicing Agreement each have been duly
authorized, executed and delivered by the Seller and, assuming due
authorization, execution and delivery by the other parties thereto,
are legal, valid and binding agreements of the Company and the Seller,
as the case may be, 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 the Company and the Seller, 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.
(D) Neither the transfer of the Loans to the Trust, the
consummation of the transactions contemplated by, nor the fulfillment
of the terms of, this Agreement, the Sale and Servicing Agreement in
the case of the Company, the Pricing Agreement and in the case of the
Seller, the Trust Agreement, (A) conflicts or will conflict with or
results or will result in a breach of or constitutes or will
constitute a default under the Certificates of Incorporation or Bylaws
of the Company or the Seller, or the terms of any material indenture
or other material agreement or instrument of which such counsel has
knowledge to which the Company or the Seller are a party or by which
it is bound or to which it is subject, or (B) results in, or will
result in the creation or imposition of any lien or encumbrance upon
the Trust or upon the related Securities, except as otherwise
contemplated by the Sale and Servicing Agreement, or (C) any statute
or order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company or the
Seller is subject or to which it is bound.
(E) 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 Company or the Seller
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
Company or the Seller or in any material impairment of the right or
ability of the Company or the Seller to carry on its business
substantially as now conducted or result in any material liability on
the part of the Company or the Seller or which would draw into
question the validity of this Agreement, the Pricing Agreement, the
Trust Agreement, or 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
the Company or the Seller to perform under the terms of this Agreement
or the Trust Agreement, and Servicing Agreement, in the case of the
Company, the Pricing Agreement or in the case of the Seller, the Trust
Agreement.
(F) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Company and the Seller of, or compliance by the
Company and the Seller with, this Agreement, the Pooling and Servicing
Agreement, or, in the case of the Company, the Pricing Agreement or in
the case of the Seller, the Trust Agreement, or the consummation of
the transactions contemplated therein, except such as may be required
under the blue sky laws of any jurisdiction and such other approvals
as have been obtained.
iii) The favorable opinion, dated as of the Closing Date, of Winston &
Strawn, counsel for the Indenture Trustee, in form and substance
satisfactory to counsel for the Underwriters.
iv) The favorable opinion, dated as of the Closing Date, of Jay
Powers, Esq., in-house counsel for First Union National Bank, in its
capacity as Custodian, in form and substance satisfactory to counsel for
the Underwriters.
v) The favorable opinion, dated as of the Closing Date, of Richards
Layton & Finger, counsel for the Owner Trustee, in form and substance
satisfactory, to counsel for the Underwriters.
vi) The favorable opinion, dated as of the Closing Date, of Bruce
Hurwitz, Senior Corporate Counsel to the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that, except as
set forth in the Prospectus Supplement, there is no action, suite,
proceeding or investigation pending or, to the best of such counsel's
knowledge, threatened against the Company or the Seller 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 Company or the Seller or in any
material impairment of the right or ability of the Company or the Seller to
carry on its business substantially as now conducted or result in any
material liability on the part of the Company or the Seller or which would
draw into question the validity of this Agreement, the Pricing Agreement,
the Indenture, the Notes, the Trust Agreement, the Certificates or 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 the Company or the Seller to perform under
the terms of this Agreement or the Sale and Servicing Agreement, the
Pricing Agreement, the Indenture, the Notes, the Trust Agreement or the
Certificates.
(c) At Closing Date, the Representative, as representative of the
Underwriters, shall have received from Stroock & Stroock & Lavan LLP, counsel
for the Underwriters, a letter, dated as of Closing Date, authorizing the
Representative, as representative of the Underwriters, to rely upon each opinion
delivered by Stroock & Stroock & Lavan LLP to either of DCR or Moody's in
connection with the issuance of the Notes as though each such opinion was
addressed to the Representative, as representative of the Underwriters, and
attaching a copy of each such opinion.
(d) At Closing Date 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 Company and the Seller and their subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Underwriter shall have received a certificate signed by one or
more duly authorized officers of the Company and the Seller, dated as of Closing
Date, 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 Date; (iii) the Company and the Seller have
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Date; 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.
(e) At or before the time of printing of the Prospectus
Supplement, the Representative, as representative of the Underwriters, shall
have received from KPMG Peat Marwick a letter dated as of Closing Date and in
form and substance satisfactory to the Representative, as representative of the
Underwriters, 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 Company's servicing
portfolio which are included in the Prospectus and which are specified by the
Representative, as representative of the Underwriters, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and the Seller
identified in such letter, (ii) the information contained in the weighted
average life tables contained in the Prospectus under the caption "Yield,
Maturity and Prepayment Considerations" and have found such information to be in
agreement with the corresponding information as computed by KPMG Peat Marwick
and (iii) certain information regarding the Loans and the 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(l) hereof and
setting forth the results of such specified procedures.
Notwithstanding the foregoing, if the letter delivered by KPMG Peat
Marwick on the Closing Date does not cover the information set forth in
subclause (iii), the Company shall cause KPMG Peat Marwick to deliver to the
Representative, as representative of the Underwriters, an additional letter
covering such information within 5 business days of the Closing Date.
(f) At Closing Date, the Representative, as representative of the
Underwriters, shall have received from the Indenture Trustee a certificate
signed by one or more duly authorized officers of the Indenture Trustee, dated
as of Closing Date, as to the due acceptance of the Indenture by the Indenture
Trustee, the due authentication of the Notes by the Indenture Trustee, and such
other matters as the Representative, as representative of the Underwriters,
shall request.
(g) [Reserved.]
(h) At Closing Date, the Representative, as representative of the
Underwriters, shall have received a certificate signed by one or more duly
authorized officers of the Company and the Seller, dated as of Closing Date to
the effect that:
i) the representations and warranties of the Company and the
Seller in each of the Basic Documents 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) the Company and the Seller have 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 Loans and the Notes;
iii) all statements and information contained in the Prospectus
Supplement under the captions "The Seller and The Money Store" and
"The Business Loan Pool" and in the Prospectus under the captions "The
Representative and the Originators" and "The SBA Loan Lending
Programs" 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 Loans required
to be furnished pursuant to the Sale and Servicing Agreement is true
and correct in all material respects and the Loans actually being
delivered to the Trust at Closing Date conform in all material
respects to the Pool information set forth in the Prospectus
Supplement;
v) the copies of the Charter and By-laws of the Company and the
Seller 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 Company or the Seller which if
adversely determined, individually or in the aggregate, would
adversely affect the Company's or the Seller's obligations under the
Basic Documents to which it is a party;
vii) each person who, as an officer or representative of the
Company or of the Seller, signed (a) this Agreement, (b) the Sale and
Servicing Agreement, (c) the Trust Agreement or (d) 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) a certified true copy of the resolutions of the board of
directors of the Company and the Seller with respect to the sale of
the Securities subject to this Agreement and the Sale and Servicing
Agreement, which resolutions have not been amended and remain in full
force and effect;
ix) all payments received with respect to the Loans after the
Cut-Off Date have been deposited in the Principal and Interest
Account, and are, as of the Closing Date, in the Principal and
Interest Account;
x) the Company has complied, and has ensured that the Seller has
complied, with all the agreements and satisfied, and has ensured that
the Seller has satisfied, all the conditions on its, and the Seller's,
part to be performed or satisfied in connection with the issuance,
sale and delivery of the Loans and the Notes; and
xi) all statements contained in the Prospectus with respect to
the Company and the Seller 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.
(i) At Closing Date, each Class of the Notes shall have received the
following ratings from each of DCR and Moody's:
CLASS DCR MOODY'S
----- --- -------
AS-1 AAA Aaa
AS-2 AAA Aaa
AS-3 AAA Aaa
MS-1 AA Aa1
MS-2 A A2
BS BBB Baa2
AN AAA Aaa
MN A A2
BN BBB Baa2
(j) At Closing Date, 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 Notes
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 the Company in
connection with the issuance and sale of the Notes as herein contemplated shall
be satisfactory in form and substance to the Representative, as representative
to the Underwriters, and counsel for the Underwriters.
(k) On or before the Closing Date the Company and the Seller shall
have delivered to the Indenture Trustee, to hold in trust for the benefit of the
holders of the Notes and the Certificates, the Loans (as defined in the
Prospectus) with aggregate outstanding principal balances as of the Cut-Off Date
of at least $615,810,348.49.
(l) On or before the Closing Date the Company shall have delivered to
the Representative a Current Report on Form 8-K containing a detailed
description of the Loans actually being delivered to the Trust at Closing Date,
in form and substance satisfactory to the Representative.
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, as representative to the Underwriters, by notice to the
Company at any time at or prior to Closing Date, 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) The Company and the Seller jointly and severally agree to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls each 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 the Company; and
iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by such Underwriter), reasonably
incurred 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 the
Prospectus or any preliminary prospectus shall not inure to the
benefit of any 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 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.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and the Seller, their directors, each of the Company's and the Seller's
officers who signed the Registration Statement, and each person, if any, who
controls the Company 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 (w) the first sentence of the second to last paragraph
on the front cover page of the Prospectus (discussing the plan of distribution),
(x) the second sentence of the fifth paragraph on the inside cover of the
Prospectus (discussing the risk of a lack of secondary trading), (y) the second
paragraph under the heading "Underwriting" in the Prospectus 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 Seller 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.
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, the
Company 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 the Company and the Seller jointly and
severally, on the one hand, and the Underwriters, on the other hand, as
incurred, in such proportions that each Underwriter is responsible for that
portion represented by the underwriting discount allocated to the principal
amount of Notes set forth next to each Underwriter's name on Annex B hereto (or,
with respect to Computational Materials furnished by an 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 excess of the principal amount of Notes set forth next to such
Underwriter's name on Annex B hereto over the underwriting discount allocated to
such principal amount of Notes), and the Company 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. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Notes set forth next to the
name of such Underwriter on Annex B hereto were offered to the public exceeds
the amount of any damages such Underwriter has 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 such Underwriter and each respective director of the Company and the Seller,
each officer of the Company and the Seller who signed the Registration
Statement, and each respective person, if any, who controls the Company and the
Seller within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company and 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
the Company 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 any of the Underwriters or any controlling person thereof, or by or on behalf
of the Company and the Seller, and shall survive delivery of the Notes to the
Underwriter.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative, as representative of the Underwriters,
may terminate this Agreement, by notice to the Company and the Seller, at any
time at or prior to Closing Date (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 the Company and the Seller considered as one entity
which, in the reasonable judgment of the Representative, as representative of
the Underwriters, materially impairs the investment quality of the Certificates;
(ii) 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; (iii) if any banking
moratorium has been declared by Federal or New York authorities; or (iv) 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
judgment of the Representative, as representative of the Underwriter, 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 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. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the
Underwriters shall fail at Closing Date to purchase the Notes which it is
obligated to purchase hereunder (the "Defaulted Notes"), the remaining
Underwriters (the "Non-Defaulting Underwriters") shall have the right, but not
the obligation, within one (1) Business Day thereafter, to make arrangements to
purchase all, but not less than all, of the Defaulted Notes upon the terms
herein set forth; if, however, the Non-Defaulting Underwriters shall have not
completed such arrangements within such one (1) Business Day period, then this
Agreement shall terminate without liability on the part of the Non-Defaulting
Underwriters.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Non-Defaulting Underwriters or the
Company shall have the right to postpone Closing Date for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
Section 11. 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 the Company with
representative forms of all Computational Materials prior to their first
use, to the extent such forms have not previously been approved by the
Company for use by such Underwriter. The Underwriter shall provide to the
Company, 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 the Company 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 the Company 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 the Company of all Computational Materials required to be
delivered in accordance with subsection (a)(iii) above, the Company 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 the Company to comply
with its agreement set forth in Section 11(b) to file the Computational
Materials by the time specified therein.
vi) The Company 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 12. 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
Underwriters shall be directed to First Union, as representative of the
Underwriters, One First Union TW-8, Charlotte, North Carolina 28288, Attention:
Patrick J. Tadie (Fax: (704) 383-6382); and notices to the Company or the Seller
shall be directed to it at 707 3rd Street; West Sacramento, California 95605,
Attention: Executive Vice President (Fax: (916) 617-2693).
Section 13. PARTIES. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Underwriters, the
Company, 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,
the Company, 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, the Company, 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 Certificates from the
Underwriter shall be deemed to be a successor by reason merely of such purchase.
The Company and the Seller shall be jointly and severally liable for all
obligations incurred under this Agreement and the Pricing Agreement.
Section 14. 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 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 15. 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.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Trust, the Underwriter and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By: /s/ Arthur Lyon
----------------------------
Name: Arthur Lyon
Title: Senior Vice President/CFO
THE MONEY STORE COMMERCIAL
MORTGAGE, INC.
By: /s/ Paul Leliakov
-----------------------------
Name: Paul Leliakov
Title: President
THE MONEY STORE
BUSINESS LOAN BACKED TRUST 1999-1
By: Chase Manhattan Bank Delaware,
not in its individual capacity but solely
as Owner Trustee
By: /s/ Denis Kelly
------------------------------
Name: Denis Kelly
Title: Assistant Vice President
<PAGE>
CONFIRMED AND ACCEPTED, as of
the date first above written:
FIRST UNION CAPITAL MARKETS CORP.,
for itself and as Representative of
the several underwriters listed on
Annex A hereto
By: /s/ William W. Ingram
--------------------------------
Name: William W. Ingram
Title: Managing Director
<PAGE>
<TABLE>
<CAPTION>
ANNEX A
LIST OF UNDERWRITERS
FIRST UNION PRUDENTIAL SALOMON
CAPITAL SECURITIES SMITH BARNEY
MARKETS CORP. INCORPORATED INC.
------------- ------------ ------------
POOL I NOTES
<S> <C> <C> <C>
Class AS-1 ................ $ 68,644,000 $ 27,657,600 $ 41,486,400
Class AS-2 ................ $ 70,528,500 $ 28,211,400 $ 42,317,100
Class AS-3 ................ $190,443,000 $ -- $ --
Class MS-1 ................ $ 11,042,000 $ 4,416,800 $ 6,625,200
Class MS-2 ................ $ 11,731,000 $ 4,692,800 $ 7,039,200
Class BS ................. $ 12,423,000 $ -- $ --
POOL II NOTES
Class AN ................. $ 27,947,000 $ 11,079,200 $ 16,368,800
Class MN ................. $ 1,114,500 $ 445,800 $ 668,700
Class BN ................. $ 4,457,000 $ -- $ --
Total ................... $398,330,000 $ 76,503,600 $114,505,400
</TABLE>
EXHIBIT 1.2
THE MONEY STORE INC.
$137,788,000 Class AS-1 Notes
$141,057,000 Class AS-2 Notes
$190,443,000 Class AS-3 Notes
$ 22,084,000 Class MS-1 Notes
$ 23,463,000 Class M-2 Notes
$ 12,423,000 Class BS Notes
$ 55,395,000 Class AN Notes
$ 2,229,000 Class MN Notes
$ 4,457,000 Class BN Notes
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
PRICING AGREEMENT
June 24, 1999
First Union Capital Markets Corp.,
as Representative of and Underwriters
One First Union Center
301 South College Street, DC-8
Charlotte, North Carolina 28288-0600
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated June 24, 1999
(the "Underwriting Agreement"), relating to: Class AS-1 Notes in the aggregate
original principal amount of $137,788,000 (the "Class AS-1 Notes"), Class AS-2
Notes in the aggregate original principal amount of $141,057,000 (the "Class
AS-2 Notes"), Class AS-3 Notes in the aggregate original principal amount of
$190,443,000 (the "Class AS-3 Notes"), Class MS-1 Notes in the aggregate amount
of $22,084,000 (the "Class MS-1 Notes"), Class MS-2 Notes in the aggregate
original principal amount of $23,463,000 (the "Class MS-2 Notes"), the Class BS
Notes in the aggregate original principal amount of $12,423,000 (the "Class BS
Notes"), the Class AN Notes in the aggregate original principal amount of
$55,395,000 (the "Class AN Notes"), the Class MN Notes in the aggregate original
principal amount of $2,229,000 (the "Class MN Notes"), and the Class BN Notes in
the aggregate original principal amount of $4,457,000 (the "Class BN Notes" and
together with the Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2,
Class BS, Class AN, and Class MN Notes, the "Notes") and all issued by The Money
Store Business Loan Backed Trust 1999-1 (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, The Money Store
Inc. (the "Company") on behalf of itself and the Seller, hereto agree with the
Representative on behalf of the Underwriters identified in Annex B of the
Underwriting Agreement as follows:
1) The Class AS-1 Notes Remittance Rate shall be LIBOR plus 0.23% per annum.
2) The Class AS-2 Notes Remittance Rate shall be LIBOR plus 0.40% per annum.
3) The Class AS-3 Notes Remittance Rate shall be the Auction Rate.
4) The Class MS-1 Notes Remittance Rate shall be LIBOR plus 0.85% per annum.
5) The Class MS-2 Notes Remittance Rate shall be LIBOR plus 1.25% per annum.
6) The Class BS Notes Remittance Rate shall be LIBOR plus 3.00% per annum.
7) The Class AN Notes Remittance Rate shall be LIBOR plus 0.50% per annum.
8) The Class MN Notes Remittance Rate shall be LIBOR plus 1.25% per annum.
9) The Class BN Notes Remittance Rate shall be LIBOR plus 3.00% per annum.
8) The purchase price for the Notes in the aggregate shall be 99.625% of the
aggregate initial principal amount of the Notes.
9) The Notes shall be offered, from time to time, in negotiated transactions
or otherwise, at prices determined at the time of sale.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Trust, the Underwriter and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By: /s/ Arthur Lyon
----------------------------
Name: Arthur Leon
Title: Senior Vice President/CFO
THE MONEY STORE COMMERCIAL
MORTGAGE, INC.
By: /s/ Paul Leliakov
----------------------------
Name: Paul Leliakov
Title: President
THE MONEY STORE
BUSINESS LOAN BACKED TRUST 1999-1
By: Chase Manhattan Bank Delaware, not
in its individual capacity but solely
as Owner Trustee
By: /s/ Denis Kelly
----------------------------
Name: Denis Kelly
Title: Assistant Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
FIRST UNION CAPITAL MARKETS CORP.,
for itself and as Representative of
the several underwriters listed on
Annex A to the Underwriting Agreement
By: /s/ William W. Ingram
------------------------
Name: William W. Ingram
Title: Managing Director
EXHIBIT 4.1
EXECUTION COPY
- -------------------------------------------------------------------------------
SALE AND SERVICING
AGREEMENT
among
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
Issuer,
THE MONEY STORE COMMERCIAL MORTGAGE INC.
Seller and Servicer
and
THE MONEY STORE INC.
Representative
Dated as of May 31, 1999
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................1
Section 1.02 Other Definitional Provisions..............................33
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST
Section 2.01 Contribution and Conveyance of Trust Account Property,
Priority and Subordination of Ownership Interests..........34
Section 2.02 Possession of Loan Files...................................35
Section 2.03 Books and Records..........................................35
Section 2.04 Delivery of Mortgage Loan Documents........................35
Section 2.05 Acceptance of the Trust Fund; Certain Substitutions;
Certification by Indenture Trustee and Custodian...........37
Section 2.06 Fees and Expenses of the Indenture Trustee, Owner
Trustee, Trust Administrator and Custodian.................39
Section 2.07 Designations under REMIC Provisions; Designation
of Startup Day; Tax Matters Person; Tax Matters
Partner....................................................39
Section 2.08 Optional Repurchase of Defaulted Loans.....................40
Section 2.09 Assignment Event...........................................40
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of Representative, Seller and
Servicer...................................................41
Section 3.02 Individual Loans...........................................47
Section 3.03 Purchase and Substitution..................................52
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 Duties of the Servicer.....................................54
Section 4.02 Liquidation of Loans.......................................57
Section 4.03 Establishment of Principal and Interest Accounts;
Deposits in Principal and Interest Account.................58
Section 4.04 Permitted Withdrawals From the Principal and
Interest Accounts..........................................59
Section 4.05 Payment of Taxes, Insurance and Other Charges..............61
Section 4.06 Transfer of Accounts.......................................62
Section 4.07 Maintenance of Hazard Insurance............................62
Section 4.08 REMIC Related Duties.......................................62
Section 4.09 Fidelity Bond..............................................64
Section 4.10 Title, Management and Disposition of REO Property..........64
Section 4.11 Certain Tax Information....................................65
Section 4.12 Collection of Certain Loan Payments........................65
Section 4.13 Access to Certain Documentation and Information
Regarding the Loans........................................66
Section 4.14 Superior Liens.............................................66
ARTICLE V
GENERAL SERVICING PROCEDURE
Section 5.01 Assumption Agreements......................................67
Section 5.02 Satisfaction of Mortgages and Release of Loan Files........67
Section 5.03 Servicing Compensation.....................................69
Section 5.04 Annual Statement as to Compliance..........................69
Section 5.05 Annual Independent Public Accountants' Servicing
Report.....................................................69
Section 5.06 Indenture Trustee's and Owner Trustee's Right to
Examine Servicer Records and Audit Operations..............70
Section 5.07 Reports to the Indenture Trustee; Principal and
Interest Account Statements................................70
ARTICLE VI
[RESERVED]
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS
Section 7.01 Note Distribution Accounts.................................71
Section 7.02 Rounding Account...........................................72
Section 7.03 Establishment of Expense Accounts; Deposits in Expense
Accounts; Permitted Withdrawals from Expense Accounts......73
Section 7.04 Letters of Credit..........................................74
Section 7.05 Alternate Credit Enhancement...............................75
Section 7.06 Interest Carryover Account.................................75
Section 7.07 Investment of Accounts.....................................76
Section 7.08 Priority and Subordination of Distributions................77
Section 7.09 Allocation of Realized Losses..............................81
Section 7.10 Statements.................................................81
Section 7.11 Advances by the Servicer...................................86
Section 7.12 Compensating Interest......................................86
Section 7.13 Reports of Foreclosure and Abandonment of Mortgaged
Property...................................................86
Section 7.14 Net Deposits...............................................87
ARTICLE VIII
[RESERVED]
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims........................87
Section 9.02 Merger or Consolidation of the Representative
and the Servicer...........................................88
Section 9.03 Limitation on Liability of the Servicer and Others.........88
Section 9.04 Servicer Not to Resign.....................................89
Section 9.05 [RESERVED].................................................89
Section 9.06 [RESERVED].................................................89
Section 9.07 Appointment of Trust Administrator.........................89
ARTICLE X
DEFAULT
Section 10.01 Servicer Default...........................................89
Section 10.02 Indenture Trustee to Act; Appointment of Successor.........91
Section 10.03 Waiver of Defaults.........................................93
Section 10.04 [RESERVED].................................................93
Section 10.05 Control by Majority Securityholders........................93
ARTICLE XI
TERMINATION
Section 11.01 Termination................................................94
ARTICLE XII
ADMINISTRATIVE DUTIES OF TRUST ADMINISTRATOR
Section 12.01 Administrative Duties......................................95
Section 12.02 Records....................................................98
Section 12.03 Additional Information To Be Furnished to the Issuer.......98
Section 12.04. Calculation of LIBOR.......................................98
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Acts of Noteholders and Certificateholders.................99
Section 13.02 Amendment..................................................99
Section 13.03 Recordation of Agreement..................................100
Section 13.04 Duration of Agreement.....................................101
Section 13.05 Governing Law.............................................101
Section 13.06 Notices...................................................101
Section 13.07 Severability of Provisions................................101
Section 13.08 No Partnership............................................102
Section 13.09 Counterparts..............................................102
Section 13.10 Successors and Assigns....................................102
Section 13.11 Headings..................................................102
Section 13.12 Assignment to Indenture Trustee...........................102
Section 13.13 Nonpetition Covenant......................................102
Section 13.14 Limitation of Liability of Owner Trustee, Indenture
Trustee and Custodian.....................................103
Section 13.15 Independence of the Servicer..............................103
Section 13.16 Notification to Rating Agencies...........................103
Section 13.17 Third Party Rights........................................104
<PAGE>
EXHIBITS
SCHEDULE I Description of Certain Litigation
EXHIBIT A Contents of Indenture Trustee's Loan File
EXHIBIT B Principal and Interest Account Letter Agreement
EXHIBIT C Form of Custodian Initial Certification
EXHIBIT C-1 Form of Custodian Interim Certification
EXHIBIT D Form of Custodian Final Certification
EXHIBIT E-1 Loan Schedule (Pool I)
EXHIBIT E-2 Loan Schedule (Pool II)
EXHIBIT F [Reserved]
EXHIBIT G Request for Release of Documents
EXHIBIT H [Reserved]
EXHIBIT I [Reserved]
EXHIBIT J Custodial Agreement
EXHIBIT K Form of Liquidation Report
EXHIBIT L Form of Delinquency Report
EXHIBIT M Servicer's Monthly Computer Tape Format
EXHIBIT N [Reserved]
EXHIBIT O [Reserved]
EXHIBIT P Form of Trust Matters Power of Attorney
EXHIBIT Q Form of Collateral Power of Attorney
<PAGE>
SALE AND SERVICING AGREEMENT dated as of May 31, 1999, among The Money
Store Business Loan Backed Trust 1999-1, a Delaware business trust (the "Trust"
or the "Issuer"), The Money Store Commercial Mortgage Inc., as Seller (the
"Seller") and Servicer (the "Servicer"), and The Money Store Inc., a New Jersey
corporation, as Representative (the "Representative").
WHEREAS, the Issuer desires to acquire a portfolio of business loans
from the Seller;
WHEREAS, the Seller has either originated and underwritten, or
purchased and re underwritten, such business loans, and is willing to
contribute such business loans to the Issuer; and
WHEREAS, the Servicer is willing to service such business loans; NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
1933 ACT: The Securities Act of 1933, as amended.
10% BALANCE DATE: Means the first Remittance Date on which the
aggregate outstanding Principal Balance of the Pool I Loans is less than or
equal to 10% of the Original Pool Amount for Pool I.
20% BALANCE DATE: Means the first Remittance Date on which the
aggregate outstanding Principal Balance of the Pool II Loans is less than or
equal to 20% of the Original Pool Amount for Pool II.
ACCELERATED PRINCIPAL DISTRIBUTION AMOUNT: For a Pool and any
Remittance Date, the lesser of (i) the positive difference, if any, of (x) any
Excess Spread for such Pool for such Remittance Date plus any amounts paid under
the Letter of Credit for such Pool pursuant to clause (1) of the definition of
"Letter of Credit Payment" MINUS (y) the Class Interest Shortfall Carryforward
Amount for the Class A, Class M and Class B Notes of such Pool for such
Remittance Date and (ii) the Subordinated Deficiency Amount for such Pool for
such Remittance Date, calculated for this purpose without giving effect to
payment of the Accelerated Principal Distribution Amount for such Pool and prior
to taking into account the Applied Realized Loss Amount for such Pool for such
Remittance Date.
ACCOUNT: The Certificate Distribution Account, Note Distribution
Accounts, Interest Carryover Account, Expense Account, Rounding Account and
Principal and Interest Account (including any sub-accounts of any of the
foregoing).
AGREEMENT: This Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
ALTERNATE CREDIT ENHANCEMENT: Credit enhancement obtained by FUNB in
lieu of a Letter of Credit pursuant to Section 7.05.
ANNUAL EXPENSE ESCROW AMOUNT: With respect to each Pool, an amount
equal to the product of (i) 0.15% per annum (in the case of Pool I) or 0.05% per
annum (in the case of Pool II) and (ii) the sum of the aggregate Class Principal
Balances of the Notes of the applicable Pool, which is computed and payable on a
monthly basis and represents the estimated annual fees and expenses of the
Indenture Trustee, Owner Trustee, Trust Administrator, the Letter of Credit
Provider and in the case of Pool I, the Remarketing Agent.
APPLIED REALIZED LOSS AMOUNT: With respect to Pool I, the collective
reference to the Class MS-1 Applied Realized Loss Amounts, Class MS-2 Applied
Realized Loss Amounts and Class BS Applied Realized Loss Amounts, and with
respect to Pool II, the collective reference to the Class MN Applied Realized
Loss Amounts and Class BN Applied Realized Loss Amounts.
ASSIGNMENT EVENT: If FUNB's long-term unsecured debt rating is reduced
below "A2" by Moody's or "A" by DCR; or if FUNB's senior unsecured debt rating
by Moody's or DCR is suspended, terminated or withdrawn.
ASSIGNMENT OF MORTGAGE: An assignment, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction in which the related Mortgaged Property is located to reflect the
contribution of the Mortgage to the Issuer, which assignment, notice of transfer
or equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction.
AUCTION PROCEDURES: The procedures set forth in Schedule I to the
Indenture by which the Auction Rate is determined for the Class AS-3 Notes.
AUCTION RATE: The rate of interest per annum that results from
implementation of the Auction Procedures.
BASIC DOCUMENTS: The Certificate of Trust, the Trust Agreement, the
Indenture, the Depository Agreement, this Sale and Servicing Agreement, the
Letters of Credit, and other documents and certificates delivered in connection
therewith.
BIF: The Bank Insurance Fund, or any successor thereto.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of California, New York, North
Carolina or Delaware are required or authorized by law to be closed.
BUSINESS NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of an Obligor under a Loan.
CCL LOAN: A Loan originated by the Seller in conjunction with the
Seller's Conventional Commercial Loan Program.
CERTIFICATE: Any Class I, Class II or Class R Certificate.
CERTIFICATE DISTRIBUTION ACCOUNT: Has the meaning assigned to such
term in the Trust Agreement.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate
is registered in the Certificate Register and the Holder of the Special
Interests.
CHANGE DATE: The date on which the Loan Interest Rate of each
adjustable rate Loan is subject to adjustment.
CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
CLASS: Collectively, Notes having the same priority of payment and
bearing the same designation or Certificates having the same priority of payment
and bearing the same designation.
CLASS I CERTIFICATE: A Certificate denominated as a Class I
Certificate, issued by the Trust pursuant to the Trust Agreement.
CLASS II CERTIFICATE: A Certificate denominated as a Class II
Certificate, issued by the Trust pursuant to the Trust Agreement.
CLASS A NOTES: : With respect to Pool I, the Class AS-1, Class AS-2
and Class AS-3 Notes, and with respect to Pool II, the Class AN Notes.
CLASS A PRINCIPAL BALANCE: The sum of the Class Principal Balances of
the Class AS-1, Class AS-2, Class AS-3 and Class AN Notes.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Remittance
Date and for each Pool, (a) prior to the related Stepdown Date, for any
Remittance Date on or after the related Stepdown Date on which the Senior
Enhancement Percentage for that Pool is less than the Senior Specified
Enhancement Percentage for that Pool, and for any Remittance Date on or after
the 10% Balance Date (for Pool I) or the 20% Balance Date (for Pool II) the
lesser of (i) 100% of the applicable Pool Principal Distribution Amount and (ii)
the aggregate Class Principal Balance of the Class A Notes of such Pool and (b)
on or after the related Stepdown Date on which the Senior Enhancement Percentage
for that Pool is at least equal to the Senior Specified Enhancement Percentage
for that Pool, but prior to the 10% Balance Date (for Pool I) or the 20% Balance
Date (for Pool II), the excess, if any, of (i) the aggregate Class Principal
Balance of the Class A Notes of such Pool immediately prior to such Remittance
Date over (ii) the lesser of (A) 73.75% (for Pool I) or 65.50% (for Pool II) of
the outstanding principal balance of the Loans of the related Pool as of the
last day of the related Due Period and (B) the outstanding principal balance of
the Loans of the related Pool as of the last day of the related Due Period minus
2.00% of the aggregate principal balance of the Loans of the related Pool as of
the Cut-Off Date.
CLASS AN NOTE: A Note denominated as a Class AN Note, issued by the
Trust pursuant to the Indenture.
CLASS AN REMITTANCE RATE: The annual rate of interest payable to the
Class AN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 0.50%
(or plus 1.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS AS NOTES: The collective reference to the Class AS-1, Class AS-2
and Class AS-3 Notes.
CLASS AS-1 NOTE: A Note denominated as a Class AS-1 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-1 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-1 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.23% and (ii) the applicable Net Funds Cap.
CLASS AS-2 NOTE: A Note denominated as a Class AS-2 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-2 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-2 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.40% and (ii) the applicable Net Funds Cap.
CLASS AS-3 NOTE: A Note denominated as a Class AS-3 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-3 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-3 Noteholders, which shall be equal to 5.27% for the first Remittance
Date. Thereafter, the Class AS-3 Remittance Rate shall be equal to the lesser of
(i) the Auction Rate and (ii) the applicable Net Funds Cap (but in no event
exceeding 14.0% per annum).
CLASS B NOTES: With respect to Pool I, the Class BS Notes, and with
respect to Pool II, the Class BN Notes.
CLASS BN APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Class Principal Balance of the Class BN Notes (after taking
into account the distribution of the Class BN Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class BN Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the Applied
Realized Loss Amounts for Pool II as of such Remittance Date.
CLASS BN NOTE: A Note denominated as a Class BN Note, issued by the
Trust pursuant to the Indenture.
CLASS BN PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date (a)
prior to the Stepdown Date for Pool II, for any Remittance Date on or after the
Stepdown Date for Pool II on which the Senior Enhancement Percentage for Pool II
is less than the Senior Specified Enhancement Percentage for Pool II, and for
any Remittance Date on or after the 20% Balance Date for Pool II, and the Class
AN Notes or the Class MN Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AN Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool II on such Remittance Date, (B) the Class
Principal Balance of the Class MN Notes after giving effect to the payment of
the Class MN Principal Distribution Amount on such Remittance Date, and (C) the
Class Principal Balance of the Class BN Notes immediately prior to such
Remittance Date over (ii) the lesser of 81.25% of the outstanding principal
balance of the Loans in Pool II as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool II as of the last day
of the related Due period MINUS 2.00% of the Original Pool Amount of Pool II.
CLASS BN REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class BN Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool II remaining
after application of the amounts set forth in Section 7.08(d)(i) through (viii),
inclusive, for Pool II.
CLASS BN REMITTANCE RATE: The annual rate of interest payable to the
Class BN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 3.00%
(or plus 6.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS BS APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Class Principal Balance of the Class BS Notes (after taking
into account the distribution of the Class BS Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class BS Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the Applied
Realized Loss Amounts for Pool I as of such Remittance Date.
CLASS BS NOTE: A Note denominated as a Class BS Note, issued by the
Trust pursuant to the Indenture.
CLASS BS PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date (a)
prior to Stepdown Date for Pool I, for any Remittance Date on or after the
Stepdown Date for Pool I on which the Senior Enhancement Percentage for Pool I
is less than the Senior Specified Enhancement Percentage for Pool I, and for any
Remittance Date on or after the 10% Balance Date for Pool I, and the Class AS
Notes, or the Class MS Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AS Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool I on such Remittance Date, (B) the Class
Principal Balance of the Class MS-1 Notes after giving effect to the payment of
the Class MS-1 Principal Distribution Amount on such Remittance Date, (C) the
Class Principal Balance of the Class MS-2 Notes after giving effect to the
payment of the Class MS-2 Principal Distribution Amount on such Remittance Date
and (D) the Class Principal Balance of the Class BS Notes immediately prior to
such Remittance Date over (ii) the lesser of 89.5% of the outstanding principal
balance of the Loans in Pool I as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool I as of the last day
of the related Due Period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS BS REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class BS Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I remaining
after application of the amounts set forth in Section 7.08(d)(i) through (viii),
inclusive, for Pool I.
CLASS BS REMITTANCE RATE: The annual rate of interest payable to the
Class BS Noteholders, which shall be equal to the lesser of (i) LIBOR plus 3.00%
(or plus 6.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS M NOTES: With respect to Pool I, the Class MS-1, and Class MS-2
Notes, and with respect to Pool II, the Class MN Notes.
CLASS MN APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Current Principal Balance of the Class MN Notes (after taking
into account the distribution of the Class MN Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class MN Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the excess of (i)
the Applied Realized Loss Amount for Pool II as of such Remittance Date over
(ii) the Class BN Applied Realized Loss Amount as of such Remittance Date.
CLASS MN NOTE: A Note denominated as a Class MN Note, issued by the
Trust pursuant to the Indenture.
CLASS MN PRINCIPAL DISTRIBUTION AMOUNT: As to any Remittance Date, (a)
prior to the Stepdown Date for Pool II, for any Remittance Date on or after the
Stepdown Date for Pool II on which the Senior Enhancement Percentage for Pool II
is less than the Senior Specified Enhancement Percentage for Pool II, and for
any Remittance Date on or after the 20% Balance Date for Pool II, and the Class
A Notes of Pool II are still outstanding, zero and (b) on any other Remittance
Date, the excess, if any, of (i) the sum of (A) the Class Principal Balance of
the Class A Notes of Pool II after giving effect to the payment of the Class A
Principal Distribution Amount for Pool II on such Remittance Date and (B) the
Class Principal Balance of the Class MN Notes immediately prior to such
Remittance Date over (ii) the lesser of (A) 70.75% of the outstanding principal
balance of the Loans in Pool II as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool II as of the last day
of the related Due Period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS MN REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MN Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool II for such
Remittance Date remaining after application of amounts set forth in
Section7.08(d)(i) through (vii) inclusive, with respect to Pool II.
CLASS MN REMITTANCE RATE: The annual rate of interest payable to the
Class MN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 1.25%
(or plus 2.50% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS MS NOTES: Collective reference to the Class MS-1 and Class MS-2
Notes.
CLASS MS-1 APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date,
the lesser of (x) the Class Principal Balance of the Class MS-1 Notes (after
taking into account the distribution of the Class MS-1 Principal Distribution
Amount on such Remittance Date, but prior to the application of the Class MS-1
Applied Realized Loss Amount, if any, on such Remittance Date) and (y) the
excess of (i) the Applied Realized Loss Amount for Pool I as of such Remittance
Date over (ii) the sum of the Class MS-2 Applied Realized Loss Amount and the
Class BS Applied Realized Loss Amount, in each case as of such Remittance Date.
CLASS MS-1 NOTE: A Note denominated as a Class MS-1 Note, issued by
the Trust pursuant to the Indenture.
CLASS MS-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Remittance Date, (a) prior to the Stepdown Date for Pool I, for any Remittance
Date on or after the Stepdown Date for Pool I on which the Senior Enhancement
Percentage for Pool I is less than the Senior Specified Enhancement Percentage
for Pool I, and for any Remittance Date on or after the 10% Balance Date for
Pool I, and the Class AS Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AS Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool I on such Remittance Date and (B) the
Class Principal Balance of the Class MS-1 Notes immediately prior to such
Remittance Date over (ii) the lesser of (A) 79.75% of the outstanding principal
balance of the Loans in Pool I as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool I as of the last day
of the related due period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS MS-1 REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MS-1 Unpaid Realized Loss Amounts of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I for such
Remittance Date remaining after application of amounts set forth in Section
7.08(d)(i) through (vi) inclusive, with respect to Pool I.
CLASS MS-1 REMITTANCE RATE: The annual rate of interest payable to the
Class MS-1 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.85% (or plus 1.70% for each Remittance Date occurring after the Optional
Servicer Termination Date) and (ii) the applicable Net Funds Cap.
CLASS MS-2 APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date,
the lesser of (x) the Current Principal Balance of the Class MS-2 Notes (after
taking into account the distribution of the Class MS-2 Principal Distribution
Amount on such Remittance Date, but prior to the application of the Class MS-2
Applied Realized Loss Amount, if any, on such Remittance Date) and (y) the
excess of (i) the Applied Realized Loss Amount for Pool I as of such Remittance
Date over (ii) the Class BS Applied Realized Loss Amount as of such Remittance
Date.
CLASS MS-2 NOTE: A Note denominated as a Class MS-2 Note, issued by
the Trust pursuant to the Indenture.
CLASS MS-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Remittance Date, (a) prior to the Stepdown Date for Pool I, for any Remittance
Date on or after the Stepdown Date for Pool I on which the Senior Enhancement
Percentage for Pool I is less than the Senior Specified Enhancement Percentage
for Pool I, and for any Remittance Date on or after the 10% Balance Date for
Pool I, and the Class AS Notes or the Class MS-1 Notes are still outstanding,
zero and (b) on any other Remittance Date, the excess, if any, of (i) the sum of
(A) the Class A Principal Balance of the Class AS Notes after giving effect to
the payment of the Class A Principal Distribution Amount for Pool I on such
Remittance Date, (B) the Class Principal Balance of the Class MS-1 Notes after
giving effect to the payment of the Class MS-1 Principal Distribution Amount on
such Remittance Date and (C) the Class Principal Balance of the Class MS-2 Notes
immediately prior to such Remittance Date over (ii) the lesser of (A) 86.125% of
the outstanding principal balance of the Loans in Pool I as of the last day of
the related Due Period and (B) the outstanding principal balance of the Loans in
Pool I as of the last day of the related Due Period MINUS 2.00% of the Original
Pool Amount of Pool I.
CLASS MS-2 REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MS-2 Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I for such
Remittance Date remaining after application of amounts set forth in Section
7.08(d)(i) through (vii), inclusive, with respect to Pool I.
CLASS MS-2 REMITTANCE RATE: The annual rate of interest payable to the
Class MS-2 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
1.25% (or plus 2.50% for each Remittance Date occurring after the Optional
Servicer Termination Date) and (ii) the applicable Net Funds Cap.
CLASS POOL FACTOR: With respect to each Class of Notes, as of any date
of determination, the then Class Principal Balance for such Class divided by the
Original Principal Balance for such Class.
CLASS PRINCIPAL BALANCE: With respect to each Class of Notes, as of
any date of determination, the Original Principal Balance of such Class less (i)
the sum of all amounts previously distributed to the Noteholders of such Class
in respect of principal pursuant to Section 7.05(d) and (ii) all Applied
Realized Losses allocated to such Class.
CLASS R CERTIFICATE: A Certificate denominated as a Class R
Certificate, issued by the Trust pursuant to the Trust Agreement and
representing both the Class R-I and Class R-II Interests.
CLASS R-I INTERESTS: As defined and described in Section 2.13(b) and
(c) of the Trust Agreement.
CLASS R-II INTERESTS: As defined and described in Section 2.13(e) of
the Trust Agreement.
CLOSING DATE: June 29, 1999
CODE: The Internal Revenue Code of 1986, as amended, or any successor
legislation thereto.
COLLATERAL: All items of property (including a Mortgaged Property),
whether real or personal, tangible or intangible, or otherwise, pledged by an
Obligor or others to the Seller (including guarantees on behalf of the Obligor)
to secure payment under a Loan.
COMMERCIAL PROPERTY: Real property (other than agricultural property
or Residential Property) that is generally used by the Obligor in the conduct of
its business.
COMPENSATING INTEREST: As defined in Section 7.12.
CONVENTIONAL COMMERCIAL LOAN PROGRAM: The Seller's Conventional
Commercial Loan Program as described in the Registration Statement.
CURRENT INTEREST REQUIREMENT: For each Class of Notes, and with
respect to each Remittance Date, an amount equal to interest based on the actual
number of days since the last Remittance Date (or in the case of the first
Remittance Date, from the Closing Date) up to but not including the upcoming
Remittance Date at the applicable Remittance Rate on the Class Principal Balance
for such Class outstanding immediately prior to such Remittance Date. The
Current Interest Requirement for a Class of Notes shall not include any
Noteholders' Interest Carryover.
CURTAILMENT: With respect to a Loan, any payment of principal received
during a Due Period as part of a payment that is in excess of five times the
amount of the Monthly Payment due for such Due Period and which is not intended
to satisfy the Loan in full, nor is intended to cure a delinquency.
CUSTODIAL AGREEMENT: Any agreement to be entered into pursuant to the
Indenture for the retention of each Loan File.
CUSTODIAN: Any custodian appointed pursuant to the Indenture. The
initial Custodian for the Pool I and Pool II Loans shall be the Trust Department
of FUNB.
CUT-OFF DATE: May 31, 1999; provided, however, that for purposes of
determining characteristics of the Loans as of the Cut-Off Date, the Cut-Off
Date for those Loans originated after May 31, 1999 shall be deemed to be the
date of the applicable Business Note.
CUTOFF DATE PRINCIPAL BALANCE: With respect to any Loan, the unpaid
principal balance thereof as of the Cut-Off Date (or as of the applicable date
of substitution with respect to a Qualified Substitute Loan).
DCR: Duff & Phelps Credit Rating Co., or any successor thereto.
DEFAULTED LOAN: Means any Loan as to which the related Obligor has
failed to pay in full three or more consecutive Monthly Payments.
DEFICIENT VALUATION: With respect to any Loan, a valuation by a court
of competent jurisdiction of the related Mortgaged Property in an amount less
than the then outstanding indebtedness under the Loan, which valuation results
from a proceeding initiated under the United States Bankruptcy Code, as amended
from time to time (11 U.S.C.).
DELETED LOAN: A Loan replaced by a Qualified Substitute Loan.
DEPOSITORY: The Depository Trust Company, and any successor Depository
hereafter named.
DEPOSITORY AGREEMENT: The Note Depository Agreement as defined in the
Indenture.
DESIGNATED DEPOSITORY INSTITUTION: With respect to each Principal and
Interest Account, an entity which is an institution whose deposits are insured
by either the BIF or SAIF administered by the FDIC, the unsecured and
uncollateralized long-term debt obligations of which shall be rated "A" or
better by DCR (if rated by DCR) and "A2" or better by Moody's, or "D-1" by DCR
(if rated by DCR) and "P-1" by Moody's, and which is either (i) a federal
savings association duly organized, validly existing and in good standing under
the federal banking laws, (ii) an institution duly organized, validly existing
and in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws, or (iv) a principal subsidiary of a
bank holding company, in each case acting or designated by the Servicer as the
depository institution for a Principal and Interest Account.
DETERMINATION DATE: That day of each month which is the later of (i)
the third Business Day prior to the 15th day of such month and (ii) the seventh
Business Day of such month.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Notes from time to time as a
securities depository.
DUE DATE: The day of the month on which the Monthly Payment is due
from the Obligor on a Loan.
DUE PERIOD: With respect to each Remittance Date, the calendar month
preceding the month in which such Remittance Date appears.
EXCESS PAYMENTS: With respect to a Due Period, any amounts received on
a Loan in excess of the Monthly Payment due on the Due Date relating to such Due
Period which does not constitute either a Curtailment or a Principal Prepayment
or payment with respect to an overdue amount. Excess Payments are payments of
principal for purposes of this Agreement.
EXCESS PROCEEDS: As of any Remittance Date, with respect to any
Liquidated Loan, the excess, if any, of (a) the total Net Liquidation Proceeds,
over (b) the Principal Balance of such Loan as of the date such Loan became a
Liquidated Loan plus 30 days interest thereon at the Weighted Average Class
Adjusted Loan Remittance Rate for the applicable Pool; PROVIDED, HOWEVER, that
such excess shall be reduced by the amount by which interest accrued on the
advance, if any, made by the Servicer pursuant to Section 4.14 at the related
Loan Interest Rate exceeds interest accrued on such advance at the applicable
Class Remittance Rates.
EXCESS SPREAD: With respect to any Remittance Date and Pool of Loans,
an amount equal to the excess of (A) the product of (i) the aggregate Principal
Balances of the applicable Pool of Loans as of the first day of the immediately
preceding Due Period and (ii) one-twelfth of the weighted average Loan Interest
Rate for the applicable Pool of Loans, as the case may be, as of the first day
of the related Due Period over (B) the sum of (i) the aggregate Current Interest
Requirements for the applicable Pool of Notes for such Remittance Date, (ii)
amounts to be deposited into the applicable Expense Account on such Remittance
Date pursuant to Sections 7.03(a)(i), and (iii) the Servicing Fee for the
applicable Pool of Mortgage Loans with respect to such Remittance Date.
EXPENSE ACCOUNT: The expense account established and maintained by the
Indenture Trustee in accordance with Section 7.03 hereof.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHA: The Federal Housing Administrator, and its successors in
interest.
FHLMC: Freddie Mac (formerly, the Federal Home Loan Mortgage
Corporation) and any successor thereto.
FIDELITY BOND: As described in Section 4.09.
FINAL MATURITY DATE: With respect to each Class of Notes, the
Remittance Date in the stated month:
CLASS DATE
- ----- -----
Class AS-1 June 2013
Class AS-2 September 2021
Class AS-3 February 2028
Class MS-1 June 2029
Class MS-2 June 2029
Class BS June 2029
Class AN September 2017
Class MN May 2029
Class BN May 2029
FNMA: Fannie Mae (formerly, the Federal National Mortgage Association)
and any successor thereto.
FORECLOSED PROPERTY: Property, the title to which is acquired in
foreclosure or by deed in lieu of foreclosure.
FUNB: First Union National Bank, a national banking association
headquartered in Charlotte, North Carolina, and any successor thereto.
GROSS MARGIN: With respect to each adjustable rate Loan, the number of
basis points set forth in the related Business Note which is added to the
applicable Index, to determine the Loan Interest Rate on the related Change
Date, subject to the applicable Periodic Rate Cap and the applicable Lifetime
Cap and Lifetime Floor.
HOLDER OF THE SPECIAL INTERESTS: The Person holding the Special
Interests as set forth in the Trust Agreement.
HUD: The United States Department of Housing and Urban Development,
and its successor in interest.
INDENTURE: The Indenture dated as of May 31, 1999, between the Issuer
and the Indenture Trustee, as the same may be amended and supplemented from time
to time.
INDENTURE TRUSTEE: The Person acting as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture, initially HSBC Bank USA.
INDENTURE TRUSTEE'S LOAN FILE: The documents delivered to the
Indenture Trustee or the Custodian pursuant to Section 2.04.
INDEX: Either the Prime Rate or the Treasury Index, as the case may
be.
INSOLVENCY EVENT: With respect to a specified Person, (a) the filing
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
(including any receiver appointed under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended), 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 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 PROCEEDS: Proceeds paid (i) to the Issuer or the Servicer by
any insurer pursuant to any insurance policy covering a Loan, Mortgaged
Property, or REO Property, including but not limited to title, hazard, life,
health and/or accident insurance policies, and/or (ii) by the Servicer pursuant
to Section 4.08, in either case, net of any expenses which are incurred by the
Servicer in connection with the collection of such proceeds and not otherwise
reimbursed to the Servicer.
INTEREST CARRYOVER ACCOUNT: The account established and maintained by
the Indenture Trustee in accordance with Section 7.06 hereof
INTEREST DETERMINATION DATE: With respect to any Interest Period after
the initial Interest Period, the second LIBOR Determination Date prior to such
Interest Period.
INTEREST PERIOD: With respect to the first Remittance Date, the period
commencing on the Closing Date and ending on July 14, 1999. Thereafter, the
period commencing on a Remittance Date and ending on the day immediately
preceding the next Remittance Date.
INTEREST RATE: Means, for each Class of Notes, the applicable
Remittance Rate for such Class.
INTEREST RATE SERVICES AGREEMENT: That certain Interest Rate Services
Agreement dated as of June 29, 1999 between the Indenture Trustee and the
Remarketing Agent, as amended or supplemented.
