EXHIBIT 4.1
Execution Copy
SALE AND SERVICING
AGREEMENT
among
THE MONEY STORE TRUST 1998-C
Issuer,
THE ORIGINATORS LISTED HEREIN
Originators
and
THE MONEY STORE INC.
Representative and Servicer
Dated as of August 31, 1998
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions............................................1
Section 1.02 Other Definitional Provisions.........................29
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST
Section 2.01 Contribution and Conveyance of Trust Account
Property. Priority and Subordination of
Ownership Interests...................................30
Section 2.02 Possession of Loan Files..............................30
Section 2.03 Books and Records.....................................31
Section 2.04 Delivery of Mortgage Loan Documents...................31
Section 2.05 Acceptance of the Trust Fund; Certain Substitutions;
Certification by Indenture Trustee and Custodian......33
Section 2.06 Fees and Expenses of the Indenture Trustee,
Owner Trustee, Trust Administrator and Custodian......35
Section 2.07 [Reserved]............................................36
Section 2.08 Optional Repurchase of Defaulted Loans................36
Section 2.09 Assignment Event......................................36
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of Representative,
Servicer and Originators..............................37
Section 3.02 Individual Loans......................................43
Section 3.03 Purchase and Substitution.............................51
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 Duties of the Servicer................................53
Section 4.02 Liquidation of Loans..................................56
Section 4.03 Establishment of Principal and Interest Accounts;
Deposits in Principal and Interest Account............57
Section 4.04 Permitted Withdrawals From the Principal
and Interest Accounts.................................58
Section 4.05 Payment of Taxes, Insurance and Other Charges.........60
Section 4.06 Transfer of Accounts..................................61
Section 4.07 Maintenance of Hazard Insurance.......................61
Section 4.08 Maintenance of Mortgage Impairment Insurance Policy...62
Section 4.09 Fidelity Bond.........................................62
Section 4.10 Title, Management and Disposition of REO Property.....62
Section 4.11 [RESERVED]............................................63
Section 4.12 Collection of Certain Loan Payments...................64
Section 4.13 Access to Certain Documentation and Information
Regarding the Loans...................................64
Section 4.14 Superior Liens........................................64
Section 4.15 [RESERVED]............................................65
ARTICLE V
GENERAL SERVICING PROCEDURES
Section 5.01 Assumption Agreements................................65
Section 5.02 Satisfaction of Mortgages and Release of Loan Files..66
Section 5.03 Servicing Compensation and Contingency Fee...........67
Section 5.04 Annual Statement as to Compliance....................68
Section 5.05 Annual Independent Public Accountants'
Servicing Report.....................................68
Section 5.06 Indenture Trustee's and Owner Trustee's Right to
Examine Servicer Records and Audit Operations........68
Section 5.07 Reports to the Indenture Trustee; Principal and
Interest Account Statements..........................69
ARTICLE VI
[RESERVED]
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 7.01 Note Distribution Accounts...........................69
Section 7.02 Rounding Account71
Section 7.03 Establishment of Expense Accounts; Deposits in
Expense Accounts; Permitted Withdrawals from
Expense Accounts.....................................72
Section 7.04 Establishment of Insurance Accounts; Deposits in
Insurance Accounts; Permitted Withdrawals from Insurance
Accounts.............................................73
Section 7.05 Establishment of Spread Account; Deposits in Spread
Account; Permitted Withdrawals from Spread Account...75
Section 7.06 [RESERVED]...........................................76
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...........................................82
Section 7.11 Advances by the Servicer.............................86
Section 7.12 Compensating Interest................................87
Section 7.13 Reports of Foreclosure and Abandonment of
Mortgaged Property...................................87
Section 7.14 Allocation of Total Monthly Excess Cashflow..........88
Section 7.15 Establishment of Servicing Accounts; Collection of
Taxes, Assessments and Similar Items.................89
Section 7.16 Net Deposits.........................................89
ARTICLE VIII
[RESERVED]
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims..................90
Section 9.02 Merger or Consolidation of the Representative and
the Servicer.........................................91
Section 9.03 Limitation on Liability of the Servicer and Others...91
Section 9.04 Servicer Not to Resign...............................92
Section 9.05 [RESERVED]...........................................92
Section 9.06 Right of Majority Securityholders to Replace
Servicer.............................................92
Section 9.07 Appointment of Trust Administrator...................92
ARTICLE X
DEFAULT
Section 10.01 Servicer Default.....................................93
Section 10.02 Indenture Trustee to Act; Appointment of Successor...94
Section 10.03 Waiver of Defaults...................................96
Section 10.04 [RESERVED]...........................................96
Section 10.05 Control by Majority Securityholders..................97
ARTICLE XI
TERMINATION
Section 11.01 Termination..........................................97
ARTICLE XII
ADMINISTRATIVE DUTIES OF TRUST ADMINISTRATOR
Section 12.01 Administrative Duties................................98
Section 12.02 Records..............................................101
Section 12.03 Additional Information To Be Furnished to the
Issuer...............................................101
Section 12.04 Calculation of LIBOR.................................101
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Acts of Noteholders and Certificateholders...........102
Section 13.02 Amendment............................................102
Section 13.03 Recordation of Agreement.............................103
Section 13.04 Duration of Agreement................................104
Section 13.05 Governing Law........................................104
Section 13.06 Notices..............................................104
Section 13.07 Severability of Provisions...........................105
Section 13.08 No Partnership.......................................105
Section 13.09 Counterparts.........................................105
Section 13.10 Successors and Assigns...............................105
Section 13.11 Headings.............................................105
Section 13.12 Assignment to Indenture Trustee......................105
Section 13.13 Nonpetition Covenant.................................106
Section 13.14 Limitation of Liability of Owner Trustee,
Indenture Trustee and Custodian.....................106
Section 13.15 Independence of the Servicer.........................107
Section 13.16 Notification to Rating Agencies......................107
Section 13.17 Third Party Rights...................................107
Section 13.18 The Note Insurer.....................................107
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 List of Originators
EXHIBIT G Request for Release of Documents
EXHIBIT H Form of Notice Under Guaranty Insurance Policy
Relating to the Pool I Notes
EXHIBIT I Form of Notice Under Guaranty Insurance Policy
Relating to the Pool II Notes
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 Subservicing Agreement
EXHIBIT O Prices for Low Interest Mortgage Loans
EXHIBIT P Form of Power of Attorney
SALE AND SERVICING AGREEMENT dated as of August 31, 1998, among The
Money Store Trust 1998-C, a Delaware business trust (the "Issuer"), the entities
listed on Exhibit F hereto (collectively, the "Originators"), and The Money
Store Inc., a New Jersey corporation ("TMS"), as Representative (the
"Representative") and Servicer (the "Servicer").
WHEREAS, the Issuer desires to acquire a portfolio of residential
loans from the Originators;
WHEREAS, the Originators have either originated and underwritten, or
purchased and re-underwritten, such residential loans, and are willing to
contribute such residential loans to the Issuer; and
WHEREAS, the Servicer is willing to service such residential 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:
ACCOUNT: The Certificate Distribution Account, Note Distribution
Account, Expense Account, Spread Account, Insurance Account, Rounding Account,
the Principal and Interest Account and Servicing Account (including any
sub-accounts of any of the foregoing).
ADJUSTED LOAN INTEREST RATE: A percentage per annum, equal to the
related Loan Interest Rate less the per annum rate used in calculating (i) the
applicable Annual Expense Escrow Amount, (ii) the premiums payable to the Note
Insurer as set forth in the Insurance Agreement, (iii) the Servicing Fee and
(iv) the Contingency Fee.
AGREEMENT: This Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
ANNUAL EXPENSE ESCROW AMOUNT: With respect to each Pool, an amount
equal to the product of (i) 0.01125% per annum (in the case of Pool I) or
0.01475% per annum (in the case of Pool II) and (ii) the sum of the 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 and Trust Administrator and in the case
of Pool I, the Remarketing Agent.
ASSIGNMENT EVENT: The occurrence of any of the following (unless
otherwise waived by the Note Insurer): (i) a Servicer Default occurs and
continues for 30 days; (ii) FUNB's long-term unsecured debt rating is reduced
below A2 by Xxxxx'x or A by S&P; (iii) the suspension, termination or withdrawal
of FUNB's long-term unsecured debt rating by Xxxxx'x and S&P's; (iv) (a) the
Representative's stockholders' equity reported in accordance with generally
accepted accounting principles is less than $5,000,000 as of the end of any
fiscal quarter beginning September 30, 1998; or (b) the Representative is in
default of any material financial obligation; (v) a lease agreement acceptable
to the Note Insurer (the "Lease") between the Custodian, as lessee and the
Representative, as lessor with respect to the space on the Representative's
premises where the Custodian holds the Indenture Trustee's Loan Files (the
"On-Site Custodial Space") is not executed within 21 days following the Closing
Date; (vi) any of the facts set forth in the Officer's Certificate of the
Custodian and the Representative dated as of September 29, 1998, describing the
initial custodial arrangement with respect to the Indenture Trustee's Loan Files
(the "On-Site Custodial Arrangement") become untrue in a material and adverse
manner; (vii) the rating on the Pool I and Pool II Notes (without regard to the
Note Insurance Policies) is downgraded below BBB by S&P or Baa2 by Xxxxx'x;
(viii) so long as the Custodian holds any of the Indenture Trustee's Loan Files
at the on-site custodial space, any event of default shall have occurred and is
continuing under the Lease, the Lease is not in effect, or the Lease is deemed
unenforceable against either party thereto or (ix) FUNB is no longer acting as
Custodian.
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 AF-2 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
Insurance Agreement, the Spread Account Agreement 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.
CERTIFICATE: A Trust Certificate (as defined in the Trust Agreement).
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
Interest.
CERTIFICATE REMITTANCE AMOUNT: As of any Remittance Date, an amount
equal to the sum of (i) the Pool Remaining Amount Available, net of
reimbursements to the Servicer or the Representative of Reimbursable Amounts
pursuant to Section 4.04(b), and (ii) the Supplemental Interest Excess for such
Remittance Date.
CHANGE DATE: The date on which the Loan Interest Rate of each Pool II
Loan is subject to adjustment, which date is the Due Date set forth in the
related Mortgage Note and each first, third, sixth or twelfth Due Date
thereafter, as set forth in the related Mortgage Note.
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.
CLASS ADJUSTED LOAN REMITTANCE RATE: With respect to each Loan, a
percentage per annum, being the sum of (i) the Weighted Average Remittance Rate
for the applicable Pool, (ii) the applicable Annual Expense Escrow Amount and
(iii) the applicable per annum rate relating to premiums payable to the Note
Insurer as set forth in the Insurance Agreement.
CLASS AF-1 NOTE: A Note denominated as a Class AF-1 Note.
CLASS AF-1 REMITTANCE RATE: The annual rate of interest payable to the
Class AF-1 Noteholders, which shall be equal to 5.65672% for the first
Remittance Date. Thereafter, the Class AF-1 Remittance Date shall be equal to
the lesser of (i) LIBOR plus 0.27% (or plus 0.54% for each Remittance Date
occurring after the Optional Servicer Termination Date) and (ii) the applicable
Net Funds Cap (but in no event exceeding 14.00% per annum).
CLASS AF-2 NOTE: A Note denominated as a Class AF-2 Note.
CLASS AF-2 REMITTANCE RATE: The annual rate of interest payable to the
Class AF-2 Noteholders, which shall be equal to 5.50% for the first Remittance
Date. Thereafter, the Class AF-2 Remittance Date shall be equal to the annual
rate of interest determined according to the Auction Procedures, subject to the
applicable Net Funds Cap (but in no event exceeding 14.0% per annum).
CLASS AV NOTE: A Note denominated as a Class AV Note.
CLASS AV REMITTANCE RATE: The annual rate of interest payable to the
Class AV Noteholders, which shall be equal to 5.64672% for the first Remittance
Date. Thereafter, the Class AV Remittance Date shall be equal to the lesser of
(i) LIBOR plus 0.26% (or plus 0.52% for each Remittance Date occurring after the
Optional Servicer Termination Date) and (ii) the applicable Net Funds Cap (but
in no event exceeding 14.0% per annum).
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 (including the principal portion of any related Insured
Payments) previously distributed to the Noteholders of such Class in respect of
principal pursuant to Section 7.05(d), and (ii) any actual loss of principal
suffered by the related Noteholders due to the failure of the Note Insurer to
perform its obligations under the related Note Insurance Policy.
CLASS 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 AF-1
Remittance Rate, Class AF-2 Remittance Rate and Class AV Remittance Rate.
CLOSING DATE: September 29, 1998.
CODE: The Internal Revenue Code of 1986, as amended, or any successor
legislation thereto.
COMPENSATING INTEREST: As defined in Section 7.12.
CONTINGENCY FEE: As to each Loan, the annual fee which is, in addition
to the Servicing Fee, payable to the Servicer pursuant to Section 5.03 of this
Agreement. 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 0.25% 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 Contingency Fee is payable solely from the interest
portion of related (i) Monthly Payments, (ii) Liquidation Proceeds, (iii)
Insurance Proceeds or (iv) Released Mortgaged Property Proceeds collected by the
Servicer, or as otherwise provided in Section 4.04.
CROSS-OVER DATE: The date on which the Subordinated Amount for Pool I
and Pool II have been reduced to zero.
CUMULATIVE REALIZED LOSSES: As of any date of determination, the
aggregate amount of Realized Losses with respect to the applicable Pool of Loans
since the Closing Date.
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; provided, however, that following the occurrence of an Assignment
Event, the Indenture Trustee (or such other Person acceptable to the Note
Insurer) shall be the successor Custodian for the Pool I and Pool II Loans.
CUT-OFF DATE: August 31, 1998; 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 August 31, 1998 shall be deemed to be the
date of the applicable Mortgage 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).
DEFAULTED LOAN: Means any Loan as to which the related Obligor has
failed to pay in full of three or more consecutive Monthly Payments.
DEFICIENCY AMOUNT: With respect to any Remittance Date and with
respect to the Pool I or Pool II Notes, (i) the excess, if any, of (a) the
Current Interest Requirement for such Pool over (b) the sum of the Pool
Available Remittance Amount for such Pool (minus amounts withdrawn to pay
required premiums to the Note Insurer and the amount required to be deposited in
the Expense Account pursuant to Section 7.03(a)(i)), the Excess Spread
applicable to such Pool for such Remittance Date, the Supplemental Interest
Payments, if any, for such Remittance Date and the amount on deposit in the
Spread Account, plus (ii) the excess, if any, of (a) the Class Principal Balance
of the Notes of the related Pool, after taking into account all distributions to
be made on such Remittance Date (other than amounts payable with respect to
principal by the Note Insurer under the applicable Note Insurance Policy)
exceeds (b) the aggregate principal balances of the related Pool of Loans as of
the close of business on the last day of the related Due Period plus the amount,
if any, in the Spread Account on such date and allocated to such Pool of Loans
(after application of clause (i) above).
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 S&P and A2 or better by Xxxxx'x, or one of the two highest short-term
ratings by S&P and the highest short-term rating by Xxxxx'x, 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.
EVENT OF EXCESSIVE POOL LOSS: Means, with respect to Pool I or Pool II,
(a) until the 36th Remittance Date, any event that causes Cumulative Realized
Losses with respect to the related Pool to equal or exceed 1.25% of the Pool
Principal Balance of the related Pool as of the Closing Date, (b) from the 36th
until the 42nd Remittance Dates, any event that causes
Cumulative Realized Losses with respect to the related Pool to equal or exceed
1.75% of the Pool Principal Balance of the related Pool as of the Closing Date,
(c) from the 42nd until the 48th Remittance Dates, any event that causes
Cumulative Realized Losses with respect to the related Pool to equal or exceed
2.25% of the Pool Principal Balance of the related Pool as of the Closing Date
and (d) thereafter, any event that causes Cumulative Realized Losses with
respect to the related Pool to equal or exceed 2.75% of the Pool Principal
Balance of the related Pool as of the Closing Date.
EVENT OF NONPAYMENT: An event of nonpayment with respect to Pool I or
Pool II shall occur with respect to any Remittance Date if the amounts remitted
by the Servicer to the Indenture Trustee pursuant to Sections 4.04(a), 7.07(e),
7.11 and 7.12 for deposit in the Note Distribution Accounts with respect to Pool
I and Pool II (minus the amount to be withdrawn from the applicable Note
Distribution Account for deposit in the applicable Insurance Account pursuant to
Section 7.01(b)(i)), plus any amount transferred from the Spread Account to the
applicable Note Distribution Account pursuant to Section 7.05(b)(ii) and any
Supplemental Interest Payments will not, taken together, be sufficient to pay
all of the Pool Remittance Amounts for each such Pool (exclusive of any Pool
Carry-Forward Amounts representing amounts previously paid to the Noteholders of
the applicable Pool as Insured Payments and exclusive of any amount described in
clause (iv) of the definition of Pool Principal Distribution Amounts with
respect to such applicable Pool which have not been paid by the Originators) in
respect of such Remittance Date.
