EXHIBIT 4.1
EXECUTION COPY
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SALE AND SERVICING
AGREEMENT
among
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
Issuer,
THE MONEY STORE COMMERCIAL MORTGAGE INC.
Seller and Servicer
and
THE MONEY STORE INC.
Representative
Dated as of May 31, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................1
Section 1.02 Other Definitional Provisions..............................33
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST
Section 2.01 Contribution and Conveyance of Trust Account Property,
Priority and Subordination of Ownership Interests..........34
Section 2.02 Possession of Loan Files...................................35
Section 2.03 Books and Records..........................................35
Section 2.04 Delivery of Mortgage Loan Documents........................35
Section 2.05 Acceptance of the Trust Fund; Certain Substitutions;
Certification by Indenture Trustee and Custodian...........37
Section 2.06 Fees and Expenses of the Indenture Trustee, Owner
Trustee, Trust Administrator and Custodian.................39
Section 2.07 Designations under REMIC Provisions; Designation
of Startup Day; Tax Matters Person; Tax Matters
Partner....................................................39
Section 2.08 Optional Repurchase of Defaulted Loans.....................40
Section 2.09 Assignment Event...........................................40
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of Representative, Seller and
Servicer...................................................41
Section 3.02 Individual Loans...........................................47
Section 3.03 Purchase and Substitution..................................52
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 Duties of the Servicer.....................................54
Section 4.02 Liquidation of Loans.......................................57
Section 4.03 Establishment of Principal and Interest Accounts;
Deposits in Principal and Interest Account.................58
Section 4.04 Permitted Withdrawals From the Principal and
Interest Accounts..........................................59
Section 4.05 Payment of Taxes, Insurance and Other Charges..............61
Section 4.06 Transfer of Accounts.......................................62
Section 4.07 Maintenance of Hazard Insurance............................62
Section 4.08 REMIC Related Duties.......................................62
Section 4.09 Fidelity Bond..............................................64
Section 4.10 Title, Management and Disposition of REO Property..........64
Section 4.11 Certain Tax Information....................................65
Section 4.12 Collection of Certain Loan Payments........................65
Section 4.13 Access to Certain Documentation and Information
Regarding the Loans........................................66
Section 4.14 Superior Liens.............................................66
ARTICLE V
GENERAL SERVICING PROCEDURE
Section 5.01 Assumption Agreements......................................67
Section 5.02 Satisfaction of Mortgages and Release of Loan Files........67
Section 5.03 Servicing Compensation.....................................69
Section 5.04 Annual Statement as to Compliance..........................69
Section 5.05 Annual Independent Public Accountants' Servicing
Report.....................................................69
Section 5.06 Indenture Trustee's and Owner Trustee's Right to
Examine Servicer Records and Audit Operations..............70
Section 5.07 Reports to the Indenture Trustee; Principal and
Interest Account Statements................................70
ARTICLE VI
[RESERVED]
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS
Section 7.01 Note Distribution Accounts.................................71
Section 7.02 Rounding Account...........................................72
Section 7.03 Establishment of Expense Accounts; Deposits in Expense
Accounts; Permitted Withdrawals from Expense Accounts......73
Section 7.04 Letters of Credit..........................................74
Section 7.05 Alternate Credit Enhancement...............................75
Section 7.06 Interest Carryover Account.................................75
Section 7.07 Investment of Accounts.....................................76
Section 7.08 Priority and Subordination of Distributions................77
Section 7.09 Allocation of Realized Losses..............................81
Section 7.10 Statements.................................................81
Section 7.11 Advances by the Servicer...................................86
Section 7.12 Compensating Interest......................................86
Section 7.13 Reports of Foreclosure and Abandonment of Mortgaged
Property...................................................86
Section 7.14 Net Deposits...............................................87
ARTICLE VIII
[RESERVED]
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims........................87
Section 9.02 Merger or Consolidation of the Representative
and the Servicer...........................................88
Section 9.03 Limitation on Liability of the Servicer and Others.........88
Section 9.04 Servicer Not to Resign.....................................89
Section 9.05 [RESERVED].................................................89
Section 9.06 [RESERVED].................................................89
Section 9.07 Appointment of Trust Administrator.........................89
ARTICLE X
DEFAULT
Section 10.01 Servicer Default...........................................89
Section 10.02 Indenture Trustee to Act; Appointment of Successor.........91
Section 10.03 Waiver of Defaults.........................................93
Section 10.04 [RESERVED].................................................93
Section 10.05 Control by Majority Securityholders........................93
ARTICLE XI
TERMINATION
Section 11.01 Termination................................................94
ARTICLE XII
ADMINISTRATIVE DUTIES OF TRUST ADMINISTRATOR
Section 12.01 Administrative Duties......................................95
Section 12.02 Records....................................................98
Section 12.03 Additional Information To Be Furnished to the Issuer.......98
Section 12.04. Calculation of LIBOR.......................................98
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Acts of Noteholders and Certificateholders.................99
Section 13.02 Amendment..................................................99
Section 13.03 Recordation of Agreement..................................100
Section 13.04 Duration of Agreement.....................................101
Section 13.05 Governing Law.............................................101
Section 13.06 Notices...................................................101
Section 13.07 Severability of Provisions................................101
Section 13.08 No Partnership............................................102
Section 13.09 Counterparts..............................................102
Section 13.10 Successors and Assigns....................................102
Section 13.11 Headings..................................................102
Section 13.12 Assignment to Indenture Trustee...........................102
Section 13.13 Nonpetition Covenant......................................102
Section 13.14 Limitation of Liability of Owner Trustee, Indenture
Trustee and Custodian.....................................103
Section 13.15 Independence of the Servicer..............................103
Section 13.16 Notification to Rating Agencies...........................103
Section 13.17 Third Party Rights........................................104
EXHIBITS
SCHEDULE I Description of Certain Litigation
EXHIBIT A Contents of Indenture Trustee's Loan File
EXHIBIT B Principal and Interest Account Letter Agreement
EXHIBIT C Form of Custodian Initial Certification
EXHIBIT C-1 Form of Custodian Interim Certification
EXHIBIT D Form of Custodian Final Certification
EXHIBIT E-1 Loan Schedule (Pool I)
EXHIBIT E-2 Loan Schedule (Pool II)
EXHIBIT F [Reserved]
EXHIBIT G Request for Release of Documents
EXHIBIT H [Reserved]
EXHIBIT I [Reserved]
EXHIBIT J Custodial Agreement
EXHIBIT K Form of Liquidation Report
EXHIBIT L Form of Delinquency Report
EXHIBIT M Servicer's Monthly Computer Tape Format
EXHIBIT N [Reserved]
EXHIBIT O [Reserved]
EXHIBIT P Form of Trust Matters Power of Attorney
EXHIBIT Q Form of Collateral Power of Attorney
SALE AND SERVICING AGREEMENT dated as of May 31, 1999, among The Money
Store Business Loan Backed Trust 1999-1, a Delaware business trust (the "Trust"
or the "Issuer"), The Money Store Commercial Mortgage Inc., as Seller (the
"Seller") and Servicer (the "Servicer"), and The Money Store Inc., a New Jersey
corporation, as Representative (the "Representative").
WHEREAS, the Issuer desires to acquire a portfolio of business loans
from the Seller;
WHEREAS, the Seller has either originated and underwritten, or
purchased and re underwritten, such business loans, and is willing to
contribute such business loans to the Issuer; and
WHEREAS, the Servicer is willing to service such business loans; NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
1933 ACT: The Securities Act of 1933, as amended.
10% BALANCE DATE: Means the first Remittance Date on which the
aggregate outstanding Principal Balance of the Pool I Loans is less than or
equal to 10% of the Original Pool Amount for Pool I.
20% BALANCE DATE: Means the first Remittance Date on which the
aggregate outstanding Principal Balance of the Pool II Loans is less than or
equal to 20% of the Original Pool Amount for Pool II.
ACCELERATED PRINCIPAL DISTRIBUTION AMOUNT: For a Pool and any
Remittance Date, the lesser of (i) the positive difference, if any, of (x) any
Excess Spread for such Pool for such Remittance Date plus any amounts paid under
the Letter of Credit for such Pool pursuant to clause (1) of the definition of
"Letter of Credit Payment" MINUS (y) the Class Interest Shortfall Carryforward
Amount for the Class A, Class M and Class B Notes of such Pool for such
Remittance Date and (ii) the Subordinated Deficiency Amount for such Pool for
such Remittance Date, calculated for this purpose without giving effect to
payment of the Accelerated Principal Distribution Amount for such Pool and prior
to taking into account the Applied Realized Loss Amount for such Pool for such
Remittance Date.
ACCOUNT: The Certificate Distribution Account, Note Distribution
Accounts, Interest Carryover Account, Expense Account, Rounding Account and
Principal and Interest Account (including any sub-accounts of any of the
foregoing).
AGREEMENT: This Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
ALTERNATE CREDIT ENHANCEMENT: Credit enhancement obtained by FUNB in
lieu of a Letter of Credit pursuant to Section 7.05.
ANNUAL EXPENSE ESCROW AMOUNT: With respect to each Pool, an amount
equal to the product of (i) 0.15% per annum (in the case of Pool I) or 0.05% per
annum (in the case of Pool II) and (ii) the sum of the aggregate Class Principal
Balances of the Notes of the applicable Pool, which is computed and payable on a
monthly basis and represents the estimated annual fees and expenses of the
Indenture Trustee, Owner Trustee, Trust Administrator, the Letter of Credit
Provider and in the case of Pool I, the Remarketing Agent.
APPLIED REALIZED LOSS AMOUNT: With respect to Pool I, the collective
reference to the Class MS-1 Applied Realized Loss Amounts, Class MS-2 Applied
Realized Loss Amounts and Class BS Applied Realized Loss Amounts, and with
respect to Pool II, the collective reference to the Class MN Applied Realized
Loss Amounts and Class BN Applied Realized Loss Amounts.
ASSIGNMENT EVENT: If FUNB's long-term unsecured debt rating is reduced
below "A2" by Xxxxx'x or "A" by DCR; or if FUNB's senior unsecured debt rating
by Xxxxx'x or DCR is suspended, terminated or withdrawn.
ASSIGNMENT OF MORTGAGE: An assignment, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction in which the related Mortgaged Property is located to reflect the
contribution of the Mortgage to the Issuer, which assignment, notice of transfer
or equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction.
AUCTION PROCEDURES: The procedures set forth in Schedule I to the
Indenture by which the Auction Rate is determined for the Class AS-3 Notes.
AUCTION RATE: The rate of interest per annum that results from
implementation of the Auction Procedures.
BASIC DOCUMENTS: The Certificate of Trust, the Trust Agreement, the
Indenture, the Depository Agreement, this Sale and Servicing Agreement, the
Letters of Credit, and other documents and certificates delivered in connection
therewith.
BIF: The Bank Insurance Fund, or any successor thereto.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of California, New York, North
Carolina or Delaware are required or authorized by law to be closed.
BUSINESS NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of an Obligor under a Loan.
CCL LOAN: A Loan originated by the Seller in conjunction with the
Seller's Conventional Commercial Loan Program.
CERTIFICATE: Any Class I, Class II or Class R Certificate.
CERTIFICATE DISTRIBUTION ACCOUNT: Has the meaning assigned to such
term in the Trust Agreement.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate
is registered in the Certificate Register and the Holder of the Special
Interests.
CHANGE DATE: The date on which the Loan Interest Rate of each
adjustable rate Loan is subject to adjustment.
CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
CLASS: Collectively, Notes having the same priority of payment and
bearing the same designation or Certificates having the same priority of payment
and bearing the same designation.
CLASS I CERTIFICATE: A Certificate denominated as a Class I
Certificate, issued by the Trust pursuant to the Trust Agreement.
CLASS II CERTIFICATE: A Certificate denominated as a Class II
Certificate, issued by the Trust pursuant to the Trust Agreement.
CLASS A NOTES: : With respect to Pool I, the Class AS-1, Class AS-2
and Class AS-3 Notes, and with respect to Pool II, the Class AN Notes.
CLASS A PRINCIPAL BALANCE: The sum of the Class Principal Balances of
the Class AS-1, Class AS-2, Class AS-3 and Class AN Notes.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Remittance
Date and for each Pool, (a) prior to the related Stepdown Date, for any
Remittance Date on or after the related Stepdown Date on which the Senior
Enhancement Percentage for that Pool is less than the Senior Specified
Enhancement Percentage for that Pool, and for any Remittance Date on or after
the 10% Balance Date (for Pool I) or the 20% Balance Date (for Pool II) the
lesser of (i) 100% of the applicable Pool Principal Distribution Amount and (ii)
the aggregate Class Principal Balance of the Class A Notes of such Pool and (b)
on or after the related Stepdown Date on which the Senior Enhancement Percentage
for that Pool is at least equal to the Senior Specified Enhancement Percentage
for that Pool, but prior to the 10% Balance Date (for Pool I) or the 20% Balance
Date (for Pool II), the excess, if any, of (i) the aggregate Class Principal
Balance of the Class A Notes of such Pool immediately prior to such Remittance
Date over (ii) the lesser of (A) 73.75% (for Pool I) or 65.50% (for Pool II) of
the outstanding principal balance of the Loans of the related Pool as of the
last day of the related Due Period and (B) the outstanding principal balance of
the Loans of the related Pool as of the last day of the related Due Period minus
2.00% of the aggregate principal balance of the Loans of the related Pool as of
the Cut-Off Date.
CLASS AN NOTE: A Note denominated as a Class AN Note, issued by the
Trust pursuant to the Indenture.
CLASS AN REMITTANCE RATE: The annual rate of interest payable to the
Class AN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 0.50%
(or plus 1.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS AS NOTES: The collective reference to the Class AS-1, Class AS-2
and Class AS-3 Notes.
CLASS AS-1 NOTE: A Note denominated as a Class AS-1 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-1 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-1 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.23% and (ii) the applicable Net Funds Cap.
CLASS AS-2 NOTE: A Note denominated as a Class AS-2 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-2 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-2 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.40% and (ii) the applicable Net Funds Cap.
CLASS AS-3 NOTE: A Note denominated as a Class AS-3 Note, issued by
the Trust pursuant to the Indenture.
CLASS AS-3 REMITTANCE RATE: The annual rate of interest payable to the
Class AS-3 Noteholders, which shall be equal to 5.27% for the first Remittance
Date. Thereafter, the Class AS-3 Remittance Rate shall be equal to the lesser of
(i) the Auction Rate and (ii) the applicable Net Funds Cap (but in no event
exceeding 14.0% per annum).
CLASS B NOTES: With respect to Pool I, the Class BS Notes, and with
respect to Pool II, the Class BN Notes.
CLASS BN APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Class Principal Balance of the Class BN Notes (after taking
into account the distribution of the Class BN Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class BN Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the Applied
Realized Loss Amounts for Pool II as of such Remittance Date.
CLASS BN NOTE: A Note denominated as a Class BN Note, issued by the
Trust pursuant to the Indenture.
CLASS BN PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date (a)
prior to the Stepdown Date for Pool II, for any Remittance Date on or after the
Stepdown Date for Pool II on which the Senior Enhancement Percentage for Pool II
is less than the Senior Specified Enhancement Percentage for Pool II, and for
any Remittance Date on or after the 20% Balance Date for Pool II, and the Class
AN Notes or the Class MN Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AN Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool II on such Remittance Date, (B) the Class
Principal Balance of the Class MN Notes after giving effect to the payment of
the Class MN Principal Distribution Amount on such Remittance Date, and (C) the
Class Principal Balance of the Class BN Notes immediately prior to such
Remittance Date over (ii) the lesser of 81.25% of the outstanding principal
balance of the Loans in Pool II as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool II as of the last day
of the related Due period MINUS 2.00% of the Original Pool Amount of Pool II.
CLASS BN REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class BN Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool II remaining
after application of the amounts set forth in Section 7.08(d)(i) through (viii),
inclusive, for Pool II.
CLASS BN REMITTANCE RATE: The annual rate of interest payable to the
Class BN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 3.00%
(or plus 6.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS BS APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Class Principal Balance of the Class BS Notes (after taking
into account the distribution of the Class BS Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class BS Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the Applied
Realized Loss Amounts for Pool I as of such Remittance Date.
CLASS BS NOTE: A Note denominated as a Class BS Note, issued by the
Trust pursuant to the Indenture.
CLASS BS PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date (a)
prior to Stepdown Date for Pool I, for any Remittance Date on or after the
Stepdown Date for Pool I on which the Senior Enhancement Percentage for Pool I
is less than the Senior Specified Enhancement Percentage for Pool I, and for any
Remittance Date on or after the 10% Balance Date for Pool I, and the Class AS
Notes, or the Class MS Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AS Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool I on such Remittance Date, (B) the Class
Principal Balance of the Class MS-1 Notes after giving effect to the payment of
the Class MS-1 Principal Distribution Amount on such Remittance Date, (C) the
Class Principal Balance of the Class MS-2 Notes after giving effect to the
payment of the Class MS-2 Principal Distribution Amount on such Remittance Date
and (D) the Class Principal Balance of the Class BS Notes immediately prior to
such Remittance Date over (ii) the lesser of 89.5% of the outstanding principal
balance of the Loans in Pool I as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool I as of the last day
of the related Due Period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS BS REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class BS Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I remaining
after application of the amounts set forth in Section 7.08(d)(i) through (viii),
inclusive, for Pool I.
CLASS BS REMITTANCE RATE: The annual rate of interest payable to the
Class BS Noteholders, which shall be equal to the lesser of (i) LIBOR plus 3.00%
(or plus 6.00% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS M NOTES: With respect to Pool I, the Class MS-1, and Class MS-2
Notes, and with respect to Pool II, the Class MN Notes.
CLASS MN APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date, the
lesser of (x) the Current Principal Balance of the Class MN Notes (after taking
into account the distribution of the Class MN Principal Distribution Amount on
such Remittance Date, but prior to the application of the Class MN Applied
Realized Loss Amount, if any, on such Remittance Date) and (y) the excess of (i)
the Applied Realized Loss Amount for Pool II as of such Remittance Date over
(ii) the Class BN Applied Realized Loss Amount as of such Remittance Date.
CLASS MN NOTE: A Note denominated as a Class MN Note, issued by the
Trust pursuant to the Indenture.
CLASS MN PRINCIPAL DISTRIBUTION AMOUNT: As to any Remittance Date, (a)
prior to the Stepdown Date for Pool II, for any Remittance Date on or after the
Stepdown Date for Pool II on which the Senior Enhancement Percentage for Pool II
is less than the Senior Specified Enhancement Percentage for Pool II, and for
any Remittance Date on or after the 20% Balance Date for Pool II, and the Class
A Notes of Pool II are still outstanding, zero and (b) on any other Remittance
Date, the excess, if any, of (i) the sum of (A) the Class Principal Balance of
the Class A Notes of Pool II after giving effect to the payment of the Class A
Principal Distribution Amount for Pool II on such Remittance Date and (B) the
Class Principal Balance of the Class MN Notes immediately prior to such
Remittance Date over (ii) the lesser of (A) 70.75% of the outstanding principal
balance of the Loans in Pool II as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool II as of the last day
of the related Due Period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS MN REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MN Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool II for such
Remittance Date remaining after application of amounts set forth in
Section7.08(d)(i) through (vii) inclusive, with respect to Pool II.
CLASS MN REMITTANCE RATE: The annual rate of interest payable to the
Class MN Noteholders, which shall be equal to the lesser of (i) LIBOR plus 1.25%
(or plus 2.50% for each Remittance Date occurring after the Optional Servicer
Termination Date) and (ii) the applicable Net Funds Cap.
CLASS MS NOTES: Collective reference to the Class MS-1 and Class MS-2
Notes.
CLASS MS-1 APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date,
the lesser of (x) the Class Principal Balance of the Class MS-1 Notes (after
taking into account the distribution of the Class MS-1 Principal Distribution
Amount on such Remittance Date, but prior to the application of the Class MS-1
Applied Realized Loss Amount, if any, on such Remittance Date) and (y) the
excess of (i) the Applied Realized Loss Amount for Pool I as of such Remittance
Date over (ii) the sum of the Class MS-2 Applied Realized Loss Amount and the
Class BS Applied Realized Loss Amount, in each case as of such Remittance Date.
CLASS MS-1 NOTE: A Note denominated as a Class MS-1 Note, issued by
the Trust pursuant to the Indenture.
CLASS MS-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Remittance Date, (a) prior to the Stepdown Date for Pool I, for any Remittance
Date on or after the Stepdown Date for Pool I on which the Senior Enhancement
Percentage for Pool I is less than the Senior Specified Enhancement Percentage
for Pool I, and for any Remittance Date on or after the 10% Balance Date for
Pool I, and the Class AS Notes are still outstanding, zero and (b) on any other
Remittance Date, the excess, if any, of (i) the sum of (A) the Class Principal
Balance of the Class AS Notes after giving effect to the payment of the Class A
Principal Distribution Amount for Pool I on such Remittance Date and (B) the
Class Principal Balance of the Class MS-1 Notes immediately prior to such
Remittance Date over (ii) the lesser of (A) 79.75% of the outstanding principal
balance of the Loans in Pool I as of the last day of the related Due Period and
(B) the outstanding principal balance of the Loans in Pool I as of the last day
of the related due period MINUS 2.00% of the Original Pool Amount of Pool I.
CLASS MS-1 REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MS-1 Unpaid Realized Loss Amounts of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I for such
Remittance Date remaining after application of amounts set forth in Section
7.08(d)(i) through (vi) inclusive, with respect to Pool I.
CLASS MS-1 REMITTANCE RATE: The annual rate of interest payable to the
Class MS-1 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
0.85% (or plus 1.70% for each Remittance Date occurring after the Optional
Servicer Termination Date) and (ii) the applicable Net Funds Cap.
CLASS MS-2 APPLIED REALIZED LOSS AMOUNT: As of any Remittance Date,
the lesser of (x) the Current Principal Balance of the Class MS-2 Notes (after
taking into account the distribution of the Class MS-2 Principal Distribution
Amount on such Remittance Date, but prior to the application of the Class MS-2
Applied Realized Loss Amount, if any, on such Remittance Date) and (y) the
excess of (i) the Applied Realized Loss Amount for Pool I as of such Remittance
Date over (ii) the Class BS Applied Realized Loss Amount as of such Remittance
Date.
CLASS MS-2 NOTE: A Note denominated as a Class MS-2 Note, issued by
the Trust pursuant to the Indenture.
CLASS MS-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Remittance Date, (a) prior to the Stepdown Date for Pool I, for any Remittance
Date on or after the Stepdown Date for Pool I on which the Senior Enhancement
Percentage for Pool I is less than the Senior Specified Enhancement Percentage
for Pool I, and for any Remittance Date on or after the 10% Balance Date for
Pool I, and the Class AS Notes or the Class MS-1 Notes are still outstanding,
zero and (b) on any other Remittance Date, the excess, if any, of (i) the sum of
(A) the Class A Principal Balance of the Class AS Notes after giving effect to
the payment of the Class A Principal Distribution Amount for Pool I on such
Remittance Date, (B) the Class Principal Balance of the Class MS-1 Notes after
giving effect to the payment of the Class MS-1 Principal Distribution Amount on
such Remittance Date and (C) the Class Principal Balance of the Class MS-2 Notes
immediately prior to such Remittance Date over (ii) the lesser of (A) 86.125% of
the outstanding principal balance of the Loans in Pool I as of the last day of
the related Due Period and (B) the outstanding principal balance of the Loans in
Pool I as of the last day of the related Due Period MINUS 2.00% of the Original
Pool Amount of Pool I.
CLASS MS-2 REALIZED LOSS AMOUNT: As of any Remittance Date, the lesser
of (x) the Class MS-2 Unpaid Realized Loss Amount as of such Remittance Date and
(y) the portion of the Pool Available Remittance Amount for Pool I for such
Remittance Date remaining after application of amounts set forth in Section
7.08(d)(i) through (vii), inclusive, with respect to Pool I.
CLASS MS-2 REMITTANCE RATE: The annual rate of interest payable to the
Class MS-2 Noteholders, which shall be equal to the lesser of (i) LIBOR plus
1.25% (or plus 2.50% for each Remittance Date occurring after the Optional
Servicer Termination Date) and (ii) the applicable Net Funds Cap.
CLASS POOL FACTOR: With respect to each Class of Notes, as of any date
of determination, the then Class Principal Balance for such Class divided by the
Original Principal Balance for such Class.
CLASS PRINCIPAL BALANCE: With respect to each Class of Notes, as of
any date of determination, the Original Principal Balance of such Class less (i)
the sum of all amounts previously distributed to the Noteholders of such Class
in respect of principal pursuant to Section 7.05(d) and (ii) all Applied
Realized Losses allocated to such Class.
CLASS R CERTIFICATE: A Certificate denominated as a Class R
Certificate, issued by the Trust pursuant to the Trust Agreement and
representing both the Class R-I and Class R-II Interests.
CLASS R-I INTERESTS: As defined and described in Section 2.13(b) and
(c) of the Trust Agreement.
CLASS R-II INTERESTS: As defined and described in Section 2.13(e) of
the Trust Agreement.
CLOSING DATE: June 29, 1999
CODE: The Internal Revenue Code of 1986, as amended, or any successor
legislation thereto.
COLLATERAL: All items of property (including a Mortgaged Property),
whether real or personal, tangible or intangible, or otherwise, pledged by an
Obligor or others to the Seller (including guarantees on behalf of the Obligor)
to secure payment under a Loan.
COMMERCIAL PROPERTY: Real property (other than agricultural property
or Residential Property) that is generally used by the Obligor in the conduct of
its business.
COMPENSATING INTEREST: As defined in Section 7.12.
CONVENTIONAL COMMERCIAL LOAN PROGRAM: The Seller's Conventional
Commercial Loan Program as described in the Registration Statement.
CURRENT INTEREST REQUIREMENT: For each Class of Notes, and with
respect to each Remittance Date, an amount equal to interest based on the actual
number of days since the last Remittance Date (or in the case of the first
Remittance Date, from the Closing Date) up to but not including the upcoming
Remittance Date at the applicable Remittance Rate on the Class Principal Balance
for such Class outstanding immediately prior to such Remittance Date. The
Current Interest Requirement for a Class of Notes shall not include any
Noteholders' Interest Carryover.
CURTAILMENT: With respect to a Loan, any payment of principal received
during a Due Period as part of a payment that is in excess of five times the
amount of the Monthly Payment due for such Due Period and which is not intended
to satisfy the Loan in full, nor is intended to cure a delinquency.
CUSTODIAL AGREEMENT: Any agreement to be entered into pursuant to the
Indenture for the retention of each Loan File.
CUSTODIAN: Any custodian appointed pursuant to the Indenture. The
initial Custodian for the Pool I and Pool II Loans shall be the Trust Department
of FUNB.
CUT-OFF DATE: May 31, 1999; provided, however, that for purposes of
determining characteristics of the Loans as of the Cut-Off Date, the Cut-Off
Date for those Loans originated after May 31, 1999 shall be deemed to be the
date of the applicable Business Note.
CUTOFF DATE PRINCIPAL BALANCE: With respect to any Loan, the unpaid
principal balance thereof as of the Cut-Off Date (or as of the applicable date
of substitution with respect to a Qualified Substitute Loan).
DCR: Duff & Xxxxxx Credit Rating Co., or any successor thereto.
DEFAULTED LOAN: Means any Loan as to which the related Obligor has
failed to pay in full three or more consecutive Monthly Payments.
DEFICIENT VALUATION: With respect to any Loan, a valuation by a court
of competent jurisdiction of the related Mortgaged Property in an amount less
than the then outstanding indebtedness under the Loan, which valuation results
from a proceeding initiated under the United States Bankruptcy Code, as amended
from time to time (11 U.S.C.).
DELETED LOAN: A Loan replaced by a Qualified Substitute Loan.
DEPOSITORY: The Depository Trust Company, and any successor Depository
hereafter named.
DEPOSITORY AGREEMENT: The Note Depository Agreement as defined in the
Indenture.
DESIGNATED DEPOSITORY INSTITUTION: With respect to each Principal and
Interest Account, an entity which is an institution whose deposits are insured
by either the BIF or SAIF administered by the FDIC, the unsecured and
uncollateralized long-term debt obligations of which shall be rated "A" or
better by DCR (if rated by DCR) and "A2" or better by Moody's, or "D-1" by DCR
(if rated by DCR) and "P-1" by Moody's, and which is either (i) a federal
savings association duly organized, validly existing and in good standing under
the federal banking laws, (ii) an institution duly organized, validly existing
and in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws, or (iv) a principal subsidiary of a
bank holding company, in each case acting or designated by the Servicer as the
depository institution for a Principal and Interest Account.
DETERMINATION DATE: That day of each month which is the later of (i)
the third Business Day prior to the 15th day of such month and (ii) the seventh
Business Day of such month.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Notes from time to time as a
securities depository.