INTEREST SHORTFALL CARRYFORWARD AMOUNT: Means, as of any Remittance
Date and with respect to any Class of Notes, the sum of (i) the amount, if any,
by which (X) the sum of (a) the Current Interest Requirement for such Class for
such Remittance Date plus (b) the Interest Shortfall Carryforward Amount for
such Class as of the immediately preceding Remittance Date exceeds (Y) the
amount paid to the Noteholders of such Class on such Remittance Date on account
of interest and (ii) one month's interest on the amount determined pursuant to
clause (i) at the applicable Class Remittance Rate.
ISSUER: Means The Money Store Business Loan Backed Trust 1999-1.
LETTER OF CREDIT FEE: The fee payable to the Issuer of the Letter of
Credit on each Remittance Date.
LETTER OF CREDIT PAYMENT: As to each Remittance Date and each Letter of
Credit, the sum of: (1) the excess, if any, of (x) the aggregate Class Principal
Balance of the Notes of the applicable Pool (after taking into account all
distributions of principal to be made on such Remittance Date other than
relating to the Letter of Credit) over (y) the aggregate principal balance of
the Loans of such Pool as of the last day of the immediately preceding Due
Period; and (2) the excess, if any, of (x) the aggregate Current Interest
Requirements and Class Interest Shortfall Carryforward Amounts for the Notes of
such Pool over (y) the Pool Available Remittance Amount for such Pool for such
Remittance Date (other than the portion relating to payments under the Letter of
Credit); provided, however, that in no event shall the Letter of Credit Payment
for a Letter of Credit exceed the then applicable LOC Available Amount.
LETTER OF CREDIT PROVIDER: FUNB, or its successors and assigns.
LETTERS OF CREDIT: Reference to each of the two Letters of Credit, one
issued for each Pool, by First Union National Bank on June 29, 1999, in favor of
the Indenture Trustee. The Letter of Credit with respect to Pool I is identified
by Letter of Credit Number SM409313C and the Letter of Credit with respect to
Pool II is identified by Letter of Credit Number SM409314C.
LETTER OF CREDIT REIMBURSEMENT AMOUNTS: For any Remittance Date and
each Letter of Credit, an amount equal to all Letter of Credit Payments under
that Letter of Credit that remain unreimbursed, together with interest thereon
from the date such Letter of Credit Payments were made until paid in full at a
rate equal to LIBOR plus 0.22%.
LIBOR: The London Interbank Offered Rate for one-month U.S. dollar
deposits, determined on each Interest Determination Date as provided in Section
12.04 hereof. LIBOR for the first Remittance Date will be equal to 5.1675%.
LIBOR DETERMINATION DATE: A date which is both a Business Day and a
London Banking Day prior to the commencement of each related Interest Period.
LIFETIME CAP: The provision in the Business Note for a Loan, which
limits the maximum Loan Interest Rate over the life of such Loan to the rate set
forth in the applicable Business Note.
LIFETIME FLOOR: The provision in the Business Note for Loan, which
limits the minimum Loan Interest Rate over the life of such Loan to the rate set
forth in the applicable Business Note.
LIQUIDATED LOAN: Any defaulted Loan or REO Property (i) as to which
the Servicer has determined that all amounts which it reasonably and in good
faith expects to recover have been recovered from or on account of such Loan, or
(ii) if earlier, is 180 days delinquent.
LIQUIDATION PROCEEDS: Cash, including Insurance Proceeds, proceeds of
any REO Disposition, amounts required to be deposited in the applicable
Principal and Interest Account pursuant to Section 4.10 hereof, and any other
amounts received in connection with the liquidation of defaulted Loans, whether
through trustee's sale, foreclosure sale or otherwise.
LOAN: An individual loan which is transferred to the Indenture Trustee
pursuant to this Agreement, together with the rights and obligations of a holder
thereof and payments thereon and proceeds therefrom, the Loans originally
subject to this Agreement being identified on the Loan Schedules delivered to
the Custodian and the Indenture Trustee as Exhibits E-1 and E-2. Any loan which,
although intended by the parties hereto to have been, and which purportedly was,
contributed to the Issuer by the Seller (as indicated by Exhibits E-1 and E-2),
in fact was not contributed or otherwise transferred and assigned to the Issuer
for any reason whatsoever, including, without limitation, the incorrectness of
the statement set forth in Section 3.02(i) hereof with respect to such loan,
shall nevertheless be considered a "Loan" for all purposes of this Agreement.
LOAN FILE: The Indenture Trustee's Loan File.
LOAN INTEREST RATE: The fixed or adjustable rate of interest borne by
a Business Note, as shown on the applicable Loan Schedule.
LOAN SCHEDULE: The separate schedules of Pool I and Pool II Loans
delivered to the Custodian on behalf of the Indenture Trustee and attached
hereto as Exhibits E-1 and E-2, such schedule identifying each Loan by address
of the related premises, and the name of the Obligor and setting forth as to
each Loan the following information: (i) the Principal Balance as of the close
of business on the Cut-Off Date, (ii) the Account Number, (iii) the original
principal amount of the Loan, (iv) the Loan date and original number of months
to maturity, in months, (v) the Loan Interest Rate, (vi) when the first Monthly
Payment was due, (vii) the Monthly Payment as of the Cut-Off Date, (viii) the
remaining number of months to maturity as of the Cut-Off Date, (ix) the Index
and Gross Margin, if applicable, and (x) the Lifetime Floor and Lifetime Cap, if
applicable.
LOAN-TO-VALUE RATIO or LTV: With respect to any Loan, the original
amount of the Loan divided by the lower of the cost or the appraisal value of
any real estate Collateral plus the discounted value (as determined by the
Seller in accordance with its underwriting criteria) of any non-real estate
Collateral securing such loan.
LOC AVAILABLE AMOUNT: As to each Remittance Date, the LOC Available
Amount equals A minus B minus C, where:
A = for Pool I: (x) for the first 24 Remittance Dates, 2.5% of
the Original Pool Amount for Pool I and (y) thereafter, the
Specified Subordinated Amount for Pool I; and
for Pool II: (x) for the first 24 Remittance Dates, 7.22% of
the Original Pool Amount for Pool II and (y) thereafter, the
Specified Subordinated Amount for Pool II;
B = $0 for the first 24 Remittance Dates and, thereafter, the
excess, if any, of (x) the aggregate principal balance of the
Loans in the applicable Pool as of the last day of the related
Due Period over (y) the aggregate Class Principal Balances of the
Notes of that Pool (after taking into account all distributions
of principal to be made on such Remittance Date other than
relating to the Letter of Credit); and
C = the amount of all prior draws under the applicable Letter of
Credit.
LONDON BANKING DAY: Any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
MAJORITY SECURITYHOLDERS: Until such time as the principal amount of
all Classes of Notes have been reduced to zero, the holder or holders (as shown
on the Note Register) of in excess of 50% of the current then-principal amount
of all Classes of Notes voting together as a single class (accordingly, the
Holders of the Certificates shall be excluded from any rights or actions of the
Majority Securityholders during such period); and (ii) thereafter, the Holder of
the Voting Interest.
MARGIN: With respect to each Class of Notes bearing interest based
upon LIBOR and each Remittance Date, the percentage added to LIBOR to obtain the
applicable Remittance Rate for such Class of Notes.
MONTHLY ADVANCE: An advance made by the Servicer pursuant to Section
7.11 hereof.
MONTHLY PAYMENT: The scheduled monthly payment of principal and/or
interest required to be made by an Obligor on the related Loan, as set forth in
the related Business Note.
MOODY'S: Moody's Investors Service, Inc., or any successor thereto.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
lien on the Mortgaged Property.
MORTGAGE LOAN: A Loan that is secured by a Mortgage on a Mortgaged
Property.
MORTGAGED PROPERTY: The underlying property securing a Loan,
consisting of a fee simple estate (or, with respect to five Loans, a leasehold
interest) in a single contiguous parcel of land improved by a Commercial
Property, Multi-Family Property or Residential Property.
MORTGAGED PROPERTY STATES: Any one of the 50 states and the District
of Columbia and Puerto Rico, where the Mortgaged Properties are located.
MULTI-FAMILY LOANS: Loans secured by Multi-family Properties.
MULTI-FAMILY PROPERTY: A residential or mixed-use property, such as
rental apartment buildings or projects containing five or more units.
NET FUNDS CAP: With respect to a Class of Notes and any Remittance
Date, the per annum rate, expressed on an actual/360 basis, equal to the
fraction, expressed as a percentage, the numerator of which is the excess of (x)
the total amount of interest due on the Loans of that Pool during the preceding
Due Period, over (y) the sum of (i) the Servicing Fee, (ii) the fees due the
Owner Trustee, the Indenture Trustee, the Trust Administrator and the Letter of
Credit Provider for the related Pool, and (iii) with respect to the Class AS-3
Notes, the fee due to the Remarketing Agent, and the denominator of which is the
aggregate Class Principal Balance of each Class of Notes of that Pool
immediately prior to that Remittance Date.
NET LIQUIDATION PROCEEDS: Liquidation Proceeds net of (i) any
reimbursements to the Servicer made therefrom pursuant to Section 4.04(b) and
(ii) amounts required to be released to the related Obligor pursuant to
applicable law.
NONRECOVERABLE ADVANCES: With respect to any Loan, (i) any Monthly
Advance previously made and not reimbursed pursuant to Section 4.04 or 7.11, or
(ii) a Servicing Advance or Monthly Advance proposed to be made in respect of a
Loan or REO Property which, in the good faith business judgment of the Servicer,
will not or, in the case of a proposed advance, would not be ultimately
recoverable pursuant to Sections 4.04 or 7.11.
NOTE: Any Class AS-1 Note, Class AS-2 Note, Class AS-3 Note, Class
MS-1 Note, Class MS-2 Note, Class BS Note, Class AN Note, Class MN Note or Class
BN Note.
NOTE DISTRIBUTION ACCOUNT: The account designated as such, established
and maintained pursuant to Section 7.01.
NOTEHOLDERS' INTEREST CARRYOVER: For any Remittance Date on which the
Remittance Rate for a Class of Notes is based upon the applicable Net Funds Cap,
the excess of (i) the amount of interest such Class of Notes would be entitled
to receive on such Remittance Date had interest been calculated at a rate equal
to LIBOR plus the applicable Margin or the Auction Rate, as the case may be,
over (ii) the amount of interest such Class will receive on such Remittance Date
at the applicable Net Funds Cap, together with the unpaid portion of any such
excess from prior Remittance Dates (and interest thereon at the then applicable
Remittance Rate, without giving effect to the Net Funds Cap). No Noteholders'
Interest Carryover shall be paid on a Class of Notes after the Class Principal
Balance of such Class is reduced to zero.
OBLIGOR: The obligor on a Business Note.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, Vice Chairman of the Board, the President, a Vice President or Assistant
Vice President, the Treasurer, the Secretary, or one of the Assistant
Secretaries of the Representative, the Seller, or the Servicer, as required by
this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be counsel for the Representative, the Servicer or the Trust
Administrator, reasonably acceptable to the Indenture Trustee and experienced in
matters relating thereto; except that any opinion of counsel relating to (a) the
qualification of REMIC I and REMIC II each as a REMIC or (b) compliance with the
REMIC Provisions, must be an opinion of counsel who (i) is in fact independent
of the Representative, the Servicer or the Trust Administrator, (ii) does not
have any direct financial interest or any material indirect financial interest
in the Representative, the Servicer or the Trust Administrator or in an
affiliate thereof and (iii) is not connected with the Representative, the
Servicer or the Trust Administrator as an officer, employee, director or person
performing similar functions.
OPTIONAL SERVICER TERMINATION DATE: As defined in Section 11.01(b)
hereof.
ORIGINAL CLASS AN PRINCIPAL BALANCE: $55,395,000.
ORIGINAL CLASS AS-1 PRINCIPAL BALANCE: $137,788,000.
ORIGINAL CLASS AS-2 PRINCIPAL BALANCE: $141,057,000.
ORIGINAL CLASS AS-3 PRINCIPAL BALANCE: $190,443,000.
ORIGINAL CLASS BN PRINCIPAL BALANCE: $4,457,000.
ORIGINAL CLASS BS PRINCIPAL BALANCE: $12,423,000.
ORIGINAL CLASS MN PRINCIPAL BALANCE: $2,229,000.
ORIGINAL CLASS MS-1 PRINCIPAL BALANCE: $22,084,000.
ORIGINAL CLASS MS-2 PRINCIPAL BALANCE: $23,463,000.
ORIGINAL COLLATERAL AMOUNT: The aggregate Principal Balance of the
Loans as of the Cut-Off Date equal to $615,810,348.49.
ORIGINAL POOL AMOUNT: The aggregate Principal Balance of the Loans as
of the Cut-Off Date of that Pool, in the case of Pool I $552,136,944.03 and in
the case of Pool II $63,673,404.46, respectively.
ORIGINAL PRINCIPAL BALANCE: With respect to each Class of Notes, the
amount set forth for such Class under the definitions of Original Class AS-1
Principal Balance, Original Class AS-2 Principal Balance, Original Class AS-3
Principal Balance, Original Class MS-1 Principal Balance, Original Class MS-2
Principal Balance, Original Class BS Principal Balance, Original Class AN
Principal Balance, Original Class MN Principal Balance, and Original Class BN
Principal Balance, as the case may be.
OWNER TRUST ESTATE: Has the meaning assigned to such term in the Trust
Agreement.
OWNER TRUSTEE: Chase Manhattan Bank Delaware, a Delaware banking
corporation, 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.
PERCENTAGE INTEREST: With respect to a Note, the portion of the
respective Class evidenced by such Note, expressed as a percentage, the
numerator of which is the denomination represented by such Note and the
denominator of which is the Original Principal Balance of such Class. The Notes
are issuable only in the minimum Percentage Interest corresponding to a minimum
denomination of $25,000.00 and integral multiples of $1,000 in excess thereof.
PERMITTED INSTRUMENTS: As used herein, Permitted Instruments shall
include the following:
(i) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal
and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States, FHA debentures,
FHLMC senior debt obligations, Federal Home Loan Bank
consolidated senior debt obligations, and FNMA senior debt
obligations, but excluding any of such securities whose terms do
not provide for payment of a fixed dollar amount upon maturity or
call for redemption;
(ii) federal funds, certificates of deposit, time deposits
and banker's acceptances (having original maturities of not more
than 365 days) of any bank or trust company incorporated under
the laws of the United States or any state thereof, provided that
the short-term debt obligations of such bank or trust company at
the date of acquisition thereof have been rated "D-1" or better
by DCR (if rated by DCR) and "P-1" or better by Moody's;
(iii) deposits of any bank or savings and loan association
which has combined capital, surplus and undivided profits of at
least $3,000,000 which deposits are held only up to the limits
insured by the BIF or SAIF administered by the FDIC, provided
that the unsecured long-term debt obligations of such bank or
savings and loan association have been rated "A" or better by DCR
(if rated by DCR) and "A3" or better by Moody's;
(iv) commercial paper (having original maturities of not
more than 365 days) rated "D-1" or better by DCR (if rated by
DCR) and "P-1" or better by Moody's;
(v) debt obligations rated "AAA" by DCR (if rated by DCR)
and "Aaa" by Moody's (other than any such obligations that do not
have a fixed par value and/or whose terms do not promise a fixed
dollar amount at maturity or call date);
(vi) investments in money market funds rated or "Aaa" or
better by Moody's and "AAAm" or "AAAm - G" by Standard & Poor's
Rating Services, the assets of which are invested solely in
instruments described in clauses (i)-(v) above including, without
limitation, any fund which the Indenture Trustee or the Owner
Trustee or an affiliate of the Indenture Trustee or the Owner
Trustee serves as an investment advisor, administrator,
shareholder, servicing agent and/or custodian or sub-custodian,
notwithstanding that (a) the Indenture Trustee or the Owner
Trustee or an affiliate of the Indenture Trustee or the Owner
Trustee charges and collects fees and expenses from such funds
for services rendered, (b) the Indenture Trustee or the Owner
Trustee charges and collects fees and expenses for services
rendered pursuant to this Agreement, and (c) services performed
for such funds and pursuant to this Agreement may converge at any
time (the parties hereto specifically authorize the Indenture
Trustee or the Owner Trustee, or an affiliate of the Indenture
Trustee or the Owner Trustee to charge and collect all fees and
expenses from such funds for services rendered to such funds, in
addition to any fees and expenses the Indenture Trustee or the
Owner Trustee may charge and collect for services rendered
pursuant to the Indenture and this Agreement;
(vii) guaranteed investment contracts or surety bonds
providing for the investment of funds in an account or insuring a
minimum rate of return on investments of such funds, which
contract or surety bond shall:
(a) be an obligation of an insurance company or other
corporation whose debt obligations or insurance
financial strength or claims paying ability are rated
"AAA" by DCR (if rated by DCR) and "Aaa" by Moody's;
and
(b) provide that the Indenture Trustee may exercise all
of the rights of the Representative under such
contract or surety bond without the necessity of the
taking of any action by the Representative;
(viii) A repurchase agreement that satisfies the following
criteria:
(a) Must be between the Indenture Trustee and a dealer
bank or securities firm described in 1. or 2. below:
1. Primary dealers on the Federal Reserve reporting
dealer list which are rated "A" or better by DCR
(if rated by DCR) and Moody's, or
2. Banks rated "A" or above by DCR (if rated by DCR)
and Moody's;
<PAGE>
(b) The written repurchase agreement must include the following:
1. Securities which are acceptable for the transfer are:
A. Direct U.S. governments, or
B. Federal Agencies backed by the full faith and credit
of the U.S. government (and FNMA & FHLMC)
2. the term of the repurchase agreement may be up to 60
days
3. the collateral must be delivered to the Indenture
Trustee or third party custodian acting as agent for
the Indenture Trustee by appropriate book entries and
confirmation statements, and must have been delivered
before or simultaneous with payment (perfection by
possession of certificated securities)
4. Valuation of collateral
A. The securities must be valued weekly, marked-to-
market at current market price plus accrued interest.
B. The value of the collateral must be equal to at
least 104% of the amount of cash transferred by the
Indenture Trustee or custodian for the Indenture
Trustee to the dealer bank or security firm under the
repurchase agreement plus accrued interest. If the
value of securities held as collateral slips below 104%
of the value of the cash transferred by the Indenture
Trustee plus accrued interest, then additional cash
and/or acceptable securities must be transferred. If,
however, the securities used as collateral are FNMA or
FHLMC, then the value of collateral must equal at least
105%; and
(ix) any other investment acceptable to the Rating Agencies,
written confirmation of which shall be furnished by to the Indenture Trustee.
PERMITTED TRANSFEREE: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Code section 860E(c)(1)) with respect to any Class R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(C), (v) a Person other than a "United States Person" as
defined in Code Section 7701(a)(30), unless the Trust Administrator consents in
writing to the Transfer to such Person and (vi) any other Person so designated
by the Trust Administrator based upon an Opinion of Counsel that the transfer of
a Percentage Interest in a Class R Certificate to such Person may cause either
REMIC I or REMIC II to fail to qualify as a REMIC at any time that the Pool I
Notes are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
FHLMC, a majority of its board of directors is not selected by such governmental
unit.
PERSON: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
POOL: Reference to either Pool I or Pool II.
POOL I: The pool of notes or loans, as applicable, constituting the
part of the Trust comprising the Pool I Notes or the Pool I Loans, respectively.
POOL II: The pool of notes or loans, as applicable, constituting the
part of the Trust comprising the Pool II Notes or the Pool II Loans,
respectively.
POOL AVAILABLE REMITTANCE AMOUNT: With respect to any Pool and any
Remittance Date, (i) the sum of all amounts relating to the Loans of such Pool
described in clauses (i) through (viii), inclusive, of Section 4.03(b) received
by the Servicer or any Subservicer (including any amounts paid by the Servicer
and the Representative and excluding any amounts withdrawn by the Servicer with
respect to the Loans in such Pool pursuant to Section 4.04(b), (c), (e) and (f)
as of the related Determination Date) during the related Due Period or, with
respect to Section 4.03(b)(vi), on the related Determination Date, and deposited
into the applicable Note Distribution Account as of the Determination Date, plus
(ii) the amount of any Monthly Advances and Compensating Interest payments
relating to the Loans of such Pool, remitted by the Servicer for such Remittance
Date, and (iii) any amounts received on such Remittance Date as a Letter of
Credit Payment, less (iv) those amounts withdrawable from the applicable Note
Distribution Account pursuant to Section 7.01(b)(ii). The "Pool Available
Remittance Amount" does not include (x) funds in the applicable Principal and
Interest Account and available to be withdrawn pursuant to Section 4.04(d)(ii)
and (y) funds in the applicable Note Distribution Account that cannot be
distributed by the Indenture Trustee on such Remittance Date as a result of a
proceeding initiated under the United States Bankruptcy Code, as amended from
time to time (11 U.S.C.).
POOL CURRENT INTEREST REQUIREMENT: For each Pool, the sum of the
Current Interest Requirements of each Class of Notes of such Pool.
POOL I LOAN: A Loan listed on Exhibit E-1 delivered to the Custodian
on behalf of the Indenture Trustee, as such Exhibit may be amended from time to
time.
POOL I NOTE: A Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class
MS-2 or Class BS Note.
POOL I TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee and the Annual Expense Escrow Amount allocable to
Pool I.
POOL II LOAN: A Loan listed on Exhibit E-2 delivered to the Custodian
on behalf of the Indenture Trustee, as such Exhibit may be amended from time to
time.
POOL II NOTE: A Class AN, Class MN or Class BN Note.
POOL II TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee and the Annual Expense Escrow Amount allocable to
Pool II.
POOL ORIGINAL COLLATERAL AMOUNT: For each Pool the aggregate Principal
Balances of the related Loans as of the Cut-Off Date.
POOL PRINCIPAL BALANCE: With respect to any Pool, the sum of the Class
Principal Balances of the Notes of such Pool.
POOL PRINCIPAL DISTRIBUTION AMOUNT: For each Pool, on any Remittance
Date, the excess of:
(X) the sum, without duplication, of the following:
(i) each payment of principal received by the Servicer or
any Subservicer (exclusive of Curtailments, Principal Prepayments
and amounts described in clause (iii) hereof) during the related
Due Period with respect to the Loans of the related Pool,
(ii) all Curtailments and all Principal Prepayments received
by the Servicer or any Subservicer during the related Due Period
with respect to the Loans of the related Pool,
(iii) the principal portion of all Insurance Proceeds,
Released Mortgaged Property Proceeds and Net Liquidation Proceeds
received by the Servicer or any Subservicer during the related
Due Period with respect to the Loans of the related Pool,
(iv) that portion of the purchase price (as indicated in
Section 2.05(b)) for any repurchased Loan (including Defaulted
Loans) from the related Pool which represents principal and any
Substitution Adjustments deposited in the applicable Principal
and Interest Account with respect to such Loans of the related
Pool and transferred to the applicable Note Distribution Account
as of the related Determination Date,
(v) the then outstanding Principal Balance of any Loan
which, as of the first day of the related Due Period, has become
a Liquidated Loan,
(vi) any proceeds representing principal on the Loans of the
related Pool received by the Indenture Trustee in connection with
the liquidation of the Loans of the related Pool or the
termination of the Trust, and
(vii) the Accelerated Principal Distribution Amount for such
Pool for such Remittance Date, OVER
(Y) the amount of any Subordination Reduction Amount for such
Pool for such Remittance Date.
PREFERENCE AMOUNT: means any amount previously distributed to a holder
of a Pool I or Pool II Note (other than the Trust Fund) 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.
PRIME RATE: With respect to any date of determination, the lowest
prime lending rate published in the Money Rate Section of THE WALL STREET
JOURNAL.
PRINCIPAL AND INTEREST ACCOUNT: Any of the principal and interest
accounts established by the Servicer pursuant to Section 4.03 hereof.
PRINCIPAL BALANCE: With respect to any Loan or related REO Property,
at any date of determination, (i) the principal balance of the Loan outstanding
as of the Cut-Off Date or substitution date relative to Qualified Substitute
Loans, after application of principal payments received on or before such date,
minus (ii) the sum of (a) the principal portion of the Monthly Payments received
during each Due Period ending prior to the most recent Remittance Date, which
were distributed pursuant to Section 7.05 on any previous Remittance Date, and
(b) all Principal Prepayments, Curtailments, Excess Payments, all Insurance
Proceeds, Released Mortgaged Property Proceeds, Net Liquidation Proceeds and net
income from an REO Property to the extent applied by the Servicer as recoveries
of principal in accordance with the provisions hereof, which were distributed
pursuant to Section 7.08 on any previous Remittance Date. The Principal Balance
of a Liquidated Loan shall equal $0.
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Loan equal to the outstanding principal balance thereof, received in advance of
the final scheduled Due Date which is intended to satisfy a Loan in full.
PRIOR LIEN: With respect to any Loan which is not a first priority
lien, each loan relating to the corresponding Mortgaged Property having a higher
priority lien.
PROHIBITED TRANSACTION: "Prohibited Transaction" shall have the
meaning set forth from time to time in the definition thereof at Section
860F(a)(2) of the Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE LOAN: A loan or loans substituted for a Deleted
Loan pursuant to Section 2.05 or 3.03 hereof, which (i) has or have a Gross
Margin and Index of not less than (and not more than two percentage points more
than) the Gross Margin and Index for the Deleted Loan; (ii) relates or relate to
the same type of Collateral, as the Deleted Loan; (iii) matures or mature no
later than (and not more than one year earlier than) the Deleted Loan; (iv) has
or have a Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such
substitution no higher than the Loan-to-Value Ratio of the Deleted Mortgage Loan
at such time; (v) has or have a principal balance or principal balances (after
application of all payments received on or prior to the date of substitution)
equal to or less than the Principal Balance (prior to the occurrence of Realized
Losses) of the Deleted Loan as of such date; (vi) was originated under the same
program type as the Deleted Loan; and (vii) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01(b)
and 3.02.
RATING AGENCIES: DCR and Moody's.
RATING AGENCY CONDITION: With respect to any action, that each of the
Rating Agencies shall have notified the Servicer, the Owner Trustee and the
Indenture Trustee, orally or in writing, that such action will not, in and of
itself, result in a reduction or withdrawal of the then current rating of any
class of Notes.
REALIZED LOSS: With respect to each Liquidated Loan, an amount (not
less than zero or greater than the related outstanding principal balance as of
the date of the final liquidation) equal to the outstanding principal balance of
the Loan as of the date of such liquidation, minus the Net Liquidation Proceeds
relating to such Liquidated Loan (such Net Liquidation Proceeds to be applied
first to the principal balance of the Liquidated Loan and then to interest
thereon). With respect to each Loan which has become the subject of a Deficient
Valuation, the Realized Loss shall be calculated as the difference between the
principal balance of the Loan immediately prior to such Deficient Valuation and
the principal balance of the Loan as reduced by the Deficient Valuation.
REALIZED LOSS AMOUNT: With respect to Pool I, the collective reference
to the Class MS-1 Realized Loss Amounts, Class MS-2 Realized Loss Amounts and
Class BS Realized Loss Amounts, and with respect to Pool II, the collective
reference to the Class MN Realized Loss Amounts and Class BN Realized Loss
Amounts.
RECORD DATE: With respect to any Remittance Date, the close of
business on the last day of the month immediately preceding the month of the
related Remittance Date.
REFERENCE BANKS: Leading banks selected by the Trust Administrator and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, (ii) which have been
designated by the Trust Administrator to the Representative and the Servicer and
(iii) which are not affiliates of the Representative.
REGISTRATION STATEMENT: The registration statement (File No.
333-60771) filed by the Representative with the Securities and Exchange
Commission in connection with the issuance and sale of the Notes and the
Certificates, including the Prospectus dated June 24, 1999 and the Prospectus
Supplement dated June 24, 1999.
REIMBURSABLE AMOUNTS: As of any date of determination, an amount
payable to the Servicer and/or Representative with respect to (i) the Monthly
Advances and Servicing Advances reimbursable pursuant to Section 4.04(b), (ii)
any advances reimbursable pursuant to Section 4.04 and not previously
reimbursed, and (iii) any other amounts reimbursable to the Servicer or the
Representative pursuant to this Agreement.
RELEASED MORTGAGED PROPERTY PROCEEDS: As to any Loan, proceeds
received by the Servicer in connection with (a) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (b) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial condemnation, sale or otherwise, which are not released to
the Obligor in accordance with applicable law, the Servicer's customary
servicing procedures and this Agreement.
REMARKETING AGENT: First Union Capital Markets Corp., and its
successors and assigns.
REMARKETING AGENT FEE: The meaning set forth in the Interest Rate
Services Agreement.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC CHANGE OF LAW: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.
REMIC I: As defined in the Trust Agreement.
REMIC II: As defined in the Trust Agreement.
REMIC I REGULAR INTERESTS: As defined and described in Section
2.13(b)-(d) of the Trust Agreement.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REMITTANCE DATE: The 15th day of any month or if such 15th day is not
a Business Day, the first Business Day immediately following, commencing on July
15, 1999; provided, however, that in no event shall the Remittance Date occur
less than three Business Days following the Determination Date.
REMITTANCE RATE: With respect to a Class of Notes, the annual rate of
interest payable to the Noteholders of such Class, which rate is set forth, or
determined as provided, under the definitions of the Class AS-1 Remittance Rate,
Class AS-2 Remittance Rate, Class AS-3 Remittance Rate, Class MS-1 Remittance
Rate, Class MS-2 Remittance Rate, Class BS Remittance Rate, Class AN Remittance
Rate, Class MN Remittance Rate and Class BN Remittance Rate.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure. The proceeds of any REO Disposition constitute part of the
definition of Liquidation Proceeds.
REO PROPERTY: As described in Section 4.10.
REPRESENTATIVE: The Money Store Inc., a New Jersey corporation, and
its successors and assigns as Representative hereunder.
RESIDENTIAL PROPERTY: Any one or more of the following, (i) single
family dwelling unit not attached in any way to another unit, (ii) row house,
(iii) two-family house, (iv) low-rise condominium, (v) planned unit development,
(vi) three- or four-family house, (vii) high-rise condominium, (viii) mixed use
building or (ix) manufactured home (as defined in FNMA/FHLMC Seller-Servicers'
Guide) to the extent that it constitutes real property in the state in which it
is located.
RESPONSIBLE OFFICER: When used with respect to the Indenture Trustee
or the Custodian (a) any officer assigned to the Corporate Trust Department,
Corporate Trust Office, or similar group, and when used with respect to the
Owner Trustee, any officer assigned to the Owner Trustee's Corporate Trust
Office as set forth in the Trust Agreement, in each case including any Vice
President, Assistant Vice President, any Assistant Secretary, any trust officer
or any other officer 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 and (b) who
shall have direct responsibility for the administration of this Agreement. When
used with respect to the Representative, the Seller, the Servicer or any other
person, any Vice President, Assistant Vice President, the Treasurer, or any
Secretary or Assistant Secretary.
ROUNDING ACCOUNT: The account established and maintained by the
Indenture Trustee in accordance with Section 7.02 hereof.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
SBA: The United States Small Business Administration, an agency of the
United States Government.
SBA 504 LOAN: A Loan originated by the Seller in conjunction with the
SBA 504 Loan Program.
SBA 504 LOAN PROGRAM: The program established by the SBA pursuant to
Rule 504 of the SBA Rules and Regulations.
SBA RULES AND REGULATIONS: The Small Business Act of 1953, as amended,
codified at 15 U.S.C. 631 ET. SEQ., all rules and regulations promulgated from
time to time.
SBA SS. 7(A) LOAN: A loan originated pursuant to Section 7(a) of the
SBA Rules and Regulations.
SBA SS. 7(A) LOAN PROGRAM: A general business loan program established
under Section 7(a) of the SBA Rules and Regulations.
SECTION 7(A) COMPANION LOAN: A Loan originated by the Seller in
conjunction with an affiliate of the Seller originating an SBA ss.7 (a) Loan to
the same Obligor.
SELLER: The Money Store Commercial Mortgage Inc., a New Jersey
corporation, and its successors and assigns as Seller hereunder.
SENIOR ENHANCEMENT PERCENTAGE: For a Pool and any Remittance Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class Principal
Balance of the Subordinated Notes of such Pool and (ii) the Spread Amount of
such Pool, in each case after giving effect to the distribution of the
applicable Pool Available Remittance Amount on such Remittance Date by (y) the
aggregate principal balance of the Loans of such Pool as of the last day of the
related Due Period.
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE: Means 26.25% for Pool I and
34.50% for Pool II.
SERIES: 1999-1
SERIES 1999-1 NOTES: The Money Store Business Loan Backed Notes,
Series 1999-1, Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2,
Class BS, Class AN, Class MN and Class BN.
SERVICER: The Money Store Commercial Mortgage Inc., a New Jersey
corporation, and its successors and assigns as Servicer hereunder.
SERVICER DEFAULT: An event specified in Section 10.01.
SERVICING ADVANCES: All reasonable and customary "out of pocket costs"
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, (iv) compliance with the obligations under
clause (vi) of Section 4.01(a) and Sections 4.02, 4.05 and 4.07, which Servicing
Advances are reimbursable to the Servicer to the extent provided in Section
4.04(b), and (e) in connection with the liquidation of a Loan, expenditures
relating to the purchase or maintenance of any Prior Lien pursuant to Section
4.14, for all of which costs and expenses the Servicer is entitled to
reimbursement with interest thereon up to a maximum rate per annum equal to the
related Loan Interest Rate, except that any amount of such interest accrued at a
rate in excess of the applicable Weighted Average Remittance Rate with respect
to the Remittance Date on which the Net Liquidation Proceeds will be distributed
shall be reimbursable only from Excess Proceeds.
SERVICING FEE: As to each Loan, the annual fee payable to the
Servicer. Such fee shall be calculated and payable monthly only from the amounts
received in respect of interest on such Loan, shall accrue at the rate of 0.40%
per annum and shall be computed on the basis of the same principal amount and
for the period respecting which any related interest payment on a Loan is
computed. The Servicing Fee includes any servicing fees owed or payable to any
Subservicer.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Loans whose name and
signature appears on a list of servicing officers furnished to the Indenture
Trustee by the Servicer, as such list may from time to time be amended.
SPECIAL INTERESTS: Collectively, the 1% non-transferable interest in
the each of the Class I and Class II Certificates held by the Holder of the
Special Interests, pursuant to the Trust Agreement.
SPECIFIED SUBORDINATED AMOUNT: Means, for a Pool and any Remittance
Date (i) prior to the Spread Amount Stepdown Date for such Pool, 7.00% (for Pool
I) and 12.50% (for Pool II) of the related Original Pool Amount and (ii) on and
after the related Spread Amount Stepdown Date, the greater of (A) 10.50% (for
Pool I) and 18.75% (for Pool II) of the aggregate Principal Balance of the Loans
of the related Pool as of the last day of the related Due Period and (B) 2.00%
(for Pool I) and 2.00% (for Pool II) of the related Original Pool Amount;
PROVIDED, HOWEVER, that if on or after the Spread Amount Stepdown Date for a
Pool, the Senior Enhancement Percentage for that Pool for the immediately
preceding Remittance Date is less than its Senior Specified Enhancement
Percentage, the Specified Subordinated Amount for that Pool will be the amount
determined pursuant to (i) above, and the Specified Subordinated Amount for a
Pool shall never exceed the then aggregate Class Principal Balance of the Notes
of such Pool.
SPREAD AMOUNT: With respect to a Pool and any Remittance Date, the
excess, if any, of (i) the aggregate Principal Balance of the Loans of such Pool
as of the last day of the related Due Period (plus the applicable LOC Available
Amount for such Pool) over (ii) the aggregate Class Principal Balances of the
Notes of such Pool (after taking into account all distributions of principal on
such Remittance Date).
SPREAD AMOUNT STEPDOWN DATE: Means the Remittance Date occurring in
July, 2001.
STEPDOWN DATE: For a Pool, the earlier to occur of (i) the later to
occur of (x) the Remittance Date in July 2001 and (y) the first Remittance Date
on which the Senior Enhancement Percentage for such Pool (after taking into
account distributions of principal on such Remittance Date) is greater than or
equal to the Senior Specified Enhancement Percentage for such Pool and (ii) the
Remittance Date on which the aggregate Class A Principal Balance has been
reduced to zero.
SUBORDINATED DEFICIENCY AMOUNT: Means, for a Pool and for any
Remittance Date, the excess, if any, of (i) the Specified Subordinated Amount
for that Pool for such Remittance Date over (ii) the then current Spread Amount
for that Pool, after giving effect to all payments previously made on such
Remittance Date.
SUBORDINATED NOTES: Means, with respect to a Pool, the collective
reference to the Class M Notes and the Class B Notes of such Pool.
SUBORDINATION REDUCTION AMOUNT: Means for a Pool and any Remittance
Date, the lesser of (i) sum of the amount set forth in clause (X) (i) through
(vi) of the definition of Pool Principal Distribution Amount and (ii) the
excess, if any, of the then current Spread Amount for such Pool over the then
current Specified Subordinated Amount for such Pool.
SUBSERVICER: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who satisfies any requirements set forth in Section
4.01(b) hereof in respect of the qualification of a Subservicer.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of certain Loans as
provided in Section 4.01(b), a copy of which shall be delivered, along with any
modifications thereto, to the Indenture Trustee.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.05 or 3.03, the amount (if any) by which the aggregate
principal balances (after application of principal payments received on or
before the date of substitution) of any Qualified Substitute Loans as of the
date of substitution are less than the aggregate of the Principal Balance, prior
to the occurrence of Realized Losses, of the related Deleted Loans.
TAX MATTERS PARTNER: The Person or Persons designated from time to
time to act as the "tax matters partner" as defined in the Code, which initially
shall be the Holder of the Special Interests.
TAX MATTERS PERSON: The Person or Persons designated from time to time
to act as the "tax matters person" (within the meaning of the REMIC Provisions)
of REMIC I and REMIC II, which shall initially be the Holder of the Class R
Certificates.
TELERATE PAGE 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
TERMINATION PRICE: The price defined in Section 11.01 hereof.
TREASURY INDEX: The applicable Five-Year Constant Maturity Treasury
Index as published by the Federal Reserve Board in the applicable Federal
Reserve Board Statistical Release No. H.15.
TRUST: The Issuer.
TRUST ACCOUNT PROPERTY: 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: Means the Accounts.
TRUST ADMINISTRATOR: FUNB, or its successor in interest.
TRUST ADMINISTRATOR FEE: As to each Mortgage Loan, the annual fee
payable to the Trust Administrator.
TRUST ADMINISTRATOR'S CERTIFICATE: The certificate as defined in
Section 7.10.
TRUST AGREEMENT: Trust Agreement dated as of May 31, 1999, between the
Seller and the Owner Trustee, as the same may be amended and supplemented from
time to time.
UNPAID REALIZED LOSS AMOUNT: With respect to any Class of the Class B
or Class M Notes and as to any Remittance Date, the excess of (x) the aggregate
cumulative amount of related Applied Realized Loss Amount with respect to such
Class for all prior Remittance Dates over (y) the aggregate cumulative amount of
related Realized Loss Amounts with respect to such Class for all prior
Remittance Dates.
VOTING INTEREST: 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.
WEIGHTED AVERAGE CLASS ADJUSTED LOAN REMITTANCE RATE: With respect to
each Loan, a percentage per annum, being the sum of (i) the applicable Weighted
Average Remittance Rate and (ii) the Annual Expense Escrow Amount expressed as a
percentage of the aggregate Class Principal Balance of each Class of Notes in
the applicable Pool.
WEIGHTED AVERAGE COUPON CAP: With respect to a Class of Pool I Notes
and any Remittance Date, the per annum rate, expressed on an actual/360 basis,
equal to the difference between (x) the weighted average Loan Interest Rate for
the Pool I Loans and (y) a fraction, expressed as a percentage, the numerator of
which is the sum of (i) the Servicing Fee and (ii) the fees due the Owner
Trustee, the Indenture Trustee, the Trust Administrator and the Letter of Credit
Provider for the related Pool, and (iii) with respect to the Class AS-3 Notes,
the fee due the Remarketing Agent, and the denominator of which is the aggregate
outstanding Principal Balance of the Pool I Loans as of the end of the preceding
Due Period.
WEIGHTED AVERAGE REMITTANCE RATE: Means for each Pool, the average of
the Remittance Rate for each outstanding Class of Notes of such Pool, weighted
by the Class Principal Balance of each such Class of Notes.
Section 1.02 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 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.
ARTICLE II
CONTRIBUTION AND CONVEYANCE OF THE TRUST
Section 2.01 CONTRIBUTION AND CONVEYANCE OF TRUST ACCOUNT PROPERTY;
PRIORITY AND SUBORDINATION OF OWNERSHIP INTERESTS.
The Seller does hereby contribute, transfer, assign, set over and
convey to the Issuer without recourse, subject to the terms of this Agreement,
all of the right, title and interest of the Seller in and to the Loans and all
other assets included or to be included in the Trust Account Property. Pool I
Loans have an aggregate Principal Balance as of the Cut-Off Date of
$552,136,944.03 and the Pool II Loans have an aggregate Principal Balance as of
the CutOff Date of $63,673,404.46.
<PAGE>
Section 2.02 POSSESSION OF LOAN FILES.
(a) Upon the issuance of the Series 1999-1 Notes, the ownership
of each Business Note, the Mortgage and the contents of the related Loan File
relating to the Loans is vested in the Issuer for the benefit of the Noteholders
and the Certificateholders.
(b) Pursuant to Section 2.04, the Seller has delivered or caused
to be delivered each Indenture Trustee's Loan File relating to the Loans to the
Custodian on behalf of the Indenture Trustee.
Section 2.03 BOOKS AND RECORDS.
The contribution of each Loan shall be reflected on the Seller's
balance sheet and other financial statements as a contribution of assets by the
Seller. The Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Loan which shall be clearly marked to
reflect the ownership of each Loan by the Issuer for the benefit of the
Noteholders and the Certificateholders.
Section 2.04 DELIVERY OF LOAN DOCUMENTS.
The Seller, (i) contemporaneously with the delivery of this Agreement, has
delivered or caused to be delivered to the Custodian each of the following
documents for each Loan:
(a) The original Business Note, endorsed by means of an allonge
as follows: "Pay to the order of HSBC Bank USA, and its successors and assigns,
as trustee under that certain Indenture dated as of May 31, 1999, for the
benefit of the noteholders of The Money Store Business Loan Backed Trust 1999-1,
without recourse" and signed, by facsimile or manual signature, in the name of
the Seller by a Responsible Officer, with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the Seller, if
the Seller was not the originator;
(b) With respect to those Loans secured by Mortgaged Properties,
either: (i) the original Mortgage, with evidence of recording thereon, (ii) a
copy of the Mortgage certified as a true copy by a Responsible Officer where the
original has been transmitted for recording until such time as the original is
returned by the public recording office or (iii) a copy of the Mortgage
certified by the public recording office in those instances where the original
recorded Mortgage has been lost; 1With respect to those Loans secured by
Mortgaged Properties, either: (i) the original Assignment of Mortgage from the
Person delivering such Assignment to "HSBC Bank USA, as Indenture Trustee for
The Money Store Business Loan Backed Trust 1999-1" with evidence of recording
thereon (provided, however, that where permitted under the laws of the
jurisdiction wherein the Mortgaged Property is located, the Assignment of
Mortgage may be effected by one or more blanket assignments for Mortgage Loans
secured by Mortgaged Properties located in the same county); or (iii) a copy of
such Assignment of Mortgage certified as a true copy by a Responsible Officer of
the Seller where the original has been transmitted for recording (provided,
however, that where the original Assignment of Mortgage is not being delivered,
each such Responsible Officer of the Seller may complete one or more blanket
certificates attaching copies of one or more Assignments of Mortgage relating to
the Mortgages originated by the Seller) (also provided, however, that the Person
delivering such Assignment shall not be required to record an assignment of a
Mortgage if such Person furnishes to the Custodian and the Trustee, on or before
the Closing Date, at the Person's expense, an opinion of counsel with respect to
the relevant jurisdiction that such recording is not necessary to perfect the
Trustee's interest in the related Mortgage Loans, in form and substance and from
counsel satisfactory to the Rating Agencies);
(c) With respect to those Loans secured by Mortgaged Properties,
either: (i) originals of all intervening assignments, if any, showing a complete
chain of title from the originator to the Seller, including warehousing
assignments, with evidence of recording thereon if such assignments were
recorded, (ii) copies of any assignments certified as true copies by a
Responsible Officer of the Seller where the originals have been submitted for
recording until such time as the originals are returned by the public recording
officer, or (iii) copies of any assignments certified by the public recording
office in any instances where the original recorded assignments have been lost;
(d) With respect to those Loans secured by Mortgaged Properties,
either: (i) originals of all title insurance policies relating to the Mortgaged
Properties to the extent the Seller obtained such policies or (ii) copies of any
title insurance policies or other evidence of lien position, including but not
limited to "PIRT" (property information report) policies, limited liability
reports and lot book reports, to the extent the Seller obtained such policies or
other evidence of lien position, certified as true by the Seller;
(e) For all Loans, blanket assignment of all Collateral securing
the Loan, including without limitation, all rights under applicable guarantees
and insurance policies;
(f) For all Loans, irrevocable power of attorney of the Seller to
the Custodian to execute, deliver, file or record and otherwise deal with the
Collateral for the Loans in accordance with this Agreement. The power of
attorney will be delegable by the Custodian to the Servicer and any successor
servicer and will permit the Custodian or its delegate to prepare, execute and
file or record UCC financing statements and notices to insurers; and 1For all
Loans, blanket UCC-1 financing statements identifying by type all Collateral for
the Loans and naming the Indenture Trustee on behalf of the Noteholders and
Certificateholders as Secured Party and the Seller as the Debtor. The UCC-1
financing statements will be filed promptly following the Closing Date in New
Jersey and California and will be in the nature of protective notice filings
rather than true financing statements.
The Seller shall, within ten Business Days after the receipt thereof,
and in any event, within one year of the Closing Date, deliver or cause to be
delivered to the Custodian: (a) the original recorded Mortgage in those
instances where a copy thereof certified by a Responsible Officer of the Seller
was delivered to the Custodian; (b) if required pursuant to Section 2.04(c), the
original recorded Assignment of Mortgage to the Indenture Trustee, which,
together with any intervening assignments of Mortgage, evidences a complete
chain of title from the originator to the Trust in those instances where copies
thereof certified by a Responsible Officer of the Seller were delivered to the
Custodian; and (c) any intervening assignments of Mortgage in those instances
where copies thereof certified by a Responsible Officer of the Seller were
delivered to the Custodian. Notwithstanding anything to the contrary contained
in this Section 2.04, in those instances where the public recording office
retains the original Mortgage, Assignment of Mortgage or the intervening
assignments of the Mortgage after it has been recorded, the Seller shall be
deemed to have satisfied its obligations hereunder upon delivery to the
Custodian of a copy of such Mortgage, Assignment of Mortgage or assignments of
Mortgage certified by the public recording office to be a true copy of the
recorded original thereof. From time to time the Seller may forward or cause to
be forwarded to the Custodian additional original documents evidencing an
assumption or modification of a Loan. All Loan documents held by the Indenture
Trustee or the Custodian on behalf of the Indenture Trustee as to each Loan are
referred to herein as the "Indenture Trustee's Loan File."
All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Servicer.
Section 2.05 ACCEPTANCE OF THE TRUST FUND; CERTAIN SUBSTITUTIONS;
CERTIFICATION BY INDENTURE TRUSTEE AND CUSTODIAN.
(a) The Custodian, on behalf of the Indenture Trustee, agrees to
execute and deliver on the Closing Date with respect to the Loans an
acknowledgment of receipt of, for each Mortgage Loan, an Assignment of Mortgage
or certified copy thereof, and for each Loan a Business Note, in the form
attached as Exhibit C hereto. The Custodian declares that it, through its
corporate trust department, will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets included in the
definition of the Trust Fund and delivered to the Custodian in trust upon and
subject to the conditions set forth herein solely as bailee for the Indenture
Trustee. The Custodian agrees, for the benefit of the Noteholders and the
Certificateholders, to review each Indenture Trustee's Loan File relating to
each Pool of Loans within 60 days after the Closing Date (or, with respect to
any Qualified Substitute Loan, within 45 days after the assignment thereof) and,
on each such date, to deliver to the Representative, the Indenture Trustee and
the Servicer, a certification in the form attached hereto as Exhibit C-1 to the
effect that, as to each Loan listed in the applicable Loan Schedule (other than
any Loan paid in full or any Loan specifically identified in such certification
as not covered by such certification), with such exceptions, if any, as
identified therein (i) all documents required to be delivered pursuant to this
Agreement are in its possession (other than items listed in Section
2.04(d)(ii)), (ii) such documents (other than items listed in Section
2.04(d)(ii)) have been reviewed by it and have not been mutilated, damaged, torn
or otherwise physically altered and relate to such Loan, (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the applicable Loan Schedule accurately reflects the information set forth in
the Indenture Trustee's Loan File, and (iv) each Business Note has been endorsed
as provided in Section 2.04 of this Agreement. The Custodian shall be under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face. Within 375 days after the Closing
Date, the Custodian shall deliver to the Servicer, the Indenture Trustee, the
Representative and any Noteholder or Certificateholder who requests a copy a
final certification in the form attached hereto as Exhibit D evidencing, if such
be the case, the completeness of the Indenture Trustee's Loan Files. In no event
shall the Indenture Trustee have any liability or responsibility for reviewing
any of the Indenture Trustee's Loan Files or any of the documents contained
therein or for the Custodian's failure to perform any of its obligations
hereunder to conduct any such review.
(b) If the Custodian during the process of reviewing the Indenture
Trustee's Loan Files finds any document constituting a part of an Indenture
Trustee's Loan File which is not properly executed, has not been received, is
unrelated to a Loan identified in the Loan Schedule, or does not conform in a
material respect to the requirements of Section 2.04 or the description thereof
as set forth in the Loan Schedule, the Custodian shall promptly so notify the
Servicer and the Representative. In performing any such review, the Custodian
may conclusively rely on the Seller as to the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Custodian's review of the Indenture Trustee's Loan Files is limited solely to
confirming that the documents listed in Section 2.04 appear on their face to
have been executed and received and to relate to the Loans identified in the
Loan Schedule, and to verify that each Mortgaged Property or other item of
collateral appears from the information contained in the Indenture Trustee's
Loan File to be a properly classified Loan. The Representative agrees to use
reasonable efforts to remedy a material defect in a document constituting part
of an Indenture Trustee's Loan File of which it is so notified. If, however,
within 60 days after notice to it respecting such defect the Representative has
not remedied the defect and the defect materially and adversely affects the
interest of the Noteholders or Certificateholders in the related Loan, the
Representative will (i) substitute in lieu of such Loan a Qualified Substitute
Loan in the manner and subject to the conditions set forth in Section 3.03 or
(ii) purchase such Loan at a purchase price equal to the Principal Balance of
the Loan as of the date of purchase, before the occurrence of Realized Losses,
if any, plus interest based on the actual number of days during the related
Interest Period on such Principal Balance, computed at the Weighted Average
Class Adjusted Loan Remittance Rates for the applicable Pool as of the next
succeeding Determination Date, plus any accrued unpaid Servicing Fees, Monthly
Advances and Servicing Advances reimbursable to the Servicer, which purchase
price shall be deposited in the applicable Principal and Interest Account on the
next succeeding Determination Date.