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 and Insurance
Account on such Remittance Date pursuant to Sections 7.03(a)(i) and 7.04(a)(i),
respectively, and (iii) the Servicing Fee and Contingency 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: The Federal Home Loan Mortgage Corporation and any successor
thereto.
FIDELITY BOND: As described in Section 4.09.
FINAL MATURITY DATE: With respect to (i) the Class AF-1 Notes, October
15, 2038 (ii) the Class AF-2 Notes, October 15, 2038 and (iii) the Class AV
Notes, November 15, 2028.
FNMA: The Federal National Mortgage Association and any successor
thereto.
FUNB: First Union National Bank, a national banking association
headquartered in Charlotte, North Carolina, and any successor thereto.
GROSS MARGIN: With respect to each Pool II Loan, the number of basis
points set forth in the related Mortgage Note which is added to the LIBOR Index
or the Treasury Index, as the case may be, 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.
HIGH-RISE CONDOMINIUM: A multiple dwelling unit of five stories or
more in which individual fee title is held to the interior space only and all
other elements of the structure and land are held in undivided common ownership.
HOLDER OF THE SPECIAL INTEREST: The Person holding the Special
Interest.
HUD: The United States Department of Housing and Urban Development,
and its successor in interest.
INDENTURE: The Indenture dated as of August 31, 1998, 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.
INDENTURE TRUSTEE'S LOAN FILE: The documents delivered to the
Indenture Trustee or the Custodian pursuant to Section 2.04.
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.
INDEX: Either the LIBOR Index or the Treasury Index, as the case may
be.
INSURANCE ACCOUNTS: The insurance accounts established and maintained
by the Indenture Trustee in accordance with Section 7.04 hereof.
INSURANCE AGREEMENT: The agreement dated as of September 1, 1998 by
and among the Note Insurer, The Money Store Inc., the Custodian, the Originators
and the Indenture Trustee, as amended from time to time by the parties thereto.
INSURANCE PAYING AGENT: With respect to any Pool I or Pool II Loan,
The Bank of New York or any successor as appointed herein.
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.
INSURED PAYMENT: means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
INSURER REIMBURSABLE AMOUNTS: As described in Section 7.14(a)(ii).
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 October 14, 1998. 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 Class
Remittance Rate for such Class.
INTEREST RATE SERVICES AGREEMENT: That certain Interest Rate Services
Agreement dated as of September 29, 1998 between the Indenture Trustee and the
Remarketing Agent, as amended or supplemented.
ISSUER: Means The Money Store Trust 1998-C.
LEASE: shall have the meaning assigned thereto in the Insurance
Agreement.
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 DETERMINATION DATE: A date which is both a Business Day and a
London Banking Day prior to the commencement of each related Interest Period.
LIBOR INDEX: The applicable London interbank offered rate for
one-month, six-month or one year U.S. dollar deposits, as specified in the
related Mortgage Note.
LIFETIME CAP: The provision in the Mortgage Note for each Pool II
Loan, which limits the maximum Loan Interest Rate over the life of such Pool II
Loan to the rate set forth in the applicable Mortgage Note.
LIFETIME FLOOR: The provision in the Mortgage Note for each Pool II
Loan, which limits the minimum Loan Interest Rate over the life of such Pool II
Loan to the rate set forth in the applicable Mortgage Note.
LIQUIDATED LOAN: Any defaulted Loan or REO Property 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.
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 applicable Originator (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. Each of the Loans is a Mortgage Loan.
LOAN FILE: The documents delivered to the Custodian on behalf of the
Indenture Trustee pursuant to Section 2.04.
LOAN INTEREST RATE: The fixed or adjustable rate of interest borne by
a Mortgage 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, such schedules
identifying each Loan by address of the Mortgaged Property 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, (iv) the LTV as of the date
of the origination of the related Loan, (v) the Due Date, (vi) the Loan Interest
Rate, (vii) the first Due Date, (viii) the Monthly Payment, (ix) the maturity
date of the Mortgage Note, (x) the remaining number of months to maturity as of
the Cut-Off Date and (xi) with respect to Pool II, the Periodic Rate Cap,
Lifetime Cap and Lifetime Floor.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Loan, (i) the sum of
(a) the original principal balance of such Loan plus (b) the remaining balance
of any Prior Lien, if any, at the time of origination of such Loan, less (c)
that portion of the principal balance equal to the amount of the premium for
credit life insurance collected by the Originators, divided by (ii) the value of
the related Mortgaged Property, based upon the appraisal (or, in the case of
certain Loans with original principal balances of less than $15,000, such other
method of valuation acceptable to the related Originator) made at the time of
origination of the Loan.
LONDON BANKING DAY: Any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
LOW INTEREST LOAN: [Not applicable].
LOW-RISE CONDOMINIUM: A multiple dwelling unit of four stories or less
in which individual fee title is held to the interior space only and all other
elements of the structure and land are held in undivided common ownership.
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 or
holders of the Voting Interest.
MARGIN: With respect to (i) the Class AF-1 Notes, the rate per annum
of 0.27% (or for each Remittance Date occurring after the Optional Servicer
Termination Date, 0.54%) and (ii) the Class AV Notes, the rate per annum of
0.26% (or for each Remittance Date occurring after the Optional Servicer
Termination Date, 0.52%), that is added to LIBOR to determine the Class AF-1
Remittance Date or Class AV Remittance Rate, respectively.
MIXED USE BUILDING: A building containing both residential dwelling
units and commercial use units, E.G., retail stores or office space.
MONTHLY ADVANCE: An advance made by the Servicer pursuant to Section
7.11 hereof.
MONTHLY EXCESS SPREAD: As of any Remittance Date and for any Pool of
Loans, an amount equal to the product of (i) the amount calculated pursuant to
the definition of Excess Spread with respect to such Remittance Date for such
Pool of Loans and (ii) the then applicable Monthly Excess Spread Percentage.
MONTHLY EXCESS SPREAD PERCENTAGE: As to any Remittance Date, 100%.
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 Mortgage Note.
MONTHLY PREMIUM: With respect to Pool I and Pool II, the monthly
premium payable to the Note Insurer equal to the product of (i) the applicable
percentage set forth in the Insurance Agreement and (ii) the applicable then
outstanding Pool Principal Balance, rounded to the nearest thousand dollars.
MOODY'S: Xxxxx'x Investors Service, Inc., or any successor thereto.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
lien on the Mortgaged Property.
MORTGAGE IMPAIRMENT INSURANCE POLICY: As described in Section 4.08.
MORTGAGE LOAN: A Loan that is secured by a Mortgage on a Mortgaged
Property.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of an Obligor under a Loan.
MORTGAGED PROPERTY: The underlying property securing a Loan,
consisting of a fee simple estate in a single contiguous parcel of land improved
by a Residential Dwelling.
MORTGAGED PROPERTY STATES: Any one of the 50 states and the District
of Columbia and Puerto Rico, where the Mortgaged Properties are located.
MULTIFAMILY LOANS: Loans secured by Multifamily Properties.
MULTIFAMILY PROPERTY: A residential or mixed-use property, such as
rental apartment buildings or projects containing five or more units.
NET FUNDS CAP: For a Class of Notes on any Remittance Date will be the
per annum rate determined on an actual 360 basis pursuant to the following
formula:
Net Funds Cap = (A X B) + C
-----------
A
Where:
A = The Class Principal Balance for the applicable Class of Notes
immediately prior to such Remittance Date.
B = The difference between (x) the weighted average Loan Interest
Rate for the Loans of the related Pool and (y) the sum of the
percentages used in determining (i) the Servicing Fee, (ii) the
Contingency Fee, (iii) the premium due the Note Insurer for the
related Pool, (iv) the fees due the Owner Trustee, the Indenture
Trustee and the Trust Administrator for the related Pool, (v)
commencing with the Remittance Date in May 1999, 0.50% and (vi)
with respect to the Class AF-2 Notes, the fee due the Remarketing
Agent.
C = With respect to the Class AF-1 and Class AF-2 Notes, the
amount, if any, of Supplemental Interest Payments allocated to
such Class for such 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.
NET MONTHLY EXCESS CASHFLOW: As defined in Section 7.14(b) hereof.
1933 ACT: The Securities Act of 1933, as amended.
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 AF-1 Note, Class AF-2 Note or Class AV Note.
NOTE DISTRIBUTION ACCOUNT: The account designated as such, established
and maintained pursuant to Section 7.01.
NOTE INSURANCE POLICIES: Collectively, the Note guaranty insurance
policies relating to the Pool I Notes and Pool II Notes, each dated the Closing
Date, and each issued by the Note Insurer for the benefit of the Holders of the
Notes of the related Pool, pursuant to which the Note Insurer guarantees Insured
Payments.
NOTE INSURER: MBIA Insurance Corporation, a New York stock insurance
corporation, or any successor thereof, as issuer of the Note Insurance Policies.
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,
(but in no event exceeding 14.00% per annum), 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, but in no event exceeding 14.00% per annum). No
Certificateholders' Interest Carryover shall be paid on a Class of Notes after
the Class Principal Balance of such Class is reduced to zero.
NOTIONAL AMOUNT: With respect to any Remittance Date, the amount
designated as such in the Rate Agreement.
OBLIGOR: The obligor on a Mortgage 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, an Originator 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 and the Servicer, reasonably
acceptable to the Indenture Trustee and the Note Insurer and experienced in
matters relating thereto.
OPTIONAL SERVICER TERMINATION DATE: As defined in Section 11.01(b)
hereof.
ORIGINAL CLASS AF-1 PRINCIPAL BALANCE: $401,250,000.
ORIGINAL CLASS AF-2 PRINCIPAL BALANCE: $133,750,000.
ORIGINAL CLASS AV PRINCIPAL BALANCE: $360,000,000.
ORIGINAL COLLATERAL AMOUNT: The aggregate Principal Balance of the
Loans as of the Cut-Off Date.
ORIGINAL PRINCIPAL BALANCE: With respect to each Class of Notes, the
amount set forth for such Class under the definitions of Original Class AF-1
Principal Balance, Original Class AF-2 Principal Balance and Original Class AV
Principal Balance, as the case may be.
ORIGINATOR: Any of the entities listed on Exhibit F hereto, each of
which is a direct wholly-owned subsidiary of the Representative, and each of
which is a Subservicer as of the date hereof.
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as to which
the related Obligor represented at the time of the origination of the Loan an
intent to occupy as such Obligor's primary, secondary or vacation residence.
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 "A-1" or better by S&P and Prime-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
"BBB" or better by S&P and Baa3 or better by Moody's;
(iv) commercial paper (having original maturities of
not more than 365 days) rated "A-1" or better by S&P and
Prime-1 or better by Moody's;
(v) debt obligations rated "AAA" by S&P 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 (including
those funds managed or advised by the Owner Trustee or
Indenture Trustee or any affiliate thereof) rated "AAAm" or
better by S&P or "Aaa" or better by Moody's, the assets of
which are invested solely in instruments described in clauses
(i)-(v) above;
(vii) guaranteed investment contracts or surety bonds
issued by or reasonably acceptable to the Note Insurer
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 S&P 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 and is acceptable to the Note Insurer:
(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 S&P and Moody's, or
2. Banks rated "A" or above by S&P and
Moody's;
(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,
with a copy to the Note Insurer, 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 Note
Insurer and the Rating Agencies, written confirmation of which shall be
furnished by the Note Insurer to the Indenture Trustee.
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 AVAILABLE AMOUNT: With respect to any Pool and each Remittance
Date, an amount equal to the sum of (i) the Pool Available Remittance Amount for
such Pool (net of the amount of Monthly Advances and Compensating Interest
deposited pursuant to Section 7.01(a)(ii)), (ii) any amount of Monthly Excess
Spread to be applied to the Notes of such Pool on such Remittance Date, (iii)
the Compensating Interest, (iv) the portion of the Monthly Advance based on the
Class Adjusted Loan Remittance Rates for the Classes of Pool I Notes, in the
case of Pool I, and the Class Adjusted Loan Remittance Rate for the Pool II
Notes, in the case of Pool II, (v) amounts transferred from the Spread Account,
if any, pursuant to Section 7.05(b), (vi) Supplemental Interest Payments, (vii)
Insured Payments, if any, made by the Note Insurer with respect to Pool I and
Pool II, respectively, and (viii) amounts required to be paid by the Servicer
pursuant to Section 7.08(c) in connection with losses on investments of amounts
in the applicable Note Distribution Account (minus (a) the amounts withdrawn
from the applicable Note Distribution Account for Pool I and Pool II, pursuant
to Section 7.01(b)(i), to deposit amounts related to required premiums in the
applicable Insurance Account and (b) amounts subject to withdrawal from the
applicable Note Distribution Account under Section 7.01(a)(v) through (viii),
inclusive).
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 Excess Spread relating to the Loans of
such Pool, 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 and any amounts deposited into the Servicing Account with
respect to the Loans in such Pool pursuant to Section 4.04(g) 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, less
(iii) those amounts withdrawable from the applicable Note Distribution Account
pursuant to Section 7.01(b)(vi). The "Pool Available Remittance Amount" does not
include (i) funds in the applicable Principal and Interest Account and available
to be withdrawn pursuant to Section 4.04(d)(ii), (ii) funds in the applicable
Note Distribution Account and available to be withdrawn pursuant to Section
7.01(b)(vi), (iii) 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.) and (iv) Insured Payments.
POOL AVAILABLE REMITTANCE AMOUNT SHORTFALL: With respect to Pool I or
Pool II and any Remittance Date, the excess, if any, of (i) the Pool Remittance
Amount for such Pool over (ii) the Pool Available Remittance Amount for such
Pool (net of the amount to be withdrawn from the applicable Note Distribution
Account pursuant to Section 7.01(b)(i) and one-twelfth of the Annual Expense
Escrow Amount with respect to such Pool).
POOL CARRY-FORWARD AMOUNT: With respect to Pool I or Pool II and any
Remittance Date, the sum of (i) the amounts, if any, by which (x) the Pool
Remittance Amount for such Pool as of the immediately preceding Remittance Date
exceeded (y) the amount of the actual distribution to the Holders of the Notes
of such Pool (including to the Note Insurer, as provided in Section 7.08),
pursuant to Section 7.08 on the immediately preceding Remittance Date, exclusive
of any Insured Payment to the Holders of the Notes of such Pool made pursuant to
Section 7.08 hereof on such immediately preceding Remittance Date, and (ii)
interest on the amounts, if any, described in clause (i) above, at one-twelfth
of the weighted average Remittance Rates of the Notes of such Pool from such
immediately preceding Remittance Date; provided, however, that only the Note
Insurer shall be entitled to interest on the principal portion of the Pool
Carry-Forward Amount.
POOL CURRENT INTEREST REQUIREMENT: For each Pool, the sum of the Class
Current Interest Requirements of the Notes of such Pool.
POOL MAXIMUM COLLATERAL AMOUNT: For each Pool, the aggregate Principal
Balances as of the Cut-Off Date of all Loans in such Pool.
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 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) 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
(vi) the amount of any Realized Loss related to a
Pool I or Pool II Loan, as the case may be, that became a
Liquidated Loan during the related Due Period.
POOL REMAINING AMOUNT AVAILABLE: With respect to any Pool and as of
any Remittance Date the greater of (x) zero dollars and (y)(i) the Pool
Available Amount for the related Pool minus (ii) the sum of payments made with
respect to the applicable Pool pursuant to Section 7.08(d)(i), (ii) and (iii).
POOL REMITTANCE AMOUNT: As to Pool I or Pool II and any Remittance
Date, the amount required to be distributed on such Remittance Date to the
Holders of the Notes of such Pool, such amount being equal to the sum of (i) the
Pool Current Interest Requirement for the related Pool, (ii) the Pool Principal
Distribution Amount for the related Pool, (iii) the Pool Carry-Forward Amount
for the related Pool and (iv) any amount received by the Indenture Trustee from
the Servicer or the Originator and paid to the Holders of the Notes of the
related Pool that constitutes a Monthly Advance and that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code, as amended from time to time (11
U.S.C.), in accordance with a final, nonappealable order of a court having
competent jurisdiction.
In the event that any amounts referenced in subclause (iv) above
constitute Insured Payments or any portion thereof, payment of such amounts
shall be disbursed to the trustee in bankruptcy named in the final order of the
court exercising jurisdiction and not directly to any Noteholder of the Notes of
such Pool unless such Noteholder has returned principal or interest paid on the
Notes of such Pool to such trustee in bankruptcy, in which case payment shall be
disbursed to such Noteholder.
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 AF-1 or Class AF-2 Note.
POOL I TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee, the Contingency Fee, the Annual Expense Escrow
Amount and the Monthly Premium payable to the Note Insurer 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 AV Note.
POOL II TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee, the Contingency Fee, the Annual Expense Escrow
Amount and the Monthly Premium payable to the Note Insurer allocable to Pool II.
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.
PREMIUM DEPOSIT AMOUNT: As of any Remittance Date, an amount equal to
the Monthly Premium for such Remittance Date.
PRINCIPAL AND INTEREST ACCOUNT: The principal and interest account
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 (or, with
respect to a Low Interest Loan, the product of such principal balance and the
percentage set forth on Exhibit O attached hereto) 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 (but not including the proceeds of any Insured
Payment) 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.