DUE DATE: The day of the month on which the Monthly Payment is due
from the Obligor on a Loan.
DUE PERIOD: With respect to each Remittance Date, the calendar month
preceding the month in which such Remittance Date appears.
EXCESS PAYMENTS: With respect to a Due Period, any amounts received on
a Loan in excess of the Monthly Payment due on the Due Date relating to such Due
Period which does not constitute either a Curtailment or a Principal Prepayment
or payment with respect to an overdue amount. Excess Payments are payments of
principal for purposes of this Agreement.
EXCESS PROCEEDS: As of any Remittance Date, with respect to any
Liquidated Loan, the excess, if any, of (a) the total Net Liquidation Proceeds,
over (b) the Principal Balance of such Loan as of the date such Loan became a
Liquidated Loan plus 30 days interest thereon at the Weighted Average Class
Adjusted Loan Remittance Rate for the applicable Pool; PROVIDED, HOWEVER, that
such excess shall be reduced by the amount by which interest accrued on the
advance, if any, made by the Servicer pursuant to Section 4.14 at the related
Loan Interest Rate exceeds interest accrued on such advance at the applicable
Class Remittance Rates.
EXCESS SPREAD: With respect to any Remittance Date and Pool of Loans,
an amount equal to the excess of (A) the product of (i) the aggregate Principal
Balances of the applicable Pool of Loans as of the first day of the immediately
preceding Due Period and (ii) one-twelfth of the weighted average Loan Interest
Rate for the applicable Pool of Loans, as the case may be, as of the first day
of the related Due Period over (B) the sum of (i) the aggregate Current Interest
Requirements for the applicable Pool of Notes for such Remittance Date, (ii)
amounts to be deposited into the applicable Expense Account on such Remittance
Date pursuant to Sections 7.03(a)(i), and (iii) the Servicing Fee for the
applicable Pool of Mortgage Loans with respect to such Remittance Date.
EXPENSE ACCOUNT: The expense account established and maintained by the
Indenture Trustee in accordance with Section 7.03 hereof.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHA: The Federal Housing Administrator, and its successors in
interest.
FHLMC: Xxxxxxx Mac (formerly, the Federal Home Loan Mortgage
Corporation) and any successor thereto.
FIDELITY BOND: As described in Section 4.09.
FINAL MATURITY DATE: With respect to each Class of Notes, the
Remittance Date in the stated month:
CLASS DATE
----- -----
Class AS-1 June 2013
Class AS-2 September 2021
Class AS-3 February 2028
Class MS-1 June 2029
Class MS-2 June 2029
Class BS June 2029
Class AN September 2017
Class MN May 2029
Class BN May 2029
FNMA: Xxxxxx Xxx (formerly, the Federal National Mortgage Association)
and any successor thereto.
FORECLOSED PROPERTY: Property, the title to which is acquired in
foreclosure or by deed in lieu of foreclosure.
FUNB: First Union National Bank, a national banking association
headquartered in Charlotte, North Carolina, and any successor thereto.
GROSS MARGIN: With respect to each adjustable rate Loan, the number of
basis points set forth in the related Business Note which is added to the
applicable Index, to determine the Loan Interest Rate on the related Change
Date, subject to the applicable Periodic Rate Cap and the applicable Lifetime
Cap and Lifetime Floor.
HOLDER OF THE SPECIAL INTERESTS: The Person holding the Special
Interests as set forth in the Trust Agreement.
HUD: The United States Department of Housing and Urban Development,
and its successor in interest.
INDENTURE: The Indenture dated as of May 31, 1999, between the Issuer
and the Indenture Trustee, as the same may be amended and supplemented from time
to time.
INDENTURE TRUSTEE: The Person acting as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture, initially HSBC Bank USA.
INDENTURE TRUSTEE'S LOAN FILE: The documents delivered to the
Indenture Trustee or the Custodian pursuant to Section 2.04.
INDEX: Either the Prime Rate or the Treasury Index, as the case may
be.
INSOLVENCY EVENT: With respect to a specified Person, (a) the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver
(including any receiver appointed under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended), liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
INSURANCE PROCEEDS: Proceeds paid (i) to the Issuer or the Servicer by
any insurer pursuant to any insurance policy covering a Loan, Mortgaged
Property, or REO Property, including but not limited to title, hazard, life,
health and/or accident insurance policies, and/or (ii) by the Servicer pursuant
to Section 4.08, in either case, net of any expenses which are incurred by the
Servicer in connection with the collection of such proceeds and not otherwise
reimbursed to the Servicer.
INTEREST CARRYOVER ACCOUNT: The account established and maintained by
the Indenture Trustee in accordance with Section 7.06 hereof
INTEREST DETERMINATION DATE: With respect to any Interest Period after
the initial Interest Period, the second LIBOR Determination Date prior to such
Interest Period.
INTEREST PERIOD: With respect to the first Remittance Date, the period
commencing on the Closing Date and ending on July 14, 1999. Thereafter, the
period commencing on a Remittance Date and ending on the day immediately
preceding the next Remittance Date.
INTEREST RATE: Means, for each Class of Notes, the applicable
Remittance Rate for such Class.
INTEREST RATE SERVICES AGREEMENT: That certain Interest Rate Services
Agreement dated as of June 29, 1999 between the Indenture Trustee and the
Remarketing Agent, as amended or supplemented.
INTEREST SHORTFALL CARRYFORWARD AMOUNT: Means, as of any Remittance
Date and with respect to any Class of Notes, the sum of (i) the amount, if any,
by which (X) the sum of (a) the Current Interest Requirement for such Class for
such Remittance Date plus (b) the Interest Shortfall Carryforward Amount for
such Class as of the immediately preceding Remittance Date exceeds (Y) the
amount paid to the Noteholders of such Class on such Remittance Date on account
of interest and (ii) one month's interest on the amount determined pursuant to
clause (i) at the applicable Class Remittance Rate.
ISSUER: Means The Money Store Business Loan Backed Trust 1999-1.
LETTER OF CREDIT FEE: The fee payable to the Issuer of the Letter of
Credit on each Remittance Date.
LETTER OF CREDIT PAYMENT: As to each Remittance Date and each Letter of
Credit, the sum of: (1) the excess, if any, of (x) the aggregate Class Principal
Balance of the Notes of the applicable Pool (after taking into account all
distributions of principal to be made on such Remittance Date other than
relating to the Letter of Credit) over (y) the aggregate principal balance of
the Loans of such Pool as of the last day of the immediately preceding Due
Period; and (2) the excess, if any, of (x) the aggregate Current Interest
Requirements and Class Interest Shortfall Carryforward Amounts for the Notes of
such Pool over (y) the Pool Available Remittance Amount for such Pool for such
Remittance Date (other than the portion relating to payments under the Letter of
Credit); provided, however, that in no event shall the Letter of Credit Payment
for a Letter of Credit exceed the then applicable LOC Available Amount.
LETTER OF CREDIT PROVIDER: FUNB, or its successors and assigns.
LETTERS OF CREDIT: Reference to each of the two Letters of Credit, one
issued for each Pool, by First Union National Bank on June 29, 1999, in favor of
the Indenture Trustee. The Letter of Credit with respect to Pool I is identified
by Letter of Credit Number SM409313C and the Letter of Credit with respect to
Pool II is identified by Letter of Credit Number SM409314C.
LETTER OF CREDIT REIMBURSEMENT AMOUNTS: For any Remittance Date and
each Letter of Credit, an amount equal to all Letter of Credit Payments under
that Letter of Credit that remain unreimbursed, together with interest thereon
from the date such Letter of Credit Payments were made until paid in full at a
rate equal to LIBOR plus 0.22%.
LIBOR: The London Interbank Offered Rate for one-month U.S. dollar
deposits, determined on each Interest Determination Date as provided in Section
12.04 hereof. LIBOR for the first Remittance Date will be equal to 5.1675%.
LIBOR DETERMINATION DATE: A date which is both a Business Day and a
London Banking Day prior to the commencement of each related Interest Period.
LIFETIME CAP: The provision in the Business Note for a Loan, which
limits the maximum Loan Interest Rate over the life of such Loan to the rate set
forth in the applicable Business Note.
LIFETIME FLOOR: The provision in the Business Note for Loan, which
limits the minimum Loan Interest Rate over the life of such Loan to the rate set
forth in the applicable Business Note.
LIQUIDATED LOAN: Any defaulted Loan or REO Property (i) as to which
the Servicer has determined that all amounts which it reasonably and in good
faith expects to recover have been recovered from or on account of such Loan, or
(ii) if earlier, is 180 days delinquent.
LIQUIDATION PROCEEDS: Cash, including Insurance Proceeds, proceeds of
any REO Disposition, amounts required to be deposited in the applicable
Principal and Interest Account pursuant to Section 4.10 hereof, and any other
amounts received in connection with the liquidation of defaulted Loans, whether
through trustee's sale, foreclosure sale or otherwise.
LOAN: An individual loan which is transferred to the Indenture Trustee
pursuant to this Agreement, together with the rights and obligations of a holder
thereof and payments thereon and proceeds therefrom, the Loans originally
subject to this Agreement being identified on the Loan Schedules delivered to
the Custodian and the Indenture Trustee as Exhibits E-1 and E-2. Any loan which,
although intended by the parties hereto to have been, and which purportedly was,
contributed to the Issuer by the Seller (as indicated by Exhibits E-1 and E-2),
in fact was not contributed or otherwise transferred and assigned to the Issuer
for any reason whatsoever, including, without limitation, the incorrectness of
the statement set forth in Section 3.02(i) hereof with respect to such loan,
shall nevertheless be considered a "Loan" for all purposes of this Agreement.
LOAN FILE: The Indenture Trustee's Loan File.
LOAN INTEREST RATE: The fixed or adjustable rate of interest borne by
a Business Note, as shown on the applicable Loan Schedule.
LOAN SCHEDULE: The separate schedules of Pool I and Pool II Loans
delivered to the Custodian on behalf of the Indenture Trustee and attached
hereto as Exhibits E-1 and E-2, such schedule identifying each Loan by address
of the related premises, and the name of the Obligor and setting forth as to
each Loan the following information: (i) the Principal Balance as of the close
of business on the Cut-Off Date, (ii) the Account Number, (iii) the original
principal amount of the Loan, (iv) the Loan date and original number of months
to maturity, in months, (v) the Loan Interest Rate, (vi) when the first Monthly
Payment was due, (vii) the Monthly Payment as of the Cut-Off Date, (viii) the
remaining number of months to maturity as of the Cut-Off Date, (ix) the Index
and Gross Margin, if applicable, and (x) the Lifetime Floor and Lifetime Cap, if
applicable.
LOAN-TO-VALUE RATIO or LTV: With respect to any Loan, the original
amount of the Loan divided by the lower of the cost or the appraisal value of
any real estate Collateral plus the discounted value (as determined by the
Seller in accordance with its underwriting criteria) of any non-real estate
Collateral securing such loan.
LOC AVAILABLE AMOUNT: As to each Remittance Date, the LOC Available
Amount equals A minus B minus C, where:
A = for Pool I: (x) for the first 24 Remittance Dates, 2.5% of
the Original Pool Amount for Pool I and (y) thereafter, the
Specified Subordinated Amount for Pool I; and
for Pool II: (x) for the first 24 Remittance Dates, 7.22% of
the Original Pool Amount for Pool II and (y) thereafter, the
Specified Subordinated Amount for Pool II;
B = $0 for the first 24 Remittance Dates and, thereafter, the
excess, if any, of (x) the aggregate principal balance of the
Loans in the applicable Pool as of the last day of the related
Due Period over (y) the aggregate Class Principal Balances of the
Notes of that Pool (after taking into account all distributions
of principal to be made on such Remittance Date other than
relating to the Letter of Credit); and
C = the amount of all prior draws under the applicable Letter of
Credit.
LONDON BANKING DAY: Any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
MAJORITY SECURITYHOLDERS: Until such time as the principal amount of
all Classes of Notes have been reduced to zero, the holder or holders (as shown
on the Note Register) of in excess of 50% of the current then-principal amount
of all Classes of Notes voting together as a single class (accordingly, the
Holders of the Certificates shall be excluded from any rights or actions of the
Majority Securityholders during such period); and (ii) thereafter, the Holder of
the Voting Interest.
MARGIN: With respect to each Class of Notes bearing interest based
upon LIBOR and each Remittance Date, the percentage added to LIBOR to obtain the
applicable Remittance Rate for such Class of Notes.
MONTHLY ADVANCE: An advance made by the Servicer pursuant to Section
7.11 hereof.
MONTHLY PAYMENT: The scheduled monthly payment of principal and/or
interest required to be made by an Obligor on the related Loan, as set forth in
the related Business Note.
MOODY'S: 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 LOAN: A Loan that is secured by a Mortgage on a Mortgaged
Property.
MORTGAGED PROPERTY: The underlying property securing a Loan,
consisting of a fee simple estate (or, with respect to five Loans, a leasehold
interest) in a single contiguous parcel of land improved by a Commercial
Property, Multi-Family Property or Residential Property.
MORTGAGED PROPERTY STATES: Any one of the 50 states and the District
of Columbia and Puerto Rico, where the Mortgaged Properties are located.
MULTI-FAMILY LOANS: Loans secured by Multi-family Properties.
MULTI-FAMILY PROPERTY: A residential or mixed-use property, such as
rental apartment buildings or projects containing five or more units.
NET FUNDS CAP: With respect to a Class of Notes and any Remittance
Date, the per annum rate, expressed on an actual/360 basis, equal to the
fraction, expressed as a percentage, the numerator of which is the excess of (x)
the total amount of interest due on the Loans of that Pool during the preceding
Due Period, over (y) the sum of (i) the Servicing Fee, (ii) the fees due the
Owner Trustee, the Indenture Trustee, the Trust Administrator and the Letter of
Credit Provider for the related Pool, and (iii) with respect to the Class AS-3
Notes, the fee due to the Remarketing Agent, and the denominator of which is the
aggregate Class Principal Balance of each Class of Notes of that Pool
immediately prior to that Remittance Date.
NET LIQUIDATION PROCEEDS: Liquidation Proceeds net of (i) any
reimbursements to the Servicer made therefrom pursuant to Section 4.04(b) and
(ii) amounts required to be released to the related Obligor pursuant to
applicable law.
NONRECOVERABLE ADVANCES: With respect to any Loan, (i) any Monthly
Advance previously made and not reimbursed pursuant to Section 4.04 or 7.11, or
(ii) a Servicing Advance or Monthly Advance proposed to be made in respect of a
Loan or REO Property which, in the good faith business judgment of the Servicer,
will not or, in the case of a proposed advance, would not be ultimately
recoverable pursuant to Sections 4.04 or 7.11.
NOTE: Any Class AS-1 Note, Class AS-2 Note, Class AS-3 Note, Class
MS-1 Note, Class MS-2 Note, Class BS Note, Class AN Note, Class MN Note or Class
BN Note.
NOTE DISTRIBUTION ACCOUNT: The account designated as such, established
and maintained pursuant to Section 7.01.
NOTEHOLDERS' INTEREST CARRYOVER: For any Remittance Date on which the
Remittance Rate for a Class of Notes is based upon the applicable Net Funds Cap,
the excess of (i) the amount of interest such Class of Notes would be entitled
to receive on such Remittance Date had interest been calculated at a rate equal
to LIBOR plus the applicable Margin or the Auction Rate, as the case may be,
over (ii) the amount of interest such Class will receive on such Remittance Date
at the applicable Net Funds Cap, together with the unpaid portion of any such
excess from prior Remittance Dates (and interest thereon at the then applicable
Remittance Rate, without giving effect to the Net Funds Cap). No Noteholders'
Interest Carryover shall be paid on a Class of Notes after the Class Principal
Balance of such Class is reduced to zero.
OBLIGOR: The obligor on a Business Note.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, Vice Chairman of the Board, the President, a Vice President or Assistant
Vice President, the Treasurer, the Secretary, or one of the Assistant
Secretaries of the Representative, the Seller, or the Servicer, as required by
this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be counsel for the Representative, the Servicer or the Trust
Administrator, reasonably acceptable to the Indenture Trustee and experienced in
matters relating thereto; except that any opinion of counsel relating to (a) the
qualification of REMIC I and REMIC II each as a REMIC or (b) compliance with the
REMIC Provisions, must be an opinion of counsel who (i) is in fact independent
of the Representative, the Servicer or the Trust Administrator, (ii) does not
have any direct financial interest or any material indirect financial interest
in the Representative, the Servicer or the Trust Administrator or in an
affiliate thereof and (iii) is not connected with the Representative, the
Servicer or the Trust Administrator as an officer, employee, director or person
performing similar functions.
OPTIONAL SERVICER TERMINATION DATE: As defined in Section 11.01(b)
hereof.
ORIGINAL CLASS AN PRINCIPAL BALANCE: $55,395,000.
ORIGINAL CLASS AS-1 PRINCIPAL BALANCE: $137,788,000.
ORIGINAL CLASS AS-2 PRINCIPAL BALANCE: $141,057,000.
ORIGINAL CLASS AS-3 PRINCIPAL BALANCE: $190,443,000.
ORIGINAL CLASS BN PRINCIPAL BALANCE: $4,457,000.
ORIGINAL CLASS BS PRINCIPAL BALANCE: $12,423,000.
ORIGINAL CLASS MN PRINCIPAL BALANCE: $2,229,000.
ORIGINAL CLASS MS-1 PRINCIPAL BALANCE: $22,084,000.
ORIGINAL CLASS MS-2 PRINCIPAL BALANCE: $23,463,000.
ORIGINAL COLLATERAL AMOUNT: The aggregate Principal Balance of the
Loans as of the Cut-Off Date equal to $615,810,348.49.
ORIGINAL POOL AMOUNT: The aggregate Principal Balance of the Loans as
of the Cut-Off Date of that Pool, in the case of Pool I $552,136,944.03 and in
the case of Pool II $63,673,404.46, respectively.
ORIGINAL PRINCIPAL BALANCE: With respect to each Class of Notes, the
amount set forth for such Class under the definitions of Original Class AS-1
Principal Balance, Original Class AS-2 Principal Balance, Original Class AS-3
Principal Balance, Original Class MS-1 Principal Balance, Original Class MS-2
Principal Balance, Original Class BS Principal Balance, Original Class AN
Principal Balance, Original Class MN Principal Balance, and Original Class BN
Principal Balance, as the case may be.
OWNER TRUST ESTATE: Has the meaning assigned to such term in the Trust
Agreement.
OWNER TRUSTEE: Chase Manhattan Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, its successors in interest or any successor Owner Trustee
under the Trust Agreement.
PERCENTAGE INTEREST: With respect to a Note, the portion of the
respective Class evidenced by such Note, expressed as a percentage, the
numerator of which is the denomination represented by such Note and the
denominator of which is the Original Principal Balance of such Class. The Notes
are issuable only in the minimum Percentage Interest corresponding to a minimum
denomination of $25,000.00 and integral multiples of $1,000 in excess thereof.
PERMITTED INSTRUMENTS: As used herein, Permitted Instruments shall
include the following:
(i) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal
and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States, FHA debentures,
FHLMC senior debt obligations, Federal Home Loan Bank
consolidated senior debt obligations, and FNMA senior debt
obligations, but excluding any of such securities whose terms do
not provide for payment of a fixed dollar amount upon maturity or
call for redemption;
(ii) federal funds, certificates of deposit, time deposits
and banker's acceptances (having original maturities of not more
than 365 days) of any bank or trust company incorporated under
the laws of the United States or any state thereof, provided that
the short-term debt obligations of such bank or trust company at
the date of acquisition thereof have been rated "D-1" or better
by DCR (if rated by DCR) and "P-1" or better by Moody's;
(iii) deposits of any bank or savings and loan association
which has combined capital, surplus and undivided profits of at
least $3,000,000 which deposits are held only up to the limits
insured by the BIF or SAIF administered by the FDIC, provided
that the unsecured long-term debt obligations of such bank or
savings and loan association have been rated "A" or better by DCR
(if rated by DCR) and "A3" or better by Moody's;
(iv) commercial paper (having original maturities of not
more than 365 days) rated "D-1" or better by DCR (if rated by
DCR) and "P-1" or better by Moody's;
(v) debt obligations rated "AAA" by DCR (if rated by DCR)
and "Aaa" by Moody's (other than any such obligations that do not
have a fixed par value and/or whose terms do not promise a fixed
dollar amount at maturity or call date);
(vi) investments in money market funds rated or "Aaa" or
better by Moody's and "AAAm" or "AAAm - G" by Standard & Poor's
Rating Services, the assets of which are invested solely in
instruments described in clauses (i)-(v) above including, without
limitation, any fund which the Indenture Trustee or the Owner
Trustee or an affiliate of the Indenture Trustee or the Owner
Trustee serves as an investment advisor, administrator,
shareholder, servicing agent and/or custodian or sub-custodian,
notwithstanding that (a) the Indenture Trustee or the Owner
Trustee or an affiliate of the Indenture Trustee or the Owner
Trustee charges and collects fees and expenses from such funds
for services rendered, (b) the Indenture Trustee or the Owner
Trustee charges and collects fees and expenses for services
rendered pursuant to this Agreement, and (c) services performed
for such funds and pursuant to this Agreement may converge at any
time (the parties hereto specifically authorize the Indenture
Trustee or the Owner Trustee, or an affiliate of the Indenture
Trustee or the Owner Trustee to charge and collect all fees and
expenses from such funds for services rendered to such funds, in
addition to any fees and expenses the Indenture Trustee or the
Owner Trustee may charge and collect for services rendered
pursuant to the Indenture and this Agreement;
(vii) guaranteed investment contracts or surety bonds
providing for the investment of funds in an account or insuring a
minimum rate of return on investments of such funds, which
contract or surety bond shall:
(a) be an obligation of an insurance company or other
corporation whose debt obligations or insurance
financial strength or claims paying ability are rated
"AAA" by DCR (if rated by DCR) and "Aaa" by Moody's;
and
(b) provide that the Indenture Trustee may exercise all
of the rights of the Representative under such
contract or surety bond without the necessity of the
taking of any action by the Representative;
(viii) A repurchase agreement that satisfies the following
criteria:
(a) Must be between the Indenture Trustee and a dealer
bank or securities firm described in 1. or 2. below:
1. Primary dealers on the Federal Reserve reporting
dealer list which are rated "A" or better by DCR
(if rated by DCR) and Moody's, or
2. Banks rated "A" or above by DCR (if rated by DCR)
and Moody's;
(b) The written repurchase agreement must include the following:
1. Securities which are acceptable for the transfer are:
A. Direct U.S. governments, or
B. Federal Agencies backed by the full faith and credit
of the U.S. government (and FNMA & FHLMC)
2. the term of the repurchase agreement may be up to 60
days
3. the collateral must be delivered to the Indenture
Trustee or third party custodian acting as agent for
the Indenture Trustee by appropriate book entries and
confirmation statements, and must have been delivered
before or simultaneous with payment (perfection by
possession of certificated securities)
4. Valuation of collateral
A. The securities must be valued weekly, marked-to-
market at current market price plus accrued interest.
B. The value of the collateral must be equal to at
least 104% of the amount of cash transferred by the
Indenture Trustee or custodian for the Indenture
Trustee to the dealer bank or security firm under the
repurchase agreement plus accrued interest. If the
value of securities held as collateral slips below 104%
of the value of the cash transferred by the Indenture
Trustee plus accrued interest, then additional cash
and/or acceptable securities must be transferred. If,
however, the securities used as collateral are FNMA or
FHLMC, then the value of collateral must equal at least
105%; and
(ix) any other investment acceptable to the Rating Agencies,
written confirmation of which shall be furnished by to the Indenture Trustee.
PERMITTED TRANSFEREE: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Code section 860E(c)(1)) with respect to any Class R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(C), (v) a Person other than a "United States Person" as
defined in Code Section 7701(a)(30), unless the Trust Administrator consents in
writing to the Transfer to such Person and (vi) any other Person so designated
by the Trust Administrator based upon an Opinion of Counsel that the transfer of
a Percentage Interest in a Class R Certificate to such Person may cause either
REMIC I or REMIC II to fail to qualify as a REMIC at any time that the Pool I
Notes are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
FHLMC, a majority of its board of directors is not selected by such governmental
unit.
PERSON: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
POOL: Reference to either Pool I or Pool II.
POOL I: The pool of notes or loans, as applicable, constituting the
part of the Trust comprising the Pool I Notes or the Pool I Loans, respectively.
POOL II: The pool of notes or loans, as applicable, constituting the
part of the Trust comprising the Pool II Notes or the Pool II Loans,
respectively.
POOL AVAILABLE REMITTANCE AMOUNT: With respect to any Pool and any
Remittance Date, (i) the sum of all amounts relating to the Loans of such Pool
described in clauses (i) through (viii), inclusive, of Section 4.03(b) received
by the Servicer or any Subservicer (including any amounts paid by the Servicer
and the Representative and excluding any amounts withdrawn by the Servicer with
respect to the Loans in such Pool pursuant to Section 4.04(b), (c), (e) and (f)
as of the related Determination Date) during the related Due Period or, with
respect to Section 4.03(b)(vi), on the related Determination Date, and deposited
into the applicable Note Distribution Account as of the Determination Date, plus
(ii) the amount of any Monthly Advances and Compensating Interest payments
relating to the Loans of such Pool, remitted by the Servicer for such Remittance
Date, and (iii) any amounts received on such Remittance Date as a Letter of
Credit Payment, less (iv) those amounts withdrawable from the applicable Note
Distribution Account pursuant to Section 7.01(b)(ii). The "Pool Available
Remittance Amount" does not include (x) funds in the applicable Principal and
Interest Account and available to be withdrawn pursuant to Section 4.04(d)(ii)
and (y) funds in the applicable Note Distribution Account that cannot be
distributed by the Indenture Trustee on such Remittance Date as a result of a
proceeding initiated under the United States Bankruptcy Code, as amended from
time to time (11 U.S.C.).
POOL CURRENT INTEREST REQUIREMENT: For each Pool, the sum of the
Current Interest Requirements of each Class of Notes of such Pool.
POOL I LOAN: A Loan listed on Exhibit E-1 delivered to the Custodian
on behalf of the Indenture Trustee, as such Exhibit may be amended from time to
time.
POOL I NOTE: A Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class
MS-2 or Class BS Note.
POOL I TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee and the Annual Expense Escrow Amount allocable to
Pool I.
POOL II LOAN: A Loan listed on Exhibit E-2 delivered to the Custodian
on behalf of the Indenture Trustee, as such Exhibit may be amended from time to
time.
POOL II NOTE: A Class AN, Class MN or Class BN Note.
POOL II TRANSACTION FEES: For any Remittance Date, the sum of the
portion of the Servicing Fee and the Annual Expense Escrow Amount allocable to
Pool II.
POOL ORIGINAL COLLATERAL AMOUNT: For each Pool the aggregate Principal
Balances of the related Loans as of the Cut-Off Date.
POOL PRINCIPAL BALANCE: With respect to any Pool, the sum of the Class
Principal Balances of the Notes of such Pool.
POOL PRINCIPAL DISTRIBUTION AMOUNT: For each Pool, on any Remittance
Date, the excess of:
(X) the sum, without duplication, of the following:
(i) each payment of principal received by the Servicer or
any Subservicer (exclusive of Curtailments, Principal Prepayments
and amounts described in clause (iii) hereof) during the related
Due Period with respect to the Loans of the related Pool,
(ii) all Curtailments and all Principal Prepayments received
by the Servicer or any Subservicer during the related Due Period
with respect to the Loans of the related Pool,
(iii) the principal portion of all Insurance Proceeds,
Released Mortgaged Property Proceeds and Net Liquidation Proceeds
received by the Servicer or any Subservicer during the related
Due Period with respect to the Loans of the related Pool,
(iv) that portion of the purchase price (as indicated in
Section 2.05(b)) for any repurchased Loan (including Defaulted
Loans) from the related Pool which represents principal and any
Substitution Adjustments deposited in the applicable Principal
and Interest Account with respect to such Loans of the related
Pool and transferred to the applicable Note Distribution Account
as of the related Determination Date,
(v) the then outstanding Principal Balance of any Loan
which, as of the first day of the related Due Period, has become
a Liquidated Loan,
(vi) any proceeds representing principal on the Loans of the
related Pool received by the Indenture Trustee in connection with
the liquidation of the Loans of the related Pool or the
termination of the Trust, and
(vii) the Accelerated Principal Distribution Amount for such
Pool for such Remittance Date, OVER
(Y) the amount of any Subordination Reduction Amount for such
Pool for such Remittance Date.
PREFERENCE AMOUNT: means any amount previously distributed to a holder
of a Pool I or Pool II Note (other than the Trust Fund) that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from time
to time, in accordance with a final nonappealable order of a court having
competent jurisdiction.
PRIME RATE: With respect to any date of determination, the lowest
prime lending rate published in the Money Rate Section of THE WALL STREET
JOURNAL.