(c) Upon receipt by the Custodian of a certification of a Servicing
Officer of the Servicer of such substitution or purchase and the deposit of the
amounts described above in the applicable Principal and Interest Account (which
certification shall be in the form of Exhibit G hereto), the Custodian shall
release to the Servicer for release to the Representative the related Indenture
Trustee's Loan File and the Custodian shall execute, without recourse, and
deliver such instruments of transfer necessary to transfer such Mortgage Loan to
the Representative. All costs of any such transfer shall be borne by the
Servicer.
If requested by either the Representative or the Servicer, on the
Remittance Date in June of each year, commencing 2000, the Custodian shall
deliver to the Representative and the Servicer a certification detailing all
transactions with respect to the Mortgage Loans for which the Custodian holds an
Indenture Trustee's Loan File pursuant to this Agreement during the prior
calendar year. Such certification shall list all Indenture Trustee's Loan Files
which were released by or returned to the Custodian during the prior calendar
year, the date of such release or return, the reason for such release or return,
and the person to whom the Indenture Trustee's Loan File was released or the
person who returned the Indenture Trustee's Loan File.
Section 2.06 FEES AND EXPENSES OF THE INDENTURE TRUSTEE, OWNER
TRUSTEE, TRUST ADMINISTRATOR AND CUSTODIAN.
The fees and expenses of the Indenture Trustee, Owner Trustee and Trust
Administrator shall be paid from the Expense Accounts in the manner set forth in
Section 7.03 hereof; PROVIDED, HOWEVER, that the Representative shall be liable
for any expenses of the Trust incurred prior to the Closing Date. The Custodian
agrees to perform its duties hereunder without charge to the Trust. Any fees or
expenses payable to the Custodian shall be paid by the Servicer. The parties
hereto hereby covenant with the Noteholders and the Certificateholders that
every material contract or other material agreement entered into by the
applicable party, on behalf of the Trust shall expressly state therein that no
Noteholder or Certificateholder shall be personally liable in its capacity as
such in connection with such contract or agreement.
Section 2.07 DESIGNATIONS UNDER REMIC PROVISIONS; DESIGNATION OF
STARTUP DAY; TAX MATTERS PERSON; TAX MATTERS PARTNER.
(a) As described in Section 2.13(e) of the Trust Agreement, each Class
of the Pool I Notes (exclusive of any rights to receive any amounts from the
Carryover Interest Account and in the case of the Class AS-3 Notes, the Rounding
Account) and the Class I Certificates are hereby designated as the "regular
interests" in REMIC II and the Class R-II Interests are designated the single
class of "residual interests" in REMIC II for the purposes of the REMIC
Provisions. As described in Section 2.13(a)-(d) of the Trust Agreement, the
REMIC I Regular Interests are hereby designated as the "regular interests" in
REMIC I and the Class R-I Interests are designated the single class of "residual
interests" in REMIC I for the purposes of the REMIC Provisions. The Class R
Certificates represent beneficial ownership of both the Class R-I and Class R-II
Interests.
<PAGE>
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of Section 860G(a)(9) of the Code. Solely for the
purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
latest possible maturity date of the "regular interests" in each of REMIC I and
REMIC II is June 15, 2033.
(c) With respect to Pool I, the holder of a majority of the Percentage
Interests in the Class R Certificates shall act as Tax Matters Person of REMIC I
and REMIC II. By acceptance of its Class R Certificate, the Tax Matters Person
agrees to and hereby does appoint the Trust Administrator to act as its agent in
all matters that are the responsibility of the Tax Matters Person under the Code
(to the extent such agency is permitted by law), and the Trust Administrator
hereby accepts such appointment.
(d) With respect to Pool II, the Holder of the Special Interests shall
act as Tax Matters Partner of the Trust. The Holder of the Special Interests, by
acceptance of its Class II Certificates, agrees to and hereby does appoint the
Trust Administrator to act as its agent in all matters that are the
responsibility of the Tax Matters Partner under the Code, and the Trust
Administrator hereby accepts such appointment.
(e) Any inconsistencies or ambiguities in this Agreement or in the
administration of the Trust shall be resolved in a manner that preserves the
validity of the election that REMIC I and REMIC II each be treated as a REMIC.
Section 2.08. OPTIONAL REPURCHASE OF DEFAULTED LOANS.
The Servicer shall have the right, but not the obligation, to repurchase
any Defaulted Loan for a purchase price equal to the Principal Balance of such
Defaulted Loan as of the date of repurchase, plus accrued interest (whether
through payments by the applicable Obligor, Monthly Advances or otherwise) on
such Principal Balance, computed at the applicable Loan Interest Rate (net of
the per annum rate used in calculating the Servicing Fee) as of the next
succeeding Determination Date, plus any accrued unpaid Servicing Fees, Monthly
Advances and Servicing Advances reimbursable to the Servicer, which purchase
price shall be deposited in the Principal and Interest Account on the next
succeeding Determination Date. Any such repurchase shall be accomplished in the
manner specified in Section 2.05(b). In no event shall the aggregate Principal
Balance of all Defaulted Loans purchased pursuant to this Section 2.10 exceed
10% of the Original Collateral Amount .
Section 2.09 ASSIGNMENT EVENT.
Immediately upon the occurrence of any Assignment Event, the
Representative or the Servicer shall notify the Indenture Trustee of such
occurrence. Thereafter, unless the Rating Agency Condition is satisfied with
respect to the Indenture Trustee's Loan Files remaining with the Custodian, the
Custodian shall begin transferring all Indenture Trustee's Loan Files in its
possession to the Indenture Trustee or its bailee. The Custodian shall undertake
such transfer in a manner that will result in the completion of the transfer of
all such Indenture Trustee's Loan Files to the Indenture Trustee within 30 days
following the occurrence of an Assignment Event. From and after the occurrence
of an Assignment Event, and the delivery of the Indenture Trustee's Loan Files
to the Indenture Trustee, the Indenture Trustee shall act as Custodian or it may
engage the services of another Person to act as Custodian. The Custodian hereby
acknowledges that it is bailee of the Indenture Trustee and is holding all of
the Indenture Trustee's Loan Files delivered to it solely in trust for the
Indenture Trustee.
From time to time following delivery of the Indenture Trustee's Loan
Files to the Indenture Trustee pursuant to this Section 2.09, the Indenture
Trustee may appoint a Custodian who is acceptable to the Trust Administrator.
The Trust Administrator shall notify the Rating Agencies of any appointment of a
successor Custodian.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 REPRESENTATIONS OF REPRESENTATIVE, SELLER AND SERVICER.
(a) The Representative (for the purposes of this Section 3.01(a),
"The Money Store Inc.") hereby represent and warrant to the Indenture Trustee,
the Owner Trustee, the Noteholders and the Certificateholders as of the Closing
Date:
(i) The Money Store Inc. is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state where the laws of such state require licensing
or qualification in order to conduct business of the type conducted by
The Money Store Inc. and perform its obligations hereunder; The Money
Store Inc. has corporate power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by The Money
Store Inc. and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action; this Agreement evidences the valid, binding and
enforceable obligation of The Money Store Inc.; and all requisite
corporate action has been taken by The Money Store Inc. to make this
Agreement valid, binding and enforceable upon The Money Store Inc. in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity,
none of which will affect the ownership of the Loans by the Trust;
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc., under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which The Money Store Inc. makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and
sale of the Notes and the Certificates and the execution and delivery
by The Money Store Inc. of the documents to which it is a party, have
been duly taken, given or obtained, as the case may be, are in full
force and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and
the other documents on the part of The Money Store Inc. and the
performance by The Money Store Inc. of its obligations under this
Agreement and such of the other documents to which it is a party;
(iii) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of
the certificate of incorporation or by-laws of The Money Store Inc. or
result in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any
obligation under, any material agreement, indenture or loan or credit
agreement or other material instrument to which The Money Store Inc.
or its property is subject, or result in the violation of any law,
rule, regulation, order, judgment or decree to which The Money Store
Inc. or its property is subject;
(iv) Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby and thereby
contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading;
(v) The Money Store Inc. does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vi) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of The Money Store
Inc.'s knowledge, threatened against The Money Store Inc. which,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial
condition, properties or assets of The Money Store Inc. or in any
material impairment of the right or ability of The Money Store Inc. to
carry on its business substantially as now conducted, or in any
material liability on the part of The Money Store Inc. or which would
draw into question the validity of this Agreement or the Loans or of
any action taken or to be taken in connection with the obligations of
The Money Store Inc. contemplated herein, or which would be likely to
impair materially the ability of The Money Store Inc. to perform under
the terms of this Agreement;
(vii) The Issuer will not constitute an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(viii) The Money Store Inc. is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of The Money Store Inc.
or its properties or might have consequences that would materially and
adversely affect its performance hereunder;
(ix) The statements contained in the Registration Statement which
describe The Money Store Inc. or matters or activities for which The
Money Store Inc. is responsible in accordance with the Registration
Statement, this Agreement and all documents referred to therein or
delivered in connection therewith, or which are attributable to The
Money Store Inc. therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue
statement of a material fact with respect to The Money Store Inc. and
does not omit to state a material fact necessary to make the
statements contained therein with respect to The Money Store Inc. not
misleading. The Money Store Inc. is not aware that the Registration
Statement contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements contained
therein not misleading. There is no fact peculiar to The Money Store
Inc. or the Loans and known to The Money Store Inc. that materially
adversely affects or in the future may (so far as The Money Store Inc.
can now reasonably foresee) materially adversely affect The Money
Store Inc. or the Loans, the Security interests therein represented by
the Notes or the ownership interests therein represented by the
Certificates that has not been set forth in the Registration
Statement;
(x) The Seller received fair consideration and reasonably
equivalent value in exchange for the contribution of the Loans;
(xi) The Seller did not contribute any interest in any Loan with
any intent to hinder, delay or defraud any of its creditors;
(xii) The Seller is solvent and will not be rendered insolvent as
a result of the contribution of the Loans to the Trust or the sale of
the Notes or the Certificates;
(xiii) No Noteholder or Certificateholder is subject to state
licensing requirements solely by virtue of holding the Notes or the
Certificates; and
(b) The Seller hereby represents and warrants to the Noteholders,
the Certificateholders, the Indenture Trustee and the Owner Trustee as of the
Closing Date:
<PAGE>
(i) The Seller is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation and, except as set forth below, has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where the laws
of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller and perform its
obligations hereunder; the Seller has corporate power and authority to
execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to
this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action; this Agreement evidences the valid,
binding and enforceable obligation of the Seller; and all requisite
corporate action has been taken by the Seller to make this Agreement
valid, binding and enforceable upon the Seller in accordance with the
respective terms of each such agreement, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally or the
application of equitable principles in any proceeding, whether at law
or in equity, none of which will affect the ownership of the Loans by
the Trust;
(ii) No approval of the transactions contemplated by this
Agreement and the Subservicing Agreement to which it is a party from
any state or federal regulatory authority having jurisdiction over the
Seller is required or, if required, such approval has been or will,
prior to the Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of
the certificate of incorporation or by-laws of the Seller or result in
the breach of any term or provision of, or conflict with or constitute
a default under or result in the acceleration of any obligation under,
any material agreement, indenture or loan or credit agreement or other
material instrument to which the Seller or its property is subject, or
result in the violation of any law, rule, regulation, order, judgment
or decree to which the Seller or its property is subject;
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Seller or its properties or
might have consequences that would materially and adversely affect its
performance hereunder;
(v) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of the Seller's
knowledge, threatened against the Seller which, either in any one
instance or in the aggregate, may result in any material adverse
change in the business, operations, condition (financial or other),
properties or assets of the Seller or in any material impairment of
the right or properties or assets of the Seller to carry on its
business substantially as now conducted, or in any material liability
on the part of the Seller or which would draw into question the
validity of this Agreement or the Loans or of any action taken or to
be taken in connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the ability of
the Seller to perform under the terms of this Agreement and there is
no injunction, writ, restraining order or other order of any nature
which adversely affects Seller's ability to perform as required by the
transactions contemplated hereby;
(vi) The Seller is in compliance with all applicable laws, rules,
regulations and orders materially affecting it and its business except
where the failure to comply would not have a material adverse effect
on the business of the Seller or on the Seller's ability to consummate
the transactions contemplated by the Basic Documents to which it is a
party;
(vii) Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby or thereby
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements contained herein or
therein not misleading;
(viii) The statements contained in the Registration Statement
which describe the Seller or matters or activities for which the
Seller is responsible in accordance with the Registration Statement,
this Agreement and all documents referred to therein or delivered in
connection therewith, or which are attributable to the Seller therein
are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact
with respect to the Seller or the Loans and does not omit to state a
material fact necessary to make the statements contained therein with
respect to the Seller or the Loans not misleading. The Seller is not
aware that the Registration Statement contains any untrue statement of
a material fact or omits to state any material fact necessary to make
the statements contained therein not misleading. There is no fact
peculiar to the Seller or the Loans and known to the Seller that
materially and adversely affects or in the future may (so far as the
Seller can now reasonably foresee) materially and adversely affect the
Seller, the security interests therein evidenced by the Notes or the
Loans or the ownership interests therein represented by the
Certificates that has not been set forth in the Registration
Statement;
(ix) Upon the receipt of each Indenture Trustee's Loan File by
the Custodian under this Agreement, the Trust will have good and
marketable title to each Loan and such other items comprising the
corpus of the related Trust free and clear of any lien (other than
liens which will be simultaneously released or liens contemplated by
the Basic Documents);
(x) The Seller's principal place of business and chief executive
office are located in West Sacramento, California, and there have been
no other such locations during the previous four months;
(xi) The Seller's legal name is The Money Store Commercial
Mortgage Inc. and the Seller has not changed its name during the
previous six months and does not have trade names, fictitious names,
assumed names or "doing business as" names;
(xii) The Seller will treat the transfer of the Loans to the
Trust as a sale for accounting purposes;
(xiii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which the Seller makes no such representation or warranty), that are
necessary or advisable in connection with the purchase and sale of the
Notes and the Certificates and the execution and delivery by the
Seller of the documents to which it is a party, have been duly taken,
given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other documents on
the part of the Seller and the performance by the Seller of its
obligations under this Agreement and such of the other documents to
which it is a party;
(xiv) The transfer, assignment and conveyance of the Business
Notes and the Collateral by the Seller pursuant to this Agreement are
not subject to the bulk transfer laws or any similar statutory
provisions in effect in any applicable jurisdiction;
(xv) The origination and collection practices used by the Seller
and the Servicer with respect to each Business Note and Mortgage
relating to the Loans have been in all material respects legal,
proper, prudent and customary in the business loan origination and
servicing business;
(xvi) Each Loan was selected from among the existing loans in the
Seller's portfolio at the date hereof in a manner not designed to
adversely affect the Noteholders and the Certificateholders;
(xvii) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(xviii) The Seller received fair consideration and reasonably
equivalent value in exchange for the contribution of the Loans;
(xix) The Seller did not contribute any interest in any Loan with
any intent to hinder, delay or defraud any of its respective
creditors;
(xx) The Seller is solvent and will not be rendered insolvent as
a result of the contribution of the Loans to the Trust or the sale of
the Notes or the Certificates;
(xxi) No Noteholder or Certificateholder is subject to state
licensing requirements solely by virtue of holding the Notes or the
Certificates;
(xxii) The Servicer's computer and other systems used in
servicing the Loans will be modified and maintained to operate in a
manner such that at all times, including on and after January 1, 2000,
the Servicer can service the Loans in accordance with the terms of
this Agreement; and
(xxiii) The Seller has valid business reasons for selling the
Loans rather than obtaining a loan with such assets as collateral.
Section 3.02 INDIVIDUAL LOANS.
The Seller hereby represents and warrants to the Issuer, the
Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders, with respect to each Loan as of the Closing Date:
(a) The information with respect to each Loan set forth in the
Loan Schedules is true and correct;
(b) All of the original or certified documentation set forth in
Section 2.04 (including all material documents related thereto) has been or will
be delivered as required by Section 2.04 to the Custodian on the Closing Date or
as otherwise provided in Section 2.04;
(c) Each Mortgaged Property is improved by a Commercial Property,
a Multi-Family Property or a Residential Property and does not constitute other
than real property under state law;
(d) Each Loan has been originated by the Seller and each Loan is
being serviced by the Servicer;
(e) Each Loan is an SBA 504 Loan, a Section 7(a) Companion Loan,
a CCL Loan or a Multi-Family Loan and is secured by one or more items of
Collateral;
(f) Each Business Note will provide for a schedule of Monthly
Payments which are, if timely paid, sufficient to fully amortize the principal
balance of such Business Note on its maturity date;
(g) With respect to those Loans secured by a Mortgaged Property,
each Mortgage is a valid and subsisting lien of record on the Mortgaged Property
subject only to any applicable Prior Liens on such Mortgaged Property and
subject in all cases to such exceptions that are generally acceptable to banking
institutions in connection with their regular commercial lending activities, and
such other exceptions to which similar properties are commonly subject and which
do not individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such Mortgage;
(h) Immediately prior to the transfer and assignment herein
contemplated, the Seller held good and indefeasible title to, and was the sole
owner of, each Loan conveyed by the Seller subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in Section
3.02(g) or other liens which will be released simultaneously with such transfer
and assignment; and immediately upon the transfer and assignment herein
contemplated, the Issuer will hold good and indefeasible title, to, and be the
sole owner of, each Loan subject to no liens, charges, mortgages, encumbrances
or rights of others except as set forth in Section 3.02(g), or other liens which
will be released simultaneously with such transfer and assignment;
(i) As of the Cut-Off Date no Loan is 59 or more days delinquent
in payment and as of the Closing Date, no more than 1.00% of the Loans will be
delinquent in payment;
(j) To the best of the Seller's knowledge, there is no delinquent
tax or assessment lien on any Mortgaged Property, and each Mortgaged Property is
free of material damage and is in good repair;
(k) The Loans are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the related Business Note or any related
Mortgage, or the exercise of any right thereunder, render either the related
Business Note or any related Mortgage unenforceable in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(l) Each Loan at the time it was made complied and, as of the
Closing Date, complies in all material respects with applicable state and
federal laws and regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws;
(m) The Loans were originated by the Seller in accordance with
the underwriting criteria set forth in the Registration Statement;
(n) The Seller requires that the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage
representing coverage described in Section 4.07;
(o) The Seller requires that if a Mortgaged Property is in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy is in effect
with respect to such Mortgaged Property with a generally acceptable carrier in
an amount representing coverage described in Section 4.07;
(p) Each Business Note, any related Mortgage and any other
agreement pursuant to which Collateral is pledged to the Seller is the legal,
valid and binding obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law), none of which will prevent the ultimate realization of the security
provided by the Collateral or other agreement, and all parties to each Loan had
full legal capacity to execute all Loan documents and convey the estate therein
purported to be conveyed;
(q) The Servicer has caused and will cause to be performed any
and all acts reasonably required to be performed to preserve the rights and
remedies of the Issuer in any insurance policies applicable to the Loans
including, without limitation, in each case, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
co-insured, joint loss payee and mortgagee rights in favor of the Issuer or the
Seller, respectively;
(r) Each original Mortgage was recorded, and all subsequent
assignments of the original Mortgage have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien thereof
as against creditors of the Seller (or, subject to Section 2.04(b) hereof, are
in the process of being recorded);
(s) Each Loan conforms, and all such Loans in the aggregate
conform, to the description thereof set forth in the Registration Statement;
(t) The terms of the Business Note and the related Mortgage or
other security agreement pursuant to which Collateral was pledged have not been
impaired, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary, to protect the interest of the Issuer and
which has been delivered to the Custodian;
(u) There are no material defaults in complying with the terms of
any applicable Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable;
(v) There is no proceeding pending or, to the best of the
Seller's knowledge, threatened for the total or partial condemnation of any
Mortgaged Property, nor is such a proceeding currently occurring, and such
property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of the
Mortgaged Property as security for the Loan or the use for which the premises
were intended;
(w) Each Mortgaged Property which is the primary collateral for
the related Loan was, at the time of origination of such Loan, and to the best
of the Seller's knowledge, is, as of the Cut-Off Date, free of contamination
from toxic substances or hazardous wastes or is subject to ongoing environmental
rehabilitation;
(x) The proceeds of the Loan have been fully disbursed, and there
is no obligation on the part of the Seller to make future advances thereunder.
Any and all requirements as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
or recording the Loans were paid;
(y) There is no obligation on the part of the Seller or any other
party (except for any guarantor of a Loan) to make Monthly Payments in addition
to those made by the Obligor;
(z) No statement, report or other document signed by the Seller
constituting a part of the Indenture Trustee's Loan File contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(aa) With respect to each Mortgage constituting a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Issuer to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Obligor;
(bb) No Loan has a shared appreciation feature, or other
contingent interest feature;
(cc) With respect to each Loan secured by a Mortgaged Property
and that is not a first mortgage loan, either (i) no consent for the Loan is
required by the holder of any related Prior Lien or (ii) such consent has been
obtained;
(dd) Each Loan was originated to a business located in the state
identified in the applicable Loan Schedule;
(ee) All parties which have had any interest in the Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein any
Mortgaged Property is located, and (2)(A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such state, or
(D) not doing business in such state;
(ff) Any related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(gg) There is no default, breach, violation or event of
acceleration existing under the Business Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration; and
neither the Servicer nor the Seller have waived any default, breach, violation
or event of acceleration;
(hh) All parties to the Business Note and any related Mortgage or
other document pursuant to which Collateral was pledged had legal capacity to
execute the Business Note and any such Mortgage or other document and each
Business Note and Mortgage or other document have been duly and properly
executed by such parties;
(ii)The Loan was not selected for inclusion under this Agreement
from the Seller's portfolio of comparable loans on any basis which would have a
material adverse affect on a Certificateholder;
(jj) All amounts received after the Cut-Off Date with respect to
the Loans have been, to the extent required by this Agreement, deposited into
the Principal and Interest Account and are, as of the Closing Date in the
Principal and Interest Account;
(kk) Each Pool I Loan is a "qualified mortgage" within the
meaning of Section 860(G)(a)(3) of the Code;
(ll) With respect to 55% or more of the Loans in Pool II
(measured by Principal Balance as of the Closing Date), either (i) the Loan is
not and has never been secured by an interest in real property or any real
estate mortgages, or (ii) the Loan is secured by an interest in real property
and/or real estate mortgages and (x) the fair market value of the real property
securing the Loan, after reduction for the amount of any lien that is senior to
the Loan and a proportionate amount of any lien that is PARI PASSU with the
Loan, was less than 80% of the amount of the Loan at the time the Loan was
originated; (y) less than 66% of the net proceeds of the Loan were used to
acquire, improve, or protect an interest in real property that at the time of
origination was the only security for the Loan (disregarding any third party
credit enhancements and loan guarantees made by federal, state, local
governments or agencies), and the Seller has no knowledge or reason to believe
that the net proceeds of the Loan were used to refinance one or more loans the
proceeds of which were used to acquire, improve, or protect an interest in real
property; and (z) the Loan has not been modified significantly since its
origination; and
(mm) No Loan nor any related Business Note has been satisfied,
subordinated or rescinded.
Section 3.03 PURCHASE AND SUBSTITUTION.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the Notes to the
Noteholders and the Certificates to the Certificateholders. Upon discovery by
the Representative, the Servicer, any Subservicer, the Custodian or upon a
Responsible Officer of the Owner Trustee or the Indenture Trustee obtaining
actual knowledge of a breach of any of such representations and warranties which
materially and adversely affects the value of the Loans or the interest of the
Noteholders and the Certificateholders, or which materially and adversely
affects the interests of the Noteholders, or the Certificateholders in the
related Loan in the case of a representation and warranty relating to a
particular Loan (notwithstanding that such representation and warranty was made
to the Representative's or the Seller's best knowledge), the party discovering
such breach shall give prompt written notice to the others. Within 60 days of
the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Representative shall (a) promptly cure such
breach in all material respects, (b) purchase such Loan by depositing in the
Principal and Interest Account, on the next succeeding Determination Date, an
amount in the manner specified in Section 2.05(b), or (c) remove such Loan from
the Trust (in which case it shall become a Deleted Loan) and substitute one or
more Qualified Substitute Loans, provided, in the case of Pool I, such
substitution is effected not later than the date which is two years after the
Startup Day, or at such later date, if the Indenture Trustee and the Owner
Trustee receive an Opinion of Counsel that such substitution would not
constitute a Prohibited Transaction or cause either REMIC I or REMIC II to fail
to qualify as a REMIC.
As to any Deleted Loan for which the Representative substitutes a
Qualified Substitute Loan or Loans, the Servicer shall effect such substitution
by delivering to the Custodian a certification in the form attached hereto as
Exhibit G, executed by a Servicing Officer and the documents constituting the
Indenture Trustee's Loan File for such Qualified Substitute Loan or Loans.
<PAGE>
The Servicer shall deposit in the Principal and Interest Account all
payments received in connection with such Qualified Substitute Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Loans on or before the date of substitution will be
retained by the Representative on behalf of the Seller. The Issuer will own all
payments received on the Deleted Loan on or before the date of substitution, and
the Representative on behalf of the Seller shall thereafter be entitled to
retain all amounts subsequently received in respect of such Deleted Loan. The
Servicer shall give written notice to the Indenture Trustee, the Representative,
the Owner Trustee and the Custodian that such substitution has taken place and
shall amend the applicable Loan Schedule to reflect the removal of such Deleted
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Loan. Upon such substitution, such Qualified Substitute Loan or Loans
shall be subject to the terms of this Agreement in all respects, including
Sections 2.04 and 2.05, and the Representative and the Seller shall be deemed to
have made with respect to such Qualified Substitute Loan or Loans, as of the
date of substitution, the covenants, representations and warranties set forth in
Sections 3.01 and 3.02. On the date of such substitution, the Representative
will remit to the Servicer, and the Servicer will deposit into the applicable
Principal and Interest Account an amount equal to the Substitution Adjustment.
In addition to the cure, purchase and substitution obligation in
Section 2.05 and this Section 3.03, the Representative shall indemnify and hold
harmless the Issuer, the Indenture Trustee, the Trust Administrator, the
Custodian, the Noteholders, the Certificateholders and the Owner Trustee in its
individual capacity against any loss, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of the Representative's or the Seller's
representations and warranties contained in this Agreement. It is understood and
agreed that the obligations of the Representative or the Seller set forth in
Sections 2.05 and 3.03 to cure, purchase or substitute for a defective Loan and
to indemnify the Issuer, the Noteholders, the Certificateholders, the Indenture
Trustee, the Trust Administrator, the Custodian and the Owner Trustee in its
individual capacity as provided in Sections 2.05 and 3.03 constitute the sole
remedies of the Indenture Trustee, the Trust Administrator, the Custodian, the
Noteholders, the Certificateholders and the Owner Trustee respecting a breach of
the foregoing representations and warranties.
Any cause of action against the Seller, the Servicer or the
Representative relating to or arising out of the breach of any representations
and warranties made in Sections 2.05, 3.01 or 3.02 shall accrue as to any Loan
upon (i) discovery of such breach by any party and notice thereof to the
Representative or notice thereof by the Representative to the Indenture Trustee,
(ii) failure by the Representative to cure such breach or purchase or substitute
such Loan as specified above, and (iii) demand upon the Representative by the
Indenture Trustee for all amounts payable in respect of such Loan.
For as long as the Pool I Notes shall exist, the Servicer, the
Indenture Trustee and the Trust Administrator shall act in accordance herewith
to assure continuing treatment of both REMIC I and REMIC II as REMICs and to
assure that neither REMIC I nor REMIC II will be subject to tax. In particular,
the Servicer, the Indenture Trustee and the Trust Administrator shall not (a)
sell or knowingly permit the sale of all or any portion of the Loans or of any
Permitted Instrument related to Pool I unless such sale is a result of a
repurchase of the Loans pursuant to this Agreement, or the Servicer, the
Indenture Trustee and the Trust Administrator has received an Opinion of Counsel
to the effect that such sale (i) is in accordance with a qualified liquidation
as defined in Section 860F(a)(4) of the Code and as described in Section 11.01
hereof, or (ii) would not be treated as a prohibited transaction within the
meaning of Section 860F(a)(2) of the Code; and (b) accept any contribution to
Pool I after the Startup Day without an Opinion of Counsel that such
contribution is included within the exceptions provided in Section 860G(d)(2) of
the Code and therefore will not be subject to the tax imposed by Section
860G(d)(1) of the Code.
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 DUTIES OF THE SERVICER.
(a) With respect to any Business Note released by the Custodian,
on behalf of the Indenture Trustee, to the Servicer or to any Subservicer in
accordance with the terms of this Agreement, other than a release or
satisfaction pursuant to Section 5.02, prior to such release, the Indenture
Trustee or Custodian shall (i) complete all endorsements in blank so that the
endorsement reads "Pay to the order of HSBC Bank USA, as Indenture Trustee under
the Indenture dated as of May 9, 1999, Series 1999-1" and (ii) complete a
restrictive endorsement that reads "HSBC Bank USA is the holder of the mortgage
note for the benefit of the Noteholders and the Certificateholders under the
Indenture dated as of May 31, 1999, Series 1999-1" with respect to those
Business Notes currently endorsed "Pay to the order of holder."
(b) The Servicer, as independent contract servicer, shall service
and administer the Loans and shall have full power and authority, acting alone,
to do any and all things in connection with such servicing and administration
which the Servicer may deem necessary or desirable and consistent with the terms
of this Agreement. The Servicer may enter into Subservicing Agreements for any
servicing and administration of Loans with any institution which is in
compliance with the laws of each state necessary to enable it to perform its
obligations under such Subservicing Agreement and (x) has a net worth of at
least $5,000,000 or (y) is an affiliate of the Servicer. The Servicer shall
notify the Indenture Trustee of the appointment of any subservicer. Any such
Subservicing Agreement shall be consistent with and not violate the provisions
of this Agreement. The Servicer shall be entitled to terminate any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement and to either itself directly service the related Loans or enter into
a Subservicing Agreement with a successor subservicer which qualifies hereunder.
(c) Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Indenture Trustee, the Noteholders, the Certificateholders and the Owner Trustee
for the servicing and administering of the Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Loans. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on Loans when any Subservicer has received such payments. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer, and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
(d) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Loans involving a Subservicer and the
Servicer shall be deemed to be between the Subservicer and the Servicer alone,
and the Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer
except as set forth in Section 4.01(e).
(e) In the event the Servicer shall for any reason no longer be
the Servicer (including by reason of a Servicer Default), the Indenture Trustee
or its designee shall, subject to Section 10.02 hereof, thereupon assume all of
the rights and obligations of the Servicer under each Subservicing Agreement
that the Servicer may have entered into, unless the Indenture Trustee is then
permitted and elects to terminate any Subservicing Agreement in accordance with
its terms. The Indenture Trustee, its designee or the successor servicer for the
Indenture Trustee shall be deemed to have assumed all of the Servicer's interest
therein and to have replaced the Servicer as a party to each Subservicing
Agreement to the same extent as if the Subservicing Agreements had been assigned
to the assuming party, except that the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreements. The Servicer at
its expense and without right of reimbursement therefor, shall, upon request of
the Indenture Trustee, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
(f) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Obligor if in the Servicer's determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Noteholders or the Certificateholders; provided, however, that (unless (x) the
Obligor is in default with respect to the Loan, or such default is, in the
judgment of the Servicer, imminent and (y) the Servicer determines that any
modification would not be considered a new loan for federal tax purposes) the
Servicer may not permit any modification with respect to any Loan that would
change the Loan Interest Rate, defer (subject to Section 4.12), or forgive the
payment of any principal or interest (unless in connection with the liquidation
of the related Loan), or extend the final maturity date on such Loan. No costs
incurred by the Servicer or any Subservicer in respect of Servicing Advances
shall for the purposes of distributions to the Noteholders or the
Certificateholders be added to the amount owing under the related Loan. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of the
Indenture Trustee, each Noteholder and each Certificateholder, all instruments
of satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Loans and with respect to
any Mortgaged Properties or other Collateral. If reasonably required by the
Servicer, the Owner Trustee shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.
The Servicer, in servicing and administering the Loans, shall employ
or cause to be employed procedures (including collection, foreclosure and REO
Property management procedures) and exercise the same care that it customarily
employs and exercises in servicing and administering mortgage loans for its own
account, in accordance with accepted servicing practices of prudent lending
institutions and giving due consideration to the Noteholders', and
Certificateholders' reliance on the Servicer.
(g) On and after such time as the Indenture Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 9.04, after receipt of the Opinion of Counsel required pursuant to
Section 9.04, the Indenture Trustee or its designee shall assume all of the
rights and obligations of the Servicer, subject to Section 10.02 hereof. The
Servicer shall, upon request of the Indenture Trustee but at the expense of the
Servicer, deliver to the Indenture Trustee or the Custodian all documents and
records (including computer tapes and diskettes) relating to the Loans and an
accounting of amounts collected and held by the Servicer and otherwise use its
best efforts to effect the orderly and efficient transfer of servicing rights
and obligations to the assuming party.
(h) In the event that any tax is imposed on the Trust, with
respect to either REMIC I, REMIC II or Pool II, such tax shall be charged
against amounts otherwise distributable to the Holders of the Class R
Certificates, with respect to either REMIC I or REMIC II, and to the Holders of
the Class II Certificates, with respect to Pool II.
(i) Notwithstanding any provision of Article XII to the contrary,
the Servicer or the Trust Administrator (as agreed to by such parties) shall (i)
assume and perform the obligations of the Trust Administrator set forth under
Article XII and (ii) perform such calculations and shall prepare or shall cause
the preparation by other appropriate persons of, and shall execute on behalf of
the Trust or the Owner Trustee, all such documents, reports, filings,
instruments, certificates and opinions that it shall be the duty of the Trust or
the Owner Trustee to prepare, file or deliver pursuant to the Basic Documents,
and at the request of the Owner Trustee shall take all appropriate action that
it is the duty of the Trust or the Owner Trustee to take pursuant to the Basic
Documents. In furtherance thereof, the Owner Trustee shall, on behalf of itself
and of the Trust, execute and deliver to the Servicer and to each successor
Servicer appointed pursuant to the terms hereof, one or more powers of attorney
substantially in the form of Exhibit P hereto, appointing the Servicer the
attorney-in-fact of the Owner Trustee and the Trust for the purpose of executing
on behalf of the Owner Trustee and the Trust all such documents, reports,
filings, instruments, certificates and opinions. In accordance with the
directions of the Owner Trustee, the Servicer shall administer, perform or
supervise the performance of such other activities in connection with the Loans
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Servicer.
Section 4.02 LIQUIDATION OF LOANS.
In the event that any payment due under any Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Obligor fails to perform any other covenant or obligation under
the Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interests of
the Noteholders and the Certificateholders. The Servicer shall foreclose upon or
otherwise comparably effect the ownership in the name of the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders of Mortgaged
Properties or other Collateral relating to defaulted Loans as to which no
satisfactory arrangements can be made for collection of delinquent payments in
accordance with the provisions of Section 4.10. In connection with such
foreclosure or other conversion, the Servicer shall exercise collection and
foreclosure procedures with the same degree of care and skill in its exercise or
use as it would exercise or use under the circumstances in the conduct of its
own affairs. The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act of 1976, or other federal, state or local
environmental legislation, on a Mortgaged Property in determining whether to
foreclose upon or otherwise comparably convert the ownership of a Mortgaged
Property; provided, however, that the Servicer shall not take title to any
Mortgaged Property in the name of the Indenture Trustee with respect to any such
Mortgaged Property if the Servicer has actual knowledge or reasonably believes
that any such environmental substance or waste exists unless it has received a
Phase I environmental report and such report reveals no environmental problems,
or such Mortgaged Property is subject to an environmental rehabilitation for
which the Seller is not responsible. Any amounts advanced in connection with
such foreclosure or other action shall constitute "Servicing Advances."
After a Loan has become a Liquidated Loan, the Servicer shall promptly
prepare and forward to the Indenture Trustee and the Owner Trustee, a
Liquidation Report, in the form attached hereto as Exhibit K , detailing the
Liquidation Proceeds received from the Liquidated Loan, expenses incurred with
respect thereto, and any Realized Loss incurred in connection therewith.
<PAGE>
Section 4.03 ESTABLISHMENT OF PRINCIPAL AND INTEREST ACCOUNTS;
DEPOSITS IN PRINCIPAL AND INTEREST ACCOUNT.
(a) The Servicer shall cause to be established and maintained one
or more Principal and Interest Accounts, in one or more Designated Depository
Institutions, in the form of time deposit or demand accounts, which may be
interest-bearing or such accounts may be trust accounts wherein the moneys
therein are invested in Permitted Instruments, titled "The Money Store Inc., in
trust for the registered holders of The Money Store Business Loan Backed Notes
and Backed Certificates, Series 1999-1, and various Obligors"; provided,
however, that for so long as (i) (A) the Servicer remains an affiliate of FUNB,
(B) no Event of Default shall have occurred and be continuing and (C) FUNB
maintains a short-term rating of at least "D-1" by DCR (if so rated by DCR) and
"P-1" by Moody's, and for five Business Days following any reduction,
suspension, termination or withdrawal in either such rating, or (ii) following
the occurrence and continuation of any event described in subclause (i) of this
paragraph, an arrangement is established that is satisfactory to the Rating
Agencies which does not in itself result in (I) any reduction of any rating
issued in respect of the Notes or (II) any reduction below investment grade of
the Notes, the Servicer, notwithstanding anything to the contrary herein
provided, may establish and maintain the Principal and Interest Account as a
deposit account with FUNB. Each such Principal and Interest Account shall be
insured by the BIF or SAIF administered by the FDIC to the maximum extent
provided by law. The creation of any Principal and Interest Account shall be
evidenced by a letter agreement in the form of Exhibit B hereto.
A copy of such letter agreement shall be furnished to the Indenture
Trustee and the Owner Trustee.
(b) The Servicer and each Subservicer shall deposit without
duplication (within 24 hours of receipt thereof) in the applicable Principal and
Interest Account and retain therein:
(i) all payments received after the Cut-Off Date on account of
principal on the Loans, including all Excess Payments, Principal
Prepayments and Curtailments received after the Cut-Off Date;
(ii) all payments received after the Cut-Off Date on account of
interest on the Loans (net of the Servicing Fee with respect to each Loan
and other servicing compensation payable to the Servicer as permitted
herein);
(iii) all Net Liquidation Proceeds received with respect to the Loans;
(iv) all Insurance Proceeds received with respect to the Loans (other
than amounts to be applied to the restoration or repair of the related
Mortgaged Property, or to be released to the Obligor in accordance with
customary servicing procedures);
(v) all Released Mortgaged Property Proceeds received with respect to
the Loans;
(vi) any amounts paid in connection with the purchase of any Loan, and
the amount of any Substitution Adjustment received with respect to the
Loans paid, pursuant to Sections 2.05 and 3.03;
(vii) any amount required to be deposited in the applicable Principal
and Interest Account pursuant to Section 4.04, 4.08, 4.10, 4.15(c) or
11.01; and
(viii) the amount of any losses incurred in connection with
investments in Permitted Instruments.
Also, for each Loan delivered on the Closing Date that was originated
on or after June 1, 1999, the Servicer shall deposit in the Principal and
Interest Account 30 days' interest on the original principal balance of
such Loan calculated at the applicable Loan Interest Rate.
(c) The foregoing requirements for deposit in the Principal and
Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, the Servicing Fee with respect
to each Loan, and payments in the nature of prepayment penalties or premiums,
late payment charges and assumption fees, to the extent received and permitted
by Sections 5.01 and 5.03, together with the difference between any Liquidation
Proceeds and the related Net Liquidation Proceeds, need not be deposited by the
Servicer in the Principal and Interest Account.
(d) Any interest earnings on funds held in the Principal and
Interest Account paid by a Designated Depository Institution shall be for the
account of the Servicer and may only be withdrawn from the applicable Principal
and Interest Account by the Servicer immediately following its monthly
remittance of the Pool Available Remittance Amount for the related Pool to the
Indenture Trustee. Any reference herein to amounts on deposit in the Principal
and Interest Account shall refer to amounts net of such investment earnings.
Section 4.04 PERMITTED WITHDRAWALS FROM THE PRINCIPAL AND INTEREST
ACCOUNTS.
The Servicer shall withdraw funds from the Principal and Interest
Accounts for the following purposes:
(a) to effect the remittance to the Indenture Trustee on each
Determination Date as follows: the portion of the Excess Spread relating to the
Loans of the related Pool and the portion of the Pool Available Remittance
Amount, that is net of Compensating Interest and Monthly Advances for the
related Pool for the related Remittance Date to the Indenture Trustee for
deposit in the Note Distribution Account. For the purposes of this Section
4.04(a), the calculation of the Pool Available Remittance Amounts shall be made
without reference to the actual deposit of funds in the Note Distribution
Account;
(b) to reimburse itself for any accrued unpaid Servicing Fees,
unreimbursed Monthly Advances and for unreimbursed Servicing Advances to the
extent that funds relating to such amount have been deposited in the applicable
Principal and Interest Account (and not netted from Monthly Payments received).
The Servicer's right to reimbursement for unpaid Servicing Fees and, except as
provided in the following sentence, Servicing Advances and Monthly Advances
shall be limited to Liquidation Proceeds, Released Mortgaged Property Proceeds,
Insurance Proceeds and such other amounts as may be collected by the Servicer
from the Obligor or otherwise relating to the Loan in respect of which such
unreimbursed amounts are owed. The Servicer's right to reimbursement for
Servicing Advances and Monthly Advances in excess of such amounts shall be
limited to any late collections of interest received on the Loans generally,
including Liquidation Proceeds, Released Mortgaged Property Proceeds and
Insurance Proceeds and any other amounts which would otherwise be distributed to
the holders of the Certificates of the applicable Pool; PROVIDED, HOWEVER, that
the Servicer's right to such reimbursement pursuant hereto shall be subordinate
to the rights of the Noteholders, and Certificateholders;
(c) to withdraw any amount received from an Obligor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(d) (i) to make investments in Permitted Instruments and (ii) to
pay to itself, as permitted by Section 4.03(d), interest paid in respect of
Permitted Instruments or by a Designated Depository Institution on funds
deposited in the applicable Principal and Interest Account;
(e) to withdraw any funds deposited in the applicable Principal
and Interest Account that were not required to be deposited therein or were
deposited therein in error;
(f) to pay itself servicing compensation pursuant to Section 5.03
hereof;
(g) [Reserved]; and
(h) to clear and terminate each Principal and Interest Account
upon the termination of this Agreement and to pay any amounts remaining therein
in accordance with Section 11.01.
So long as no Servicer Default shall have occurred and be continuing,
and consistent with any requirements of the Code, the Principal and Interest
Account shall either be maintained as an interest-bearing accounts meeting the
requirements set forth in Section 4.03(a), or the funds held therein may be
invested by the Servicer (to the extent practicable) in Permitted Instruments.
In either case, funds in the Principal and Interest Account must be available
for withdrawal without penalty, and any Permitted Instruments must mature not
later than the Business Day immediately preceding the Determination Date next
following the date of such investment (except that if such Permitted Instrument
is an obligation of the institution that maintains such account, then such
Permitted Instrument shall mature not later than such Determination Date) and
shall not be sold or disposed of prior to its maturity. All Permitted
Instruments must be held by or registered in the name of "The Money Store
Commercial Mortgage Inc. in trust for the registered holders of The Money Store
Business Loan Backed Notes and Certificates, Series 1999-1." All interest or
other earnings from funds on deposit in the Principal and Interest Account (or
any Permitted Instruments thereof) shall be the exclusive property of the
Servicer, and may be withdrawn from either Principal and Interest Account
pursuant to clause (d)(ii) above. The amount of any losses incurred in
connection with the investment of funds in the applicable Principal and Interest
Account in Permitted Instruments shall be deposited in the applicable Principal
and Interest Account by the Servicer from its own funds immediately as realized
without reimbursement therefor.
Section 4.05 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting fire and hazard insurance coverage.
With respect to each Mortgage Loan which is a first Mortgage Loan, or
as to which the Servicer has advanced the outstanding principal balance of any
Prior Lien pursuant to Section 4.14 or as to which the Servicer maintains escrow
accounts, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates and other charges which are or may
become a lien upon the Mortgaged Property and the status of primary mortgage
guaranty insurance premiums, if any, and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the Obligor
in any escrow account which shall have been estimated and accumulated by the
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage (provided, however, that to the extent the Servicer advances its
own funds, such advances shall constitute "Servicing Advances"). To the extent
that a Mortgage does not provide for escrow payments, the Servicer shall
determine that any such payments are made by the Obligor at the time they first
become due. Notwithstanding anything contained herein to the contrary, the
Servicer may choose not to make the payments described above on a timely basis,
provided that collections on the related Mortgage Loan that are required to be
remitted to the Trust would not be reduced, as a result of such failure to
timely pay, from the amount that would otherwise be remitted to the Trust;
provided further, however, that this provision shall not have the effect of
permitting the Servicer to take, or fail to take, any action in respect of the
payments described herein that would adversely affect the interest of the Trust
in any Mortgaged Property.
<PAGE>
Section 4.06 TRANSFER OF ACCOUNTS.
The Servicer may, upon written prior notice to the Indenture Trustee,
transfer the Principal and Interest Account to a different Designated Depository
Institution.
Section 4.07 MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall comply with the customary servicing procedures
concerning the issuance and maintenance of fire and hazard insurance with
extended coverage customary in the area where the Mortgaged Property is located.
If at origination of a Loan, to the best of the Servicer's knowledge after
reasonable investigation, the related Mortgaged Property is in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
if it maintains flood insurance, the Servicer will require the related Obligor
to purchase a flood insurance policy with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (i) the
full insurable value of the Mortgaged Property, or (ii) the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended.
The Servicer shall also maintain, to the extent such insurance is available, and
in accordance with the Servicer's policies, on REO Property constituting real
property, fire and hazard insurance in the amounts described above and liability
insurance. Any amounts collected by the Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the Mortgaged
Property, or to be released to the Obligor in accordance with applicable law)
shall be deposited in the Principal and Interest Account, subject to withdrawal
pursuant to Section 5.04. It is understood and agreed that no earthquake or
other additional insurance need be required by the Servicer of any Obligor or
maintained on REO Property, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with losses payable to the Servicer or its
affiliates.
Section 4.08 REMIC RELATED DUTIES.
It is intended that both REMIC I and REMIC II shall constitute and
that the affairs of both REMIC I and REMIC II shall be conducted so that each
qualifies as a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Servicer covenants and agrees that it shall, to the extent permitted by law, act
as agent (and the Servicer is hereby appointed to act as agent) on behalf of
REMIC I and REMIC II and the Trust Administrator covenants and agrees that it
shall act as agent on behalf of the Tax Matters Person on behalf of REMIC I and
REMIC II. The Trust Administrator (and in the case of (iv) and (v) below, the
Servicer) shall: (i) prepare and file, or cause to be prepared and filed, in a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066) and any other tax return required to be filed by each of REMIC I and
REMIC II using a calendar year as the taxable year for each of REMIC I and REMIC
II and using the accrual method of accounting, including, without limitation,
information reports relating to "original issue discount," as defined in the
Code, based upon an assumption equal to a constant prepayment rate on the Loans
of 12% per annum and calculated by using the issue price of the Pool I Notes,
the Class I Certificates and the Class R Certificates; (ii) make, or cause to be
made, an election, on behalf of each of REMIC I and REMIC II, to be treated as a
REMIC on the federal tax return of each of REMIC I and REMIC II for their first
taxable year; (iii) prepare and forward, or cause to be prepared and forwarded,
to the Indenture Trustee, the Pool I Noteholders, the Class I and Class R
Certificateholders, the Owner Trustee and to the Internal Revenue Service and
any other relevant governmental taxing authority all information returns or
reports as and when required to be provided to them in accordance with the REMIC
Provisions and any other provision of federal, state or local income tax laws;
(iv) to the extent that the affairs of the REMIC are within its control, conduct
such affairs at all times that any Pool I Notes, Class I or Class R Certificates
are outstanding so as to maintain the status of each of REMIC I and REMIC II as
a REMIC under the REMIC Provisions and any other applicable federal, state and
local laws; (v) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either of
REMIC I or REMIC II or that would cause the imposition of a prohibited
transaction tax, a tax on "net income from foreclosure property," or a tax on
contributions to either REMIC I or REMIC II; (vi) pay the amount of any and all
federal, state, and local taxes, including, without limitation, prohibited
transaction taxes as defined in Section 860F of the Code imposed on either REMIC
I or REMIC II when and as the same shall be due and payable (but such obligation
shall not prevent the Trust Administrator or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trust Administrator from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (vii) ensure that any such returns or
reports filed on behalf of each of REMIC I and REMIC II are properly executed by
the appropriate person; (viii) represent each of REMIC I and REMIC II in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each of REMIC I and REMIC II, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any item of either REMIC I or REMIC II and otherwise act
on behalf of each of REMIC I and REMIC II in relation to any tax matter
involving either REMIC I or REMIC II and (ix) as provided in Section 4.11
hereof, make available information necessary for the computation of any tax
imposed (1) on transferors of residual interests to transferees that are not
Permitted Transferees or (2) on pass-through entities, any interest in which is
held by an entity which is not a Permitted Transferee. The Owner Trustee will
cooperate with the Servicer and the Trust Administrator in the foregoing matters
and will sign, as Owner Trustee, any and all tax returns required to be filed by
either REMIC I or REMIC II. The Servicer shall indemnify the Indenture Trustee
and the Owner Trustee and each of REMIC I and REMIC II, as applicable, for any
liability they may incur in connection with this Section 4.08; provided,
however, that the Servicer shall not indemnify the Indenture Trustee or the
Owner Trustee for its negligence or willful misconduct.
<PAGE>
Section 4.09 FIDELITY BOND.
The Servicer shall maintain with a responsible company, and at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy,
in a minimum amount equal to $1,500,000, and a maximum deductible of $100,000,
if commercially available, with coverage on all employees acting in any capacity
requiring them to handle funds, money, documents or papers relating to the Loans
("Servicer Employees"). The fidelity bond shall insure the Owner Trustee, the
Indenture Trustee and their respective officers, and employees, against losses
resulting from forgery, theft, embezzlement or fraud, by such Servicer
Employees. The errors and omissions policy shall insure against losses resulting
from the errors, omissions and negligent acts of such Servicer Employees. No
provision of this Section 4.09 requiring such fidelity bond and errors and
omissions insurance shall relieve the Servicer from its duties as set forth in
this Agreement. Upon the request of the Owner Trustee or the Indenture Trustee,
the Servicer shall cause to be delivered to the Owner Trustee or the Indenture
Trustee a certified true copy of such fidelity bond and insurance policy. The
current issuer of such fidelity bond and insurance policy is National Union Fire
Insurance Company of Pittsburgh, Pennsylvania.