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.
PUD AND DE MINIMIS PUD: A planned unit development in which individual
fee title is held to the interior and exterior of the units and underlying land
and common areas, recreational facilities and streets are held in undivided
common ownership.
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 an interest
rate or rates (or, in the case of a Pool II Loan, a Gross Margin and Index) of
not less than (and not more than two percentage points more than) the Loan
Interest Rate (or, in the case of a Pool II Loan, a Gross Margin and Index) for
the Deleted Loan; (ii) relates or relate to the same type of Residential
Dwelling or Multifamily Property, as the case may be, 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)
with respect to each Deleted Loan that is a first lien mortgage loan, is a first
lien mortgage 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.
RATE AGREEMENT: The interest rate agreement dated September 17, 1998
between Xxxxxxx Xxxxx Derivative Products AG and TMS, which was assigned to the
Trust on the Closing Date, pursuant to which Supplemental Interest Payments are
required to be paid, as amended from time to time by the parties thereto.
RATE AGREEMENT PAYMENT DATE: With respect to any Remittance Date, the
first London Banking Day immediately preceding such Remittance Date.
RATE AGREEMENT PROVIDER: Xxxxxxx Xxxxx Derivative Products AG, and its
permitted successors and assigns.
RATING AGENCIES: S&P and Xxxxx'x.
RATING AGENCY CONDITION: With respect to any action, that each of the
Rating Agencies shall have notified the Servicer, the Note Insurer, the Owner
Trustee and the Indenture Trustee, orally or in writing, that such action will,
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. With
respect to any Loan made to an Obligor who has filed a petition in bankruptcy
under the United States Bankruptcy Code, as amended from time to time (11
U.S.C.), a Realized Loss shall be deemed to have occurred whenever a withdrawal
is made from the Principal and Interest Account in respect of such Loan pursuant
to Section 4.04(c), and shall be equal to the amount of such withdrawal.
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, the Servicer and
the Note Insurer 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 September 28, 1998 and the
Prospectus Supplement dated September 28, 1998.
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, a division of Wheat
First Securities, Inc., and its successors and assigns.
REMARKETING AGENT FEE: The meaning set forth in the Interest Rate
Services Agreement.
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
October 15, 1998; provided, however, that in no event shall the Remittance Date
occur less than three Business Days following the Determination Date.
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 DWELLING: Any one or more of the following, (i) Single
Family Detached House, (ii) Row House, (iii) Two-Family House, (iv) Low-Rise
Condominium, (v) PUD and de minimis PUD, (vi) Three- or Four-Family House, (vii)
High-Rise Condominium, or (viii) 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, an Originator 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.
ROW HOUSE: A single family dwelling unit attached to another dwelling
unit by common walls.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
and any successor thereto.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
SERIES: 1998-C
SERIES 1998-C NOTES: The Money Store Asset Backed Notes, Series
1998-C, Class AF-1, Class AF-2 and Class AV.
SERVICER: The Money Store Inc., a New Jersey corporation, and its
successors and assigns as Servicer hereunder.
SERVICER DEFAULT: An event specified in Section 10.01.
SERVICING ACCOUNT: The Servicing Account established and maintained by
the Servicer in accordance with Section 7.15 hereof. The Servicing Account, and
amounts deposited therein, shall not constitute part of the Trust Account
Property and Certificateholders and Noteholders shall have no interest therein.
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 DELINQUENCY TRIGGER: Will be deemed to have occurred on any
date of determination (i) on or prior to September 30, 2002, if the Total
Expected Losses (as defined below) of the Pool I and Pool II Loans exceed 9.00%
and 13.25% of the aggregate Principal Balances of the Pool I and Pool II Loans,
respectively, as of the Cut-Off Date and (ii) after September 30, 2002, but on
or prior to September 30, 2007, if the Total Expected Losses of the Pool I and
Pool II Loans exceed 13.50% and 19.875%, respectively, of the aggregate
Principal Balances of the Pool I and Pool II Loans, respectively, as of the
Cut-Off Date.
For purposes of the foregoing definition, the "Total Expected Losses"
of the Pool I and Pool II Loans on any date of determination shall equal the sum
of (i) the Cumulative Realized Losses on the Pool I and Pool II Loans from the
Closing Date through and including such date of determination and (ii) the
Delinquency Calculation (as defined below).
For purposes of the foregoing definition, the "Delinquency
Calculation" on any date of determination shall equal the sum of:
(i) the Principal Balance of all Pool I and Pool II
Loans 30-59 days delinquent multiplied by 10.75% and 10.75%,
respectively;
(ii) the Principal Balance of all Pool I and Pool II
Loans 60-89 days delinquent multiplied by 21.50% and 21.50%,
respectively; and
(iii) the Principal Balance of all Pool I and Pool II
Loans 90 days or more delinquent multiplied by 43.00% and 43.00%,
respectively;
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 .25%
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 is payable solely from the interest portion of
related (i) Monthly Payments, (ii) Liquidation Proceeds or (iii) Released
Mortgaged Property Proceeds collected by the Servicer, or as otherwise provided
in Section 4.04. 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.
SINGLE FAMILY DETACHED HOUSE: A single family dwelling unit not
attached in any way to any other unit.
SINGLE FAMILY LOANS: Loans secured by a Mortgaged Property consisting
of one- to-four family units.
SIXTY-DAY DELINQUENCY RATIO: Means, as of any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the outstanding Principal Balances of all Loans that were delinquent 60 days or
more as of the end of the prior Due Period (including Loans in respect of which
the related real estate has been foreclosed upon but is still in inventory), and
the denominator of which is the sum of the Principal Balances of all the Loans
as of the end of the immediately preceding Due Period.
SPECIAL INTEREST: The 1% interest in the Trust held by FUNB pursuant
to the Trust Agreement.
SPECIFIED SPREAD ACCOUNT REQUIREMENT: As to any Pool and as of any
date of determination, the amount calculated as such in accordance with the
Insurance Agreement.
SPREAD ACCOUNT: The Spread Account established in accordance with the
terms of the Spread Account Agreement and pledged to the Indenture Trustee for
distribution in accordance with the provisions of Section 7.05 hereof.
SPREAD ACCOUNT AGREEMENT: The Agreement dated as of August 31, 1998 by
and among the Spread Account Depositor and the Indenture Trustee, as amended
from time to time by the parties thereto.
SPREAD ACCOUNT DEPOSITOR: FUNB.
SPREAD ACCOUNT PORTION: As of any Pool and as of any date of
determination, an amount equal to the product of (i) the amount on deposit in
the Spread Account immediately prior to such date and (ii) a fraction the
numerator of which is the Specified Spread Account Requirement for such Pool and
the denominator of which is the aggregate Specified Spread Account Requirement
for Pool I and Pool II.
SPREAD BALANCE: As of any date of determination, the aggregate amount
then on deposit in the Spread Account, less the aggregate investment earnings on
such amount.
SUBORDINATED AMOUNT: As to any Pool and any date of determination, the
amount calculated as such in accordance with the Insurance Agreement.
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 and the Note Insurer.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.05 or 3.03, the sum of (i) 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 and (ii) the interest portion of any unreimbursed Insured Payments
made by the Note Insurer related to such Loan.
SUPPLEMENTAL INTEREST AMOUNT: As to any Remittance Date, the excess,
if any, of (i) the amount of interest accrued on the Class AF-1 and Class AF-2
Notes for the related Interest Period at the applicable Class Remittance Rates
(without giving effect to the applicable Net Funds Cap) and (ii) the amount of
interest so accrued on such Classes of Notes based upon the applicable Net Funds
Cap without giving effect to Supplemental Interest Payments.
SUPPLEMENTAL INTEREST EXCESS: As to any Remittance Date on which the
Notional Amount for such Remittance Date exceeds the aggregate Class Principal
Balance of the Pool I Notes immediately prior to such Remittance Date, an amount
equal to the excess of (x) the product of (i) the Supplemental Interest Payments
with respect to such Remittance Date and (ii) a fraction, the numerator of which
is the excess of (a) the Notional Amount over (b) the Class Principal Balance of
the Pool I Notes, and the denominator of which is the Notional Amount over (Y)
the portion, if any, of the amount calculated pursuant to (x) above applied to
payment of the Current Interest Requirements or such Remittance Date.
SUPPLEMENTAL INTEREST PAYMENTS: As to any Remittance Date, the amount
owed by the Rate Agreement Provider on such Remittance Date pursuant to the
terms of the Rate Agreement.
TELERATE PAGE 3750: The display page currently so designated on the
Dow Xxxxx 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 One-Year Constant Maturity Treasury
Index as published by the Federal Reserve Board in the applicable Federal
Reserve Board Statistical Release No. H.15.
THREE- OR FOUR-FAMILY HOUSE: Three or four dwelling units under one
roof.
TMS: The Money Store Inc., a New Jersey Corporation.
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), the Rate Agreement, and all proceeds of the foregoing.
TRUST ACCOUNTS: Means the Note Distribution Accounts, the Certificate
Distribution Account, the Expense Accounts, the Insurance Accounts, the
Principal and Interest Accounts and the Rounding Account.
TRUST ADMINISTRATOR: FUNB, or its successor in interest.
TRUST ADMINISTRATOR FEE: As to each Mortgage Loan, the annual fee
payable to the Trust Administrator. Such fee shall be calculated and payable
monthly and shall accrue at the rate of .0085% per annum, in the case of the
Pool I Mortgage Loans, and .0110% per annum, in the case of the Pool II Mortgage
Loans, and shall be computed on the basis of the same principal amount and for
the period respecting which any related interest payment on such Mortgage Loan
is computed.
TRUST ADMINISTRATOR'S CERTIFICATE: The certificate as defined in
Section 7.10.
TRUST AGREEMENT: Trust Agreement dated as of August 31, 1998, among
the Originators and the Owner Trustee, as the same may be amended and
supplemented from time to time.
TWO FAMILY HOUSE: Two dwelling units under one roof.
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, (ii) the applicable Annual Expense Escrow Amount and
(iii) the percentage used in calculating the applicable Monthly Premium.
WEIGHTED AVERAGE FIVE-MONTH SIXTY-DAY DELINQUENCY RATIO: Means, as of
any Remittance Date, the average of the Sixty-Day Delinquency Ratios for such
Remittance Date and for each of the four Remittance Dates immediately preceding
such Remittance Date, weighted by the sum of the Principal Balances of the Loans
as of the ends of the related Due Periods.
WEIGHTED AVERAGE REMITTANCE RATE: Means for each Pool, the average of
the Interest 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 Originators do 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 Originators in and to the Loans and
all other assets included or to be included in the Trust Account Property. The
Representative, on behalf of the Originators, 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 Representative in
and to the Rate Agreement. The Loans have an aggregate Principal Balance as of
the Cut-Off Date of $895,000,031.80.
Section 2.02 POSSESSION OF LOAN FILES.
(a) Upon the issuance of the Series 1998-C Notes, the
ownership of each Mortgage 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, the Certificateholders and the Note Insurer, as the case may be.
(b) Pursuant to Section 2.04, the Originators have 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 Originator's
balance sheets and other financial statements as a contribution of assets by
each Originator. The Originators 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.
Each Originator, (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 Mortgage Note, endorsed "Pay to the order of
holder" or "Pay to the order of __________________" and signed, by facsimile or
manual signature, in the name of the Person delivering the note by a Responsible
Officer, with all prior and intervening endorsements showing a complete chain of
endorsement from the originator to such Person;
(b) 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;
(c)Either: (i) the original Assignment of Mortgage from the
Person delivering such Assignment to "The Bank of New York, as Indenture Trustee
for The Money Store Trust 1998-C" 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) (also provided, however, that the Person delivering
such Assignment shall not be required to record an assignment of a Mortgage if,
except as set forth in the next sentence, an Assignment Event has not occurred);
or (iii) a copy of such Assignment of Mortgage certified as a true copy by a
Responsible Officer of the Originator 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 Originator may
complete one or more blanket certificates attaching copies of one or more
Assignments of Mortgage relating to the Mortgages originated by the related
Originator). Notwithstanding the foregoing, the Custodian or the Representative
shall cause to be recorded each Assignment or Mortgage relating to the Loans
upon the earliest to occur of (a) the Note Insurer delivering a written request
to the Representative and the Custodian to record the Assignments of Mortgage
with respect to such Loans, with such request specifying that the Note Insurer
is making such request because the Note Insurer has determined, in its
reasonable judgment, that such recordation is necessary to protect the Note
Insurer's interest with respect to such Loans because (I) a material adverse
change has occurred with respect to the Representative or (II) the Note Insurer
has been so advised by its counsel as a result of a change that occurred after
the Closing Date in applicable law or the interpretation thereof or (b) with
respect to a particular Loan, the insolvency of the related Obligor;
(d)(i) The original policy of title insurance or, if such
policy has not yet been delivered by the insurer, the commitment or binder to
issue same, or if the original principal balance of the Mortgage Loan was less
than or equal to $15,000 or the Mortgage Loan was not originated by the
Originators, other evidence of the status of title, which shall consist of an
attorney's opinion of title or certificate of title, a preliminary title report,
a property search, a title search, a lot book report, a property information
report or a report entitled "prelim" or "PIRT" (property information report),
and (ii) proof of hazard insurance in the form of a hazard insurance policy or
hazard insurance policy endorsement that names the related Originator, its
successors and assigns, as a mortgagee/loss payee, and, if such endorsement does
not show the amount insured by the related hazard insurance policy, some
evidence of such amount;
(e) With respect to any intervening assignments, if
applicable, either: (i) originals of all intervening assignments, if any,
showing a complete chain of title from the Originator to the Person delivering
such assignment, 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 Originator 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;
(f) Original of all assumption and modification agreements,
if any; and
(g) Except with respect to certain Mortgage Loans with
original principal balances of less than $15,000, the appraisal made in
connection with the origination of the related Mortgage Loan with photographs of
the subject property and of comparable properties (if available), constituting
evidence sufficient to indicate that the Mortgaged Property relates to a
Residential Dwelling (or, with respect to Multifamily Loans, a Multifamily
Property) and identifying the type thereof.
The Originator shall, within five 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
Originator 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 Indenture Trustee in those
instances where copies thereof certified by a Responsible Officer of the
Originator were delivered to the Custodian; (c) any intervening assignments of
Mortgage in those instances where copies thereof certified by a Responsible
Officer of the Originator were delivered to the Custodian; and (d) the title
insurance policy, or, where no such policy is required to be provided, the other
evidence of title and hazard insurance required in clause (d) above.
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 Originator 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 Originator may forward or cause to be forwarded to the Custodian
additional original documents evidencing an assumption or modification of a
Mortgage 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.
The Originators also shall deliver a copy of the stamped UCC financing
statement relating to the Loans and notice of publication regarding the sale of
the Loans by the Originators to the Issuer obtained pursuant to Section
3440.1(h) of the California Civil Code.
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 (with a copy to the Note Insurer) on the Closing
Date with respect to the Mortgage Loans an acknowledgment of receipt of, for
each Mortgage Loan, an Assignment of Mortgage or certified copy thereof, and a
Mortgage 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 the applicable Pool of Mortgage Loans within 60 days after the
Closing Date (or, with respect to any Qualified Substitute Mortgage Loan, within
45 days after the assignment thereof) and, on each such date, to deliver to the
Representative, the Servicer and the Note Insurer, a certification in the form
attached hereto as Exhibit C-1 to the effect that, as to each Mortgage Loan
listed in the applicable Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage 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 Mortgage 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 with respect to clauses (ii), (iii), (v), (vi)
(with respect to the Pool I Loans), (vii), (viii) (which, with respect to the
Pool II Loans, shall only be with respect to the initial Monthly Payment), (ix)
and (xi) (with respect to the Pool II Loans) of the definition of Loan Schedule,
and (iv) each Mortgage 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 Representative and the Note Insurer 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 (other than items listed in Section 2.04(d)(ii)).
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 Note Insurer or 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 Mortgage 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
Note Insurer or the Custodian shall promptly so notify the Servicer, the
Representative, the Custodian and the Note Insurer. In performing any such
review, the Custodian may conclusively rely on the related Originator 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 (other than the items listed in Section 2.04(d)(ii)) appear on their face
to have been executed and received and to relate to the Mortgage Loans
identified in the Loan Schedule, and to verify that each Mortgaged Property
appears from the information contained in the Indenture Trustee's Loan File to
be a Residential Dwelling (or, with respect to the Multifamily Loans, a
Multifamily Property). The Representative agrees to use reasonable efforts to
remedy a material defect in a document constituting part of a 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 Mortgage Loan or the interests of the Note
Insurer, the Representative will (i) substitute in lieu of such Mortgage Loan a
Qualified Substitute Loan in the manner and subject to the conditions set forth
in Section 3.03 or (ii) purchase such Mortgage Loan at a purchase price equal to
the Principal Balance of the Mortgage 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, Contingency Fees, Monthly Advances and Servicing Advances
reimbursable to the Servicer, plus the interest portion of any unreimbursed
Insured Payments made by the Note Insurer related to Mortgage Loan, which
purchase price shall be deposited in the applicable Principal and Interest
Account on the next succeeding Determination Date except for the amount
described above relating to unreimbursed Insured Payments on a Pool I or Pool II
Mortgage Loan, which shall be paid directly by the Representative to the Note
Insurer.