PRINCIPAL AND INTEREST ACCOUNT: Any of the principal and interest
accounts established by the Servicer pursuant to Section 4.03 hereof.
PRINCIPAL BALANCE: With respect to any Loan or related REO Property,
at any date of determination, (i) the principal balance of the Loan outstanding
as of the Cut-Off Date or substitution date relative to Qualified Substitute
Loans, after application of principal payments received on or before such date,
minus (ii) the sum of (a) the principal portion of the Monthly Payments received
during each Due Period ending prior to the most recent Remittance Date, which
were distributed pursuant to Section 7.05 on any previous Remittance Date, and
(b) all Principal Prepayments, Curtailments, Excess Payments, all Insurance
Proceeds, Released Mortgaged Property Proceeds, Net Liquidation Proceeds and net
income from an REO Property to the extent applied by the Servicer as recoveries
of principal in accordance with the provisions hereof, which were distributed
pursuant to Section 7.08 on any previous Remittance Date. The Principal Balance
of a Liquidated Loan shall equal $0.
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Loan equal to the outstanding principal balance thereof, received in advance of
the final scheduled Due Date which is intended to satisfy a Loan in full.
PRIOR LIEN: With respect to any Loan which is not a first priority
lien, each loan relating to the corresponding Mortgaged Property having a higher
priority lien.
PROHIBITED TRANSACTION: "Prohibited Transaction" shall have the
meaning set forth from time to time in the definition thereof at Section
860F(a)(2) of the Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE LOAN: A loan or loans substituted for a Deleted
Loan pursuant to Section 2.05 or 3.03 hereof, which (i) has or have a Gross
Margin and Index of not less than (and not more than two percentage points more
than) the Gross Margin and Index for the Deleted Loan; (ii) relates or relate to
the same type of Collateral, as the Deleted Loan; (iii) matures or mature no
later than (and not more than one year earlier than) the Deleted Loan; (iv) has
or have a Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such
substitution no higher than the Loan-to-Value Ratio of the Deleted Mortgage Loan
at such time; (v) has or have a principal balance or principal balances (after
application of all payments received on or prior to the date of substitution)
equal to or less than the Principal Balance (prior to the occurrence of Realized
Losses) of the Deleted Loan as of such date; (vi) was originated under the same
program type as the Deleted Loan; and (vii) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01(b)
and 3.02.
RATING AGENCIES: DCR and Xxxxx'x.
RATING AGENCY CONDITION: With respect to any action, that each of the
Rating Agencies shall have notified the Servicer, the Owner Trustee and the
Indenture Trustee, orally or in writing, that such action will not, in and of
itself, result in a reduction or withdrawal of the then current rating of any
class of Notes.
REALIZED LOSS: With respect to each Liquidated Loan, an amount (not
less than zero or greater than the related outstanding principal balance as of
the date of the final liquidation) equal to the outstanding principal balance of
the Loan as of the date of such liquidation, minus the Net Liquidation Proceeds
relating to such Liquidated Loan (such Net Liquidation Proceeds to be applied
first to the principal balance of the Liquidated Loan and then to interest
thereon). With respect to each Loan which has become the subject of a Deficient
Valuation, the Realized Loss shall be calculated as the difference between the
principal balance of the Loan immediately prior to such Deficient Valuation and
the principal balance of the Loan as reduced by the Deficient Valuation.
REALIZED LOSS AMOUNT: With respect to Pool I, the collective reference
to the Class MS-1 Realized Loss Amounts, Class MS-2 Realized Loss Amounts and
Class BS Realized Loss Amounts, and with respect to Pool II, the collective
reference to the Class MN Realized Loss Amounts and Class BN Realized Loss
Amounts.
RECORD DATE: With respect to any Remittance Date, the close of
business on the last day of the month immediately preceding the month of the
related Remittance Date.
REFERENCE BANKS: Leading banks selected by the Trust Administrator and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, (ii) which have been
designated by the Trust Administrator to the Representative and the Servicer and
(iii) which are not affiliates of the Representative.
REGISTRATION STATEMENT: The registration statement (File No.
333-60771) filed by the Representative with the Securities and Exchange
Commission in connection with the issuance and sale of the Notes and the
Certificates, including the Prospectus dated June 24, 1999 and the Prospectus
Supplement dated June 24, 1999.
REIMBURSABLE AMOUNTS: As of any date of determination, an amount
payable to the Servicer and/or Representative with respect to (i) the Monthly
Advances and Servicing Advances reimbursable pursuant to Section 4.04(b), (ii)
any advances reimbursable pursuant to Section 4.04 and not previously
reimbursed, and (iii) any other amounts reimbursable to the Servicer or the
Representative pursuant to this Agreement.
RELEASED MORTGAGED PROPERTY PROCEEDS: As to any Loan, proceeds
received by the Servicer in connection with (a) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (b) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial condemnation, sale or otherwise, which are not released to
the Obligor in accordance with applicable law, the Servicer's customary
servicing procedures and this Agreement.
REMARKETING AGENT: First Union Capital Markets Corp., and its
successors and assigns.
REMARKETING AGENT FEE: The meaning set forth in the Interest Rate
Services Agreement.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC CHANGE OF LAW: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.
REMIC I: As defined in the Trust Agreement.
REMIC II: As defined in the Trust Agreement.
REMIC I REGULAR INTERESTS: As defined and described in Section
2.13(b)-(d) of the Trust Agreement.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REMITTANCE DATE: The 15th day of any month or if such 15th day is not
a Business Day, the first Business Day immediately following, commencing on July
15, 1999; provided, however, that in no event shall the Remittance Date occur
less than three Business Days following the Determination Date.
REMITTANCE RATE: With respect to a Class of Notes, the annual rate of
interest payable to the Noteholders of such Class, which rate is set forth, or
determined as provided, under the definitions of the Class AS-1 Remittance Rate,
Class AS-2 Remittance Rate, Class AS-3 Remittance Rate, Class MS-1 Remittance
Rate, Class MS-2 Remittance Rate, Class BS Remittance Rate, Class AN Remittance
Rate, Class MN Remittance Rate and Class BN Remittance Rate.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure. The proceeds of any REO Disposition constitute part of the
definition of Liquidation Proceeds.
REO PROPERTY: As described in Section 4.10.
REPRESENTATIVE: The Money Store Inc., a New Jersey corporation, and
its successors and assigns as Representative hereunder.
RESIDENTIAL PROPERTY: Any one or more of the following, (i) single
family dwelling unit not attached in any way to another unit, (ii) row house,
(iii) two-family house, (iv) low-rise condominium, (v) planned unit development,
(vi) three- or four-family house, (vii) high-rise condominium, (viii) mixed use
building or (ix) manufactured home (as defined in FNMA/FHLMC Seller-Servicers'
Guide) to the extent that it constitutes real property in the state in which it
is located.
RESPONSIBLE OFFICER: When used with respect to the Indenture Trustee
or the Custodian (a) any officer assigned to the Corporate Trust Department,
Corporate Trust Office, or similar group, and when used with respect to the
Owner Trustee, any officer assigned to the Owner Trustee's Corporate Trust
Office as set forth in the Trust Agreement, in each case including any Vice
President, Assistant Vice President, any Assistant Secretary, any trust officer
or any other officer customarily performing functions similar to those performed
by any of the above designated officers and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and (b) who
shall have direct responsibility for the administration of this Agreement. When
used with respect to the Representative, the Seller, the Servicer or any other
person, any Vice President, Assistant Vice President, the Treasurer, or any
Secretary or Assistant Secretary.
ROUNDING ACCOUNT: The account established and maintained by the
Indenture Trustee in accordance with Section 7.02 hereof.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
SBA: The United States Small Business Administration, an agency of the
United States Government.
SBA 504 LOAN: A Loan originated by the Seller in conjunction with the
SBA 504 Loan Program.
SBA 504 LOAN PROGRAM: The program established by the SBA pursuant to
Rule 504 of the SBA Rules and Regulations.
SBA RULES AND REGULATIONS: The Small Business Act of 1953, as amended,
codified at 15 U.S.C. 631 ET. SEQ., all rules and regulations promulgated from
time to time.
SBA SS. 7(A) LOAN: A loan originated pursuant to Section 7(a) of the
SBA Rules and Regulations.
SBA SS. 7(A) LOAN PROGRAM: A general business loan program established
under Section 7(a) of the SBA Rules and Regulations.
SECTION 7(A) COMPANION LOAN: A Loan originated by the Seller in
conjunction with an affiliate of the Seller originating an SBA ss.7 (a) Loan to
the same Obligor.
SELLER: The Money Store Commercial Mortgage Inc., a New Jersey
corporation, and its successors and assigns as Seller hereunder.
SENIOR ENHANCEMENT PERCENTAGE: For a Pool and any Remittance Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class Principal
Balance of the Subordinated Notes of such Pool and (ii) the Spread Amount of
such Pool, in each case after giving effect to the distribution of the
applicable Pool Available Remittance Amount on such Remittance Date by (y) the
aggregate principal balance of the Loans of such Pool as of the last day of the
related Due Period.
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE: Means 26.25% for Pool I and
34.50% for Pool II.
SERIES: 1999-1
SERIES 1999-1 NOTES: The Money Store Business Loan Backed Notes,
Series 1999-1, Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2,
Class BS, Class AN, Class MN and Class BN.
SERVICER: The Money Store Commercial Mortgage Inc., a New Jersey
corporation, and its successors and assigns as Servicer hereunder.
SERVICER DEFAULT: An event specified in Section 10.01.
SERVICING ADVANCES: All reasonable and customary "out of pocket costs"
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, (iv) compliance with the obligations under
clause (vi) of Section 4.01(a) and Sections 4.02, 4.05 and 4.07, which Servicing
Advances are reimbursable to the Servicer to the extent provided in Section
4.04(b), and (e) in connection with the liquidation of a Loan, expenditures
relating to the purchase or maintenance of any Prior Lien pursuant to Section
4.14, for all of which costs and expenses the Servicer is entitled to
reimbursement with interest thereon up to a maximum rate per annum equal to the
related Loan Interest Rate, except that any amount of such interest accrued at a
rate in excess of the applicable Weighted Average Remittance Rate with respect
to the Remittance Date on which the Net Liquidation Proceeds will be distributed
shall be reimbursable only from Excess Proceeds.
SERVICING FEE: As to each Loan, the annual fee payable to the
Servicer. Such fee shall be calculated and payable monthly only from the amounts
received in respect of interest on such Loan, shall accrue at the rate of 0.40%
per annum and shall be computed on the basis of the same principal amount and
for the period respecting which any related interest payment on a Loan is
computed. The Servicing Fee includes any servicing fees owed or payable to any
Subservicer.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Loans whose name and
signature appears on a list of servicing officers furnished to the Indenture
Trustee by the Servicer, as such list may from time to time be amended.
SPECIAL INTERESTS: Collectively, the 1% non-transferable interest in
the each of the Class I and Class II Certificates held by the Holder of the
Special Interests, pursuant to the Trust Agreement.
SPECIFIED SUBORDINATED AMOUNT: Means, for a Pool and any Remittance
Date (i) prior to the Spread Amount Stepdown Date for such Pool, 7.00% (for Pool
I) and 12.50% (for Pool II) of the related Original Pool Amount and (ii) on and
after the related Spread Amount Stepdown Date, the greater of (A) 10.50% (for
Pool I) and 18.75% (for Pool II) of the aggregate Principal Balance of the Loans
of the related Pool as of the last day of the related Due Period and (B) 2.00%
(for Pool I) and 2.00% (for Pool II) of the related Original Pool Amount;
PROVIDED, HOWEVER, that if on or after the Spread Amount Stepdown Date for a
Pool, the Senior Enhancement Percentage for that Pool for the immediately
preceding Remittance Date is less than its Senior Specified Enhancement
Percentage, the Specified Subordinated Amount for that Pool will be the amount
determined pursuant to (i) above, and the Specified Subordinated Amount for a
Pool shall never exceed the then aggregate Class Principal Balance of the Notes
of such Pool.
SPREAD AMOUNT: With respect to a Pool and any Remittance Date, the
excess, if any, of (i) the aggregate Principal Balance of the Loans of such Pool
as of the last day of the related Due Period (plus the applicable LOC Available
Amount for such Pool) over (ii) the aggregate Class Principal Balances of the
Notes of such Pool (after taking into account all distributions of principal on
such Remittance Date).
SPREAD AMOUNT STEPDOWN DATE: Means the Remittance Date occurring in
July, 2001.
STEPDOWN DATE: For a Pool, the earlier to occur of (i) the later to
occur of (x) the Remittance Date in July 2001 and (y) the first Remittance Date
on which the Senior Enhancement Percentage for such Pool (after taking into
account distributions of principal on such Remittance Date) is greater than or
equal to the Senior Specified Enhancement Percentage for such Pool and (ii) the
Remittance Date on which the aggregate Class A Principal Balance has been
reduced to zero.
SUBORDINATED DEFICIENCY AMOUNT: Means, for a Pool and for any
Remittance Date, the excess, if any, of (i) the Specified Subordinated Amount
for that Pool for such Remittance Date over (ii) the then current Spread Amount
for that Pool, after giving effect to all payments previously made on such
Remittance Date.
SUBORDINATED NOTES: Means, with respect to a Pool, the collective
reference to the Class M Notes and the Class B Notes of such Pool.
SUBORDINATION REDUCTION AMOUNT: Means for a Pool and any Remittance
Date, the lesser of (i) sum of the amount set forth in clause (X) (i) through
(vi) of the definition of Pool Principal Distribution Amount and (ii) the
excess, if any, of the then current Spread Amount for such Pool over the then
current Specified Subordinated Amount for such Pool.
SUBSERVICER: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who satisfies any requirements set forth in Section
4.01(b) hereof in respect of the qualification of a Subservicer.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of certain Loans as
provided in Section 4.01(b), a copy of which shall be delivered, along with any
modifications thereto, to the Indenture Trustee.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.05 or 3.03, the amount (if any) by which the aggregate
principal balances (after application of principal payments received on or
before the date of substitution) of any Qualified Substitute Loans as of the
date of substitution are less than the aggregate of the Principal Balance, prior
to the occurrence of Realized Losses, of the related Deleted Loans.
TAX MATTERS PARTNER: The Person or Persons designated from time to
time to act as the "tax matters partner" as defined in the Code, which initially
shall be the Holder of the Special Interests.
TAX MATTERS PERSON: The Person or Persons designated from time to time
to act as the "tax matters person" (within the meaning of the REMIC Provisions)
of REMIC I and REMIC II, which shall initially be the Holder of the Class R
Certificates.
TELERATE PAGE 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
TERMINATION PRICE: The price defined in Section 11.01 hereof.
TREASURY INDEX: The applicable Five-Year Constant Maturity Treasury
Index as published by the Federal Reserve Board in the applicable Federal
Reserve Board Statistical Release No. H.15.
TRUST: The Issuer.
TRUST ACCOUNT PROPERTY: The Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
TRUST ACCOUNTS: Means the Accounts.
TRUST ADMINISTRATOR: FUNB, or its successor in interest.
TRUST ADMINISTRATOR FEE: As to each Mortgage Loan, the annual fee
payable to the Trust Administrator.
TRUST ADMINISTRATOR'S CERTIFICATE: The certificate as defined in
Section 7.10.
TRUST AGREEMENT: Trust Agreement dated as of May 31, 1999, between the
Seller and the Owner Trustee, as the same may be amended and supplemented from
time to time.
UNPAID REALIZED LOSS AMOUNT: With respect to any Class of the Class B
or Class M Notes and as to any Remittance Date, the excess of (x) the aggregate
cumulative amount of related Applied Realized Loss Amount with respect to such
Class for all prior Remittance Dates over (y) the aggregate cumulative amount of
related Realized Loss Amounts with respect to such Class for all prior
Remittance Dates.
VOTING INTEREST: The interest in the Trust issued pursuant to the
Trust Agreement entitling the holder thereof to exercise sole voting control
over actions requiring the approval or disapproval of Certificateholders.
WEIGHTED AVERAGE CLASS ADJUSTED LOAN REMITTANCE RATE: With respect to
each Loan, a percentage per annum, being the sum of (i) the applicable Weighted
Average Remittance Rate and (ii) the Annual Expense Escrow Amount expressed as a
percentage of the aggregate Class Principal Balance of each Class of Notes in
the applicable Pool.
WEIGHTED AVERAGE COUPON CAP: With respect to a Class of Pool I Notes
and any Remittance Date, the per annum rate, expressed on an actual/360 basis,
equal to the difference between (x) the weighted average Loan Interest Rate for
the Pool I Loans and (y) a fraction, expressed as a percentage, the numerator of
which is the sum of (i) the Servicing Fee and (ii) the fees due the Owner
Trustee, the Indenture Trustee, the Trust Administrator and the Letter of Credit
Provider for the related Pool, and (iii) with respect to the Class AS-3 Notes,
the fee due the Remarketing Agent, and the denominator of which is the aggregate
outstanding Principal Balance of the Pool I Loans as of the end of the preceding
Due Period.
WEIGHTED AVERAGE REMITTANCE RATE: Means for each Pool, the average of
the Remittance Rate for each outstanding Class of Notes of such Pool, weighted
by the Class Principal Balance of each such Class of Notes.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in the Indenture, or, if not defined
therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby
and in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
ARTICLE II
CONTRIBUTION AND CONVEYANCE OF THE TRUST
Section 2.01 CONTRIBUTION AND CONVEYANCE OF TRUST ACCOUNT PROPERTY;
PRIORITY AND SUBORDINATION OF OWNERSHIP INTERESTS.
The Seller does hereby contribute, transfer, assign, set over and
convey to the Issuer without recourse, subject to the terms of this Agreement,
all of the right, title and interest of the Seller in and to the Loans and all
other assets included or to be included in the Trust Account Property. Pool I
Loans have an aggregate Principal Balance as of the Cut-Off Date of
$552,136,944.03 and the Pool II Loans have an aggregate Principal Balance as of
the CutOff Date of $63,673,404.46.
Section 2.02 POSSESSION OF LOAN FILES.
(a) Upon the issuance of the Series 1999-1 Notes, the ownership
of each Business Note, the Mortgage and the contents of the related Loan File
relating to the Loans is vested in the Issuer for the benefit of the Noteholders
and the Certificateholders.
(b) Pursuant to Section 2.04, the Seller has delivered or caused
to be delivered each Indenture Trustee's Loan File relating to the Loans to the
Custodian on behalf of the Indenture Trustee.
Section 2.03 BOOKS AND RECORDS.
The contribution of each Loan shall be reflected on the Seller's
balance sheet and other financial statements as a contribution of assets by the
Seller. The Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Loan which shall be clearly marked to
reflect the ownership of each Loan by the Issuer for the benefit of the
Noteholders and the Certificateholders.
Section 2.04 DELIVERY OF LOAN DOCUMENTS.
The Seller, (i) contemporaneously with the delivery of this Agreement, has
delivered or caused to be delivered to the Custodian each of the following
documents for each Loan:
(a) The original Business Note, endorsed by means of an allonge
as follows: "Pay to the order of HSBC Bank USA, and its successors and assigns,
as trustee under that certain Indenture dated as of May 31, 1999, for the
benefit of the noteholders of The Money Store Business Loan Backed Trust 1999-1,
without recourse" and signed, by facsimile or manual signature, in the name of
the Seller by a Responsible Officer, with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the Seller, if
the Seller was not the originator;
(b) With respect to those Loans secured by Mortgaged Properties,
either: (i) the original Mortgage, with evidence of recording thereon, (ii) a
copy of the Mortgage certified as a true copy by a Responsible Officer where the
original has been transmitted for recording until such time as the original is
returned by the public recording office or (iii) a copy of the Mortgage
certified by the public recording office in those instances where the original
recorded Mortgage has been lost; 1With respect to those Loans secured by
Mortgaged Properties, either: (i) the original Assignment of Mortgage from the
Person delivering such Assignment to "HSBC Bank USA, as Indenture Trustee for
The Money Store Business Loan Backed Trust 1999-1" with evidence of recording
thereon (provided, however, that where permitted under the laws of the
jurisdiction wherein the Mortgaged Property is located, the Assignment of
Mortgage may be effected by one or more blanket assignments for Mortgage Loans
secured by Mortgaged Properties located in the same county); or (iii) a copy of
such Assignment of Mortgage certified as a true copy by a Responsible Officer of
the Seller where the original has been transmitted for recording (provided,
however, that where the original Assignment of Mortgage is not being delivered,
each such Responsible Officer of the Seller may complete one or more blanket
certificates attaching copies of one or more Assignments of Mortgage relating to
the Mortgages originated by the Seller) (also provided, however, that the Person
delivering such Assignment shall not be required to record an assignment of a
Mortgage if such Person furnishes to the Custodian and the Trustee, on or before
the Closing Date, at the Person's expense, an opinion of counsel with respect to
the relevant jurisdiction that such recording is not necessary to perfect the
Trustee's interest in the related Mortgage Loans, in form and substance and from
counsel satisfactory to the Rating Agencies);
(c) With respect to those Loans secured by Mortgaged Properties,
either: (i) originals of all intervening assignments, if any, showing a complete
chain of title from the originator to the Seller, including warehousing
assignments, with evidence of recording thereon if such assignments were
recorded, (ii) copies of any assignments certified as true copies by a
Responsible Officer of the Seller where the originals have been submitted for
recording until such time as the originals are returned by the public recording
officer, or (iii) copies of any assignments certified by the public recording
office in any instances where the original recorded assignments have been lost;
(d) With respect to those Loans secured by Mortgaged Properties,
either: (i) originals of all title insurance policies relating to the Mortgaged
Properties to the extent the Seller obtained such policies or (ii) copies of any
title insurance policies or other evidence of lien position, including but not
limited to "PIRT" (property information report) policies, limited liability
reports and lot book reports, to the extent the Seller obtained such policies or
other evidence of lien position, certified as true by the Seller;
(e) For all Loans, blanket assignment of all Collateral securing
the Loan, including without limitation, all rights under applicable guarantees
and insurance policies;
(f) For all Loans, irrevocable power of attorney of the Seller to
the Custodian to execute, deliver, file or record and otherwise deal with the
Collateral for the Loans in accordance with this Agreement. The power of
attorney will be delegable by the Custodian to the Servicer and any successor
servicer and will permit the Custodian or its delegate to prepare, execute and
file or record UCC financing statements and notices to insurers; and 1For all
Loans, blanket UCC-1 financing statements identifying by type all Collateral for
the Loans and naming the Indenture Trustee on behalf of the Noteholders and
Certificateholders as Secured Party and the Seller as the Debtor. The UCC-1
financing statements will be filed promptly following the Closing Date in New
Jersey and California and will be in the nature of protective notice filings
rather than true financing statements.
The Seller shall, within ten Business Days after the receipt thereof,
and in any event, within one year of the Closing Date, deliver or cause to be
delivered to the Custodian: (a) the original recorded Mortgage in those
instances where a copy thereof certified by a Responsible Officer of the Seller
was delivered to the Custodian; (b) if required pursuant to Section 2.04(c), the
original recorded Assignment of Mortgage to the Indenture Trustee, which,
together with any intervening assignments of Mortgage, evidences a complete
chain of title from the originator to the Trust in those instances where copies
thereof certified by a Responsible Officer of the Seller were delivered to the
Custodian; and (c) any intervening assignments of Mortgage in those instances
where copies thereof certified by a Responsible Officer of the Seller were
delivered to the Custodian. Notwithstanding anything to the contrary contained
in this Section 2.04, in those instances where the public recording office
retains the original Mortgage, Assignment of Mortgage or the intervening
assignments of the Mortgage after it has been recorded, the Seller shall be
deemed to have satisfied its obligations hereunder upon delivery to the
Custodian of a copy of such Mortgage, Assignment of Mortgage or assignments of
Mortgage certified by the public recording office to be a true copy of the
recorded original thereof. From time to time the Seller may forward or cause to
be forwarded to the Custodian additional original documents evidencing an
assumption or modification of a Loan. All Loan documents held by the Indenture
Trustee or the Custodian on behalf of the Indenture Trustee as to each Loan are
referred to herein as the "Indenture Trustee's Loan File."
All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Servicer.
Section 2.05 ACCEPTANCE OF THE TRUST FUND; CERTAIN SUBSTITUTIONS;
CERTIFICATION BY INDENTURE TRUSTEE AND CUSTODIAN.
(a) The Custodian, on behalf of the Indenture Trustee, agrees to
execute and deliver on the Closing Date with respect to the Loans an
acknowledgment of receipt of, for each Mortgage Loan, an Assignment of Mortgage
or certified copy thereof, and for each Loan a Business Note, in the form
attached as Exhibit C hereto. The Custodian declares that it, through its
corporate trust department, will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets included in the
definition of the Trust Fund and delivered to the Custodian in trust upon and
subject to the conditions set forth herein solely as bailee for the Indenture
Trustee. The Custodian agrees, for the benefit of the Noteholders and the
Certificateholders, to review each Indenture Trustee's Loan File relating to
each Pool of Loans within 60 days after the Closing Date (or, with respect to
any Qualified Substitute Loan, within 45 days after the assignment thereof) and,
on each such date, to deliver to the Representative, the Indenture Trustee and
the Servicer, a certification in the form attached hereto as Exhibit C-1 to the
effect that, as to each Loan listed in the applicable Loan Schedule (other than
any Loan paid in full or any Loan specifically identified in such certification
as not covered by such certification), with such exceptions, if any, as
identified therein (i) all documents required to be delivered pursuant to this
Agreement are in its possession (other than items listed in Section
2.04(d)(ii)), (ii) such documents (other than items listed in Section
2.04(d)(ii)) have been reviewed by it and have not been mutilated, damaged, torn
or otherwise physically altered and relate to such Loan, (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the applicable Loan Schedule accurately reflects the information set forth in
the Indenture Trustee's Loan File, and (iv) each Business Note has been endorsed
as provided in Section 2.04 of this Agreement. The Custodian shall be under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face. Within 375 days after the Closing
Date, the Custodian shall deliver to the Servicer, the Indenture Trustee, the
Representative and any Noteholder or Certificateholder who requests a copy a
final certification in the form attached hereto as Exhibit D evidencing, if such
be the case, the completeness of the Indenture Trustee's Loan Files. In no event
shall the Indenture Trustee have any liability or responsibility for reviewing
any of the Indenture Trustee's Loan Files or any of the documents contained
therein or for the Custodian's failure to perform any of its obligations
hereunder to conduct any such review.
(b) If the Custodian during the process of reviewing the Indenture
Trustee's Loan Files finds any document constituting a part of an Indenture
Trustee's Loan File which is not properly executed, has not been received, is
unrelated to a Loan identified in the Loan Schedule, or does not conform in a
material respect to the requirements of Section 2.04 or the description thereof
as set forth in the Loan Schedule, the Custodian shall promptly so notify the
Servicer and the Representative. In performing any such review, the Custodian
may conclusively rely on the Seller as to the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Custodian's review of the Indenture Trustee's Loan Files is limited solely to
confirming that the documents listed in Section 2.04 appear on their face to
have been executed and received and to relate to the Loans identified in the
Loan Schedule, and to verify that each Mortgaged Property or other item of
collateral appears from the information contained in the Indenture Trustee's
Loan File to be a properly classified Loan. The Representative agrees to use
reasonable efforts to remedy a material defect in a document constituting part
of an Indenture Trustee's Loan File of which it is so notified. If, however,
within 60 days after notice to it respecting such defect the Representative has
not remedied the defect and the defect materially and adversely affects the
interest of the Noteholders or Certificateholders in the related Loan, the
Representative will (i) substitute in lieu of such Loan a Qualified Substitute
Loan in the manner and subject to the conditions set forth in Section 3.03 or
(ii) purchase such Loan at a purchase price equal to the Principal Balance of
the Loan as of the date of purchase, before the occurrence of Realized Losses,
if any, plus interest based on the actual number of days during the related
Interest Period on such Principal Balance, computed at the Weighted Average
Class Adjusted Loan Remittance Rates for the applicable Pool as of the next
succeeding Determination Date, plus any accrued unpaid Servicing Fees, Monthly
Advances and Servicing Advances reimbursable to the Servicer, which purchase
price shall be deposited in the applicable Principal and Interest Account on the
next succeeding Determination Date.
(c) Upon receipt by the Custodian of a certification of a Servicing
Officer of the Servicer of such substitution or purchase and the deposit of the
amounts described above in the applicable Principal and Interest Account (which
certification shall be in the form of Exhibit G hereto), the Custodian shall
release to the Servicer for release to the Representative the related Indenture
Trustee's Loan File and the Custodian shall execute, without recourse, and
deliver such instruments of transfer necessary to transfer such Mortgage Loan to
the Representative. All costs of any such transfer shall be borne by the
Servicer.