Section 4.10 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be taken in the name of the Trust for the benefit of
the Noteholders and the Certificateholders.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Noteholders and the Certificateholders solely for the purpose
of its prudent and prompt disposition and sale. The Servicer shall, either
itself or through an agent selected by the Servicer, manage, conserve, protect
and operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Noteholders and the Certificateholders.
The Servicer shall cause to be deposited in the applicable Principal
and Interest Account, no later than five Business Days after the receipt
thereof, all revenues received with respect to the conservation and disposition
of the related REO Property net of funds necessary for the proper operation,
management and maintenance of the REO Property and the fees of any managing
agent acting on behalf of the Servicer.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interest of the Noteholders and the Certificateholders. The proceeds
of sale of the REO Property shall be promptly deposited in the Principal and
Interest Account as received from time to time and, as soon as practicable
thereafter, the expenses of such sale shall be paid, the Servicer shall, subject
to Section 4.04, reimburse itself for any related unreimbursed Servicing
Advances, unpaid Servicing Fees and unreimbursed Monthly Advances, and the
Servicer shall deposit in the Principal and Interest Account the net cash
proceeds of such sale to be distributed to the Noteholders and the
Certificateholders, in accordance with Section 7.05 hereof.
In the event any Mortgaged Property is acquired as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property within three years from
the close of the taxable year of its acquisition unless the Servicer shall have
received an Opinion of Counsel (also addressed to the Indenture Trustee) to the
effect that the holding of such Mortgaged Property subsequent to such period
will not result in the imposition of taxes on "prohibited transactions" as
defined in section 860F of the Code or cause either REMIC I or REMIC II to fail
to qualify as a REMIC at any time that any Pool I Notes are outstanding or
otherwise not result in the imposition of taxes on the Trust. Notwithstanding
any other provision of this Agreement, no Mortgaged Property with respect to
Pool I Loans acquired by the Servicer pursuant to this Section shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust, and no construction shall take place on
such Mortgaged Property, in such a manner or pursuant to any terms that would
cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or result in the receipt by
the Trust of any "net income from foreclosure property" which is subject to
taxation within the meaning of Sections 860G(c) and 857(b)(4)(B) of the Code. If
a period greater than the three year period referred to above is permitted under
this Agreement and is necessary to sell any REO Property, the Servicer shall
give appropriate notice to the Indenture Trustee and the Trust Administrator and
shall report monthly to the Indenture Trustee and the Trust Administrator as to
the progress being made in selling such REO Property.
Section 4.11 CERTAIN TAX INFORMATION.
The Trust Administrator shall furnish on behalf of the Trust and the
Owner Trustee (a) any information which may be required under the Code including
the computation of the present value of the "excess inclusions" (as defined in
Section 860E of the Code) with respect to any transfer of a Class R Certificate,
and, upon request, shall provide such information to any Holder of a Class R
Certificate and to the Internal Revenue Service within 60 days of such request
for a reasonable fee and (b) the information required to be furnished pursuant
to Sections 1.860F-4 and 1.6049-7 of the Treasury Regulations.
Section 4.12 COLLECTION OF CERTAIN LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Loans, and shall, to the extent
such procedures shall be consistent with this Agreement, comply with the terms
and provisions of any applicable hazard insurance policy. Consistent with the
foregoing, the Servicer may in its discretion waive or permit to be waived any
late payment charge, prepayment charge, assumption fee or any penalty interest
in connection with the prepayment of a Loan or any other fee or charge which the
Servicer would be entitled to retain hereunder as servicing compensation and
extend the due date for payments due on a Business Note for a period (with
respect to each payment as to which the due date is extended) not greater than
180 days after the initially scheduled due date for such payment provided that
the Servicer determines such extension would not be considered a new mortgage
loan for federal income tax purposes. In the event the Servicer shall consent to
the deferment of the due dates for payments due on a Business Note, the Servicer
shall nonetheless make payment of any required Monthly Advance with respect to
the payments so extended to the same extent as if such installment were due,
owing and delinquent and had not been deferred, and shall be entitled to
reimbursement therefor in accordance with Section 4.04(b) hereof.
Section 4.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE LOANS.
The Servicer shall provide to the Indenture Trustee, the Owner Trustee
and the Custodian access to the documentation regarding the Loans required by
applicable local, state and federal regulations, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer designated by it.
Section 4.14 SUPERIOR LIENS.
The Servicer shall file of record a request for notice of any action
by a superior lienholder under a Prior Lien for the protection of the Trust's
interest, where permitted by local law and whenever applicable state law does
not require that a junior lienholder be named as a party defendant in
foreclosure proceedings in order to foreclose such junior lienholder's equity of
redemption. With respect to each Mortgage Loan, the Servicer must also notify
any superior lienholder in writing of the existence of the Mortgage Loan and
request notification of any action (as described below) to be taken against the
Obligor or the Mortgaged Property by the superior lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by any Prior Lien,
or has declared or intends to declare a default under the mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take, on
behalf of the Issuer, whatever actions are necessary to protect the interests of
the related Noteholders and the Certificateholders, and/or to preserve the
security of the related Mortgage Loan. The Servicer shall immediately notify the
Owner Trustee of any such action or circumstances, subject, with respect to
Mortgage Loans that are part of Pool I, to the application of the REMIC
Provisions. The Servicer will advance the necessary funds to cure the default or
reinstate the superior lien, if such advance is in the best interests of the
Noteholders and the Certificateholders. The Servicer shall thereafter take such
action as is necessary to recover the amount so advanced.
<PAGE>
ARTICLE V
GENERAL SERVICING PROCEDURE
Section 5.01 ASSUMPTION AGREEMENTS.
Subject to the provisions of the last paragraph of this Section 5.01,
when a Mortgaged Property has been or is about to be conveyed by the Obligor,
the Servicer shall, to the extent it has knowledge of such conveyance or
prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Business Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law or if such enforcement
would materially increase the risk of default or delinquency on, or materially
decrease the security for, such Mortgage Loan. In such event, the Servicer shall
enter into an assumption and modification agreement with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Business Note and, unless prohibited by applicable law
or the Mortgage, the Obligor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Obligor is released from liability and such
person is substituted as Obligor and becomes liable under the Business Note. The
Servicer shall notify the Indenture Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Custodian the
original of such substitution or assumption agreement, which original shall be
added by the Custodian to the Indenture Trustee's Loan File and shall, for all
purposes, be considered a part of such Indenture Trustee's Loan File to the same
extent as all other documents and instruments constituting a part thereof. In
connection with any assumption or substitution agreement entered into pursuant
to this Section 5.01, the Servicer shall not change the Loan Interest Rate or
the Monthly Payment, defer or forgive the payment of principal or interest,
reduce the outstanding principal amount or extend the final maturity date on
such Loan. Any fee collected by the Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Loan by operation of law or any assumption which the Servicer may be restricted
by law from preventing, for any reason whatsoever.
Section 5.02 SATISFACTION OF MORTGAGES AND RELEASE OF LOAN FILES.
The Servicer shall not grant a satisfaction or release of a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or otherwise prejudice any right the Noteholders or the
Certificateholders may have under the mortgage instruments, subject to Section
4.01 hereof. The Servicer shall maintain the Fidelity Bond as provided for in
Section 4.09 insuring the Servicer against any loss it may sustain with respect
to any Loan not satisfied in accordance with the procedures set forth herein.
Upon the payment in full of any Loan, or the receipt by the Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Servicer will immediately notify the Custodian and the
Indenture Trustee, by an Officers' Certificate in the form of Exhibit G attached
hereto (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the applicable Principal and Interest Account
pursuant to Section 4.03 have been or will be so deposited) of a Servicing
Officer and shall request delivery to it of the Indenture Trustee's Loan File.
Upon receipt of such certification and request, the Custodian, shall promptly
release the related Indenture Trustee's Loan File to the Servicer. The Servicer
shall prepare all required documents required to evidence such release and the
Indenture Trustee shall upon receipt of such documents from the Servicer execute
and deliver such documentation to the Servicer, but only to the extent that the
Servicer is unable to record such release acting solely in its capacity as
Servicer. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be payable only from and to the extent of servicing
compensation and shall not be chargeable to the Principal and Interest Account
or any other Accounts.
From time to time and as appropriate for the servicing or foreclosure
of any Loan, including, for this purpose, collection under any primary mortgage
guaranty insurance policy, the Custodian shall, upon request of the Servicer and
delivery to the Custodian of a certification in the form of Exhibit G attached
hereto signed by a Servicing Officer, release the related Indenture Trustee's
Loan File to the Servicer, and the Custodian shall execute such documents as
shall be necessary to the prosecution of any such proceedings. Such servicing
receipt shall obligate the Servicer to return the Indenture Trustee's Loan File
to the Custodian when the need therefor by the Servicer no longer exists, unless
the Loan has been liquidated and the Liquidation Proceeds relating to the Loan
have been deposited in the applicable Principal and Interest Account or the
Indenture Trustee's Loan File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Custodian a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Loan File or
such document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Loan was
liquidated, the servicing receipt shall be released by the Custodian to the
Servicer.
The Indenture Trustee, upon the request of the Servicer and receipt of
the applicable documents by the Custodian, shall execute upon request of the
Servicer and delivery to the Indenture Trustee any court pleadings, requests for
trustee's sale or other documents necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Obligor on the Business Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Business Note or Mortgage or otherwise available at law or in equity. Together
with such documents or pleadings, the Servicer shall deliver to the Indenture
Trustee a certificate of a Servicing Officer requesting that such pleadings or
documents be executed by the Indenture Trustee and certifying as to the reason
such documents or pleadings are required and that the execution and delivery
thereof by the Indenture Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale. The Indenture Trustee shall, upon receipt
of a written request from a Servicing Officer, execute any document provided to
the Indenture Trustee by the Servicer or take any other action requested in such
request, that is, in the opinion of the Servicer as evidenced by such request,
required by any state or other jurisdiction to discharge the lien of a Mortgage
upon the satisfaction thereof and the Indenture Trustee will sign and post, but
will not guarantee receipt of, any such documents to the Servicer, or such other
party as the Servicer may direct, within five Business Days of the Indenture
Trustee's receipt of such certificate or documents. Such certificate or
documents shall establish to the Indenture Trustee's satisfaction that the
related Loan has been paid in full by or on behalf of the Obligor and that such
payment has been deposited in the applicable Principal and Interest Account.
Section 5.03 SERVICING COMPENSATION . As compensation for its services
hereunder, the Servicer shall be entitled to withdraw from the applicable
Principal and Interest Account or to retain from interest payments on the Loans
the Servicer's Servicing Fee. Additional servicing compensation in the form of
assumption and other administrative fees, prepayment penalties and premiums,
interest paid on funds on deposit in the Principal and Interest Account,
interest paid and earnings realized on Permitted Instruments, and late payment
charges shall be retained by or remitted to the Servicer to the extent not
required to be remitted to the Indenture Trustee for deposit in the applicable
Account. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for herein.
Section 5.04 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver to the Owner Trustee, the Indenture Trustee
and each of the Rating Agencies, on or before May 31 of each year beginning May
31, 2000, an Officers' Certificate stating that (i) the Servicer has fully
complied with the provisions of Articles IV and V, (ii) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, and (iii)
to the best of such officers' 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 and
the action being taken by the Servicer to cure such default.
Section 5.05 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before May 31 of each year beginning May 31, 2000, the Servicer,
at its expense, shall cause a firm of independent public accountants reasonably
acceptable to the Indenture Trustee to furnish a letter or letters to the Owner
Trustee, the Indenture Trustee and the Rating Agencies to the effect that such
firm has with respect to the Servicer's overall servicing operations examined
such operations in accordance with the requirements of the Uniform Single Audit
Program for Mortgage Bankers, and stating such firm's conclusions relating
thereto.
Section 5.06 INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S RIGHT TO EXAMINE
SERVICER RECORDS AND AUDIT OPERATIONS.
The Indenture Trustee and the Owner Trustee shall have the right upon
reasonable prior notice, during normal business hours and as often as reasonably
required, to examine and audit any and all of the books, records or other
information of the Servicer, whether held by the Servicer or by another on
behalf of the Servicer, which may be relevant to the performance or observance
by the Servicer of the terms, covenants or conditions of this Agreement. No
amounts payable in respect of the foregoing shall be paid for the Trust.
Section 5.07 REPORTS TO THE INDENTURE TRUSTEE; PRINCIPAL AND INTEREST
ACCOUNT STATEMENTS.
Not later than 20 days after each Record Date, the Servicer shall
forward to the Indenture Trustee a statement, certified by a Servicing Officer,
setting forth the status of each Principal and Interest Account as of the close
of business on the preceding Record Date and showing, for the period covered by
such statement, the aggregate of deposits into each Principal and Interest
Account for each category of deposit specified in Section 4.03, the aggregate of
withdrawals from each Principal and Interest Account for each category of
withdrawal specified in Section 4.04, the aggregate amount of permitted
withdrawals not made in the related Due Period, and the amount of any Monthly
Advances or payments of Compensating Interest, in each case, for the related Due
Period.
ARTICLE VI
[RESERVED]
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 7.01 NOTE DISTRIBUTION ACCOUNTS.
(a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department two separate trust
accounts, which shall not be interest-bearing, titled "The Money Store Business
Loan Backed Trust 1999-1 Note Distribution Account 1999-1-I" and "The Money
Store Business Loan Backed Trust 1999-1 Note Distribution Account 1999-1-II"
(each a "Note Distribution Account" and together, the "Note Distribution
Accounts"). The Indenture Trustee shall, promptly upon receipt, deposit in the
applicable Note Distribution Account and retain therein:
(i) the Pool Available Remittance Amount of the related Pool
(net of amounts deposited pursuant to subclauses (ii) and (iii) below)
remitted to the Indenture Trustee by the Servicer;
(ii) the Compensating Interest and the Monthly Advance for the
related Pool remitted to the Indenture Trustee by the Servicer;
(iii) Letter of Credit Payments or any amounts received from any
Alternate Credit Enhancement pursuant to Sections 7.04 and 7.05;
(iv) amounts required to be paid by the Servicer pursuant to
Section 7.08(e) in connection with losses on investments of amounts in
the applicable Note Distribution Account; and
(v) amounts received from the Rounding Account pursuant to
Section 7.02(b)(i).
(b) Amounts on deposit in each Note Distribution Account shall be
withdrawn on each Remittance Date by the Indenture Trustee, or the
applicable Paying Agent on its behalf, to effect the applicable
distributions described in Section 7.08(d);
and also, in no particular order of priority:
(i) by the Indenture Trustee, to invest amounts on deposit in the
applicable Note Distribution Account in Permitted Instruments pursuant
to Section 7.07;
(ii) by the Indenture Trustee, to pay on a monthly basis to the
Servicer as additional servicing compensation interest paid and
earnings realized on Permitted Instruments;
<PAGE>
(iii) by the Indenture Trustee, to withdraw any amount not
required to be deposited in the applicable Note Distribution Account
or deposited therein in error; and
(iv) by the Indenture Trustee, to clear and terminate the
applicable Note Distribution Account upon the termination of the Trust
in accordance with the terms of Section 11.01 hereof.
Section 7.02 ROUNDING ACCOUNT.
(a) No later than the Closing Date, the Indenture Trustee will
establish with itself in its trust department a trust account, which shall not
be interest-bearing, titled "The Money Store Business Loan Backed Trust 1999-1
Rounding Account 1999-1" (the "Rounding Account"). The Indenture Trustee shall
deposit into the Rounding Account:
(i) prior to the first Remittance Date on which principal
distributions will be made to the Class AS-3 Notes, from FUNB an
amount equal to $25,000;
(ii) on each Remittance Date, amounts received from the
applicable Note Distribution Account for Pool I pursuant to Section
7.08(g); and
(iii) upon receipt, amounts required to be paid by the Servicer
pursuant to Section 7.07 in connection with losses on investments of
amounts in the Rounding Account.
(b) The Indenture Trustee shall invest amounts on deposit in the
Rounding Account in Permitted Instruments pursuant to Section 7.07 hereof, and
the Indenture Trustee shall withdraw amounts on deposit in the Rounding Account
to:
(i) deposit in the Note Distribution Account for Pool I on each
Remittance Date the amount required to be transferred pursuant to
Section 7.08(G);
(ii) withdraw any amounts not required to be deposited in the
Rounding Account or deposited therein in error; and
(iii) distribute to the Owner Trustee (or the Paying Agent under
the Trust Agreement on its behalf) for distribution to the Class I
Certificateholders any amounts remaining in the Rounding Account upon
the termination of this Agreement in accordance with Section 11.01
hereof.
<PAGE>
(c) The Rounding Account shall be treated as an "outside reserve fund"
under applicable Treasury Regulations and will not be an asset of any REMIC. Any
investment earnings on the Rounding Account will be treated as owned by, and
will be taxable to, the Class I Certificateholders. Distributions made to or by
any outside reserve fund under this document shall be treated as made to or by
the owner of such fund.
Section 7.03 ESTABLISHMENT OF EXPENSE ACCOUNTS; DEPOSITS IN EXPENSE
ACCOUNTS; PERMITTED WITHDRAWALS FROM EXPENSE ACCOUNTS.
(a) No later than the Closing Date, the Indenture Trustee will
establish with itself in its trust department two separate trust accounts, which
shall not be interest-bearing, titled "The Money Store Business Loan Backed
Trust 1999-1 Expense Account 1999-1-I" and "The Money Store Business Loan Backed
Trust 1999-1 Expense Account 1999-1-II" (each, an "Expense Account" and together
the "Expense Accounts"). The Indenture Trustee shall deposit into the applicable
Expense Account:
(i) on each Remittance Date from the amounts on deposit in the
applicable Note Distribution Account an amount equal to one-twelfth of
that portion of the Annual Expense Escrow Amount (as determined by the
Servicer or the Trust Administrator) relating to Pool I or Pool II, as
the case may be, subject to the provisions of Section 7.08(d); and
(ii) upon receipt, amounts required to be paid by the Servicer
pursuant to Section 7.07(e) in connection with losses on investments
of amounts in the applicable Expense Account.
If, at any time the aggregate amount then on deposit in the Expense Accounts
shall be insufficient to pay in full the fees and expenses of the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Letter of Credit Provider
and the Trust Administrator (as calculated by the Servicer) then due with
respect to the Trust, the Indenture Trustee, the Owner Trustee, the Remarketing
Agent, the Trust Administrator or the Letter of Credit Provider, as the case may
be, shall make demand on the Servicer to advance the amount of such
insufficiency, and the Servicer shall promptly advance such amount to the
Indenture Trustee for deposit in the applicable Expense Accounts. Thereafter,
the Servicer shall be entitled to reimbursement from the applicable Expense
Account for the amount of any such advance from any excess funds available
pursuant to subclause (c)(ii) below. Without limiting the obligation of the
Servicer to advance such insufficiency, in the event the Servicer does not
advance the full amount of such insufficiency by the Business Day immediately
preceding the Determination Date, the amount of such insufficiency shall be
deposited into the applicable Expense Account for payment to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust Administrator or
the Letter of Credit Provider, as the case may be, pursuant to Section
7.08(d)(i), to the extent of available funds in the applicable Note Distribution
Account.
(b) The Indenture Trustee shall invest amounts on deposit in each
Expense Account in Permitted Instruments pursuant to Section 7.07 hereof, and
the Indenture Trustee shall withdraw amounts on deposit in the applicable
Expense Account to:
(i) pay the fees and expenses of the Indenture Trustee, the Owner
Trustee, the Remarketing Agent, the Trust Administrator and the Letter
of Credit Provider with respect to the Trust in accordance with
written instructions provided by the Servicer or the Trust
Administrator;
(ii) pay on a monthly basis to the Servicer as additional
servicing compensation interest paid and earnings realized on
Permitted Instruments;
(iii) to withdraw any amounts not required to be deposited in the
applicable Expense Account or deposited therein in error; and
(iv) to clear and terminate the applicable Expense Account upon
the termination of the Trust Fund in accordance with Section 11.01
hereof.
(c) On the twelfth Remittance Date following the Closing Date, and on
each twelfth Remittance Date thereafter, the Indenture Trustee shall determine
that all payments required to be made during the prior twelve month period
pursuant to subclauses (b)(i), (b)(ii) and (b)(iii) above, have been made, and,
if all such payments have been made, from the amounts remaining in the
applicable Expense Account, the Indenture Trustee shall (in the following order
of priority):
(i) reimburse the Servicer and/or the Representative, for
reimbursable advances made pursuant to Section 9.01;
(ii) reimburse the Servicer for advances made by it pursuant to
the last paragraph of subclause (a) above; and
(iii) remit to the Servicer as additional servicing compensation
any amounts remaining in any Expense Account after payments made
pursuant to subclauses (b)(i), (b)(ii), (b)(iii), (c)(i) and (c)(ii),
above.
Section 7.04 LETTERS OF CREDIT.
(a) No later than each Determination Date, the Administrator shall
notify the Indenture Trustee of the amount of any Letter of Credit Payment for
the upcoming Distribution Date. Not later than the Business Day preceding such
Distribution Date, the Indenture Trustee shall draw upon the applicable Letter
of Credit and instruct the Letter of Credit Provider to remit to the applicable
Note Distribution Account the Letter of Credit Payment for such Distribution
Date. If the Administrator has actual knowledge that the Letter of Credit
Provider has its senior unsecured debt rating lowered to below "A2" by Moody's
or "A" by DCR or its short-term unsecured debt rating lowered to below "P-1" by
Moody's or "D-1" by DCR then the Administrator shall notify the Indenture
Trustee of such event. Not later than the Business Day preceding the next
Distribution Date, the Indenture Trustee shall draw upon each Letter of Credit
an amount equal to the then applicable Letter of Credit Available Amount, unless
prior to the Business Day preceding such Distribution Date the Letter of Credit
Provider delivers Alternate Credit Enhancement to the Indenture Trustee.
(b) If the Letter of Credit Provider fails to make a Letter of Credit
Payment in whole or in part, the Administrator shall promptly notify the
Indenture Trustee, and the Indenture Trustee shall promptly notify each
Noteholder. The Administrator shall promptly notify the Indenture Trustee in the
event of any termination of a Letter of Credit pursuant to its terms or any
change of the Person providing the Letter of Credit, including but not limited
to a change by merger.
Section 7.05 ALTERNATE CREDIT ENHANCEMENT.
The Letter of Credit Provider, at its option and upon prior written
notice to the Indenture Trustee, may substitute or add an alternate form of
credit enhancement in place of or in addition to a Letter of Credit, provided
that the Rating Agency Condition shall have been satisfied. Such alternate form
of credit enhancement can be in the form of cash or securities deposited by the
Letter of Credit Provider or any other Person in a segregated escrow, trust or
collateral account or a letter of credit, certificate insurance policy or surety
bond provided by a third party and delivered to or held by the Indenture
Trustee.
Section 7.06 INTEREST CARRYOVER ACCOUNT.
(a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department an account, which
shall not be interest bearing, titled "The Money Store Loan Backed Trust 1999-1
Interest Carryover Account 1999-1-I" (the "Interest Carryover Account"). The
Interest Carryover Account shall constitute part of the Trust, but will be
treated as an "outside reserve fund" under applicable Treasury Regulations and
will not be an asset of the REMIC, and the funds held therein may be invested in
Permitted Instruments. For federal income tax purposes, any investment earnings
on the Interest Carryover Account will be treated as owned by, and will be
taxable to, the Class I Certificateholders. Distributions to or by any outside
reserve fund under this document shall be treated as made to or by the owner of
such fund. On the Closing Date, the Seller will make an initial cash deposit
into the Interest Carryover Account in an amount equal to $10,000.
If on a particular Remittance Date, the Remittance Rate for a Class of
Pool I Notes exceeds the Weighted Average Coupon Cap, a portion of the Current
Interest Requirement being distributed to that Class of Notes equal to the
amount of interest accrued on the Class Principal Balance of that Class of Notes
at a rate equal to the difference between the Remittance Rate for that Class and
the Weighted Average Coupon Cap will be transferred by the Indenture Trustee
from the Note Distribution Account for Pool I to the Interest Carryover Account
and then distributed to that Class. Similarly, if on a particular Remittance
Date, any Noteholders' Interest Carryover is payable with respect to a Class of
Pool I Notes under Section 7.08(d), the amount of such Noteholders' Interest
Carryover shall be transferred by the Indenture Trustee from the Note
Distribution Account for Pool I to the Interest Carryover Account and
distributed from the Interest Carryover Account with respect to that Class of
Pool I Notes. Additionally, amounts in the Interest Carryover Account will be
withdrawn by the Indenture Trustee and distributed to the Owner Trustee (or the
Paying Agent on its behalf) for distribution to the Class I Certificateholders
upon termination of this Agreement in accordance with the terms of Section 11.01
hereof.
Section 7.07 INVESTMENT OF ACCOUNTS.
(a) So long as no Servicer Default shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of any Account held by the Indenture Trustee shall be invested and reinvested by
the Indenture Trustee as directed in writing by the Servicer, in one or more
Permitted Instruments bearing interest or sold at a discount. No such investment
in the Note Distribution Accounts shall mature later than the Business Day
immediately preceding the next Remittance Date and no such investment in the
Expense Accounts, Interest Carryover Account or Rounding Account shall mature
later than the Business Day immediately preceding the date such funds will be
needed to pay fees or premiums or be transferred to the applicable Note
Distribution Account, as the case may be; PROVIDED, HOWEVER, the Indenture
Trustee or any affiliate thereof may be the obligor on any investment which
otherwise qualifies as a Permitted Instrument and any investment on which the
Indenture Trustee is the obligor may mature on such Remittance Date or date when
needed, as the case may be.
(b) If any amounts are needed for disbursement from any Account held
by the Indenture Trustee and sufficient uninvested funds are not available to
make such disbursement, the Indenture Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Account. The Indenture Trustee shall not be liable for any investment loss or
other charge resulting therefrom.
(c) Subject to Section 12.01 hereof, the Indenture Trustee shall not
in any way be held liable by reason of any insufficiency in any Account held by
the Indenture Trustees resulting from any investment loss on any Permitted
Instrument included therein (except to the extent that the Indenture Trustee is
the obligor thereon).
(d) The Indenture Trustee shall invest and reinvest funds in the
Accounts held by them to the fullest extent practicable, in such manner as the
Servicer shall from time to time direct in writing, but only in one or more
Permitted Instruments.
(e) All income or other gain from investments in any Account held by
the Indenture Trustee shall be deposited in such Account, immediately on
receipt, and the Indenture Trustee shall notify the Servicer of any loss
resulting from such investments. The Servicer shall remit the amount of any such
loss from its own funds, without reimbursement therefor, to the Indenture
Trustee for deposit in the Account from which the related funds were withdrawn
for investment by the next Determination Date following receipt by the Servicer
of such notice.
Section 7.08 PRIORITY AND SUBORDINATION OF DISTRIBUTIONS.
(a) The rights of the Noteholders and Certificateholders to receive
distributions from the proceeds of the Trust, and all ownership interests of the
Noteholders and Certificateholders in such distributions, shall be as set forth
in this Agreement and the Trust Agreement. In this regard, all rights of the
Certificateholders to receive distributions in respect of the Certificates, and
all ownership interests of the Certificateholders in and to such distributions,
shall be subject and subordinate to the preferential rights of the Noteholders
to receive distributions in respect of the Notes, as described herein. In
accordance with the foregoing, the ownership interests of the Certificateholders
in amounts deposited in the applicable Principal and Interest Account or in any
Accounts from time to time shall not vest unless and until such amounts are
distributed in respect of the Certificates in accordance with the terms of this
Agreement and the Trust Agreement. Notwithstanding anything contained in this
Agreement to the contrary, the Certificateholders shall not be required to
refund any amount properly distributed on the Certificates.
(b) [Reserved]
(c) [Reserved]
(d) On each Remittance Date, the Indenture Trustee shall withdraw from
the applicable Note Distribution Account the portion of the Pool Available
Remittance Amount for the applicable Pool, net of reimbursements to the Servicer
for Reimbursable Advances (plus, in the case of Pool I, amounts transferred from
the Rounding Account) and make distributions thereof in the following order of
priority (based solely upon information received from the Trust Administrator):
POOL I
(i) to the Expense Account relating to Pool I, an amount equal to
one-twelfth of the Annual Expense Escrow Amount with respect to the
Pool I Loans, plus any amount required to be paid to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust
Administrator or the Letter of Credit Provider pursuant to Section
7.03(a) resulting from insufficiencies in the Expense Account for Pool
I;
(ii) to the Class AS-1, Class AS-2 and Class AS-3 Notes,
concurrently, the sum of their respective Current Interest
Requirements and Class Interest Shortfall Carryforward Amounts, pro
rata based upon such amounts;
(iii) to the Class MS-1, Class MS-2 and Class BS Notes,
sequentially in that order, the sum of their respective Current
Interest Requirements and Class Interest Shortfall Carryforward
Amounts;
(iv) to the Class AS-1, Class AS-2 and Class AS-3 Notes, the
Class A Principal Distribution Amount, first to the Holders of the
Class AS-1 Notes until their Class Principal Balance has been reduced
to zero, then to the Holders of the Class AS-2 Notes until their Class
Principal Balance has been reduced to zero, and then to the Holders of
the Class AS-3 Notes until their Class Principal Balance has been
reduced to zero; provided, however that on and after any Remittance
Date on which the Class Principal Balances of the Class M and Class B
Notes of Pool I have been reduced to zero, any amounts payable to the
Class A Notes of Pool I on such Remittance Date shall be distributed
pro rata, based upon their Class Principal Balances, and not
sequentially;
(v) to the Class MS-1 and Class MS-2 Notes, sequentially in that
order, the Class MS-1 and Class MS-2 Principal Distribution Amounts,
respectively;
(vi) to the Class BS Notes, the Class BS Principal Distribution
Amount;
(vii) to the Class MS-1 Notes, the Class MS-1 Realized Loss
Amount;
(viii) to the Class MS-2 Notes, the Class MS-2 Realized Loss
Amount;
(ix) to the Class BS Notes, the Class BS Realized Loss Amount;
(x) to the Servicer, any unpaid Servicing Advances for Pool I;
(xi) to the Letter of Credit Provider, the amount of any unpaid
Letter of Credit Reimbursement Amounts;
(xii) to the Class MN and Class BN Notes, sequentially in that
order, the Class MN and Class BN Realized Loss Amounts, respectively;
(xiii) to the Class AS-1, Class AS-2, Class AS-3, Class MS-1,
Class MS-2 and Class BS Notes, sequentially in that order, their
respective Noteholders' Interest Carryover; and
(xiv) any remainder to the Owner Trustee for Deposit in the
sub-account of the Certificate Distribution Account applicable to Pool
I.
Principal payments distributed to the Holders of the Class AS-3 Notes
are required to be made in integral multiples of $25,000. If on any Remittance
Date the amount of principal to be distributed to the Holders of the Class AS-3
Notes is not an even multiple of $25,000, such holders will receive the amount
of such difference amounts from the Rounding Account.
POOL II
(i) to the Expense Account relating to Pool II, an amount equal
to one-twelfth of the Annual Expense Escrow Amount with respect to the
Pool II Loans, plus any amount required to be paid to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust
Administrator or the Letter of Credit Provider pursuant to Section
7.03(a) resulting from insufficiencies in the Expense Account for Pool
II;
(ii) to the Class AN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(iii) to the Class MN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(iv) to the Class BN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(v) to the Class AN Notes, the Class AN Principal Distribution
Amount;
(vi) to the Class MN Notes, the Class MN Principal Distribution
Amount;
(vii) to the Class BN Notes, the Class BN Principal Distribution
Amount;
(viii) to the Class MN Notes, the Class MN Realized Loss Amount;
(ix) to the Class BN Notes, the Class BN Realized Loss Amount;
(x) to the Servicer, any unpaid Servicing Advances for Pool II;
(xi) to the Letter of Credit Provider, the amount of any unpaid
Letter of Credit Reimbursement Amounts;
(xii) to the Class MS-1, Class MS-2 and Class BS Notes,
sequentially in that order, the Class MS-1, Class MS-2 and Class BS
Realized Loss Amounts, respectively;
(xiii) to the Class AN, Class MN and Class BN Notes, sequentially
in that order, their respective Noteholders' Interest Carryover; and
(xiv) any remainder to the Owner Trustee for deposit in the
sub-account of the Certificate Distribution Account for Pool II.
(e) Except as described in clause (f) below, all distributions made to
the Noteholders on each Remittance Date will be made on a pro rata basis among
the Noteholders of the respective Class of record on the next preceding Record
Date based on the Percentage Interest represented by their respective Notes, and
shall, except for the final payment on such Notes, be made by wire transfer of
immediately available funds to the account of such Noteholder as shall appear on
the Note Register without the presentation or surrender of the Note or the
making of any notation thereon, at a bank or other entity having appropriate
facilities therefor, at the expense of each such Noteholder unless such
Noteholder shall own of record Notes which have original principal amounts
aggregating (i) at least $5,000,000 or (ii) one of the two highest outstanding
amounts less than $5,000,000.
(f) Notwithstanding the foregoing, the amount of principal being
distributed to the Class AS-3 Notes on each Remittance Date will be allocated to
the specific Notes of such Class selected no later than 5 Business Days prior to
the related Remittance Date by lot or such other manner as may be determined,
which allocations will be made only in amounts equal to $25,000 and integral
multiples of $25,000 in excess thereof.
(g) On each Remittance Date that principal is being distributed to the
Class AS-3 Notes, such Notes also will receive amounts transferred from the
Rounding Account pursuant to Section 7.02(b)(i). Principal payments distributed
to the holders of the Class AS-3 Notes shall be made in integral multiples of
$25,000. If on any Remittance Date the amount of principal to be distributed to
the holders of Class AS-3 Notes is not an even multiple of $25,000, such holders
will receive from the Rounding Account the amount of such difference. The
Rounding Account will be reimbursed, to the extent funds are available, on the
next Remittance Date prior to principal being paid to the holders of the Class
AS-3 Notes.
<PAGE>
Section 7.09 ALLOCATION OF REALIZED LOSSES.
If on any Remittance Date, after taking into account all Realized
Losses experienced during the prior Due Period, and the distribution of
principal (including the Accelerated Principal Distribution Amount) with respect
to the Notes on such Remittance Date, the aggregate Class Principal Balance of
the Notes of a Pool exceeds the aggregate balance of the Loans of such Pool as
of the end of the related Due Period and the LOC Available Amount of that Pool,
(i.e., if the level of overcollateralization is negative), then the Class
Principal Balance of the Notes of such Pool will be reduced (in effect, "written
down") such that the level of the Spread Amount is zero, rather than negative.
Such a negative level is an "Applied Realized Loss Amount" which will be applied
as a reduction in the Class Principal Balance of the related Class B and Class M
Notes in reverse order of seniority. In no event shall the Class Principal
Balance of any Class A Note be written down as a result of applying Realized
Losses.
Once the Class Principal Balance of a Class of Notes has been "written
down," the amount of such write down will no longer bear interest, nor will such
amount thereafter be "reinstated" or "written up," although the amount of such
write down may, on future Remittance Dates, be paid to Holders of the Notes
which experienced the write down, in direct order of seniority.
Section 7.10 STATEMENTS.
Each month, not later than 12:00 noon New York time on the
Determination Date, the Trust Administrator shall deliver to the Indenture
Trustee, by telecopy, for distribution to the Noteholders, and the Owner Trustee
for distribution to the Certificateholders, the receipt and legibility of which
shall be confirmed telephonically, with hard copy thereof to be delivered on the
Business Day following the Determination Date, a certificate signed by an
officer of the Trust Administrator (a "Trust Administrator's Certificate")
stating the date (day, month and year), the Series number of the Notes, the date
of this Agreement, and the following:
(i) the Pool Available Remittance Amounts for each Pool for the
related Remittance Date;
(ii) the Class Principal Balances for each Class of Pool I and
Pool II Notes as reported in the prior Trust Administrator's
Certificate pursuant to subclause (xv) below, or, in the case of the
first Determination Date, the Original Principal Balance for each
Class of Pool I and Pool II Notes;
(iii) the Pool Principal Distribution Amounts for each Pool for
the related Remittance Date, in the aggregate and listed separately
for the portions relating to each Class of Pool I and Pool II Notes;
(iv) the amount of any Letter of Credit Payments in the aggregate
and listed separately by Pool;
(v) the Current Interest Requirements for each Class of Notes for
the related Remittance Date;
(vi) the number and Principal Balances of all Loans in each Pool
which were the subject of Principal Prepayments during the Due Period;
(vii) the amount of all Curtailments which were received during
the Due Period, stated separately for each Pool;
(viii) the aggregate amount of all Excess Payments and the
amounts of Monthly Payments in respect of principal received during
the Due Period, stated separately for each Pool;
(ix) the amount of interest received on the Mortgage Loans,
stated separately for each Pool;
(x) the amount of the Monthly Advances to be made on the
Determination Date, the portion of the Monthly Advances to be
deposited in the Note Distribution Accounts pursuant to Section
7.01(a)(ii), and the Compensating Interest payment to be made on the
Determination Date, in each case stated separately for each Pool;
(xi) the delinquency and foreclosure information set forth in the
form attached hereto as Exhibit L, stated separately for each Pool;
(xii) the amount of any Realized Losses incurred during the
related Due Period, stated separately for each Pool;
(xiii) the Interest Shortfall Carryforward Amounts, if any, for
each Class of Notes for such Remittance Date;
(xiv) the Reimbursable Amounts and the amounts transferred to the
Owner Trustee for deposit into the Certificate Distribution Account
and distribution to each Class of Certificates with respect to the
Remittance Date;
(xv) the Class Principal Balance for each Class of Notes and the
Pool Principal Balance for each Pool after giving effect to the
distribution to be made on the Remittance Date and after allocation of
Applied Realized Loss Amounts made on such Remittance Date;
(xvi) the Excess Spread (in the aggregate and stated separately
for each Pool);
(xvii) the Spread Amount and the Specified Subordinated Amount
for such Remittance Date, stated separately by Pool;
(xviii) the amount of any Applied Realized Loss Amount, Realized
Loss Amount and Unpaid Realized Loss Amount for each Class;
(xix) amounts to be deposited to the Expense Accounts, stated
separately for each Pool;
(xx) the amount of all payments and reimbursements to the
Servicer pursuant to Section 4.04(b), (c), (d)(ii), (e) and (f),
stated separately with respect to each Pool;
(xxi) the Class Pool Factor for each Class determined using the
balances in subclause (xv) above;
(xxii) the weighted average Loan Interest Rate of the Loans for
each Pool and the Weighted Average Class Adjusted Loan Remittance
Rates for each Pool, in each case for the related Remittance Date, and
the weighted average Loan Interest Rate for the prior three month
period;
(xxiii) the Class Remittance Rate for each Class of Notes with
respect to the Remittance Date and if the Class Remittance Rate for
any Class of Notes was based on the applicable Net Funds Cap, what it
would have been if based on LIBOR plus the applicable Margin or the
Auction Rate, as the case may be;
(xxiv) the rate of LIBOR and the Auction Rate with respect to the
Remittance Date;
(xxv) if the Remittance Rate for any Class of Notes for such
Remittance Date is based on the applicable Net Funds Cap, the Net
Funds Cap and, for Pool I, the Weighted Average Coupon Cap, for such
Class of Notes with respect to the Remittance Date;
(xxvi) if the Remittance Rate for any Class of Notes for such
Remittance Date is based on the applicable Net Funds Cap, the amount
of any Noteholders' Interest Carryover for such Class for such
Remittance Date;
(xxvii) the amount of the distribution, if any, allocable to
Noteholders' Interest Carryover and the amount of any Noteholders'
Interest Carryover for all prior Remittance Dates after giving effect
to such distribution (in each case, stated separately by Class and in
the aggregate);
(xxviii) the number and Principal Balance of all Defaulted Loans
purchased during the Due Period, stated separately for each Pool; and
(xxix) such other information as the Indenture Trustee may
reasonably require.
The Indenture Trustee shall forward such report to the Noteholders of
the applicable Pool and the Owner Trustee on the Remittance Date, together, if
requested by a Noteholder, with a separate report indicating the amount of funds
deposited in each Note Distribution Account pursuant to Section 7.01(a)(iv); and
the amounts which are reimbursable to the Servicer (all reports prepared by the
Indenture Trustee of such withdrawals and deposits will be based in whole or in
part upon the information provided to the Indenture Trustee by the Servicer or
the Trust Administrator).
To the extent that there are inconsistencies between the telecopy of
the Trust Administrator's Certificate and the hard copy thereof, the Indenture
Trustee shall be entitled to rely upon the telecopy. In the discretion of the
Trust Administrator, in the case of certain information furnished pursuant to
the above provisions, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class per $25,000 original dollar amount
as of the Cut-Off Date.
Each month, not later than the third Business Day prior to the
Determination Date occurring in such month, the Servicer shall deliver to the
Trust Administrator the Servicer's Monthly Computer Tape in the form attached
hereto as Exhibit R (both in hard copy and in computer tape form). The Trust
Administrator may rely fully upon and shall have no liability with respect to
any such information provided to it by the Servicer. The Trust Administrator
shall not be obligated to verify, recompute, reconcile or confirm any
information contained in the Servicer's Monthly Computer Tape or otherwise
provided by the Servicer.
In making any payments or distributions required to be made by them
pursuant to any of the provisions hereof, the Indenture Trustee shall make such
payments and distributions based solely upon the information contained in the
applicable Trust Administrator's Certificate or, if such information is not
included in the applicable Trust Administrator's Certificate, upon written
instructions of the Servicer or the Trust Administrator. The Indenture Trustee
may rely fully upon and shall have no liability with respect to any such
information provided to it by the Servicer or the Trust Administrator. The
Indenture Trustee shall not be obligated to verify, recompute, reconcile or
confirm any information contained in any Trust Administrator's Certificate or
otherwise provided by the Trust Administrator or the Servicer.
<PAGE>
(a) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall furnish to the Indenture Trustee for
distribution to each Person who at any time during the calendar year was a
Noteholder of the applicable Pool the amount of interest and principal
distributed with respect to each Class of Notes plus such other customary
information as the Trust Administrator determines to be necessary and/or
required by the Internal Revenue Service to enable the Noteholders to prepare
their tax returns for such calendar year. Such obligation of the Trust
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trust
Administrator pursuant to any requirements of the Code as from time to time are
in force.
(b) On each Remittance Date, the Indenture Trustee shall forward to
the Owner Trustee, for distribution to the Certificateholders, a copy of the
report forwarded to the Noteholders of each Pool in respect of such Remittance
Date, as the case may be, and a statement, prepared by the Servicer or the Trust
Administrator, setting forth the amounts actually distributed to the
Certificateholders on such Remittance Date together with such other information
as the Servicer or Trust Administrator provides and deems necessary or
appropriate.
(c) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall furnish to the Indenture Trustee, with a
copy to the Owner Trustee for distribution to each Person who at any time during
the calendar year was a Certificateholder such information as is reasonably
necessary to provide to such Person a statement containing the information
provided pursuant to the previous paragraph aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder, as
applicable. Such obligation of the Trust Administrator shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Trust Administrator pursuant to any requirements of the Code as
from time to time in force.
(d) Upon reasonable advance notice in writing, the Servicer will
provide to each Noteholder which is a savings and loan association, bank or
insurance company certain reports and access to information and documentation
regarding the Loans sufficient to permit such Noteholder to comply with
applicable regulations of the Office of Thrift Supervision or other regulatory
authorities with respect to investment in the Notes.
(e) The Servicer shall furnish to each Noteholder during the term of
this Agreement, such periodic, special, or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable, or appropriate
with respect to the Noteholder, or otherwise with respect to the purposes of
this Agreement, all such reports or information to be provided by and in
accordance with such applicable instructions and directions as the Noteholder
may reasonably require; provided, that the Servicer shall be entitled to be
reimbursed by such Noteholder for the Servicer's actual expenses incurred in
providing such reports if such reports are not producible in the ordinary course
of the Servicer's business.
<PAGE>
Section 7.11 ADVANCES BY THE SERVICER.
Not later than the close of business on each Determination Date, the
Servicer shall remit to the Indenture Trustee for deposit in the applicable Note
Distribution Account an amount (as indicated in the Trust Administrator's
Certificate prepared pursuant to Section 7.10), to be distributed on the related
Remittance Date pursuant to Section 7.08, equal to the amount, if any, by which
(a) the sum of (x) 30 days' interest at the then applicable weighted average
Remittance Rate for the Notes of a Pool on the aggregate Class Principal Balance
of the Notes of that Pool immediately prior to that Remittance Date and (y) the
amount required to be deposited into the Expense Account of that Pool on that
Remittance Date exceeds (b) the amount received by the Servicer as of the
related Record Date in respect of interest on the Loans of the related Pool. The
sum of such excess calculated for each Pool is defined herein as the "Monthly
Advance." The Servicer may reimburse itself for Monthly Advances made pursuant
to Section 4.04.
Notwithstanding anything herein to the contrary, no Monthly Advance
shall be required to be made if the Servicer determines that such Monthly
Advance would, if made, constitute a Nonrecoverable Advance.
Section 7.12 COMPENSATING INTEREST.
The Noteholders shall be entitled to a full month's interest for each
Loan for any month during which a Principal Prepayment or Curtailment is
received on such Loan. Not later than the close of business on each
Determination Date, with respect to each Loan for which a Principal Prepayment
or Curtailment was received during the related Due Period, the Servicer shall
remit to the Indenture Trustee for deposit in the applicable Note Distribution
Account from amounts otherwise payable to it as servicing compensation, an
amount (such amount required to be delivered to the Indenture Trustee is
referred to herein as "Compensating Interest") (as indicated in the Trust
Administrator's Certificate prepared pursuant to Section 7.10) equal to the
difference between (a) 30 days' interest on the Principal Balance of each such
Loan at its Loan Interest Rate and (b) the amount of interest actually received
on each such Loan for such Due Period.
Section 7.13 REPORTS OF FORECLOSURE AND ABANDONMENT OF MORTGAGED
PROPERTY.
Each year the Indenture Trustee shall execute upon receipt from the
Servicer and return to the Servicer for filing the reports of foreclosures and
abandonments of any Mortgaged Property of the applicable Pool prepared by the
Servicer required by Section 6050J of the Code. In order to facilitate this
reporting process, the Servicer, on or before January 15th of each year, shall
provide to the Indenture Trustee reports relating to each instance occurring
during the previous calendar year in which the Servicer (i) on behalf of the
Trust acquires an interest in a Mortgaged Property relating to a Loan through
foreclosure or other comparable conversion in full or partial satisfaction of
the Loan, or (ii) knows or has reason to know that a Mortgaged Property relating
to a Loan has been abandoned. The reports from the Servicer shall be in form and
substance sufficient to enable the Indenture Trustee to meet the reporting
requirements imposed by such Section 6050J.
Section 7.14 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 Loans for or with respect to the Due Period net of
distributions to be made to the Servicer with respect to the Due Period (other
than with respect to Nonrecoverable Advances). The Servicer, however, will
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.
[RESERVED]
ARTICLE IX
THE SERVICER
Section 9.01 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) The Servicer agrees to indemnify and hold the Indenture
Trustee, the Owner Trustee, the Trust Administrator, the Custodian and each
Noteholder and Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee, the Owner Trustee,
the Trust Administrator, the Custodian and any Noteholder and Certificateholder
may sustain in any way related to the failure of the Servicer to perform its
duties and service the Loans in compliance with the terms of this Agreement. The
Servicer shall immediately notify the Indenture Trustee, the Owner Trustee, the
Trust Administrator, the Custodian and each Noteholder and Certificateholder if
a claim is made by a third party with respect to this Agreement, and the
Servicer shall assume (with the consent of the Indenture Trustee) the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer, the Indenture Trustee, the
Owner Trustee, the Trust Administrator, the Custodian and/or Noteholder or
Certificateholder in respect of such claim. The Indenture Trustee shall
reimburse the Servicer from amounts otherwise payable to the Certificateholders
for all amounts advanced by it pursuant to the preceding sentence except when
the Claim relates directly to the failure of the Servicer to service and
administer the Loans in compliance with the terms of this Agreement.
(b) The Representative agrees to indemnify and hold the Indenture
Trustee, the Owner Trustee, the Trust Administrator, the Custodian and each
Noteholder and Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee, the Owner Trustee,
the Trust Administrator, the Custodian and any Noteholder or Certificateholder
may sustain in any way related to the failure of the Servicer, if it is an
affiliate thereof, or the failure of the Representative to perform their
respective duties in compliance with the terms of this Agreement and in the best
interests of the Noteholders and the Certificateholders. The Representative
shall immediately notify the Indenture Trustee, the Owner Trustee, the Trust
Administrator, the Custodian and each Noteholder and Certificateholder if a
claim is made by a third party with respect to this Agreement, and the
Representative shall assume (with the consent of the Indenture Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Servicer, the
Representative, the Indenture Trustee, the Owner Trustee, the Trust
Administrator, the Custodian and/or Noteholder or Certificateholder in respect
of such claim. The Indenture Trustee shall reimburse the Representative from
amounts otherwise payable to the Certificateholders for all amounts advanced by
it pursuant to the preceding sentence except when the claim relates directly to
the Representative's indemnification pursuant to Section 2.05 and Section 3.03
or to the failure of the Servicer, if it is an affiliate of the Representative
to perform its obligations to service and administer the Loans in compliance
with the terms of this Agreement, or the failure of the Representative to
perform its duties in compliance with the terms of this Agreement and in the
best interests of the Noteholders and the Certificateholders.
(c) The Servicer also acknowledges its indemnification
obligations under Section 6.7 of the Indenture.
Section 9.02 MERGER OR CONSOLIDATION OF THE REPRESENTATIVE AND THE
SERVICER.
The Servicer and the Representative will each keep in full effect its
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Loans and to perform its duties under this Agreement.
Any Person into which the Servicer, the Representative may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer and the Representative shall be a party, or
any Person succeeding to the business of the Servicer and the Representative,
shall be an established mortgage loan servicing institution that has a net worth
of at least $15,000,000 and shall be the successor of the Servicer and the
Representative, as applicable, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Servicer and the Representative
shall send notice of any such merger or consolidation to the Issuer, the Owner
Trustee and the Indenture Trustee.
<PAGE>
Section 9.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities respecting any matters arising hereunder. Subject to the terms of
Section 9.01 herein, the Servicer shall have no obligation to appear with
respect to, prosecute or defend any legal action which is not incidental to the
Servicer's duty to service the Loans in accordance with this Agreement.
Section 9.04 SERVICER NOT TO RESIGN.
The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Owner Trustee and the Indenture Trustee, or upon the determination
that the Servicer's duties hereunder are no longer permissible under applicable
law and such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by a written
Opinion of Counsel (who may be counsel for the Servicer) to such effect
delivered to the Indenture Trustee and the Owner Trustee, which Opinion of
Counsel shall be in form and substance acceptable to the Indenture Trustee and
the Owner Trustee. No such resignation shall become effective until a successor
has assumed the Servicer's responsibilities and obligations hereunder in
accordance with Section 10.02.