(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, the Servicer or
the Note Insurer, on the Remittance Date in June of each year, commencing 1999,
the Custodian shall deliver to the Representative, the Servicer and the Note
Insurer 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 [Reserved.]
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
and the Contingency 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 5% 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 Note Insurer and the Indenture
Trustee of such occurrence or the Note Insurer shall notify the Representative,
the Servicer and the Indenture Trustee. Thereafter, the Custodian shall (i)
begin transferring all Indenture Trustee's Loan Files in its possession to the
Indenture Trustee (or such other Person acceptable to the Note Insurer) and (ii)
either cause proper assignments of each Pool I and Pool II Mortgage to be
recorded in the relevant real property recording office for each such Mortgage
or to deliver assignments of the Mortgages, in recordable form, to the Indenture
Trustee, together with an opinion of counsel, addressed to and acceptable to the
Note Insurer, to the effect that recordation of such assignments is not
necessary to perfect the interest of the Indenture Trustee in such Mortgages.
The Custodian shall undertake such transfer and recording in a manner that will
result in the completion of the transfer of all such Indenture Trustee's Loan
Files to the Indenture Trustee and the recording of such assignments of mortgage
(or delivery of such opinion of counsel) 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 approved by the Note Insurer 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 Note Insurer and 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,
SERVICER AND ORIGINATORS.
(a) The Representative and the Servicer (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 each Subservicing
Agreement and to perform in accordance herewith and therewith; the
execution, delivery and performance of this Agreement and each
Subservicing Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement and each Subservicing Agreement)
by The Money Store Inc. and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary corporate action; this Agreement and each
Subservicing 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 and each
Subservicing Agreement valid, binding and enforceable upon The Money
Store Inc. in accordance with the respective terms of each, 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
each Subservicing 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 each Subservicing Agreement and
such of the other documents to which it is a party;
(iii) The consummation of the transactions contemplated by
this Agreement and each Subservicing 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 or any Subservicing Agreement
nor any statement, report or other document furnished or to be
furnished pursuant to this Agreement and each Subservicing 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 and each
Subservicing 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 and each Subservicing 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 or under any Subservicing
Agreement;
(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 or the ownership interests
therein represented by the Certificates that has not been set forth in
the Registration Statement;
(x) Each Originator received fair consideration and
reasonably equivalent value in exchange for the contribution of the
Loans;
(xi)No Originator contributed any interest in any Loan with
any intent to hinder, delay or defraud any of its respective
creditors;
(xii) The Originators are solvent and the Originators 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
(xiv)The Servicer's computer and other systems used in
servicing the Mortgage 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.
(b) Each Originator hereby represents and warrants to the Noteholders,
the Certificateholders, the Indenture Trustee and the Owner Trustee as of the
Closing Date:
(i) Such Originator 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 such Originator and perform its
obligations hereunder; such Originator has corporate power and
authority to execute and deliver this Agreement and the Subservicing
Agreement to which it is a party and to perform in accordance herewith
and therewith; the execution, delivery and performance of this
Agreement and the Subservicing Agreement to which it is a party
(including all instruments of transfer to be delivered pursuant to
this Agreement and the Subservicing Agreement to which it is a party)
by such Originator and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary corporate action; this Agreement and the Subservicing
Agreement to which it is a party evidences the valid, binding and
enforceable obligation of such Originator; and all requisite corporate
action has been taken by such Originator to make this Agreement and
the Subservicing Agreement to which it is a party valid, binding and
enforceable upon such Originator 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
such Originator 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 and the Subservicing Agreement to which it is a party
will not result in the breach of any terms or provisions of the
certificate of incorporation or by-laws of such Originator 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 such Originator or its
property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which such Originator or its
property is subject;
(iv) Such Originator 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 such Originator or its
properties or might have consequences that would materially and
adversely affect its performance hereunder or under the Subservicing
Agreement to which it is a party;
(v) Except as set forth on Schedule I, there is no action,
suit, proceeding or investigation pending or, to the best of such
Originator's knowledge, threatened against such Originator 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 such Originator or in
any material impairment of the right or properties or assets of such
Originator to carry on its business substantially as now conducted, or
in any material liability on the part of such Originator or which
would draw into question the validity of this Agreement or the
Subservicing Agreement to which it is a party or the Loans or of any
action taken or to be taken in connection with the obligations of such
Originator contemplated herein, or which would be likely to impair
materially the ability of such Originator to perform under the terms
of this Agreement or the Subservicing Agreement to which it is a
party;
(vi) Neither this Agreement or the Subservicing Agreement to
which it is a party nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or the
Subservicing Agreement to which it is a party 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;
(vii) The statements contained in the Registration Statement
which describe such Originator or matters or activities for which such
Originator 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 such
Originator 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 such Originator or the Loans and does
not omit to state a material fact necessary to make the statements
contained therein with respect to such Originator or the Loans not
misleading. Such Originator 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 such Originator
or the Loans and known to such Originator that materially and
adversely affects or in the future may (so far as such Originator can
now reasonably foresee) materially and adversely affect such
Originator or the Loans or the ownership interests therein represented
by the Certificates that has not been set forth in the Registration
Statement;
(viii) 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);
(ix) 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 such Originator 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 such
Originator 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 Subservicing
Agreement to which it is a party and the other documents on the part
of such Originator and the performance by such Originator of its
obligations under this Agreement and the Subservicing Agreement to
which it is a party and such of the other documents to which it is a
party;
(x) The transfer, assignment and conveyance of the Notes and
the Mortgages by the Originators pursuant to this Agreement are not
or, with respect to the Subsequent Loans, will not be, subject to the
bulk transfer laws or any similar statutory provisions in effect in
any applicable jurisdiction;
(xi) The origination and collection practices used by each
Originator and the primary servicer with respect to each Mortgage Note
and Mortgage relating to the Loans have been in all material respects
legal, proper, prudent and customary in the second mortgage
origination and servicing business;
(xii) Each Loan was selected from among the existing loans
in the respective Originator's portfolio at the date hereof in a
manner not designed to adversely affect the Noteholders and the
Certificateholders;
(xiii) Such Originator 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 and the Subservicing Agreement to
which it is a party;
(xiv) Such Originator received fair consideration and
reasonably equivalent value in exchange for the contribution of the
Loans;
(xv) Such Originator did not contribute any interest in any
Loan with any intent to hinder, delay or defraud any of its respective
creditors;
(xvi) Such Originator is solvent, and such Originator 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;
(xvii) No Noteholder or Certificateholder is subject to
state licensing requirements solely by virtue of holding the Notes or
the Certificates; and
(xviii)The Subservicing Agreement to which the Originator is
a party conforms to the requirements for a Subservicing Agreement
contained in this Agreement.
Section 3.02 INDIVIDUAL LOANS.
Each Originator hereby represents and warrants to the Issuer, with
respect to each Loan, as of the Closing Date:
(a) The information with respect to each Loan set forth in
the Loan Schedule 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 to the Custodian on the Closing Date or as otherwise provided
in Section 2.04;
(c) [Reserved];
(d) Each Mortgaged Property (other than the Multifamily
Properties) is improved by a Residential Dwelling, which, to the best of the
Originator's knowledge, does not include cooperatives or mobile homes not
attached to a foundation and does not constitute other than real property under
state law;
(e) Each Loan has been originated and underwritten, or
purchased and re-underwritten, by an Originator in accordance with the
Representative's underwriting criteria set forth in the Registration Statement
and each Loan is being serviced by the Servicer or one or more Subservicers and,
with respect to each Loan originated by an Originator, there is only one
originally executed Mortgage Note not stamped as a duplicate copy with respect
to each such Loan;
(f) The Mortgage Note with respect to each Pool I Loan bears
a fixed Loan Interest Rate and the Mortgage Note with respect to each Pool II
Loan bears an adjustable Loan Interest Rate;
(g) (i) Except with respect to 2.66% of the Pool I Loans,
each Mortgage Note relating to the Pool I Loans will provide for a schedule of
substantially level and equal Monthly Payments which are, if timely paid,
sufficient to fully amortize the principal balance of such Mortgage Note on or
before its maturity date and (ii) each Mortgage Note relating to the Pool II
Loans will provide for a schedule of Monthly Payments which are, if timely paid
as adjusted, sufficient to fully amortize the principal balance of such Mortgage
Note on or before its maturity date;
(h) Each Mortgage is, with respect to the Loans, a valid and
subsisting lien of record on the Mortgaged Property (with 80.08% and 100.00% of
the Pool I and Pool II Loans, respectively (measured by Principal Balances as of
the Cut-Off Date) being secured by first liens) subject, in the case of any
second or more junior Mortgage Loan, only to any applicable Prior Liens on such
Mortgaged Property and subject in all cases to the exceptions to title set forth
in the title insurance policy or the other evidence of title enumerated in
Section 2.04(d), with respect to the related Loan, which exceptions are
generally acceptable to banking institutions in connection with their regular
mortgage 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;
(i) Immediately prior to the transfer and assignment herein
contemplated, the Originator held good and indefeasible title to, and was the
sole owner of, each Loan conveyed by the Originator subject to no liens,
charges, mortgages, encumbrances or rights of others except as set forth in
Section 3.02(h) 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(h) or other liens which
will be released simultaneously with such transfer and assignment;
(j) As of the Cut-Off Date, no Loan is 60 days or more
delinquent in payment and, except as provided in the next sentence, no Loan has
been delinquent more than 60 days or more as measured at the end of any month
during the 12 months immediately preceding the Cut-Off Date. Approximately 3.04%
of the Pool I Loans and 5.12% of the Pool II Loans were 60 days or more
delinquent as measured at the end of any month during the 12 months immediately
preceding the Cut-Off Date;
(k) To the best of the Originator'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;
(l) The Loan is 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 Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
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;
(m) There is no mechanics' lien or claim for work, labor or
material affecting any Mortgaged Property which is or may be a lien prior to, or
equal with, the lien of such Mortgage except those which are insured against by
the title insurance policy referred to in Section 3.02(o) below;
(n) Each Loan at the time it was made complied in all
material respects with applicable state and federal laws and regulations,
including, without limitation, usury, equal credit opportunity, disclosure and
recording laws;
(o) With respect to each Mortgage Loan with an original
principal balance greater than $15,000 other than any Mortgage Loan which was
not originated by an Originator, a lender's title insurance policy, issued in
standard American Land Title Association, California Land Title Association, New
York Board of Title Underwriters form, or other form acceptable in a particular
jurisdiction, by a title insurance company authorized to transact business in
the state in which the related Mortgaged Property is situated, together with a
condominium endorsement, if applicable, in an amount at least equal to the
original principal balance of such Mortgage Loan insuring the mortgagee's
interest under the related Mortgage Loan as the holder of a valid first or
second lien of record on the real property described in the Mortgage, subject
only to exceptions of the character referred to in Section 3.02(h) above, or,
with respect to any Mortgage Loan with an original principal balance less than
or equal to $15,000 or any Mortgage Loan which was not originated by an
Originator, some other evidence of the status of title, or other evidence of
title as enumerated in Section 2.04(d), was effective on the date of the
origination of such Mortgage Loan, and, as of the Closing Date, such policy will
be valid and thereafter such policy shall continue in full force and effect;
(p) 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 Sections 4.07 and 4.08;
(q) If the 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 Sections 4.07 and 4.08;
(r) Each Mortgage and Mortgage Note 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
Mortgage, and all parties to each Loan had full legal capacity to execute all
Loan documents and convey the estate therein purported to be conveyed;
(s) The Servicer, at the direction of the related
Originator, has caused and will cause to be performed any and all acts required
to be performed to preserve the rights and remedies of the Indenture Trustee in
any insurance policies applicable to the Loans including, without limitation,
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 Indenture Trustee;
(t) No more than 0.02% and 0.06% of the Principal Balances
of the Pool I and Pool II Loans, respectively, are secured by Mortgaged
Properties located within any single zip code area;
(u) 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 Originator (or, subject to Section 2.04 hereof, are
in the process of being recorded);
(v) Each Loan conforms, and all such Loans in the aggregate
conform, to the description thereof set forth in the Registration Statement;
(w) The Loans were originated or were purchased and re-
underwritten, by the Originators in accordance with the Representative's
underwriting criteria set forth in the Registration Statement;
(x) All of the Loans are Mortgage Loans;
(y) All of the Pool I and Pool II Loans are Single-Family
Loans. None of the Pool I and Pool II Loans are secured by a mobile home or a
co-op;
(z) With respect to each Multifamily Loan, no less than
approximately 90% of the related Mortgaged Property, measured by square footage,
number of units and projected rent, is allocated to residential units;
(aa) The terms of the Mortgage Note and the Mortgage 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
Certificateholders and Noteholders and which has been delivered to the
Custodian. The substance of any such alteration or modification is reflected on
the Loan Schedule and has been approved by the primary mortgage guaranty
insurer, if any;
(bb) No instrument of release or waiver has been executed in
connection with the Loan, and no Obligor has been released, in whole or in part,
except in connection with an assumption agreement which has been approved by the
primary mortgage guaranty insurer, if any, and which has been delivered to the
Custodian;
(cc) There are no defaults in complying with the terms of
the 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. The Servicer
has not advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Obligor, directly or indirectly, for the
payment of any amount required by the Mortgage, except for interest accruing
from the date of the Mortgage Note or date of disbursement of the Loan proceeds,
whichever is greater, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(dd) There is no proceeding pending or threatened for the
total or partial condemnation of the 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
Mortgage Loan or the use for which the premises were intended;
(ee) All of the improvements which were included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged Property unless
any such improvements are (except with respect to those Mortgage Loans with
original principal balances which were less than $15,000 or not originated by a
Originator) stated in the title insurance policy and affirmatively insured;
(ff) To the best of the Originator's knowledge there do not
exist any circumstances or conditions with respect to the Mortgage, the
Mortgaged Property, the Obligor or the Obligor's credit standing that can be
reasonably expected to cause private institutional investors to regard the Loan
as an unacceptable investment, cause the Loan to become delinquent or adversely
affect the value or marketability of the Loan;
(gg) No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
(hh) The proceeds of the Loan have been fully disbursed, and
there is no obligation on the part of the mortgagee to make future advances
thereunder. Any and all requirements as to completion of any on-site or off-site
improvements and 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;
(ii) The related Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except the lien of
the corresponding Mortgage;
(jj) No Loan was originated under a buydown plan;
(kk) There is no obligation on the part of the Originator or
any other party to make payments in addition to those made by the Obligor;
(ll) No statement, report or other document signed by the
Originator constituting a part of the Loan File contains any untrue statement of
fact or omits to state a fact necessary to make the statements contained therein
not misleading;
(mm) The origination and collection practices used by the
Originator with respect to the Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage lending and
servicing business;
(nn) 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 Noteholders or the
Certificateholders to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Obligor;
(oo) 1No Loan has a shared appreciation feature, or other
contingent interest feature;
(pp) With respect to each Mortgage Loan that is not a first
mortgage loan, the related Prior Lien requires equal monthly payments, or if it
bears an adjustable interest rate, the monthly payments for the related Prior
Lien may be adjusted no more frequently than monthly; at the time of origination
of the Mortgage Loan, the related Prior Lien was not 30 or more days delinquent;
(qq) With respect to each Mortgage Loan that is not a first
mortgage loan, either (i) no consent for the Mortgage Loan is required by the
holder of the related Prior Lien or (ii) such consent has been obtained and is
contained in the Loan File;
(rr) With respect to each Mortgage Loan that is not a first
mortgage loan, to the best of the Originator's knowledge, the related Prior Lien
does not provide for negative amortization;
(ss) With respect to each Mortgage Loan that is not a first
mortgage loan, the maturity date of the Mortgage Loan is prior to the maturity
date of the related Prior Lien if such Prior Lien provides for a balloon
payment;
(tt) The Mortgaged Property is located in the state
identified in the loan Schedule and consists of a single parcel of real property
with a Residential Dwelling erected thereon (or, with respect to any Multifamily
Loans, a Multifamily Property erected thereon);
(uu) 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
the 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;
(vv) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Loan in the
event the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(ww) Any future advances made prior to the Cut-Off Date have
been consolidated with the outstanding principal amount secured by the Mortgage,
if any, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Loan Schedule. The
consolidated principal amount does not exceed the original principal amount of
the Loan. The Mortgage Note does not permit or obligate the Servicer to make
future advances to the Obligor at the option of the Obligor;
(xx) 1The 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 Obligor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(yy) There is no default, breach, violation or event of
acceleration existing under any Mortgage or Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration;
and neither the Servicer nor the Originator has waived any default, breach,
violation or event of acceleration;
(zz) All parties to the Mortgage Note and the Mortgage, if
any, had legal capacity to execute the Mortgage Note and the Mortgage, if any,
and each Mortgage Note and Mortgage, if any, have been duly and properly
executed by such parties;
(aaa) The Loan was not selected for inclusion under this
Agreement from its portfolio of comparable loans on any basis which would have a
material adverse effect on a Certificateholder or Noteholder;
(bbb) All amounts received after the Cut-Off Date with
respect to the Loans have been deposited into the applicable Principal and
Interest Account and are, as of the Closing Date, in the Principal and Interest
Account;
(ccc) With respect to each Mortgage Loan originated by an
Originator with an original principal balance in excess of $15,000 for which the
Originator conducted a drive-by appraisal pursuant to FHLMC Form 704 or
alternative FNMA Form in connection with the origination thereof, such deposited
Mortgage Loan (i) had an original principal balance not in excess of $35,000,
and (ii) has a Loan-to-Value Ratio less than 50% and/or an appraisal on
FNMA/FHLMC Form 1004 was performed by the related Originator within one year
prior to the origination of such Mortgage Loan; and
(ddd) At the applicable dates of origination of the Mortgage
Loans, none of the Pool I or Pool II Loans had a Loan-to-Value Ratio which
exceeded 100% and 100%, respectively;
(eee) No more than approximately 21.65% of the Pool I Loans
and 26.92% of the Pool II Loans, respectively (measured by outstanding principal
balance as of the Cut-Off Date), had a Debt-to-Income Ratio exceeding 44.0%.