If requested by either the Representative or the Servicer, on the
Remittance Date in June of each year, commencing 2000, the Custodian shall
deliver to the Representative and the Servicer a certification detailing all
transactions with respect to the Mortgage Loans for which the Custodian holds an
Indenture Trustee's Loan File pursuant to this Agreement during the prior
calendar year. Such certification shall list all Indenture Trustee's Loan Files
which were released by or returned to the Custodian during the prior calendar
year, the date of such release or return, the reason for such release or return,
and the person to whom the Indenture Trustee's Loan File was released or the
person who returned the Indenture Trustee's Loan File.
Section 2.06 FEES AND EXPENSES OF THE INDENTURE TRUSTEE, OWNER
TRUSTEE, TRUST ADMINISTRATOR AND CUSTODIAN.
The fees and expenses of the Indenture Trustee, Owner Trustee and Trust
Administrator shall be paid from the Expense Accounts in the manner set forth in
Section 7.03 hereof; PROVIDED, HOWEVER, that the Representative shall be liable
for any expenses of the Trust incurred prior to the Closing Date. The Custodian
agrees to perform its duties hereunder without charge to the Trust. Any fees or
expenses payable to the Custodian shall be paid by the Servicer. The parties
hereto hereby covenant with the Noteholders and the Certificateholders that
every material contract or other material agreement entered into by the
applicable party, on behalf of the Trust shall expressly state therein that no
Noteholder or Certificateholder shall be personally liable in its capacity as
such in connection with such contract or agreement.
Section 2.07 DESIGNATIONS UNDER REMIC PROVISIONS; DESIGNATION OF
STARTUP DAY; TAX MATTERS PERSON; TAX MATTERS PARTNER.
(a) As described in Section 2.13(e) of the Trust Agreement, each Class
of the Pool I Notes (exclusive of any rights to receive any amounts from the
Carryover Interest Account and in the case of the Class AS-3 Notes, the Rounding
Account) and the Class I Certificates are hereby designated as the "regular
interests" in REMIC II and the Class R-II Interests are designated the single
class of "residual interests" in REMIC II for the purposes of the REMIC
Provisions. As described in Section 2.13(a)-(d) of the Trust Agreement, the
REMIC I Regular Interests are hereby designated as the "regular interests" in
REMIC I and the Class R-I Interests are designated the single class of "residual
interests" in REMIC I for the purposes of the REMIC Provisions. The Class R
Certificates represent beneficial ownership of both the Class R-I and Class R-II
Interests.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of Section 860G(a)(9) of the Code. Solely for the
purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
latest possible maturity date of the "regular interests" in each of REMIC I and
REMIC II is June 15, 2033.
(c) With respect to Pool I, the holder of a majority of the Percentage
Interests in the Class R Certificates shall act as Tax Matters Person of REMIC I
and REMIC II. By acceptance of its Class R Certificate, the Tax Matters Person
agrees to and hereby does appoint the Trust Administrator to act as its agent in
all matters that are the responsibility of the Tax Matters Person under the Code
(to the extent such agency is permitted by law), and the Trust Administrator
hereby accepts such appointment.
(d) With respect to Pool II, the Holder of the Special Interests shall
act as Tax Matters Partner of the Trust. The Holder of the Special Interests, by
acceptance of its Class II Certificates, agrees to and hereby does appoint the
Trust Administrator to act as its agent in all matters that are the
responsibility of the Tax Matters Partner under the Code, and the Trust
Administrator hereby accepts such appointment.
(e) Any inconsistencies or ambiguities in this Agreement or in the
administration of the Trust shall be resolved in a manner that preserves the
validity of the election that REMIC I and REMIC II each be treated as a REMIC.
Section 2.08. OPTIONAL REPURCHASE OF DEFAULTED LOANS.
The Servicer shall have the right, but not the obligation, to repurchase
any Defaulted Loan for a purchase price equal to the Principal Balance of such
Defaulted Loan as of the date of repurchase, plus accrued interest (whether
through payments by the applicable Obligor, Monthly Advances or otherwise) on
such Principal Balance, computed at the applicable Loan Interest Rate (net of
the per annum rate used in calculating the Servicing Fee) as of the next
succeeding Determination Date, plus any accrued unpaid Servicing Fees, Monthly
Advances and Servicing Advances reimbursable to the Servicer, which purchase
price shall be deposited in the Principal and Interest Account on the next
succeeding Determination Date. Any such repurchase shall be accomplished in the
manner specified in Section 2.05(b). In no event shall the aggregate Principal
Balance of all Defaulted Loans purchased pursuant to this Section 2.10 exceed
10% of the Original Collateral Amount .
Section 2.09 ASSIGNMENT EVENT.
Immediately upon the occurrence of any Assignment Event, the
Representative or the Servicer shall notify the Indenture Trustee of such
occurrence. Thereafter, unless the Rating Agency Condition is satisfied with
respect to the Indenture Trustee's Loan Files remaining with the Custodian, the
Custodian shall begin transferring all Indenture Trustee's Loan Files in its
possession to the Indenture Trustee or its bailee. The Custodian shall undertake
such transfer in a manner that will result in the completion of the transfer of
all such Indenture Trustee's Loan Files to the Indenture Trustee within 30 days
following the occurrence of an Assignment Event. From and after the occurrence
of an Assignment Event, and the delivery of the Indenture Trustee's Loan Files
to the Indenture Trustee, the Indenture Trustee shall act as Custodian or it may
engage the services of another Person to act as Custodian. The Custodian hereby
acknowledges that it is bailee of the Indenture Trustee and is holding all of
the Indenture Trustee's Loan Files delivered to it solely in trust for the
Indenture Trustee.
From time to time following delivery of the Indenture Trustee's Loan
Files to the Indenture Trustee pursuant to this Section 2.09, the Indenture
Trustee may appoint a Custodian who is acceptable to the Trust Administrator.
The Trust Administrator shall notify the Rating Agencies of any appointment of a
successor Custodian.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 REPRESENTATIONS OF REPRESENTATIVE, SELLER AND SERVICER.
(a) The Representative (for the purposes of this Section 3.01(a),
"The Money Store Inc.") hereby represent and warrant to the Indenture Trustee,
the Owner Trustee, the Noteholders and the Certificateholders as of the Closing
Date:
(i) The Money Store Inc. is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state where the laws of such state require licensing
or qualification in order to conduct business of the type conducted by
The Money Store Inc. and perform its obligations hereunder; The Money
Store Inc. has corporate power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by The Money
Store Inc. and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action; this Agreement evidences the valid, binding and
enforceable obligation of The Money Store Inc.; and all requisite
corporate action has been taken by The Money Store Inc. to make this
Agreement valid, binding and enforceable upon The Money Store Inc. in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity,
none of which will affect the ownership of the Loans by the Trust;
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc., under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which The Money Store Inc. makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and
sale of the Notes and the Certificates and the execution and delivery
by The Money Store Inc. of the documents to which it is a party, have
been duly taken, given or obtained, as the case may be, are in full
force and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and
the other documents on the part of The Money Store Inc. and the
performance by The Money Store Inc. of its obligations under this
Agreement and such of the other documents to which it is a party;
(iii) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of
the certificate of incorporation or by-laws of The Money Store Inc. or
result in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any
obligation under, any material agreement, indenture or loan or credit
agreement or other material instrument to which The Money Store Inc.
or its property is subject, or result in the violation of any law,
rule, regulation, order, judgment or decree to which The Money Store
Inc. or its property is subject;
(iv) Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby and thereby
contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading;
(v) The Money Store Inc. does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vi) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of The Money Store
Inc.'s knowledge, threatened against The Money Store Inc. which,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial
condition, properties or assets of The Money Store Inc. or in any
material impairment of the right or ability of The Money Store Inc. to
carry on its business substantially as now conducted, or in any
material liability on the part of The Money Store Inc. or which would
draw into question the validity of this Agreement or the Loans or of
any action taken or to be taken in connection with the obligations of
The Money Store Inc. contemplated herein, or which would be likely to
impair materially the ability of The Money Store Inc. to perform under
the terms of this Agreement;
(vii) The Issuer will not constitute an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(viii) The Money Store Inc. is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of The Money Store Inc.
or its properties or might have consequences that would materially and
adversely affect its performance hereunder;
(ix) The statements contained in the Registration Statement which
describe The Money Store Inc. or matters or activities for which The
Money Store Inc. is responsible in accordance with the Registration
Statement, this Agreement and all documents referred to therein or
delivered in connection therewith, or which are attributable to The
Money Store Inc. therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue
statement of a material fact with respect to The Money Store Inc. and
does not omit to state a material fact necessary to make the
statements contained therein with respect to The Money Store Inc. not
misleading. The Money Store Inc. is not aware that the Registration
Statement contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements contained
therein not misleading. There is no fact peculiar to The Money Store
Inc. or the Loans and known to The Money Store Inc. that materially
adversely affects or in the future may (so far as The Money Store Inc.
can now reasonably foresee) materially adversely affect The Money
Store Inc. or the Loans, the Security interests therein represented by
the Notes or the ownership interests therein represented by the
Certificates that has not been set forth in the Registration
Statement;
(x) The Seller received fair consideration and reasonably
equivalent value in exchange for the contribution of the Loans;
(xi) The Seller did not contribute any interest in any Loan with
any intent to hinder, delay or defraud any of its creditors;
(xii) The Seller is solvent and will not be rendered insolvent as
a result of the contribution of the Loans to the Trust or the sale of
the Notes or the Certificates;
(xiii) No Noteholder or Certificateholder is subject to state
licensing requirements solely by virtue of holding the Notes or the
Certificates; and
(b) The Seller hereby represents and warrants to the Noteholders,
the Certificateholders, the Indenture Trustee and the Owner Trustee as of the
Closing Date:
(i) The Seller is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation and, except as set forth below, has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where the laws
of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller and perform its
obligations hereunder; the Seller has corporate power and authority to
execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to
this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action; this Agreement evidences the valid,
binding and enforceable obligation of the Seller; and all requisite
corporate action has been taken by the Seller to make this Agreement
valid, binding and enforceable upon the Seller in accordance with the
respective terms of each such agreement, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally or the
application of equitable principles in any proceeding, whether at law
or in equity, none of which will affect the ownership of the Loans by
the Trust;
(ii) No approval of the transactions contemplated by this
Agreement and the Subservicing Agreement to which it is a party from
any state or federal regulatory authority having jurisdiction over the
Seller is required or, if required, such approval has been or will,
prior to the Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of
the certificate of incorporation or by-laws of the Seller or result in
the breach of any term or provision of, or conflict with or constitute
a default under or result in the acceleration of any obligation under,
any material agreement, indenture or loan or credit agreement or other
material instrument to which the Seller or its property is subject, or
result in the violation of any law, rule, regulation, order, judgment
or decree to which the Seller or its property is subject;
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Seller or its properties or
might have consequences that would materially and adversely affect its
performance hereunder;
(v) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of the Seller's
knowledge, threatened against the Seller which, either in any one
instance or in the aggregate, may result in any material adverse
change in the business, operations, condition (financial or other),
properties or assets of the Seller or in any material impairment of
the right or properties or assets of the Seller to carry on its
business substantially as now conducted, or in any material liability
on the part of the Seller or which would draw into question the
validity of this Agreement or the Loans or of any action taken or to
be taken in connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the ability of
the Seller to perform under the terms of this Agreement and there is
no injunction, writ, restraining order or other order of any nature
which adversely affects Seller's ability to perform as required by the
transactions contemplated hereby;
(vi) The Seller is in compliance with all applicable laws, rules,
regulations and orders materially affecting it and its business except
where the failure to comply would not have a material adverse effect
on the business of the Seller or on the Seller's ability to consummate
the transactions contemplated by the Basic Documents to which it is a
party;
(vii) Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby or thereby
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements contained herein or
therein not misleading;
(viii) The statements contained in the Registration Statement
which describe the Seller or matters or activities for which the
Seller is responsible in accordance with the Registration Statement,
this Agreement and all documents referred to therein or delivered in
connection therewith, or which are attributable to the Seller therein
are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact
with respect to the Seller or the Loans and does not omit to state a
material fact necessary to make the statements contained therein with
respect to the Seller or the Loans not misleading. The Seller is not
aware that the Registration Statement contains any untrue statement of
a material fact or omits to state any material fact necessary to make
the statements contained therein not misleading. There is no fact
peculiar to the Seller or the Loans and known to the Seller that
materially and adversely affects or in the future may (so far as the
Seller can now reasonably foresee) materially and adversely affect the
Seller, the security interests therein evidenced by the Notes or the
Loans or the ownership interests therein represented by the
Certificates that has not been set forth in the Registration
Statement;
(ix) Upon the receipt of each Indenture Trustee's Loan File by
the Custodian under this Agreement, the Trust will have good and
marketable title to each Loan and such other items comprising the
corpus of the related Trust free and clear of any lien (other than
liens which will be simultaneously released or liens contemplated by
the Basic Documents);
(x) The Seller's principal place of business and chief executive
office are located in West Sacramento, California, and there have been
no other such locations during the previous four months;
(xi) The Seller's legal name is The Money Store Commercial
Mortgage Inc. and the Seller has not changed its name during the
previous six months and does not have trade names, fictitious names,
assumed names or "doing business as" names;
(xii) The Seller will treat the transfer of the Loans to the
Trust as a sale for accounting purposes;
(xiii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which the Seller makes no such representation or warranty), that are
necessary or advisable in connection with the purchase and sale of the
Notes and the Certificates and the execution and delivery by the
Seller of the documents to which it is a party, have been duly taken,
given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other documents on
the part of the Seller and the performance by the Seller of its
obligations under this Agreement and such of the other documents to
which it is a party;
(xiv) The transfer, assignment and conveyance of the Business
Notes and the Collateral by the Seller pursuant to this Agreement are
not subject to the bulk transfer laws or any similar statutory
provisions in effect in any applicable jurisdiction;
(xv) The origination and collection practices used by the Seller
and the Servicer with respect to each Business Note and Mortgage
relating to the Loans have been in all material respects legal,
proper, prudent and customary in the business loan origination and
servicing business;
(xvi) Each Loan was selected from among the existing loans in the
Seller's portfolio at the date hereof in a manner not designed to
adversely affect the Noteholders and the Certificateholders;
(xvii) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(xviii) The Seller received fair consideration and reasonably
equivalent value in exchange for the contribution of the Loans;
(xix) The Seller did not contribute any interest in any Loan with
any intent to hinder, delay or defraud any of its respective
creditors;
(xx) The Seller is solvent and will not be rendered insolvent as
a result of the contribution of the Loans to the Trust or the sale of
the Notes or the Certificates;
(xxi) No Noteholder or Certificateholder is subject to state
licensing requirements solely by virtue of holding the Notes or the
Certificates;
(xxii) The Servicer's computer and other systems used in
servicing the Loans will be modified and maintained to operate in a
manner such that at all times, including on and after January 1, 2000,
the Servicer can service the Loans in accordance with the terms of
this Agreement; and
(xxiii) The Seller has valid business reasons for selling the
Loans rather than obtaining a loan with such assets as collateral.
Section 3.02 INDIVIDUAL LOANS.
The Seller hereby represents and warrants to the Issuer, the
Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders, with respect to each Loan as of the Closing Date:
(a) The information with respect to each Loan set forth in the
Loan Schedules is true and correct;
(b) All of the original or certified documentation set forth in
Section 2.04 (including all material documents related thereto) has been or will
be delivered as required by Section 2.04 to the Custodian on the Closing Date or
as otherwise provided in Section 2.04;
(c) Each Mortgaged Property is improved by a Commercial Property,
a Multi-Family Property or a Residential Property and does not constitute other
than real property under state law;
(d) Each Loan has been originated by the Seller and each Loan is
being serviced by the Servicer;
(e) Each Loan is an SBA 504 Loan, a Section 7(a) Companion Loan,
a CCL Loan or a Multi-Family Loan and is secured by one or more items of
Collateral;
(f) Each Business Note will provide for a schedule of Monthly
Payments which are, if timely paid, sufficient to fully amortize the principal
balance of such Business Note on its maturity date;
(g) With respect to those Loans secured by a Mortgaged Property,
each Mortgage is a valid and subsisting lien of record on the Mortgaged Property
subject only to any applicable Prior Liens on such Mortgaged Property and
subject in all cases to such exceptions that are generally acceptable to banking
institutions in connection with their regular commercial lending activities, and
such other exceptions to which similar properties are commonly subject and which
do not individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such Mortgage;
(h) Immediately prior to the transfer and assignment herein
contemplated, the Seller held good and indefeasible title to, and was the sole
owner of, each Loan conveyed by the Seller subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in Section
3.02(g) or other liens which will be released simultaneously with such transfer
and assignment; and immediately upon the transfer and assignment herein
contemplated, the Issuer will hold good and indefeasible title, to, and be the
sole owner of, each Loan subject to no liens, charges, mortgages, encumbrances
or rights of others except as set forth in Section 3.02(g), or other liens which
will be released simultaneously with such transfer and assignment;
(i) As of the Cut-Off Date no Loan is 59 or more days delinquent
in payment and as of the Closing Date, no more than 1.00% of the Loans will be
delinquent in payment;
(j) To the best of the Seller's knowledge, there is no delinquent
tax or assessment lien on any Mortgaged Property, and each Mortgaged Property is
free of material damage and is in good repair;
(k) The Loans are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the related Business Note or any related
Mortgage, or the exercise of any right thereunder, render either the related
Business Note or any related Mortgage unenforceable in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(l) Each Loan at the time it was made complied and, as of the
Closing Date, complies in all material respects with applicable state and
federal laws and regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws;
(m) The Loans were originated by the Seller in accordance with
the underwriting criteria set forth in the Registration Statement;
(n) The Seller requires that the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage
representing coverage described in Section 4.07;
(o) The Seller requires that if a Mortgaged Property is in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy is in effect
with respect to such Mortgaged Property with a generally acceptable carrier in
an amount representing coverage described in Section 4.07;
(p) Each Business Note, any related Mortgage and any other
agreement pursuant to which Collateral is pledged to the Seller is the legal,
valid and binding obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law), none of which will prevent the ultimate realization of the security
provided by the Collateral or other agreement, and all parties to each Loan had
full legal capacity to execute all Loan documents and convey the estate therein
purported to be conveyed;
(q) The Servicer has caused and will cause to be performed any
and all acts reasonably required to be performed to preserve the rights and
remedies of the Issuer in any insurance policies applicable to the Loans
including, without limitation, in each case, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
co-insured, joint loss payee and mortgagee rights in favor of the Issuer or the
Seller, respectively;
(r) Each original Mortgage was recorded, and all subsequent
assignments of the original Mortgage have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien thereof
as against creditors of the Seller (or, subject to Section 2.04(b) hereof, are
in the process of being recorded);
(s) Each Loan conforms, and all such Loans in the aggregate
conform, to the description thereof set forth in the Registration Statement;
(t) The terms of the Business Note and the related Mortgage or
other security agreement pursuant to which Collateral was pledged have not been
impaired, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary, to protect the interest of the Issuer and
which has been delivered to the Custodian;
(u) There are no material defaults in complying with the terms of
any applicable Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable;
(v) There is no proceeding pending or, to the best of the
Seller's knowledge, threatened for the total or partial condemnation of any
Mortgaged Property, nor is such a proceeding currently occurring, and such
property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of the
Mortgaged Property as security for the Loan or the use for which the premises
were intended;
(w) Each Mortgaged Property which is the primary collateral for
the related Loan was, at the time of origination of such Loan, and to the best
of the Seller's knowledge, is, as of the Cut-Off Date, free of contamination
from toxic substances or hazardous wastes or is subject to ongoing environmental
rehabilitation;
(x) The proceeds of the Loan have been fully disbursed, and there
is no obligation on the part of the Seller to make future advances thereunder.
Any and all requirements as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
or recording the Loans were paid;
(y) There is no obligation on the part of the Seller or any other
party (except for any guarantor of a Loan) to make Monthly Payments in addition
to those made by the Obligor;
(z) No statement, report or other document signed by the Seller
constituting a part of the Indenture Trustee's Loan File contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(aa) With respect to each Mortgage constituting a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Issuer to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Obligor;
(bb) No Loan has a shared appreciation feature, or other
contingent interest feature;
(cc) With respect to each Loan secured by a Mortgaged Property
and that is not a first mortgage loan, either (i) no consent for the Loan is
required by the holder of any related Prior Lien or (ii) such consent has been
obtained;
(dd) Each Loan was originated to a business located in the state
identified in the applicable Loan Schedule;
(ee) All parties which have had any interest in the Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein any
Mortgaged Property is located, and (2)(A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such state, or
(D) not doing business in such state;
(ff) Any related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(gg) There is no default, breach, violation or event of
acceleration existing under the Business Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration; and
neither the Servicer nor the Seller have waived any default, breach, violation
or event of acceleration;
(hh) All parties to the Business Note and any related Mortgage or
other document pursuant to which Collateral was pledged had legal capacity to
execute the Business Note and any such Mortgage or other document and each
Business Note and Mortgage or other document have been duly and properly
executed by such parties;
(ii)The Loan was not selected for inclusion under this Agreement
from the Seller's portfolio of comparable loans on any basis which would have a
material adverse affect on a Certificateholder;
(jj) All amounts received after the Cut-Off Date with respect to
the Loans have been, to the extent required by this Agreement, deposited into
the Principal and Interest Account and are, as of the Closing Date in the
Principal and Interest Account;
(kk) Each Pool I Loan is a "qualified mortgage" within the
meaning of Section 860(G)(a)(3) of the Code;
(ll) With respect to 55% or more of the Loans in Pool II
(measured by Principal Balance as of the Closing Date), either (i) the Loan is
not and has never been secured by an interest in real property or any real
estate mortgages, or (ii) the Loan is secured by an interest in real property
and/or real estate mortgages and (x) the fair market value of the real property
securing the Loan, after reduction for the amount of any lien that is senior to
the Loan and a proportionate amount of any lien that is PARI PASSU with the
Loan, was less than 80% of the amount of the Loan at the time the Loan was
originated; (y) less than 66% of the net proceeds of the Loan were used to
acquire, improve, or protect an interest in real property that at the time of
origination was the only security for the Loan (disregarding any third party
credit enhancements and loan guarantees made by federal, state, local
governments or agencies), and the Seller has no knowledge or reason to believe
that the net proceeds of the Loan were used to refinance one or more loans the
proceeds of which were used to acquire, improve, or protect an interest in real
property; and (z) the Loan has not been modified significantly since its
origination; and
(mm) No Loan nor any related Business Note has been satisfied,
subordinated or rescinded.
Section 3.03 PURCHASE AND SUBSTITUTION.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the Notes to the
Noteholders and the Certificates to the Certificateholders. Upon discovery by
the Representative, the Servicer, any Subservicer, the Custodian or upon a
Responsible Officer of the Owner Trustee or the Indenture Trustee obtaining
actual knowledge of a breach of any of such representations and warranties which
materially and adversely affects the value of the Loans or the interest of the
Noteholders and the Certificateholders, or which materially and adversely
affects the interests of the Noteholders, or the Certificateholders in the
related Loan in the case of a representation and warranty relating to a
particular Loan (notwithstanding that such representation and warranty was made
to the Representative's or the Seller's best knowledge), the party discovering
such breach shall give prompt written notice to the others. Within 60 days of
the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Representative shall (a) promptly cure such
breach in all material respects, (b) purchase such Loan by depositing in the
Principal and Interest Account, on the next succeeding Determination Date, an
amount in the manner specified in Section 2.05(b), or (c) remove such Loan from
the Trust (in which case it shall become a Deleted Loan) and substitute one or
more Qualified Substitute Loans, provided, in the case of Pool I, such
substitution is effected not later than the date which is two years after the
Startup Day, or at such later date, if the Indenture Trustee and the Owner
Trustee receive an Opinion of Counsel that such substitution would not
constitute a Prohibited Transaction or cause either REMIC I or REMIC II to fail
to qualify as a REMIC.
As to any Deleted Loan for which the Representative substitutes a
Qualified Substitute Loan or Loans, the Servicer shall effect such substitution
by delivering to the Custodian a certification in the form attached hereto as
Exhibit G, executed by a Servicing Officer and the documents constituting the
Indenture Trustee's Loan File for such Qualified Substitute Loan or Loans.
The Servicer shall deposit in the Principal and Interest Account all
payments received in connection with such Qualified Substitute Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Loans on or before the date of substitution will be
retained by the Representative on behalf of the Seller. The Issuer will own all
payments received on the Deleted Loan on or before the date of substitution, and
the Representative on behalf of the Seller shall thereafter be entitled to
retain all amounts subsequently received in respect of such Deleted Loan. The
Servicer shall give written notice to the Indenture Trustee, the Representative,
the Owner Trustee and the Custodian that such substitution has taken place and
shall amend the applicable Loan Schedule to reflect the removal of such Deleted
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Loan. Upon such substitution, such Qualified Substitute Loan or Loans
shall be subject to the terms of this Agreement in all respects, including
Sections 2.04 and 2.05, and the Representative and the Seller shall be deemed to
have made with respect to such Qualified Substitute Loan or Loans, as of the
date of substitution, the covenants, representations and warranties set forth in
Sections 3.01 and 3.02. On the date of such substitution, the Representative
will remit to the Servicer, and the Servicer will deposit into the applicable
Principal and Interest Account an amount equal to the Substitution Adjustment.
In addition to the cure, purchase and substitution obligation in
Section 2.05 and this Section 3.03, the Representative shall indemnify and hold
harmless the Issuer, the Indenture Trustee, the Trust Administrator, the
Custodian, the Noteholders, the Certificateholders and the Owner Trustee in its
individual capacity against any loss, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of the Representative's or the Seller's
representations and warranties contained in this Agreement. It is understood and
agreed that the obligations of the Representative or the Seller set forth in
Sections 2.05 and 3.03 to cure, purchase or substitute for a defective Loan and
to indemnify the Issuer, the Noteholders, the Certificateholders, the Indenture
Trustee, the Trust Administrator, the Custodian and the Owner Trustee in its
individual capacity as provided in Sections 2.05 and 3.03 constitute the sole
remedies of the Indenture Trustee, the Trust Administrator, the Custodian, the
Noteholders, the Certificateholders and the Owner Trustee respecting a breach of
the foregoing representations and warranties.
Any cause of action against the Seller, the Servicer or the
Representative relating to or arising out of the breach of any representations
and warranties made in Sections 2.05, 3.01 or 3.02 shall accrue as to any Loan
upon (i) discovery of such breach by any party and notice thereof to the
Representative or notice thereof by the Representative to the Indenture Trustee,
(ii) failure by the Representative to cure such breach or purchase or substitute
such Loan as specified above, and (iii) demand upon the Representative by the
Indenture Trustee for all amounts payable in respect of such Loan.
For as long as the Pool I Notes shall exist, the Servicer, the
Indenture Trustee and the Trust Administrator shall act in accordance herewith
to assure continuing treatment of both REMIC I and REMIC II as REMICs and to
assure that neither REMIC I nor REMIC II will be subject to tax. In particular,
the Servicer, the Indenture Trustee and the Trust Administrator shall not (a)
sell or knowingly permit the sale of all or any portion of the Loans or of any
Permitted Instrument related to Pool I unless such sale is a result of a
repurchase of the Loans pursuant to this Agreement, or the Servicer, the
Indenture Trustee and the Trust Administrator has received an Opinion of Counsel
to the effect that such sale (i) is in accordance with a qualified liquidation
as defined in Section 860F(a)(4) of the Code and as described in Section 11.01
hereof, or (ii) would not be treated as a prohibited transaction within the
meaning of Section 860F(a)(2) of the Code; and (b) accept any contribution to
Pool I after the Startup Day without an Opinion of Counsel that such
contribution is included within the exceptions provided in Section 860G(d)(2) of
the Code and therefore will not be subject to the tax imposed by Section
860G(d)(1) of the Code.
ARTICLE IV
ADMINISTRATION AND SERVICING OF LOANS
Section 4.01 DUTIES OF THE SERVICER.
(a) With respect to any Business Note released by the Custodian,
on behalf of the Indenture Trustee, to the Servicer or to any Subservicer in
accordance with the terms of this Agreement, other than a release or
satisfaction pursuant to Section 5.02, prior to such release, the Indenture
Trustee or Custodian shall (i) complete all endorsements in blank so that the
endorsement reads "Pay to the order of HSBC Bank USA, as Indenture Trustee under
the Indenture dated as of May 9, 1999, Series 1999-1" and (ii) complete a
restrictive endorsement that reads "HSBC Bank USA is the holder of the mortgage
note for the benefit of the Noteholders and the Certificateholders under the
Indenture dated as of May 31, 1999, Series 1999-1" with respect to those
Business Notes currently endorsed "Pay to the order of holder."