Section 9.05 [Reserved]
Section 9.06 [Reserved]
Section 9.07 APPOINTMENT OF TRUST ADMINISTRATOR.
The Representative and Servicer hereby appoint First Union National
Bank, a national banking association, as Trust Administrator and, in such
capacity, the Trust Administrator shall have all the rights, powers, obligations
and duties respecting the Trust Administrator set forth herein and in the other
Basic Documents.
ARTICLE X
DEFAULT
Section 10.01 SERVICER DEFAULT.
(a) In case one or more of the following Servicer Defaults shall
occur and be continuing, that is to say:
(i) (A) the failure by the Servicer to make any required
Servicing Advance, to the extent such failure materially and adversely
affects the interests of the Noteholders or the Certificateholders;
(B) the failure by the Servicer to make any required Monthly Advance;
(C) the failure by the Servicer to remit any Compensating Interest; or
(D) any failure by the Servicer to remit to Noteholders or the
Certificateholders, or to the Indenture Trustee for the benefit of the
Noteholders or the Certificateholders, any payment required to be made
under the terms of this Agreement which continues unremedied after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Indenture
Trustee or to the Servicer and the Indenture Trustee by any Noteholder
or Certificateholder; or
(ii) failure by the Servicer or the Representative duly to
observe or perform, in any material respect, any other covenants,
obligations or agreements of the Servicer or the Representative as set
forth in this Agreement, which failure continues 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 to
the Servicer or the Representative, as the case may be, by the
Indenture Trustee or to the Servicer or the Representative, as the
case may be, and the Indenture Trustee by any Noteholder or
Certificateholder; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in
force, undischarged or unstayed for a period of 60 days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property; or
(v) the Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of
its obligations;
(b) then, and in each and every such case, so long as a Servicer
Default shall not have been remedied, and in the case of clause (i) above
(except for clause (i)(C)), if such Servicer Default shall not have been
remedied within 30 days after the Servicer has received notice of such Servicer
Default, (x) with respect solely to clause (i)(C) above, if such Monthly Advance
is not made earlier than 4:00 p.m. New York time on the Determination Date, the
Indenture Trustee shall give immediate telephonic notice of such failure to a
Servicing Officer of the Servicer, as the case may be, and, unless such failure
is cured, by receipt of payment by 12:00 Noon New York time on the following
Business Day, the Indenture Trustee shall immediately assume, pursuant to
Section 10.02 hereof, the duties of a successor Servicer; and (y) in the case of
clauses (i)(A), (i)(B), (i)(D), (i)(E), (ii), (iii), (iv) and (v), the Majority
Securityholders then outstanding, by notice in writing to the Servicer, may, in
addition to whatever rights such Noteholders may have at law or equity including
damages, injunctive relief and specific performance, in each case commence
termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Loans and the proceeds thereof, as Servicer. Upon
receipt by the Servicer of a second written notice from such Noteholders stating
that they or it intend to terminate the Servicer as a result of such Servicer
Default, all authority and power of the Servicer under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall, subject to Section
10.02, pass to and be vested in the Indenture Trustee or its designee and the
Indenture Trustee or its designee is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Loans and related documents. The Servicer agrees to cooperate
with the Indenture Trustee in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Indenture Trustee or its designee for administration by it of
all amounts which shall at the time be credited by the Servicer to each
Principal and Interest Account or thereafter received with respect to the Loans.
Section 10.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 10.01 or the Indenture Trustee receives the resignation of
the Servicer evidenced by an Opinion of Counsel pursuant to Section 9.04 or the
Servicer is removed as servicer pursuant to this Article X, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof,
provided, however, that the Indenture Trustee shall not be liable for any
actions of any servicer prior to it, and that the Indenture Trustee shall not be
obligated to make advances or payments pursuant to Sections 7.11, 7.12, 4.05,
4.10 or 4.14 or otherwise but only to the extent the Indenture Trustee, as the
case may be, determines reasonably and in good faith that such advances would
not be recoverable, such determination to be evidenced with respect to each such
advance by a certification of a Responsible Officer of the Indenture Trustee, as
the case may be. As compensation therefor, the Indenture Trustee shall be
entitled to all funds relating to the Loans which the Servicer would have been
entitled to receive from the Principal and Interest Account pursuant to Section
4.04 if the Servicer had continued to act as servicer hereunder, together with
other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Sections 5.01 and 5.03.
Notwithstanding the above, the Indenture Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Majority
Securityholders so request in writing to the Indenture Trustee, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution satisfying the Rating Agency Condition that has a net
worth of not less than $15,000,000 as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any collections received by the Servicer after
removal or resignation shall be endorsed by it to the Indenture Trustee and
remitted directly to the Indenture Trustee or, at the direction of the Indenture
Trustee, to the successor servicer. The compensation of any successor servicer
(including, without limitation, the Indenture Trustee) so appointed shall be the
aggregate Servicing Fees, together with other servicing compensation in the form
of assumption fees, late payment charges or otherwise. In the event the
Indenture Trustee is required to solicit bids as provided herein, the Indenture
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer shall be entitled to, with respect to the Loans each would be
servicing, the full amount of the aggregate Servicing Fees relating to such
Loans as servicing compensation, together with the other servicing compensation
in the form of assumption fees, late payment charges or otherwise. Within thirty
days after any such public announcement, the Indenture Trustee shall negotiate
and effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Indenture Trustee shall deduct from any sum received by the
Indenture Trustee from the successor to the Servicer in respect of such sale,
transfer and assignment all costs and expenses of any public announcement and of
any sale, transfer and assignment of the servicing rights and responsibilities
hereunder and the amount of any unreimbursed Servicing Advances and Monthly
Advances. After such deductions, the remainder of such sum shall be paid by the
Indenture Trustee to the Servicer at the time of such sale, transfer and
assignment to the Servicer's successor. The Indenture Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Servicer agrees to cooperate with the
Indenture Trustee and any successor servicer in effecting the termination of the
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Indenture Trustee or such successor servicer, as applicable, all
documents and records reasonably requested by it to enable it to assume the
Servicer's functions hereunder and shall promptly also transfer to the Indenture
Trustee or such successor servicer, as applicable, all amounts which then have
been or should have been deposited in the Principal and Interest Account by the
Servicer or which are thereafter received with respect to the Loans. Neither the
Indenture Trustee nor any other successor servicer shall be held liable by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Servicer to
deliver, or any delay in delivering, cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
Servicer hereunder. No appointment of a successor to the Servicer hereunder
shall be effective until written notice of such proposed appointment shall have
been provided by the Indenture Trustee to each Noteholder and each
Certificateholder, and the Indenture Trustee shall have consented thereto. The
Indenture Trustee shall not resign as servicer until a successor servicer has
been appointed.
Pending appointment of a successor to the Servicer hereunder, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Indenture Trustee may make
such arrangements for the compensation of such successor out of payments on
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer pursuant to
Section 5.03 or otherwise as provided in this Agreement. The Servicer, the
Indenture Trustee, the Owner Trustee, any Custodian and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
Section 10.03 WAIVER OF DEFAULTS.
The Majority Securityholders, may, on behalf of all Noteholders and
Certificateholders waive any events permitting removal of the Servicer as
servicer pursuant to this Article X, provided, however, that such Noteholders
may not waive a default in making a required distribution on a Note or
Certificate without the consent of the holder of such Note or Certificate, as
the case may be. Upon any 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 except to the
extent expressly so waived.
Section 10.04 [Reserved]
Section 10.05 CONTROL BY MAJORITY SECURITYHOLDERS.
The Majority Securityholders may, by written instruction, direct the
time, method and place of conducting any proceeding relating to the Owner Trust
Estate or for any remedy available to the Indenture Trustee with respect to the
Owner Trust Estate or exercising any trust or power conferred on the Indenture
Trustee with respect to the Owner Trust Estate and the Indenture Trustee, by
written instruction, may direct the time, method and place of conducting any
proceeding for any remedy available to the Owner Trustee with respect to the
Owner Trust Estate or exercising any trust or power conferred on the Owner
Trustee with respect to the Owner Trust Estate, PROVIDED THAT:
(a) such direction shall not be in conflict with any rule of law
or with this Agreement or the Trust Agreement and shall contain a
representation to such effect upon which the recipient of such direction
may rely;
(b) the Indenture Trustee, or the Owner Trustee, as the case may
be, shall have been provided with indemnity satisfactory to it; and
(c) the Indenture Trustee, and the Owner Trustee may take any
other action deemed proper by the Indenture Trustee, and the Owner Trustee
which is not inconsistent with such direction; provided, however, that the
Indenture Trustee, and the Owner Trustee need not take any action which it
determines might involve it in liability or may be unjustly prejudicial to
the Holders not so directing.
<PAGE>
ARTICLE XI
TERMINATION
Section 11.01 TERMINATION.
(a) This Agreement shall terminate upon notice to the Indenture
Trustee of either: (a) the latter of the final payment or other liquidation of
the last Loan or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Loan and the remittance of all funds due
thereunder, or (b) mutual consent of the Servicer and all Noteholders and all
Certificateholders in writing.
(b) The Servicer may, at its option, on any date on which the
aggregate Principal Balances of the Loans are less than 10% of the aggregate
Principal Balances of the Loans as of the Cut-Off Date (such date, the "Optional
Servicer Termination Date"), purchase on the next succeeding Remittance Date,
all of the Loans and any related REO Properties at a price equal to the sum of
(x) 100% of the Principal Balances of the Loans before the occurrence of
Realized Losses, and any related REO Property, and (y) accrued but unpaid
interest thereon (whether through payments by the applicable Obligor, Monthly
Advances or otherwise) at the weighted average Remittance Rates of the Pool I
Notes in the case of the Pool I Loans and the weighted average Remittance Rates
of the Pool II Notes in the case of the Pool II Loans (the "Termination Price").
(c) In the event that this Agreement is terminated under clause
(b) of Section 11.01(a), or the Servicer exercises its purchase option as
provided in Section 11.01(b), the Trust shall be terminated in accordance with
the following additional requirements, unless the Owner Trustee and the Trust
Administrator shall have been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
10.02 will not (1) result in the imposition of taxes on "prohibited
transactions" of REMIC I or REMIC II as defined in Section 860F of the Code or
(2) cause either REMIC I or REMIC II to fail to qualify as a REMIC at any time
that any REMIC I Regular Interest, Pool I Notes or Class I Certificates are
outstanding:
(i) Within 90 days prior to the final Remittance Date, the Servicer
shall adopt and the Owner Trustee shall sign a plan of complete liquidation
for each of REMIC I and REMIC II meeting the requirements of a "Qualified
Liquidation" under Section 860F of the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Remittance date, the Owner Trustee
shall sell all of the assets of the Trust (to the Servicer, in the case of
a termination under Section 11.01(b)) for cash; and
(iii) At the time of the making of the final payment on the Notes, the
Indenture Trustee shall distribute or credit, or cause to be distributed or
credited from the Pool I Note Distribution Account (A) to REMIC II, as
holder of the REMIC I Regular Interests, the unpaid principal balance
thereof plus accrued interest thereon, (B) to each Class of Pool I Notes,
the amounts payable with respect to such Notes pursuant to Section 7.08,
and (C) to the Owner Trustee, for deposit into the sub-account of the
Certificate Distribution Account applicable to Pool I any amounts remaining
in the Pool I Note Distribution Account, for distribution to the Class I
Certificates any amounts that it has accrued under Section 2.13 of the
Trust Agreement, but which have not yet been paid with respect to such
Certificates, and distribution to the Class R Certificates, all amount
remaining in REMIC I and REMIC II after such payment.
By their acceptance of the Pool I Notes and Class I Certificates, the Holders
thereof hereby agree to appoint the Owner Trustee as their attorney in fact to:
(i) adopt such a plan of complete liquidation (and the holders of the Pool I
Notes and Class I Certificates hereby appoint the Owner Trustee as their
attorney in fact to sign such plan) as appropriate and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plan of complete liquidation all in accordance with the terms hereof.
(d) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Indenture Trustee and the Rating Agencies as
soon as practicable after the Servicer has received notice thereof.
(e) 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 or its designee will succeed to the rights of the Indenture
Trustee pursuant to this Agreement.
ARTICLE XII
ADMINISTRATIVE DUTIES OF THE TRUST ADMINISTRATOR
Section 12.01 ADMINISTRATIVE DUTIES.
(a) DUTIES WITH RESPECT TO THE INDENTURE AND DEPOSITORY
AGREEMENTS. The Trust Administrator shall perform all the duties of the Issuer
under the Depository Agreement and the Indenture. In addition, the Trust
Administrator shall consult with the Owner Trustee as the Trust Administrator
deems appropriate regarding the duties of the Issuer under the Indenture and the
Depository Agreement. The Trust Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee in writing when action is
necessary to comply with the Issuer's duties under the Indenture and the
Depository Agreement. The Trust Administrator 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 Agreement. In furtherance of the foregoing, the Trust
Administrator shall take all appropriate action that is the duty of the Issuer
to take pursuant to the Indenture and the Depository Agreement. The Owner
Trustee shall not be responsible for monitoring or supervising the activities of
the Trust Administrator; provided, however, the Owner Trustee shall remain
liable for performing its services hereunder and under the other Basic
Documents. The Owner Trustee shall incur no liability for the default or
misconduct of the Trust Administrator.
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) The Trust
Administrator 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. In accordance with the directions of
the Owner Trustee, the Trust Administrator 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 Owner Trustee and are
reasonably within the capability of the Trust Administrator. In furtherance
thereof, the Owner Trustee shall, on behalf of itself and the Trust, execute and
deliver to the Trust Administrator, one or more powers of attorney substantially
in the form of Exhibit P hereto, appointing the Trust Administrator the
attorney-in-fact of the Owner Trustee and the Trust for the purpose of executing
on behalf of the Owner Trustee and the Trust any and all documents and taking
any and all actions necessary in connection with the performance by the Trust
Administrator of its obligations under this Agreement.
(ii) Notwithstanding anything in this Agreement or any of the Basic
Documents to the contrary, the Trust Administrator shall be responsible for
promptly notifying the Owner Trustee in writing 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(c) of the Trust Agreement. Any such notice shall 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 Trust Administrator shall be responsible for
performance of the duties of the Owner Trustee and the Holder of the
Special Interests set forth in Sections 2.13, 2.14, 6.2, 6.3, 6.4. 6.5 and
6.6 of the Trust Agreement with respect to, among other things, accounting
and reports to Owners (as defined in the Trust Agreement); PROVIDED,
HOWEVER, that the Holder of the Special Interests 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 Trust Administrator 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 Trust Administrator
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 Trust Administrator 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 Trust Administrator's opinion, no less favorable to the Issuer in any
material respect.
(c) TAX MATTERS. The Trust Administrator shall prepare and file,
on behalf of the Trust and the Holder of the Special Interests, 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 Sections
2.6, 2.13 and 2.14 and Article V of the Trust Agreement, including without
limitation, Internal Revenue Service forms 1099, 1065 and 1066. All tax returns
relating to REMIC I, REMIC II, the Class I Certificates and Class R Certificates
will be signed by the Owner Trustee and all tax returns relating to Pool II and
the Class II Certificates shall be signed by the Holder of the Special
Interests, unless some other party is required by law to sign such returns (in
which case such other party shall sign).
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Trust Administrator are non-ministerial, the Trust
Administrator shall not take any action pursuant to this Article X unless within
a reasonable time before the taking of such action, the Trust Administrator
shall have notified in writing the Owner Trustee and the Indenture Trustee of
the proposed action and the Owner Trustee and, with respect to items (A), (B),
(C) and (D) below, Indenture 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 Loans);
(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 Indenture Trustees pursuant to the Indenture or the
appointment of Successor Servicers or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture Trustee of its obligations under
the Indenture; and
(E) the removal of the Indenture Trustee.
(c) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Trust Administrator, 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 Indenture Trust Estate pursuant to
Section 5.4 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 12.02 RECORDS.
The Trust Administrator 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 12.03 ADDITIONAL INFORMATION TO BE FURNISHED TO THE
ISSUER.
The Trust Administrator shall furnish to the Issuer from time to
time such additional information available to the Trust Administrator regarding
the Owner Trust Estate as the Issuer shall reasonably request.
Section 12.04. CALCULATION OF LIBOR.
(a) On each Interest Determination Date, the Trust Administrator
will determine LIBOR based on the rate for one-month U.S. dollar deposits (the
"One Month Index Maturity") which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date in determining the Class Remittance Rates for
the Remittance Date in the following month. If such LIBOR rate does not appear
on Telerate Page 3750, the LIBOR rate for that day will be determined on the
basis of the rates at which deposits in United States dollars, having the One-
Month Index Maturity and in a principal amount of not less than U.S. $1,000,000,
are offered at approximately 11:00 a.m., London time, on that day to prime banks
in the London interbank market by the Reference Banks. The Trust Administrator
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that day will be the arithmetic mean of the quotations. If fewer
than two quotations are provided, the rate for that day will be the arithmetic
mean of the rates quoted by major banks in New York City, selected by the Trust
Administrator, at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks having a One-Month
Index Maturity and in a principal amount equal to an amount of not less than
U.S. $1,000,000; provided that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, LIBOR in effect for the applicable
Interest Period will be LIBOR in effect for the previous Interest Period.
Neither the Representative, Servicer nor the Indenture Trustee shall
have any liability or responsibility to any Person for the selection of any
Reference Bank for the purpose of determining LIBOR. In determining LIBOR and
the Class Remittance Rates the Trust Administrator may conclusively rely and
shall be protected in relying upon the rates appearing on Telerate Page 3750 or
the offered quotations (whether written, oral or on Telerate Page 3750) from
Reference Banks, as appropriate, in effect from time to time. Neither of the
Representative, the Servicer nor the Indenture Trustee shall have liability or
responsibility to any Person for (i) the Trust Administrator's selection of
Reference Banks for purposes of determining LIBOR or (ii) the Trust
Administrator's or the Servicer's inability, as applicable, following a
good-faith reasonable effort, to obtain such quotations from Reference Banks or
such New York City banks or to determine such arithmetic mean, all as provided
for in this Section 12.15.
The establishment of LIBOR and the Class Remittance Rates by the Trust
Administrator shall (in the absence of manifest error) be final, conclusive and
binding upon each Holder of a Note, the Representative and the Servicer.
The Trust Administrator is not responsible for determining (or for the
failure of the Servicer to determine) the Net Funds Cap.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 ACTS OF NOTEHOLDERS AND CERTIFICATEHOLDERS.
Except as otherwise specifically provided herein, whenever Noteholder
or Certificateholder action, consent or approval is required under this
Agreement, such action, consent or approval shall be deemed to have been taken
or given on behalf of, and shall be binding upon, all Noteholders and
Certificateholders if the Majority Securityholders agree to take such action or
give such consent or approval.
Section 13.02 AMENDMENT.
This Agreement may be amended by the Servicer and the Owner Trustee,
with the consent of the Indenture Trustee (which consent may not be unreasonably
withheld), but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Servicer
and the Owner Trustee, with the consent of the Indenture Trustee and the Letter
of Credit Provider and the consent of the Majority Securityholders 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 Loans 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 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
of each Class and the Holders (as defined in the Trust Agreement) of all the
outstanding Certificates affected thereby.
Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Rating Agencies. 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 and the
Indenture Trustee.
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.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture 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. The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
Any amendment to this Agreement shall also require the consent of the
Custodian and/or the Trust Administrator, if such proposed amendment affects any
of their respective rights, duties or obligations hereunder.
Section 13.03 RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Noteholders and the Certificateholders' expense on direction of
the Majority Securityholders, but only when accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Noteholders and the Certificateholders or is necessary for the
administration or servicing of the Mortgage Loans.
Section 13.04 DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 13.05 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 13.06 NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified mail or registered mail, postage prepaid, to (i) in
the cases of the Representative, Seller and Servicer, The Money Store Inc., 707
Third Street, West Sacramento, California 95605, Attention: Executive Vice
President, or such other addresses as may hereafter be furnished to the
Noteholders and the Certificateholders in writing by the Representative, the
Seller and the Servicer, (ii) in the case of the Indenture Trustee, 140
Broadway, 12th Floor, New York, New York 10005, Attention: Corporate Trust
Department, (iii) in the case of the Owner Trustee to The Money Store Business
Loan Backed Trust 1999-1, c/o Chase Manhattan Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trust Department, (iv) in the
case of Moody's, to 99 Church Street, New York, New York 10007, Attention:
Structured Finance, (v) in the case of DCR, to Duff & Phelps Credit Rating Co.,
55 East Monroe Street, Suite 3800, Chicago, Illinois 60603, Attention:
Monitoring Group (Small Business Loans), (vi) in the case of the Custodian,
First Union National Bank, Trust Department, 9639 Doctor Perry Road, Suite 124,
Ijamsville, Maryland 21754, Attention: Robin Belanger, or (vii) in the case of
the Trust Administrator, First Union National Bank, 230 South Tryon Street, 9th
Floor, Charlotte, NC 28288, Attention: The Money Store Business Loan Backed
Trust, Series 1999-1 or to such other address as such party may hereafter
specify in writing.
Section 13.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
Section 13.08 NO PARTNERSHIP.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Noteholders or the Certificateholders.
Section 13.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
Section 13.10 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
Representative, the Seller, the Servicer, the Issuer, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders and their respective
successors and assigns.
Section 13.11 HEADINGS.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
Section 13.12 ASSIGNMENT TO INDENTURE TRUSTEE.
The Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the Indenture for the benefit of the Noteholders of all
right, title and interest of the Issuer in, to and under the Mortgage Loans
and/or the assignment of any or all of the Issuer's rights and obligations
hereunder to the Indenture Trustee.
Section 13.13 NONPETITION COVENANT.
Notwithstanding any prior termination of this Agreement, the Seller
and Servicer 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.
Section 13.14 LIMITATION OF LIABILITY OF OWNER TRUSTEE, INDENTURE
TRUSTEE AND CUSTODIAN.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been signed and countersigned by Chase Manhattan Bank
Delaware not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank 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 or the Owner Trustee 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 the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by HSBC Bank USA not in its individual capacity
but solely as Indenture Trustee and in no event shall HSBC Bank USA 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.
(c) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by First Union National Bank, not in its
individual capacity but solely as Custodian and Trust Administrator, and in no
event shall First Union National 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 13.15 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.
<PAGE>
Section 13.16 NOTIFICATION TO RATING AGENCIES.
The Indenture Trustee shall give prompt notice to the Rating Agencies
of the occurrence of any of the following events of which it has received
notice: (1) any modification or amendment to this Agreement, (2) any appointment
of a Custodian (other than First Union National Bank), (3) any change of the
Indenture Trustee or the Servicer, (4) any Servicer Default, and (5) the final
payment of all the Notes and the Certificates. The Servicer shall promptly
deliver to the Rating Agencies a copy of each of the Trust Administrator's
Certificates.
Section 13.17 THIRD PARTY RIGHTS.
The parties hereto agree that the Indenture Trustee, the Owner
Trustee, the Trust Administrator and the Custodian shall each be deemed a third
party beneficiary of the Agreement entitled to all rights and benefits set forth
herein as fully as if it were a party hereto.
<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 BUSINESS LOAN
BACKED TRUST 1999-1
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity but
solely as Owner Trustee on behalf of the Trust,
By: /s/ Denis Kelly
-----------------------------------
Name: Denis Kelly
Title: Assistant Vice President
THE MONEY STORE INC., as Representative
By: /s/ Arthur Lyon
-----------------------------------
Name: Arthur Lyon
Title: Senior Vice President/CFO
THE MONEY STORE COMMERCIAL
MORTGAGE, INC., as Seller and Servicer
By: /s/ Paul Leliakov
----------------------------------
Name: Paul Leliakov
Title: President
<PAGE>
Acknowledged and Accepted:
HSBC Bank USA, not
in its individual capacity
but solely as Indenture Trustee,
By: /s/ Susan Barstock
-------------------------------
Name: Susan Barstock
Title: Assistant Vice President
<PAGE>
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
not in its individual capacity
but as Custodian
By: /s/ Robert Ashbaugh
------------------------------
Name: Robert Ashbaugh
Title: Vice President
<PAGE>
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
not in its individual capacity
but as Trust Administrator
By: /s/ Steven R. Johnson
-------------------------------
Name: Steven R. Johnson
Title: Vice President
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 29th day of June 1999 before me, a Notary Public in and for said
State, personally appeared Denis Kelly, known to me to be an officer of
Chase Manhattan Bank Delaware, a Delaware banking corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Amanda C. Scuder
------------------------------
Notary Public
My Commission expires November 24, 1999
<PAGE>
STATE OF CALIFORNIA )
: ss.:
COUNTY OF YOLO )
On the 29th day of September 1999 before me, a Notary Public in and for the
State of California, personally appeared Arthur Q. Lyon, known to me to be the
Senior Vice President/CFO of The Money Store Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Sonya V. Snow
---------------------------
Notary Public
My Commission expires August 9, 2002
<PAGE>
STATE OF CALIFORNIA )
: ss.:
COUNTY OF YOLO )
On the 29th day of June 1999 before me, a Notary Public in and for the
State of California, personally appeared Paul Leliakov, known to me to be the
President of The Money Store Commercial Mortgage Inc., and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Sonya V. Snow
----------------------------
Notary Public
My Commission expires August 9, 2002
<PAGE>
SCHEDULE I
DESCRIPTION OF CERTAIN LITIGATION
None.
<PAGE>
EXHIBIT A
CONTENTS OF INDENTURE TRUSTEE'S LOAN FILE
With respect to each Loan, the Indenture Trustee's Loan File shall include
the documents set forth in Section 2.04 of the Sale and Servicing Agreement.
<PAGE>
EXHIBIT B
PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT
June __, 1999
To: _________________ (the "Depository")
As "Servicer" under the Sale and Servicing Agreement, dated as of May
31, 1999, among The Money Store Business Loan Backed Trust 1999-1, The Money
Store Inc., and the Money Store Commercial Mortgage Inc., as Seller and Servicer
(the "Agreement"), we hereby authorize and request you to establish an account,
as a Principal and Interest Account pursuant to Section 4.03 of the Agreement,
to be designated as "The Money Store Commercial Mortgage Inc., in trust for the
registered holders of The Money Store Business Loan Backed Notes, and
Certificates Series 1999-1, and various Obligors." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Servicer. You
may refuse any deposit which would result in violation of the requirement that
the account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
THE MONEY STORE INC.
By: ________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum amount provided by applicable law by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund.
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF CUSTODIAN INITIAL CERTIFICATION
June 29, 1999
The Money Store Inc. The Money Store Commercial Mortgage Inc.
707 Third Street 707 Third Street
West Sacramento, CA 95605 West Sacramento, CA 95605
First Union Capital Markets Corp., as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 140 Broadway, 12th Floor
One First Union Center New York, New York 10005
301 South College Street, DC-8
Charlotte, North Carolina 28288-0600
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that,
except as noted on the attachment hereto, if any (the "Loan Exception Report"),
it has received an Assignment of Mortgage, or a certified copy thereof, and a
Business Note with respect to each Pool I and Pool II Loan listed in the related
Loan Schedule and the documents contained therein appear to bear original
signatures.
The undersigned has made no independent examination of any such
documents beyond the review specifically required in the above-referenced Sale
and Servicing Agreement. The undersigned makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any such
documents or any of Pool I or Pool II Loans identified on the related Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Pool I or Pool II Loan.
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
FIRST UNION NATIONAL BANK,
as Custodian
By: _______________________
Name:
Title:
<PAGE>
EXHIBIT C-1
FORM OF CUSTODIAN INTERIM CERTIFICATION
[Date]
The Money Store Inc. The Money Store Commercial Mortgage Inc.
707 Third Street 707 Third Street
West Sacramento, CA 95605 West Sacramento, CA 95605
First Union Capital Markets Corp. as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 140 Broadway, 12th Floor
One First Union Center New York, New York 10005
301 South College Street, DC-8
Charlotte, North Carolina 28288-0600
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-referenced Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that as to
each Pool I and Pool II Loan listed in the related Loan Schedule (other than any
Pool I or Pool II Loan paid in full or any Pool I or Pool II Loan listed on the
attachment hereto), it has reviewed the documents delivered to it pursuant to
Section 2.04 of the Sale and Servicing Agreement and has determined that (i) all
such documents are in its possession, (ii) such documents have been reviewed by
it and have not been mutilated, damaged, torn or otherwise physically altered
and relate to such Pool I or Pool II Loan, (iii) based on its examination and
only as to the foregoing documents, the information set forth in the related
Loan Schedule respecting such Pool I or Pool II Loan is correct and (iv) each
Business Note has been endorsed as provided in Section 2.04 of the Sale and
Servicing Agreement.
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
FIRST UNION NATIONAL BANK,
as Custodian
By __________________________
Name:
Title:
<PAGE>
EXHIBIT D
FORM OF CUSTODIAN FINAL CERTIFICATION
[Date]
The Money Store Inc. The Money Store Commercial Mortgage Inc.
707 Third Street 707 Third Street
West Sacramento, CA 95605 West Sacramento, CA 95605
First Union Capital Markets Corp. as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 140 Broadway, 12th Floor
One First Union Center New York, New York 10005
301 South College Street, DC-8
Charlotte, North Carolina 28288-0600
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that,
except as noted on the attachment hereto, as to each Pool I and Pool II Loan
listed in the related Loan Schedule (other than any Pool I or Pool II Loan paid
in full or listed on the attachment hereto) it has reviewed the documents
delivered to it pursuant to Section 2.04 (other than items listed in Section
2.04(d)(ii)) of the Sale and Servicing Agreement and has determined that (i) all
such documents are in its possession, (ii) such documents have been reviewed by
it and have not been mutilated, damaged, torn or otherwise physically altered
and relate to such Pool I or Pool II Loan, (iii) based on its examination, and
only as to the foregoing documents, the information set forth in the related
Loan Schedule respecting such Pool I or Pool II Loan is correct and (iv) each
Business Note has been endorsed as provided in Section 2.04 of the Sale and
Servicing Agreement. The undersigned has made no independent examination of such
documents beyond the review specifically required in the above-referenced Sale
and Servicing Agreement. The undersigned makes no representations as to: (i) the
validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Pool I or Pool II Loan identified on the related
Loan Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any such Pool I or Pool II Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
FIRST UNION NATIONAL BANK,
as Custodian
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT E-1
POOL I LOAN SCHEDULE
The Pool I Loan Schedule is maintained with the Indenture Trustee.
<PAGE>
EXHIBIT E-2
POOL II LOAN SCHEDULE
The Pool II Loan Schedule is maintained with the Indenture Trustee.
<PAGE>
EXHIBIT F
[RESERVED]
<PAGE>
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS
To: [First Union National Bank,
as Custodian]
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and CERTIFICATES, SERIES 1999-1, DATED AS OF MAY 31,
1999
In connection with the administration of the Pool of Loans held by you
as Custodian for the Noteholders and the Certificateholders, we request the
release, and acknowledge receipt, of the (Indenture Trustee's Loan File/[specify
document]) for the Loan described below, for the reason indicated.
OBLIGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
____ 1. Loan Paid in Full
(Servicer hereby certifies that all amounts received in
connection therewith have been credited to the Principal and
Interest Account and remitted to the Indenture Trustee for
deposit into the applicable Note Distribution Account pursuant to
the Sale and Servicing Agreement.)
____ 2. Loan Liquidated
(Servicer hereby certifies that all proceeds of foreclosure,
insurance or other liquidation have been finally received and
credited to the Principal and Interest Account and remitted to
the Indenture Trustee for deposit into the applicable Note
Distribution Account pursuant to the Sale and Servicing
Agreement.)
____ 3. Loan in Foreclosure
_____4. Loan Purchased Pursuant to Section 11.01 of the Sale and
Servicing Agreement.
_____5. Loan Repurchased or Substituted Pursuant to Article II or III of
the Sale and Servicing Agreement (Servicer hereby certifies that the
repurchase price or Substitution Adjustment has been credited to the
Principal and Interest Account and remitted to the Indenture Trustee
for deposit into the applicable Note Distribution Account pursuant
to the Sale and Servicing Agreement.)
_____6. Collateral being released pursuant to Section 4.01(f) of the Sale
and Servicing Agreement.
_____7. Other (explain) ____________________________
____________________________
If box 1 or 2 above is checked, and if all or part of the Indenture
Trustee's Loan File was previously released to us, please release to us our
previous receipt on file with you, as well as any additional documents in your
possession relating to the above specified Loan.
If box 3, 4, 5, 6 or 7 above is checked, upon our return of all of the
above documents to you as Custodian, please acknowledge your receipt by signing
in the space indicated below, and returning this form.
THE MONEY STORE COMMERCIAL
MORTGAGE INC.
By: _____________________________
Name:
Title:
Documents returned to Custodian:
____________________________________
Custodian
By: ___________________________
Date: _________________________
<PAGE>
EXHIBIT H
[RESERVED]
<PAGE>
EXHIBIT I
[RESERVED]
<PAGE>
EXHIBIT J
FORM OF CUSTODIAL AGREEMENT
Dated _______________________
HSBC Bank USA, a New York banking corporation and trust company, as
indenture trustee (the "Indenture Trustee") and ____________________________,
_________________________ (the "Custodian"), agree as follows:
WHEREAS, The Money Store Business Loan Backed Trust 1999-1, The Money
Store Commercial Mortgage Inc., as seller (the "Seller") and servicer (the
"Servicer"), and The Money Store Inc., as Representative, have entered into a
Sale and Servicing Agreement dated as of May 31, 1999 relating to The Money
Store Business Loan Backed Notes and Certificates, Series 1999-1 (the "Sale and
Servicing Agreement"), the terms defined therein being used herein with the same
meaning) pursuant to which the Seller transferred, assigned, set-over and
otherwise conveyed certain Loans to the Trust; and
WHEREAS, in connection with such transfer and assignment and pursuant
to the Sale and Servicing Agreement, the Indenture Trustee holds, directly or
pursuant to a custodial agreement, the Indenture Trustee's Loan Files:
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Custodian and the Indenture Trustee agree as follows:
1. APPOINTMENT AS CUSTODIAN; ACKNOWLEDGMENT OF RECEIPT. Subject to the
terms and conditions herein, the Indenture Trustee hereby appoints the
Custodian, and the Custodian hereby accepts such appointment, as its Custodian
to maintain custody of the Indenture Trustee's Loan Files. The Custodian hereby
acknowledges receipt of the Business Notes, the Mortgages, the assignments and
other documents relating to the Loans referred to in Section 2.04, except for
the items referred to in Section 2.04(d)(ii), of the Sale and Servicing
Agreement. The Servicer shall be liable for all of the Custodian's fees under
this Agreement.
2. MAINTENANCE OF OFFICE. The Custodian agrees to maintain each
Indenture Trustee's Loan File identified in Section 2.04 of the Sale and
Servicing Agreement, said Exhibit being incorporated herein by reference, at the
office of the Custodian located at ________ ___________________ or at such other
office of the Custodian in _______________ as the Custodian shall designate from
time to time after giving the Indenture Trustee 30 days' prior written notice.
3. DUTIES OF CUSTODIAN. As Custodian, the Custodian shall have and
perform the following powers and duties:
(a) SAFEKEEPING. To segregate the Indenture Trustee's Loan Files
from all other mortgages and mortgage notes and similar records in its
possession, to identify the Indenture Trustee's Loan Files as being
held and to hold the Indenture Trustee's Loan Files for and on behalf
of the Indenture Trustee for the benefit of all present and future
Noteholders and Certificateholders, to maintain accurate records
pertaining to each Business Note and Mortgage in the Indenture
Trustee's Loan Files as will enable the Indenture Trustee to comply
with the terms and conditions of the Sale and Servicing Agreement, to
maintain at all times a current inventory thereof and to conduct
periodic physical inspections of the Indenture Trustee's Loan Files
held by it under this Agreement in such a manner as shall enable the
Indenture Trustee and the Custodian to verify the accuracy of such
record-keeping, inventory and physical possession. The Custodian will
promptly report to the Indenture Trustee any failure on its part to
hold the Indenture Trustee's Loan Files as herein provided and
promptly take appropriate action to remedy any such failure.
(b) RELEASE OF DOCUMENTS. To release any Business Note and
Mortgage in the Indenture Trustee's Loan Files as provided in the Sale
and Servicing Agreement.
(c) ADMINISTRATION; REPORTS. In general, to attend to all
non-discretionary details in connection with maintaining custody of
the Indenture Trustee's Loan Files on behalf of the Indenture Trustee,
the Noteholders and the Certificateholders. In addition, the Custodian
shall assist the Indenture Trustee generally in the preparation of
reports to Noteholders and to Certificateholders or to regulatory
bodies to the extent necessitated by the Custodian's custody of the
Indenture Trustee's Loan Files.
4. ACCESS TO RECORDS. The Custodian shall permit the Indenture Trustee
or its duly authorized representatives, attorneys or auditors and those persons
permitted access pursuant to Section 4.13 of the Sale and Servicing Agreement to
inspect the Indenture Trustee's Loan Files and the books and records maintained
by the Custodian pursuant hereto at such times as they may reasonably request,
subject only to compliance with the terms of the Sale and Servicing Agreement.
5. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be deemed to
have received proper instructions with respect to the Indenture Trustee's Loan
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee or the Servicer. A certified copy of a resolution of
the Board of Directors of the Indenture Trustee may be accepted by the Custodian
as conclusive evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written notice to the
contrary by the Custodian from the Indenture Trustee. Such instructions may be
general or specific in terms.
6. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to indemnify
the Indenture Trustee for any and all liabilities, obligations, losses, damages,
payments, costs or expenses, including attorneys' fees, of any kind whatsoever
which may be imposed on, incurred by or asserted against the Indenture Trustee
as the result of any act or omission in any way relating to the maintenance and
custody by the Custodian of the Indenture Trustee's Loan Files; provided,
however, that the Custodian shall not be liable for any portion of any such
amount resulting from the gross negligence or willful misconduct of the
Indenture Trustee.
7. ADVICE OF COUNSEL. The Custodian and the Indenture Trustee further
agree that the Custodian shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder as Custodian and shall be
without liability for any action reasonably taken pursuant to such advice,
provided that such action is not in violation of applicable Federal or State
law. This paragraph shall not negate the Custodian's obligations under paragraph
6 above.
8. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT, AND INTERPRETIVE AND
ADDITIONAL PROVISIONS. This Agreement shall become effective as of the date
hereof and shall continue in full force and effect until terminated as
hereinafter provided, and may be amended at any time by mutual agreement of the
parties hereto. This Agreement may be terminated by either party in a writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect no sooner than sixty (60) days after the date of such delivery or
mailing. Concurrently with, or as soon as practicable after, the termination of
this Agreement, the Custodian shall redeliver the Indenture Trustee's Loan Files
to the Indenture Trustee at such place as the Indenture Trustee may reasonably
designate. In connection with the administration of this Agreement, the
Custodian and the Indenture Trustee may agree from time to time upon the
interpretation of the provisions of this Agreement as may in their opinion by
consistent with the general tenor and purposes of this Agreement, any such
interpretation to be signed and annexed hereto.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. NOTICES. Notices and other writings shall be delivered or mailed,
postage prepaid, to the Indenture Trustee at 140 Broadway, 12th Floor, New York,
New York 10005, Attention: Corporate Trust Department, or to the Custodian at
_________________________________________, Attention: __________; or to such
other address as the Indenture Trustee or the Custodian may hereafter specify in
writing. Notices or other writings shall be effective only upon actual receipt
by the parties.
11. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the Indenture Trustee and the Custodian and their
respective successors and assigns. Concurrently with the appointment of a
successor trustee as provided in Section 6.8 of the Indenture, the Indenture
Trustee and the Custodian shall amend this Agreement to make said successor
trustee the successor to the Indenture Trustee hereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
HSBC BANK USA
as Indenture Trustee under the Indenture
referred to above
By:_______________________________________
Name:
Title:
[_______________________________], as
Custodian under the Sale and Servicing
Agreement referred to above
By:_______________________________________
Name:
Title:
<PAGE>
EXHIBIT K
FORM OF LIQUIDATION REPORT
Customer Name:
Account number:
Original Principal Balance:
1. Liquidation Proceeds
Principal Prepayment $________
Property Sale Proceeds ________
Insurance Proceeds ________
Other (Itemize) ________
Total Proceeds $_______
2. Servicing Advances $________
Monthly Advances ________
Total Advances $_______
3. Net Liquidation Proceeds $_______
(Line 1 minus Line 2)
4. Principal Balance of the
Loan on date of liquidation $_______
5. Realized (Loss) or Gain $_______
(Line 3 minus Line 4)
<PAGE>
EXHIBIT L
FORM OF DELINQUENCY REPORT
DELINQUENCY AND FORECLOSURE INFORMATION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REO FORECLOSURES
--------------------------------------------------------------------
OUTSTANDING # OF # OF # OF OUTSTANDING # OF OUTSTANDING
INVESTOR DOLLARS ACCT RANGES AMOUNT ACCTS. PCT ACCTS DOLLARS % ACCTS DOLLARS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 TO 29 DAYS
30 TO 59 DAYS
60 TO 89 DAYS
90 AND OVER
TOTALS
</TABLE>
<PAGE>
EXHIBIT M
SERVICER'S MONTHLY COMPUTER TAPE FORMAT
The computer tape to be delivered to the Indenture Trustee pursuant to
Section 7.07 shall contain the following information for each Loan as of the
related Record Date:
1. Name of the Obligor, address of the Mortgaged Property, or
principal residence of Obligor, and Account Number.
2. The LTV as of the origination date of the Mortgage Loan.
3. The Due Date.
4. The Loan Original Principal Balance.
5. The Loan Interest Rate.
6. The Monthly Payment.
7. The date on which the last payment was received and the amount of
such payment segregated into the following categories; (a) total
interest received (including Servicing Fee and Monthly Excess
Spread); (b) Servicing Fee; (c) Monthly Excess Spread; (d) The
amount equal to total interest received minus Servicing Fee and
Monthly Excess Spread; (e) principal and Excess Payments
received; (f) Curtailments received; and (g) Principal
Prepayments received.
8. The Loan Principal Balance.
9. The Business Note maturity date.
10. A "Delinquency Flag" noting that the Loan is current or
delinquent. If delinquent, state the date on which the last
payment was received.
11. A "Foreclosure Flag" noting that the Loan is the subject of
foreclosure proceedings.
12. An "REO Flag" noting that the Loan is an REO Property.
13. A "Liquidated Loan Flag" noting that the Loan is a Liquidated
Loan and the Net Liquidation Proceeds received in connection
therewith.
14. Lifetime Cap.
15. Lifetime Floor.
16. Periodic Cap.
17. Net Funds Cap.
18. Any additional information reasonably requested by the Indenture
Trustee.
<PAGE>
EXHIBIT N
[RESERVED]
<PAGE>
EXHIBIT O
[RESERVED]
<PAGE>
EXHIBIT P
FORM OF TRUST MATTERS POWER OF ATTORNEY
STATE OF _____________ )
: ss.:
COUNTY OF ___________ )
KNOW ALL MEN BY THESE PRESENTS, that CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee (the "Owner Trustee") for The Money Store Business Loan Backed Trust
1999-1 (the "Trust"), does hereby make, constitute and appoint each of THE MONEY
STORE COMMERCIAL MORTGAGE INC., as Servicer (the "Servicer") and FIRST UNION
NATIONAL BANK, as Trust Administrator (the "Trust Administrator") under the Sale
and Servicing Agreement dated as of May 31, 1999 (the "Agreement"), among the
Trust, the Servicer, and The Money Store Inc., as Representative, as the same
may be amended from time to time, severally and not jointly, and each of their
respective agents and attorneys, as Attorneys-in-Fact to execute on behalf of
the Owner Trustee or the Trust any and all such documents, reports, filings,
instruments, certificates and opinions as it should be the duty of the Owner
Trustee or the Trust to prepare, file or deliver pursuant to the Basic
Documents, including, without limitation, to appear for and represent the Owner
Trustee and the Trust in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Trust, if any, and with
full power to perform any and all acts associated with such returns and audits,
if any, that the Owner Trustee could perform, including without limitation, the
right to distribute and receive confidential information, defend and assert
positions in response to audits, initiate and defend litigation, and to execute
waivers of restrictions on assessments of deficiencies, consents to the
extension of any statutory or regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed
by the Owner Trustee are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
EXECUTED this 29th of June, 1999.
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Owner Trustee for the Money Store
Trust 1999-1
By: _________________________________
Name:
Title:
<PAGE>
EXHIBIT Q
FORM OF COLLATERAL POWER OF ATTORNEY
STATE OF CALIFORNIA )
: ss.:
COUNTY OF YOLO )
KNOW ALL MEN BY THESE PRESENTS, that The Money Store Commercial
Mortgage Inc. (the "Seller") has made, constituted and appointed, and by these
presents hereby makes, constitutes and appoints, First Union National Bank, as
Custodian (the "Custodian") under the Sale and Servicing Agreement dated as of
May 31, 1999 (the "Sale and Servicing Agreement") among The Money Store
Commercial Mortgage Inc., as Seller and Servicer, The Money Store Inc., as
Representative and The Money Store Business Loan Backed Trust 1999-1, as the
Seller's true and lawful attorney for the Seller's name, place and stead, for
the limited purposes of (i) executing, delivering, filing, or recording and
otherwise dealing with the collateral for the Loans transferred by the Seller to
the Trust in accordance with the Sale and Servicing Agreement and (ii)
preparing, executing, filing or recording Uniform Commercial Code financing
statements and notices to insurers with respect to such Loans.
This power of attorney is intended to be, and shall be construed to
be, an irrevocable power delegable by the Custodian to the Servicer and any
successor servicer under the Sale and Servicing Agreement.
IN WITNESS WHEREOF, this power of attorney has been duly executed by
the Seller as of this 29th day of June 1999.
THE MONEY STORE COMMERCIAL MORTGAGE INC.
By:________________________________
Name:
Title:
EXHIBIT 4.2
- -------------------------------------------------------------------------------
EXECUTION COPY
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
TRUST AGREEMENT
among
THE MONEY STORE COMMERCIAL MORTGAGE INC.,
as Seller and Servicer
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of May 31, 1999
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS
SECTION 1.1. Capitalized Terms...................................2
SECTION 1.2. Other Definitional Provisions.......................6
ARTICLE II - ORGANIZATION
SECTION 2.1. Name.....................................................7
SECTION 2.2. Office...................................................7
SECTION 2.3. Purposes and Powers......................................7
SECTION 2.4. Appointment of Owner Trustee.............................8
SECTION 2.5. Initial Capital Contribution of Trust Estate.............8
SECTION 2.6. Declaration of Trust.....................................8
SECTION 2.7. Transfer of Interest to the Holder of the
Special Interests; Liability of the Holder of
the Special Interests....................................9
SECTION 2.8. Title to Trust Property..................................9
SECTION 2.9. Situs of Trust...........................................9
SECTION 2.10. Representations and Warranties of the Seller............10
SECTION 2.11. Voting Interest.........................................10
SECTION 2.12. Pool II Federal Income Tax Allocations..................12
SECTION 2.13. Certain REMIC Matters...................................12
SECTION 2.14. Miscellaneous REMIC Provisions..........................14
SECTION 2.15 Investment Company......................................15
ARTICLE III - TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership.......................................15
SECTION 3.2. The Trust Certificates..................................15
SECTION 3.3. Authentication of Trust Certificates....................16
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates............................................16
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates............................................17
SECTION 3.6. Persons Deemed Certificateholders.......................17
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses...............................................18
SECTION 3.8. Appointment of Authenticating Agent.....................18
SECTION 3.9. Appointment of Paying Agent.............................18
SECTION 3.10. Restrictions on Transfer................................19
SECTION 3.11. [Reserved]..............................................22
SECTION 3.12. Disposition by the Holder of the Special
Interests...............................................22
ARTICLE IV - ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Owners with Respect to Certain
Matters.................................................23
SECTION 4.2. Action by the Owner Trustee with Respect to
Certain Matters.........................................24
SECTION 4.3. Action by Holder of Voting Interest with Respect
to Bankruptcy...........................................24
SECTION 4.4. Restrictions on Power...................................24
SECTION 4.5. Control by Holder of the Voting Interest................25
SECTION 4.6. Execution of Documents..................................25
ARTICLE V - APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account.......26
SECTION 5.2. Application of Funds in Certificate Distribution
Account.................................................26
SECTION 5.3. [Reserved.].............................................27
SECTION 5.4. Method of Payment.......................................27
SECTION 5.5. No Segregation of Monies; No Interest...................27
SECTION 5.6. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service
and Others..............................................27
SECTION 5.7. Signature on Returns; Tax Matters Partner;
Tax Matters Person......................................28
ARTICLE VI - AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.......................................28
SECTION 6.2. Action upon Instruction.................................29
SECTION 6.3. No Duties Except as Specified in this Agreement
or in Instructions......................................30
SECTION 6.4. No Action Except under Specified Documents
or Instructions.........................................31
SECTION 6.5. Restrictions............................................31
SECTION 6.6. Notice of Default Under Indenture.......................31
ARTICLE VII - CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties.........................31
SECTION 7.2. Furnishing of Documents.................................33
SECTION 7.3. Representations and Warranties..........................33
SECTION 7.4. Reliance; Advice of Counsel.............................33
SECTION 7.5. Not Acting in Individual Capacity.......................34
SECTION 7.6. Owner Trustee Not Liable for Trust Certificates
or Loans................................................34
SECTION 7.7. Owner Trustee May Own Trust Certificates and
Series 1999-1 Notes.....................................35
SECTION 7.8. Payments from Owner Trust Estate........................35
SECTION 7.9. Doing Business in Other Jurisdictions...................35
ARTICLE VIII - COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.......................35
SECTION 8.2. Indemnification.........................................36
SECTION 8.3. Payments to the Owner Trustee...........................36
SECTION 8.4. Non-recourse Obligations................................36
ARTICLE IX - DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. Termination of Trust Agreement..........................36
ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee..............38
SECTION 10.2. Resignation or Removal of Owner Trustee.................38
SECTION 10.3. Successor Owner Trustee.................................39
SECTION 10.4. Merger or Consolidation of Owner Trustee................39
SECTION 10.5. Appointment of Co-Trustee or Separate Indenture
Trustee.................................................40
SECTION 10.6. Resignation or Removal of Holder of the Voting
Interest................................................41
ARTICLE XI - MISCELLANEOUS
SECTION 11.1. Supplements and Amendments..............................42
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders......................................43
SECTION 11.3. Limitations on Rights of Others.........................43
SECTION 11.4. Notices.................................................43
SECTION 11.5. Severability............................................44
SECTION 11.6. Separate Counterparts...................................44
SECTION 11.7. Successors and Assigns..................................44
SECTION 11.8. [Reserved.].............................................44
SECTION 11.9. No Petition.............................................44
SECTION 11.10. No Recourse.............................................44
SECTION 11.11. Headings................................................45
SECTION 11.12. Governing Law...........................................45
SECTION 11.13. Servicer................................................45
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Investment Letter
Exhibit D Form of Transferee Affidavit
<PAGE>
TRUST AGREEMENT dated as of May 31, 1999 among The Money Store
Commercial Mortgage Inc., as Seller and Servicer, and Chase Manhattan Bank
Delaware, as Owner Trustee.