"Debt-to-Income Ratio" is that ratio, stated as a percentage, which results from
dividing an Obligor's monthly debt by his gross monthly income. "Monthly debt"
includes (i) the monthly payment under the Prior Liens (which generally includes
an escrow for real estate taxes), (ii) the related Mortgage Loan Monthly Payment
(which, with respect to the Pool II Loans, is calculated with interest based on
a rate equal to the Lifetime Cap), (iii) other installment debt service
payments, including, in respect of revolving credit debt, the required monthly
payment thereon, or, if no such payment is specified, 5.0% of the balance as of
the date of calculation. "Monthly debt" does not include any of the debt (other
than revolving credit debt) described above that matures within less than 10
months from the date of the calculation. No more than approximately 5% of the
Pool I Mortgage Loans were originated without verifying the Obligor's income;
(fff) At the applicable dates of origination, each Pool I
and Pool II Loan had an original term to maturity of no greater than 40 and 30
years, respectively;
(ggg) Each Mortgage Loan has a first Due Date no later than
November 15, 1998 in the case of the Pool I Loans and December 1, 1998 in the
case of the Pool II Loans.
(hhh) [Reserved];
(iii) As of the Cut-off Date, for each Pool II Loan, the
related Mortgage Note does not provide for negative amortization, limits in the
amount of monthly payments or a conversion feature, the Loan Interest Rate is
subject to adjustment on each Change Date to equal the sum of the LIBOR Index,
or Treasury Index, as the case may be, plus the applicable Gross Margin, subject
to rounding, the Periodic Rate Cap, the applicable Lifetime Floor and the
applicable Lifetime Cap on each Change Date, the Obligor's new monthly payment
will be adjusted to an amount equal to the payment which, when paid in
substantially equal installments during the then remaining term of the Pool II
Loan, would amortize fully the unpaid principal balance of such Initial Pool II
Loan, at the then applicable Loan Interest Rate without extension of the
original maturity date which maturity date is not more than 360 months after the
original Due Date therefor; and
(jjj) With respect to each Pool II Loan, all of the terms of
the Mortgage and Mortgage Note pertaining to interest rate adjustments, payment
adjustments and adjustments of the outstanding principal balance are
enforceable, such adjustments will not affect the priority of the Mortgage lien,
and all of the interest rate calculations have been properly calculated,
recorded, reported and applied in accordance with the Mortgage and Mortgage
Note.
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, the Note
Insurer 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 or the Note Insurer 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
Originators' 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 Account
Property (in which case it shall become a Deleted Loan) and substitute one or
more Qualified Substitute Loans, provided such substitution is effected not
later than the date which is two years after the Closing Date or at such later
date, if the Indenture Trustee, the Note Insurer and the Owner Trustee receive
an Opinion of Counsel that such substitution would not result in a material
adverse tax event to the Noteholders or the Certificateholders.
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.
The Servicer shall deposit in the applicable 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 related Originator. 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 Originators 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, the Custodian and the Note
Insurer 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 Originator 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, the Note Insurer 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 any
Originator's representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Representative or any
Originator 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, the Note Insurer 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 Note
Insurer and the Owner Trustee respecting a breach of the foregoing
representations and warranties.
Any cause of action against any Originator, 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.
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 DUTIES OF THE SERVICER.
(a) With respect to any Mortgage 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 The Bank of New York, as Indenture
Trustee under the Indenture dated as of August 31, 1998, Series 1998-C" and (ii)
complete a restrictive endorsement that reads "The Bank of New York is the
holder of the mortgage note for the benefit of the Noteholders and the
Certificateholders under the Indenture dated as of August 31, 1998, Series
1998-C" with respect to those Mortgage 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 (i) been
designated an approved Servicer by FHLMC or FNMA for first and second mortgage
loans and (ii) has a net worth of at least $5,000,000 or (y) is an Originator or
another affiliate of the Servicer. The Servicer shall notify the Note Insurer 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, the Note Insurer 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 in
its capacity as such and not as an originator 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 the Obligor is in default with respect to the Loan, or such default is,
in the judgment of the Servicer, imminent and the Servicer obtains the written
consent of the Note Insurer) 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 Mortgage Loan. Without limiting the generality of the foregoing, and
subject to the consent of the Note Insurer, 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
the Mortgaged Properties. 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', Note Insurer's
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, such
tax shall be charged against amounts otherwise distributable to the Holders of
the Certificates.
(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, the Note Insurer 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,
as the case may be, of Mortgaged Properties relating to defaulted Mortgage 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 and
it determines that it would not be commercially reasonable to foreclose on such
Mortgaged Property. 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, the Note Insurer 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.
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 Asset
Backed Certificates and Asset Backed Notes, Series 1998-C, 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 A-1 by S&P and
P-1 by Xxxxx'x, 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 and the Note Insurer 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 without the benefit of the Note Insurance
Policies, 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, the Note Insurer 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;
(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 credit life insurance premium
refund which is not due to the related Obligor.
Also, for each Loan delivered on the Closing Date that was
originated on or after September 1, 1998, 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 and the
Contingency 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 Mortgage 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, unpaid Contingency 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, unpaid Contingency 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; PROVIDED, HOWEVER, that the Servicer's right to such reimbursement
pursuant hereto shall be subordinate to the rights of the Noteholders, the Note
Insurer 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) to withdraw amounts required to be deposited into the
Servicing Account pursuant to Section 7.15(b); 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 Inc.
in trust for the registered holders of The Money Store Asset Backed Notes and
Certificates, Series 1998-C." 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.
Section 4.06 TRANSFER OF ACCOUNTS.
The Servicer may, upon written prior notice to the Indenture Trustee
and the Note Insurer, transfer the Principal and Interest Account to a different
Designated Depository Institution.
Section 4.07 MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall cause to be maintained, subject to the provisions
of Section 4.08 hereof, fire and hazard insurance with extended coverage
customary in the area where the related Mortgaged Property is located, in an
amount which is at least equal to the least of (a) the outstanding principal
balance owing on the Mortgage Loan and any Prior Lien, (b) the full insurable
value of the premises securing the Mortgage Loan and (c) the minimum amount
required to compensate for damage or loss on a replacement cost basis. If the
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) the Servicer will cause to be purchased a
flood insurance policy with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan and any Prior Lien, (ii) the full
insurable value of the Mortgaged Property, or (iii) 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, on
REO Property, fire and hazard insurance in the amounts described above,
liability insurance and, to the extent required and available under the National
Flood Insurance Act of 1968, as amended, flood insurance in an amount equal to
that required above. 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
customary servicing procedures) shall be deposited in the Principal and Interest
Account, subject to withdrawal pursuant to Section 4.04. 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.
Section 4.08 MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE POLICY.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against fire and hazards of extended coverage on all of the
Mortgage Loans, then, to the extent such policy names the Indenture Trustee on
behalf of the Noteholders and the Certificateholders as loss payee and provides
coverage in an amount equal to the aggregate unpaid principal balance on the
Mortgage Loans without co-insurance, and otherwise complies with the
requirements of Section 4.07, the Servicer shall be deemed conclusively to have
satisfied its obligations with respect to fire and hazard insurance coverage
under Section 4.07, it being understood and agreed that such blanket policy may
contain a deductible clause, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with Section 4.07, and there shall have been a loss which would have
been covered by such policy, deposit in the applicable Principal and Interest
Account from the Servicer's own funds the difference, if any, between the amount
that would have been payable under a policy complying with Section 4.07 and the
amount paid under such blanket policy. Upon the request of the Owner Trustee,
the Note Insurer or the Indenture Trustee, the Servicer shall cause to be
delivered to the Owner Trustee, the Note Insurer or the Indenture Trustee, as
the case may be, a certified true copy of such policy. The current issuer of
such policy is Lloyds of London.
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, the Note Insurer or the
Indenture Trustee, the Servicer shall cause to be delivered to the Owner
Trustee, the Note Insurer 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, the Note Insurer 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, the Note Insurer 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, unpaid Contingency 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 two
years after its acquisition unless the Servicer shall have received an Opinion
of Counsel to the effect that the holding of such Mortgaged Property subsequent
to two years after its acquisition will not result in the imposition of taxes on
the Issuer.
Section 4.11 [Reserved]
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 Mortgage Note for a period (with
respect to each payment as to which the due date is extended) not greater than
125 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 Mortgage 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, the Note Insurer 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. 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.
Section 4.15 [Reserved]
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 Mortgage 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 Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Obligor remains liable thereon. The Servicer is also
authorized, with the consent of the Note Insurer, 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 Mortgage Note. The Servicer shall notify the Indenture Trustee
and the Note Insurer that any such substitution or assumption agreement has been
completed by forwarding to the Custodian the original of such substitution or
assumption agreement, and a duplicate thereof to the Note Insurer, 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 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 Home Improvement
Loan have been deposited in the applicable Principal and Interest Account or the
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 Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage 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 AND CONTINGENCY FEE.
(a) 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.
(b) The Servicer shall be entitled to withdraw from the Principal and
Interest Account or to retain from interest payments on the Loans the
Contingency Fee. In the event that The Money Store Inc. is terminated as
Servicer pursuant to this Agreement, any duly appointed successor to the
Servicer shall also be entitled to withdraw from the Principal and Interest
Account or to retain from interest payments on the Loans the successor
Servicer's Contingency Fee.
Section 5.04 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver to the Owner Trustee, the Indenture Trustee,
the Note Insurer and each of the Rating Agencies, on or before May 31 of each
year beginning May 31, 1999, 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 and the ,
as applicable, to cure such default.
Section 5.05 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before May 31 of each year beginning May 31, 1999, the Servicer,
at its expense, shall cause a firm of independent public accountants reasonably
acceptable to the Indenture Trustee and the Note Insurer to furnish a letter or
letters to the Owner Trustee, the Indenture Trustee, the Note Insurer 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, NOTE INSURER'S AND OWNER TRUSTEE'S
RIGHT TO EXAMINE SERVICER RECORDS AND AUDIT OPERATIONS.
The Indenture Trustee, the Note Insurer 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. The Note Insurer shall have the right upon reasonable prior notice,
during normal business hours and as often as reasonably required to perform
ongoing diligence of the Servicer's operations through loans reviews,
reappraisals or other reasonable review of Servicer operations. No amounts
payable in respect of the foregoing shall be paid for the Trust.
Section 5.07 REPORTS TO THE INDENTURE TRUSTEE AND THE NOTE INSURER;
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. The Servicer shall also forward a copy of such report containing such
information for Pool I and Pool II to the Note Insurer. In addition, the
Servicer shall deliver to the Note Insurer on a quarterly basis, beginning in
December 1998, a computer diskette containing a quarterly summary of the
information provided in the statement forwarded to the Note Insurer pursuant to
the previous sentence, and also containing information similar to the
information provided in the Loan Schedule.
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 "TMS Note Distribution
Account 1998-C-I" and "TMS Note Distribution Account 1998-C-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 the amount of Monthly Advances and
Compensating Interest deposited pursuant to subclause (ii)
below) plus the Excess Spread with respect to the Mortgage
Loans of the related Pool remitted to the Indenture Trustee by
the Servicer;
(ii) the Compensating Interest and the portion of the
Monthly Advance based on the Class Adjusted Loan Remittance
Rates for the Classes of Pool I Notes, in the case of Pool I
and the Class Adjusted Loan Remittance Rates for the Pool II
Notes, in the case of Pool II, remitted to the Indenture
Trustee by the Servicer;
(iii) amounts transferred from the Spread Account
pursuant to Section 7.05(b)(ii), Supplemental Interest
Payments received by the Indenture Trustee and Insured
Payments received by the Indenture Trustee after a claim
pursuant to Section 7.08(c);
(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 following parties in the following
order of priority:
(i) by the Indenture Trustee, to make deposits
in the applicable Insurance Account pursuant to
Section 7.04(a)(i);
(ii) [Reserved];
(iii)[Reserved];
(iv) by the applicable 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:
(v) by the Indenture Trustee, to invest amounts on
deposit in the applicable Note Distribution Account in
Permitted Instruments pursuant to Section
7.07;
(vi) 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;
(vii) 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
(viii) 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 "TMS Rounding Account 1998-C" (the "Rounding
Account"). The Indenture Trustee shall deposit into the Rounding Account:
(i) on the Closing Date, from FUNB an amount
equal to $2,000;
(ii) on each Remittance Date, amounts received from
the applicable Note Distribution Account 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 applicable Note Distribution
Account 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 Certificateholders any amounts remaining
in the Rounding Account upon the termination of this Agreement
in accordance with Section 11.01 hereof.
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 "TMS Expense Account 1998-C-I" and "TMS
Expense Account 1998-C-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 the Pool I or Pool II Mortgage
Loans, 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 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 or Trust
Administrator, 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 or the Trust
Administrator, 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 and the
Trust Administrator 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 ESTABLISHMENT OF INSURANCE ACCOUNTS; DEPOSITS IN
INSURANCE ACCOUNTS; PERMITTED WITHDRAWALS FROM INSURANCE ACCOUNTS.
(a) No later than the Closing Date, the Indenture Trustee will
establish with itself in its trust department two separate trust accounts for
the benefit of the Note Insurer, titled "TMS MBIA Insurance Account 1998-C-I"
and "TMS MBIA Insurance Account 1998-C-II" (each an "Insurance Account, and
together, the "Insurance Accounts"). The Indenture Trustee shall deposit into
the applicable Insurance Account:
(i) on each Remittance Date, prior to making the
remittances required pursuant to Section 7.08(d), from the
applicable Note Distribution Account an amount equal to the
Premium Deposit Amount relating to the Pool I or Pool II
Notes, as the case may be; 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 Insurance Account.
If at any time that a Monthly Premium is due, the aggregate amount then on
deposit in the Insurance Accounts is insufficient to pay in full the Monthly
Premium then due with respect to the Pool I and Pool II Notes pursuant to the
terms of the Insurance Agreement, the Servicer shall notify the Note Insurer to
that effect and the Note Insurer 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 Insurance Accounts, pro rata
in accordance with the amounts then on deposit in each such Insurance Account.
Thereafter, the Servicer shall be entitled to reimbursement from the applicable
Insurance Account for the amount of any such advance from moneys on deposit
therein not related to the Premium Deposit Amount necessary to make timely
payment of the next Monthly Premium.
(b) The Indenture Trustee shall invest amounts on deposit in each
Insurance Account in Permitted Instruments pursuant to Section 7.07, and the
Indenture Trustee shall withdraw amounts on deposit in the applicable Insurance
Account to:
(i) remit on a monthly basis sufficient funds to the
Insurance Paying Agent to pay the Note Insurer the Monthly
Premium with respect to the Pool I or Pool II Notes, as the
case may be, on each Remittance Date commencing in October
1998 as required by the Insurance Agreement;
(ii) pay on a monthly basis to the Servicer as
additional servicing compensation interest paid and earnings
realized on Permitted Instruments;
(iii) withdraw amounts not required to be deposited
in the applicable Insurance Account or deposited therein in
error; and
(iv) reimburse the Servicer for advances made by it
pursuant to the last paragraph of subclause (a) above to the
extent such funds are not needed to pay the Monthly Premium.
If sufficient funds are available in the Insurance Account to timely
pay the Monthly Premium, the Indenture Trustee has received from the Servicer
any information necessary to determine the amount of the Monthly Premium and the
Indenture Trustee and the Insurance Paying Agent (if the Insurance Paying Agent
and the Indenture Trustee are the same party) fail to timely remit the Monthly
Premium to the Note Insurer from funds on deposit in the Insurance Account in
accordance with subsections (a) and (b) above, the Indenture Trustee shall,
contemporaneous with the payment of the Monthly Premium, pay to the Note Insurer
from its own funds, for which reimbursement shall not be available, interest on
the Monthly Premium at the Prime Rate published in the most recent Wall Street
Journal plus 3.0% for each day that the Monthly Premium is not paid to the Note
Insurer.
Section 7.05 ESTABLISHMENT OF SPREAD ACCOUNT; DEPOSITS IN SPREAD
ACCOUNT; PERMITTED WITHDRAWALS FROM SPREAD ACCOUNT.