(b) The Servicer, as independent contract servicer, shall service
and administer the Loans and shall have full power and authority, acting alone,
to do any and all things in connection with such servicing and administration
which the Servicer may deem necessary or desirable and consistent with the terms
of this Agreement. The Servicer may enter into Subservicing Agreements for any
servicing and administration of Loans with any institution which is in
compliance with the laws of each state necessary to enable it to perform its
obligations under such Subservicing Agreement and (x) has a net worth of at
least $5,000,000 or (y) is an affiliate of the Servicer. The Servicer shall
notify the Indenture Trustee of the appointment of any subservicer. Any such
Subservicing Agreement shall be consistent with and not violate the provisions
of this Agreement. The Servicer shall be entitled to terminate any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement and to either itself directly service the related Loans or enter into
a Subservicing Agreement with a successor subservicer which qualifies hereunder.
(c) Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Indenture Trustee, the Noteholders, the Certificateholders and the Owner Trustee
for the servicing and administering of the Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Loans. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on Loans when any Subservicer has received such payments. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer, and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
(d) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Loans involving a Subservicer and the
Servicer shall be deemed to be between the Subservicer and the Servicer alone,
and the Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer
except as set forth in Section 4.01(e).
(e) In the event the Servicer shall for any reason no longer be
the Servicer (including by reason of a Servicer Default), the Indenture Trustee
or its designee shall, subject to Section 10.02 hereof, thereupon assume all of
the rights and obligations of the Servicer under each Subservicing Agreement
that the Servicer may have entered into, unless the Indenture Trustee is then
permitted and elects to terminate any Subservicing Agreement in accordance with
its terms. The Indenture Trustee, its designee or the successor servicer for the
Indenture Trustee shall be deemed to have assumed all of the Servicer's interest
therein and to have replaced the Servicer as a party to each Subservicing
Agreement to the same extent as if the Subservicing Agreements had been assigned
to the assuming party, except that the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreements. The Servicer at
its expense and without right of reimbursement therefor, shall, upon request of
the Indenture Trustee, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
(f) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Obligor if in the Servicer's determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Noteholders or the Certificateholders; provided, however, that (unless (x) the
Obligor is in default with respect to the Loan, or such default is, in the
judgment of the Servicer, imminent and (y) the Servicer determines that any
modification would not be considered a new loan for federal tax purposes) the
Servicer may not permit any modification with respect to any Loan that would
change the Loan Interest Rate, defer (subject to Section 4.12), or forgive the
payment of any principal or interest (unless in connection with the liquidation
of the related Loan), or extend the final maturity date on such Loan. No costs
incurred by the Servicer or any Subservicer in respect of Servicing Advances
shall for the purposes of distributions to the Noteholders or the
Certificateholders be added to the amount owing under the related Loan. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of the
Indenture Trustee, each Noteholder and each Certificateholder, all instruments
of satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Loans and with respect to
any Mortgaged Properties or other Collateral. If reasonably required by the
Servicer, the Owner Trustee shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.
The Servicer, in servicing and administering the Loans, shall employ
or cause to be employed procedures (including collection, foreclosure and REO
Property management procedures) and exercise the same care that it customarily
employs and exercises in servicing and administering mortgage loans for its own
account, in accordance with accepted servicing practices of prudent lending
institutions and giving due consideration to the Noteholders', and
Certificateholders' reliance on the Servicer.
(g) On and after such time as the Indenture Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 9.04, after receipt of the Opinion of Counsel required pursuant to
Section 9.04, the Indenture Trustee or its designee shall assume all of the
rights and obligations of the Servicer, subject to Section 10.02 hereof. The
Servicer shall, upon request of the Indenture Trustee but at the expense of the
Servicer, deliver to the Indenture Trustee or the Custodian all documents and
records (including computer tapes and diskettes) relating to the Loans and an
accounting of amounts collected and held by the Servicer and otherwise use its
best efforts to effect the orderly and efficient transfer of servicing rights
and obligations to the assuming party.
(h) In the event that any tax is imposed on the Trust, with
respect to either REMIC I, REMIC II or Pool II, such tax shall be charged
against amounts otherwise distributable to the Holders of the Class R
Certificates, with respect to either REMIC I or REMIC II, and to the Holders of
the Class II Certificates, with respect to Pool II.
(i) Notwithstanding any provision of Article XII to the contrary,
the Servicer or the Trust Administrator (as agreed to by such parties) shall (i)
assume and perform the obligations of the Trust Administrator set forth under
Article XII and (ii) perform such calculations and shall prepare or shall cause
the preparation by other appropriate persons of, and shall execute on behalf of
the Trust or the Owner Trustee, all such documents, reports, filings,
instruments, certificates and opinions that it shall be the duty of the Trust or
the Owner Trustee to prepare, file or deliver pursuant to the Basic Documents,
and at the request of the Owner Trustee shall take all appropriate action that
it is the duty of the Trust or the Owner Trustee to take pursuant to the Basic
Documents. In furtherance thereof, the Owner Trustee shall, on behalf of itself
and of the Trust, execute and deliver to the Servicer and to each successor
Servicer appointed pursuant to the terms hereof, one or more powers of attorney
substantially in the form of Exhibit P hereto, appointing the Servicer the
attorney-in-fact of the Owner Trustee and the Trust for the purpose of executing
on behalf of the Owner Trustee and the Trust all such documents, reports,
filings, instruments, certificates and opinions. In accordance with the
directions of the Owner Trustee, the Servicer shall administer, perform or
supervise the performance of such other activities in connection with the Loans
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Servicer.
Section 4.02 LIQUIDATION OF LOANS.
In the event that any payment due under any Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Obligor fails to perform any other covenant or obligation under
the Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interests of
the Noteholders and the Certificateholders. The Servicer shall foreclose upon or
otherwise comparably effect the ownership in the name of the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders of Mortgaged
Properties or other Collateral relating to defaulted Loans as to which no
satisfactory arrangements can be made for collection of delinquent payments in
accordance with the provisions of Section 4.10. In connection with such
foreclosure or other conversion, the Servicer shall exercise collection and
foreclosure procedures with the same degree of care and skill in its exercise or
use as it would exercise or use under the circumstances in the conduct of its
own affairs. The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act of 1976, or other federal, state or local
environmental legislation, on a Mortgaged Property in determining whether to
foreclose upon or otherwise comparably convert the ownership of a Mortgaged
Property; provided, however, that the Servicer shall not take title to any
Mortgaged Property in the name of the Indenture Trustee with respect to any such
Mortgaged Property if the Servicer has actual knowledge or reasonably believes
that any such environmental substance or waste exists unless it has received a
Phase I environmental report and such report reveals no environmental problems,
or such Mortgaged Property is subject to an environmental rehabilitation for
which the Seller is not responsible. Any amounts advanced in connection with
such foreclosure or other action shall constitute "Servicing Advances."
After a Loan has become a Liquidated Loan, the Servicer shall promptly
prepare and forward to the Indenture Trustee and the Owner Trustee, a
Liquidation Report, in the form attached hereto as Exhibit K , detailing the
Liquidation Proceeds received from the Liquidated Loan, expenses incurred with
respect thereto, and any Realized Loss incurred in connection therewith.
Section 4.03 ESTABLISHMENT OF PRINCIPAL AND INTEREST ACCOUNTS;
DEPOSITS IN PRINCIPAL AND INTEREST ACCOUNT.
(a) The Servicer shall cause to be established and maintained one
or more Principal and Interest Accounts, in one or more Designated Depository
Institutions, in the form of time deposit or demand accounts, which may be
interest-bearing or such accounts may be trust accounts wherein the moneys
therein are invested in Permitted Instruments, titled "The Money Store Inc., in
trust for the registered holders of The Money Store Business Loan Backed Notes
and Backed Certificates, Series 1999-1, and various Obligors"; provided,
however, that for so long as (i) (A) the Servicer remains an affiliate of FUNB,
(B) no Event of Default shall have occurred and be continuing and (C) FUNB
maintains a short-term rating of at least "D-1" by DCR (if so rated by DCR) and
"P-1" by 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 which does not in itself result in (I) any reduction of any rating
issued in respect of the Notes or (II) any reduction below investment grade of
the Notes, the Servicer, notwithstanding anything to the contrary herein
provided, may establish and maintain the Principal and Interest Account as a
deposit account with FUNB. Each such Principal and Interest Account shall be
insured by the BIF or SAIF administered by the FDIC to the maximum extent
provided by law. The creation of any Principal and Interest Account shall be
evidenced by a letter agreement in the form of Exhibit B hereto.
A copy of such letter agreement shall be furnished to the Indenture
Trustee and the Owner Trustee.
(b) The Servicer and each Subservicer shall deposit without
duplication (within 24 hours of receipt thereof) in the applicable Principal and
Interest Account and retain therein:
(i) all payments received after the Cut-Off Date on account of
principal on the Loans, including all Excess Payments, Principal
Prepayments and Curtailments received after the Cut-Off Date;
(ii) all payments received after the Cut-Off Date on account of
interest on the Loans (net of the Servicing Fee with respect to each Loan
and other servicing compensation payable to the Servicer as permitted
herein);
(iii) all Net Liquidation Proceeds received with respect to the Loans;
(iv) all Insurance Proceeds received with respect to the Loans (other
than amounts to be applied to the restoration or repair of the related
Mortgaged Property, or to be released to the Obligor in accordance with
customary servicing procedures);
(v) all Released Mortgaged Property Proceeds received with respect to
the Loans;
(vi) any amounts paid in connection with the purchase of any Loan, and
the amount of any Substitution Adjustment received with respect to the
Loans paid, pursuant to Sections 2.05 and 3.03;
(vii) any amount required to be deposited in the applicable Principal
and Interest Account pursuant to Section 4.04, 4.08, 4.10, 4.15(c) or
11.01; and
(viii) the amount of any losses incurred in connection with
investments in Permitted Instruments.
Also, for each Loan delivered on the Closing Date that was originated
on or after June 1, 1999, the Servicer shall deposit in the Principal and
Interest Account 30 days' interest on the original principal balance of
such Loan calculated at the applicable Loan Interest Rate.
(c) The foregoing requirements for deposit in the Principal and
Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, the Servicing Fee with respect
to each Loan, and payments in the nature of prepayment penalties or premiums,
late payment charges and assumption fees, to the extent received and permitted
by Sections 5.01 and 5.03, together with the difference between any Liquidation
Proceeds and the related Net Liquidation Proceeds, need not be deposited by the
Servicer in the Principal and Interest Account.
(d) Any interest earnings on funds held in the Principal and
Interest Account paid by a Designated Depository Institution shall be for the
account of the Servicer and may only be withdrawn from the applicable Principal
and Interest Account by the Servicer immediately following its monthly
remittance of the Pool Available Remittance Amount for the related Pool to the
Indenture Trustee. Any reference herein to amounts on deposit in the Principal
and Interest Account shall refer to amounts net of such investment earnings.
Section 4.04 PERMITTED WITHDRAWALS FROM THE PRINCIPAL AND INTEREST
ACCOUNTS.
The Servicer shall withdraw funds from the Principal and Interest
Accounts for the following purposes:
(a) to effect the remittance to the Indenture Trustee on each
Determination Date as follows: the portion of the Excess Spread relating to the
Loans of the related Pool and the portion of the Pool Available Remittance
Amount, that is net of Compensating Interest and Monthly Advances for the
related Pool for the related Remittance Date to the Indenture Trustee for
deposit in the Note Distribution Account. For the purposes of this Section
4.04(a), the calculation of the Pool Available Remittance Amounts shall be made
without reference to the actual deposit of funds in the Note Distribution
Account;
(b) to reimburse itself for any accrued unpaid Servicing Fees,
unreimbursed Monthly Advances and for unreimbursed Servicing Advances to the
extent that funds relating to such amount have been deposited in the applicable
Principal and Interest Account (and not netted from Monthly Payments received).
The Servicer's right to reimbursement for unpaid Servicing Fees and, except as
provided in the following sentence, Servicing Advances and Monthly Advances
shall be limited to Liquidation Proceeds, Released Mortgaged Property Proceeds,
Insurance Proceeds and such other amounts as may be collected by the Servicer
from the Obligor or otherwise relating to the Loan in respect of which such
unreimbursed amounts are owed. The Servicer's right to reimbursement for
Servicing Advances and Monthly Advances in excess of such amounts shall be
limited to any late collections of interest received on the Loans generally,
including Liquidation Proceeds, Released Mortgaged Property Proceeds and
Insurance Proceeds and any other amounts which would otherwise be distributed to
the holders of the Certificates of the applicable Pool; PROVIDED, HOWEVER, that
the Servicer's right to such reimbursement pursuant hereto shall be subordinate
to the rights of the Noteholders, and Certificateholders;
(c) to withdraw any amount received from an Obligor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(d) (i) to make investments in Permitted Instruments and (ii) to
pay to itself, as permitted by Section 4.03(d), interest paid in respect of
Permitted Instruments or by a Designated Depository Institution on funds
deposited in the applicable Principal and Interest Account;
(e) to withdraw any funds deposited in the applicable Principal
and Interest Account that were not required to be deposited therein or were
deposited therein in error;
(f) to pay itself servicing compensation pursuant to Section 5.03
hereof;
(g) [Reserved]; and
(h) to clear and terminate each Principal and Interest Account
upon the termination of this Agreement and to pay any amounts remaining therein
in accordance with Section 11.01.
So long as no Servicer Default shall have occurred and be continuing,
and consistent with any requirements of the Code, the Principal and Interest
Account shall either be maintained as an interest-bearing accounts meeting the
requirements set forth in Section 4.03(a), or the funds held therein may be
invested by the Servicer (to the extent practicable) in Permitted Instruments.
In either case, funds in the Principal and Interest Account must be available
for withdrawal without penalty, and any Permitted Instruments must mature not
later than the Business Day immediately preceding the Determination Date next
following the date of such investment (except that if such Permitted Instrument
is an obligation of the institution that maintains such account, then such
Permitted Instrument shall mature not later than such Determination Date) and
shall not be sold or disposed of prior to its maturity. All Permitted
Instruments must be held by or registered in the name of "The Money Store
Commercial Mortgage Inc. in trust for the registered holders of The Money Store
Business Loan Backed Notes and Certificates, Series 1999-1." All interest or
other earnings from funds on deposit in the Principal and Interest Account (or
any Permitted Instruments thereof) shall be the exclusive property of the
Servicer, and may be withdrawn from either Principal and Interest Account
pursuant to clause (d)(ii) above. The amount of any losses incurred in
connection with the investment of funds in the applicable Principal and Interest
Account in Permitted Instruments shall be deposited in the applicable Principal
and Interest Account by the Servicer from its own funds immediately as realized
without reimbursement therefor.
Section 4.05 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting fire and hazard insurance coverage.
With respect to each Mortgage Loan which is a first Mortgage Loan, or
as to which the Servicer has advanced the outstanding principal balance of any
Prior Lien pursuant to Section 4.14 or as to which the Servicer maintains escrow
accounts, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates and other charges which are or may
become a lien upon the Mortgaged Property and the status of primary mortgage
guaranty insurance premiums, if any, and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the Obligor
in any escrow account which shall have been estimated and accumulated by the
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage (provided, however, that to the extent the Servicer advances its
own funds, such advances shall constitute "Servicing Advances"). To the extent
that a Mortgage does not provide for escrow payments, the Servicer shall
determine that any such payments are made by the Obligor at the time they first
become due. Notwithstanding anything contained herein to the contrary, the
Servicer may choose not to make the payments described above on a timely basis,
provided that collections on the related Mortgage Loan that are required to be
remitted to the Trust would not be reduced, as a result of such failure to
timely pay, from the amount that would otherwise be remitted to the Trust;
provided further, however, that this provision shall not have the effect of
permitting the Servicer to take, or fail to take, any action in respect of the
payments described herein that would adversely affect the interest of the Trust
in any Mortgaged Property.
Section 4.06 TRANSFER OF ACCOUNTS.
The Servicer may, upon written prior notice to the Indenture Trustee,
transfer the Principal and Interest Account to a different Designated Depository
Institution.
Section 4.07 MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall comply with the customary servicing procedures
concerning the issuance and maintenance of fire and hazard insurance with
extended coverage customary in the area where the Mortgaged Property is located.
If at origination of a Loan, to the best of the Servicer's knowledge after
reasonable investigation, the related Mortgaged Property is in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
if it maintains flood insurance, the Servicer will require the related Obligor
to purchase a flood insurance policy with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (i) the
full insurable value of the Mortgaged Property, or (ii) the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended.
The Servicer shall also maintain, to the extent such insurance is available, and
in accordance with the Servicer's policies, on REO Property constituting real
property, fire and hazard insurance in the amounts described above and liability
insurance. Any amounts collected by the Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the Mortgaged
Property, or to be released to the Obligor in accordance with applicable law)
shall be deposited in the Principal and Interest Account, subject to withdrawal
pursuant to Section 5.04. It is understood and agreed that no earthquake or
other additional insurance need be required by the Servicer of any Obligor or
maintained on REO Property, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with losses payable to the Servicer or its
affiliates.
Section 4.08 REMIC RELATED DUTIES.
It is intended that both REMIC I and REMIC II shall constitute and
that the affairs of both REMIC I and REMIC II shall be conducted so that each
qualifies as a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Servicer covenants and agrees that it shall, to the extent permitted by law, act
as agent (and the Servicer is hereby appointed to act as agent) on behalf of
REMIC I and REMIC II and the Trust Administrator covenants and agrees that it
shall act as agent on behalf of the Tax Matters Person on behalf of REMIC I and
REMIC II. The Trust Administrator (and in the case of (iv) and (v) below, the
Servicer) shall: (i) prepare and file, or cause to be prepared and filed, in a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066) and any other tax return required to be filed by each of REMIC I and
REMIC II using a calendar year as the taxable year for each of REMIC I and REMIC
II and using the accrual method of accounting, including, without limitation,
information reports relating to "original issue discount," as defined in the
Code, based upon an assumption equal to a constant prepayment rate on the Loans
of 12% per annum and calculated by using the issue price of the Pool I Notes,
the Class I Certificates and the Class R Certificates; (ii) make, or cause to be
made, an election, on behalf of each of REMIC I and REMIC II, to be treated as a
REMIC on the federal tax return of each of REMIC I and REMIC II for their first
taxable year; (iii) prepare and forward, or cause to be prepared and forwarded,
to the Indenture Trustee, the Pool I Noteholders, the Class I and Class R
Certificateholders, the Owner Trustee and to the Internal Revenue Service and
any other relevant governmental taxing authority all information returns or
reports as and when required to be provided to them in accordance with the REMIC
Provisions and any other provision of federal, state or local income tax laws;
(iv) to the extent that the affairs of the REMIC are within its control, conduct
such affairs at all times that any Pool I Notes, Class I or Class R Certificates
are outstanding so as to maintain the status of each of REMIC I and REMIC II as
a REMIC under the REMIC Provisions and any other applicable federal, state and
local laws; (v) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either of
REMIC I or REMIC II or that would cause the imposition of a prohibited
transaction tax, a tax on "net income from foreclosure property," or a tax on
contributions to either REMIC I or REMIC II; (vi) pay the amount of any and all
federal, state, and local taxes, including, without limitation, prohibited
transaction taxes as defined in Section 860F of the Code imposed on either REMIC
I or REMIC II when and as the same shall be due and payable (but such obligation
shall not prevent the Trust Administrator or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trust Administrator from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (vii) ensure that any such returns or
reports filed on behalf of each of REMIC I and REMIC II are properly executed by
the appropriate person; (viii) represent each of REMIC I and REMIC II in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each of REMIC I and REMIC II, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any item of either REMIC I or REMIC II and otherwise act
on behalf of each of REMIC I and REMIC II in relation to any tax matter
involving either REMIC I or REMIC II and (ix) as provided in Section 4.11
hereof, make available information necessary for the computation of any tax
imposed (1) on transferors of residual interests to transferees that are not
Permitted Transferees or (2) on pass-through entities, any interest in which is
held by an entity which is not a Permitted Transferee. The Owner Trustee will
cooperate with the Servicer and the Trust Administrator in the foregoing matters
and will sign, as Owner Trustee, any and all tax returns required to be filed by
either REMIC I or REMIC II. The Servicer shall indemnify the Indenture Trustee
and the Owner Trustee and each of REMIC I and REMIC II, as applicable, for any
liability they may incur in connection with this Section 4.08; provided,
however, that the Servicer shall not indemnify the Indenture Trustee or the
Owner Trustee for its negligence or willful misconduct.
Section 4.09 FIDELITY BOND.
The Servicer shall maintain with a responsible company, and at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy,
in a minimum amount equal to $1,500,000, and a maximum deductible of $100,000,
if commercially available, with coverage on all employees acting in any capacity
requiring them to handle funds, money, documents or papers relating to the Loans
("Servicer Employees"). The fidelity bond shall insure the Owner Trustee, the
Indenture Trustee and their respective officers, and employees, against losses
resulting from forgery, theft, embezzlement or fraud, by such Servicer
Employees. The errors and omissions policy shall insure against losses resulting
from the errors, omissions and negligent acts of such Servicer Employees. No
provision of this Section 4.09 requiring such fidelity bond and errors and
omissions insurance shall relieve the Servicer from its duties as set forth in
this Agreement. Upon the request of the Owner Trustee or the Indenture Trustee,
the Servicer shall cause to be delivered to the Owner Trustee or the Indenture
Trustee a certified true copy of such fidelity bond and insurance policy. The
current issuer of such fidelity bond and insurance policy is National Union Fire
Insurance Company of Pittsburgh, Pennsylvania.
Section 4.10 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be taken in the name of the Trust for the benefit of
the Noteholders and the Certificateholders.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Noteholders and the Certificateholders solely for the purpose
of its prudent and prompt disposition and sale. The Servicer shall, either
itself or through an agent selected by the Servicer, manage, conserve, protect
and operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Noteholders and the Certificateholders.
The Servicer shall cause to be deposited in the applicable Principal
and Interest Account, no later than five Business Days after the receipt
thereof, all revenues received with respect to the conservation and disposition
of the related REO Property net of funds necessary for the proper operation,
management and maintenance of the REO Property and the fees of any managing
agent acting on behalf of the Servicer.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interest of the Noteholders and the Certificateholders. The proceeds
of sale of the REO Property shall be promptly deposited in the Principal and
Interest Account as received from time to time and, as soon as practicable
thereafter, the expenses of such sale shall be paid, the Servicer shall, subject
to Section 4.04, reimburse itself for any related unreimbursed Servicing
Advances, unpaid Servicing Fees and unreimbursed Monthly Advances, and the
Servicer shall deposit in the Principal and Interest Account the net cash
proceeds of such sale to be distributed to the Noteholders and the
Certificateholders, in accordance with Section 7.05 hereof.
In the event any Mortgaged Property is acquired as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property within three years from
the close of the taxable year of its acquisition unless the Servicer shall have
received an Opinion of Counsel (also addressed to the Indenture Trustee) to the
effect that the holding of such Mortgaged Property subsequent to such period
will not result in the imposition of taxes on "prohibited transactions" as
defined in section 860F of the Code or cause either REMIC I or REMIC II to fail
to qualify as a REMIC at any time that any Pool I Notes are outstanding or
otherwise not result in the imposition of taxes on the Trust. Notwithstanding
any other provision of this Agreement, no Mortgaged Property with respect to
Pool I Loans acquired by the Servicer pursuant to this Section shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust, and no construction shall take place on
such Mortgaged Property, in such a manner or pursuant to any terms that would
cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or result in the receipt by
the Trust of any "net income from foreclosure property" which is subject to
taxation within the meaning of Sections 860G(c) and 857(b)(4)(B) of the Code. If
a period greater than the three year period referred to above is permitted under
this Agreement and is necessary to sell any REO Property, the Servicer shall
give appropriate notice to the Indenture Trustee and the Trust Administrator and
shall report monthly to the Indenture Trustee and the Trust Administrator as to
the progress being made in selling such REO Property.
Section 4.11 CERTAIN TAX INFORMATION.
The Trust Administrator shall furnish on behalf of the Trust and the
Owner Trustee (a) any information which may be required under the Code including
the computation of the present value of the "excess inclusions" (as defined in
Section 860E of the Code) with respect to any transfer of a Class R Certificate,
and, upon request, shall provide such information to any Holder of a Class R
Certificate and to the Internal Revenue Service within 60 days of such request
for a reasonable fee and (b) the information required to be furnished pursuant
to Sections 1.860F-4 and 1.6049-7 of the Treasury Regulations.
Section 4.12 COLLECTION OF CERTAIN LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Loans, and shall, to the extent
such procedures shall be consistent with this Agreement, comply with the terms
and provisions of any applicable hazard insurance policy. Consistent with the
foregoing, the Servicer may in its discretion waive or permit to be waived any
late payment charge, prepayment charge, assumption fee or any penalty interest
in connection with the prepayment of a Loan or any other fee or charge which the
Servicer would be entitled to retain hereunder as servicing compensation and
extend the due date for payments due on a Business Note for a period (with
respect to each payment as to which the due date is extended) not greater than
180 days after the initially scheduled due date for such payment provided that
the Servicer determines such extension would not be considered a new mortgage
loan for federal income tax purposes. In the event the Servicer shall consent to
the deferment of the due dates for payments due on a Business Note, the Servicer
shall nonetheless make payment of any required Monthly Advance with respect to
the payments so extended to the same extent as if such installment were due,
owing and delinquent and had not been deferred, and shall be entitled to
reimbursement therefor in accordance with Section 4.04(b) hereof.
Section 4.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE LOANS.
The Servicer shall provide to the Indenture Trustee, the Owner Trustee
and the Custodian access to the documentation regarding the Loans required by
applicable local, state and federal regulations, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer designated by it.
Section 4.14 SUPERIOR LIENS.
The Servicer shall file of record a request for notice of any action
by a superior lienholder under a Prior Lien for the protection of the Trust's
interest, where permitted by local law and whenever applicable state law does
not require that a junior lienholder be named as a party defendant in
foreclosure proceedings in order to foreclose such junior lienholder's equity of
redemption. With respect to each Mortgage Loan, the Servicer must also notify
any superior lienholder in writing of the existence of the Mortgage Loan and
request notification of any action (as described below) to be taken against the
Obligor or the Mortgaged Property by the superior lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by any Prior Lien,
or has declared or intends to declare a default under the mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take, on
behalf of the Issuer, whatever actions are necessary to protect the interests of
the related Noteholders and the Certificateholders, and/or to preserve the
security of the related Mortgage Loan. The Servicer shall immediately notify the
Owner Trustee of any such action or circumstances, subject, with respect to
Mortgage Loans that are part of Pool I, to the application of the REMIC
Provisions. The Servicer will advance the necessary funds to cure the default or
reinstate the superior lien, if such advance is in the best interests of the
Noteholders and the Certificateholders. The Servicer shall thereafter take such
action as is necessary to recover the amount so advanced.
ARTICLE V
GENERAL SERVICING PROCEDURE
Section 5.01 ASSUMPTION AGREEMENTS.
Subject to the provisions of the last paragraph of this Section 5.01,
when a Mortgaged Property has been or is about to be conveyed by the Obligor,
the Servicer shall, to the extent it has knowledge of such conveyance or
prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Business Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law or if such enforcement
would materially increase the risk of default or delinquency on, or materially
decrease the security for, such Mortgage Loan. In such event, the Servicer shall
enter into an assumption and modification agreement with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Business Note and, unless prohibited by applicable law
or the Mortgage, the Obligor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Obligor is released from liability and such
person is substituted as Obligor and becomes liable under the Business Note. The
Servicer shall notify the Indenture Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Custodian the
original of such substitution or assumption agreement, which original shall be
added by the Custodian to the Indenture Trustee's Loan File and shall, for all
purposes, be considered a part of such Indenture Trustee's Loan File to the same
extent as all other documents and instruments constituting a part thereof. In
connection with any assumption or substitution agreement entered into pursuant
to this Section 5.01, the Servicer shall not change the Loan Interest Rate or
the Monthly Payment, defer or forgive the payment of principal or interest,
reduce the outstanding principal amount or extend the final maturity date on
such Loan. Any fee collected by the Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Loan by operation of law or any assumption which the Servicer may be restricted
by law from preventing, for any reason whatsoever.
Section 5.02 SATISFACTION OF MORTGAGES AND RELEASE OF LOAN FILES.
The Servicer shall not grant a satisfaction or release of a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or otherwise prejudice any right the Noteholders or the
Certificateholders may have under the mortgage instruments, subject to Section
4.01 hereof. The Servicer shall maintain the Fidelity Bond as provided for in
Section 4.09 insuring the Servicer against any loss it may sustain with respect
to any Loan not satisfied in accordance with the procedures set forth herein.
Upon the payment in full of any Loan, or the receipt by the Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Servicer will immediately notify the Custodian and the
Indenture Trustee, by an Officers' Certificate in the form of Exhibit G attached
hereto (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the applicable Principal and Interest Account
pursuant to Section 4.03 have been or will be so deposited) of a Servicing
Officer and shall request delivery to it of the Indenture Trustee's Loan File.