ARTICLE 1.
DEFINITIONS
SECTION 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.
"Authenticating Agent" shall mean any authenticating agent or
co-authenticating agent appointed pursuant to Section 3.8 and shall initially be
HSBC Bank USA.
"Bank" shall mean Chase Manhattan Bank Delaware, or any successor
thereto, in its individual capacity.
"Basic Documents" shall mean the Sale and Servicing Agreement, the
Indenture, the Note Depository Agreement, the Certificate of Trust, this Trust
Agreement, the Letters of Credit Agreement and the other documents and
certificates delivered in connection therewith.
"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 any of the Class I, Class R or Class II
Certificates, each of which evidence the beneficial interest of the related
Certificateholder in either Pool I (in the case of a Class I or Class R
Certificate) or Pool II (in the case of a Class II Certificate) each comprising
a portion of the Trust, substantially in the forms of Exhibits A-1, A-2 and A-3,
respectively, attached hereto.
"Certificate Distribution Accounts" 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 Register" and "Certificate Registrar" shall mean the
register mentioned in and the registrar appointed pursuant to Section 3.4.
"Class" or "Classes" means the reference to any one or more the Class
I, Class R or Class II Certificates, or if specified, to any class or classes of
Notes.
"Class I Certificates" means the Class I Certificates, substantially
in the form of Exhibit A hereto.
<PAGE>
"Class II Certificates" means the Class II Certificates substantially
in the form of Exhibit A hereto.
"Class R Certificates" means the Class R Certificates, substantially
in the form of Exhibit A hereto, which shall represent both the Class R-I and
Class R-II Interests described in Section 2.13.
"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, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
1201 Market Street, Wilmington, Delaware 19801, Attention: Corporate Trust
Administration; or at such other address as the Owner Trustee may designate by
notice to the Certificateholders, and the Representative, 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
Representative); and (ii) with respect to the Authenticating Agent, the
principal corporate trust office of the Authenticating Agent located at 140
Broadway, 12th Floor, New York, New York 10005, Attention: Corporate Trust
Department, or at such other address as the Authenticating Agent may designate
by notice to the Owner Trustee.
"Delaware Trustee" shall have the meaning assigned to such term in
Section 10.1.
"Disqualified Person" shall mean any of the following: (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax, and, except for the Federal Home Loan Mortgage Corporation, a majority of
its board of directors is not selected by such governmental unit), (ii) any
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Trust Administrator based
upon an Opinion of Counsel that a transfer of a Class R Certificate to such
Person may cause either REMIC I or REMIC II to fail to qualify as a REMIC at any
time that the Pool I Notes and/or Class I Certificates are outstanding. For
purposes of this definition, the terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register and the Holder of
the Special Interests.
"Holder of the Special Interests" shall mean First Union National
Bank, a national banking association.
"Holder of the Voting Interest" shall mean Norwest Bank Minnesota,
National Association, and any permitted successor, assignee or transferee
thereof.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of May 31, 1999 between
the Trust and HSBC Bank USA, as Indenture Trustee, as the same may be amended or
supplemented from time to time.
"Indenture Trustee" shall mean HSBC Bank USA, as Indenture Trustee
under the Indenture, or any successor thereto.
"Letter of Credits": " shall mean the two separate letters of credit
issued by First Union National Bank in favor of the Indenture Trustee for the
benefit of the Noteholders.
"Loan" shall have the meaning set forth in the Sale and Servicing
Agreement.
"Note Depository Agreement" shall mean the agreement among the Trust,
the Indenture Trustee, the Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated as of one Business Day prior to the Closing Date,
relating to The Money Store Business Loan Backed Notes, Series 1999-1, as the
same may be amended or supplemented from time to time.
"Note" shall mean any of The Money Store Business Loan Backed Notes,
Series 1999-1, Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2, Class
BS, Class AN, Class MN or Class BN issued by The Money Store Business Loan
Backed Trust 1999-1 pursuant to the Indenture.
"Originator" shall mean each entity listed on Annex I attached hereto.
"Ownership Percentage" shall mean with respect to any
Certificateholder, the proportion (expressed as a percentage) of the aggregate
beneficial ownership interests in any Class of Certificates held of record by
such Certificateholder, as evidenced by such Holder's Certificates.
"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 Trust
pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9 and shall initially be HSBC Bank USA.
"Pool I" and "Pool II" shall have the meanings set forth in the Sale
and Servicing Agreement.
"Record Date" shall mean, with respect to any Remittance Date, the
close of business on the last day of the month immediately preceding the month
of the related Remittance Date.
"REMIC" shall mean a real estate mortgage investment conduit within
the meaning of Section 860D of the Code.
"REMIC I" shall mean the segregated portion of assets, consisting of
the Owner Trust Estate with respect to Pool I (excluding the REMIC I Regular
Interests, the Rounding Account and the Interest Carryover Account), for which a
REMIC election is made in accordance with the terms of Section 2.13.
"REMIC I Regular Interests" shall have the meaning ascribed to such
term in Section 2.13.
"REMIC II" shall mean the segregated portion of assets, consisting of
the REMIC I Regular Interests, for which a REMIC election is made in accordance
with the terms of Section 2.13.
"Representative" shall mean The Money Store Inc., a New Jersey
corporation, as Representative of the Seller, and, its successors and assigns.
"Responsible Officer" shall mean, when used with respect to the Owner
Trustee or the Authenticating Agent, any officer assigned to the Corporate Trust
Office of the Owner Trustee or the Authenticating Agent, as the case may be,
including any Vice President, any Assistant Vice President, any Assistant
Secretary, any trust officer or any other officer of the Owner Trustee or the
Authenticating Agent, as the case may be, customarily performing functions
similar to those performed by any of the above designated officers or any agent
acting under a power of attorney from the Owner Trustee or the Authenticating
Agent, as the case may be, having responsibility for the administration of this
Trust Agreement and also, with respect to a particular matter relating to the
Trust, any other officer of the Owner Trustee or the Authenticating Agent, as
the case may be, to whom such matter is referred because of such officer's
knowledge of and familiarity with such matter. Any notice given to the Owner
Trustee at the address and in the manner specified in Section 11.4 hereof shall
be deemed to be given to a Responsible Officer.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of May 31, 1999, among the Trust, The Money Store Commercial
Mortgage Inc., as Seller and Servicer, and The Money Store Inc., as
Representative, 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.
"Seller" means The Money Store Commercial Mortgage Inc., in its
capacity as Seller.
"Series 1999-1 Notes" shall mean The Money Store Business Loan Backed
Trust 1999-1 Business Loan Backed Notes, Series 1999-1, Class AS-1, Class AS-2,
Class AS-3, Class MS-1, Class MS-2, Class BS, Class AN, Class MN and Class BN.
"Servicer" means The Money Store Commercial Mortgage Inc., a New
Jersey corporation, in its capacity as Servicer, or any successor servicer under
the Sale and Servicing Agreement.
"Special Interests" shall have the meaning assigned to such term in
Section 2.7.
"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 2.11.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. Capitalized terms used
and not otherwise defined herein have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture.
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.
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.
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."
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.
ARTICLE II.
ORGANIZATION
SECTION 2.1. NAME. The name of the Trust created hereby shall be "The
Money Store Business Loan Backed Trust 1999-1", in which name the Owner Trustee,
on behalf of the Trust, shall have power and authority, and is hereby authorized
and empowered, to engage in the transactions contemplated hereby, 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 and the
Representative.
SECTION 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, and the Owner Trustee shall have
power and authority, and is hereby authorized and empowered in the name and on
behalf of the Trust, to do or cause to be done all acts and things necessary,
appropriate or convenient to cause the Trust to engage in the following
activities:
to execute, deliver and issue the Series 1999-1 Notes pursuant to
the Indenture and to authorize, execute, authenticate, issue and
deliver each Class of the Trust Certificates, the Special Interests
and the Voting Interest pursuant to this Agreement, and to sell the
Series 1999-1 Notes, the Trust Certificates, the Special Interests and
the Voting Interest;
with the proceeds of the sale of the Series 1999-1 Notes and the
Trust Certificates, to pay the organizational, start-up and
transactional expenses of the Trust and to pay the balance to the
Seller pursuant to the Sale and Servicing Agreement;
to acquire, receive and accept from time to time the Owner Trust
Estate, and to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate (including the Collateral) pursuant to the
Indenture and to hold, manage and distribute to the Certificateholders
pursuant to the terms of the Sale and Servicing Agreement any portion
of the Owner Trust Estate released from the lien of, and remitted to
the Trust pursuant to, the Indenture;
to enter into, execute, deliver, file and perform its obligations
under the Basic Documents;
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
subject to compliance with the Basic Documents to which the Trust
is a party, 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 Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers, authority, authorization and duties set forth
herein.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Seller
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 Seller 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 Seller shall pay all 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 to which the
Trust is a party. 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, as it relates to the assets in Pool II, the Pool II Notes
and the Class II Certificates, shall be treated as a partnership if, for federal
income tax purposes, the Trust is considered to have more than one Class II
Certificateholder, or as a division of the Class II Certificateholder that is
ignored as an entity separate from the Certificateholder if, for federal income
tax purposes, there is a single Class II Certificateholder. 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 it relates to the
assets in Pool II, the Pool II Notes and the Class II Certificates, as a
partnership or division of the Class II Certificateholder, as just described,
for such tax purposes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers, authority and authorization 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.
In addition, for federal income tax purposes and with respect to Pool
I, the Owner Trustee shall execute and deliver all documents required to make
and maintain effective REMIC elections with respect to Pool I as described in
Section 2.13; and the Trust will file or cause to be filed annual or other
necessary returns, reports or other forms consistent with the characterization
of the Pool I assets as two REMICs, as described in Section 2.13.
SECTION 2.7. TRANSFER OF INTEREST TO THE HOLDER OF THE SPECIAL
INTERESTS; LIABILITY OF THE HOLDER OF THE SPECIAL INTERESTS. (a) First Union
National Bank shall be the holder of no less than a 1% non-transferable
Ownership Percentage in each of the Class I and Class II Certificates (each, a
"Special Interest" and collectively, the "Special Interests"). For purposes of
the Business Trust Statute, each of the Special Interests 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 Special
Interests, as such, shall be deemed a separate class of beneficial owner of the
Trust from all other beneficial owners of the Trust.
(b) No Holder or Holder of the Voting Interest 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) No Holder shall have legal title to any part of the Owner
Trust Estate. The Holders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest 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
beneficial 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 States of Delaware, North
Carolina or New York. Payments will be received by the Trust only in Delaware,
New York or North Carolina, and payments will be made by the Trust only from
Delaware, New York or North Carolina. The only office of the Trust will be at
the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
hereby represents and warrants, to the Owner Trustee as of the Closing Date,
that:
(a) It is duly organized and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and to conduct its
business as such properties are currently owned and such business presently
conducted.
(b) 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 property or the conduct of
its business shall require such qualifications.
(c) It has the corporate power and authority to execute and deliver
this Agreement and to carry out its terms and the execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate action.
(d) 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 its articles of
incorporation or bylaws, or any material indenture, agreement or other
material instrument to which it 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 it
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it or
its properties.
SECTION 2.11. VOTING INTEREST. By acceptance and agreement to this
Agreement, Norwest Bank Minnesota, National Association (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 and shall be entitled
to all rights of the Holder of the Voting Interest hereunder. 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 any Class of Certificateholders. Except as otherwise provided
herein, any action requiring the consent, approval or vote of any Class of
Certificateholders 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 Indenture Trustee (on which the Holder of
the Voting Interest shall conclusively rely and shall be fully protected for all
purposes in so relying). The Holder of the Voting Interest shall have no duty or
obligation other than to exercise such power and authority in accordance with
such written instructions and shall have no liability or obligation to act in
the absence of such written instructions; provided, however, that should the
written instructions of the Indenture Trustee, instruct the Holder of the Voting
Interest to take any action that, in the reasonable judgment of the Holder of
the Voting Interest 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 any Class of
Certificateholders, or would adversely affect the federal or state tax
consequences to any Class of Certificateholders, the Holder of Voting Interest
shall not be required to take such action except upon receipt of the written
consent of all Certificateholders of each Class affected thereby to such action
(or, in connection with any requested action that the Holder of Voting Interest
believes may adversely affect the federal or state tax consequences to the
Certificateholders, upon receipt of an opinion of counsel acceptable to the
Holder of Voting Interest, which opinion shall not be an expense of the Holder
of Voting Interest, to the effect that such action will not adversely affect the
federal or state tax consequences to such Class or Classes of
Certificateholders). The Owner Trustee shall cooperate with the Holder of the
Voting Interest in coordinating and providing any required communication with
any Class of Certificateholders, including providing to the Holder of Voting
Interest, upon request, a certified listing of names and addresses of all
Certificateholders upon which the Holder of Voting Interest may conclusively
rely.
Notwithstanding any provision herein or in any other document to the
contrary, the Holder of the Voting Interest shall not have any liability for any
duties, responsibilities, obligations or actions of the Trust or any other
person or entity, any action taken or omitted pursuant to any written
instructions of the Indenture Trustee, or otherwise relating to the Trust or its
serving as the Holder of the Voting Interest except for liability relating
solely to its own willful misconduct, bad faith or gross negligence. 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 Special Interests; PROVIDED,
HOWEVER, that upon any merger, consolidation or transfer of the corporate trust
business of the Holder of the Voting Interest or sale of substantially all of
the assets of the corporate trust business of the Holder of the Voting Interest,
all rights, duties and obligations of the Holder of Voting Interest hereunder
shall transfer to any successor to the Holder of the Voting Interest or its
corporate trust business without any further action. 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 Certificate of any Class and the Holder of the Voting Interest
shall not be deemed a Holder (except as to benefit afforded Holders). 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.
<PAGE>
The Holder of Special Interests hereby indemnifies and holds harmless
each of Norwest Bank Minnesota, National Association and each of its directors,
officers, employees and agents, and its and their respective successors and
assigns, as applicable, from and against any and all losses, liabilities,
claims, charges, damages, fines, penalties, judgments, actions, suits, costs and
expenses of any kind or nature (including reasonable attorneys' fees and
expenses and reasonable fees and expenses of experts) imposed on, incurred by,
or asserted against any such person or entity in any way related to or arising
out of Norwest Bank Minnesota, National Association acting as the Holder of
Voting Interest hereunder, except to the extent caused by such person's bad
faith, gross negligence or willful misconduct. In particular, the Holder of
Special Interests hereby agrees promptly to reimburse the Holder of Voting
Interest for all costs and expenses incurred by the Holder of Voting Interest in
connection with the performance of its obligations hereunder, including any
costs of notices or distributions to any of Certificateholders. These
indemnification and reimbursement provisions shall survive the termination of
the this Trust Agreement and the resignation or removal of the Holder of Voting
Interest hereunder.
SECTION 2.12. POOL II FEDERAL INCOME TAX ALLOCATIONS. Net income of
the Trust with respect to Pool II 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 to the Class II
Certificateholders, and apportioned among the Certificateholders of such Class
pro rata based upon their respective Ownership Percentage.
SECTION 2.13. CERTAIN REMIC MATTERS. (a) The Trust shall elect that
each of REMIC I and REMIC II (each as described below) shall be treated as a
real estate mortgage investment conduit ("REMIC") under Section 860D of the
Code. Each such election will be made on Form 1066 or other appropriate federal
tax or information return for the taxable year ending December 31, 1999, and on
any appropriate state return. Any inconsistencies or ambiguities in this
Agreement or in the administration of this Agreement shall be resolved in a
manner that preserves the validity of such REMIC elections. The Owner Trust
Estate with respect to Pool I (excluding the REMIC I Regular Interests, the
Rounding Account and the Interest Carryover Account) shall constitute the assets
of REMIC I. The REMIC I Regular Interests (as defined below) shall constitute
the assets of REMIC II.
(b) REMIC I will be evidenced by (x) the Class I-AS-1, Class I-AS-2,
Class I-AS-3, Class I-MS-1, Class I-MS-2, Class I-BS and Class I-M Interests
(the "REMIC I Regular Interests"), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in REMIC I
and (y) the Class R-I Interests, which are hereby designated as the single
"residual interest" in REMIC I (the REMIC I Regular Interests, together with the
Class R-I Interests, the "REMIC I Interests"). The REMIC I Regular Interests
shall be recorded on the records of REMIC I as being issued to and held by the
Owner Trustee on behalf of REMIC II.
(c) The REMIC I Interests will have the following designations,
initial principal balances and pass-through rates, and distributions of interest
thereon shall be allocated from such REMIC I Interests to the Class I
Certificates in the following manner:
PASS- ALLOCATIONS
REMIC I INITIAL THROUGH OF
INTERESTS BALANCE RATE INTEREST
- --------- ------- ------- ------------
I-AS-1 $ 1,377,880 (1) (2)
I-AS-2 $ 1,410,570 (1) (2)
I-AS-3 $ 1,904,430 (1) (2)
I-MS-1 $ 220,840 (1) (2)
I-MS-2 $ 234,630 (1) (2)
I-BS $ 124,230 (1) (2)
I-M $ 546,864,364.03 (1) (2)
R-I $ 0 0% (3) NA
- ------------
(1) The Pass-Through Rate on these REMIC I Regular Interests shall at any time
of determination equal the Weighted Average Coupon Cap of the Pool I Loans
("WAC I").
(2) Any interest with respect to this REMIC I Regular Interest in excess of the
product of (i) 100 times the weighted average Pass-Through Rate of the
REMIC I Regular Interests, where the Class I-AS-1, Class I-AS-2, Class
I-AS-3, Class I-MS-1, Class I-MS-2 and Class I-BS Interests are first
subject to a cap equal to the Remittance Rates (determined without regard
to the Net Funds Cap) on the Class AS-1, Class AS-2, Class AS-3, Class
MS-1, Class MS-2 and Class BS Notes, respectively and the Class I-M
Interest is subject to a cap equal to 0%, and (ii) the principal balance of
this REMIC I Regular Interest, shall be allocated to the Class I
Certificates. The Class I Certificates will also be entitled to a portion
of the principal paid on the REMIC I Regular Interests in an amount equal
to the initial principal balance of the Class I Certificates (as described
in (e) below).
(3) On each Distribution Date, available funds, if any remaining in REMIC I
after payments of interest and principal, as designated above, and expenses
of the Trust that are payable from the assets in Pool I will be distributed
to the Class R-I Certificates. It is expected that there will not be any
distributions on the Class R-I Certificates.
(d) The Accelerated Principal Distribution Amount for Pool I will not
be paid directly as principal to the REMIC I Regular Interests, but instead a
portion of the interest payable with respect to the Class I-M Interest which
equals 1% of the such Accelerated Principal Distribution Amount will be payable
as a reduction of the principal balances of the Class I-AS-1, Class I-AS-2,
Class I-AS-3, Class I-MS-1, Class I-MS-2 and Class I-BS Interests, in the same
manner in which the Accelerated Principal Distribution Amount is allocated among
the Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and Class BS
Notes, respectively (and will be accrued and added to the principal balance of
the Class I-M Interest). Principal payments on the Pool I Loans shall be
allocated 99% to the Class I-M Interest, and 1% to the other REMIC I Regular
Interests, until paid in full. The aggregate amount of principal allocated among
the Class I-AS-1, Class I-AS-2, Class I-AS-3, Class I-MS-1, Class I-MS-2 and
Class I-BS Interests shall be apportioned among such Interests in the same
manner in which principal on the Pool I Loans is payable with respect to the
Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and Class BS Notes,
respectively. Notwithstanding the above, principal payments that are
attributable to the Subordination Reduction Amount for Pool I shall be allocated
to the Class I-M Interest, until paid in full. Realized losses shall be applied
such that after all distributions have been made on each Distribution Date (i)
the principal balances of the Class I-AS-1, Class I-AS-2, Class I-AS-3, Class
I-MS-1, Class I-MS-2 and Class I-BS Interests are each 1% of the principal
balances of the Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and
Class BS Notes, respectively; and (ii) the principal balance of the Class I-M
Interest is equal to the aggregate principal balances of the Loans in Pool I,
less an amount equal to the sum of the principal balances of the REMIC I Regular
Interests, other than the Class I-M Interest.
(e) REMIC II will be evidenced by (x) the Class AS-1, Class AS-2,
Class AS-3, Class MS-1, Class MS-2 and Class BS Notes (exclusive of any rights
to receive Noteholders' Interest Carryover, to receive current interest at a
rate exceeding WAC I and in the case of the Class AS-3 Notes, to receive amounts
from the Rounding Account) and the Class I Certificates (together, the "REMIC II
Regular Interests"), which are hereby designated as the "regular interests" in
REMIC II and (y) the Class R-II Interests, which are hereby designated as the
single "residual interest" in REMIC II (the REMIC II Regular Interests, together
with the Class R-II Interests, the "REMIC II Interests"). The REMIC II Regular
Interests (other than the Class I Certificates) shall have the principal
balances set forth for the Class AS-1, Class AS-2, Class AS-3, Class MS-1,
Class MS-2 and Class BS Notes in the Indenture and each such Class shall bear
interest at the lesser of its Remittance Rate (determined without regard to the
Net Funds Cap) and WAC I. The Class I Certificates shall have an initial
principal balance equal to the initial Spread Amount for Pool I and additionally
shall be entitled to the specified portion of interest described in note (2) of
Section 2.13(c) above. The Class R-II Interests shall have a zero principal
balance and a 0% interest rate, but will be entitled on each Remittance Date to
any available funds remaining in REMIC II after all distributions have been made
with respect to the Pool I Notes and the Class I Certificates.
(f) Solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
I Regular Interests and REMIC II Regular Interests is June 15, 2033.
SECTION 2.14. MISCELLANEOUS REMIC PROVISIONS. (a) The Closing Date is
hereby designated as the "startup day" of each REMIC created hereunder within
the meaning of Section 860G(a)(9) of the Code.
(b) The owner of a majority of the Percentage Interest in the Class R
Certificates is hereby designated as the "tax matters person" (within the
meaning of Treasury Regulations Section 1.860F-4(d) with respect to each of
REMIC I and REMIC II.
(c) Each REMIC created hereunder shall, for federal income tax
purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(d) For all federal income tax purposes, amounts transferred to the
Class R Certificates shall be treated as distributions by each of REMIC I and
REMIC II with respect to the Class R-I and Class R-II Interests, respectively
(each to the extent that the amount transferred is from assets held by the
respective REMIC).
(f) The Owner Trustee shall provide to the Internal Revenue Service
and to the persons described in Sections 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any
successor regulation thereto, with respect to each of REMIC I and REMIC II. Such
information shall be prepared by the Trust Administrator and provided in the
manner described in Treasury Regulation Section 1.860E-2(a)(5), or any
successor regulation thereto.
SECTION 2.15. INVESTMENT COMPANY. Neither the Seller nor any
Certificateholder shall take any action that would cause the Trust to become an
"investment company" required to register under the Investment Company Act of
1940, as amended.
ARTICLE III.
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Seller pursuant to Section 2.5 and until the issuance of the
Trust Certificates and the Voting Interest, the Seller shall be the sole
beneficial owner of the Trust. Upon such issuance of the Trust Certificates and
the Voting Interest, the Seller shall cease to be the beneficial owner of the
Trust, and their respective beneficial interests in the Trust shall be and shall
be deemed canceled, void, and of no further force and effect.
SECTION 3.2 THE TRUST CERTIFICATES. Subject to Section 3.3, each Class
of Trust Certificates shall be issued in minimum denominations corresponding to
an Ownership Percentage of 10% in each such Class and integral multiples of 1%
in excess thereof; PROVIDED, HOWEVER, that Trust Certificates may be issued to
the Holder of the Special Interests in minimum denominations corresponding to an
Ownership Percentage of 1% of each of the Class I and Class II Certificates.
Each Class of Trust Certificates shall be executed in the name and on behalf of
the Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee, and the Owner Trustee shall have power and authority and is hereby
authorized and empowered, in the name and on behalf of the Trust, to authorize,
execute, authenticate, issue and deliver each Class of Trust Certificates, the
Special Interests 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 benefits 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. Except as provided in Section 3.10, a transferee of a Class
of Trust Certificates shall become a Certificateholder of such Class and shall
be entitled to the rights and subject to the obligations of a Certificateholder
of such Class hereunder, upon due registration of such Class of Trust
Certificates in such transferee's name pursuant to Section 3.4.
SECTION 3.3. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial contribution of the Loans to the Trust pursuant to the Sale and
Servicing Agreement, and without further action by the Seller, the Owner
Trustee, or the Authenticating Agent at the direction of 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 Special Interests
(which shall include a 1% Ownership Percentage in each of the Class I and Class
II Certificates) and Trust Certificates therefor and the Voting Interest to be
issued to, and registered on the Certificate Register in the name of, the Holder
of the Special Interests and the Holder of the Voting Interest, respectively,
and the balance of the Trust Certificates of each Class to be executed by an
Authorized Officer of the Owner Trustee, or the Authenticating Agent at the
direction of the Owner Trustee, and authenticated, issued and delivered to and
in the names of, and registered on the Certificate Register in the names of, the
following: (i) 99% of the Ownership Percentage in each of the Class I and Class
II Certificates, to TMS SBA Holdings, Inc., and (ii) 100% of the Ownership
Percentage in the Class R Certificates to First Union National Bank. Thereupon,
all Classes of such Certificates, the Special Interests, and the Voting Interest
shall be validly issued and entitled to the benefits of this Agreement. 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 Exhibits A-1, A-2, and A-3, as applicable, executed by the Owner Trustee, or
the Authenticating Agent at the direction of the Owner Trustee, by manual
signature; such authentication shall constitute conclusive evidence that such
Trust Certificate shall have been duly executed, authenticated, authorized,
issued 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 its
offices located at 140 Broadway, New York, New York 10005, or such other office,
the address of which the Certificate Registrar shall provide in writing to the
Owner Trustee and the Holders, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of each Class of Trust Certificates and the Voting
Interest and of transfers and exchanges of each Class of Trust Certificates and
the Voting Interest as herein provided. HSBC Bank USA shall be the initial
Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at such office and, upon satisfaction of the conditions set forth below, the
Owner Trustee, in the name and on behalf of the Trust, shall execute,
authenticate, issue and deliver, in the name of the designated transferee or
transferees, one or more new Trust Certificates of the same Class and 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 of a
Class may be exchanged for other Trust Certificates of the same Class and of a
like Ownership Percentage upon surrender of the Trust Certificates to be
exchanged at such office.
<PAGE>
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by 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 may 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 Certificate Registrar 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 and the Owner Trustee or
the Authenticating Agent such security or indemnity as may be required by them
to save each of them harmless, then in the absence of actual knowledge by a
Responsible Officer of the Owner Trustee or the Authenticating Agent that such
Trust Certificate shall have been acquired by a bona fide purchaser, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, in
the name and on behalf of the Trust shall execute, authenticate, issue 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 Authenticating Agent
at the direction of the Owner Trustee, or the Certificate Registrar may, but
shall not be obligated to, 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 be duly
authorized, validly issued and entitled to the benefits of this Agreement, and
shall constitute conclusive evidence of a beneficial ownership interest 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 of any Class for registration of transfer, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, and
the Certificate Registrar may treat the Person in whose name any Trust
Certificate of any Class shall be registered in the Certificate Register as the
Holder of such Trust Certificate of such Class for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes whatsoever, and
neither the Owner Trustee, or the Authenticating Agent if acting at the
direction of the Owner Trustee, nor the Certificate Registrar shall be bound by
any notice to the contrary.
SECTION 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished to
the Servicer, the Representative, and the Holder of the Special Interests,
within 15 days after receipt by the Certificate Registrar of a request therefor
from the Servicer, the Representative, or the Holder of the Special Interests in
writing, a list, in such form as the Servicer, the Representative, or the Holder
of the Special Interests may reasonably require, of the names and addresses of
the Certificateholders as of the most recent Record Date. If three or more
Holders of Trust Certificates of any Class or Classes or one or more Holders of
Trust Certificates evidencing not less than 25% of the aggregate Ownership
Percentage of any Class or Classes apply in writing to the Certificate
Registrar, and such application states that the applicants desire to communicate
with other Certificateholders of the same or different Classes 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 Certificate Registrar 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 either the Representative, the Certificate Registrar, the Indenture
Trustee, the Owner Trustee, or the Bank accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
SECTION 3.8. APPOINTMENT OF AUTHENTICATING AGENT. The Authenticating
Agent shall, at the direction of the Owner Trustee, execute and deliver such
Trust Certificates on behalf of the Trust as are to be issued by the Trust in
accordance with the terms of this Agreement. HSBC Bank USA, shall be the initial
Authenticating Agent.
SECTION 3.9. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Certificateholders of each Class from the appropriate
sub-account of the Certificate Distribution Account pursuant to Section 5.2 and
shall report the amounts of such distributions to the Owner Trustee. Any 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 Paying Agent if
the Owner Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be HSBC Bank USA, and any co-paying
agent chosen by the Owner Trustee and Certificate Registrar and acceptable to
the Servicer. The Paying Agent shall be permitted to resign upon 30 days'
written notice to the Owner Trustee, and the Servicer. In the event that HSBC
Bank USA shall no longer be the Paying Agent, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that as Paying Agent, such successor Paying
Agent or additional Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Articles VII and VIII shall apply to the Paying Agent and The Chase Manhattan
Bank also in its roles as Authenticating Agent and Certificate Registrar and in
any other capacities under the Basic Documents and, to the extent applicable, to
any other paying agent or certificate registrar appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 3.10. RESTRICTIONS ON TRANSFER. (a) 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 of 1933, as amended, 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. Except for the initial issuance of the Trust Certificates to First Union
National Bank, 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 Certificate Registrar, the Owner Trustee and the Holder of
the Special Interests 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 made to any Person 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) No sale or other transfer of record or beneficial ownership of a
Class R Certificate (whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agreement or otherwise) shall be made to a
Disqualified Person or an agent of a Disqualified Person. The transfer, sale or
other disposition of a Class R Certificate (whether pursuant to a purchase, a
transfer resulting from a default under a secured lending agreement or
otherwise) to a Disqualified Person shall be deemed to be of no legal force or
effect whatsoever and such transferee shall not be deemed to be the owner for
any purpose hereunder, including, but not limited to, the receipt of
distributions on such Class R Certificates. Furthermore, in no event shall the
Owner Trustee accept surrender for transfer, registration of transfer, or
register the transfer, of any Class R Certificate nor authenticate and make
available any new Class R Certificate unless the Owner Trustee has received an
affidavit from the proposed transferee in the form attached hereto as Exhibit D.
Each holder of a Class R Certificate by his acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this Section 3.10(d). No
sale or other transfer of a Class R Certificate shall be made unless the
transferee accepts the appointment as "tax matters person" pursuant to Section
2.14(b). All references to the Class R Certificates in this Section 3.10(d)
include individual references to the Class R-I Interests and the Class R-II
Interests in the event that the Class R Certificates are split into their
component parts.
(e) Each Trust Certificate will bear legends 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 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 IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
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.
(f) In addition to the legends provided in Section 3.10(e), the Class
I Certificates shall bear a legend substantially to the following effect:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.
(g) In addition to the legends provided in Section 3.10(e), the Class
R Certificates shall bear legends substantially to the following effect:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.
SECTION 3.11. [Reserved.]
SECTION 3.12. DISPOSITION BY THE HOLDER OF THE SPECIAL INTERESTS. On
and after the Closing Date, the Holder of the Special Interests shall retain
beneficial and record ownership of Trust Certificates representing at least 1%
of the Ownership Percentage in each of the Class I and Class II Certificates,
respectively, including the Special Interests. Any attempted transfer of any
Trust Certificate that would reduce such interest of the Holder of the Special
Interests below 1% of the Ownership Percentage in each of the Class I and Class
II Certificates respectively, shall be void unless the Rating Agency Condition
is satisfied. The Trust Certificate representing the 1% Special Interest in each
of the Class I and Class II Certificates issued to the Holder of the Special
Interests shall contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 PRIOR NOTICE TO OWNERS 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, and the Holder of the Voting
Interest in writing of the proposed action and the Holder of the Voting Interest
shall not 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:
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);
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);
the amendment of any Basic Document;
the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or, pursuant to this
Agreement, of a successor Certificate Registrar or Certificate Paying Agent or
the consent to the assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar or Certificate Paying Agent of its obligations
under the Indenture or this Agreement, as applicable;
the consent to the calling or waiver of any default under
any Basic Document;
the consent to the assignment by the Indenture Trustee or
Servicer of their respective obligations under any Basic Document;
except as provided in Article IX hereof, dissolve, terminate
or liquidate the Trust in whole or in part;
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;
cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in the Basic Documents;
perform any act that conflicts with any other Basic
Document;
perform any act which would make it impossible to carry on
the ordinary business of the Trust as described in Section 2.3 hereof;
confess a judgment against the Trust;
possess Trust assets or assign the Trust's right to property
for other than a Trust purpose;
cause the Trust to lend any funds to any entity; or
change the Trust's purpose and powers from those enumerated
in this Agreement.
SECTION 4.2 ACTION BY THE OWNER TRUSTEE WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Holder of Voting Interest, to (a) remove the Servicer under the Sale and
Servicing Agreement pursuant to Section 10.01 thereof, (b) except as expressly
provided in the Basic Documents, sell the Loans after the termination of the
Indenture, (c) institute proceedings to have the Trust declared or adjudicated
to be bankrupt or insolvent, (d) consent to the institution of bankruptcy or
insolvency proceedings against the Trust, (e) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy, (f) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (g) make any assignment for the benefit of the Trust's creditors, (h)
cause the Trust to admit in writing its inability to pay its debts generally as
they become due, (i) take any action or cause the Trust to take any action, in
furtherance of any of the foregoing clauses (c) through (i) (any of such
clauses, a "Bankruptcy Action"). The Owner Trustee shall take the actions
referred to in the preceding sentence only upon written instructions signed by
the Holder of the Voting Interest.
SECTION 4.3 ACTION BY HOLDER OF 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 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, after review of and reliance upon information provided to the
Holder of the Voting Interest by the Indenture Trustee, the Owner Trustee or a
Certificateholder, it reasonably believes that the Trust is insolvent. So long
as the Indenture remains in effect, no Certificateholder nor the Indenture
Trustee shall be entitled to direct the Holder of the Voting Interest to take
any Bankruptcy Action with respect to the Trust or to direct the Owner Trustee
to take any Bankruptcy Action with respect to the Trust.
SECTION 4.4 RESTRICTIONS ON POWER. (a) The Owner Trustee shall not
take or refrain from taking any action if such action or inaction 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.
(b) None of the Certificateholders, or the Indenture Trustee, acting
independently or through the Holder of the Voting Interest, nor the Holder of
the Voting Interest, shall 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, acting pursuant to Section
2.11, 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 aggregate 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; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder, the Holder of the Voting
Interest and the Owner Trustee, that no one or more Holders of Certificates of
any Class 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, but subject to the terms of this Agreement, 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 pursuant to Section 2.11. Except as otherwise specifically provided
herein, any written notice to the Certificateholders delivered pursuant to this
Agreement shall be effective if written evidence is received that Holders of
Certificates evidencing not less than a majority of the aggregate Ownership
Percentage of the affected Class or Classes of Certificates have been delivered
of such notice.
SECTION 4.6 EXECUTION OF DOCUMENTS. Notwithstanding anything herein to
the contrary, the Owner Trustee shall have power and authority and hereby is
authorized, empowered and directed, in the name and on behalf of the Trust, to
execute, deliver, issue and authenticate each Class of Certificates, to execute,
deliver and issue the Series 1999-1 Notes, and to execute and deliver each Basic
Document to which the Trust or the Owner Trustee is or is to be a party and any
other document, instrument, certificate or other writing that may be necessary,
convenient or incidental thereto. Any such execution, delivery, issuance and
authentication is hereby ratified and confirmed in all respects and does not and
will be deemed not to conflict with, constitute or result in a breach or
violation of, or a default under, any provision of or any duty under this Trust
Agreement.
<PAGE>
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, shall establish
and maintain at a Designated Depository Institution in the name of the Trust an
eligible deposit account (the "Certificate Distribution Account"), which shall
have two sub-accounts, one for funds received from Pool Available Remittance
Amounts with respect to Pool I for distribution to the Class I and Class R
Certificates, as applicable, and the second for funds received from Pool
Available Remittance Amounts with respect to Pool II for distribution to the
Class II Certificates, in each case as set forth in Section 7.08(d) of the Sale
and Servicing Agreement. Each sub-account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
related Certificateholders. Except as otherwise provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders.
(b) The Trust shall possess all right, title and interest in all funds
on deposit from time to time in each sub-account of the Certificate Distribution
Account and in all proceeds thereof. If, at any time, the Certificate
Distribution Account ceases to be held in an account with a Designated
Depository Institution, the Owner Trustee shall within ten Business Days after a
Responsible Officer of the Owner Trustee obtains actual knowledge thereof,
establish a new Certificate Distribution Account to be held in an account with a
Designated Depository Institution, and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT.
(a) On each Remittance Date, the Paying Agent will, based on the information
contained in the Trust Administrator's Certificate delivered on the related
Determination Date pursuant to Section 7.10 of the Sale and Servicing Agreement,
distribute to each Class of Certificateholders, and within each Class pro rata,
based on the related Ownership Percentage of such Class, to the extent of the
funds available, and in accordance with Section 7.08(d) of the Sale and
Servicing Agreement, amounts deposited in the applicable sub-account of the
Certificate Distribution Account pursuant to Section 7.08(d) of the Sale and
Servicing Agreement on such Remittance Date.
(b) On each Remittance Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Trust
Administrator pursuant to Section 7.10 of the Sale and Servicing Agreement on
such Remittance 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 Paying Agent 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 or the Paying Agent 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 Paying Agent may in its
sole discretion withhold such amounts in accordance with this clause (c). In the
event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee and the Paying Agent shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee and the Paying Agent for
any out-of-pocket expenses incurred. The Servicer shall facilitate compliance
with this Section 5.2(c) by performance of its duties under Section 12.01 of the
Sale and Servicing Agreement.
(d) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
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 Remittance Date
shall be made by the Paying Agent on each Remittance Date to each
Certificateholder of record as shown on the Certificate Register on the
preceding Record Date either (a) 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 Paying Agent appropriate written instructions at least five
Business Days prior to such Remittance Date and such Holder's Trust Certificates
in the aggregate evidence an Ownership Percentage of the applicable Class of not
less than 20% or (ii) such Certificateholder is the Holder of the Special
Interests, or has been identified to the Owner Trustee and Paying Agent in
writing as an Affiliate thereof, or, (b) if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
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. Neither the
Paying Agent nor the Owner Trustee shall 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
12.01(b)(iii) and 12.01(c) of the Sale and Servicing Agreement, the Trust
Administrator 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 IRS Form 1065, if the Trust, as it relates to the
assets in Pool II, the Pool II Notes and the Class II Certificates, is treated
as a partnership for federal income tax purposes, as described in Section 2.6)
to enable each Certificateholder to prepare its federal and state income tax
returns, (c) prepare or cause to be prepared, and file or cause to be filed, all
tax returns relating to the Trust (including a partnership information return,
IRS Form 1065, if the Trust, as it relates to the assets in Pool II, the Pool II
Notes and the Class II Certificates, is treated as a partnership for federal
income tax purposes, as described in Section 2.6), and direct the Owner Trustee
in writing 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 characterization of the Trust (as it relates to
the assets in Pool II, the Pool II Notes and the Class II Certificates) as a
partnership or division of a single Class II Certificateholder, as described in
Section 2.6, as the case may be, for federal income tax purposes, (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,
(e) prepare or cause to be prepared, and file or cause to be filed, all tax
returns relating to each of REMIC I and REMIC II (including returns on IRS Form
1066 and Schedule Q thereto and IRS Form 8811), and (f) prepare or cause to be
prepared, and file or cause to be filed, deliver or cause to be delivered any
annual or other necessary returns, reports or forms relating to the Notes, the
Class I Certificates (including information returns on IRS Form 1099) and the
Class R Certificates. The Trust shall make all elections pursuant to this
Section as directed in writing by the Trust Administrator. The Owner Trustee
shall sign all tax information returns relating to REMIC I, REMIC II, the Class
I Certificates or the Class R Certificates, if any, furnished to it in execution
form by the Trust Administrator and any other returns as may be required by law
and so furnished to it by and at the direction of the Trust Administrator, and
in doing so shall be entitled to, and shall be fully protected if it shall, rely
entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Trust Administrator.
SECTION 5.7. SIGNATURE ON RETURNS; TAX MATTERS PARTNER; TAX MATTERS
PERSON. . All tax returns relating to REMIC I, REMIC II, the Class I
Certificates and the Class R Certificates shall be signed by the Owner Trustee
and all tax returns relating to Pool II and the Class II Certificates shall be
signed by the Holder of the Special Interests, unless some other party is
required by law to sign such return (in which case such other party shall sign).
(b) If the Trust, as it relates to the assets in Pool II, the Pool II
Notes and the Class II Certificates, is characterized as a partnership for
federal income tax purposes, as described in Section 2.6, the Holder of the
Special Interests shall be the "tax matters partner" of the Trust pursuant to
the Code. The owner of a majority of the Percentage Interests in the Class R
Certificates shall be the "tax matters person" (within the meaning of Treasury
Regulations Section 1.860F-4(d)) with respect to each of REMIC I and REMIC II.
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. GENERAL AUTHORITY. The Owner Trustee shall have power and
authority and hereby is authorized, empowered and directed to execute and
deliver the Basic Documents to which the Trust is named as a party and each
certificate or other document 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 Representative shall approve as
evidenced conclusively by the Owner Trustee's execution thereof, and on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Class
AS-1 Notes in the aggregate principal amount of $137,788,000, Class AS-2 Notes
in the aggregate principal amount of $141,057,000, Class AS-3 Notes in the
aggregate principal amount of $190,443,000, Class MS-1 Notes in the aggregate
principal amount of $22,084,000, Class MS-2 Notes in the aggregate principal
amount of $23,463,000, Class BS Notes in the aggregate principal amount of
$12,423,000, Class AN Notes in the aggregate principal amount of $55,395,000,
Class MN Notes in the aggregate principal amount of $2,229,000, Class BN Notes
in the aggregate principal amount of $4,457,000. In addition to the foregoing,
the Owner Trustee shall have power and authority and hereby is authorized and
empowered, but shall not be obligated, to take all actions required of the Trust
pursuant to the Basic Documents. The Owner Trustee further shall have power and
authority and hereby is authorized and empowered from time to time to take such
action as the Servicer recommends to it in writing with respect to the Basic
Documents.
It shall be the duty of the Owner Trustee, and the Owner Trustee shall
have power and authority and is hereby authorized and empowered, 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
Special Interests has agreed hereunder or thereunder, to perform any act or to
discharge any duty of the Owner Trustee hereunder or of the Trust 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 Special Interests to carry out its
obligations hereunder or thereunder.
SECTION 6.2.ACTION UPON INSTRUCTION. (a) In accordance with Section
10.05 of the Sale and Servicing Agreement, and subject to the terms of this
Agreement, the Majority Securityholders, the Indenture Trustee and (subject to
Article IV) the Holder of the Voting Interest, may, by written instruction,
direct the Owner Trustee in the management of the Trust, and the Owner Trustee
shall have power and authority, and is hereby authorized and empowered, to
follow, and shall be fully protected in following, any such instruction.
(b) Notwithstanding any provisions hereof to the contrary, 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 Certificateholders, and the
Holder of the Voting Interest 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 Holder of the Voting Interest,
the Owner Trustee shall not be liable on account of such action to any Person.
If the Owner Trustee shall not have received appropriate written 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, as it shall deem to be in the best interests of the
Certificateholders, 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
Certificateholders, the Indenture Trustee, and the Holder of the Voting Interest
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any written instruction
received from the Holder of the Voting Interest (who shall provide such
instruction pursuant to Section 2.11 of this Agreement), 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 written 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, as it
shall deem to be in the best interests of the Certificateholders, and shall have
no liability to any Person for such action or inaction.
SECTION 6.3. 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 Trust or the Owner Trustee is a party, except as expressly provided
by the terms of this Agreement or in any direction or written instruction
received by the Owner Trustee pursuant to Section 6.2; 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 or termination 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 Securities and
Exchange Commission filing for the Trust or to record this Agreement or any
Basic Document. The Owner Trustee and the Bank nevertheless agrees, each as to
itself only, 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 Bank or the Owner Trustee,
as the case may be, that are not related to the ownership or the administration
of the Owner Trust Estate or the Owner Trustee's serving as owner trustee of the
Trust.
SECTION 6.4. 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 direction or instruction delivered to the Owner
Trustee pursuant to Section 6.2.
SECTION 6.5. RESTRICTIONS. (a) The Owner Trustee shall not take any
action that is inconsistent with the purposes of the Trust set forth in Section
2.3 or (b) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust or any portion of the Trust becoming taxable
as a corporation for federal income tax purposes or would result in either REMIC
I or REMIC II not being treated as a REMIC for federal income tax purposes.
Neither the Holder of the Voting Interest nor the Certificateholders shall
knowingly direct the Owner Trustee to take action that would violate the
provisions of this Section.
(b) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of any other entity.
SECTION 6.6 NOTICE OF DEFAULT UNDER INDENTURE. Within 5 days of
receipt of a written notice of Default under the Indenture from the Indenture
Trustee, the Owner Trustee shall provide notice thereof 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 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 Bank shall not be answerable or accountable hereunder or under
any Basic Document under any circumstances, except to the Trust and the
Certificateholders (i) for its own willful misconduct, bad faith or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Bank. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
the Bank shall not be liable for any error of judgment made
by a Responsible Officer of the Owner Trustee;
the Bank shall not be liable with respect to any action
taken or omitted to be taken by the Owner Trustee in accordance with the
instructions of the Indenture Trustee, the Servicer, the Holder of the Special
Interests, the Holder of the Voting Interest, Majority Securityholders, or any
Certificateholder or in reliance on any provision of this Agreement;
no provision of this Agreement or any Basic Document shall
require the Bank 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 Bank 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;
under no circumstances shall the Bank be liable for the
Certificates or any amount due and owing thereon, any other interest in or
indebtedness of the Trust, or indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest on the Series
1999-1 Notes;
the Bank shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by any
other party hereto, 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 Bank shall in no event assume
or incur any liability, duty or obligation to any Noteholder or to any
Certificateholder or other Person, other than as expressly provided for herein;
the Bank shall not be liable for the default or misconduct
of the Indenture Trustee or the Servicer or the Holder of the Special Interests
or the Originators or the Representative or the Holder of the Voting Interest or
the Holders or the Certificate Registrar (if not the Owner Trustee) or the
Paying Agent (if not the Owner Trustee) under any of the Basic Documents or
otherwise and the Bank shall have no obligation or liability to monitor or
insure compliance by the Indenture Trustee or the Servicer or the Holder of the
Special Interests or the Originators or the Representative or the Holder of the
Voting Interest or the Holders or the Certificate Registrar (if not the Owner
Trustee) or the Paying Agent (if not the Owner Trustee) 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
Indenture Trustee under the Indenture or the Servicer under the Sale and
Servicing Agreement or the Holder of the Special Interests under this Agreement;
and
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 Indenture Trustee, the Certificateholders or Majority
Securityholders or the Holder of the Voting Interest, unless such Indenture
Trustee, Certificateholders, Majority Securityholders or Holder of the Voting
Interest 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, except as otherwise provided in the third
sentence of this Section 7.1, the Bank shall not be answerable 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 Bank hereby
represents and warrants to the Representative, and for the benefit of the
Certificateholders, that:
It is a banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has its
principal office within the State of Delaware. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
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.
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 or other entity 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 opinion or advice of any such counsel,
accountants or other such persons.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Agreement, in accepting the trusts hereby created Chase Manhattan Bank
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 LOANS.
The recitals contained herein and in the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates)
shall be taken as the statements of the Representative and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations or warranties as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates) or
the Series 1999-1 Notes, or of any Loan 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 Note, or the perfection and
priority of any security interest created by any Loan in any Mortgaged Property
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 Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any Loan
on any computer or other record thereof; the validity of the assignment of any
Loan to the Trust or of any intervening assignment; the completeness of any
Loan; the performance or enforcement of any Loan; the compliance by the
Representative, 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 Indenture 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 SERIES
1999-1 NOTES. The Owner Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Series 1999-1 Notes and may
deal with the Indenture 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 Trustee
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Chase Manhattan Bank 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 Chase Manhattan Bank Delaware nor
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 Chase Manhattan Bank Delaware (or any successor
thereto); or (iii) subject Chase Manhattan Bank 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 Chase Manhattan Bank Delaware (or any successor thereto) or
the Owner Trustee, as the case may be, contemplated hereby.
ARTICLEVIII.
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. To the extent not
received by the Owner Trustee pursuant to Section 7.03(b) of the Sale and
Servicing Agreement, the Owner Trustee and the Holder of the Voting Interest
shall receive from the Representative 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 Representative for
their respective other reasonable expenses hereunder and under the Basic
Documents, 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, as applicable, may employ in connection with the
exercise and performance of their respective rights and duties hereunder.
SECTION 8.2. INDEMNIFICATION. Except as set forth in Section 2.11
hereof, the Representative shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Bank, in its individual capacity and as
Owner Trustee, and the Holder of the Voting Interest and their respective
successors, assigns, directors, officers, employees, 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
Representative 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,
the Holder of the Voting Interest 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 Representative, which approval shall not be
unreasonably withheld. In the event the Owner Trustee has notice of a claim for
Expenses it shall give prompt written notice thereof to the Representative and
the Representative shall promptly confirm to the Owner Trustee whether it shall
defend such claim.
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 Originator, the Representative, any
Certificateholder.
ARTICLE IX.
DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. TERMINATION OF TRUST AGREEMENT. (a) This Agreement (other
than Article VIII) and the Trust shall dissolve, wind-up and terminate and be of
no further force or effect, upon the final distribution by the Paying Agent
and/or Owner Trustee of all moneys or other property or proceeds of the Owner
Trust Estate in accordance with the terms of the Indenture, the Sale and
Servicing Agreement and Article V and the termination of the Indenture;
PROVIDED, HOWEVER, that the rights to indemnification under Section 8.2 and
other rights and protections of the Owner Trustee and the Bank shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
of any prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder or Owner,
including the Holder of the Special Interests, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such Certificateholder's
or Owner'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), none of the
Representative, the Seller or the Holder of the Special Interests nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Remittance Date upon which the Certificateholders shall surrender their Trust
Certificates to the 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 11.01 of the Sale and
Servicing Agreement, stating as set forth in such notice from the Servicer (i)
the Remittance 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 Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Trust Certificates at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if
other than the Owner Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Trust Certificates,
the Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Remittance 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 Special
Interests to the extent the funds are attributable to Pool II, and to those
Class R Certificateholders who surrendered their Class R Certificates to the
extent the funds are attributable to Pool I. Class II Certificateholders shall
thereafter look solely to the Holder of the Special Interests 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 Class R Certificateholders, in the case
of funds attributable to Pool I, and to the Holder of the Special Interests, in
the case of funds attributable to Pool II.