(a) No later than the Closing Date, FUNB, as initial holder of the
Certificates, shall establish, in accordance with the terms of the Spread
Account Agreement, an account titled "The Bank of New York--TMS Spread Account
1998-C" (the "Spread Account"). The Spread Account shall not constitute part of
the Trust but is being pledged to the Indenture Trustee for the benefit of the
Noteholders and the Note Insurer. The Spread Account shall be the property of
FUNB, as Spread Account Depositor, subject to the terms hereof and of the Spread
Account Agreement. The Spread Account shall be a deposit account maintained with
FUNB for so long as (i)(A) the Servicer remains an affiliate of FUNB, (B) no
Servicer Default shall have occurred and be continuing, (C) FUNB maintains a
short-term debt rating of at least A-1 by S&P and P-1 by Xxxxx'x, and for five
Business Days following any reduction, suspension, termination or withdrawal in
either such rating, (D) FUNB maintains a long-term debt rating of at least A by
S&P and A2 by Xxxxx'x, and for five Business Days following any reduction,
suspension, termination or withdrawal in either such rating, (E) there has been
no (X) material adverse change in the financial condition of FUNB or (Y) event
which, in the reasonable judgment of the Note Insurer, could result in a
material adverse change in the financial condition of FUNB and (F) no change in
facts or circumstances exist which, in the reasonable judgment of the Note
Insurer, could result in the Indenture Trustee not being entitled to the
benefits of the Spread Account, 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 Note Insurer 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 without the
benefit of the Note Insurance Policies. If the foregoing conditions are no
longer satisfied, the Indenture Trustee shall withdraw all funds on deposit in
or credited to the Spread Account, including investments therein, and transfer
all such funds to a Designated Depository Institution as instructed in writing
by the Note Insurer. The Indenture Trustee shall, promptly upon receipt, deposit
in the Spread Account, amounts received pursuant to Section 7.14(b)(i).
(b) Amounts on deposit in the Spread Account shall be invested
pursuant to Section 7.07, and the Indenture Trustee shall or, so long as the
Spread Account is maintained with FUNB, FUNB shall withdraw amounts on deposit
in the Spread Account to:
(i) [Reserved];
(ii) deposit in the applicable Note Distribution
Account on any Remittance Date an amount equal to the amount
of any Insured Payment otherwise required with respect to such
Remittance Date;
(iii) on any Remittance Date for which the Spread
Balance exceeds the Specified Spread Account Requirement for
such Remittance Date, after giving effect to clause (ii)
above, distribute the excess, if any, to the Owner Trustee (or
the Paying Agent under the Trust Agreement on its behalf) for
deposit in the Certificate Distribution Account.
(iv) distribute to the Owner Trustee (or the Paying
Agent under the Trust Agreement on its behalf) for
distribution to the Certificateholders' such amounts then
remaining on deposit in the Spread Account as the Note Insurer
may consent to in writing;
(v) withdraw any amounts not required to be deposited
in the Spread Account or deposited therein in error; and
(vi) distribute to the Owner Trustee (or the Paying
Agent under the Trust Agreement on its behalf) for
distribution to the Certificateholders any amounts remaining
in the Spread Account upon the termination of this Agreement
in accordance with Section 11.01 hereof.
Section 7.06 [Reserved]
Section 7.07 INVESTMENT OF ACCOUNTS.
(a) So long as no default or Servicer of 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. So
long as the Spread Account is maintained at FUNB, amounts on such Account may be
invested, at the option of FUNB, in Permitted Instruments or other investments
not satisfying the definition of Permitted Instruments. 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
Insurance Accounts, Expense Accounts, Rounding Account or Spread 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. So long as the Spread Account is maintained at FUNB, FUNB shall
remit to the Spread Account, from its own funds, the amount of any loss
resulting from investments, without reimbursement therefor, by the next
Determination Date following such loss.
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) As soon as possible, and in no event later than 10:00 a.m. New
York time on the Business Day immediately preceding each Remittance Date, the
Indenture Trustee shall furnish the Note Insurer and the Servicer with a
completed notice in the form set forth as Exhibit H or Exhibit I (the "Notice")
hereto, as the case may be, which will be based upon the information set forth
in the Trust Administrator's Certificate, in the event that an Event of
Nonpayment will occur with respect to such Remittance Date. The Notice shall
specify the total amount of the Insured Payment to be paid on the applicable
Remittance Date, stated separately for each Class of Pool I or Pool II Notes, as
applicable, and shall constitute a claim for an Insured Payment pursuant to the
applicable Note Insurance Policy. The Note Insurer shall remit or cause to be
remitted to the Insurance Paying Agent the amount of the Insured Payment. Upon
receipt of such Insured Payment by the Insurance Paying Agent on behalf of the
Holders of the respective Class of Pool I or Pool II Notes under the applicable
Note Insurance Policy, it shall remit such amounts to the Indenture Trustee who
shall deposit such Insured Payment in the applicable Note Distribution Account
and shall distribute such Insured Payment in accordance with Sections 7.08(d)
and (e) hereof.
Notwithstanding the foregoing, if an Event of Nonpayment with respect
to Pool I or Pool II will occur with respect to a Remittance Date and funds are
on deposit in the Spread Account, the amount of the Insured Payment shall be
reduced up to the amount then on deposit in the Spread Account. Pursuant to
Section 7.05(b)(ii), the Indenture Trustee shall, on such Remittance Date,
transfer such amount to the applicable Note Distribution Account from the Spread
Account.
The Indenture Trustee shall serve as Insurance Paying Agent hereunder
for so long as a Note Insurance Policy shall remain in effect; PROVIDED,
HOWEVER, that the Insurance Paying Agent may be located in another jurisdiction
with the written consent of the Note Insurer. The Insurance Paying Agent shall
act as the agent of the Indenture Trustee and shall (i) pay amounts required by
Section 7.04(b)(i) hereof to the Note Insurer, (ii) pay Insured Payments
received from the Note Insurer as the Indenture Trustee shall direct and (iii)
take such other actions with respect to the Note Insurer and the Note Insurance
Policies as the Indenture Trustee shall direct.
The Indenture Trustee shall receive through the Insurance Paying
Agent, as attorney-in-fact of each Holder of Pool I or Pool II Notes, any
Insured Payment from the Note Insurer and disburse the same to each Holder of
Pool I or Pool II Notes in accordance with the provisions of this Section 7.08.
Insured Payments disbursed by the Indenture Trustee from proceeds of the Note
Insurance Policies shall not be considered payment by the Trust nor shall such
payments discharge the obligation of the Trust with respect to such Pool I or
Pool II Notes, and the Note Insurer shall become the owner of such unpaid
amounts of Insured Payments due from the Trust in respect of such Notes. The
Indenture Trustee hereby agrees on behalf of each Holder of Pool I or Pool II
Notes for the benefit of the Note Insurer that it recognizes that to the extent
the Note Insurer makes Insured Payments, either directly or indirectly (as by
paying through the Insurance Paying Agent), to the Pool I or Pool II
Noteholders, the Note Insurer will be subrogated to the rights of the such Pool
I or Pool II Noteholders with respect to such Insured Payment, shall be deemed
to the extent of the payments so made to be a registered Noteholder of the
related Class, and shall receive the Pool Carry-Forward Amounts of the related
Pools in accordance with Section 7.08(d)(I)(A) and (B), in the case of Pool I,
and Section 7.08(d) (II)(A) and (B), in the case of Pool II, below until all
such Insured Payments by the Note Insurer have been fully reimbursed. To
evidence such subrogation, the Indenture Trustee shall, or shall cause the Note
Registrar to, note the Note Insurer's rights as subrogee on the registration
books maintained by the Indenture Trustee or the Note Registrar upon receipt
from the Note Insurer of proof of payment of any Insured Payment.
Each Pool I or Pool II Noteholder shall promptly (i) notify the
Indenture Trustee in writing upon the receipt of a court order to the effect
that any amounts described in Clause (iv) of the definition of Pool Remittance
Amount constitute a voidable preference pursuant to the United States Bankruptcy
Code and (ii) shall enclose a certified copy of such order with such notice to
the Indenture Trustee.
(d) On each Remittance Date, and after making the allocations set
forth in Section 7.14, the Indenture Trustee shall withdraw from the applicable
Note Distribution Account the Pool Available Amount for each such Pool and make
distributions thereof in the following order of priority (based solely upon
information received from the Trust Administrator):
(i) to the Expense Account relating to Pool I or Pool
II, an amount equal to one-twelfth of the Annual Expense
Escrow Amount with respect to the Loans of the related Pool,
plus any amount required to be paid to the Indenture Trustee,
the Owner Trustee, the Remarketing Agent or the Trust
Administrator pursuant to Section 7.03(a) resulting from
insufficiencies in the applicable Expense Account;
(ii) then to the Noteholders of each such Pool, the
lesser of the Pool Available Amount for the related Pool less
the amount applied under clause (i) with respect to such Pool
and the Pool Remittance Amount for the related Pool first in
payment of the applicable Current Interest Requirements and
then in reduction of the applicable Class Principal Balances
of the applicable Notes;
(iii) then to the Servicer and/or the Representative,
an amount, if any, equal to the Reimbursable Amounts with
respect to the applicable Pool to the extent the Servicer has
not previously netted such amounts from Monthly Payments;
(iv) [Reserved]; and
(v) then to the Owner Trustee (or the Paying Agent
under the Trust Agreement on its behalf) for deposit in the
Certificate Distribution Account, the Certificate Remittance
Amount.
(I) On each Remittance Date, the amount to be distributed to the Pool
I Notes pursuant to clause (ii) above, along with amounts transferred from the
Rounding Account pursuant to Section 7.08(g), will be allocated in the following
order of priority:
(A) first, concurrently to the Noteholders of each Class of Pool I
Notes, the applicable Current Interest Requirement for such Remittance Date, pro
rata in accordance with such Current Interest Requirements; and
(B) second, concurrently to the Class AF-1 and Class AF-2 Notes, pro
rata based upon their respective Class Principal Balance, the excess, if any, of
the amount to be distributed to the Pool I Notes on such Remittance Date over
the amount distributed pursuant to (A) above and reimbursement to the Rounding
Account as described below, until the Class Principal Balance of each such Class
is reduced to zero and such Noteholders have received an amount equal to the
amount described in clause (iv) of the definition of Pool Remittance Amount that
is recovered from such Noteholders.
(II) On each Remittance Date, the amount to be distributed to the Pool
II Notes pursuant to clause (ii) above will be allocated in the following order
of priority:
(A) first, to the Holders of the Class AV Notes, the Current Interest
Requirement for the Class AV Notes for such Remittance Date; and
(B) second, to the Class AV Noteholders, the excess, if any, of the
amount to be distributed to the Pool II Notes on such Remittance Date over the
amount distributed pursuant to (A) above, until the Class Principal Balance of
such Class is reduced to zero and such Noteholders have received an amount equal
to the amount described in clause (iv) of the definition of Pool Remittance
Amount that is recovered from such Noteholders.
(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 being distributed to the
Class AF-2 Notes on each Remittance Date pursuant to Section 7.08(d)(I)(B) will
be allocated as principal 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 $1,000 and integral multiples of $1,000 in excess thereof.
(g) On each Remittance Date, the holders of the Class AF-1 and Class
AF-2 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 AF-1 and Class AF-2 Notes shall be made in integral multiples of
$1,000. If on any Remittance Date the amount of principal to be distributed to
the holders of Class AF-1 or Class AF-2 is not an even multiple of $1,000, 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 AF-1 and Class AF-2 Notes.
Section 7.09 ALLOCATION OF REALIZED LOSSES.
Prior to each Determination Date, the Servicer shall determine the
total amount of Realized Losses, if any, that occurred in the related Due
Period. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate, stated separately for the Pool I and Pool II Loans, and, to the
extent paid by the Note Insurer as an Insured Payment, shall constitute a
Carry-Forward Amount for the related Pool. Any Realized Losses relating to the
Pool I and Pool II Loans occurring after the Cross-Over Date shall be allocated
to the Pool I and Pool II Notes, respectively, but only if and to the extent
that the Pool I or Pool II Notes, as the case may be, did not receive Insured
Payments in connection with such Realized Loss. Any allocation of Realized
Losses relating to a Pool I Loan shall be allocated between the Class AF-1 and
Class AF-2 Notes, pro rata based upon then outstanding Class Principal Balances.
Further, any allocation of Realized Losses among a Class of Notes shall be made
on a pro rata basis among the Noteholders of record of such Class on the next
preceding Record Date based on the Percentage Interest represented by their
respective Notes by reducing their respective principal balances by the amount
so allocated, which allocation shall be deemed to have occurred on the related
Remittance Date.
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 Note Insurer
and 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 Insured 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
Mortgage 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 Pool Remittance Amounts for Pool I and
Pool II and in the aggregate and by component and listed
separately for the portions relating to each Class of Notes in
the related Pool;
(xiv) the Reimbursable Amounts and the
Certificate Remittance Amount 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 Realized Losses made on such
Remittance Date;
(xvi) the Excess Spread (in the aggregate and stated
separately for each Pool);
(xvii) the Cumulative Realized Losses, stated
separately for each Pool, with respect to the Remittance
Date;
(xviii) the weighted average maturity and weighted
average Loan Interest Rate, stated separately for each Pool;
(xix) the Servicing Fees, the Contingency Fees, and
amounts to be deposited to the Expense Accounts and the
Insurance Accounts, in each case, as applicable, 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 and
Adjusted Loan Interest Rate of the Mortgage 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 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 Supplemental Interest Amount,
Supplemental Interest Payments and Supplemental Interest
Excess, if any, for such Remittance Date;
(xxix) the number and Principal Balance of all
Defaulted Loans purchased during the Due Period, stated
separately for each Pool;
(xxx) the Spread Balance, the Specified Spread
Account Requirement for such Remittance Date and the portion
of the amounts on deposit on the Spread Account that
constitute investment earnings; and
(xxxi) such other information as the Note Insurer and
the Indenture Trustee may reasonably require.
The Indenture Trustee shall forward such report to the Noteholders of
the applicable Pool, the Note Insurer 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 or
the Representative, as appropriate, pursuant to Sections 7.03(c)(i),
7.03(c)(ii), 7.04(b)(iv) and 7.08(d)(iii) (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.
(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 Mortgage 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 and the Note
Insurer, 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 the Note
Insurer, 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 or the Note Insurer may reasonably
require; provided, that the Servicer shall be entitled to be reimbursed by such
Noteholder or the Note Insurer 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.
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 (i) interest on the actual number of days since the last
Remittance Date (or, in the case of the October 1998 Remittance Date, from
September 29, 1998) up to but not including the upcoming Remittance Date at the
weighted average Class Adjusted Loan Remittance Rates for the applicable Pool on
the related Pool Principal Balance immediately prior to the related Remittance
Date plus (ii) the Monthly Excess Spread relating to the Mortgage Loans of the
related Pool with respect to such Remittance Date exceeds (b) the amount
received by the Servicer as of the related Record Date in respect of interest on
the Mortgage 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
Mortgage Loan for any month during which a Principal Prepayment or Curtailment
is received on such Mortgage Loan. Not later than the close of business on each
Determination Date, with respect to each Mortgage 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) interest on the actual number of days since the last
Remittance Date (or, in the case of the first Remittance Date, from September
29, 1998) to but not including the upcoming Remittance Date at the then weighted
average Class Adjusted Loan Remittance Rates for the applicable Pool on the
Principal Balance of each such Mortgage Loan and (b) the amount of interest
actually received on each such Mortgage Loan for such Due Period as of the
beginning of the Due Period applicable to the Remittance Date on which such
amount will be distributed.
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 and the Note Insurer 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 through
foreclosure or other comparable conversion in full or partial satisfaction of
the Mortgage Loan, or (ii) knows or has reason to know that a Mortgaged Property
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 ALLOCATION OF TOTAL MONTHLY EXCESS CASHFLOW.
(a) On each Remittance Date, for each Pool of Mortgage Loans the
Indenture Trustee shall, based solely upon information provided in the related
Trust Administrator's Certificate delivered pursuant to Section 7.10, allocate
an amount equal to the Monthly Excess Spread with respect to each such Pool and
Remittance Date in the following order of priority:
(i) FIRST, to the related Pool in an amount up to (A)
the Pool Available Remittance Amount Shortfall for such Pool
and (B) the excess of (x) the sum of the aggregate Current
Interest Requirements for the Certificates of such respective
Pool, over (y) the Pool Available Amount for the respective
Pool calculated without giving effect to the addition of any
Monthly Excess Spread pursuant to clause (ii) of the
definition of Pool Available Amount;
(ii) SECOND, to the Note Insurer in respect of
amounts owed on account of any Insured Payments theretofore
made with respect to the related Pool of Mortgage Loans (any
such amount so owed to the Note Insurer and not theretofore
paid, together with accrued interest thereon, the "Insurer
Reimbursable Amount" with respect to the related Pool of
Mortgage Loans); and
(iii) THIRD, to the Note Insurer in respect of any
Insurer Reimbursable Amount with respect to the other Pool;
(b) The amount, if any, of the Monthly Excess Spread with respect to a
Pool of Mortgage Loans on a Remittance Date remaining after the allocations
described in (a) above is the "Net Monthly Excess Cashflow" with respect to such
Pool for such Remittance Date; such amount is required to be applied in the
following order of priority:
(i) FIRST, to reduce the Pool Carry-Forward
Amount;
(ii) SECOND, for deposit in the Spread Account until
the amount on deposit therein equals the Specified Spread
Account Requirement;
(iii) THIRD, to the Servicer to the extent of any
unreimbursed Servicing Advances and accrued and unpaid
Servicing Fees;
(iv) FOURTH, to provide funds to the other Pool to
cover current Realized Losses;
(v) FIFTH, to the Noteholders any Noteholders'
Interest Carryover owing for such Remittance Date and all
prior Remittance Dates (to the extent such Net Monthly Excess
Cashflow is attributable to Loans of the applicable Pool); and
(vi) SIXTH, any excess to the Owner Trustee (or the
Paying Agent under the Trust Agreement on its behalf) for
distribution to the Certificateholders.