Upon receipt of such certification and request, the Custodian, shall promptly
release the related Indenture Trustee's Loan File to the Servicer. The Servicer
shall prepare all required documents required to evidence such release and the
Indenture Trustee shall upon receipt of such documents from the Servicer execute
and deliver such documentation to the Servicer, but only to the extent that the
Servicer is unable to record such release acting solely in its capacity as
Servicer. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be payable only from and to the extent of servicing
compensation and shall not be chargeable to the Principal and Interest Account
or any other Accounts.
From time to time and as appropriate for the servicing or foreclosure
of any Loan, including, for this purpose, collection under any primary mortgage
guaranty insurance policy, the Custodian shall, upon request of the Servicer and
delivery to the Custodian of a certification in the form of Exhibit G attached
hereto signed by a Servicing Officer, release the related Indenture Trustee's
Loan File to the Servicer, and the Custodian shall execute such documents as
shall be necessary to the prosecution of any such proceedings. Such servicing
receipt shall obligate the Servicer to return the Indenture Trustee's Loan File
to the Custodian when the need therefor by the Servicer no longer exists, unless
the Loan has been liquidated and the Liquidation Proceeds relating to the Loan
have been deposited in the applicable Principal and Interest Account or the
Indenture Trustee's Loan File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Custodian a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Loan File or
such document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Loan was
liquidated, the servicing receipt shall be released by the Custodian to the
Servicer.
The Indenture Trustee, upon the request of the Servicer and receipt of
the applicable documents by the Custodian, shall execute upon request of the
Servicer and delivery to the Indenture Trustee any court pleadings, requests for
trustee's sale or other documents necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Obligor on the Business Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Business Note or Mortgage or otherwise available at law or in equity. Together
with such documents or pleadings, the Servicer shall deliver to the Indenture
Trustee a certificate of a Servicing Officer requesting that such pleadings or
documents be executed by the Indenture Trustee and certifying as to the reason
such documents or pleadings are required and that the execution and delivery
thereof by the Indenture Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale. The Indenture Trustee shall, upon receipt
of a written request from a Servicing Officer, execute any document provided to
the Indenture Trustee by the Servicer or take any other action requested in such
request, that is, in the opinion of the Servicer as evidenced by such request,
required by any state or other jurisdiction to discharge the lien of a Mortgage
upon the satisfaction thereof and the Indenture Trustee will sign and post, but
will not guarantee receipt of, any such documents to the Servicer, or such other
party as the Servicer may direct, within five Business Days of the Indenture
Trustee's receipt of such certificate or documents. Such certificate or
documents shall establish to the Indenture Trustee's satisfaction that the
related Loan has been paid in full by or on behalf of the Obligor and that such
payment has been deposited in the applicable Principal and Interest Account.
Section 5.03 SERVICING COMPENSATION . As compensation for its services
hereunder, the Servicer shall be entitled to withdraw from the applicable
Principal and Interest Account or to retain from interest payments on the Loans
the Servicer's Servicing Fee. Additional servicing compensation in the form of
assumption and other administrative fees, prepayment penalties and premiums,
interest paid on funds on deposit in the Principal and Interest Account,
interest paid and earnings realized on Permitted Instruments, and late payment
charges shall be retained by or remitted to the Servicer to the extent not
required to be remitted to the Indenture Trustee for deposit in the applicable
Account. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for herein.
Section 5.04 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver to the Owner Trustee, the Indenture Trustee
and each of the Rating Agencies, on or before May 31 of each year beginning May
31, 2000, an Officers' Certificate stating that (i) the Servicer has fully
complied with the provisions of Articles IV and V, (ii) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, and (iii)
to the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof and
the action being taken by the Servicer to cure such default.
Section 5.05 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before May 31 of each year beginning May 31, 2000, the Servicer,
at its expense, shall cause a firm of independent public accountants reasonably
acceptable to the Indenture Trustee to furnish a letter or letters to the Owner
Trustee, the Indenture Trustee and the Rating Agencies to the effect that such
firm has with respect to the Servicer's overall servicing operations examined
such operations in accordance with the requirements of the Uniform Single Audit
Program for Mortgage Bankers, and stating such firm's conclusions relating
thereto.
Section 5.06 INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S RIGHT TO EXAMINE
SERVICER RECORDS AND AUDIT OPERATIONS.
The Indenture Trustee and the Owner Trustee shall have the right upon
reasonable prior notice, during normal business hours and as often as reasonably
required, to examine and audit any and all of the books, records or other
information of the Servicer, whether held by the Servicer or by another on
behalf of the Servicer, which may be relevant to the performance or observance
by the Servicer of the terms, covenants or conditions of this Agreement. No
amounts payable in respect of the foregoing shall be paid for the Trust.
Section 5.07 REPORTS TO THE INDENTURE TRUSTEE; PRINCIPAL AND INTEREST
ACCOUNT STATEMENTS.
Not later than 20 days after each Record Date, the Servicer shall
forward to the Indenture Trustee a statement, certified by a Servicing Officer,
setting forth the status of each Principal and Interest Account as of the close
of business on the preceding Record Date and showing, for the period covered by
such statement, the aggregate of deposits into each Principal and Interest
Account for each category of deposit specified in Section 4.03, the aggregate of
withdrawals from each Principal and Interest Account for each category of
withdrawal specified in Section 4.04, the aggregate amount of permitted
withdrawals not made in the related Due Period, and the amount of any Monthly
Advances or payments of Compensating Interest, in each case, for the related Due
Period.
ARTICLE VI
[RESERVED]
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 7.01 NOTE DISTRIBUTION ACCOUNTS.
(a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department two separate trust
accounts, which shall not be interest-bearing, titled "The Money Store Business
Loan Backed Trust 1999-1 Note Distribution Account 1999-1-I" and "The Money
Store Business Loan Backed Trust 1999-1 Note Distribution Account 1999-1-II"
(each a "Note Distribution Account" and together, the "Note Distribution
Accounts"). The Indenture Trustee shall, promptly upon receipt, deposit in the
applicable Note Distribution Account and retain therein:
(i) the Pool Available Remittance Amount of the related Pool
(net of amounts deposited pursuant to subclauses (ii) and (iii) below)
remitted to the Indenture Trustee by the Servicer;
(ii) the Compensating Interest and the Monthly Advance for the
related Pool remitted to the Indenture Trustee by the Servicer;
(iii) Letter of Credit Payments or any amounts received from any
Alternate Credit Enhancement pursuant to Sections 7.04 and 7.05;
(iv) amounts required to be paid by the Servicer pursuant to
Section 7.08(e) in connection with losses on investments of amounts in
the applicable Note Distribution Account; and
(v) amounts received from the Rounding Account pursuant to
Section 7.02(b)(i).
(b) Amounts on deposit in each Note Distribution Account shall be
withdrawn on each Remittance Date by the Indenture Trustee, or the
applicable Paying Agent on its behalf, to effect the applicable
distributions described in Section 7.08(d);
and also, in no particular order of priority:
(i) by the Indenture Trustee, to invest amounts on deposit in the
applicable Note Distribution Account in Permitted Instruments pursuant
to Section 7.07;
(ii) by the Indenture Trustee, to pay on a monthly basis to the
Servicer as additional servicing compensation interest paid and
earnings realized on Permitted Instruments;
(iii) by the Indenture Trustee, to withdraw any amount not
required to be deposited in the applicable Note Distribution Account
or deposited therein in error; and
(iv) by the Indenture Trustee, to clear and terminate the
applicable Note Distribution Account upon the termination of the Trust
in accordance with the terms of Section 11.01 hereof.
Section 7.02 ROUNDING ACCOUNT.
(a) No later than the Closing Date, the Indenture Trustee will
establish with itself in its trust department a trust account, which shall not
be interest-bearing, titled "The Money Store Business Loan Backed Trust 1999-1
Rounding Account 1999-1" (the "Rounding Account"). The Indenture Trustee shall
deposit into the Rounding Account:
(i) prior to the first Remittance Date on which principal
distributions will be made to the Class AS-3 Notes, from FUNB an
amount equal to $25,000;
(ii) on each Remittance Date, amounts received from the
applicable Note Distribution Account for Pool I pursuant to Section
7.08(g); and
(iii) upon receipt, amounts required to be paid by the Servicer
pursuant to Section 7.07 in connection with losses on investments of
amounts in the Rounding Account.
(b) The Indenture Trustee shall invest amounts on deposit in the
Rounding Account in Permitted Instruments pursuant to Section 7.07 hereof, and
the Indenture Trustee shall withdraw amounts on deposit in the Rounding Account
to:
(i) deposit in the Note Distribution Account for Pool I on each
Remittance Date the amount required to be transferred pursuant to
Section 7.08(G);
(ii) withdraw any amounts not required to be deposited in the
Rounding Account or deposited therein in error; and
(iii) distribute to the Owner Trustee (or the Paying Agent under
the Trust Agreement on its behalf) for distribution to the Class I
Certificateholders any amounts remaining in the Rounding Account upon
the termination of this Agreement in accordance with Section 11.01
hereof.
(c) The Rounding Account shall be treated as an "outside reserve fund"
under applicable Treasury Regulations and will not be an asset of any REMIC. Any
investment earnings on the Rounding Account will be treated as owned by, and
will be taxable to, the Class I Certificateholders. Distributions made to or by
any outside reserve fund under this document shall be treated as made to or by
the owner of such fund.
Section 7.03 ESTABLISHMENT OF EXPENSE ACCOUNTS; DEPOSITS IN EXPENSE
ACCOUNTS; PERMITTED WITHDRAWALS FROM EXPENSE ACCOUNTS.
(a) No later than the Closing Date, the Indenture Trustee will
establish with itself in its trust department two separate trust accounts, which
shall not be interest-bearing, titled "The Money Store Business Loan Backed
Trust 1999-1 Expense Account 1999-1-I" and "The Money Store Business Loan Backed
Trust 1999-1 Expense Account 1999-1-II" (each, an "Expense Account" and together
the "Expense Accounts"). The Indenture Trustee shall deposit into the applicable
Expense Account:
(i) on each Remittance Date from the amounts on deposit in the
applicable Note Distribution Account an amount equal to one-twelfth of
that portion of the Annual Expense Escrow Amount (as determined by the
Servicer or the Trust Administrator) relating to Pool I or Pool II, as
the case may be, subject to the provisions of Section 7.08(d); and
(ii) upon receipt, amounts required to be paid by the Servicer
pursuant to Section 7.07(e) in connection with losses on investments
of amounts in the applicable Expense Account.
If, at any time the aggregate amount then on deposit in the Expense Accounts
shall be insufficient to pay in full the fees and expenses of the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Letter of Credit Provider
and the Trust Administrator (as calculated by the Servicer) then due with
respect to the Trust, the Indenture Trustee, the Owner Trustee, the Remarketing
Agent, the Trust Administrator or the Letter of Credit Provider, as the case may
be, shall make demand on the Servicer to advance the amount of such
insufficiency, and the Servicer shall promptly advance such amount to the
Indenture Trustee for deposit in the applicable Expense Accounts. Thereafter,
the Servicer shall be entitled to reimbursement from the applicable Expense
Account for the amount of any such advance from any excess funds available
pursuant to subclause (c)(ii) below. Without limiting the obligation of the
Servicer to advance such insufficiency, in the event the Servicer does not
advance the full amount of such insufficiency by the Business Day immediately
preceding the Determination Date, the amount of such insufficiency shall be
deposited into the applicable Expense Account for payment to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust Administrator or
the Letter of Credit Provider, as the case may be, pursuant to Section
7.08(d)(i), to the extent of available funds in the applicable Note Distribution
Account.
(b) The Indenture Trustee shall invest amounts on deposit in each
Expense Account in Permitted Instruments pursuant to Section 7.07 hereof, and
the Indenture Trustee shall withdraw amounts on deposit in the applicable
Expense Account to:
(i) pay the fees and expenses of the Indenture Trustee, the Owner
Trustee, the Remarketing Agent, the Trust Administrator and the Letter
of Credit Provider with respect to the Trust in accordance with
written instructions provided by the Servicer or the Trust
Administrator;
(ii) pay on a monthly basis to the Servicer as additional
servicing compensation interest paid and earnings realized on
Permitted Instruments;
(iii) to withdraw any amounts not required to be deposited in the
applicable Expense Account or deposited therein in error; and
(iv) to clear and terminate the applicable Expense Account upon
the termination of the Trust Fund in accordance with Section 11.01
hereof.
(c) On the twelfth Remittance Date following the Closing Date, and on
each twelfth Remittance Date thereafter, the Indenture Trustee shall determine
that all payments required to be made during the prior twelve month period
pursuant to subclauses (b)(i), (b)(ii) and (b)(iii) above, have been made, and,
if all such payments have been made, from the amounts remaining in the
applicable Expense Account, the Indenture Trustee shall (in the following order
of priority):
(i) reimburse the Servicer and/or the Representative, for
reimbursable advances made pursuant to Section 9.01;
(ii) reimburse the Servicer for advances made by it pursuant to
the last paragraph of subclause (a) above; and
(iii) remit to the Servicer as additional servicing compensation
any amounts remaining in any Expense Account after payments made
pursuant to subclauses (b)(i), (b)(ii), (b)(iii), (c)(i) and (c)(ii),
above.
Section 7.04 LETTERS OF CREDIT.
(a) No later than each Determination Date, the Administrator shall
notify the Indenture Trustee of the amount of any Letter of Credit Payment for
the upcoming Distribution Date. Not later than the Business Day preceding such
Distribution Date, the Indenture Trustee shall draw upon the applicable Letter
of Credit and instruct the Letter of Credit Provider to remit to the applicable
Note Distribution Account the Letter of Credit Payment for such Distribution
Date. If the Administrator has actual knowledge that the Letter of Credit
Provider has its senior unsecured debt rating lowered to below "A2" by Xxxxx'x
or "A" by DCR or its short-term unsecured debt rating lowered to below "P-1" by
Xxxxx'x or "D-1" by DCR then the Administrator shall notify the Indenture
Trustee of such event. Not later than the Business Day preceding the next
Distribution Date, the Indenture Trustee shall draw upon each Letter of Credit
an amount equal to the then applicable Letter of Credit Available Amount, unless
prior to the Business Day preceding such Distribution Date the Letter of Credit
Provider delivers Alternate Credit Enhancement to the Indenture Trustee.
(b) If the Letter of Credit Provider fails to make a Letter of Credit
Payment in whole or in part, the Administrator shall promptly notify the
Indenture Trustee, and the Indenture Trustee shall promptly notify each
Noteholder. The Administrator shall promptly notify the Indenture Trustee in the
event of any termination of a Letter of Credit pursuant to its terms or any
change of the Person providing the Letter of Credit, including but not limited
to a change by merger.
Section 7.05 ALTERNATE CREDIT ENHANCEMENT.
The Letter of Credit Provider, at its option and upon prior written
notice to the Indenture Trustee, may substitute or add an alternate form of
credit enhancement in place of or in addition to a Letter of Credit, provided
that the Rating Agency Condition shall have been satisfied. Such alternate form
of credit enhancement can be in the form of cash or securities deposited by the
Letter of Credit Provider or any other Person in a segregated escrow, trust or
collateral account or a letter of credit, certificate insurance policy or surety
bond provided by a third party and delivered to or held by the Indenture
Trustee.
Section 7.06 INTEREST CARRYOVER ACCOUNT.
(a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department an account, which
shall not be interest bearing, titled "The Money Store Loan Backed Trust 1999-1
Interest Carryover Account 1999-1-I" (the "Interest Carryover Account"). The
Interest Carryover Account shall constitute part of the Trust, but will be
treated as an "outside reserve fund" under applicable Treasury Regulations and
will not be an asset of the REMIC, and the funds held therein may be invested in
Permitted Instruments. For federal income tax purposes, any investment earnings
on the Interest Carryover Account will be treated as owned by, and will be
taxable to, the Class I Certificateholders. Distributions to or by any outside
reserve fund under this document shall be treated as made to or by the owner of
such fund. On the Closing Date, the Seller will make an initial cash deposit
into the Interest Carryover Account in an amount equal to $10,000.
If on a particular Remittance Date, the Remittance Rate for a Class of
Pool I Notes exceeds the Weighted Average Coupon Cap, a portion of the Current
Interest Requirement being distributed to that Class of Notes equal to the
amount of interest accrued on the Class Principal Balance of that Class of Notes
at a rate equal to the difference between the Remittance Rate for that Class and
the Weighted Average Coupon Cap will be transferred by the Indenture Trustee
from the Note Distribution Account for Pool I to the Interest Carryover Account
and then distributed to that Class. Similarly, if on a particular Remittance
Date, any Noteholders' Interest Carryover is payable with respect to a Class of
Pool I Notes under Section 7.08(d), the amount of such Noteholders' Interest
Carryover shall be transferred by the Indenture Trustee from the Note
Distribution Account for Pool I to the Interest Carryover Account and
distributed from the Interest Carryover Account with respect to that Class of
Pool I Notes. Additionally, amounts in the Interest Carryover Account will be
withdrawn by the Indenture Trustee and distributed to the Owner Trustee (or the
Paying Agent on its behalf) for distribution to the Class I Certificateholders
upon termination of this Agreement in accordance with the terms of Section 11.01
hereof.
Section 7.07 INVESTMENT OF ACCOUNTS.
(a) So long as no Servicer Default shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of any Account held by the Indenture Trustee shall be invested and reinvested by
the Indenture Trustee as directed in writing by the Servicer, in one or more
Permitted Instruments bearing interest or sold at a discount. No such investment
in the Note Distribution Accounts shall mature later than the Business Day
immediately preceding the next Remittance Date and no such investment in the
Expense Accounts, Interest Carryover Account or Rounding Account shall mature
later than the Business Day immediately preceding the date such funds will be
needed to pay fees or premiums or be transferred to the applicable Note
Distribution Account, as the case may be; PROVIDED, HOWEVER, the Indenture
Trustee or any affiliate thereof may be the obligor on any investment which
otherwise qualifies as a Permitted Instrument and any investment on which the
Indenture Trustee is the obligor may mature on such Remittance Date or date when
needed, as the case may be.
(b) If any amounts are needed for disbursement from any Account held
by the Indenture Trustee and sufficient uninvested funds are not available to
make such disbursement, the Indenture Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Account. The Indenture Trustee shall not be liable for any investment loss or
other charge resulting therefrom.
(c) Subject to Section 12.01 hereof, the Indenture Trustee shall not
in any way be held liable by reason of any insufficiency in any Account held by
the Indenture Trustees resulting from any investment loss on any Permitted
Instrument included therein (except to the extent that the Indenture Trustee is
the obligor thereon).
(d) The Indenture Trustee shall invest and reinvest funds in the
Accounts held by them to the fullest extent practicable, in such manner as the
Servicer shall from time to time direct in writing, but only in one or more
Permitted Instruments.
(e) All income or other gain from investments in any Account held by
the Indenture Trustee shall be deposited in such Account, immediately on
receipt, and the Indenture Trustee shall notify the Servicer of any loss
resulting from such investments. The Servicer shall remit the amount of any such
loss from its own funds, without reimbursement therefor, to the Indenture
Trustee for deposit in the Account from which the related funds were withdrawn
for investment by the next Determination Date following receipt by the Servicer
of such notice.
Section 7.08 PRIORITY AND SUBORDINATION OF DISTRIBUTIONS.
(a) The rights of the Noteholders and Certificateholders to receive
distributions from the proceeds of the Trust, and all ownership interests of the
Noteholders and Certificateholders in such distributions, shall be as set forth
in this Agreement and the Trust Agreement. In this regard, all rights of the
Certificateholders to receive distributions in respect of the Certificates, and
all ownership interests of the Certificateholders in and to such distributions,
shall be subject and subordinate to the preferential rights of the Noteholders
to receive distributions in respect of the Notes, as described herein. In
accordance with the foregoing, the ownership interests of the Certificateholders
in amounts deposited in the applicable Principal and Interest Account or in any
Accounts from time to time shall not vest unless and until such amounts are
distributed in respect of the Certificates in accordance with the terms of this
Agreement and the Trust Agreement. Notwithstanding anything contained in this
Agreement to the contrary, the Certificateholders shall not be required to
refund any amount properly distributed on the Certificates.
(b) [Reserved]
(c) [Reserved]
(d) On each Remittance Date, the Indenture Trustee shall withdraw from
the applicable Note Distribution Account the portion of the Pool Available
Remittance Amount for the applicable Pool, net of reimbursements to the Servicer
for Reimbursable Advances (plus, in the case of Pool I, amounts transferred from
the Rounding Account) and make distributions thereof in the following order of
priority (based solely upon information received from the Trust Administrator):
POOL I
(i) to the Expense Account relating to Pool I, an amount equal to
one-twelfth of the Annual Expense Escrow Amount with respect to the
Pool I Loans, plus any amount required to be paid to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust
Administrator or the Letter of Credit Provider pursuant to Section
7.03(a) resulting from insufficiencies in the Expense Account for Pool
I;
(ii) to the Class AS-1, Class AS-2 and Class AS-3 Notes,
concurrently, the sum of their respective Current Interest
Requirements and Class Interest Shortfall Carryforward Amounts, pro
rata based upon such amounts;
(iii) to the Class MS-1, Class MS-2 and Class BS Notes,
sequentially in that order, the sum of their respective Current
Interest Requirements and Class Interest Shortfall Carryforward
Amounts;
(iv) to the Class AS-1, Class AS-2 and Class AS-3 Notes, the
Class A Principal Distribution Amount, first to the Holders of the
Class AS-1 Notes until their Class Principal Balance has been reduced
to zero, then to the Holders of the Class AS-2 Notes until their Class
Principal Balance has been reduced to zero, and then to the Holders of
the Class AS-3 Notes until their Class Principal Balance has been
reduced to zero; provided, however that on and after any Remittance
Date on which the Class Principal Balances of the Class M and Class B
Notes of Pool I have been reduced to zero, any amounts payable to the
Class A Notes of Pool I on such Remittance Date shall be distributed
pro rata, based upon their Class Principal Balances, and not
sequentially;
(v) to the Class MS-1 and Class MS-2 Notes, sequentially in that
order, the Class MS-1 and Class MS-2 Principal Distribution Amounts,
respectively;
(vi) to the Class BS Notes, the Class BS Principal Distribution
Amount;
(vii) to the Class MS-1 Notes, the Class MS-1 Realized Loss
Amount;
(viii) to the Class MS-2 Notes, the Class MS-2 Realized Loss
Amount;
(ix) to the Class BS Notes, the Class BS Realized Loss Amount;
(x) to the Servicer, any unpaid Servicing Advances for Pool I;
(xi) to the Letter of Credit Provider, the amount of any unpaid
Letter of Credit Reimbursement Amounts;
(xii) to the Class MN and Class BN Notes, sequentially in that
order, the Class MN and Class BN Realized Loss Amounts, respectively;
(xiii) to the Class AS-1, Class AS-2, Class AS-3, Class MS-1,
Class MS-2 and Class BS Notes, sequentially in that order, their
respective Noteholders' Interest Carryover; and
(xiv) any remainder to the Owner Trustee for Deposit in the
sub-account of the Certificate Distribution Account applicable to Pool
I.
Principal payments distributed to the Holders of the Class AS-3 Notes
are required to be made in integral multiples of $25,000. If on any Remittance
Date the amount of principal to be distributed to the Holders of the Class AS-3
Notes is not an even multiple of $25,000, such holders will receive the amount
of such difference amounts from the Rounding Account.
POOL II
(i) to the Expense Account relating to Pool II, an amount equal
to one-twelfth of the Annual Expense Escrow Amount with respect to the
Pool II Loans, plus any amount required to be paid to the Indenture
Trustee, the Owner Trustee, the Remarketing Agent, the Trust
Administrator or the Letter of Credit Provider pursuant to Section
7.03(a) resulting from insufficiencies in the Expense Account for Pool
II;
(ii) to the Class AN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(iii) to the Class MN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(iv) to the Class BN Notes, the sum of its Current Interest
Requirement and Class Interest Shortfall Carryforward Amount;
(v) to the Class AN Notes, the Class AN Principal Distribution
Amount;
(vi) to the Class MN Notes, the Class MN Principal Distribution
Amount;
(vii) to the Class BN Notes, the Class BN Principal Distribution
Amount;
(viii) to the Class MN Notes, the Class MN Realized Loss Amount;
(ix) to the Class BN Notes, the Class BN Realized Loss Amount;
(x) to the Servicer, any unpaid Servicing Advances for Pool II;
(xi) to the Letter of Credit Provider, the amount of any unpaid
Letter of Credit Reimbursement Amounts;
(xii) to the Class MS-1, Class MS-2 and Class BS Notes,
sequentially in that order, the Class MS-1, Class MS-2 and Class BS
Realized Loss Amounts, respectively;
(xiii) to the Class AN, Class MN and Class BN Notes, sequentially
in that order, their respective Noteholders' Interest Carryover; and
(xiv) any remainder to the Owner Trustee for deposit in the
sub-account of the Certificate Distribution Account for Pool II.
(e) Except as described in clause (f) below, all distributions made to
the Noteholders on each Remittance Date will be made on a pro rata basis among
the Noteholders of the respective Class of record on the next preceding Record
Date based on the Percentage Interest represented by their respective Notes, and
shall, except for the final payment on such Notes, be made by wire transfer of
immediately available funds to the account of such Noteholder as shall appear on
the Note Register without the presentation or surrender of the Note or the
making of any notation thereon, at a bank or other entity having appropriate
facilities therefor, at the expense of each such Noteholder unless such
Noteholder shall own of record Notes which have original principal amounts
aggregating (i) at least $5,000,000 or (ii) one of the two highest outstanding
amounts less than $5,000,000.
(f) Notwithstanding the foregoing, the amount of principal being
distributed to the Class AS-3 Notes on each Remittance Date will be allocated to
the specific Notes of such Class selected no later than 5 Business Days prior to
the related Remittance Date by lot or such other manner as may be determined,
which allocations will be made only in amounts equal to $25,000 and integral
multiples of $25,000 in excess thereof.
(g) On each Remittance Date that principal is being distributed to the
Class AS-3 Notes, such Notes also will receive amounts transferred from the
Rounding Account pursuant to Section 7.02(b)(i). Principal payments distributed
to the holders of the Class AS-3 Notes shall be made in integral multiples of
$25,000. If on any Remittance Date the amount of principal to be distributed to
the holders of Class AS-3 Notes is not an even multiple of $25,000, such holders
will receive from the Rounding Account the amount of such difference. The
Rounding Account will be reimbursed, to the extent funds are available, on the
next Remittance Date prior to principal being paid to the holders of the Class
AS-3 Notes.
Section 7.09 ALLOCATION OF REALIZED LOSSES.
If on any Remittance Date, after taking into account all Realized
Losses experienced during the prior Due Period, and the distribution of
principal (including the Accelerated Principal Distribution Amount) with respect
to the Notes on such Remittance Date, the aggregate Class Principal Balance of
the Notes of a Pool exceeds the aggregate balance of the Loans of such Pool as
of the end of the related Due Period and the LOC Available Amount of that Pool,
(i.e., if the level of overcollateralization is negative), then the Class
Principal Balance of the Notes of such Pool will be reduced (in effect, "written
down") such that the level of the Spread Amount is zero, rather than negative.
Such a negative level is an "Applied Realized Loss Amount" which will be applied
as a reduction in the Class Principal Balance of the related Class B and Class M
Notes in reverse order of seniority. In no event shall the Class Principal
Balance of any Class A Note be written down as a result of applying Realized
Losses.
Once the Class Principal Balance of a Class of Notes has been "written
down," the amount of such write down will no longer bear interest, nor will such
amount thereafter be "reinstated" or "written up," although the amount of such
write down may, on future Remittance Dates, be paid to Holders of the Notes
which experienced the write down, in direct order of seniority.
Section 7.10 STATEMENTS.