(e) Upon termination and completion of the winding up of the
Trust, in accordance with Section 3808 of the Business Trust Statute, 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 and thereupon the Trust
and this Agreement shall terminate. The Owner Trustee shall furnish notice of
such filing to each Rating Agency.
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 or association (i) authorized to
exercise corporate trust powers; and (ii) having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authorities; PROVIDED that with respect to the initial Owner Trustee (but
not any successor trustee) the combined capital and surplus of the parent
organization of such banking association shall be included in the determination
of the combined capital and surplus of such banking association. If such
association 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. In addition, at all times the Owner
Trustee or a co-trustee shall be a person that satisfies the requirements of
Section 3807(a) of the Business Trust Statute (the "Delaware Trustee").
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 Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Owner Trustee 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. 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 (or after removal pursuant to the following paragraph), the Owner
Trustee so resigning or being removed 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 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 by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee along with payment of all fees and other amounts, if any, 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
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 and any
other amounts due to it hereunder 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 Indenture 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 or association into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from or surviving any merger, conversion or consolidation
to which the Owner Trustee shall be a party, or any corporation or association
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 or association 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, sale,
conversion 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 Mortgaged Property may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power,
authority and authorization to, and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee 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 Owner Trust Estate, 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 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: 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 Owner
Trust Estate 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;
no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee
under this Agreement; and
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 or
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 or 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.
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.
SECTION 10.6. RESIGNATION OR REMOVAL OF HOLDER OF THE VOTING INTEREST.
The Holder of the Voting Interest may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Owner Trustee
and the Holder of the Special Interest. Upon receiving such notice of
resignation, the Holder of the Special Interest shall promptly appoint a
successor Holder of the Voting Interest by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Holder of the
Voting Interest and one copy to the successor Holder of the Voting Interest. If
no successor Holder of the Voting Interest shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation (or after removal pursuant to the following paragraph), the Holder
of the Voting Interest so resigning or being removed may petition any court of
competent jurisdiction for the appointment of a successor Holder of the Voting
Interest.
If at any time the Holder of the Voting Interest shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Holder of the Voting Interest or of its property shall be appointed, or any
public officer shall take charge or control of the Holder of the Voting Interest
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Holder of the Special Interests may remove the Holder of
the Voting Interest. If the Holder of the Special Interests shall remove the
Holder of the Voting Interest under the authority of the immediately preceding
sentence, the Holder of the Special Interests, shall promptly appoint a
successor Holder of the Voting Interest by written instrument, in duplicate, one
copy of which instrument shall be delivered to the outgoing Holder of the Voting
Interest so removed and one copy to the successor Holder of the Voting Interest
along with payment of all fees and other amounts, if any, owed to the outgoing
Holder of the Voting Interest.
Any resignation or removal of the Holder of the Voting Interest and
appointment of a successor Holder of the Voting Interest pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Holder of the Voting Interest and payment of all
fees and expenses owed to the outgoing Holder of the Voting Interest. The Owner
Trustee shall provide notice of such resignation or removal of the Holder of the
Voting Interest to each of the Rating Agencies.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by the Representative and the Owner Trustee, with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; 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 by
the Representative and the Owner Trustee, with the prior written notice to the
Rating Agencies, with the consent of the Holders of Series 1999-1 Notes
evidencing not less than a majority of the Outstanding Amount of the Series
1999-1 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 no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Loans or distributions that shall be required to be
made for the benefit of the Noteholders or the Certificateholders or (ii) reduce
the aforesaid percentage of the Outstanding Amount of the Series 1999-1 Notes
and the Ownership Percentage required to consent to any such amendment, without
the consent of the Holders of all the outstanding Series 1999-1 Notes and
Holders of all outstanding Certificates. Promptly after the execution of any
such amendment or its receipt of any such consent, the Owner Trustee shall
furnish written notification of the substance of such amendment or its receipt
of any consent to each Certificateholder, the Indenture Trustee, and each of the
Rating Agencies.
(c) It shall not be necessary for the consent of the Holder
of the Voting Interest, the Certificateholders, the Noteholders or the Indenture
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 and the 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.
(d) 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.
(e) 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. The Owner Trustee shall furnish copies of any
such amendments to this Agreement to each Rating Agency.
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 beneficial ownership
interest 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 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 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Sections 2.7
and 8.2, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Bank, the Representative, the Certificateholders, the
Servicer, and, to the extent expressly provided herein, the Indenture Trustee
and the Noteholders, and nothing in this Agreement, whether express of 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. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
personally delivered, delivered by overnight courier or mailed certified mail,
return receipt requested or telecopied and shall be deemed to have been duly
given upon receipt, if to the Trust, addressed to the Owner Trustee at the
Corporate Trust Office; if to the Owner Trustee, addressed to the Corporate
Trust Office; if to the Originators, the Representative or the Holder of the
Special Interests, addressed to The Money Store Inc., 707 Third Street, West
Sacramento, California 95605, Attention: Executive Vice President; if to the
Rating Agencies, addressed to Duff & Phelps Credit Rating Co., 55 East Monroe
Street, Suite 3800, Chicago, Illinois 60603, Attention: Monitoring Group (Small
Business Loans) and to Moody's Investors Service, 99 Church Street, 4th Floor,
New York, New York 10007, Attention: Structured Finance; if to the Holder of the
Voting Interest, addressed to Norwest Bank Minnesota, National Association,
11000 Broken Land Parkway, Columbia, Maryland 21004, Attention: Corporate Trust
Department (Money Store 99-1); or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
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. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Representative, the Holder of the Special Interests , the Owner Trustee and its
successors, each Certificateholder and its successors and permitted assigns and
the Holder of the Voting Interest and its successors and permitted assigns., all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
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, the Bank, the Seller and the Indenture 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 Trust, or join in any institution
against 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.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial ownership interests in the Trust only and do not represent
interests in or obligations of the Representative, the Originators, the
Servicer, the Holder of the Special Interests, the Holder of the Voting
Interest, the Owner Trustee, the Bank, the Indenture Trustee, or any Affiliate
thereof and no recourse by such Certificateholder 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 GOVERNED BY AND
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. SERVICER. The Servicer is authorized and empowered to
execute, prepare, file and/or deliver in the name and on behalf of the Trust all
such documents, reports, filings, tax returns, instruments, certificates and
opinions as it shall be the duty of the Trust to prepare, file or deliver
pursuant to the Basic Documents. Upon written request of the Servicer, the Owner
Trustee on behalf of the Trust shall execute and deliver to the Servicer a power
of attorney appointing the Servicer the Trust's agent and attorney-in-fact to
execute, prepare, file and deliver all such documents, reports, filings, tax
returns, instruments, certificates and opinions.
<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.
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
By: /s/ Denis Kelly
--------------------------------
Name: Denis Kelly
Title: Assistant Vice President
THE MONEY STORE COMMERCIAL MORTGAGE
INC., as Seller and Servicer
By: /s/ Arthur Lyon
--------------------------------
Name: Arthur Lyon
Title: Senior Vice President/CFO
<PAGE>
ACCEPTED AND AGREED:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Holder of the Voting Interest
By: /s/ Amy Wahl
-------------------------------
Name: Amy Wahl
Title: Assistant Vice President
<PAGE>
ACCEPTED AND AGREED:
HSBC BANK USA, Authenticating Agent,
Certificate Registrar and Paying Agent
By: /s/ Susan Barstock
-------------------------------
Name: Susan Barstock
Title: Assistant Vice President
<PAGE>
ACCEPTED AND AGREED:
FIRST UNION NATIONAL BANK,
as Holder of the Special Interests
By: /s/ Al R. Bush
-------------------------------
Name: Al R. Bush
Title: Senior Vice President
<PAGE>
ACCEPTED AND AGREED:
THE MONEY STORE INC.,
as Representative
By: /s/ Arthur Lyon
-------------------------------
Name: Arthur Lyon
Title: Senior Vice President/CFO
<PAGE>
EXHIBIT A
CLASS ____ CERTIFICATE
NUMBER ___
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 IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
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.
[SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.]
[SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.]
[THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.]
[THIS TRUST CERTIFICATE IS NOT TRANSFERABLE]1
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
SERIES 1999-1, CLASS ____ BUSINESS LOAN BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes two pool of Loans
contributed to the Trust by the Seller.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE MONEY STORE INC., THE MONEY STORE COMMERCIAL MORTGAGE INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES.)
THIS CERTIFIES THAT ________________ is the registered owner of ____%
of the aggregate Ownership Percentage as a nonassessable, fully-paid, beneficial
ownership interest in the Class ___ Certificates issued by The Money Store
Business Loan Backed Trust 1999-1 (the "Trust") formed by The Money Store
Commercial Mortgage Inc., as seller (the "Seller").
The Trust was created pursuant to that certain Trust Agreement dated
as of May 31, 1999 (the "Trust Agreement") between the Seller, and Chase
Manhattan Bank 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.
- ---------------------
1 To be inseted on the Certificate to be held by the Holder of the Special
Interest.
<PAGE>
This Certificate is one of the duly authorized Class ____ Certificates
(herein called the "Trust Certificates"). Also issued under the Indenture, dated
as of May 31, 1999, between the Trust and HSBC Bank USA, as Indenture Trustee
(the "Indenture Trustee"), are the Series 1999-1 Business Loan Backed Notes,
Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2, Class BS, Class AN,
Class MN and Class BN (collectively, the "Series 1999-1 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 portfolio of business
loans contributed by the Seller (the "Loans"), all monies received on the Loans
after the Cut-Off Date, security interests in certain bank accounts and the
proceeds thereof, and certain other rights under the Trust Agreement and the
Sale and Servicing Agreement dated as of May 31, 1999, among, the Trust, the
Seller, as seller and as servicer (in such capacity, "the Servicer"), The Money
Store, Inc., as Representative (the "Representative") and the Indenture Trustee
(the "Sale and Servicing Agreement").
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(the "Remittance Date"), commencing in July 15, 1999, to the Person in whose
name this Trust Certificate is registered at the close of business on the day
immediately preceding the Remittance Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to the Class ____ Certificateholders on such Remittance 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 Representative, the Servicer, the Seller, the
Holder of the Special Interests and the Certificateholders that (i) for purposes
of federal income taxes, the Trust, as it relates to the asset in Pool II, the
Pool II Notes and the Class II Certificates, will be treated as a partnership
and the Class II Certificateholders will be treated as partners in that
partnership if, for federal income tax purposes, there is more than one Class II
Certificateholder, or as a division of the Class II Certificateholder and
ignored as an entity separate from the Class II Certificateholder if, for
federal income tax purposes, there is a single Class II Certificateholder; and
(ii) certain portions of the assets in Pool I will be treated as "real estate
mortgage investment conduits" ("REMICs") within the meaning of Section 860D of
the Internal Revenue Code of 1986, as amended (the "Code"), the Pool I Notes and
the Class I Certificates will be "regular interests" in a REMIC, within the
meaning of Section 860G(a)(1) of the Code, and the Class R Certificates will be
"residual interests" in a REMIC, within the meaning of Section 860G(a)(2) of the
Code. The Holder of the Special Interests and the other Certificateholders, by
acceptance of their Trust Certificates, agree to treat, and to take no action
inconsistent with, the tax treatment 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 Holder of the Special Interests, or join in any
institution against the Trust or the Holder of the Special Interests 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 Series 1999-1 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 Paying Agent named therein by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon.
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, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, in the name and on behalf of
the Trust and not in its individual capacity, has caused this Trust Certificate
to be duly executed.
Date: June 29, 1999
THE MONEY STORE BUSINESS LOAN BACKED TRUST
1999-1
By: CHASE MANHATTAN BANK DELAWARE
solely as Owner Trustee and not in its individual
capacity
[or HSBC BANK USA, as Authenticating
Agent and not in its individual capacity]
By:
-------------------------------
Authorized Signatory
OWNER TRUSTEE'S [OR AUTHENTICATING AGENT'S] CERTIFICATE OF AUTHENTICATION
This is one of the Class ____ Certificates referred to in the
within-mentioned Trust Agreement.
Date: June 29, 1999
[CHASE MANHATTAN BANK DELAWARE
solely as Owner Trustee and not in its individual
capacity]
[or HSBC BANK USA, as Authenticating
Agent and not in its individual capacity]
By:
----------------------------------
Authorized Signatory
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto:______________________________________________________________________,
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER 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 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 BUSINESS LOAN BACKED TRUST 1999-1
THIS Certificate of Trust of The Money Store Trust 1999-1 (the
"Trust"), is being duly executed and filed by Chase Manhattan Bank Delaware, a
Delaware banking corporation, not in its individual capacity but solely as
trustee, 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 BUSINESS LOAN BACKED TRUST 1999-1.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust which has its principal place of business in the State of Delaware is
Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust.
CHASE MANHATTAN BANK 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.
The Money Store Commercial Mortgage Inc.
707 Third Street
West Sacramento, California 95605
HSBC Bank USA,
as Certificate Registrar
140 Broadway
New York, New York 10005
Attention: Corporate Trust Department
The Money Store Business Loan Backed Trust 1999-1
c/o Chase Manhattan Bank Delaware,
as Owner Trustee
1201 Market Street
Wilmington, Delaware 19801
Attn: Corporate Trust Administration
Re: THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
Ladies and Gentlemen:
In connection with its purchase of certain Trust Certificates (the
"Certificates") of The Money Store Business Loan Backed Trust 1999-1 (the
"Issuer"), 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 Issuer 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 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:
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 IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
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.
[With respect to Class I Certificates:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.]
[With respect to Class R Certificates:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.]
"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)
<PAGE>
EXHIBIT D
FORM OF TRANSFEREE AFFIDAVIT
STATE OF )
) : ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is a of , the proposed transferee (the
"Transferee") of ____% Percentage Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Trust Agreement (the "Agreement"), dated
as of May 31, 1999, between The Money Store Commercial Mortgage Inc. (the
"Seller") and Chase Manhattan Bank Delaware, as Owner Trustee (the "Owner
Trustee"), pursuant to which The Money Store Business Loan Backed Trust 1999-1
(the "Trust") was formed and the Trust issued its Class I, Class II, and Class R
Certificates. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the transfer, a Permitted Transferee. The Transferee is acquiring its
Percentage Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is a record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of the Agreement and the
restrictive legends contained on the face of the Certificate (which are
incorporated herein by reference) and understands the legal consequences of the
acquisition of a Percentage Interest in the Certificate including, without
limitation, the restrictions on subsequent transfers and the provisions
regarding voiding the transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to transfer any or all of its Percentage
Interest in the Certificate, and in connection with any transfer by a Person for
whom the Transferee is acting as nominee, trustee or agent, and the Transferee
will not transfer its Percentage Interest or cause any Percentage Interest to be
transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate (a "Transferor
Certificate") to the effect that it has no actual knowledge that the Person to
which the transfer is to be made is not a Permitted Transferee.
7. The Transferee's taxpayer identification number is _______________.
8. Defined terms not defined herein have the meanings ascribed thereto
in the Agreement.
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer, this ________________ day of ____, [19___] [20___].
-----------------------------
[Name of Transferee]
By:
-------------------------
Name:
Title:
<PAGE>
STATE OF )
) : ss:
COUNTY OF )
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ______, _____.
NOTARY PUBLIC
My Commission expires:___________________________
EXECUTION COPY
===============================================================
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
SERIES 1999-1 NOTES
--------------------------------
INDENTURE
Dated as of May 31, 1999
--------------------------------
HSBC Bank USA,
as Trustee
================================================================
<PAGE>
CROSS REFERENCE TABLE1
TIA Indenture
Section Section
310 (a) (1) ................................................ 6.11
(a) (2) ................................................ 6.11
(a) (3) ................................................ 6.10
(a) (4) ................................................ N.A.2
(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
(d) ................................................ 7.4
313 (a) ................................................ 7.4
(b) (1) ................................................ 7.4
(b) (2) ................................................ 11.5
(c) ................................................ 7.4
(d) ................................................ 7.3
314 (a) ................................................ 3.9; 11.15
(b) ................................................ 11.1
(c) (1) ................................................ 11.1
(c) (2) ................................................ 11.1
(c) (3) ................................................ 11.1
(d) ................................................ 11.1
(e) ................................................ 11.1
(f) ................................................ 11.1
315 (a) ................................................ 6.1
(b) ................................................ 6.5; 11.5
(c) ................................................ 6.1
(d) ................................................ 6.1
(e) ................................................ 5.13
316 (a) (last sentence)........................................ 2.7
(a) (1) (A)................................................ 5.11
(a) (1) (B)................................................ 5.12
(a) (2) ................................................ N.A.
(b) ................................................ 5.7
(c) ................................................ N.A
317 (a) (1) ................................................ 5.3
(a) (2) ................................................ 5.32
(b) ................................................ 3.3
318 (a) ................................................ 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.....................................................2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act..............11
SECTION 1.3 Rules of Construction..........................................12
ARTICLE II
The Notes
SECTION 2.1 Form ......................................................12
SECTION 2.2 Execution, Authentication and Delivery.........................13
SECTION 2.3 Temporary Notes................................................13
SECTION 2.4 Registration; Registration of Transfer and Exchange............14
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.....................15
SECTION 2.6 Persons Deemed Owner...........................................16
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest......... 16
SECTION 2.8 Cancellation...................................................18
SECTION 2.9 Release of Collateral..........................................18
SECTION 2.10 Book-Entry Notes..............................................18
SECTION 2.11 Notices to Clearing Agency....................................19
SECTION 2.12 Definitive Notes..............................................19
ARTICLE III
Covenants
SECTION 3.1 Payment of Principal and Interest..............................19
SECTION 3.2 Maintenance of Office or Agency................................20
SECTION 3.3 Money for Payments To Be Held in Trust.........................20
SECTION 3.4 Existence......................................................22
SECTION 3.5 Protection of Trust Estate.....................................22
SECTION 3.6 Opinions as to Trust Estate....................................22
SECTION 3.7 Performance of Obligations; Servicing of the Loans.............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..................................................27
SECTION 3.14 Servicer's Obligations........................................27
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.............27
SECTION 3.16 Capital Expenditures..........................................27
SECTION 3.17 Compliance with Laws..........................................27
SECTION 3.18 Restricted Payments...........................................28
SECTION 3.19 Notice of Events of Default...................................28
SECTION 3.20 Further Instruments and Acts..................................28
SECTION 3.21 Income Tax Characterization...................................28
ARTICLE IIIA
Representations and Warranties
SECTION 3.1A Representations and Warranties of Issuer......................28
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture........................30
SECTION 4.2 Application of Trust Money.....................................31
SECTION 4.3 Repayment of Moneys Held by Paying Agent.......................31
SECTION 4.4 Notice ......................................................31
ARTICLE V
Remedies
SECTION 5.1 Events of Default..............................................31
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.............33
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee...................................................34
SECTION 5.4 Remedies; Priorities...........................................36
SECTION 5.5 Optional Preservation of the Loans.............................39
SECTION 5.6 Limitation of Suits............................................39
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest.................................................40
SECTION 5.8 Restoration of Rights and Remedies.............................40
SECTION 5.9 Rights and Remedies Cumulative.................................41
SECTION 5.10 Delay or Omission Not a Waiver................................41
SECTION 5.11 Control by Noteholders........................................41
SECTION 5.12 Waiver of Past Defaults.......................................41
SECTION 5.13 Undertaking for Costs.........................................42
SECTION 5.14 Waiver of Stay or Extension Laws..............................42
SECTION 5.15 Action on Notes...............................................42
SECTION 5.16 Performance and Enforcement of Certain Obligations............42
ARTICLE VI
The Trustee
SECTION 6.1 Duties of Trustee..............................................43
SECTION 6.2 Rights of Trustee..............................................45
SECTION 6.3 Individual Rights of Trustee...................................46
SECTION 6.4 Trustee's Disclaimer...........................................46
SECTION 6.5 Notice of Defaults.............................................46
SECTION 6.6 Reports by Trustee to Holders..................................46
SECTION 6.7 Compensation and Indemnity.....................................46
SECTION 6.8 Replacement of Trustee.........................................47
SECTION 6.9 Successor Trustee by Merger....................................48
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.................49
SECTION 6.11 Eligibility; Disqualification.................................50
SECTION 6.12 Preferential Collection of Claims Against Issuer..............50
SECTION 6.13 Appointment of Custodians......................................50
SECTION 6.14 Executing Basic Documents......................................48
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish Trustee Names and Addresses of Noteholders...51
SECTION 7.2 Preservation of Information; Communications to Noteholders.....51
SECTION 7.3 Reports by Issuer..............................................51
SECTION 7.4 Reports by Trustee.............................................52
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money............................................52
SECTION 8.2 Trust Accounts.................................................52
SECTION 8.3 General Provisions Regarding Accounts..........................53
SECTION 8.4 Release of Trust Estate........................................53
SECTION 8.5 Opinion of Counsel.............................................54
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures without Consent of Noteholders.........54
SECTION 9.2 Supplemental Indentures with Consent of Noteholders............55
SECTION 9.3 Execution of Supplemental Indentures...........................57
SECTION 9.4 Effect of Supplemental Indenture...............................57
SECTION 9.5 Conformity with Trust Indenture Act............................57
SECTION 9.6 Reference in Notes to Supplemental Indentures..................58
ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption....................................................58
SECTION 10.2 Form of Redemption Notice.....................................58
SECTION 10.3 Notes Payable on Redemption Date..............................59
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc.....................59
SECTION 11.2 Form of Documents Delivered to Trustee........................61
SECTION 11.3 Acts of Noteholders...........................................62
SECTION 11.4 Notices, etc., to Trustee, Issuer and Rating Agencies.........62
SECTION 11.5 Notices to Noteholders; Waiver................................63
SECTION 11.6 Alternate Payment and Notice Provisions.......................63
SECTION 11.7 Conflict with Trust Indenture Act.............................63
SECTION 11.8 Effect of Headings and Table of Contents......................64
SECTION 11.9 Successors and Assigns........................................64
SECTION 11.10 Separability.................................................64
SECTION 11.11 Benefits of Indenture........................................64
SECTION 11.12 Legal Holidays...............................................64
SECTION 11.13 Governing Law................................................64
SECTION 11.14 Counterparts.................................................64
SECTION 11.15 Recording of Indenture.......................................64
SECTION 11.16 Trust Obligation.............................................65
SECTION 11.17 No Petition..................................................65
SECTION 11.18 Inspection...................................................65
SECTION 11.19 Usury ......................................................65
<PAGE>
Testimonium, Signatures and Seals
Schedule I Auction Procedures
Exhibit A Schedule of Loans
Exhibit B Form of Note
Exhibit C Form of Custodial Agreement
<PAGE>
INDENTURE dated as of May 31, 1999, between THE MONEY STORE BUSINESS
LOAN BACKED TRUST 1999-1, a Delaware business trust (the "Issuer"), and HSBC
Bank USA, a New York banking corporation and trust company, as trustee and not
in its individual capacity (the "Trustee" or "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the Holders of Class AS-1 Adjustable Rate Business Loan Backed Notes (the
"Class AS-1 Notes"), Class AS-2 Adjustable Rate Business Loan Backed Notes (the
"Class AS-2 Notes"), Class AS-3 Auction Rate Business Loan Backed Notes (the
"Class AS-3 Notes" and collectively with the Class AS-1 and Class AS-2 Notes,
the "Class AS Notes"), Class MS-1 Adjustable Rate Business Loan Backed Notes
(the "Class MS-1 Notes"), Class MS 2 Adjustable Rate Business Loan Backed Notes
(the "Class MS-2 Notes" and collectively with the Class MS-1 Notes, the "Class
MS Notes"), Class BS Adjustable Rate Business Loan Backed Notes (the "Class BS
Notes" and collectively with the Class AS Notes and the Class MS Notes, the
"Pool I Notes"), Class AN Adjustable Rate Business Loan Backed Notes (the "Class
AN Notes"), and Class MN Adjustable Rate Business Loan Backed Notes (the "Class
MN Notes"), Class BN Adjustable Rate Business Loan Backed Notes (the "Class BN
Notes" and collectively with the Class AN Notes and the Class MN Notes, the
"Pool II Notes," and the Pool I Notes together with the Pool II are referred to
as the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee with respect to all Loans for
the benefit of the Holders of the Notes, a security interest in and to all of
the Issuer's right, title and interest in and to: (a) each Loan identified in
the Loan Schedules delivered by the Issuer on the Closing Date; (b) the
principal collected and interest accrued on each such Loan after the Cut-Off
Date; (c) the principal and interest received on such Loan on or prior to the
Cut-Off Date that is due after the Cut Off Date; (d) all prepayments, proceeds
of foreclosure proceedings, insurance proceeds, investment income respecting the
foregoing; (e) any Collateral which becomes property of the Trust; (f) the
Issuer's rights and benefits, but none of its obligations or burdens, under the
Sale and Servicing Agreement and the Letters of Credit; (g) all items contained
in each Indenture Trustee's Loan File; (h) all funds on deposit in any account
maintained by the Owner Trustee or the Servicer on behalf of the Issuer; and (i)
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, and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture; provided, however, that the Class MS Notes are
subordinated to all amounts owing on the Class AS Notes and the Class BS Notes
are subordinated to all amounts owing on the Class AS Notes and on the Class MS
Notes as described herein or any other Basic Document; and provided, further,
that the Class MN Notes are subordinated to all amounts owing on the Class AN
Notes and the Class BN Notes are subordinated to all amounts owing on the Class
AN Notes and on the Class MN Notes as described herein or any other Basic
Document.
The Trustee, as Trustee on behalf of the Holders of the Notes,
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 according to customary industry practice to the end that the
interests of the Holders of the Notes may be adequately and effectively
protected.
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.
"AUCTION PROCEDURES" means the procedures set forth in Schedule I to
this Indenture by which the Auction Rate is determined for the Class AS-3 Notes.
"AUCTION RATE" means the rate of interest per annum that results from
implementation of the Auction Procedures.
"AUCTION RATE NOTES" The Class AS-3 Notes.
"AUTHORIZED OFFICER" means, with respect to the Issuer and the
Servicer, any officer or agent acting under a power of attorney 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 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, this Indenture, the Note Depository
Agreements, the Letters of Credit 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 any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the States of California, New York,
North Carolina or Delaware are required or authorized by law 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" or "CLASSES" means any one or more of the Class AS-1, AS-2,
AS-3, MS-1, MS-2, BS, AN, MN or BN Notes.
"CLASS AN NOTES" means the Class AN Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS AN NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS AS NOTES" means the collective reference to the Class AS-1,
Class AS-2 and Class AS-3 Notes.
"CLASS AS-1 NOTES" means the Class AS-1 Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS AS-1 NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS AS-2 NOTES" means the Class AS-2 Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS AS-2 NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS AS-3 NOTES" means the Class AS-3 Auction Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS AS-3 NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement. The Class As-3 Notes Remittance Rate shall be
determined in accordance with the Auction Procedures attached hereto as Schedule
I.
"CLASS BN NOTES" means the Class BN Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS BN NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS BS NOTES" means the Class BS Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS BS NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS MN NOTES" means the Class MN Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS MN NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS MS NOTES" means the collective reference to the Class MS-1 and
Class MS-2 Notes.
"CLASS MS-1 NOTES" means the Class MS-1 Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS MS-1 NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"CLASS MS-2 NOTES" means the Class MS-2 Adjustable Rate Business Loan
Backed Notes, substantially in the form of Exhibit B.
"CLASS MS-2 NOTES REMITTANCE RATE" shall have the meaning set forth in
the Sale and Servicing Agreement.
"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. "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.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Indenture is
located at 140 Broadway, 12th Floor, New York, New York, Attention: Corporate
Trust Department (Telephone: (212) 658-2079; Facsimile: (212) 658-6425) or at
such other address as the Trustee may designate from time to time by notice to
the Noteholders, 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).
"CUSTODIAN" means First Union National Bank, or any successor thereto,
as custodian under the Sale and Servicing Agreement.
"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
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, 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.
"INDENTURE" means this Indenture as amended and supplemented from time
to time.
"INDENTURE TRUSTEE" means the Trustee.
"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 Representative 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 Representative or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Representative 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 Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee 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.
"INTEREST RATE SERVICES AGREEMENT" means that certain Interest Rate
Services Agreement dated as of June 29, 1999 between the Indenture Trustee and
the Remarketing Agent, as amended or supplemented.
"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 PARTY" means of the Trustee in respect of the Trustee
Issuer Secured Obligations.
"LOAN SCHEDULE" means the listing of the Loans set forth in Exhibit A
(which Exhibit may be in the form of microfiche).
"NOTE" or "NOTES" means the reference to any or all of The Money Store
Business Loan Backed Notes, Series 1999-1, issued by the Issuer pursuant to this
Indenture.
"NOTE DEPOSITORY AGREEMENT" means the agreement among the Issuer, the
Trustee, the Servicer and The Depository Trust Company, as the initial Clearing
Agency, dated one Business Day prior to Closing Date.
"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.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Issuer, 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 which
opinion or opinions shall be addressed to the Trustee as Trustee, shall comply
with any applicable requirements of Section 11.1, and shall be in form and
substance satisfactory to the Trustee.
"ORIGINATORS" shall have the meaning ascribed to such term in the Sale
and Servicing Agreement.
"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 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 Representative 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 Representative 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.
"OWNER TRUSTEE" shall have the meaning given to such term in the Trust
Agreement.
"PAYING AGENT" means the Trustee or any other Person 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
Principal and Interest Account and the Pool I Note Distribution Account and Pool
II Note Distribution Account, including payment of principal of or interest on
the Notes on behalf of the Issuer.
"PAYMENT DATE" means a Remittance Date.
"POOL I NOTES" means the collective reference to the Class AS Notes,
the Class MS Notes and the Class BS Notes.
"POOL II NOTES" means the collective reference to the Class AN Notes,
the Class MN Notes and the Class BN Notes.
"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.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"RECORD DATE" means, with respect to a Remittance Date or Redemption
Date, the close of business on the last day of the month immediately preceding
the month of the related Remittance 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 Remittance 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 Notes plus accrued and unpaid interest thereon to but
excluding the Redemption Date, or (b) in the case of a payment made to
Noteholders pursuant to Section 10.1(b), the amount on deposit in the applicable
Note Distribution Account, but not in excess of the amount specified in clause
(a) above.
"REMARKETING AGENT" means First Union Capital Markets Corp., and its
successors and assigns under the Interest Rate Services Agreement.
"REMITTANCE RATE" means with respect to (i) the Class AS-1 Notes, the
Class AS-1 Notes Remittance Rate, (ii) the Class AS-2 Notes, the Class AS-2
Notes Remittance Rate, (iii) the Class AS-3 Notes, the Class AS-3 Notes
Remittance Rate, (iv) the Class MS-1 Notes, the Class MS-1 Notes Remittance
Rate, (v) the Class MS-2 Notes, the Class MS-2 Notes Remittance Rate, (vi) the
Class BS Notes, the Class BS Notes Remittance Rate, (vii) the Class AN Notes,
the Class AN Notes Remittance Rate, (viii) the Class MN Notes, the Class MN
Notes Remittance Rate, and (ix) the Class BN Notes, the Class BN Notes
Remittance Rate.
"REPRESENTATIVE" means The Money Store Inc., a New Jersey corporation,
as Representative of the Seller under the Sale and Servicing Agreement and the
Trust Agreement, and its successors and assigns as Representative thereunder.
"RESPONSIBLE OFFICER" means, with respect to the Trustee, any officer
(a) assigned to the Corporate Trust Department of the Trustee, including any
Vice President, Assistant Vice President, any Assistant Secretary, any trust
officer 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 and (b) who shall have direct responsibility for the
administration of this Indenture.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of May 31, 1999, among the Issuer, the Representative and Servicer, and
the Originators named therein, as the same may be amended or supplemented from
time to time.
"SELLER" means The Money Store Commercial Mortgage Inc., and its
successors and assigns.
"SERVICER" means The Money Store Commercial Mortgage Inc., and its
successors and assigns.
"SPECIAL INTERESTS" shall have the meaning given to such term in the
Trust Agreement.
"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 date on which the Trustee shall have
received payment and performance of all Trustee Issuer Secured Obligations.
"TRUST AGREEMENT" means the Trust Agreement, dated as of May 31, 1999,
between the Seller and Chase Manhattan Bank Delaware, as Owner Trustee.
"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 (including all property and
interests Granted to the Trustee), 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 HSBC Bank USA, 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 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, amended or
supplemented from time to time, 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
Collateral................................................ Section 1.01
Compensating Interest..................................... Section 1.01
Certificateholders........................................ Section 1.01
Closing Date ............................................. Section 1.01
Cut-Off Date.............................................. Section 1.01
Deleted Loan.............................................. Section 1.01
Due Period................................................ Section 1.01
Final Maturity Date....................................... Section 1.01
Liquidated Loan........................................... Section 1.01
Monthly Advances.......................................... Section 1.01
Note Depository Agreements................................ Section 1.01
Letters of Credit......................................... Section 1.01
Loan...................................................... Section 1.01
Mortgaged Property........................................ Section 1.01
Note Distribution Account................................. Section 1.01
Original Principal Balance................................ Section 1.01
Originator................................................ Section 1.01
Permitted Instruments..................................... Section 1.01
Person.................................................... Section 1.01
Pool Available Remittance Amount.......................... Section 1.01
Principal and Interest Account............................ Section 1.01
Rating Agency ............................................ Section 1.01
Rating Agency Condition................................... Section 1.01
Remittance Date........................................... Section 1.01
REO Property.............................................. Section 1.01
Servicer Default.......................................... Section 1.01
Servicer.................................................. Section 1.01
Trust Accounts............................................ Section 1.01
Trust Administrator....................................... Section 1.01
(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;
(v) words in the singular include the plural and words in the
plural include the singular; and (vi) any pronoun shall be deemed to
cover all genders.
ARTICLE II
THE NOTES
SECTION 2.1. FORM. Each Class of Notes, together with the Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit B attached hereto, 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 officer executing such Notes, as evidenced by his 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 officer executing such Notes, as
evidenced by his execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits B-1 through B-9, inclusive, are 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 an Issuer Order authenticate and
deliver each of the following Classes of Notes for original issue in an
aggregate principal amount as follows:
CLASS OF NOTES Original Aggregate Principal Amount
AS-1 $137,788,000
AS-2 $141,057,000
AS-3 $190,433,000
MS-1 $ 22,084,000
MS-2 $ 23,463,000
BS $ 12,423,000
AN $ 55,395,000
MN $ 2,229,000
BN $ 4,457,000
The aggregate principal amount of 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.
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 officer executing such Notes may
determine, as evidenced by his or her (as the case may be) 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. The Note Registrar may resign as such
only upon written notice delivered to an Authorized Officer of the Issuer, and
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, upon one of its
Authorized Officers receiving written notice thereof, 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
applicable requirements of Article 8 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 applicable
requirements of Article 8 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 Issuer 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 such security or indemnity as may be required
by it to hold the Issuer and the Trustee 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 applicable requirements
of Article 8 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 and the Trustee 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 and any agent of
the Issuer or the Trustee 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
neither the Issuer nor 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 respective Note and the Sale
and Servicing Agreement and such interest shall be payable on each Remittance
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 Remittance 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 Remittance Date or on the Final Maturity 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 Remittance Date as set forth in the Sale and Servicing Agreement.
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. In such event, all principal payments on the
Notes shall be made pro rata to the Noteholders of such Class entitled thereto
from the Loans of the respective Pool. The Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Remittance Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid, written
notice of which has been provided to the Trustee. Such notice shall be mailed or
transmitted by facsimile prior to such final Remittance 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)(1) The rights of the Holders of the Class MS Notes to receive
distributions with respect to interest and principal shall be subordinated to
the prior rights of the Holders of the Class AS Notes to receive all payments of
interest to which they are entitled and, after the Holders of the Class AS Notes
have received the full amount of interest to which they are entitled, the rights
of the Holders of the Class MS Notes to receive distributions with respect to
principal shall be subordinated to the prior rights of the Holders of the Class
AS Notes to receive all payments of principal to which they are entitled; and
the rights of the Holders of the Class BS Notes to receive distributions with
respect to interest and principal shall be subordinated to the prior rights of
the Holders of the Class AS Notes and the Holders of the Class MS Notes to
receive all payments of interest to which they are entitled and, after the
Holders of the Class AS Notes and the Holders of the Class MS Notes have
received the full amount of interest to which they are entitled, the rights of
the Holders of the Class BS Notes to receive distributions with respect to
principal shall be subordinated to the prior rights of the Holders of the Class
AS Notes and the Holders of the Class MS Notes to receive all payments of
principal to which they are entitled.
(2) The rights of the Holders of the Class MN Notes to receive
distributions with respect to interest and principal shall be subordinated to
the prior rights of the Holders of the Class AN Notes to receive all payments of
interest to which they are entitled and, after the Holders of the Class AN Notes
have received the full amount of interest to which they are entitled, the rights
of the Holders of the Class MN Notes to receive distributions with respect to
principal shall be subordinated to the prior rights of the Holders of the Class
AN Notes to receive all payments of principal to which they are entitled; and
the rights of the Holders of the Class BN Notes to receive distributions with
respect to interest and principal shall be subordinated to the prior rights of
the Holders of the Class AN Notes and the Holders of the Class MN Notes to
receive all payments of interest to which they are entitled and, after the
Holders of the Class AN Notes and the Holders of the Class MN Notes have
received the full amount of interest to which they are entitled, the rights of
the Holders of the Class BN Notes to receive distributions with respect to
principal shall be subordinated to the prior rights of the Holders of the Class
AN Notes and the Holders of the Class MN Notes to receive all payments of
principal to which they are entitled.
(d) 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 Remittance 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.
SECTION 2.8 CANCELLATION. 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. 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. 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 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. Subject to Section 11.1, the
Trustee shall release property from the lien of this Indenture only upon receipt
of an Issuer Request accompanied by an Officer's Certificate, an Opinion of
Counsel and Independent Certificates in accordance with TIAss.314(c) and
314(d)(l) or an Opinion of Counsel in lieu of such Independent Certificates to
the effect that the TIA does not require any such Independent Certificates.
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 HSBC Bank USA, as agent for 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; and
(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.
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 Noteholders.
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,
subject to Section 8.2(c), the Issuer will cause to be distributed on a
Remittance Date pursuant to the Sale and Servicing Agreement (i) all amounts on
deposit in the Pool I Note Distribution Account for the benefit of the Pool I
Notes to the Holders of each Class of Pool I Notes in the amounts set forth in
Section 7.08(d) of the Sale and Servicing Agreement, and (ii) all amounts on
deposit in the Pool II Note Distribution Account for the benefit of the Pool II
Notes to the Holders of each Class of Pool II Notes, in the amounts set forth in
Section 7.08(d) of the Sale and Servicing Agreement. 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 Principal and
Interest Account and the Note Distribution Account pursuant to Section 8.2(c)
shall be made on behalf of the Issuer by the Trustee or by another Paying Agent,
and no amounts so withdrawn from the Principal and Interest Account and either
Note Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before each Remittance Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Pool I Note Distribution Account
and Pool II Note Distribution Account, to the extent of Pool Available
Remittance Amounts, an aggregate sum sufficient to pay the amounts then becoming
due under the Pool I Notes and Pool II Notes, respectively, 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 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, 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 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.
SECTION3.5 PROTECTION OF 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) maintain or preserve the lien and security interest and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
prepared and delivered to the Trustee that are required to be executed pursuant
to this Section; it being understood that the Trustee has no duty to determine
whether any filing or recording is necessary hereunder.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Trustee 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 lien and security interest of this Indenture for
the benefit of the Issuer Secured Party 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 Cut-Off Date, the Issuer shall furnish to the Trustee 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 THE LOANS. (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 to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee 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 and the Trust Administrator, pursuant to the Sale
and Servicing Agreement, 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, or the Holders of at least a
majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly notify
the Trustee, 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 of which the Issuer has knowledge
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 Loans,
the Issuer shall take all reasonable steps available to it to remedy such
failure.
(e) Upon any termination of the Servicer's rights and powers pursuant
to Section 10.01 of the Sale and Servicing Agreement, the Issuer shall promptly
notify the Trustee. As soon as a successor to the Servicer (other than the
Trustee) is appointed pursuant to Section 10.02 of the Sale and Servicing
Agreement, the Issuer shall notify the Trustee of such appointment, specifying
in such notice the name and address of such successor Servicer (the "Successor
Servicer").
(f) Upon an Authorized Officer of the Issuer acquiring actual
knowledge of 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) Without derogating from the absolute nature of the assignment
granted to the Trustee under this Indenture or the rights of the Trustee
hereunder, the Issuer agrees that, unless such action is specifically permitted
hereunder or under the Basic Documents, it will not, without the prior written
consent of the Trustee or the Holders of at least a majority in Outstanding
Amount of the Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral or the Basic Documents, or waive
timely performance or observance by the Servicer, or the Representative under
the Sale and Servicing Agreement; provided, however, that no such amendment
shall (i) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, distributions that are required to be made for the benefit of the
Noteholders, or (ii) reduce the aforesaid percentage of the Notes which are
required to consent to any such amendment, without the consent of the Holders of
all the Outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Trustee or such Holders, the Issuer
agrees, promptly following a request by the Trustee to do so, to execute and
deliver, in its own name and at its own expense, such agreements, instruments,
consents and other documents as the Trustee may deem necessary or appropriate in
the circumstances.
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 Trustee;
(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 of 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 Loan and
arising solely as a result of an action or omission of the related
obligor, except as expressly permitted by the Basic Documents) or (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.
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Trustee, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year ending December 31, 1999), 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, 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) to the effect that
such transaction will not have any material adverse tax consequence to
the Trust, 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 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).
(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, 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, (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) to the effect that
such transaction will not have any material adverse tax consequence to
the Trust, 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).
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 Business Loan Backed
Trust 1999-1 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 Business Loan Backed Trust 1999-1 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
Loans in the manner contemplated by this Indenture and the Basic Documents and
activities incidental thereto.
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 the Notes, and any other indebtedness permitted by or
arising under the Basic Documents.
SECTION 3.14 SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with Sections 5.04, 5.05, 5.07 and 7.07 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 Trustee, the Holder of the Special
Interests 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 Principal and Interest Account except in accordance with
this Indenture and the Basic Documents.
SECTION 3.19 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give
the Trustee, and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Servicer or the
Representative of its obligations under the Sale and Servicing Agreement of
which an Authorized Officer of the Issuer acquires actual knowledge.
SECTION 3.20 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, 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 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 and the Issuer shall
take all actions necessary to ensure that the Issuer is not treated as an
association (or publicly traded partnership) taxable as a corporation.
ARTICLE IIIA
REPRESENTATIONS AND WARRANTIES
SECTION 3.1A. REPRESENTATIONS AND WARRANTIES OF ISSUER. The Issuer
hereby represents and warrants as of the date of initial issuance of Notes as
follows:
(a) The Issuer is a business trust, and is duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The Notes, when executed, authenticated and issued in accordance
with the Indenture, and the Basic Documents (other than the Notes) to which the
Issuer is a party, when executed and delivered by the Issuer, will constitute
the legal, valid and binding obligations of the Issuer, enforceable in
accordance with their respective terms against the Issuer, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws relating to or affecting creditors' equitable principles and
public policy considerations as to rights of indemnification.
(c) The Issuer's principal place of business (which is its only place
of business) is located in Wilmington, Delaware.
(d) The Issuer has good and marketable title to each Loan and Mortgage
Note free and clear of any lien (other than liens contemplated by the Basic
Documents) and the Issuer has the authority to pledge the Loans and Mortgage
Notes to the Trustee as contemplated in this Indenture.
(e) The Issuer has the power and authority to own and convey all of
its properties and to execute and perform its obligations under the Basic
Documents.
(f) The transactions contemplated hereby do not violate organizational
documents of the Issuer or any contracts to which the Issuer is a party and will
not create any claim upon the issuer, the Loans or the Mortgage Notes except as
contemplated by the Indenture.
(g) The Basic Documents have been duly executed and delivered by the
Issuer.
(h) No consent, filing or governmental approval that has not been made
or obtained as of the Closing Date is necessary for the due execution, delivery
and performance of the Basic Documents by the Issuer.
(i) There is no pending or threatened action, suit or proceeding
against the Issuer which in any way would adversely affect the transactions
contemplated hereby and there is no injunction, writ, restraining order or other
order of any nature which would adversely affect Issuer's performance of the
transactions contemplated hereby.
(j) The Issuer is in compliance with all applicable laws, rules,
regulations, and orders with regard to its business, properties and all
purchased assets.
(k) The Issuer has filed all required tax returns in a timely fashion.
(l) The Issuer is solvent and will not become insolvent after giving
effect to the transactions contemplated hereby; the Issuer is adequately
capitalized to carry out its business and will continue to be adequately
capitalized after giving effect to the transactions contemplated hereby; and the
Issuer pays its debts as they become due.
(m) The legal name of the Issuer is The Money Store Business Loan
Backed Trust 1999-1 and the Issuer has no trade names, fictitious names, assumed
names, or 'doing business as' names.
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, 3.21 and 11.16, (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; 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
Maturity 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
Trustee 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 Remittance 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 Trustee Issuer
Secured Obligations and all other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Trustee an Officer's Certificate,
an Opinion of Counsel and (if required by the TIA, the Trustee) 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.
SECTION 4.4 NOTICE. Upon the satisfaction and discharge of this
Indenture with respect to any Class of Notes, the Trustee shall notify each
Rating Agency of such satisfaction and discharge.
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 (other
than any Noteholders' Interest Carryover, if applicable) when the same
becomes due and payable, and such default shall continue for a period
of five days; provided, however, that so long as any Class AS Notes
remain Outstanding, the default in such payment on a Class MS or a
Class BS Note shall not be deemed to be an Event of Default, and so
long as any Class MS Notes remain Outstanding, the default in such
payment on a Class BS Note shall not be deemed to be an Event of
Default; and provided, further, that so long as any Class AN Notes
remain Outstanding, the default in such payment on a Class MN or Class
BN Note shall not be deemed to be an Event of Default, and so long as
any Class MN Notes remain Outstanding, the default in such payment on
a Class BN Note shall not be deemed to be an Event of Default; or
(ii) default in the payment of the principal of any Note when the
same becomes due and payable provided, however, that so long as any
Class AS Notes remain Outstanding, the default in such payment on a
Class MS or Class BS Note shall not be deemed to be an Event of
Default, and so long as any Class MS Notes remain Outstanding, the
default in such payment on a Class BS Note shall not be deemed to be
an Event of Default; and provided, further, that so long as any Class
AN Notes remain Outstanding, the default in such payment on a Class MN
or Class BN Note shall not be deemed to be an Event of Default, and so
long as any Class MN Notes remain Outstanding, the default in such
payment on a Class BN Note shall not be deemed to be an Event of
Default; or
(iii) 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), which continues
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 notice thereof 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
(iv) 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 breach is not cured within 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 notice
thereof 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) 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 30
consecutive days; or
(vi) 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, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event of which an Authorized Officer of the Issuer has acquired actual
knowledge 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 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default should occur and be continuing, then in every
such case, the Trustee or the Holders of Notes representing not less than a
majority of the Outstanding Amounts of the Notes of Classes in the aggregate may
declare all the Notes of every Class to be immediately due and payable at par,
by a notice in writing to the Issuer (and to the Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
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 of all
Classes in the aggregate, 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 rate borne by the
Notes 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) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a proceeding for the collection of the sums so due and unpaid, and
may prosecute such proceeding to judgment or final decree, and may enforce the
same against the Issuer or other obligor upon such Notes and collect in the
manner provided by law out of the property of the Issuer or other obligor upon
such Notes, wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Trustee may,
as more particularly provided in Section 5.4, in its discretion, 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 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) [Reserved]
(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;
(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
(v) to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matter;
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 to
which the Trustee shall be a party), 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; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing, the Trustee 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) 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 the Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.1(i) or (ii), unless (A) the Holders of 100% of
the Outstanding Amount of the Notes of all Classes in the aggregate consent
thereto, (B) 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 (C) 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 obtains the consent
of Holders of 66-2/3% of the Outstanding Amount of the Notes of all Classes in
the aggregate. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), 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.
(b) If the Trustee collects any money or property pursuant to this
Article V, it shall pay out such money or property held as Collateral for the
benefit of the Noteholders in the following order of priority:
(A) from proceeds received with respect to Pool I (and if any funds
from Pool II remain after payment in full of all Pool II Notes, from proceeds of
Pool II):
FIRST: to the Trustee, the Owner Trustee, the Servicer, the Trust
Administrator and the Letter of Credit Provider, any unpaid fees, expenses
and indemnities to which such parties are entitled pursuant to the Basic
Documents;
SECOND: to the Noteholders of the Class AS Notes, pro rata (based upon
the Outstanding Amount of each Class of Class AS Notes over the total
Outstanding Amount of all Class AS Notes), for amounts due and unpaid on
each Class of Class AS Notes for interest (other than Noteholders' Interest
Carryover), ratably and without preference or priority of any kind within
each such Class, according to the amounts due and payable on each Class of
Class AS Notes for interest;
THIRD: to the Noteholders of the Class AS Notes, pro rata (based upon
the Outstanding Amount of each Class of Class AS Notes over the total
Outstanding Amount of all Class AS Notes), for amounts due and unpaid on
each Class of Class AS Notes for principal, ratably and without preference
or priority of any kind within each such Class, according to the amounts
due and payable on each Class of Class AS Notes for principal; and
FOURTH: to the Class MS-1 Noteholders for amounts due and unpaid on
the Class MS-1 Notes for interest (other than Noteholders' Interest
Carryover), ratably and without preference or priority of any kind within
such Class, according to the amounts due and payable on the Class MS-1
Notes for interest;
FIFTH: to the Class MS-1 Noteholders for amounts due and unpaid on the
Class MS-1 Notes for principal, ratably and without preference or priority
of any kind within such Class, according to the amounts due and payable on
the Class MS-1 Notes for principal;
SIXTH: to the Class MS-2 Noteholders for amounts due and unpaid on the
Class MS-2 Notes for interest (other than Noteholders' Interest Carryover),
ratably and without preference or priority of any kind within such Class,
according to the amounts due and payable on the Class MS-2 Notes for
interest;
SEVENTH: to the Class MS-2 Noteholders for amounts due and unpaid on
the Class MS-2 Notes for principal, ratably and without preference or
priority of any kind within such Class, according to the amounts due and
payable on the Class MS-2 Notes for principal;
EIGHTH: to the Class BS Noteholders for amounts due and unpaid on the
Class BS Notes for interest (other than Noteholders' Interest Carryover),
ratably and without preference or priority of any kind within such Class,
according to the amounts due and payable on the Class BS Notes for
interest;
NINTH: to the Class BS Noteholders for amounts due and unpaid on the
Class BS Notes for principal, ratably and without preference or priority of
any kind within such Class, according to the amounts due and payable on the
Class BS Notes for principal;
TENTH: to the Pool II Noteholders for any amounts due and unpaid after
distribution of proceeds from Pool II;
ELEVENTH: to the Class AS, Class MS-1, Class MS-2 and Class BS
Noteholders, sequentially in that order (and pro rata among each
Outstanding Class of Class AS Notes), notably and without preference or
priority of any kind within each such Class, according to the amounts due
and payable for Noteholders' Interest Carryover; and
TWELFTH: to the Issuer for distribution to the Class I and Class R
Certificateholders pursuant to the terms of the Trust Agreement.