Section 7.15 ESTABLISHMENT OF SERVICING ACCOUNTS; COLLECTION OF TAXES,
ASSESSMENTS AND SIMILAR ITEMS.
(a) The Servicer shall establish and maintain, or cause to be
established and maintained, one or more Servicing Accounts. The Servicer will
deposit and retain, or cause to be deposited and retained, therein all
collections from the Obligors for the payment of taxes, assessments, insurance
premiums, or comparable items as agent of the Obligors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Servicer or a Subservicer acting on its
own behalf and as agent for holders of various pass-through securities and other
interests in mortgage loans sold by it. The amount at any time credited to a
Servicing Account must be fully insured by FDIC, or, to the extent that such
deposits exceed the limits of such insurance, such excess must be (i)
transferred to another fully insured account in another Designated Depository
Institution or (ii) if permitted by applicable law, invested in Permitted
Investments held in trust by the Servicer or a Subservicer. Withdrawals of
amounts from the Servicing Accounts may be made only to effect timely payment of
taxes, assessments, insurance premiums, or comparable items, to reimburse the
related Servicer or Subservicer for any advances made with respect to such
items, to refund to any Obligors any sums as may be determined to be overages,
to pay interest, if required, to Obligors on balances in the Servicing Accounts,
to pay the related Servicer or Subservicer the remainder of any income on
balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement.
Section 7.16 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.
ARTICLE VIII
[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, the Note Insurer 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, the Note Insurer, 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, the Note
Insurer 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, the Note Insurer 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, the Note
Insurer 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, the Note Insurer 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, the Note
Insurer 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, the Note Insurer 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, the Note Insurer 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 a valid Contract of Insurance 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, the Note Insurer and the
Indenture Trustee.
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, the Note Insurer 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, the Note Insurer and the Owner
Trustee, which Opinion of Counsel shall be in form and substance acceptable to
the Indenture Trustee, the Note Insurer 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 RIGHT OF NOTE INSURER TO REPLACE SERVICER.
From and after the occurrence of a Servicing Delinquency Trigger, the
Note Insurer may, upon written notice to the Indenture Trustee, the Owner
Trustee and the Rating Agencies, replace the Servicer with a successor. No such
replacement shall become effective until a successor has assumed the Servicer's
responsibilities and obligations hereunder in accordance with Section 10.02.
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) an Event of Nonpayment; (B) 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, the Note Insurer or the
Certificateholders; (C) the failure by the Servicer to make any
required Monthly Advance; (D) the failure by the Servicer to
remit any Compensating Interest; or (E) 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, the Note Insurer 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, the Note Insurer 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, either by receipt of payment or receipt of evidence satisfactory to
the Note Insurer (E.G., a wire reference number communicated by the sending
bank) that such funds have been sent, 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 Note
Insurer or the Majority Securityholders then outstanding, subject to the prior
written consent of the Note Insurer, which consent may not be unreasonably
withheld, by notice in writing to the Servicer, may, in addition to whatever
rights such Noteholders or Note Insurer 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 the Note Insurer or such
Noteholders, as the case may be, 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 are 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, the Contingency Fee 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 or the Note Insurer, so request in writing to the Indenture
Trustee, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution acceptable to the Note Insurer,
which acceptance shall not be unreasonably withheld, that has a net worth of not
less than $15,000,000 and which is approved as a servicer by FNMA and FHLMC 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 the Contingency Fee and 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 and Contingency Fee
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, the Note Insurer and each
Certificateholder, and the Note Insurer 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 Note Insurer or the Majority Securityholders, may, on behalf of
all Noteholders and Certificateholders, and subject to the consent of the Note
Insurer, which consent may not be unreasonably withheld, waive any events
permitting removal of the Servicer as servicer pursuant to this Article X,
provided, however, that such Noteholders or the Note Insurer 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 Note Insurer or the Majority Securityholders with the consent of
the Note Insurer, which consent may not be unreasonably withheld, 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.
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, the Note Insurer and all
Noteholders and all Certificateholders in writing.
(b) The Servicer may, at its option, and in the absence of the
exercise thereof by the Servicer, the Note Insurer may, at its option, on any
date on which the aggregate Principal Balances of the Mortgage Loans are less
than five (5) percent of the aggregate Principal Balances of the Mortgage Loans
as of the Cut-Off Date (such date, the "Optional Servicer Termination Date"),
purchase on the next succeeding Remittance Date, all of the Mortgage Loans and
any related REO Properties at a price equal to the sum of (x) 100% of the
Principal Balances of the Mortgage Loans before the occurrence of Realized
Losses, and any related REO Property, (y) accrued but unpaid interest thereon
(whether through payments by the applicable Obligor, Monthly Advances or
otherwise) at the weighted average Class AF-1 and Class AF-2 Remittance Rates in
the case of the Pool I Mortgage Loans and the Class AV Remittance Rate in the
case of the Pool II Mortgage Loans, and (z) the interest portion of any
unreimbursed Insured Payments made by the Note Insurer (the "Termination
Price").
On any Remittance Date on or after the Cross-Over Date when Pool I
and/or Pool II Mortgage Loans with aggregate original Principal Balances that
equal or exceed 25% of the aggregate Principal Balance of the Mortgage Loans as
of the Cut-Off Date have become Liquidated Mortgage Loans, the Note Insurer may
determine to purchase and may cause the purchase from the Trust of all Mortgage
Loans and REO Properties at a price equal to the sum of the Termination Price
with respect to the Trust and the outstanding and unpaid fees and expenses of
the Indenture Trustee, the Owner Trustee, the Remarketing Agent, the Custodian
and the Servicer. In connection with such purchase, the Servicer shall remit to
the Indenture Trustee all amounts then on deposit in the applicable Principal
and Interest Account for deposit to the Note Distribution Account, which deposit
shall be deemed to have occurred immediately preceding such purchase.
(c) [Reserved]
(d) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Indenture Trustee, the Note Insurer 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, and assume the
obligations 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. 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 and the Note
Insurer 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 Interest set forth in Sections 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 Spread Interest
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 Holder of the Special Interest, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including without limitation forms 1099 and 1066. All tax returns
will be signed by the Holder of the Special Interest.
(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, the Note Insurer and the
Indenture Trustee of the proposed action and the Owner Trustee and, with respect
to items (A), (B), (C) and (D) below, the Note Insurer 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.
(e) 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, the Note Insurer 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), and with the consent of the Note Insurer, 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 Note
Insurer 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 case of the Representative, the Servicer, and each Originator, The Money
Store Inc., 000 Xxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Executive Vice President, or such other addresses as may hereafter be furnished
to the Noteholders and the Certificateholders in writing by the Representative
and the Servicer, (ii) in the case of the Indenture Trustee, The Bank of New
York, 101 Xxxxxxx Street, 00xx Xxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust Administration -MBS, (iii) in the case of the Owner Trustee to
The Money Store Trust 0000-X, x/x Xxxxx Xxxxxxxxx Bank Delaware, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Department, (iv)
in the case of Moody's, to 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Structured Finance, (v) in the case of S&P, to Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Residential Mortgages, (vi) in the case of the
Custodian, First Union National Bank, Trust Department, 0000 Xxxxxx Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxxx, (vii) in the
case of the Trust Administrator, First Union National Bank, 000 Xxxxx Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000, Attention: The Money Store Series
1998-C, or (viii) in the case of the Note Insurer, MBIA Insurance Corporation,
000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx, 00000, Attention: IPM-SF (Mortgage-Backed)
(The Money Store, Trust 1998-C), 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 Servicer, the Originators, 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.
Each Originator 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 Servicer
and the Originators 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 The Bank of New York not in its individual
capacity but solely as Indenture Trustee and in no event shall The Bank of New
York 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.
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. Further, the Representative shall give prompt notice to the Rating
Agencies if the Representative or any of its affiliates acquire any Notes, which
notice shall acknowledge that the Representative, or such affiliate understands
that such Notes so acquired will not be entitled to the benefits of the Note
Insurance Policy and, accordingly, will not be rated by the Rating Agencies so
long as such Notes are owned by the Representative or any such affiliate.
Section 13.17 THIRD PARTY RIGHTS.
The parties hereto agree that the Indenture Trustee, the Owner
Trustee, the Note Insurer, 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.
Section 13.18 THE NOTE INSURER.
Any right conferred to the Note Insurer shall be suspended during any
period in which the Note Insurer is in default in its payment obligations under
a Note Insurance Policy. At such time as the Notes are no longer outstanding
hereunder, and no amounts owed to the Note Insurer hereunder remain unpaid, the
Note Insurer's rights hereunder shall terminate. The notice address of the Note
Insurer is MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: Insured Portfolio Management-SF (Mortgage-Backed) (The Money Store
Trust 1998-C).
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 TRUST 1998-C
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity but solely as Owner
Trustee on behalf of the Trust,
By: /s/ Xxxxx Xxxxx
------------------------
Name: Xxxxx Xxxxx
Title: Trust Officer
THE MONEY STORE INC., as
Representative and Servicer
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
TMS MORTGAGE INC.
THE MONEY STORE/D.C. INC.
THE MONEY STORE/MINNESOTA INC.
THE MONEY STORE HOME EQUITY CORP.
THE MONEY STORE/KENTUCKY INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Acknowledged and Accepted:
The Bank of New York, not
in its individual capacity
but solely as Indenture Trustee,
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
Acknowledged and Accepted:
First Union National Bank,
not in its individual capacity
but as Custodian and Trust Administrator
By: /s/ Xxxxxx Xxxx
------------------------
Name: Xxxxxx Xxxx
Title: Vice President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 29th day of September 1998 before me, a Notary Public in and
for said State, personally appeared Xxxxx Xxxxx, 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/ Xxxxx X. Xxxxxxxxxx
------------------------
Notary Public
My Commission expires April 4, 0000
XXXXX XX XXXXXXXXXX )
: ss.:
COUNTY OF YOLO )
On the 29th day of September 1998 before me, a Notary Public in and
for the State of California, personally appeared Xxxxxxx X. Xxxxxxxxx, known to
me to be the Executive Vice President 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/ Xxxxxxx X. Xxxxx
-----------------------
Notary Public
My Commission expires Feb. 6, 0000
XXXXX XX XXXXXXXXXX )
: ss.:
COUNTY OF YOLO )
On the 29th day of September 1998 before me, a Notary Public in and
for the State of California, personally appeared Xxxxxxx X. Xxxxxxxxx, known to
me to be the President of each Originator listed on Exhibit F to the within
instrument, and also known to me to be the person who executed it on behalf of
each such corporation, and acknowledged to me that each 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/ Xxxxxxx X. Xxxxx
---------------------------
Notary Public
My Commission expires Feb. 6, 2002
SCHEDULE I
DESCRIPTION OF CERTAIN LITIGATION
None.
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.
EXHIBIT B
PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT
September __, 1998
To: _________________ (the "Depository")
As "Servicer" under the Sale and Servicing Agreement, dated as of
August 31, 1998, among The Money Store Trust 1998-C, the Originators listed
therein and The Money Store Inc. (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
Inc., in trust for the registered holders of The Money Store Asset Backed
Certificates and Asset-Backed Notes, Series 1998-C, 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:
EXHIBIT C
FORM OF CUSTODIAN INITIAL CERTIFICATION
September ___, 1998
The Money Store Inc. MBIA Insurance Corporation
000 Xxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 Xxxxxx, Xxx Xxxx 00000
First Union Capital Markets, a The Bank of New York, as
division of Indenture Trustee
Wheat First Securities, Inc., 000 Xxxxxxx Xxxxxx
as Representative and Underwriter Xxx Xxxx, Xxx Xxxx 00000
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money
Store Asset Backed Notes and Asset
Backed Certificates, Series 1998-C,
dated as of August 31, 1998 among The
Money Store Inc. as Representative and
Servicer, the Originators and
The Money Store Trust 1998-C
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
Mortgage Note with respect to each Pool [ ] Loan listed in the 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 [ ] Loans identified on the Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Pool [ ]
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:
EXHIBIT C-1
FORM OF CUSTODIAN INTERIM CERTIFICATION
[Date]
The Money Store Inc. MBIA Insurance Corporation
000 Xxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 Xxxxxx, Xxx Xxxx 00000
First Union Capital Markets, a The Bank of New York, as
division of Indenture Trustee
Wheat First Securities, Inc., 000 Xxxxxxx Xxxxxx
as Representative and Underwriter Xxx Xxxx, Xxx Xxxx 00000
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money
Store Asset Backed Notes and Asset
Backed Certificates, Series 1998-C,
dated as of August 31, 1998 among The
Money Store Inc. as Representative and
Servicer, the Originators and
The Money Store Trust 1998-C
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 [ ] Loan listed in the Loan Schedule (other than any Pool [ ] Loan
paid in full or any Pool [ ] Loan 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 [ ] Loan, (iii) based on
its examination and only as to the foregoing documents, the information set
forth in the Loan Schedule respecting such Pool [ ] Loan with respect to clauses
(ii), (iii), (v), (vi) (with respect to the Pool I Loans), (vii), (viii) (which,
with respect to the Pool II Loans, shall only be with respect to the initial
Monthly Payment), (ix) and (xi) (with respect to the Pool II Loans) of the
definition thereof is correct and (iv) each Mortgage Note has been endorsed as
provided in Section 2.04 of the Sale and Servicing Agreement.
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:
EXHIBIT D
FORM OF CUSTODIAN FINAL CERTIFICATION
[Date]
The Money Store Inc. MBIA Insurance Corporation
000 Xxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 Xxxxxx, Xxx Xxxx 00000
First Union Capital Markets, a The Bank of New York, as
division of Indenture Trustee
Wheat First Securities, Inc., 000 Xxxxxxx Xxxxxx
as Representative and Underwriter Xxx Xxxx, Xxx Xxxx 00000
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money
Store Asset Backed Notes and Asset
Backed Certificates, Series 1998-C,
dated as of August 31, 1998 among The
Money Store Inc. as Representative and
Servicer, the Originators and
The Money Store Trust 1998-C
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 [ ] Loan listed in the
Loan Schedule (other than any Pool [ ] 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
[ ] Loan, (iii) based on its examination, and only as to the foregoing
documents, the information set forth in the Loan Schedule respecting such Pool [
] Loan with respect to clauses (ii), (iii) (v), (vi) (with respect to the Pool I
Loans), (vii), (viii) (which, with respect to the Pool II Loans, shall only be
with respect to the initial Monthly Payment), (ix) and (xi) (with respect to the
Pool II Loans) of the definition thereof is correct and (iv) each Mortgage 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 [ ] Loan identified on the Loan Schedule,
or (ii) the collectability, insurability, effectiveness or suitability of any
such Pool [ ] 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:
EXHIBIT E-1
POOL I LOAN SCHEDULE
The Pool I Loan Schedule is maintained with the Indenture Trustee.
EXHIBIT E-2
POOL II LOAN SCHEDULE
The Pool II Loan Schedule is maintained with the Indenture Trustee.
EXHIBIT F
LIST OF ORIGINATORS
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS
To: [First Union National Bank,
as Custodian]
Re: Sale and Servicing Agreement, The Money Store
Asset Backed Notes and Asset Backed
Certificates, Series 1998-C, dated as of August 31, 1998
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. 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 or 6 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 INC.
By:
Name:
Title:
Documents returned to Custodian:
Custodian
By:
Date:
EXHIBIT H
FORM OF NOTICE UNDER NOTE GUARANTY INSURANCE
POLICY RELATING TO THE POOL I NOTES
EXHIBIT I
FORM OF NOTICE UNDER NOTE GUARANTY INSURANCE
POLICY RELATING TO THE CLASS AV NOTES
EXHIBIT J
FORM OF CUSTODIAL AGREEMENT
Dated _______________________
The Bank of New York, a New York Banking Corporation, as indenture
trustee (the "Indenture Trustee") and ___________________________,
________________________ (the "Custodian"), agree as follows:
WHEREAS, The Money Store Trust 1998-C, the Originators and The Money
Store Inc. ("TMS") have entered into a Sale and Servicing Agreement dated as of
August 31, 1998 relating to The Money Store Asset Backed Notes and Asset Backed
Certificates, Series 1998-C (the "Sale and Servicing Agreement"), the terms
defined therein being used herein with the same meaning) pursuant to which the
Originators 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 Mortgage 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 Mortgage 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 and the Note Insurer 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 and the Note Insurer, to maintain
accurate records pertaining to each Mortgage 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 Mortgage
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, the Certificateholders and
the Note Insurer. 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
_________________________________________________________, Attention:
____________________________________, or to the Custodian at
_________________________________________, Attention: __________; to the Note
Insurer: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: (PM-SF (Mortgage-Backed) (The Money Store Trust 1998-C), 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.