Each month, not later than 12:00 noon New York time on the
Determination Date, the Trust Administrator shall deliver to the Indenture
Trustee, by telecopy, for distribution to the Noteholders, and the Owner Trustee
for distribution to the Certificateholders, the receipt and legibility of which
shall be confirmed telephonically, with hard copy thereof to be delivered on the
Business Day following the Determination Date, a certificate signed by an
officer of the Trust Administrator (a "Trust Administrator's Certificate")
stating the date (day, month and year), the Series number of the Notes, the date
of this Agreement, and the following:
(i) the Pool Available Remittance Amounts for each Pool for the
related Remittance Date;
(ii) the Class Principal Balances for each Class of Pool I and
Pool II Notes as reported in the prior Trust Administrator's
Certificate pursuant to subclause (xv) below, or, in the case of the
first Determination Date, the Original Principal Balance for each
Class of Pool I and Pool II Notes;
(iii) the Pool Principal Distribution Amounts for each Pool for
the related Remittance Date, in the aggregate and listed separately
for the portions relating to each Class of Pool I and Pool II Notes;
(iv) the amount of any Letter of Credit Payments in the aggregate
and listed separately by Pool;
(v) the Current Interest Requirements for each Class of Notes for
the related Remittance Date;
(vi) the number and Principal Balances of all Loans in each Pool
which were the subject of Principal Prepayments during the Due Period;
(vii) the amount of all Curtailments which were received during
the Due Period, stated separately for each Pool;
(viii) the aggregate amount of all Excess Payments and the
amounts of Monthly Payments in respect of principal received during
the Due Period, stated separately for each Pool;
(ix) the amount of interest received on the Mortgage Loans,
stated separately for each Pool;
(x) the amount of the Monthly Advances to be made on the
Determination Date, the portion of the Monthly Advances to be
deposited in the Note Distribution Accounts pursuant to Section
7.01(a)(ii), and the Compensating Interest payment to be made on the
Determination Date, in each case stated separately for each Pool;
(xi) the delinquency and foreclosure information set forth in the
form attached hereto as Exhibit L, stated separately for each Pool;
(xii) the amount of any Realized Losses incurred during the
related Due Period, stated separately for each Pool;
(xiii) the Interest Shortfall Carryforward Amounts, if any, for
each Class of Notes for such Remittance Date;
(xiv) the Reimbursable Amounts and the amounts transferred to the
Owner Trustee for deposit into the Certificate Distribution Account
and distribution to each Class of Certificates with respect to the
Remittance Date;
(xv) the Class Principal Balance for each Class of Notes and the
Pool Principal Balance for each Pool after giving effect to the
distribution to be made on the Remittance Date and after allocation of
Applied Realized Loss Amounts made on such Remittance Date;
(xvi) the Excess Spread (in the aggregate and stated separately
for each Pool);
(xvii) the Spread Amount and the Specified Subordinated Amount
for such Remittance Date, stated separately by Pool;
(xviii) the amount of any Applied Realized Loss Amount, Realized
Loss Amount and Unpaid Realized Loss Amount for each Class;
(xix) amounts to be deposited to the Expense Accounts, stated
separately for each Pool;
(xx) the amount of all payments and reimbursements to the
Servicer pursuant to Section 4.04(b), (c), (d)(ii), (e) and (f),
stated separately with respect to each Pool;
(xxi) the Class Pool Factor for each Class determined using the
balances in subclause (xv) above;
(xxii) the weighted average Loan Interest Rate of the Loans for
each Pool and the Weighted Average Class Adjusted Loan Remittance
Rates for each Pool, in each case for the related Remittance Date, and
the weighted average Loan Interest Rate for the prior three month
period;
(xxiii) the Class Remittance Rate for each Class of Notes with
respect to the Remittance Date and if the Class Remittance Rate for
any Class of Notes was based on the applicable Net Funds Cap, what it
would have been if based on LIBOR plus the applicable Margin or the
Auction Rate, as the case may be;
(xxiv) the rate of LIBOR and the Auction Rate with respect to the
Remittance Date;
(xxv) if the Remittance Rate for any Class of Notes for such
Remittance Date is based on the applicable Net Funds Cap, the Net
Funds Cap and, for Pool I, the Weighted Average Coupon Cap, for such
Class of Notes with respect to the Remittance Date;
(xxvi) if the Remittance Rate for any Class of Notes for such
Remittance Date is based on the applicable Net Funds Cap, the amount
of any Noteholders' Interest Carryover for such Class for such
Remittance Date;
(xxvii) the amount of the distribution, if any, allocable to
Noteholders' Interest Carryover and the amount of any Noteholders'
Interest Carryover for all prior Remittance Dates after giving effect
to such distribution (in each case, stated separately by Class and in
the aggregate);
(xxviii) the number and Principal Balance of all Defaulted Loans
purchased during the Due Period, stated separately for each Pool; and
(xxix) such other information as the Indenture Trustee may
reasonably require.
The Indenture Trustee shall forward such report to the Noteholders of
the applicable Pool and the Owner Trustee on the Remittance Date, together, if
requested by a Noteholder, with a separate report indicating the amount of funds
deposited in each Note Distribution Account pursuant to Section 7.01(a)(iv); and
the amounts which are reimbursable to the Servicer (all reports prepared by the
Indenture Trustee of such withdrawals and deposits will be based in whole or in
part upon the information provided to the Indenture Trustee by the Servicer or
the Trust Administrator).
To the extent that there are inconsistencies between the telecopy of
the Trust Administrator's Certificate and the hard copy thereof, the Indenture
Trustee shall be entitled to rely upon the telecopy. In the discretion of the
Trust Administrator, in the case of certain information furnished pursuant to
the above provisions, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class per $25,000 original dollar amount
as of the Cut-Off Date.
Each month, not later than the third Business Day prior to the
Determination Date occurring in such month, the Servicer shall deliver to the
Trust Administrator the Servicer's Monthly Computer Tape in the form attached
hereto as Exhibit R (both in hard copy and in computer tape form). The Trust
Administrator may rely fully upon and shall have no liability with respect to
any such information provided to it by the Servicer. The Trust Administrator
shall not be obligated to verify, recompute, reconcile or confirm any
information contained in the Servicer's Monthly Computer Tape or otherwise
provided by the Servicer.
In making any payments or distributions required to be made by them
pursuant to any of the provisions hereof, the Indenture Trustee shall make such
payments and distributions based solely upon the information contained in the
applicable Trust Administrator's Certificate or, if such information is not
included in the applicable Trust Administrator's Certificate, upon written
instructions of the Servicer or the Trust Administrator. The Indenture Trustee
may rely fully upon and shall have no liability with respect to any such
information provided to it by the Servicer or the Trust Administrator. The
Indenture Trustee shall not be obligated to verify, recompute, reconcile or
confirm any information contained in any Trust Administrator's Certificate or
otherwise provided by the Trust Administrator or the Servicer.
(a) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall furnish to the Indenture Trustee for
distribution to each Person who at any time during the calendar year was a
Noteholder of the applicable Pool the amount of interest and principal
distributed with respect to each Class of Notes plus such other customary
information as the Trust Administrator determines to be necessary and/or
required by the Internal Revenue Service to enable the Noteholders to prepare
their tax returns for such calendar year. Such obligation of the Trust
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trust
Administrator pursuant to any requirements of the Code as from time to time are
in force.
(b) On each Remittance Date, the Indenture Trustee shall forward to
the Owner Trustee, for distribution to the Certificateholders, a copy of the
report forwarded to the Noteholders of each Pool in respect of such Remittance
Date, as the case may be, and a statement, prepared by the Servicer or the Trust
Administrator, setting forth the amounts actually distributed to the
Certificateholders on such Remittance Date together with such other information
as the Servicer or Trust Administrator provides and deems necessary or
appropriate.
(c) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall furnish to the Indenture Trustee, with a
copy to the Owner Trustee for distribution to each Person who at any time during
the calendar year was a Certificateholder such information as is reasonably
necessary to provide to such Person a statement containing the information
provided pursuant to the previous paragraph aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder, as
applicable. Such obligation of the Trust Administrator shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Trust Administrator pursuant to any requirements of the Code as
from time to time in force.
(d) Upon reasonable advance notice in writing, the Servicer will
provide to each Noteholder which is a savings and loan association, bank or
insurance company certain reports and access to information and documentation
regarding the Loans sufficient to permit such Noteholder to comply with
applicable regulations of the Office of Thrift Supervision or other regulatory
authorities with respect to investment in the Notes.
(e) The Servicer shall furnish to each Noteholder during the term of
this Agreement, such periodic, special, or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable, or appropriate
with respect to the Noteholder, or otherwise with respect to the purposes of
this Agreement, all such reports or information to be provided by and in
accordance with such applicable instructions and directions as the Noteholder
may reasonably require; provided, that the Servicer shall be entitled to be
reimbursed by such Noteholder for the Servicer's actual expenses incurred in
providing such reports if such reports are not producible in the ordinary course
of the Servicer's business.
Section 7.11 ADVANCES BY THE SERVICER.
Not later than the close of business on each Determination Date, the
Servicer shall remit to the Indenture Trustee for deposit in the applicable Note
Distribution Account an amount (as indicated in the Trust Administrator's
Certificate prepared pursuant to Section 7.10), to be distributed on the related
Remittance Date pursuant to Section 7.08, equal to the amount, if any, by which
(a) the sum of (x) 30 days' interest at the then applicable weighted average
Remittance Rate for the Notes of a Pool on the aggregate Class Principal Balance
of the Notes of that Pool immediately prior to that Remittance Date and (y) the
amount required to be deposited into the Expense Account of that Pool on that
Remittance Date exceeds (b) the amount received by the Servicer as of the
related Record Date in respect of interest on the Loans of the related Pool. The
sum of such excess calculated for each Pool is defined herein as the "Monthly
Advance." The Servicer may reimburse itself for Monthly Advances made pursuant
to Section 4.04.
Notwithstanding anything herein to the contrary, no Monthly Advance
shall be required to be made if the Servicer determines that such Monthly
Advance would, if made, constitute a Nonrecoverable Advance.
Section 7.12 COMPENSATING INTEREST.
The Noteholders shall be entitled to a full month's interest for each
Loan for any month during which a Principal Prepayment or Curtailment is
received on such Loan. Not later than the close of business on each
Determination Date, with respect to each Loan for which a Principal Prepayment
or Curtailment was received during the related Due Period, the Servicer shall
remit to the Indenture Trustee for deposit in the applicable Note Distribution
Account from amounts otherwise payable to it as servicing compensation, an
amount (such amount required to be delivered to the Indenture Trustee is
referred to herein as "Compensating Interest") (as indicated in the Trust
Administrator's Certificate prepared pursuant to Section 7.10) equal to the
difference between (a) 30 days' interest on the Principal Balance of each such
Loan at its Loan Interest Rate and (b) the amount of interest actually received
on each such Loan for such Due Period.
Section 7.13 REPORTS OF FORECLOSURE AND ABANDONMENT OF MORTGAGED
PROPERTY.
Each year the Indenture Trustee shall execute upon receipt from the
Servicer and return to the Servicer for filing the reports of foreclosures and
abandonments of any Mortgaged Property of the applicable Pool prepared by the
Servicer required by Section 6050J of the Code. In order to facilitate this
reporting process, the Servicer, on or before January 15th of each year, shall
provide to the Indenture Trustee reports relating to each instance occurring
during the previous calendar year in which the Servicer (i) on behalf of the
Trust acquires an interest in a Mortgaged Property relating to a Loan through
foreclosure or other comparable conversion in full or partial satisfaction of
the Loan, or (ii) knows or has reason to know that a Mortgaged Property relating
to a Loan has been abandoned. The reports from the Servicer shall be in form and
substance sufficient to enable the Indenture Trustee to meet the reporting
requirements imposed by such Section 6050J.
Section 7.14 NET DEPOSITS. As an administrative convenience, unless
the Servicer is required to remit collections within two Business Days of
receipt thereof, the Servicer will be permitted to make the deposit of
collections on the Loans for or with respect to the Due Period net of
distributions to be made to the Servicer with respect to the Due Period (other
than with respect to Nonrecoverable Advances). The Servicer, however, will
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.
[RESERVED]
ARTICLE IX
THE SERVICER
Section 9.01 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) The Servicer agrees to indemnify and hold the Indenture
Trustee, the Owner Trustee, the Trust Administrator, the Custodian and each
Noteholder and Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee, the Owner Trustee,
the Trust Administrator, the Custodian and any Noteholder and Certificateholder
may sustain in any way related to the failure of the Servicer to perform its
duties and service the Loans in compliance with the terms of this Agreement. The
Servicer shall immediately notify the Indenture Trustee, the Owner Trustee, the
Trust Administrator, the Custodian and each Noteholder and Certificateholder if
a claim is made by a third party with respect to this Agreement, and the
Servicer shall assume (with the consent of the Indenture Trustee) the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer, the Indenture Trustee, the
Owner Trustee, the Trust Administrator, the Custodian and/or Noteholder or
Certificateholder in respect of such claim. The Indenture Trustee shall
reimburse the Servicer from amounts otherwise payable to the Certificateholders
for all amounts advanced by it pursuant to the preceding sentence except when
the Claim relates directly to the failure of the Servicer to service and
administer the Loans in compliance with the terms of this Agreement.
(b) The Representative agrees to indemnify and hold the Indenture
Trustee, the Owner Trustee, the Trust Administrator, the Custodian and each
Noteholder and Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee, the Owner Trustee,
the Trust Administrator, the Custodian and any Noteholder or Certificateholder
may sustain in any way related to the failure of the Servicer, if it is an
affiliate thereof, or the failure of the Representative to perform their
respective duties in compliance with the terms of this Agreement and in the best
interests of the Noteholders and the Certificateholders. The Representative
shall immediately notify the Indenture Trustee, the Owner Trustee, the Trust
Administrator, the Custodian and each Noteholder and Certificateholder if a
claim is made by a third party with respect to this Agreement, and the
Representative shall assume (with the consent of the Indenture Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Servicer, the
Representative, the Indenture Trustee, the Owner Trustee, the Trust
Administrator, the Custodian and/or Noteholder or Certificateholder in respect
of such claim. The Indenture Trustee shall reimburse the Representative from
amounts otherwise payable to the Certificateholders for all amounts advanced by
it pursuant to the preceding sentence except when the claim relates directly to
the Representative's indemnification pursuant to Section 2.05 and Section 3.03
or to the failure of the Servicer, if it is an affiliate of the Representative
to perform its obligations to service and administer the Loans in compliance
with the terms of this Agreement, or the failure of the Representative to
perform its duties in compliance with the terms of this Agreement and in the
best interests of the Noteholders and the Certificateholders.
(c) The Servicer also acknowledges its indemnification
obligations under Section 6.7 of the Indenture.
Section 9.02 MERGER OR CONSOLIDATION OF THE REPRESENTATIVE AND THE
SERVICER.
The Servicer and the Representative will each keep in full effect its
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Loans and to perform its duties under this Agreement.
Any Person into which the Servicer, the Representative may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer and the Representative shall be a party, or
any Person succeeding to the business of the Servicer and the Representative,
shall be an established mortgage loan servicing institution that has a net worth
of at least $15,000,000 and shall be the successor of the Servicer and the
Representative, as applicable, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Servicer and the Representative
shall send notice of any such merger or consolidation to the Issuer, the Owner
Trustee and the Indenture Trustee.
Section 9.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities respecting any matters arising hereunder. Subject to the terms of
Section 9.01 herein, the Servicer shall have no obligation to appear with
respect to, prosecute or defend any legal action which is not incidental to the
Servicer's duty to service the Loans in accordance with this Agreement.
Section 9.04 SERVICER NOT TO RESIGN.
The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Owner Trustee and the Indenture Trustee, or upon the determination
that the Servicer's duties hereunder are no longer permissible under applicable
law and such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by a written
Opinion of Counsel (who may be counsel for the Servicer) to such effect
delivered to the Indenture Trustee and the Owner Trustee, which Opinion of
Counsel shall be in form and substance acceptable to the Indenture Trustee and
the Owner Trustee. No such resignation shall become effective until a successor
has assumed the Servicer's responsibilities and obligations hereunder in
accordance with Section 10.02.
Section 9.05 [Reserved]
Section 9.06 [Reserved]
Section 9.07 APPOINTMENT OF TRUST ADMINISTRATOR.
The Representative and Servicer hereby appoint First Union National
Bank, a national banking association, as Trust Administrator and, in such
capacity, the Trust Administrator shall have all the rights, powers, obligations
and duties respecting the Trust Administrator set forth herein and in the other
Basic Documents.
ARTICLE X
DEFAULT
Section 10.01 SERVICER DEFAULT.
(a) In case one or more of the following Servicer Defaults shall
occur and be continuing, that is to say:
(i) (A) the failure by the Servicer to make any required
Servicing Advance, to the extent such failure materially and adversely
affects the interests of the Noteholders or the Certificateholders;
(B) the failure by the Servicer to make any required Monthly Advance;
(C) the failure by the Servicer to remit any Compensating Interest; or
(D) any failure by the Servicer to remit to Noteholders or the
Certificateholders, or to the Indenture Trustee for the benefit of the
Noteholders or the Certificateholders, any payment required to be made
under the terms of this Agreement which continues unremedied after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Indenture
Trustee or to the Servicer and the Indenture Trustee by any Noteholder
or Certificateholder; or
(ii) failure by the Servicer or the Representative duly to
observe or perform, in any material respect, any other covenants,
obligations or agreements of the Servicer or the Representative as set
forth in this Agreement, which failure continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer or the Representative, as the case may be, by the
Indenture Trustee or to the Servicer or the Representative, as the
case may be, and the Indenture Trustee by any Noteholder or
Certificateholder; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in
force, undischarged or unstayed for a period of 60 days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property; or
(v) the Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of
its obligations;
(b) then, and in each and every such case, so long as a Servicer
Default shall not have been remedied, and in the case of clause (i) above
(except for clause (i)(C)), if such Servicer Default shall not have been
remedied within 30 days after the Servicer has received notice of such Servicer
Default, (x) with respect solely to clause (i)(C) above, if such Monthly Advance
is not made earlier than 4:00 p.m. New York time on the Determination Date, the
Indenture Trustee shall give immediate telephonic notice of such failure to a
Servicing Officer of the Servicer, as the case may be, and, unless such failure
is cured, by receipt of payment by 12:00 Noon New York time on the following
Business Day, the Indenture Trustee shall immediately assume, pursuant to
Section 10.02 hereof, the duties of a successor Servicer; and (y) in the case of
clauses (i)(A), (i)(B), (i)(D), (i)(E), (ii), (iii), (iv) and (v), the Majority
Securityholders then outstanding, by notice in writing to the Servicer, may, in
addition to whatever rights such Noteholders may have at law or equity including
damages, injunctive relief and specific performance, in each case commence
termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Loans and the proceeds thereof, as Servicer. Upon
receipt by the Servicer of a second written notice from such Noteholders stating
that they or it intend to terminate the Servicer as a result of such Servicer
Default, all authority and power of the Servicer under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall, subject to Section
10.02, pass to and be vested in the Indenture Trustee or its designee and the
Indenture Trustee or its designee is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Loans and related documents. The Servicer agrees to cooperate
with the Indenture Trustee in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Indenture Trustee or its designee for administration by it of
all amounts which shall at the time be credited by the Servicer to each
Principal and Interest Account or thereafter received with respect to the Loans.
Section 10.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 10.01 or the Indenture Trustee receives the resignation of
the Servicer evidenced by an Opinion of Counsel pursuant to Section 9.04 or the
Servicer is removed as servicer pursuant to this Article X, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof,
provided, however, that the Indenture Trustee shall not be liable for any
actions of any servicer prior to it, and that the Indenture Trustee shall not be
obligated to make advances or payments pursuant to Sections 7.11, 7.12, 4.05,
4.10 or 4.14 or otherwise but only to the extent the Indenture Trustee, as the
case may be, determines reasonably and in good faith that such advances would
not be recoverable, such determination to be evidenced with respect to each such
advance by a certification of a Responsible Officer of the Indenture Trustee, as
the case may be. As compensation therefor, the Indenture Trustee shall be
entitled to all funds relating to the Loans which the Servicer would have been
entitled to receive from the Principal and Interest Account pursuant to Section
4.04 if the Servicer had continued to act as servicer hereunder, together with
other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Sections 5.01 and 5.03.
Notwithstanding the above, the Indenture Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Majority
Securityholders so request in writing to the Indenture Trustee, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution satisfying the Rating Agency Condition that has a net
worth of not less than $15,000,000 as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any collections received by the Servicer after
removal or resignation shall be endorsed by it to the Indenture Trustee and
remitted directly to the Indenture Trustee or, at the direction of the Indenture
Trustee, to the successor servicer. The compensation of any successor servicer
(including, without limitation, the Indenture Trustee) so appointed shall be the
aggregate Servicing Fees, together with other servicing compensation in the form
of assumption fees, late payment charges or otherwise. In the event the
Indenture Trustee is required to solicit bids as provided herein, the Indenture
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer shall be entitled to, with respect to the Loans each would be
servicing, the full amount of the aggregate Servicing Fees relating to such
Loans as servicing compensation, together with the other servicing compensation
in the form of assumption fees, late payment charges or otherwise. Within thirty
days after any such public announcement, the Indenture Trustee shall negotiate
and effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Indenture Trustee shall deduct from any sum received by the
Indenture Trustee from the successor to the Servicer in respect of such sale,
transfer and assignment all costs and expenses of any public announcement and of
any sale, transfer and assignment of the servicing rights and responsibilities
hereunder and the amount of any unreimbursed Servicing Advances and Monthly
Advances. After such deductions, the remainder of such sum shall be paid by the
Indenture Trustee to the Servicer at the time of such sale, transfer and
assignment to the Servicer's successor. The Indenture Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Servicer agrees to cooperate with the
Indenture Trustee and any successor servicer in effecting the termination of the
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Indenture Trustee or such successor servicer, as applicable, all
documents and records reasonably requested by it to enable it to assume the
Servicer's functions hereunder and shall promptly also transfer to the Indenture
Trustee or such successor servicer, as applicable, all amounts which then have
been or should have been deposited in the Principal and Interest Account by the
Servicer or which are thereafter received with respect to the Loans. Neither the
Indenture Trustee nor any other successor servicer shall be held liable by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Servicer to
deliver, or any delay in delivering, cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
Servicer hereunder. No appointment of a successor to the Servicer hereunder
shall be effective until written notice of such proposed appointment shall have
been provided by the Indenture Trustee to each Noteholder and each
Certificateholder, and the Indenture Trustee shall have consented thereto. The
Indenture Trustee shall not resign as servicer until a successor servicer has
been appointed.
Pending appointment of a successor to the Servicer hereunder, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Indenture Trustee may make
such arrangements for the compensation of such successor out of payments on
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer pursuant to
Section 5.03 or otherwise as provided in this Agreement. The Servicer, the
Indenture Trustee, the Owner Trustee, any Custodian and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
Section 10.03 WAIVER OF DEFAULTS.
The Majority Securityholders, may, on behalf of all Noteholders and
Certificateholders waive any events permitting removal of the Servicer as
servicer pursuant to this Article X, provided, however, that such Noteholders
may not waive a default in making a required distribution on a Note or
Certificate without the consent of the holder of such Note or Certificate, as
the case may be. Upon any waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived.
Section 10.04 [Reserved]
Section 10.05 CONTROL BY MAJORITY SECURITYHOLDERS.
The Majority Securityholders may, by written instruction, direct the
time, method and place of conducting any proceeding relating to the Owner Trust
Estate or for any remedy available to the Indenture Trustee with respect to the
Owner Trust Estate or exercising any trust or power conferred on the Indenture
Trustee with respect to the Owner Trust Estate and the Indenture Trustee, by
written instruction, may direct the time, method and place of conducting any
proceeding for any remedy available to the Owner Trustee with respect to the
Owner Trust Estate or exercising any trust or power conferred on the Owner
Trustee with respect to the Owner Trust Estate, PROVIDED THAT:
(a) such direction shall not be in conflict with any rule of law
or with this Agreement or the Trust Agreement and shall contain a
representation to such effect upon which the recipient of such direction
may rely;
(b) the Indenture Trustee, or the Owner Trustee, as the case may
be, shall have been provided with indemnity satisfactory to it; and
(c) the Indenture Trustee, and the Owner Trustee may take any
other action deemed proper by the Indenture Trustee, and the Owner Trustee
which is not inconsistent with such direction; provided, however, that the
Indenture Trustee, and the Owner Trustee need not take any action which it
determines might involve it in liability or may be unjustly prejudicial to
the Holders not so directing.
ARTICLE XI
TERMINATION
Section 11.01 TERMINATION.
(a) This Agreement shall terminate upon notice to the Indenture
Trustee of either: (a) the latter of the final payment or other liquidation of
the last Loan or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Loan and the remittance of all funds due
thereunder, or (b) mutual consent of the Servicer and all Noteholders and all
Certificateholders in writing.
(b) The Servicer may, at its option, on any date on which the
aggregate Principal Balances of the Loans are less than 10% of the aggregate
Principal Balances of the Loans as of the Cut-Off Date (such date, the "Optional
Servicer Termination Date"), purchase on the next succeeding Remittance Date,
all of the Loans and any related REO Properties at a price equal to the sum of
(x) 100% of the Principal Balances of the Loans before the occurrence of
Realized Losses, and any related REO Property, and (y) accrued but unpaid
interest thereon (whether through payments by the applicable Obligor, Monthly
Advances or otherwise) at the weighted average Remittance Rates of the Pool I
Notes in the case of the Pool I Loans and the weighted average Remittance Rates
of the Pool II Notes in the case of the Pool II Loans (the "Termination Price").
(c) In the event that this Agreement is terminated under clause
(b) of Section 11.01(a), or the Servicer exercises its purchase option as
provided in Section 11.01(b), the Trust shall be terminated in accordance with
the following additional requirements, unless the Owner Trustee and the Trust
Administrator shall have been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
10.02 will not (1) result in the imposition of taxes on "prohibited
transactions" of REMIC I or REMIC II as defined in Section 860F of the Code or
(2) cause either REMIC I or REMIC II to fail to qualify as a REMIC at any time
that any REMIC I Regular Interest, Pool I Notes or Class I Certificates are
outstanding:
(i) Within 90 days prior to the final Remittance Date, the Servicer
shall adopt and the Owner Trustee shall sign a plan of complete liquidation
for each of REMIC I and REMIC II meeting the requirements of a "Qualified
Liquidation" under Section 860F of the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Remittance date, the Owner Trustee
shall sell all of the assets of the Trust (to the Servicer, in the case of
a termination under Section 11.01(b)) for cash; and
(iii) At the time of the making of the final payment on the Notes, the
Indenture Trustee shall distribute or credit, or cause to be distributed or
credited from the Pool I Note Distribution Account (A) to REMIC II, as
holder of the REMIC I Regular Interests, the unpaid principal balance
thereof plus accrued interest thereon, (B) to each Class of Pool I Notes,
the amounts payable with respect to such Notes pursuant to Section 7.08,
and (C) to the Owner Trustee, for deposit into the sub-account of the
Certificate Distribution Account applicable to Pool I any amounts remaining
in the Pool I Note Distribution Account, for distribution to the Class I
Certificates any amounts that it has accrued under Section 2.13 of the
Trust Agreement, but which have not yet been paid with respect to such
Certificates, and distribution to the Class R Certificates, all amount
remaining in REMIC I and REMIC II after such payment.
By their acceptance of the Pool I Notes and Class I Certificates, the Holders
thereof hereby agree to appoint the Owner Trustee as their attorney in fact to:
(i) adopt such a plan of complete liquidation (and the holders of the Pool I
Notes and Class I Certificates hereby appoint the Owner Trustee as their
attorney in fact to sign such plan) as appropriate and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plan of complete liquidation all in accordance with the terms hereof.
(d) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Indenture Trustee and the Rating Agencies as
soon as practicable after the Servicer has received notice thereof.
(e) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee or its designee will succeed to the rights of the Indenture
Trustee pursuant to this Agreement.
ARTICLE XII
ADMINISTRATIVE DUTIES OF THE TRUST ADMINISTRATOR
Section 12.01 ADMINISTRATIVE DUTIES.
(a) DUTIES WITH RESPECT TO THE INDENTURE AND DEPOSITORY
AGREEMENTS. The Trust Administrator shall perform all the duties of the Issuer
under the Depository Agreement and the Indenture. In addition, the Trust
Administrator shall consult with the Owner Trustee as the Trust Administrator
deems appropriate regarding the duties of the Issuer under the Indenture and the
Depository Agreement. The Trust Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee in writing when action is
necessary to comply with the Issuer's duties under the Indenture and the
Depository Agreement. The Trust Administrator shall prepare for execution by the
Issuer or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture
and the Depository Agreement. In furtherance of the foregoing, the Trust
Administrator shall take all appropriate action that is the duty of the Issuer
to take pursuant to the Indenture and the Depository Agreement. The Owner
Trustee shall not be responsible for monitoring or supervising the activities of
the Trust Administrator; provided, however, the Owner Trustee shall remain
liable for performing its services hereunder and under the other Basic
Documents. The Owner Trustee shall incur no liability for the default or
misconduct of the Trust Administrator.
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) The Trust
Administrator shall perform such calculations and shall prepare for execution by
the Issuer or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Owner
Trustee to prepare, file or deliver pursuant to this Agreement or any of the
Basic Documents, and at the request of the Owner Trustee shall take all
appropriate action that it is the duty of the Issuer to take pursuant to this
Agreement or any of the Basic Documents. In accordance with the directions of
the Owner Trustee, the Trust Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Trust Administrator. In furtherance
thereof, the Owner Trustee shall, on behalf of itself and the Trust, execute and
deliver to the Trust Administrator, one or more powers of attorney substantially
in the form of Exhibit P hereto, appointing the Trust Administrator the
attorney-in-fact of the Owner Trustee and the Trust for the purpose of executing
on behalf of the Owner Trustee and the Trust any and all documents and taking
any and all actions necessary in connection with the performance by the Trust
Administrator of its obligations under this Agreement.