(B) from proceeds received with respect to Pool II (and if any funds
from Pool I remain after payment in full of all Pool I Notes, from proceeds of
Pool I):
FIRST: to the Trustee, the Owner Trustee, the Servicer, the Trust
Administrator and the Letter of Credit Provider, any unpaid fees, expenses
and indemnities to which such parties are entitled pursuant to the Basic
Documents;
SECOND: to the Class AN Noteholders for amounts due and unpaid on the
Class AN Notes for interest (other than Noteholders' Interest Carryover),
ratably and without preference or priority of any kind within such Class,
according to the amounts due and payable on the Class AN Notes for
interest;
THIRD: to the Class AN Noteholders for amounts due and unpaid on the
Class AN Notes for principal, ratably and without preference or priority of
any kind within such Class, according to the amounts due and payable on the
Class AN Notes for principal; and
FOURTH: to the Class MN Noteholders for amounts due and unpaid on the
Class MN Notes for interest (other than Noteholders' Interest Carryover),
ratably and without preference or priority of any kind within such Class,
according to the amounts due and payable on the Class MN Notes for
interest;
FIFTH: to the Class MN Noteholders for amounts due and unpaid on the
Class MN Notes for principal, ratably and without preference or priority of
any kind within such Class, according to the amounts due and payable on the
Class MN Notes for principal;
SIXTH: to the Class BN Noteholders for amounts due and unpaid on the
Class BN Notes for interest (other than Noteholders' Interest Carryover),
ratably and without preference or priority of any kind within such Class,
according to the amounts due and payable on the Class BN Notes for
interest;
SEVENTH: to the Class BN Noteholders for amounts due and unpaid on the
Class BN Notes for principal, ratably and without preference or priority of
any kind within such Class, according to the amounts due and payable on the
Class BN Notes for principal;
EIGHTH: to the Pool I Noteholders for any amounts due and unpaid after
distribution of proceeds from Pool I;
NINTH: to the Class AN, Class MN and Class BN Noteholders,
sequentially in that order, ratably and without preference or priority of
any kind within each such Class, according to the amounts due any payable
for Noteholders' Interest Carryover; and
TENTH: to the Issuer for distribution to the Class II
Certificateholders pursuant to the terms of the Trust Agreement.
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 5.5 OPTIONAL PRESERVATION OF THE LOANS. 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.
SECTION5.6 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) 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 in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 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 5.8 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee 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 5.9 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Trustee 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 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Trustee 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 5.11 CONTROL BY NOTEHOLDERS. 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 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, 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 5.13 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 5.14 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 5.15 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 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a written 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, 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 Representative or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Representative or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) 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 Representative 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 Representative 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.
ARTICLE VI
THE TRUSTEE
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.
(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 5.11.
(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, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.
(i) Whenever any action under the Basic Documents requires the
approval or disapproval of Certificateholders or the Holder of the Voting
Interests, the Trustee shall, in accordance with, and subject to, Section 2.11
of the Trust Agreement and other provisions of the Trust Agreement concerning
the Holder of the Voting Interests, instruct the Holder of the Voting Interests
to act in accordance with written directions, received from Holders of a
majority of the Outstanding Amount of the Notes.
(j) The Trustee's appointment of the Custodian shall be deemed to have
been made with due care and without negligence on the part of the Trustee. The
Trustee shall have no liability or responsibility in connection with or arising
out of any acts or omissions on the part of any Custodian.
(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 Loans, 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 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, (iii)
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 (iv) to inquire as to the performance of
observance of any of the Issuer's, the Seller's, the Trust Administrator's or
the Servicer's representations, warranties or covenants or the Servicer's duties
and obligations as Servicer under the Sale and Servicing Agreement.
(l) The Trustee shall not be deemed to have knowledge of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge
thereof.
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. The Trustee shall not be responsible for
any misconduct or negligence on the part of, or for the supervision of, any 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 of its selection, 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, pursuant to the
provisions of this Indenture, unless such Holders of Notes shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(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 properly demanded by the Holders of Notes of any Class
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
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 actually known or written notice of the existence thereof
has been delivered to a Responsible Officer of the Trustee, the Trustee shall
mail to each Noteholder and the Owner Trustee notice of the Default within 90
days 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. The Issuer shall or shall
cause the Servicer to pay to the Trustee and the Custodian (as defined below)
from time to time compensation for their services in accordance with separate
agreements between the Servicer and the Trustee, and the Servicer and the
Custodian, respectively, which 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 and the Custodian 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 or the Custodian's agents, counsel, accountants and experts. The
Issuer shall or shall cause the Servicer to indemnify the Trustee and the
Custodian and their respective officers, directors, employees and agents against
any and all loss, liability or expense (including attorneys' fees and expenses)
incurred by any of them in connection with the acceptance or the administration
of this trust and the performance of their respective duties hereunder and under
the Sale and Servicing Agreement and the Custodial Agreement. The Trustee or the
Custodian shall notify the Issuer and the Servicer promptly of any claim for
which it may seek indemnity. Failure by the Trustee or the Custodian 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 XII of
the Sale and Servicing Agreement. The Issuer shall or shall cause the Servicer
to defend the claim and the Trustee or the Custodian may have separate counsel
and the Issuer shall or shall cause the Servicer to pay the reasonable 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 or the Custodian through the Trustee's or Custodian's, as applicable,
own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Trustee and the Custodian
pursuant to this Section shall survive the discharge of this Indenture and the
resignation or removal of the Trustee or the Custodian, as applicable, 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
Interests, the Representative, any Originator or any Certificateholder.
SECTION 6.8 REPLACEMENT OF TRUSTEE. The Trustee may resign at any time
by so notifying the Issuer and the Representative. The Holders of a majority in
Outstanding Amount of the Notes in the aggregate may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Representative
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 Representative shall promptly 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 Representative.
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 Representative
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 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 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 Indenture 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 TIAss. 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 at least BBB by Duff & Phelps Credit Rating Co. ("DCR"), if so rated
by DCR, and Baa by Moody's Investors Service, Inc. ("Moody's"), or such lower
rating as may be acceptable to DCR and Moody's.
SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Trustee shall comply with TIAss. 311(a), excluding any creditor relationship
listed in TIAss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIAss. 311(a) to the extent indicated.
SECTION 6.13 APPOINTMENT OF CUSTODIANS. (a) The Issuer and the Trustee
may appoint one or more custodians (a "Custodian") to hold all or a portion of
the mortgage files and documents relating to the Loans (a "File") as agent for
the Trustee and perform such other duties on behalf of the Trustee as set forth
in the Sale and Servicing Agreement, by entering into a custodial agreement (a
"Custodial Agreement"). Subject to this Article VI, the Trustee agrees to comply
with the terms of each such Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the Noteholders and,
the Certificateholders. The Custodian's fees shall be payable solely from the
fees received by it pursuant to Section 6.7. Each Custodian shall be a
depository institution subject to supervision by federal or state authority,
shall be qualified to do business in the jurisdiction in which it holds any
File.
(b) The Trustee and the Issuer hereby appoint First Union National
Bank as Custodian with respect to the Files relating to all of the Loans that
constitute, or may in the future constitute, part of Pool I and Pool II, and to
perform such other duties as set forth in the Sale and Servicing Agreement on
the terms and conditions set forth in the related Custodial Agreement, which
shall be substantially in the form of Exhibit C attached hereto and made a part
hereof. The Custodian shall be responsible hereunder solely for the express
duties and functions specified for it herein and in the Sale and Servicing
Agreement with respect to the custody, review and confirmation, safekeeping,
substitution and release of the Files relating to the Loans.
(c) The parties hereto agree that the Custodian shall be deemed a
third party beneficiary of this Indenture entitled to all rights and benefits
set forth herein as fully as if it were a party hereto.
SECTION 6.14 EXECUTING BASIC DOCUMENTS. The Trustee is hereby
instructed to execute and deliver the Sale and Servicing Agreement and all other
Basic Documents to which the Trustee is a party.
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 the earlier of (i) each Record Date and (ii) three
months after the last 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.
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 ss. 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 ss. 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 ss. 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 ss. 313(a), within
60 days after each December 31, beginning with December 31, 1999, the Trustee
shall mail to each Noteholder as required by TIA ss. 313(c) a brief report dated
as of such date that complies with TIA ss. 313(a). The Trustee also shall comply
with TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the Commission, if required by the Exchange Act,
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 and the Certificateholders, the
Trust Accounts as provided in Section 7.01 of the Sale and Servicing Agreement.
(b) On or before each Remittance Date, all funds required to be
deposited in the Principal and Interest Account, with respect to the preceding
Due Period, will be deposited in the Principal and Interest Account as provided
in Section 4.03 of the Sale and Servicing Agreement. On or before each
Remittance Date, the Available Remittance Amount (net of any Compensating
Interest or Monthly Advances) with respect to the preceding Due Period will be
transferred from the Principal and Interest Account to the respective Note
Distribution Accounts as provided in Sections 4.04(a) and 7.01 of the Sale and
Servicing Agreement.
(c) On each Remittance Date and Redemption Date, the Trustee shall
distribute all amounts on deposit in each Note Distribution Account to the
respective Class of Noteholders in respect of such Class of Notes, and to the
Owner Trustee, or the Paying Agent under the Trust Agreement on its behalf, for
distribution to the Holders of the Certificates in accordance with the
provisions of Section 7.05 of the Sale and Servicing Agreement.
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 Permitted
Instruments and reinvested by the Trustee upon Issuer Order, subject to the
provisions of Section 4.03 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 Principal and
Interest 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 an Opinion of Counsel, acceptable to the
Trustee, 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 Permitted
Instruments 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 11:00 a.m.
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, (iii) if such Notes shall
have been declared due and payable following an Event of Default but 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 one or more Permitted Instruments.
SECTION 8.4 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses pursuant to Section 6.7, the Trustee 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 Trustee'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 Trustee as provided in this Article VIII shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Trustee 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 TIAss. 314(c) and 314(d)(1) meeting the applicable requirements
of Section 11.1.
SECTION 8.5 OPINION OF COUNSEL. The Trustee 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
(if required by the TIA), 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 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 Trustee any
property subject or required to be subjected to the lien of this
Indenture, or to subject to the lien of this Indenture additional
property;
(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 Trustee;
(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 in any material respect 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 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 and with the consent of the Holders of not less
than a majority of the aggregate 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 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
Remittance 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 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, based upon an Opinion of Counsel delivered to it,
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. The
Trustee shall provide copies of each such supplemental indenture to each of the
Rating Agencies.
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 Representative pursuant to
Section 11.01 of the Sale and Servicing Agreement, on any Remittance Date on
which the Representative exercises its option to purchase the Trust Estate
pursuant to said Section 11.01. The purchase price for the Notes shall be equal
to the Redemption Price; PROVIDED, HOWEVER, that the Issuer has available funds
sufficient to pay the Redemption Price. The Servicer shall furnish the Rating
Agencies notice of such redemption. If the Notes are to be redeemed pursuant to
this Section 10.1(a) the Servicer shall furnish notice to the Trustee not later
than 25 days prior to the Redemption Date and the Issuer shall deposit with the
Trustee in the Pool I Note Distribution Account and Pool II Note Distribution
Account, as the case may be, on or before the Redemption Date, the Redemption
Price of the respective Pool I or Pool II 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 the Notes.
(b) 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 Pool I Note
Distribution Account and Pool II Note Distribution Account, as the case may be,
shall be paid to the respective Pool I Noteholders or Pool II Noteholders up to
the Outstanding Amount of the respective Class of Notes and all accrued and
unpaid interest thereon. If amounts are to be paid to Noteholders pursuant to
this Section 10.1(b), the Servicer or the Issuer shall, to the extent
practicable, furnish notice of such event to the Trustee not later than 25 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 not less than five days in the case
of Section 10.1(a) 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 to take any action under any
provision of this Indenture, the Issuer shall furnish to the Trustee (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 Trustee 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 Trustee 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
Trustee 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 Trustee 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 one
percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any
Deleted Loans or Liquidated Loans, whenever any property or
securities are to be released from the lien of this Indenture,
the Issuer shall also furnish to the Trustee 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 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 Trustee
an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property
other than Deleted Loans and Liquidated Loans, 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 one 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 Loans and other Collateral 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 Representative or the Issuer, stating that the information
with respect to such factual matters is in the possession of the Servicer, the
Representative 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 in writing
and 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 Business Loan Backed Trust 1999-1, in care of the Owner Trustee,
Attention: Corporate Trust Administration at the address of the Owner Trustee's
Corporate Trust Office set forth in the Trust Agreement 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) 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 10007, Attention:
Structured Finance and (ii) in the case of DCR, at the following address: Duff &
Phelps Credit Rating Co., 55 East Monroe Street, Suite 3800, Chicago, Illinois
60603, Attention: Monitoring Group (Small Business Loans); 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 ss.ss. 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.
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. 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.
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) 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 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 Representative,
the Servicer, the holder of the Special Interests, the Owner Trustee or the
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Representative,
the Servicer, the holder of the Special Interests, the Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Representative, the Servicer, the holder of the Special
Interests, the Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Representative, the Servicer,
the holder of the Special Interests, the Owner Trustee or the Trustee or of any
successor or assign of the Representative, the Servicer, the holder of the
Special Interests, the Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of the
Trust Agreement.
SECTION 11.17 NO PETITION. The Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time, prior to the date that is one year and a day
after the termination of the Indenture, institute against the Representative,
the holder of the Special Interests or the Trust, or join in any institution
against the Representative, the holder of the Special Interests 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
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, 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.
SECTION 11.19 USURY. The amount of interest payable or paid on any
Note under the terms of this Indenture shall be limited to an amount which shall
not exceed the maximum non usurious rate of interest allowed by the State of New
York or Delaware (whichever shall permit the lower rate) which could lawfully be
contracted for, charged or received (the "Highest Lawful Rate"). If any payment
of interest on any Note exceeds the Highest Lawful Rate, the Issuer stipulates
that such excess amount will be deemed to have been paid as a result of an error
on the part of both the Trustee, acting on behalf of the Holder of such Note,
and the Issuer, and the Noteholder receiving such excess payment shall promptly,
upon discovery of such error or upon notice thereof from the Issuer or the
Trustee, refund the amount of such excess and, at the option of the Trustee,
apply the excess to the payment of principal of such Note, if any, remaining
unpaid.
<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 BUSINESS LOAN BACKED TRUST 1999-1,
By: CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but solely as Owner
Trustee
By: /s/ Denis Kelly
--------------------------------
Name: Denis Kelly
Title: Assistant Vice President
HSBC BANK USA,
not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Susan Barstock
-------------------------------
Name: Susan Barstock
Title: Assistant Vice President
<PAGE>
Acceptance of Custodian
First Union National Bank, a national banking association
headquartered in Charlotte, North Carolina, hereby accepts its appointment
pursuant to Section 6.13(b) of the within instrument to serve as Custodian with
respect to the Loans. The Files relating to the Loans initially will be kept in
our offices located in North Highlands, California. In connection therewith,
First Union National Bank agrees to be bound by all applicable provisions of the
Indenture and the Sale and Servicing Agreement.
FIRST UNION NATIONAL BANK, as Custodian
By: /s/ Robert Ashbaugh
--------------------------
Name: Robert Ashbaugh
Title: Vice President
<PAGE>
SCHEDULE I
AUCTION PROCEDURES
DEFINITIONS
Capitalized terms used herein and not otherwise defined have the
meanings ascribed in the Sale and Servicing Agreement and the Indenture.
Additionally, the following terms have the meanings ascribed to them (the term
"Security" as used in this Schedule I refers to the Class AS-3 Notes and the
term "Securityholder" refers to Holders of Class AS-3 Notes).
"All Hold Rate" means ninety percent (90%) of One-Month LIBOR.
"Auction" means the implementation of the Auction Procedures on an
Auction Date.
"Auction Date" means, with respect to the Initial Period for each
Class of Securities, July 14, 1999 and thereafter, the Business Day immediately
preceding the first day of each Auction Period for each Security, other than:
(A) each Auction Period commencing after the ownership of the
Securities is no longer maintained in Book-Entry Form by DTC;
(B) each Auction Period commencing after and during the continuance of
an Event of Default; or
(C) each Auction Period commencing less than two Business Days after
the cure or waiver of an Event of Default.
Notwithstanding the foregoing, the Auction Date for one or more Auction Periods
may be changed as described herein.
"Auction Period" means, with respect to each Security, the Interest
Period applicable to such Security during which time the applicable Security
Interest Rate is determined pursuant to the Indenture.
"Auction Period Adjustment" means an adjustment to the Auction Period
as described herein.
"Auction Procedures" means the procedures set forth and described
herein by which the Auction Rate applicable to a Security is determined.
"Auction Rate" means, with respect to any Security, the rate of
interest pre annum that results from the implementation of the Auction
Procedures and is determined as described herein.
"Estimated Range of Interest Rate" has the meaning as set forth
herein.
"Initial Period" means, as to any Security, the period commencing on
the Closing Date of such Security and continuing through the day immediately
preceding the Security Initial Rate Adjustment Date for such Security.
"Interest Period" means, with respect to a Security, the Initial
Period for such Security and each period commencing on the Rate Adjustment Date
for such Security and ending on the day before (i) the next Rate Adjustment Date
for such Security or (ii) the final maturity date of such Security, as
applicable. "Interest Rate Services Agreement" means the initial Interest Rate
Services Agreement unless and until a substitute Interest Rate Services
Agreement is entered into, after with
"Interest Rate Services Agreement" shall mean such substitute Interest
Rate Services Agreement.
"Maximum Auction Rate" generally means the lesser of (i) either (A)
One-Month LIBOR plus 0.60% (if both ratings assigned by the Rating Agencies to
the applicable Security are "Aa3" or "AA-" or better) or (B) One-Month LIBOR
plus 1.50% (if any one of the ratings assigned by the Rating Agencies to the
Security is less than "Aa3" or "AA-") or (ii) 14.00%. For purposes of the
Remarketing Agent and the Remarketing Agent has been given notice pursuant to
the Interest Rate Services Agreement.
"Non-Payment Rate" means the then applicable Maximum Auction Rate.
"One-Month LIBOR" means LIBOR as defined in the Sale and Servicing
Agreement.
"Rate Adjustment Date" means, with respect to each Security, the date
on which the applicable Security Interest Rate is effective and means, with
respect to each such Security, the date of commencement of each Auction Period.
"Rate Determination Date" means, with respect to any Security, the
Auction Date, or if no Auction Date is applicable to such Security, the Business
Day immediately preceding the date of commencement of an Auction Period.
"Remarketing Agent" means the initial remarketing agent under the
initial Interest Rate Services Agreement unless and until a substitute Interest
Rate Services Agreement becomes effective, after which "Remarketing Agent" shall
mean the substitute remarketing agent.
"Remarketing Agent Fee" has the meaning set forth in the Interest Rate
Services Agreement.
"Security Initial Rate" means, with respect to any Security, the rate
at which interest accrues on such Security during the Initial Period.
"Security Initial Rate Adjustment Date" means July 15, 1999.
SECTION 1.1. CLASS REMITTANCE RATE.
SECTION 1.1.1. DETERMINING THE CLASS REMITTANCE RATE FOR THE AUCTION
RATE NOTES.
Promptly after the Remarketing Agent has made the determinations
described in Section 1.1.3, the Remarketing Agent is to advise the Indenture
Trustee of the Maximum Auction Rate, the All Hold Rate and the components
thereof on the Auction Date, and based on such determinations, the Auction Rate
for the next succeeding Interest Period for the Auction Rate Notes.
Promptly after the Remarketing Agent has determined the Auction Rate,
the Remarketing Agent will determine and advise the Indenture Trustee of such
Auction Rate for the Auction Rate Notes, which rate will be the lesser of (a)
the Maximum Auction Rate for the Auction Rate Notes and (b) the rate established
by the Remarketing Agent for the Class AS-3 Notes (the "Auction Rate Notes") no
later than 1:00 p.m., New York City time, on the Auction Date immediately
preceding each Interest Period for the Auction Rate Notes as being the minimum
rate of interest that would be necessary, in the best professional judgment of
the Remarketing Agent, taking into account prevailing market conditions, to sell
all of the Auction Rate Notes for the next succeeding Interest Period on such
date in the secondary market at a price equal to the principal amount thereof
for settlement on the next succeeding Remittance Date for the Auction Rate
Notes.
In the process of taking into account prevailing market conditions,
the Remarketing Agent shall take, among other actions it may deem appropriate,
the following actions. Not more than one Business Day before the Auction Date,
the Remarketing Agent shall make available to all interested parties an
estimated range of interest rates for the Auction Rate Notes for the next
ensuing Interest Period (the "Estimated Range of Interest Rate"). The
Remarketing Agent shall then inquire of owners of the Auction Rate Notes that
communicate with the Remarketing Agent as to whether or not such owners choose
to continue to hold their Auction Rate Notes at the Estimated Range of Interest
Rate or, if not, as to the specific interest rate, if any, at which such owners
would choose to continue to hold such Auction Rate Notes. The Remarketing Agent
shall thereupon establish the Auction Rate for the Auction Rate Notes for the
next ensuing Auction Period or Periods and communicate the same to the parties
and in the manner required by the Auction Procedures.
For each Auction Date, the Indenture Trustee shall notify the
Remarketing Agent of the principal amount of Auction Rate Notes outstanding not
later than the Business Day preceding each Auction Date. The Remarketing Agent
will accept bids that satisfy the lowest possible bid for all outstanding
Auction Rate Notes and will allocate payments accordingly. In accordance with
DTC's normal procedures, on the Business Day after the Auction Date, the
transactions described above will be executed through DTC, so long as DTC is the
depository, and the accounts of the respective Participants at DTC will be
debited and credited and the Auction Rate Notes delivered as necessary to effect
the purchases and sales of the Auction Rate Notes as determined in the Auction.
Purchasers are required to make payment through their Participants in same-day
funds to DTC against delivery through their Participants. DTC will make payment
in accordance with its normal procedures, which now provide for payment against
delivery by its Participants in immediately available funds.
SECTION 1.1.2. REMARKETING AGENT FEES AND EXPENSES.
(a) [Reserved]
(b) Not later than 2:00 p.m., eastern time, on each Remittance Date,
the Indenture Trustee shall pay to the Remarketing Agent, in immediately
available funds out of amounts in the Expense Account an amount equal to the
Remarketing Agent Fee as calculated in the Interest Rate Services Agreement. The
Representative shall from time to time at the request of the Remarketing Agent
reimburse the Remarketing Agent for its reasonable expenses as provided in the
Interest Rate Services Agreement.
SECTION 1.1.3. CALCULATION OF MAXIMUM AUCTION RATE, ALL HOLD RATE,
THREE-MONTH LIBOR AND NON-PAYMENT RATE.
The Remarketing Agent will calculate the Maximum Auction Rate, the All
Hold Rate and One-Month LIBOR on each Auction Date. If the ownership of a Class
of Auction Rate Notes is no longer maintained in Book-Entry Form, the Indenture
Trustee will calculate the Maximum Auction Rate, on the Business Day immediately
preceding the first day of each Interest Period commencing after delivery of
such Class of Auction Rate Notes. The Remarketing Agent will determine One-Month
LIBOR for each Interest Period other than the Initial Period for a Class of
Auction Rate Notes; provided, that if the ownership of the Auction Rate Notes is
no longer maintained in Book-Entry Form, then the Indenture Trustee will
determine One-Month LIBOR for each such Interest Period. The determination by
the Indenture Trustee or the Remarketing Agent, as the case may be, of One-Month
LIBOR will (in the absence of manifest error) be final and binding upon the
Noteholders and all other parties. If calculated or determined by the
Remarketing Agent, the Remarketing Agent will promptly advise the Indenture
Trustee of One-Month LIBOR.
SECTION 1.1.4. NOTIFICATION OF RATES, AMOUNTS OF REMITTANCE DATES.
Promptly after the Closing Date and after the beginning of each
subsequent Interest Period relating to each Class of Auction Rate Notes, and in
any event at least 10 days prior to any Remittance Date relating to a Class of
Auction Rate Notes, the Indenture Trustee shall confirm with the Remarketing
Agent, so long as the ownership of the Auction Rate Notes is maintained in
Book-Entry Form by the Depository, (1) the date of such next Remittance Date
relating to a Class of Auction Rate Notes and (2) the amount payable to the
Remarketing Agent on the Auction Date pursuant to Section 2.1.2(b) hereof.
If any day scheduled to be a Remittance Date shall be changed after
the Indenture Trustee shall have given the notice or confirmation referred to in
the preceding sentence, the Indenture Trustee shall, not later than 9:15 a.m.,
eastern time, on the Business Day next preceding the earlier of the new
Remittance Date or the old Remittance Date, by such means as the Indenture
Trustee deems practicable, give notice of such change to the Remarketing Agent,
so long as the ownership of the Auction Rate Notes is maintained in Book-Entry
Form by the Depository.
SECTION 1.1.5. REMARKETING AGENT. First Union Capital Markets Corp. is
hereby appointed as initial Remarketing Agent to serve as agent for the
Representative in connection with Auctions. The Indenture Trustee is hereby
directed to, enter into the initial Interest Rate Services Agreement with First
Union Capital Markets. The Remarketing Agent may, with the consent of the
Representative and notice to the Indenture Trustee and designation of the party
authorized to direct the Indenture Trustee, enter into an agreement with one or
more co-remarketing agents under which certain duties of the Remarketing Agent
may be delegated to the co-remarketing agent. The Remarketing Agent, any
successors to the Remarketing Agent and any co-remarketing agent shall be
members of the National Association of Securities Dealers, Inc. having a
capitalization acceptable to the Representative and authorized by laws to
perform all the duties imposed upon them hereunder, under the Sale and Servicing
Agreement and under the Interest Rate Services Agreement. The Remarketing Agent
may at any time resign and be discharged of the duties and obligations created
by the Sale and Servicing Agreement and the Interest Rate Services Agreement by
giving at least sixty (60) days' written notice to the Representative and the
Indenture Trustee. The Remarketing Agent may be removed upon at least sixty (60)
days' written notice to the Remarketing Agent, at the direction of the
Representative and with the prior written consent of the Indenture Trustee, by
an instrument signed by the Representative and filed with the Remarketing Agent,
the Indenture Trustee. Notwithstanding the foregoing, no resignation or removal
of the Remarketing Agent shall be effective unless and until a successor shall
have been appointed; provided that such resignation by the Remarketing Agent
shall be effective upon such sixty (60) days' written notice whether or not a
successor has been appointed if and when the Remarketing Agent reasonably
determines that any one of the following shall obtain: (i) the Representative is
not diligently pursuing the appointment of a successor Remarketing Agent at the
level of compensation then generally paid in the marketplace for the services to
be performed by the successor Remarketing Agent, (ii) events have occurred which
materially adversely affect the Remarketing Agent's ability to fulfill its
duties as Remarketing Agent, including the elimination of the Remarketing
Agent's capacity to fulfill the duties of the Remarketing Agent or a
determination by counsel to the Remarketing Agent that continuation of
performance as such hereunder would be contrary to law or would expose the
Remarketing Agent to material risk of illegality, (iii) the Sale and Servicing
Agreement has been amended, modified or terminated in such manner as would
affect the Remarketing Agent or its duties without the consent of the
Remarketing Agent, or (iv) any condition to performance by the Remarketing Agent
hereunder shall not be satisfied. Any subsequent Remarketing Agent shall be
selected by the Representative, with notice to the Indenture Trustee, provided,
however, that, with the Representative's consent, the co-remarketing agent (or
one of them, at the Representative's discretion) shall become the Remarketing
Agent automatically if the Remarketing Agent ceases to act as Remarketing Agent
for any reason.
In the event of the resignation or removal of the Remarketing Agent,
the Remarketing Agent shall pay over, assign and deliver the Auction Rate Notes
held by it in such capacity to its successor. In the event that the
Representative shall fail to appoint a Remarketing Agent hereunder, the
Indenture Trustee may do so.
SECTION 1.2. CHANGES IN AUCTION TERMS.
SECTION 1.2.1. CHANGES IN THE AUCTION DATE.
The Remarketing Agent, at the written direction of the Representative,
may specify an earlier Auction Date (but in no event more than five Business
Days earlier) than the Auction Date that would otherwise be determined in
accordance with the definition of "Auction Date" with respect to one or more
specified Auction Periods in order to conform with then current market practice
with respect to similar securities or to accommodate economic and financial
factors that may affect or be relevant to the day of the week constituting an
Auction Date and the interest rate borne on the Auction Rate Notes. The
Representative will not consent to such change in the Auction Date unless the
Representative will have received from the Remarketing Agent not less than three
days nor more than 20 days prior to the effective date of such change a written
request for consent together with a certificate demonstrating the need for
change in reliance on such factors. The Remarketing Agent will provide notice of
its determination to specify an earlier Auction Date for one or more Auction
Periods by means of a written notice delivered at least 10 days prior to the
proposed changed Auction Date to the Indenture Trustee, the Remarketing Agent
and the Representative.
The changes in Auction terms described above may be made with respect
to the Auction Rate Notes. In connection with any change in Auction Terms
described above, the Remarketing Agent is to provide such further notice to such
parties as is specified in the Interest Rate Services Agreement.
<PAGE>
EXHIBIT A
Schedule of Loans
[Provided to Trustee]
<PAGE>
EXHIBIT B
[FORM OF CLASS _____ NOTE]
REGISTERED $_________________
NO. 1
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.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS NOTE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
<PAGE>
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1,
SERIES 1999-1, CLASS _____ BUSINESS LOAN BACKED NOTES
The Money Store Business Loan Backed Trust 1999-1, 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 Remittance Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $________________ and the denominator
of which is $______________ by (ii) the aggregate amount, if any, payable from
the applicable Note Distribution Account in respect of principal on the Class
_____ 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
earlier of _____________ (the "Class _____ Final Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.1(a) (i) or (ii) or Section
10.1(b) of the Indenture. The Issuer will pay interest on this Note at a
variable interest rate equal to Class _____ Remittance Rate as set forth in the
Indenture (the "Remittance Rate") on each Remittance Date commencing in July
1998 until the principal of this Note is paid or made available for payment, on
the principal amount of this Note outstanding on the preceding Remittance Date
(after giving effect to all payments of principal made on the preceding
Remittance Date). Interest will be computed on the basis of a 360-day year
consisting of the actual number of days elapsed since interest was last paid or,
in the case of the first Remittance Date, from the Closing Date. Such principal
of and interest on this Note shall be paid in the manner specified on the
reverse hereof.
[Distributions of interest and principal on the Class BS Notes are
subordinated in priority of payment to distributions of interest and principal
on the Class AS Notes, Class MS-1 and Class MS-2 Notes; distributions of
interest and principal on the Class MS-2 Notes are subordinated in priority of
payment to distributions of interest and principal on the Class AS Notes and the
Class MS-1 Notes; and distributions of interest and principal on the Class MS-1
Notes are subordinated in priority of payment to distributions of interest and
principal on the Class AS Notes, each as described in the Sale and Servicing
Agreement.]
[Distributions of interest and principal on the Class BN Notes are
subordinated in priority of payment to distributions of interest and principal
on the Class AN Notes and the Class MN Notes; and distributions of interest and
principal on the Class MN Notes are subordinated in priority of payment to
distributions of interest and principal on the Class AN Notes, each as described
in the Sale and Servicing Agreement.]
Distributions of principal of this Note will made in the manner
described in the Sale and Servicing Agreement until the principal balance of
this Note is reduced to zero.
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.
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 Indenture 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.
Date: June 29, 1999 THE MONEY STORE BUSINESS LOAN BACKED
TRUST 1999-1,
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
By:
-----------------------
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class _____ Business Loan Backed Notes of The Money
Store Business Loan Backed Trust 1999-1 designated above and referred to in the
within-mentioned Indenture.
Date: June 29, 1999 HSBC BANK USA
not in its individual capacity
but solely as Indenture 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 _____ Notes (herein called the "Class _____ Notes"), all
issued under an Indenture dated as of May 31, 1999 (such indenture, as
supplemented or amended, is herein called the "Indenture"), between the Issuer
and HSBC Bank USA, as Indenture Trustee (the "Indenture Trustee", which term
includes any successor Indenture Trustee 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
Indenture 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 Notes of each Class are and will be secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class _____ Notes will be payable on each Remittance
Date in an amount described on the face hereof. "Remittance Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing July 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class _____ Final Maturity Date
and the Redemption Date, if any, pursuant to Section 10.1(a) or Section 10.1(b)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture 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 of the Indenture. All principal payments on
the Class ______ Notes shall be made pro rata to the Class _______ Noteholders
entitled thereto.
Payments of interest on this Note due and payable on each Remittance
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 Remittance
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 Remittance Date, then the Indenture 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 Remittance Date by notice
mailed prior to such Remittance Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
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 _____ Remittance Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Representative, on any Remittance Date on or
after the date on which the Pool Balance is less than five percent of the
Original Pool Principal Balances.
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
Indenture 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 Indenture 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 or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Representative, the Servicer, the holder of the
Special Interests, the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Representative, the Servicer, the holder of the Special Interests, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Representative, the Servicer, the holder
of the Special Interests, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Representative, the Servicer, the holder of the
Special Interests, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
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 Representative, the holder of the Special Interests
or the Issuer, or join in any institution against the Representative, the holder
of the Special Interests 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 Indenture Trustee, and any agent of the Issuer or the
Indenture Trustee 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 Indenture 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 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 of 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 Indenture 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 Indenture 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 the Owner Trustee in
its individual capacity, HSBC Bank USA 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 of the Issuer have been made for the sole
purposes of binding 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: 3
------------------- -----------------------
- -------------------
3 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>
EXHIBIT C
Custodial Agreement
See Exhibit I to the Sale and Servicing Agreement.
Exhibit 4.4
EXECUTION COPY
INTEREST RATE SERVICES AGREEMENT
THIS INTEREST RATE SERVICES AGREEMENT (the "Agreement"), dated as of
June 29, 1999, is being entered into between HSBC Bank USA, as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee under
the Indenture, as hereinafter defined and described, and First Union Capital
Markets Corp. (the "Remarketing Agent") acting not in its individual capacity
but solely as agent for The Money Store Inc. (the "Representative");
WITNESSETH:
The Representative proposes to cause the Indenture Trustee to
authenticate and deliver up to $589,339,000 aggregate principal amount of The
Money Store Business Loan Backed Notes, Series 1999-1 (the "Notes") to be issued
by The Money Store Business Loan Backed Trust 1999-1 (the "Trust"). The Notes
will be issued under the Indenture (the "Indenture"), which term includes all
Exhibits, Schedules and Annexes thereto), dated as of May 31, 1999, by and
between the Indenture Trustee and the Trust. After the applicable initial
Interest Period, the Class Remittance Rate for the Class AS-3 Notes (the
"Auction Rate Notes") shall be based on the Auction Procedures set forth in
Schedule I to the Indenture. The Representative desires to appoint First Union
Capital Markets Corp. ("First Union Capital Markets") as the Remarketing Agent
under this Agreement and First Union Capital Markets desires to accept such
appointment.
The Indenture Trustee is entering into this Interest Rate Services
Agreement at the direction of the Trust pursuant to the terms of the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. All terms not otherwise defined in this
Agreement shall have the meanings set forth in the Indenture, including Schedule
I thereto.
ARTICLE II
APPOINTMENT OF AGENT
SECTION 2.01. FIRST UNION CAPITAL MARKETS APPOINTMENT AND ACCEPTANCE.
The Representative hereby appoints First Union Capital Markets as the
Remarketing Agent under this Interest Rate Services Agreement and First Union
Capital Markets hereby accepts such appointment. For purposes of this Agreement
the office of First Union Capital Markets shall be One First Union Center, 301
S. College St., DC-8, Charlotte, North Carolina 28288-0602 unless otherwise
indicated in writing by First Union Capital Markets.
SECTION 2.02. PERFORMANCE BY OTHER PARTIES. The Remarketing Agent
shall be obligated to perform hereunder only upon performance in all material
respects by the parties to this Agreement of their duties and responsibilities
hereunder and under the Indenture.
SECTION 2.03. NO UNDERWRITING. The Remarketing Agent shall not, in
fulfilling its obligations hereunder, be required to act as an underwriter for
Auction Rate Notes and is in no way obligated, directly or indirectly, to
advance its own funds to purchase Auction Rate Notes available for purchase in
the secondary market. The duties of the Remarketing Agent shall be solely as
provided herein, and no implied covenants or obligations on the part of the
Remarketing Agent shall be read into this Agreement.
ARTICLE III
DUTIES OF REMARKETING AGENT
SECTION 3.01. DUTIES OF REMARKETING AGENT. The Remarketing Agent
hereby agrees to undertake the duties specified as duties of the Remarketing
Agent set forth in the Indenture in connection with the determination from time
to time of the interest rates payable on the Auction Rate Notes and giving
notice and providing information to the Indenture Trustee as specified in the
Indenture. In performing such tasks, the Remarketing Agent shall be acting as an
independent contractor and not as agent for the Representative or owners of the
Auction Rate Notes. The Remarketing Agent may appoint third parties to assist it
in performing its functions hereunder.
SECTION 3.02. DETERMINATION OF AUCTION RATES FOR NOTES. The Class
Remittance Rate on the Auction Rate Notes for each Auction Period shall be the
lesser of (i) the Maximum Auction Rate in effect for such Auction Period and
(ii) the rate established by the Remarketing Agent for such Auction Rate Notes
no later than 1:00 p.m., New York City time, on the Auction Date immediately
preceding each Interest Period for the Auction Rate Notes as being the minimum
rate of interest that would be necessary, in the best professional judgment of
the Remarketing Agent, taking into account prevailing market conditions, to sell
all of the Auction Rate Notes for the next succeeding Auction Period on such
date in the secondary market at a price equal to the principal amount thereof
for settlement on the next succeeding Remittance Date for the Auction Rate
Notes.
In the process of taking into account prevailing market conditions,
the Remarketing Agent shall take, among other actions it may deem appropriate,
the following actions. Not more than one Business Day before the Auction Date,
the Remarketing Agent shall make available to all interested parties an
estimated range of interest rates for the Auction Rate Notes for which the
interest rate is being determined during the next ensuing Auction Period (the
"Estimated Range of Interest Rate"). The Remarketing Agent shall then inquire of
owners of such Auction Rate Notes that communicate with the Remarketing Agent as
to whether or not such owners choose to continue to hold their Auction Rate
Notes at the Estimated Range of Interest Rate or, if not, as to the specific
interest rate, if any, at which such owners would choose to continue to hold
such Auction Rate Notes. The Remarketing Agent shall thereupon establish the
Auction Rate for the Auction Rate Notes for the next ensuing Auction Period or
Periods and communicate the same to the parties and in the manner required by
the Indenture.
ARTICLE IV
RESIGNATION OR DISCHARGE OF THE REMARKETING AGENT;
REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION OF THE REMARKETING AGENT
SECTION 4.01. RESIGNATION OR DISCHARGE OF REMARKETING AGENT. (a) The
Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Agreement by giving at least sixty (60) days'
written notice to the Representative and the Indenture Trustee. The Remarketing
Agent may be removed upon at least sixty (60) days' written notice to the
Remarketing Agent, at the direction of the Representative, by an instrument
signed by the Representative and filed with the Remarketing Agent and the
Indenture Trustee. Notwithstanding the foregoing, no resignation or removal of
the Remarketing Agent shall be effective unless and until a successor shall have
been appointed; provided that such resignation by the Remarketing Agent shall be
effective upon such sixty (60) days' written notice whether or not a successor
has been appointed if and when the Remarketing Agent reasonably determines that
any one of the following shall obtain: (i) the Representative is not diligently
pursuing the appointment of a successor Remarketing Agent at the level of
compensation then generally paid in the marketplace for the services to be
performed by the successor Remarketing Agent, (ii) events have occurred which
materially adversely affect the Remarketing Agent's ability to fulfill its
duties as Remarketing Agent, including the elimination of the Remarketing
Agent's capacity to fulfill the duties of the Remarketing Agent or a
determination by counsel to the Remarketing Agent that continuation of
performance as such hereunder would be contrary to law or would expose the
Remarketing Agent to material risk of illegality, (iii) the Indenture has been
amended, modified or terminated in such manner as would affect the Remarketing
Agent or its duties without the consent of the Remarketing Agent, or (iv) any
condition to performance by the Remarketing Agent hereunder shall not be
satisfied.
(b) In the event of the resignation or removal of the Remarketing
Agent, the Remarketing Agent shall pay over, assign and deliver any Auction Rate
Notes held by it in such capacity to its successor. In the event that the
Representative shall fail to appoint a Remarketing Agent hereunder, the
Indenture Trustee may do so, subject to the criteria set forth in the Indenture.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. (a) The
Representative represents and warrants that (i) the Representative is duly
incorporated, validly existing and in good standing as a corporation under the
laws of the State of New Jersey; (ii) the Representative has all requisite
corporate power to execute and deliver, and has by proper corporate action duly
authorized the execution and delivery of this Agreement; and (iii) this
Agreement is the legal, valid and binding obligation of the Representative
enforceable in accordance with its terms, except that enforcement may be limited
by laws relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights generally and by
general principles of equity.
(b) The Remarketing Agent represents and warrants that (i) the
Remarketing Agent is duly incorporated, validly existing and in good standing as
a corporation under the laws of the Commonwealth of Virginia; (ii) the
Remarketing Agent has all requisite power to execute and deliver, and has by
proper action duly authorized the execution and delivery of this Agreement;
(iii) the Remarketing Agent is a member of the National Association of
Securities Dealers, Inc.; and (iv) this Agreement constitutes the legal, valid
and binding obligation of the Remarketing Agent enforceable in accordance with
its terms, except that enforcement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally and by general principles of
equity.
SECTION 4.03. INDEMNIFICATION OF REMARKETING AGENT. The Representative
agrees to indemnify and hold the Remarketing Agent harmless from any and all
liability, loss, damages, costs and expenses of any nature (including, without
limitation, reasonable counsel fees and expenses) arising out of or in
connection with the Remarketing Agent's duties or those of the Remarketing
Agent's employees or agents (each, an "Indemnified Party") arising from its
performance under this Agreement or the Indenture, except for liabilities,
losses, damages, costs, expenses and fees arising out of the bad faith, gross
negligence or willful misconduct of the Remarketing Agent or any of its
employees or agents. The Representative agrees that neither the Remarketing
Agent nor any of its employees or agents shall be liable for any action or
omission to act, taken or made pursuant to this Agreement, except for gross
negligence, bad faith or willful misconduct. The foregoing provisions of this
Section 4.03 include, without limitation, any action taken or omitted within the
scope of this Agreement or the Indenture or any such action taken or omitted
upon telephonic or written instructions received or reasonably believed to have
been received from the Representative or the Indenture Trustee.
Promptly after receipt by an Indemnified Party of notice of the
commencement of any action in respect to which indemnification may be sought
against the Representative under Section 4.03 hereof, such Indemnified Party
shall promptly notify the Representative in writing; but the omission to so
notify the Representative shall neither relieve the Representative from any
liability which the Representative may have to any Indemnified Party otherwise
than under this Section 4.03 nor affect any rights that the Representative may
have otherwise than this Section 4.03 nor affect any rights that the
Representative may have otherwise than under this Section 4.03 to participate in
and/or assume the defense of any action brought against any Indemnified Party.
In the event such action is brought against any Indemnified Party, and such
Indemnified Party notifies the Representative of the commencement thereof, the
Representative shall be entitled to participate in, and, to the extent that the
Representative chooses so to do, to assume the defense thereof (including,
without limitation, the employment of counsel reasonably satisfactory to such
Indemnified Party), and the Representative shall assume the payment of all fees
and expenses relating to such defense, and shall have the right to negotiate and
consent to any settlement thereof reasonably satisfactory to such Indemnified
Party. Any one or more of the Indemnified Parties shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but after notice from the Representative to such Indemnified Party of the
Representative's election to assume the defense thereof, the fees and expense of
such separate counsel shall be at the expense of such Indemnified Party unless
the employment of such counsel has been specifically authorized in writing by
the Representative or unless a conflict of interest reasonably necessitates
separate counsel. The Representative shall not be liable for any settlement of
any such action effected without its consent, but if settled with the consent of
the Representative or if there be a final judgment for the plaintiff in any such
action as to which the Representative has received notice in writing as
hereinabove required, the Representative agrees to indemnify and hold harmless
the Indemnified Party from and against any loss or liability by reason of such
settlement or judgment.
In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in this Section 4.03 is held
to be unavailable for the Remarketing Agent from the Representative with respect
to matters covered by this Section 4.03 for which the Remarketing Agent is
adjudged to be contributorily responsible, the Representative on the one hand
and the Remarketing Agent on the other, with respect to such matters, shall
contribute to the aggregate losses and expenses, to which the Representative on
the one hand and the Remarketing Agent on the other may be subject in such
proportion such that the Remarketing Agent is responsible for that portion
represented by the percentage that the Remarketing Agent Fee payable to the
Remarketing Agent hereunder with respect to the distribution in question bears
to the aggregate offering price of the Auction Rate Notes, and the
Representative shall be responsible for the balance. In no event, however, shall
the Remarketing Agent be responsible for an amount in excess of such Remarketing
Agent Fee and in no event shall any person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The allocation of contributions provided by this Section 4.03
also shall extend, without limitation, to any and all expenses whatsoever
reasonably incurred in connection with investigating, preparing for, or
defending against, or providing evidence, producing documents, or taking any
other reasonable action in respect of, any such loss, damage, expense, liability
or claim (or action in respect thereof), whether or not resulting in any
liability, and shall include any loss to the extent of the aggregate amount paid
in settlement of any litigation, commenced or threatened, or of any claim
whatsoever as set forth herein if such settlement is effected with the written
consent of the Representative. For purposes of this Section 4.03, each officer,
director, employee, agent, or attorney of the Remarketing Agent and each person,
if any, who controls the Remarketing Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, or within the meaning of
any amendment of said Acts, shall, under the same circumstances, have the same
rights to contribution from the Representative as does the Remarketing Agent
hereunder. Within a reasonable time after a party entitled to contribution under
this Section 4.03 shall have been served with the summons or other first legal
process or shall have received written notice of the threat of a claim in
respect of which contribution may be sought hereunder, such person shall, if a
claim for contribution is to be made against the Representative or the
Remarketing Agent under this Section 4.03, notify such party, in writing, of the
commencement thereof, PROVIDED, HOWEVER, that any notice given by the
Remarketing Agent for the purposes of, and as provided in, this Section 4.03
shall constitute notice for purposes of this Section 4.03.
The indemnity provided by this Section 4.03 shall be in addition to
any other liability that the Representative may otherwise have hereunder, at
common law, or otherwise. The indemnity provided by this Section 4.03 is
provided solely for the benefit of each of the Indemnified Parties and their
respective successors, assigns, and legal representatives, and no other person
shall acquire or have any right under or by virtue of such provisions of this
Agreement. The indemnification provided by this Section 4.03 shall survive
termination of this Agreement and discharge or resignation of the Remarketing
Agent.
ARTICLE V
COMPENSATION OF REMARKETING AGENT
SECTION 5.01. In consideration of the services to be performed by the
Remarketing Agent under this Agreement, the Remarketing Agent shall be entitled
to a fee (the "Remarketing Agent Fee") at a per annum rate equal to the product
of (i) the then outstanding Class Principal Balance of the Auction Rate Notes
and (ii) 0.25%.
The Remarketing Agent shall be entitled to receive the Remarketing
Agent Fee pursuant to Section 7.08(d)(i) of the Sale and Servicing Agreement or,
if such fee is not paid when due, from the Representative.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. (a) This 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.
(b) The Remarketing Agent's duties and obligations hereunder shall be
governed solely by the terms of this Agreement and the Indenture, anything in
any other document to the contrary notwithstanding. Any conflict between the
terms of the Indenture or any other agreement and this Agreement shall be
resolved in favor of this Agreement.
(c) This Agreement may be amended only by a written agreement signed
by the parties hereto.
(d) This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall constitute an original, but such
counterparts together shall constitute but one and the same Agreement.
(e) The captions or headings in this Agreement are for convenience of
reference only and in no way define, limit or describe the scope or intent of
any provisions or sections hereof.
(f) Any notices, requests or other communications given or made
hereunder or pursuant hereto shall be in writing (unless otherwise specified
herein) and shall be deemed to have been validly given or made when delivered
(via telecopy or by hand) or mailed, registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
(i) if to the Indenture Trustee, to HSBC Bank USA, 140
Broadway, 12th Floor, New York, New York 10005 (or telecopy (212)
658-6425), Attention: Susan Barstock; Corporate Trust Department
(telephone (212) 658-2079);
(ii) if to the Representative, The Money Store Inc.,
707 Third Street, West Sacramento, California 95605 (or telecopy
(916) 617-2693), Attention: Managing Attorney (telephone (916)
617-2699); and
(iii) if to the Remarketing Agent, to First Union
Capital Markets Corp., One First Union Center, 301 S. College
St., DC-8, Charlotte, North Carolina 28288-0602 (or telecopy
(704) 383-6382), Attention: Angus McBride (telephone (704)
383-7727).
(g) In the event any one or more of the provisions of this Agreement
shall for any reason be held to be illegal or invalid, such illegality or
invalidity shall not affect any other provisions of the Agreement, and this
Agreement shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein.
(h) Neither the Representative nor the Indenture Trustee shall amend
Schedule I to the Indenture without the written consent of the Remarketing
Agent.
(i) Unless terminated earlier as herein provided, the term of this
Agreement shall be equal to the term of the Auction Rate Notes, as the same may
be shortened by retirement thereof before maturity.
(j) Unless otherwise specifically provided herein, all times specified
herein shall be New York City time.
(k) The Remarketing Agent may become the owner of any of the Auction
Rate Notes with the same rights it would have if it were not acting as
Remarketing Agent hereunder.
<PAGE>
IN WITNESS WHEREOF, the Representative and the Remarketing Agent have
each caused this Interest Rate Services Agreement to be executed in their
respective corporate names by their duly authorized officers or signatories as
of the date first above written.
HSBC BANK USA, not in its individual
capacity but solely as Indenture Trustee
By /s/ Susan Barstock
----------------------------------
Name: Susan Barstock
Title: Assistant Vice President
FIRST UNION CAPITAL MARKETS CORP.
By /s/ William W. Ingram
----------------------------------
Name: William W. Ingram
Title: Managing Director
<PAGE>
The Representative hereby accepts
its obligations hereunder, including
those pursuant to Sections 2.01, 4.02,
4.03, 5.01 and 6.01(h) hereof.
THE MONEY STORE INC.
By /s/ Arthur Lyon
-----------------------------------
Name: Arthur Lyon
Title: Senior Vice President/CFO