THE BANK OF NEW YORK
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:
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)
EXHIBIT L
FORM OF DELINQUENCY REPORT
DELINQUENCY AND FORECLOSURE INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
REO FORECLOSURES
---------------------------
OUTSTANDING # OF # OF # OF OUTSTANDING # OF OUTSTANDING
INVESTOR DOLLARS ACCT RANGES AMOUNT ACCTS. PCT ACCTS DOLLARS % ACCTS DOLLARS %
-----------------------------------------------------------------------------------------------------------------------------------
1 TO 29 DAYS
30 TO 59 DAYS
60 TO 89 DAYS
90 AND OVER
TOTALS
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, Contingency Fee and Monthly
Excess Spread); (b) Servicing Fee and Contingency
Fee; (c) Monthly Excess Spread; (d) The amount equal
to total interest received minus Servicing Fee,
Contingency 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 Mortgage 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.
EXHIBIT N
FORM OF SUB-SERVICING AGREEMENT
THIS SUB-SERVICING AGREEMENT is made effective as of 29th day of
September, 1998, by and between The Money Store Inc., a New Jersey corporation
(the "Servicer") whose principal business address is 000 Xxxxx Xxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000, and each of the entities listed on Schedule A
hereto (each an "Originator", and collectively the "Originators").
RECITALS
1. Each Originator is a wholly-owned subsidiary of the Servicer.
2. The Servicer, the Originators and the Trust are parties to that
certain Sale and Servicing Agreement dated and effective as of August 31, 1998
(the "Sale and Servicing Agreement").
3. Pursuant to the terms of the Sale and Servicing Agreement, each
Originator has transferred certain Loans (as defined in the Sale and Servicing
Agreement) to the Indenture Trustee, for the benefit of Noteholders and
Certificateholders (as defined in the Sale and Servicing Agreement).
4. The Originators desire to convey to the Servicer the right to
service the Loans. As authorized by the Sale and Servicing Agreement, the
Servicer desires to enter into a subservicing agreement with each Originator so
that each Originator will perform subservicing functions for the Loans
transferred by it to the Indenture Trustee or such subservicing functions to be
rendered in compliance with the terms of the Sale and Servicing Agreement.
5. Each Originator desires to undertake such subservicing and
supervision of the Mortgage Loans on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the agreements of the parties
herein and other good and valuable consideration, the receipt and sufficiency of
which each party hereby acknowledges, and in order in part to induce the
Indenture Trustee to enter into the Sale and Servicing Agreement and perform its
obligations thereunder, the parties agree as follows:
1. ASSIGNMENT OF SERVICING; SUBSERVICING AGREEMENT. Each Originator
hereby assigns, transfers, conveys and sets over to the Servicer, its successors
and assigns, all of such Originator's right, title and interest to service the
Loans listed next to such Originator's name on the schedule furnished by each
Originator to the Servicer and dated the date hereof, to have and to hold such
rights hereby assigned, conveyed and transferred to the Servicer, for its own
use and benefit, and that of its successors and assigns, forever. In
consideration of the foregoing assignment, the Servicer hereby appoints each
Originator as subservicer with respect to the Loans conveyed by each such
Originator to the Indenture Trustee, each such Originator to service and
supervise such Loans as provided for herein, such subservicing to commence on
the effective date of this Agreement and to terminate as provided for herein. As
compensation for such subservicing and supervision, each Originator shall be
entitled to an annual fee for each Loan serviced, such fee to be computed and
paid as set forth on Schedule B hereto. Each Originator, as contract
subservicer, 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 Originator may deem necessary or
desirable; PROVIDED, HOWEVER, that each Originator shall conduct its servicing
activities (i) in compliance with and pursuant to the servicing requirements set
out in the Sale and Servicing Agreement, as such requirements relate to
subservicing rendered thereunder, and (ii) to the extent not inconsistent with
such Originator's obligations as an authorized subservicer under the Sale and
Servicing Agreement, (x) in accordance with the provisions of Section 3 hereof
and (y) otherwise in accordance with the standards and requirements set forth on
Schedule C hereto and subject to applicable Federal, state and local laws and
regulations. On or after the date hereof, each Originator shall deliver such
appropriately executed and authenticated instruments of sale, assignment,
transfer and conveyance to the Servicer, if any, including limited powers of
attorney, as the Servicer or its counsel determine to be reasonable in order to
accomplish the transfer to the Servicer of such Originator's rights with respect
to the servicing.
2. REPRESENTATIONS AND WARRANTIES. Each Originator represents and
warrants as follows:
2.1 Such Originator is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Originator is
and at all relevant times has been properly licensed and qualified to transact
business in all appropriate jurisdictions, to conduct all activities performed
with respect to origination and servicing of the Loans and is in good standing
in each jurisdiction in which the failure to be in such good standing would have
a material, adverse effect on the consummation of the transactions contemplated
hereby.
2.2 Originator has all requisite corporate power, authority and
capacity to enter into this Agreement and to perform the obligations required of
it hereunder. The execution and delivery of this Agreement by the Originator,
and the consummation of the transactions contemplated hereby, have each been
duly and validly authorized by all necessary corporate action. This Agreement
constitutes the valid and legally binding agreement of Originator enforceable in
accordance with its terms, and no offset, counterclaim or defense exists to the
full performance of this Agreement, subject to laws respecting bankruptcy,
receivership, insolvency and other laws affecting creditors' rights generally.
2.3 The execution, delivery and performance of this Agreement by
Originator, its compliance with the terms hereof and consummation of the
transactions contemplated will not violate, conflict with, result in a breach
of, constitute a default under, be prohibited by or require any additional
approval under its certificate of incorporation, bylaws, or any instrument or
agreement to which it is a party or by which it is bound or which affects the
servicing conveyed hereunder.
2.4 Such Originator is the lawful owner of the servicing, has the sole
right and authority to transfer the servicing as contemplated hereby, and is not
contractually obligated to sell the servicing to any other party. The transfer,
assignment and delivery of the servicing in accordance with the terms and
conditions of this Agreement shall vest in the Servicer all rights as servicer
free and clear of any and all claims, charges, defenses, offsets and
encumbrances of any kind or nature whatsoever, including but not limited to
those of Originator.
2.5 With respect to each individual Loan for which servicing rights
are assigned hereunder, such Originator makes to the Servicer those
representations and warranties that are contained in Section 3.02 of the Sale
and Servicing Agreement.
3. ORIGINATOR'S DUTIES. Until the principal, interest and any other
amounts due on each Loan are paid in full, each Originator shall:
A. Proceed diligently to collect all payments due under the
terms of each Loan as they become due.
B. Keep a complete and accurate account of and properly apply
all sums collected by it from the mortgagor on account of each such
Loan for principal and interest, and upon request, furnish evidence
acceptable to the Servicer of all expenditures for taxes, assessments
and other public charges and hazard insurance premiums. In the
event any Obligor fails to make a payment to an Originator required to
be made under the terms of any such Loan, such Originator will notify
the Servicer of such fact within 20 days after the same shall have
become due and payable.
C. Deposit all funds received in respect of each Loan in an
account in an institution the accounts of which are insured by an
agency of the United States government. Unless directed otherwise by
the Servicer such account shall be held by a Originator, which shall
maintain or shall cause to be maintained detailed records to show the
respective interest of each individual mortgagor in the account.
D. Pay into the related Principal and Interest Accounts (as
defined in the Sale and Servicing Agreement) all amounts of principal
and interest collected under the Mortgage Loans.
E. Submit to the Servicer at least annually an accounting of
the balances in each such account, if any.
F. Perform such other customary duties, furnish such other
reports and execute such other documents in connection with its duties
hereunder as the Servicer from time to time reasonably may require.
4. ADVANCES BY ORIGINATOR. In the event an Originator, on behalf of
the Servicer, makes any advance of principal and/or interest to the holder of a
Loan serviced hereunder before such Originator has received the applicable
payment from any Obligor, or makes any other advance to protect the security of
a or otherwise (including but not limited to property taxes, special
assessments, and hazard insurance premiums), EXCEPT advances related to
foreclosure or real estate owned losses (which are covered by Section 8), then
the Servicer, promptly upon being billed therefore, shall, at its option, either
(i) reimburse such Originator the full amount of all such advances, (ii) credit
such amount as a set-off against amounts such Originator may then owe to the
Servicer pursuant to this Agreement, (iii) use a combination of such
reimbursement and crediting to fully discharge such amount or (iv) forego such
reimbursement or crediting with respect to all or a portion of such amount, in
which case the amount not reimbursed or offset shall be deemed currently due and
payable and, until paid to such Originator, shall bear interest on the average
monthly balance thereof at the underlying Loan Interest Rate.
5. ORIGINATOR'S RECORDS; MONITORING OF PROPERTY. Each Originator will
during regular business hours make all of its records and files relating to
Loans covered by this Agreement available for inspection by the Servicer and its
authorized agents. In addition, an Originator will use ordinary diligence to
ascertain, and will forthwith notify the Servicer of any of the following which
might come to the attention of such Originator:
A. The vacating of or any change in the occupancy of any
premises securing a mortgage.
B. The sale or transfer of any such premises.
C. The death, bankruptcy, insolvency or other disability of
an Obligor which might impair ability to repay the Loan.
D. Any loss or damage in excess of $10,000 to any such
premises, in which event, in addition to notifying the Servicer, an
Originator shall see to it that the insurance companies concerned are
promptly notified. For losses or damages of $10,000 or less, the
Servicer hereby authorizes an Originator to endorse insurance checks
or drafts on behalf of the Servicer. For losses or damages in excess
of $10,000, an Originator shall make a report to the Servicer and the
Servicer retains the right to endorse any insurance drafts related to
such loss or damage.
E. Any lack of repair or any other deterioration or waste
suffered or committed in respect to the premises covered by any
mortgage.
It is understood and agreed, however, that no notice need be given to the
Servicer of any facts other than those of which an Originator has actual notice,
or those of which an Originator would, except for its negligence, have had
actual notice.
6 NO WAIVER, RELEASE OR CONSENT BY ORIGINATOR. An Originator will not
waive, modify, release or consent to postponement on the part of the mortgagor
of any term or provision of any Loan without the consent of the Servicer.
7. HAZARD INSURANCE. An Originator shall cause to be maintained such
fire and hazard insurance as shall be requested by the Servicer pursuant to
Sections 4.07 and 4.08 of the Sale and Servicing Agreement.
8. FORECLOSURE AND REAL ESTATE OWNED. An Originator will assist in the
foreclosure or other acquisition of the property securing any Loan and the
transfer of such property, pursuant to instruction of the Servicer given under
Section 4.10 of the Sale and Servicing Agreement.
9. TERM; TERMINATION. This Agreement shall commence on the date hereof
and shall, subject to earlier termination pursuant to the provisions of this
Section 9, terminate upon the termination of the Sale and Servicing Agreement.
This Agreement may be canceled and terminated (i) at any time hereunder by the
Servicer on 10 days notice to an Originator, or (ii) by the Indenture Trustee on
notice to an Originator, at any time after the Indenture Trustee shall have
become the successor servicer with respect to the Loans or, as the case may be,
pursuant to Sections 10.01 and 10.02 of the Sale and Servicing Agreement. In
addition, this Agreement may be canceled and terminated by the Servicer, by
notice to an Originator, if:
A. An Originator fails in a material respect to perform its
obligations hereunder and (i) does not cure or rectify such failure
within 45 days or, (ii) if the character of such cure or rectification
is such that it cannot reasonably be effected within 45 days, does not
commence such cure or rectification within 45 days and complete the
same within a commercially reasonable time thereafter, given the
circumstances.
B. An Originator becomes insolvent or bankrupt or is placed
under conservatorship or receivership.
C. An Originator assigns or attempts to assign its rights
and obligations hereunder, without written consent of the Servicer,
provided that any assignment, transfer or other conveyance of an
Originator's rights and obligations hereunder that occurs as a result
of a merger, consolidation, reorganization, name change or acquisition
of or involving an Originator shall not be construed as an assignment
(or attempted assignment) under the provisions of this Section 9.C.
Upon termination of this Agreement, an Originator will account for and turn over
to the Servicer all funds collected under each Loan for which said termination
is effective, less only the compensation, fees and reimbursements then due an
Originator, and will deliver to the Servicer or its designee all records and
documents relating to each such Loan.
10. COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Each Originator will
comply with, and will use all reasonable efforts to cause each Obligor to comply
with, all applicable state and federal rules and regulations or requirements
including those requiring the giving of notices.
11. FIDELITY, ERRORS AND OMISSIONS INSURANCE, ETC. Each Originator
agrees to be responsible, at no expense to the Servicer, for seeing to it that
at all times, while this Agreement is in force, policies of fidelity, fire, and
extended coverage, theft, forgery, and errors and omissions insurance are
maintained in conformity with the Sale and Servicing Agreement. Each Originator
will, without demand therefore, provide the Servicer annually, on a date
agreeable to the Servicer, a certificate or binder of insurance delineating the
various types of insurance carried by such Originator.
12. MISCELLANEOUS. This document contains the entire agreement between
the parties hereto and cannot be modified in any respect except by an amendment
in writing signed by each party. The invalidity of any portion of this Agreement
shall in no way affect the balance thereof. Any notice permitted or required
hereunder shall be in writing and shall be deemed given when hand delivered to
an officer or authorized agent of, or when mailed, registered or certified mail,
postage prepaid, to Servicer or an Originator at the address of the Servicer set
forth above. The captions and headings used in this Agreement are for
convenience only, and do not define or limit the terms and provisions of this
Agreement. Notwithstanding any provision in this Agreement to the contrary,
nothing contained herein shall be deemed an attempt to assign or an assignment
of any servicing rights by an Originator to the Servicer if an attempted
assignment of the same without the consent of any agency or instrumentality of
the United States or a state thereof (a "Regulatory Authority") with
jurisdiction over such assignment would constitute a breach of an applicable
regulatory requirement or agreement between an Originator and such Regulatory
Authority unless and until such consent shall have been obtained. In the event
the consent of any Regulatory Authority is required to authorize the conveyance
of any or all of the servicing to be conveyed hereunder and such consent shall
not have been granted prior to the occurrence of Servicer Default under Section
10.01 of the Sale and Servicing Agreement, then upon the occurrence of an Event
of Default, each Originator shall enter into an agreement with the Indenture
Trustee, which agreement shall be in form and substance satisfactory to the
Indenture Trustee and its counsel, which recognizes the Indenture Trustee as the
successor servicer of the Mortgage Loans as provided for by such Section 10.01,
and shall continue to subservice the Mortgage Loans or shall convey such
subservicing at the election and upon the direction of the Indenture Trustee.
13. DEFINED TERMS. All terms not otherwise defined herein shall have
the meanings ascribed to such terms in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, each party has caused this instrument to be signed
in its corporate name on its behalf by its proper officials duly authorized as
of the day and year first above written.
SERVICER:
ATTEST: The Money Store Inc.
By: ______________________ By: ______________________________
Name:
Title:
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
ATTEST:
By: _______________________ By: ______________________________
Name:
Title:
SCHEDULE A
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
SCHEDULE B
Each Originator shall receive 25 basis points per annum of the
principal balance of each Loan serviced as compensation for servicing hereunder
as well as other servicing fees as permitted.
SCHEDULE C
1. Make telephone contact with any Obligor whose account is either a first
payment default or delinquent 9-29 days.
2. Confirm telephone contacts as necessary.
3. Contact, in writing, each Obligor who can not be contacted.
4. Send a "default" letter to any Obligor who is 30 days delinquent.
5. Commence foreclosure proceedings after 60 days delinquency.
6. Obtain legal counsel where appropriate including in foreclosure matter
commenced by prior lienholders and bankruptcy matters.
7. Monitor all outside counsel and proceedings.
8. Monitor loans for continuing performance.
EXHIBIT O
PRICES FOR LOW INTEREST LOANS
[Not Applicable]
EXHIBIT P
FORM OF POWER OF ATTORNEY
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
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 Trust 1998-C (the "Trust"),
does hereby make, constitute and appoint [THE MONEY STORE INC., as
Representative and Servicer (the "Servicer"),] [FIRST UNION NATIONAL BANK, as
Trust Administrator (the "Trust Administrator")] under the Sale and Servicing
Agreement dated as of August 31, 1998 (the "Agreement"), among the Trust, the
Originators named therein and the Servicer, as the same may be amended from time
to time, and its 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 September, 1998.
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Owner Trustee for the Money Store
Trust 1998-C
By: __________________________________
Name:_____________________________
Title:____________________________