(ii) Notwithstanding anything in this Agreement or any of the Basic
Documents to the contrary, the Trust Administrator shall be responsible for
promptly notifying the Owner Trustee in writing in the event that any
withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.2(c) of the Trust Agreement. Any such notice shall specify the
amount of any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Trust Administrator shall be responsible for
performance of the duties of the Owner Trustee and the Holder of the
Special Interests set forth in Sections 2.13, 2.14, 6.2, 6.3, 6.4. 6.5 and
6.6 of the Trust Agreement with respect to, among other things, accounting
and reports to Owners (as defined in the Trust Agreement); PROVIDED,
HOWEVER, that the Holder of the Special Interests shall retain
responsibility for the distribution of the Schedule K-1s necessary to
enable each Certificateholder to prepare its federal and state income tax
returns.
(iv) The Trust Administrator shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be performed
in connection with the resignation or removal of the Owner Trustee, and any
other duties expressly required to be performed by the Trust Administrator
under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Trust Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; PROVIDED,
HOWEVER, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in
the Trust Administrator's opinion, no less favorable to the Issuer in any
material respect.
(c) TAX MATTERS. The Trust Administrator shall prepare and file,
on behalf of the Trust and the Holder of the Special Interests, all tax returns,
tax elections, financial statements and such annual or other reports of the
Issuer as are necessary for preparation of tax reports as provided in Sections
2.6, 2.13 and 2.14 and Article V of the Trust Agreement, including without
limitation, Internal Revenue Service forms 1099, 1065 and 1066. All tax returns
relating to REMIC I, REMIC II, the Class I Certificates and Class R Certificates
will be signed by the Owner Trustee and all tax returns relating to Pool II and
the Class II Certificates shall be signed by the Holder of the Special
Interests, unless some other party is required by law to sign such returns (in
which case such other party shall sign).
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Trust Administrator are non-ministerial, the Trust
Administrator shall not take any action pursuant to this Article X unless within
a reasonable time before the taking of such action, the Trust Administrator
shall have notified in writing the Owner Trustee and the Indenture Trustee of
the proposed action and the Owner Trustee and, with respect to items (A), (B),
(C) and (D) below, Indenture Trustee shall not have withheld consent or provided
an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Loans);
(C) the amendment, change or modification of this Agreement or any of
the Basic Documents;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of Successor Servicers or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture Trustee of its obligations under
the Indenture; and
(E) the removal of the Indenture Trustee.
(c) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Trust Administrator, in its capacity hereunder, shall not be obligated to,
and shall not, (1) make any payments to the Noteholders or Certificateholders
under the Basic Documents, (2) sell the Indenture Trust Estate pursuant to
Section 5.4 of the Indenture, (3) take any other action that the Issuer directs
the Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
Section 12.02 RECORDS.
The Trust Administrator shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours.
Section 12.03 ADDITIONAL INFORMATION TO BE FURNISHED TO THE
ISSUER.
The Trust Administrator shall furnish to the Issuer from time to
time such additional information available to the Trust Administrator regarding
the Owner Trust Estate as the Issuer shall reasonably request.
Section 12.04. CALCULATION OF LIBOR.
(a) On each Interest Determination Date, the Trust Administrator
will determine LIBOR based on the rate for one-month U.S. dollar deposits (the
"One Month Index Maturity") which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date in determining the Class Remittance Rates for
the Remittance Date in the following month. If such LIBOR rate does not appear
on Telerate Page 3750, the LIBOR rate for that day will be determined on the
basis of the rates at which deposits in United States dollars, having the One-
Month Index Maturity and in a principal amount of not less than U.S. $1,000,000,
are offered at approximately 11:00 a.m., London time, on that day to prime banks
in the London interbank market by the Reference Banks. The Trust Administrator
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that day will be the arithmetic mean of the quotations. If fewer
than two quotations are provided, the rate for that day will be the arithmetic
mean of the rates quoted by major banks in New York City, selected by the Trust
Administrator, at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks having a One-Month
Index Maturity and in a principal amount equal to an amount of not less than
U.S. $1,000,000; provided that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, LIBOR in effect for the applicable
Interest Period will be LIBOR in effect for the previous Interest Period.
Neither the Representative, Servicer nor the Indenture Trustee shall
have any liability or responsibility to any Person for the selection of any
Reference Bank for the purpose of determining LIBOR. In determining LIBOR and
the Class Remittance Rates the Trust Administrator may conclusively rely and
shall be protected in relying upon the rates appearing on Telerate Page 3750 or
the offered quotations (whether written, oral or on Telerate Page 3750) from
Reference Banks, as appropriate, in effect from time to time. Neither of the
Representative, the Servicer nor the Indenture Trustee shall have liability or
responsibility to any Person for (i) the Trust Administrator's selection of
Reference Banks for purposes of determining LIBOR or (ii) the Trust
Administrator's or the Servicer's inability, as applicable, following a
good-faith reasonable effort, to obtain such quotations from Reference Banks or
such New York City banks or to determine such arithmetic mean, all as provided
for in this Section 12.15.
The establishment of LIBOR and the Class Remittance Rates by the Trust
Administrator shall (in the absence of manifest error) be final, conclusive and
binding upon each Holder of a Note, the Representative and the Servicer.
The Trust Administrator is not responsible for determining (or for the
failure of the Servicer to determine) the Net Funds Cap.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 ACTS OF NOTEHOLDERS AND CERTIFICATEHOLDERS.
Except as otherwise specifically provided herein, whenever Noteholder
or Certificateholder action, consent or approval is required under this
Agreement, such action, consent or approval shall be deemed to have been taken
or given on behalf of, and shall be binding upon, all Noteholders and
Certificateholders if the Majority Securityholders agree to take such action or
give such consent or approval.
Section 13.02 AMENDMENT.
This Agreement may be amended by the Servicer and the Owner Trustee,
with the consent of the Indenture Trustee (which consent may not be unreasonably
withheld), but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Servicer
and the Owner Trustee, with the consent of the Indenture Trustee and the Letter
of Credit Provider and the consent of the Majority Securityholders the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes
and the Certificate Balance, the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all the outstanding Notes
of each Class and the Holders (as defined in the Trust Agreement) of all the
outstanding Certificates affected thereby.
Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Rating Agencies. Promptly after the execution of any such
amendment or consent, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Certificateholder and the
Indenture Trustee.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
Any amendment to this Agreement shall also require the consent of the
Custodian and/or the Trust Administrator, if such proposed amendment affects any
of their respective rights, duties or obligations hereunder.
Section 13.03 RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Noteholders and the Certificateholders' expense on direction of
the Majority Securityholders, but only when accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Noteholders and the Certificateholders or is necessary for the
administration or servicing of the Mortgage Loans.
Section 13.04 DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 13.05 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 13.06 NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified mail or registered mail, postage prepaid, to (i) in
the cases of the Representative, Seller and Servicer, The Money Store Inc., 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, the
Seller and the Servicer, (ii) in the case of the Indenture Trustee, 000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Department, (iii) in the case of the Owner Trustee to The Money Store Business
Loan Backed Trust 0000-0, 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 DCR, to Duff & Xxxxxx Credit Rating Co.,
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention:
Monitoring Group (Small Business Loans), (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, or (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 Business Loan Backed
Trust, Series 1999-1 or to such other address as such party may hereafter
specify in writing.
Section 13.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
Section 13.08 NO PARTNERSHIP.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Noteholders or the Certificateholders.
Section 13.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
Section 13.10 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
Representative, the Seller, the Servicer, the Issuer, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders and their respective
successors and assigns.
Section 13.11 HEADINGS.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
Section 13.12 ASSIGNMENT TO INDENTURE TRUSTEE.
The Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the Indenture for the benefit of the Noteholders of all
right, title and interest of the Issuer in, to and under the Mortgage Loans
and/or the assignment of any or all of the Issuer's rights and obligations
hereunder to the Indenture Trustee.
Section 13.13 NONPETITION COVENANT.
Notwithstanding any prior termination of this Agreement, the Seller
and Servicer shall not, prior to the date which is one year and one day after
the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
Section 13.14 LIMITATION OF LIABILITY OF OWNER TRUSTEE, INDENTURE
TRUSTEE AND CUSTODIAN.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been signed and countersigned by Chase Manhattan Bank
Delaware not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank Delaware in its
individual capacity or, except as expressly provided in the Trust Agreement, as
Owner Trustee have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer or the Owner Trustee hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by HSBC Bank USA not in its individual capacity
but solely as Indenture Trustee and in no event shall HSBC Bank USA have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.
(c) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by First Union National Bank, not in its
individual capacity but solely as Custodian and Trust Administrator, and in no
event shall First Union National Bank have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
Section 13.15 INDEPENDENCE OF THE SERVICER.
For all purposes of this Agreement, the Servicer shall be an
independent contractor and shall not be subject to the supervision of the Issuer
or the Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by the
Issuer, the Servicer shall have no authority to act for or represent the Issuer
or the Owner Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Owner Trustee.
Section 13.16 NOTIFICATION TO RATING AGENCIES.
The Indenture Trustee shall give prompt notice to the Rating Agencies
of the occurrence of any of the following events of which it has received
notice: (1) any modification or amendment to this Agreement, (2) any appointment
of a Custodian (other than First Union National Bank), (3) any change of the
Indenture Trustee or the Servicer, (4) any Servicer Default, and (5) the final
payment of all the Notes and the Certificates. The Servicer shall promptly
deliver to the Rating Agencies a copy of each of the Trust Administrator's
Certificates.
Section 13.17 THIRD PARTY RIGHTS.
The parties hereto agree that the Indenture Trustee, the Owner
Trustee, the Trust Administrator and the Custodian shall each be deemed a third
party beneficiary of the Agreement entitled to all rights and benefits set forth
herein as fully as if it were a party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
THE MONEY STORE BUSINESS LOAN
BACKED TRUST 1999-1
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity but
solely as Owner Trustee on behalf of the Trust,
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
THE MONEY STORE INC., as Representative
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
Title: Senior Vice President/CFO
THE MONEY STORE COMMERCIAL
MORTGAGE, INC., as Seller and Servicer
By: /s/ Xxxx Leliakov
----------------------------------
Name: Xxxx Leliakov
Title: President
Acknowledged and Accepted:
HSBC Bank USA, not
in its individual capacity
but solely as Indenture Trustee,
By: /s/ Xxxxx Barstock
-------------------------------
Name: Xxxxx Barstock
Title: Assistant Vice President
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
not in its individual capacity
but as Custodian
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
not in its individual capacity
but as Trust Administrator
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 29th day of June 1999 before me, a Notary Public in and for said
State, personally appeared 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/ Xxxxxx X. Xxxxxx
------------------------------
Notary Public
My Commission expires November 24, 0000
XXXXX XX XXXXXXXXXX )
: ss.:
COUNTY OF YOLO )
On the 29th day of September 1999 before me, a Notary Public in and for the
State of California, personally appeared Xxxxxx X. Xxxx, known to me to be the
Senior Vice President/CFO of The Money Store Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxx
---------------------------
Notary Public
My Commission expires August 9, 0000
XXXXX XX XXXXXXXXXX )
: ss.:
COUNTY OF YOLO )
On the 29th day of June 1999 before me, a Notary Public in and for the
State of California, personally appeared Xxxx Leliakov, known to me to be the
President of The Money Store Commercial Mortgage Inc., and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxx
----------------------------
Notary Public
My Commission expires August 9, 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
June __, 1999
To: _________________ (the "Depository")
As "Servicer" under the Sale and Servicing Agreement, dated as of May
31, 1999, among The Money Store Business Loan Backed Trust 1999-1, The Money
Store Inc., and the Money Store Commercial Mortgage Inc., as Seller and Servicer
(the "Agreement"), we hereby authorize and request you to establish an account,
as a Principal and Interest Account pursuant to Section 4.03 of the Agreement,
to be designated as "The Money Store Commercial Mortgage Inc., in trust for the
registered holders of The Money Store Business Loan Backed Notes, and
Certificates Series 1999-1, and various Obligors." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Servicer. You
may refuse any deposit which would result in violation of the requirement that
the account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
THE MONEY STORE INC.
By: ________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum amount provided by applicable law by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund.
By: ________________________________
Name:
Title:
EXHIBIT C
FORM OF CUSTODIAN INITIAL CERTIFICATION
June 29, 1999
The Money Store Inc. The Money Store Commercial Mortgage Inc.
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 West Xxxxxxxxxx, XX 00000
First Union Capital Markets Corp., as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that,
except as noted on the attachment hereto, if any (the "Loan Exception Report"),
it has received an Assignment of Mortgage, or a certified copy thereof, and a
Business Note with respect to each Pool I and Pool II Loan listed in the related
Loan Schedule and the documents contained therein appear to bear original
signatures.
The undersigned has made no independent examination of any such
documents beyond the review specifically required in the above-referenced Sale
and Servicing Agreement. The undersigned makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any such
documents or any of Pool I or Pool II Loans identified on the related Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Pool I or Pool II Loan.
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. The Money Store Commercial Mortgage Inc.
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 West Xxxxxxxxxx, XX 00000
First Union Capital Markets Corp. as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-referenced Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that as to
each Pool I and Pool II Loan listed in the related Loan Schedule (other than any
Pool I or Pool II Loan paid in full or any Pool I or Pool II Loan listed on the
attachment hereto), it has reviewed the documents delivered to it pursuant to
Section 2.04 of the Sale and Servicing Agreement and has determined that (i) all
such documents are in its possession, (ii) such documents have been reviewed by
it and have not been mutilated, damaged, torn or otherwise physically altered
and relate to such Pool I or Pool II Loan, (iii) based on its examination and
only as to the foregoing documents, the information set forth in the related
Loan Schedule respecting such Pool I or Pool II Loan is correct and (iv) each
Business Note has been endorsed as provided in Section 2.04 of the Sale and
Servicing Agreement.
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. The Money Store Commercial Mortgage Inc.
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000 West Xxxxxxxxxx, XX 00000
First Union Capital Markets Corp. as HSBC Bank USA, as Indenture Trustee
Representative and Underwriter 000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and Certificates, Series 1999-1, dated as of May 31,
1999 among The Money Store Inc. as Representative, The Money
Store Commercial Mortgage Inc., as Seller and Servicer, and The
Money Store Business Loan BACKED TRUST 1999-1
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that,
except as noted on the attachment hereto, as to each Pool I and Pool II Loan
listed in the related Loan Schedule (other than any Pool I or Pool II Loan paid
in full or listed on the attachment hereto) it has reviewed the documents
delivered to it pursuant to Section 2.04 (other than items listed in Section
2.04(d)(ii)) of the Sale and Servicing Agreement and has determined that (i) all
such documents are in its possession, (ii) such documents have been reviewed by
it and have not been mutilated, damaged, torn or otherwise physically altered
and relate to such Pool I or Pool II Loan, (iii) based on its examination, and
only as to the foregoing documents, the information set forth in the related
Loan Schedule respecting such Pool I or Pool II Loan is correct and (iv) each
Business Note has been endorsed as provided in Section 2.04 of the Sale and
Servicing Agreement. The undersigned has made no independent examination of such
documents beyond the review specifically required in the above-referenced Sale
and Servicing Agreement. The undersigned makes no representations as to: (i) the
validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Pool I or Pool II Loan identified on the related
Loan Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any such Pool I or Pool II Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
FIRST UNION NATIONAL BANK,
as Custodian
By: ________________________________
Name:
Title:
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
[RESERVED]
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS
To: [First Union National Bank,
as Custodian]
Re: Sale and Servicing Agreement, The Money Store Business Loan
Backed Notes and CERTIFICATES, SERIES 1999-1, DATED AS OF MAY 31,
1999
In connection with the administration of the Pool of Loans held by you
as Custodian for the Noteholders and the Certificateholders, we request the
release, and acknowledge receipt, of the (Indenture Trustee's Loan File/[specify
document]) for the Loan described below, for the reason indicated.
OBLIGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
____ 1. Loan Paid in Full
(Servicer hereby certifies that all amounts received in
connection therewith have been credited to the Principal and
Interest Account and remitted to the Indenture Trustee for
deposit into the applicable Note Distribution Account pursuant to
the Sale and Servicing Agreement.)
____ 2. Loan Liquidated
(Servicer hereby certifies that all proceeds of foreclosure,
insurance or other liquidation have been finally received and
credited to the Principal and Interest Account and remitted to
the Indenture Trustee for deposit into the applicable Note
Distribution Account pursuant to the Sale and Servicing
Agreement.)
____ 3. Loan in Foreclosure
_____4. Loan Purchased Pursuant to Section 11.01 of the Sale and
Servicing Agreement.
_____5. Loan Repurchased or Substituted Pursuant to Article II or III of
the Sale and Servicing Agreement (Servicer hereby certifies that the
repurchase price or Substitution Adjustment has been credited to the
Principal and Interest Account and remitted to the Indenture Trustee
for deposit into the applicable Note Distribution Account pursuant
to the Sale and Servicing Agreement.)
_____6. Collateral being released pursuant to Section 4.01(f) of the Sale
and Servicing Agreement.
_____7. Other (explain) ____________________________
____________________________
If box 1 or 2 above is checked, and if all or part of the Indenture
Trustee's Loan File was previously released to us, please release to us our
previous receipt on file with you, as well as any additional documents in your
possession relating to the above specified Loan.
If box 3, 4, 5, 6 or 7 above is checked, upon our return of all of the
above documents to you as Custodian, please acknowledge your receipt by signing
in the space indicated below, and returning this form.
THE MONEY STORE COMMERCIAL
MORTGAGE INC.
By: _____________________________
Name:
Title:
Documents returned to Custodian:
____________________________________
Custodian
By: ___________________________
Date: _________________________
EXHIBIT H
[RESERVED]
EXHIBIT I
[RESERVED]
EXHIBIT J
FORM OF CUSTODIAL AGREEMENT
Dated _______________________
HSBC Bank USA, a New York banking corporation and trust company, as
indenture trustee (the "Indenture Trustee") and ____________________________,
_________________________ (the "Custodian"), agree as follows:
WHEREAS, The Money Store Business Loan Backed Trust 1999-1, The Money
Store Commercial Mortgage Inc., as seller (the "Seller") and servicer (the
"Servicer"), and The Money Store Inc., as Representative, have entered into a
Sale and Servicing Agreement dated as of May 31, 1999 relating to The Money
Store Business Loan Backed Notes and Certificates, Series 1999-1 (the "Sale and
Servicing Agreement"), the terms defined therein being used herein with the same
meaning) pursuant to which the Seller transferred, assigned, set-over and
otherwise conveyed certain Loans to the Trust; and
WHEREAS, in connection with such transfer and assignment and pursuant
to the Sale and Servicing Agreement, the Indenture Trustee holds, directly or
pursuant to a custodial agreement, the Indenture Trustee's Loan Files:
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Custodian and the Indenture Trustee agree as follows:
1. APPOINTMENT AS CUSTODIAN; ACKNOWLEDGMENT OF RECEIPT. Subject to the
terms and conditions herein, the Indenture Trustee hereby appoints the
Custodian, and the Custodian hereby accepts such appointment, as its Custodian
to maintain custody of the Indenture Trustee's Loan Files. The Custodian hereby
acknowledges receipt of the Business Notes, the Mortgages, the assignments and
other documents relating to the Loans referred to in Section 2.04, except for
the items referred to in Section 2.04(d)(ii), of the Sale and Servicing
Agreement. The Servicer shall be liable for all of the Custodian's fees under
this Agreement.
2. MAINTENANCE OF OFFICE. The Custodian agrees to maintain each
Indenture Trustee's Loan File identified in Section 2.04 of the Sale and
Servicing Agreement, said Exhibit being incorporated herein by reference, at the
office of the Custodian located at ________ ___________________ or at such other
office of the Custodian in _______________ as the Custodian shall designate from
time to time after giving the Indenture Trustee 30 days' prior written notice.
3. DUTIES OF CUSTODIAN. As Custodian, the Custodian shall have and
perform the following powers and duties:
(a) SAFEKEEPING. To segregate the Indenture Trustee's Loan Files
from all other mortgages and mortgage notes and similar records in its
possession, to identify the Indenture Trustee's Loan Files as being
held and to hold the Indenture Trustee's Loan Files for and on behalf
of the Indenture Trustee for the benefit of all present and future
Noteholders and Certificateholders, to maintain accurate records
pertaining to each Business Note and Mortgage in the Indenture
Trustee's Loan Files as will enable the Indenture Trustee to comply
with the terms and conditions of the Sale and Servicing Agreement, to
maintain at all times a current inventory thereof and to conduct
periodic physical inspections of the Indenture Trustee's Loan Files
held by it under this Agreement in such a manner as shall enable the
Indenture Trustee and the Custodian to verify the accuracy of such
record-keeping, inventory and physical possession. The Custodian will
promptly report to the Indenture Trustee any failure on its part to
hold the Indenture Trustee's Loan Files as herein provided and
promptly take appropriate action to remedy any such failure.
(b) RELEASE OF DOCUMENTS. To release any Business Note and
Mortgage in the Indenture Trustee's Loan Files as provided in the Sale
and Servicing Agreement.
(c) ADMINISTRATION; REPORTS. In general, to attend to all
non-discretionary details in connection with maintaining custody of
the Indenture Trustee's Loan Files on behalf of the Indenture Trustee,
the Noteholders and the Certificateholders. In addition, the Custodian
shall assist the Indenture Trustee generally in the preparation of
reports to Noteholders and to Certificateholders or to regulatory
bodies to the extent necessitated by the Custodian's custody of the
Indenture Trustee's Loan Files.
4. ACCESS TO RECORDS. The Custodian shall permit the Indenture Trustee
or its duly authorized representatives, attorneys or auditors and those persons
permitted access pursuant to Section 4.13 of the Sale and Servicing Agreement to
inspect the Indenture Trustee's Loan Files and the books and records maintained
by the Custodian pursuant hereto at such times as they may reasonably request,
subject only to compliance with the terms of the Sale and Servicing Agreement.
5. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be deemed to
have received proper instructions with respect to the Indenture Trustee's Loan
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee or the Servicer. A certified copy of a resolution of
the Board of Directors of the Indenture Trustee may be accepted by the Custodian
as conclusive evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written notice to the
contrary by the Custodian from the Indenture Trustee. Such instructions may be
general or specific in terms.
6. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to indemnify
the Indenture Trustee for any and all liabilities, obligations, losses, damages,
payments, costs or expenses, including attorneys' fees, of any kind whatsoever
which may be imposed on, incurred by or asserted against the Indenture Trustee
as the result of any act or omission in any way relating to the maintenance and
custody by the Custodian of the Indenture Trustee's Loan Files; provided,
however, that the Custodian shall not be liable for any portion of any such
amount resulting from the gross negligence or willful misconduct of the
Indenture Trustee.
7. ADVICE OF COUNSEL. The Custodian and the Indenture Trustee further
agree that the Custodian shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder as Custodian and shall be
without liability for any action reasonably taken pursuant to such advice,
provided that such action is not in violation of applicable Federal or State
law. This paragraph shall not negate the Custodian's obligations under paragraph
6 above.
8. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT, AND INTERPRETIVE AND
ADDITIONAL PROVISIONS. This Agreement shall become effective as of the date
hereof and shall continue in full force and effect until terminated as
hereinafter provided, and may be amended at any time by mutual agreement of the
parties hereto. This Agreement may be terminated by either party in a writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect no sooner than sixty (60) days after the date of such delivery or
mailing. Concurrently with, or as soon as practicable after, the termination of
this Agreement, the Custodian shall redeliver the Indenture Trustee's Loan Files
to the Indenture Trustee at such place as the Indenture Trustee may reasonably
designate. In connection with the administration of this Agreement, the
Custodian and the Indenture Trustee may agree from time to time upon the
interpretation of the provisions of this Agreement as may in their opinion by
consistent with the general tenor and purposes of this Agreement, any such
interpretation to be signed and annexed hereto.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. NOTICES. Notices and other writings shall be delivered or mailed,
postage prepaid, to the Indenture Trustee at 000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Trust Department, or to the Custodian at
_________________________________________, Attention: __________; or to such
other address as the Indenture Trustee or the Custodian may hereafter specify in
writing. Notices or other writings shall be effective only upon actual receipt
by the parties.
11. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the Indenture Trustee and the Custodian and their
respective successors and assigns. Concurrently with the appointment of a
successor trustee as provided in Section 6.8 of the Indenture, the Indenture
Trustee and the Custodian shall amend this Agreement to make said successor
trustee the successor to the Indenture Trustee hereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
HSBC BANK USA
as Indenture Trustee under the Indenture
referred to above
By:_______________________________________
Name:
Title:
[_______________________________], as
Custodian under the Sale and Servicing
Agreement referred to above
By:_______________________________________
Name:
Title:
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 and Monthly Excess
Spread); (b) Servicing Fee; (c) Monthly Excess Spread; (d) The
amount equal to total interest received minus Servicing Fee and
Monthly Excess Spread; (e) principal and Excess Payments
received; (f) Curtailments received; and (g) Principal
Prepayments received.
8. The Loan Principal Balance.
9. The Business Note maturity date.
10. A "Delinquency Flag" noting that the Loan is current or
delinquent. If delinquent, state the date on which the last
payment was received.
11. A "Foreclosure Flag" noting that the Loan is the subject of
foreclosure proceedings.
12. An "REO Flag" noting that the Loan is an REO Property.
13. A "Liquidated Loan Flag" noting that the Loan is a Liquidated
Loan and the Net Liquidation Proceeds received in connection
therewith.
14. Lifetime Cap.
15. Lifetime Floor.
16. Periodic Cap.
17. Net Funds Cap.
18. Any additional information reasonably requested by the Indenture
Trustee.
EXHIBIT N
[RESERVED]
EXHIBIT O
[RESERVED]
EXHIBIT P
FORM OF TRUST MATTERS POWER OF ATTORNEY
STATE OF _____________ )
: ss.:
COUNTY OF ___________ )
KNOW ALL MEN BY THESE PRESENTS, that CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee (the "Owner Trustee") for The Money Store Business Loan Backed Trust
1999-1 (the "Trust"), does hereby make, constitute and appoint each of THE MONEY
STORE COMMERCIAL MORTGAGE INC., as Servicer (the "Servicer") and FIRST UNION
NATIONAL BANK, as Trust Administrator (the "Trust Administrator") under the Sale
and Servicing Agreement dated as of May 31, 1999 (the "Agreement"), among the
Trust, the Servicer, and The Money Store Inc., as Representative, as the same
may be amended from time to time, severally and not jointly, and each of their
respective agents and attorneys, as Attorneys-in-Fact to execute on behalf of
the Owner Trustee or the Trust any and all such documents, reports, filings,
instruments, certificates and opinions as it should be the duty of the Owner
Trustee or the Trust to prepare, file or deliver pursuant to the Basic
Documents, including, without limitation, to appear for and represent the Owner
Trustee and the Trust in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Trust, if any, and with
full power to perform any and all acts associated with such returns and audits,
if any, that the Owner Trustee could perform, including without limitation, the
right to distribute and receive confidential information, defend and assert
positions in response to audits, initiate and defend litigation, and to execute
waivers of restrictions on assessments of deficiencies, consents to the
extension of any statutory or regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed
by the Owner Trustee are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
EXECUTED this 29th of June, 1999.
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Owner Trustee for the Money Store
Trust 1999-1
By: _________________________________
Name:
Title:
EXHIBIT Q
FORM OF COLLATERAL POWER OF ATTORNEY
STATE OF CALIFORNIA )
: ss.:
COUNTY OF YOLO )
KNOW ALL MEN BY THESE PRESENTS, that The Money Store Commercial
Mortgage Inc. (the "Seller") has made, constituted and appointed, and by these
presents hereby makes, constitutes and appoints, First Union National Bank, as
Custodian (the "Custodian") under the Sale and Servicing Agreement dated as of
May 31, 1999 (the "Sale and Servicing Agreement") among The Money Store
Commercial Mortgage Inc., as Seller and Servicer, The Money Store Inc., as
Representative and The Money Store Business Loan Backed Trust 1999-1, as the
Seller's true and lawful attorney for the Seller's name, place and stead, for
the limited purposes of (i) executing, delivering, filing, or recording and
otherwise dealing with the collateral for the Loans transferred by the Seller to
the Trust in accordance with the Sale and Servicing Agreement and (ii)
preparing, executing, filing or recording Uniform Commercial Code financing
statements and notices to insurers with respect to such Loans.
This power of attorney is intended to be, and shall be construed to
be, an irrevocable power delegable by the Custodian to the Servicer and any
successor servicer under the Sale and Servicing Agreement.
IN WITNESS WHEREOF, this power of attorney has been duly executed by
the Seller as of this 29th day of June 1999.
THE MONEY STORE COMMERCIAL MORTGAGE INC.
By:________________________________
Name:
Title:
