EXECUTION COPY
THE MONEY STORE RESIDENTIAL TRUST 1997-II
TRUST AGREEMENT
among
THE ORIGINATORS LISTED HEREIN
Originators
and
CHASE MANHATTAN BANK DELAWARE
Owner Trustee
Dated as of November 30, 1997
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS
SECTION 1.1. Capitalized Terms..........................................1
SECTION 1.2. Other Definitional Provisions..............................4
ARTICLE II - ORGANIZATION
SECTION 2.1. Name.......................................................5
SECTION 2.2. Office.....................................................5
SECTION 2.3. Purposes and Powers........................................5
SECTION 2.4. Appointment of Owner Trustee...............................6
SECTION 2.5. Initial Capital Contribution of Trust Estate...............6
SECTION 2.6. Declaration of Trust.......................................6
SECTION 2.7. Transfer of Interest to the Holder of the GP Interest;
Liability of the Holder of the GP Interest...............6
SECTION 2.8. Title to Trust Property....................................7
SECTION 2.9. Situs of Trust.............................................8
SECTION 2.10. Representations and Warranties of the Originators..........8
SECTION 2.11. Voting Interest............................................8
SECTION 2.12. Federal Income Tax Allocations.............................9
ARTICLE III - TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership..........................................9
SECTION 3.2. The Trust Certificates....................................10
SECTION 3.3. Authentication of Trust Certificates......................10
SECTION 3.4. Registration of Transfer and Exchange of
Trust Certificates......................................11
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates............................................11
SECTION 3.6. Persons Deemed Certificateholders.........................12
SECTION 3.7. Access to List of Certificateholders' Names
and Addresses...........................................12
SECTION 3.8. Appointment of Authenticating Agent.......................12
SECTION 3.9. Appointment of Paying Agent...............................13
SECTION 3.10. Restrictions on Transfer..................................13
SECTION 3.11. [Reserved]................................................15
SECTION 3.12. Disposition by the Holder of the GP Interest..............15
ARTICLE IV - ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Owners with Respect to Certain
Matters.................................................15
SECTION 4.2. Action by Holder of the Voting Interest with Respect
to Certain Matters......................................16
SECTION 4.3. Action by Holder of Voting Interest with Respect
to Bankruptcy...........................................16
SECTION 4.4. Restrictions on Power.....................................16
SECTION 4.5. Control by Holder of the Voting Interest..................17
SECTION 4.6. Execution of Documents....................................17
ARTICLE V - APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account.........18
SECTION 5.2. Application of Funds in Certificate Distribution
Account.................................................18
SECTION 5.3. [Reserved.]...............................................19
SECTION 5.4. Method of Payment.........................................19
SECTION 5.5. No Segregation of Monies; No Interest.....................19
SECTION 5.6. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue
Service and Others......................................19
SECTION 5.7. Signature on Returns; Tax Matters Partner.................20
ARTICLE VI - AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.........................................20
SECTION 6.2. Action upon Instruction...................................21
SECTION 6.3. No Duties Except as Specified in this Agreement or in
Instructions............................................22
SECTION 6.4. No Action Except under Specified Documents or
Instructions............................................23
SECTION 6.5. Restrictions..............................................23
SECTION 6.6. Notice of Default Under Indenture.........................23
ARTICLE VII - CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties...........................23
SECTION 7.2. Furnishing of Documents...................................25
SECTION 7.3. Representations and Warranties............................25
SECTION 7.4. Reliance; Advice of Counsel...............................25
SECTION 7.5. Not Acting in Individual Capacity.........................26
SECTION 7.6. Owner Trustee Not Liable for Trust Certificates
or Loans................................................26
SECTION 7.7. Owner Trustee May Own Trust Certificates and Series
1997-II Notes...........................................27
SECTION 7.8. Payments from Owner Trust Estate..........................27
SECTION 7.9. Doing Business in Other Jurisdictions.....................27
ARTICLE VIII - COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.........................28
SECTION 8.2. Indemnification...........................................28
SECTION 8.3. Payments to the Owner Trustee.............................28
SECTION 8.4. Non-recourse Obligations..................................29
ARTICLE IX - DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. Termination of Trust Agreement............................29
SECTION 9.2. Dissolution upon Bankruptcy of the Holder of the
GP Interest.............................................30
ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee................31
SECTION 10.2. Resignation or Removal of Owner Trustee...................31
SECTION 10.3. Successor Owner Trustee...................................32
SECTION 10.4. Merger or Consolidation of Owner Trustee..................33
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.............33
ARTICLE XI - MISCELLANEOUS
SECTION 11.1. Supplements and Amendments................................35
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders......................................36
SECTION 11.3. Limitations on Rights of Others...........................36
SECTION 11.4. Notices...................................................36
SECTION 11.5. Severability..............................................37
SECTION 11.6. Separate Counterparts.....................................37
SECTION 11.7. Successors and Assigns....................................37
SECTION 11.8. [Reserved.]...............................................37
SECTION 11.9. No Petition...............................................37
SECTION 00.00.Xx Recourse...............................................37
SECTION 11.11.Headings .................................................38
SECTION 11.12.Governing Law.............................................38
SECTION 11.13.[Reserved.]...............................................38
SECTION 11.14.Servicer .................................................38
EXHIBITS
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Investment Letter
Annex I List of Originators
TRUST AGREEMENT dated as of November
30, 1997 among the Originators listed on
Annex I hereto, and Chase Manhattan Bank
Delaware, as Owner Trustee.
ARTICLE I.
DEFINITIONS
SECTION 1.1. CAPITALIZED TERMS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Authenticating Agent" shall mean any authenticating agent or
co-authenticating agent appointed pursuant to Section 3.8 and shall initially be
The Chase Manhattan Bank.
"Bank" shall mean Chase Manhattan Bank Delaware, or any successor
thereto, in its individual capacity.
"Basic Documents" shall mean the Sale and Servicing Agreement, the
Indenture, the Note Depository Agreement, the Certificate of Trust, this Trust
Agreement and the other documents and certificates delivered in connection
therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE ss. 3801 ET SEQ., as the same may be amended from
time to time.
"Certificate" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A
attached hereto.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned in and the registrar appointed pursuant to Section 3.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration; or at such other address as the Owner Trustee may designate by
notice to the Certificateholders and the Representative, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Certificateholders and the
Representative).
"Delaware Trustee" shall have the meaning assigned to such term in
Section 10.1.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"GP Interest" shall have the meaning assigned to such term in Section
2.7.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register and the Holder of
the GP Interest.
"Holder of the GP Interest" shall mean TMS SPV, Inc., a Delaware
special purpose corporation and an Affiliate of The Money Store. Inc.
"Holder of the Voting Interest" shall mean First Union Bank of
Delaware, and any permitted successor, assignee or transferee thereof.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of November 30, 1997
between the Trust and the Bank of New York, as Indenture Trustee, as the same
may be amended or supplemented from time to time.
"Note Depository Agreement" shall mean the agreement among the Trust,
the Trustee, the Servicer and The Depository Trust Company, as the initial
Clearing Agency, dated as of one Business Day prior to the Closing Date,
relating to the Series 1997-II Notes, as the same may be amended or supplemented
from time to time.
"Originator" shall mean each entity listed on Annex I attached hereto.
"Ownership Percentage" shall mean with respect to any
Certificateholder, the proportion (expressed as a percentage) of the aggregate
beneficial ownership interests in the Trust held of record by such
Certificateholder, as evidenced by such Holder's Certificates.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Trust
pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9 and shall initially be The Chase Manhattan
Bank.
"Record Date" shall mean, with respect to any Remittance Date, the
close of business on the last day of the month immediately preceding the month
of the related Remittance Date.
"Representative" shall mean The Money Store Inc., a New Jersey
corporation, as Representative of the Originators, and, its successors and
assigns.
"Responsible Officer" shall mean, when used with respect to the Owner
Trustee, any officer assigned to the Corporate Trust Office of the Owner
Trustee, including any Vice President, any Assistant Vice President, any
Assistant Secretary, any trust officer or any other officer of the Owner Trustee
customarily performing functions similar to those performed by any of the above
designated officers or any agent acting under a power of attorney from the Owner
Trustee, having responsibility for the administration of this Trust Agreement,
as the case may be, and also, with respect to a particular matter relating to
the Trust, any other officer of the Owner Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with such
matter. Any notice given to the Owner Trustee at the address and in the manner
specified in Section 11.4 hereof shall be deemed to be given to a Responsible
Officer.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of November 30, 1997, among the Trust, the Originators
listed therein and The Money Store Inc., as Representative, Servicer and Claims
Administrator, as the same may be amended and supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Series 1997-II Notes" shall mean The Money Store Residential Loan
Notes, Series 1997-II, Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class M-1,
Class M-2 and Class B.
"Servicer" means The Money Store Inc., a New Jersey corporation, or
any successor servicer under the Sale and Servicing Agreement.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
"Trustee" shall mean The Bank of New York, as indenture trustee under
the Indenture, or any successor thereto.
"Voting Interest" shall have the meaning assigned to such term in
Section 2.11.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II.
ORGANIZATION
SECTION 2.1. NAME. The name of the Trust created hereby shall be "The
Money Store Residential Trust 1997-II", in which name the Owner Trustee, on
behalf of the Trust, shall have power and authority, and is hereby authorized
and empowered, to engage in the transactions contemplated hereby, conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and xxx and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Originators.
SECTION 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, and the Owner Trustee shall have
power and authority, and is hereby authorized and empowered in the name and on
behalf of the Trust, to do or cause to be done all acts and things necessary,
appropriate or convenient to cause the Trust to engage in the following
activities:
(i) to execute, deliver and issue the Series 1997-II
Notes pursuant to the Indenture and to authorize, execute,
authenticate, issue and deliver the Trust Certificates, the GP
Interest and the Voting Interest pursuant to this Agreement, and to
sell the Series 1997-II Notes, the Trust Certificates, the GP Interest
and the Voting Interest;
(ii) with the proceeds of the sale of the Series
1997-II Notes and the Trust Certificates, to fund the Pre-Funding
Account and the Capitalized Interest Account, to pay the
organizational, start-up and transactional expenses of the Trust and
to pay the balance to the Originators pursuant to the Sale and
Servicing Agreement;
(iii) to acquire, receive and accept from time to
time the Owner Trust Estate, and to assign, grant, transfer, pledge,
mortgage and convey the Trust Estate (including the Collateral)
pursuant to the Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of the Sale and Servicing
Agreement any portion of the Owner Trust Estate released from the lien
of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into, execute, deliver, file and
perform its obligations under the Basic Documents;
(v) to engage in those activities, including
entering into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or connected
therewith; and
(vi) subject to compliance with the Basic Documents
to which the Trust is a party, to engage in such other activities as
may be required in connection with conservation of the Owner Trust
Estate and the making of distributions to the Certificateholders and
the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Originators hereby
appoint the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers, authority, authorization and duties set
forth herein.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Originators hereby sell, assign, transfer, convey and set over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Originators, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Certificate Distribution Account. The
Originators shall pay all organizational expenses of the Trust as they may
arise.
SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents to which the
Trust is a party. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership. The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers, authority and authorization set forth herein and to the extent
not inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
SECTION 2.7. TRANSFER OF INTEREST TO THE HOLDER OF THE GP INTEREST;
LIABILITY OF THE HOLDER OF THE GP INTEREST. (a) TMS SPV, Inc., as holder of no
less than 1% Ownership Percentage in the Trust (the "GP Interest"), shall pay,
to the extent not paid by the Originators, organizational expenses of the Trust
as they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee. The
Holder of the GP Interest shall also be liable directly to and will indemnify
the injured party for all losses, claims, damages, liabilities and expenses of
the Trust (including Expenses, to the extent not paid out of the Owner Trust
Estate) to the extent that the Holder of the GP Interest would be liable if the
Trust were a partnership under the Delaware Revised Uniform Limited Partnership
Act in which the Holder of the GP Interest were a general partner; PROVIDED,
HOWEVER, that the Holder of the GP Interest shall not be liable for any losses
incurred by a Certificateholder in the capacity of an investor in the Trust
Certificates or a Noteholder in the capacity of an investor in the Series
1997-II Notes. In addition, any third party creditors of the Trust (other than
in connection with the obligations described in the preceding sentence for which
the Holder of the GP Interest shall not be liable) shall be deemed third party
beneficiaries of this paragraph. The obligations of the Holder of the GP
Interest under this paragraph shall be evidenced by the Trust Certificate
representing a 1% Ownership Percentage issued to the Holder of the GP Interest
as described in Section 3.12, which for purposes of the Business Trust Statute
shall be deemed to be a separate class of Trust Certificates from all other
Trust Certificates issued by the Trust. For purposes of the Business Trust
Statute, the GP Interest shall be deemed a separate class of beneficial
ownership interest in the Trust from all other beneficial ownership interests in
the Trust, and the Holder of the GP Interest, as such, shall be deemed a
separate class of beneficial owner of the Trust from all other beneficial owners
of the Trust.
(b) No Holder or Holder of the Voting Interest, other than to the
extent set forth in clause (a), shall have any personal liability for any
liability or obligation of the Trust.
(c) The Holder of the GP Interest shall at all times have a net worth
of at least $1,000,000.
SECTION 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) No Holder shall have legal title to any part of the Owner Trust
Estate. The Holders shall be entitled to receive distributions with respect to
their undivided beneficial ownership interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise, of any right,
title or interest by any Certificateholder of its beneficial ownership interest
in the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Owner Trust Estate.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the States of Delaware, North
Carolina or New York. Payments will be received by the Trust only in Delaware,
New York or North Carolina, and payments will be made by the Trust only from
Delaware, New York or North Carolina. The only office of the Trust will be at
the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS. Each
of the Originators hereby represents and warrants, as to itself, to the Owner
Trustee, as of the Closing Date, that:
(a) It is duly organized and validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its
properties and to conduct its business as such properties are
currently owned and such business presently conducted.
(b) It is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such
qualifications.
(c) It has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms and the
execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action.
(d) The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under its articles of incorporation or bylaws, or any
material indenture, agreement or other material instrument to which it
is a party or by which it is bound; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best
of its knowledge, any order, rule or regulation applicable to it of
any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
it or its properties.
SECTION 2.11. VOTING INTEREST. By executing this Agreement, First
Union Bank of Delaware (the "Holder of the Voting Interest") shall acquire a
100% voting interest in the Trust (the "Voting Interest") and shall be deemed to
have agreed to be bound by the terms and conditions set forth herein concerning
the Voting Interest. Except as otherwise provided herein, the Holder of the
Voting Interest shall have the sole power and authority to approve or disapprove
actions requiring the approval or disapproval of Certificateholders. Except as
otherwise provided herein, any action requiring the consent, approval or vote of
Certificateholders shall be taken only upon the written consent, approval or
vote of the Holder of the Voting Interest. In exercising such power and
authority to give or withhold such consent, approval or vote, the Holder of the
Voting Interest shall act only in accordance with and upon receipt of written
instructions delivered to it by the Trustee (on which the Holder of the Voting
Interest shall be fully protected in relying). The Holder of the Voting Interest
shall have no obligation other than to exercise such power and authority in
accordance with such instructions; provided, however, that no action may be
taken that would increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Loans or distributions
required to be made for the benefit of Certificateholders, or would adversely
affect the Federal or state tax consequences to the Certificateholders, without
the consent of all Certificateholders affected thereby. Notwithstanding any
provision herein or in any other document to the contrary, the Holder of the
Voting Interest shall not have any personal liability for any liability or
obligation of the Trust, any action taken or omitted pursuant to any written
instructions of the Trustee, or otherwise relating to the Trust or its serving
as the Holder of the Voting Interest. The Holder of the Voting Interest may not
sell, transfer, assign, pledge or otherwise convey, directly or indirectly, all
or any part of the Voting Interest without the prior written consent of the
Holder of the GP Interest. The Holder of the Voting Interest shall have no right
to receive any amounts hereunder or under any other Basic Document or any other
economic rights as a beneficial owner of the Trust, and, except as otherwise
expressly set forth herein, the Voting Interest shall not be deemed a
Certificate and the Holder of the Voting Interest shall not be deemed a Holder
(except as to benefit afforded Holders). For purposes of the Business Trust
Statute, the Voting Interest shall be deemed a separate class of beneficial
ownership interest in the Trust from all other beneficial ownership interests in
the Trust, and the Holder of the Voting Interest, as such, shall be deemed a
separate class of beneficial owner of the Trust from all other beneficial owners
of the Trust. The Voting Interest shall not be represented by a certificate.
SECTION 2.12. FEDERAL INCOME TAX ALLOCATIONS. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated to the Certificateholders pro rata based upon their Ownership
Percentage.
ARTICLE III.
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Originators pursuant to Section 2.5 and until the issuance
of the Trust Certificates and the Voting Interest, the Originators shall be the
sole beneficial owners of the Trust. Upon such issuance of the Trust
Certificates and the Voting Interest, the Originators shall cease to be
beneficial owners of the Trust, and their respective beneficial interests in the
Trust shall be and shall be deemed cancelled, void, and of no further force and
effect.
SECTION 3.2. THE TRUST CERTIFICATES. Subject to Section 3.3, the Trust
Certificates shall be issued in minimum denominations corresponding to an
Ownership Percentage of 10% and integral multiples of 1% in excess thereof;
PROVIDED, HOWEVER, that Trust Certificates may be issued to the Holder of the GP
Interest in minimum denominations corresponding to an Ownership Percentage of
1%. The Trust Certificates shall be executed in the name and on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee, and the Owner Trustee shall have power and authority and is hereby
authorized and empowered, in the name and on behalf of the Trust, to authorize,
execute, authenticate, issue and deliver Trust Certificates, the GP Interest and
the Voting Interest. Trust Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Trust Certificates or did not hold such
offices at the date of authentication and delivery of such Trust Certificates. A
transferee of a Trust Certificate shall become a Certificateholder, and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder, upon due registration of such Trust Certificate in such transferee's
name pursuant to Section 3.4.
SECTION 3.3. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial contribution of the Loans to the Trust pursuant to the Sale and
Servicing Agreement, and without further action by the Originators, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, in
the name and on behalf of the Trust, shall cause, and shall have power and
authority and is hereby authorized and empowered to cause, the GP Interest
(which shall include a 1% Ownership Percentage) and a Trust Certificate therefor
and the Voting Interest to be issued to, and registered on the Certificate
Register in the name of, the Holder of the GP Interest and the Holder of the
Voting Interest, respectively, and the balance of the Trust Certificates to be
executed by an Authorized Officer of the Owner Trustee, or the Authenticating
Agent at the direction of the Owner Trustee, and authenticated, issued and
delivered to and in the names of, and registered on the Certificate Register in
the names of, the following: 99% of the Ownership Percentage to TMS SPV, Inc.
Thereupon, all such Certificates, the GP Interest, and the Voting Interest shall
be validly issued and entitled to the benefits of this Agreement. No Trust
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Trust
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee, or the Authenticating Agent at the
direction of the Owner Trustee, by manual signature; such authentication shall
constitute conclusive evidence that such Trust Certificate shall have been duly
executed, authenticated, authorized, issued and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication.
SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at its
offices located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
office, the address of which the Certificate Registrar shall provide in writing
to the Owner Trustee and the Holders, a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Trust Certificates and of transfers and
exchanges of Trust Certificates as herein provided. The Chase Manhattan Bank
shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at such office and, upon satisfaction of the conditions set forth below, the
Owner Trustee, in the name and on behalf of the Trust, shall execute,
authenticate, issue and deliver, in the name of the designated transferee or
transferees, one or more new Trust Certificates of a like Ownership Percentage
dated the date of authentication by the Owner Trustee or any authenticating
agent. At the option of a Holder, Trust Certificates may be exchanged for other
Trust Certificates of a like Ownership Percentage upon surrender of the Trust
Certificates to be exchanged at such office.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements may include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may, but shall not be obligated to, require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
SECTION 3.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee or
the Authenticating Agent such security or indemnity as may be required by them
to save each of them harmless, then in the absence of actual knowledge by a
Responsible Officer of the Owner Trustee or the Authenticating Agent that such
Trust Certificate shall have been acquired by a bona fide purchaser, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, in
the name and on behalf of the Trust shall execute, authenticate, issue and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like class, tenor and
Ownership Percentage. In connection with the issuance of any new Trust
Certificate under this Section, the Owner Trustee, or the Authenticating Agent
at the direction of the Owner Trustee, or the Certificate Registrar may, but
shall not be obligated to, require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Certificate issued pursuant to this Section shall be duly
authorized, validly issued and entitled to the benefits of this Agreement, and
shall constitute conclusive evidence of a beneficial ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
SECTION 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Trust Certificate for registration of transfer, the Owner Trustee, or the
Authenticating Agent at the direction of the Owner Trustee, and the Certificate
Registrar may treat the Person in whose name any Trust Certificate shall be
registered in the Certificate Register as the Holder of such Trust Certificate
for the purpose of receiving distributions pursuant to Section 5.2 and for all
other purposes whatsoever, and neither the Owner Trustee, or the Authenticating
Agent if acting at the direction of the Owner Trustee, nor the Certificate
Registrar shall be bound by any notice to the contrary.
SECTION 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished to
the Servicer, the Representative, and the Holder of the GP Interest, within 15
days after receipt by the Certificate Registrar of a request therefor from the
Servicer, the Representative, or the Holder of the GP Interest in writing, a
list, in such form as the Servicer, the Representative, or the Holder of the GP
Interest may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more Holders
of Trust Certificates or one or more Holders of Trust Certificates evidencing
not less than 25% of the aggregate Ownership Percentage apply in writing to the
Certificate Registrar, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Trust Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Certificate Registrar shall, within five Business Days after
the receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Trust Certificate, shall be deemed to have agreed not to
hold either the Representative, the Certificate Registrar, the Owner Trustee, or
the Bank accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 3.8. APPOINTMENT OF AUTHENTICATING AGENT. The Authenticating
Agent shall, at the direction of the Owner Trustee, execute and deliver such
Trust Certificates on behalf of the Trust as are to be issued by the Trust in
accordance with the terms of this Agreement. The Chase Manhattan Bank shall be
the initial Authenticating Agent.
SECTION 3.9. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.2 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be The Chase
Manhattan Bank, and any co-paying agent chosen by the Owner Trustee and
Certificate Registrar and acceptable to the Servicer. The Paying Agent shall be
permitted to resign upon 30 days' written notice to the Owner Trustee and the
Servicer. In the event that The Chase Manhattan Bank shall no longer be the
Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The Owner Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Owner
Trustee that as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. The Paying
Agent shall return all unclaimed funds to the Owner Trustee and upon removal of
a Paying Agent such Paying Agent shall also return all funds in its possession
to the Owner Trustee. The provisions of Articles VII and VIII shall apply to The
Chase Manhattan Bank also in its roles as Paying Agent, Authenticating Agent and
Certificate Registrar and in any other capacities under the Basic Documents and,
to the extent applicable, to any other paying agent or certificate registrar
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 3.10. RESTRICTIONS ON TRANSFER. (a) Except for the initial
issuance of Trust Certificates to TMS SPV, Inc. and The Money Store Inc., the
Trust Certificates may not be offered or sold except to institutional
"accredited investors" (as defined in Rule 501(a)(1)-(3) under the Securities
Act of 1933, as amended, who are United States persons (as defined in Section
7701(a)(30) of the Code) in reliance on an exemption from the registration
requirements of the Securities Act. No offer, sale, transfer or other
disposition (including pledge) of Trust Certificates shall be made to any Person
unless such Person executes and delivers to the Certificate Registrar, the Owner
Trustee and the Holder of the GP Interest an Investment Letter substantially in
the form set forth as Exhibit C hereto.
(b) No offer, sale, transfer or other disposition (including pledge)
of the Trust Certificates shall be made to any Person which is, or is purchasing
for, or on behalf of (1) an employee benefit plan, retirement arrangement,
individual retirement account or Xxxxx plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, or (2) an entity (including an
insurance company general account) whose underlying assets include plan assets
by reason of any such plan's arrangements or account's investment in any such
entity.
(c) Each Certificateholder must be a United States person as defined
in Section 7701(a)(30) of the Code.
(d) Each Trust Certificate will bear a legend substantially to the
following effect.
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.
SECTION 3.11. [Reserved.]
SECTION 3.12. DISPOSITION BY THE HOLDER OF THE GP INTEREST. On and
after the Closing Date, the Holder of the GP Interest shall retain beneficial
and record ownership of Trust Certificates representing at least 1% of the
Ownership Percentage, including the GP Interest. Any attempted transfer of any
Trust Certificate that would reduce such interest of the Holder of the GP
Interest below 1% of the Ownership Percentage shall be void. The Trust
Certificate representing the 1% GP Interest issued to the Holder of the GP
Interest shall contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
ARTICLE IV.
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. PRIOR NOTICE TO OWNERS WITH RESPECT TO CERTAIN MATTERS.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders and the Holder of the Voting Interest
in writing of the proposed action and the Holder of the Voting Interest shall
not have notified the Owner Trustee in writing prior to the 30th day after such
notice is given that it has withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the Trust
except claims or lawsuits brought in connection with the collection of the Loans
and the compromise of any material action, claim or lawsuit brought by or
against the Trust (except with respect to the aforementioned claims or lawsuits
for collection of the Loans);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
or
(e) the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholders.
SECTION 4.2. ACTION BY HOLDER OF THE VOTING INTEREST WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power, except upon the
direction of the Holder of Voting Interest, to (a) remove the Servicer under the
Sale and Servicing Agreement pursuant to Section 10.01 thereof or (b) except as
expressly provided in the Basic Documents sell the Loans after the termination
of the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Holder of Voting
Interest.
SECTION 4.3. ACTION BY HOLDER OF VOTING INTEREST WITH RESPECT TO
BANKRUPTCY. The Owner Trustee shall not have the power to, and shall not,
commence a voluntary proceeding in bankruptcy relating to the Trust without the
prior written approval of the Holder of the Voting Interest and the delivery to
the Owner Trustee by the Holder of the Voting Interest of a certificate
certifying that it reasonably believes that the Trust is insolvent.
SECTION 4.4. RESTRICTIONS ON POWER. (a) The Holder of the Voting
Interest shall not direct the Owner Trustee to take or refrain from taking any
action if such action or inaction would be contrary to any obligation of the
Trust or the Owner Trustee under this Agreement or any of the Basic Documents or
would be contrary to Section 2.3 nor shall the Owner Trustee be obligated to
determine if the Holder of the Voting Interest's direction violates this Section
4.4 or to follow any such direction, if given. Further, the Holder of the Voting
Interest shall not direct the Owner Trustee to take or refrain from taking any
action if such action or inaction would increase or reduce in any manner the
amount of, or accelerate or delay the timing of collections of payments on Loans
or distributions required to be made for the benefit of Certificateholders, or
would adversely affect the Federal or state tax consequences to the
Certificateholders, without the consent of all Certificateholders affected
thereby.
(b) The Holder of the Voting Interest shall not have any right by
virtue or by availing itself of any provisions of this Agreement to institute
any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document unless the Holder of the Voting
Interest previously shall have given to the Owner Trustee a written notice of
default and of the continuance thereof, as provided in this Agreement, or unless
Certificateholders evidencing not less than 25% of the aggregate Ownership
Percentage shall have made written request upon the Owner Trustee to institute
such action, suit or proceeding in its own name as Owner Trustee under this
Agreement and shall have offered to the Owner Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Owner Trustee, for 30 days after its receipt of such
notice, request, and offer of indemnity, shall have neglected or refused to
institute any such action, suit, or proceeding, and during such 30-day period no
request or waiver inconsistent with such written request has been given to the
Owner Trustee pursuant to and in compliance with this Section; it being
understood and intended, and being expressly covenanted by the Holder of the
Voting Interest and each Certificateholder with every other Certificateholder,
the Holder of the Voting Interest and the Owner Trustee, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue or
by availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder, the Holder of the Voting
Interest and the Owner Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 4.5. CONTROL BY HOLDER OF THE VOTING INTEREST. Except as
otherwise specifically provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Holder of the Voting
Interest. Except as otherwise specifically provided herein, any written notice
to the Certificateholders delivered pursuant to this Agreement shall be
effective if written evidence is received that Holders of Certificates
evidencing not less than a majority of the aggregate Ownership Percentage have
been delivered of such notice.
SECTION 4.6. EXECUTION OF DOCUMENTS. Notwithstanding anything herein
to the contrary, the Owner Trustee shall have power and authority and hereby is
authorized, empowered and directed, in the name and on behalf of the Trust, to
execute, deliver, issue and authenticate the Certificates, to execute, deliver
and issue the Series 1997-II Notes, and to execute and deliver each Basic
Document to which the Trust or the Owner Trustee is or is to be a party and any
other document, instrument, certificate or other writing that may be necessary,
convenient or incidental thereto. Any such execution, delivery, issuance and
authentication is hereby ratified and confirmed in all respects and does not and
will be deemed not to conflict with, constitute or result in a breach or
violation of, or a default under, any provision of or any duty under this Trust
Agreement.
ARTICLE V.
APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. ESTABLISHMENT OF CERTIFICATE DISTRIBUTION ACCOUNT. (a)
The Owner Trustee, for the benefit of the Certificateholders, shall establish
and maintain at a Designated Depository Institution in the name of the Trust an
eligible deposit account (the "Certificate Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders. Except as otherwise provided herein, the
Certificate Distribution Account shall be under the sole dominion and control of
the Owner Trustee for the benefit of the Certificateholders.
(b) The Trust shall possess all right, title and interest in all funds
on deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof. If, at any time, the Certificate Distribution Account ceases
to be held in an account with a Designated Depository Institution, the Owner
Trustee shall within five Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) after a Responsible
Officer of the Owner Trustee obtains actual knowledge thereof, establish a new
Certificate Distribution Account to be held in an account with a Designated
Depository Institution, and shall transfer any cash and/or any investments to
such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested, by
the Owner Trustee at the Servicer's written direction, in Permitted Instruments
that mature not later than one Business Day prior to the Remittance Date for the
Due Period to which such amounts relate. Investments in Permitted Instruments
shall be made in the name of the Trust, and such investments shall not be sold
or disposed of prior to their maturity. Subject to the other provisions hereof,
the Owner Trustee shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment, if any, shall be delivered directly to the Owner Trustee. All
investment earnings on funds in the Certificate Distribution Account shall be
distributed on the next Remittance Date pursuant to Section 7.05 of the Sale and
Servicing Agreement.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT.
(a) On each Remittance Date, the Paying Agent will, based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 7.07 of the Sale and Servicing Agreement, distribute to
Certificateholders, pro rata, based on Ownership Percentage, to the extent of
the funds available, amounts deposited in the Certificate Distribution Account
pursuant to Section 7.05 of the Sale and Servicing Agreement on such Remittance
Date.
(b) On each Remittance Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 7.07 of the Sale and Servicing Agreement on such Remittance
Date.
(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this
Section. The Paying Agent is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee or the Paying Agent from contesting any such
tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a Certificateholder shall be treated as
cash distributed to such Certificateholder at the time it is withheld by the
Trust and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution (such
as a distribution to a non-US Certificateholder), the Paying Agent may in its
sole discretion withhold such amounts in accordance with this clause (c). In the
event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee and the Paying Agent shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee and the Paying Agent for
any out-of-pocket expenses incurred. The Servicer shall facilitate compliance
with this Section 5.2(c) by performance of its duties under Section 12.01 of the
Sale and Servicing Agreement.
SECTION 5.3. [Reserved.]
SECTION 5.4. METHOD OF PAYMENT. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Remittance Date
shall be made by the Paying Agent on each Remittance Date to each
Certificateholder of record as shown on the Certificate Register on the
preceding Record Date either (a) by wire transfer, in immediately available
funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if (i) such Certificateholder shall have
provided to the Paying Agent appropriate written instructions at least five
Business Days prior to such Remittance Date and such Holder's Trust Certificates
in the aggregate evidence an Ownership Percentage of not less than 20% or (ii)
such Certificateholder is the Holder of the GP Interest, or has been identified
to the Owner Trustee and Paying Agent in writing as an Affiliate thereof, or,
(b) if not, by check mailed to such Certificateholder at the address of such
holder appearing in the Certificate Register.
SECTION 5.5. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law. Neither the
Paying Agent nor the Owner Trustee shall be liable for any interest thereon.
SECTION 5.6. ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to Sections
12.01(b)(iii) and 12.01(c) of the Sale and Servicing Agreement, the Holder of
the GP Interest shall (a) maintain (or cause to be maintained) the books of the
Trust on a calendar year basis on the accrual method of accounting, (b) deliver
(or cause to be delivered) to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1) to enable each Certificateholder to prepare its Federal
and state income tax returns, (c) prepare or cause to be prepared, and file or
cause to be filed, all tax returns relating to the Trust (including a
partnership information return, Form 1065), and direct the Owner Trustee in
writing to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes and (d) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall make all elections pursuant to this Section as directed in writing by the
Holder of the GP Interest. The Owner Trustee shall sign all tax information
returns furnished to it in execution form by the Holder of the GP Interest and
any other returns as may be required by law and so furnished to it by the Holder
of the GP Interest, and in doing so shall be entitled to, and shall be fully
protected if it shall, rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Holder of the GP
Interest. The Owner Trustee shall cause the Trust to elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Loans, as directed in writing by the Holder of the GP Interest.
SECTION 5.7. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust the tax returns of the Trust furnished to it in execution
form by the Holder of the GP Interest, unless applicable law requires a
Certificateholder or an Owner to sign such documents, in which case such
documents shall be signed by the Holder of the GP Interest.
(b) The Holder of the GP Interest shall be the "tax matters partner"
of the Trust pursuant to the Code.
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. GENERAL AUTHORITY. The Owner Trustee shall have power and
authority and hereby is authorized, empowered and directed to execute and
deliver the Basic Documents to which the Trust is named as a party and each
certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Trust is named as a party and any amendment
thereto, in each case, in such form as the Representative shall approve as
evidenced conclusively by the Owner Trustee's execution thereof, and on behalf
of the Trust, to direct the Trustee to authenticate and deliver Class A-1 Notes
in the aggregate principal amount of $50,644,000, Class A-2 Notes in the
aggregate principal amount of $17,885,000 Class A-3 Notes in the aggregate
principal amount of $12,315,000, Class A-4 Notes in the aggregate principal
amount of $16,693,000 Class M-1 Notes in the aggregate principal amount of
$13,837,000, Class M-2 Notes in the aggregate principal amount of $13,837,000
and Class B Notes in the aggregate principal amount of $9,789,000. In addition
to the foregoing, the Owner Trustee shall have power and authority and hereby is
authorized and empowered but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee further
shall have power and authority and hereby is authorized and empowered from time
to time to take such action as the Servicer recommends to it in writing with
respect to the Basic Documents.
It shall be the duty of the Owner Trustee, and the Owner Trustee shall
have power and authority and is hereby authorized and empowered, to discharge
(or cause to be discharged) all of its responsibilities pursuant to the terms of
this Agreement and the Sale and Servicing Agreement and to administer the Trust
in the interest of the Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement, or the Holder of the GP
Interest has agreed hereunder or thereunder, to perform any act or to discharge
any duty of the Owner Trustee hereunder or of the Trust under any Basic
Document, and the Owner Trustee shall not be liable for the default or failure
of the Servicer or the Holder of the GP Interest to carry out its obligations
hereunder or thereunder.
SECTION 6.2. ACTION UPON INSTRUCTION. (a) In accordance with Section
10.05 of the Sale and Servicing Agreement, the Majority Securityholders, the
Trustee and (subject to Article IV) the Holder of the Voting Interest, may, by
written instruction, direct the Owner Trustee in the management of the Trust,
and the Owner Trustee shall have power and authority, and is hereby authorized
and empowered, to follow, and shall be fully protected in following, any such
instruction.
(b) Notwithstanding any provisions hereof to the contrary, the Owner
Trustee shall not be required to take any action hereunder or under any Basic
Document if the Owner Trustee shall have reasonably determined, or shall have
been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders and the
Holder of the Voting Interest requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Holder of the Voting Interest
received, the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate written
instruction within ten days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders and the Holder of the Voting Interest requesting instruction
and, to the extent that the Owner Trustee acts or refrains from acting in good
faith in accordance with any written instruction received from the Holder of the
Voting Interest, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate written instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, as it shall deem to be in the best interests
of the Certificateholders, and shall have no liability to any Person for such
action or inaction.
SECTION 6.3. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Trust or the Owner Trustee is a party, except as expressly provided
by the terms of this Agreement or in any direction or written instruction
received by the Owner Trustee pursuant to Section 6.2; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation or termination statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder or to prepare or file any Securities and
Exchange Commission filing for the Trust or to record this Agreement or any
Basic Document. The Bank nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge any Liens on
any part of the Owner Trust Estate that result from actions by, or claims
against, the Bank that are not related to the ownership or the administration of
the Owner Trust Estate or the Owner Trustee's serving as owner trustee of the
Trust.
SECTION 6.4. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any direction or instruction delivered to the Owner
Trustee pursuant to Section 6.2.
SECTION 6.5. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust's becoming taxable as a corporation for
Federal income tax purposes. Neither the Holder of the Voting Interest nor the
Certificateholders shall direct the Owner Trustee to take action that would
violate the provisions of this Section.
SECTION 6.6. NOTICE OF DEFAULT UNDER INDENTURE. Within 5 days of
receipt of a written notice of Default under the Indenture from the Trustee, the
Owner Trustee shall provide notice thereof to each Certificateholder by letter.
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Bank shall not be answerable or accountable hereunder or under
any Basic Document under any circumstances, except to the Trust and the
Certificateholders (i) for its own willful misconduct, bad faith or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Bank. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Bank shall not be liable for any error of judgment made by a
Responsible Officer of the Owner Trustee;
(b) the Bank shall not be liable with respect to any action taken or
omitted to be taken by the Owner Trustee in accordance with the instructions of
the Trustee, the Servicer, the Holder of the GP Interest, the Holder of the
Voting Interest, Majority Securityholders, or any Certificateholder or in
reliance on any provision of this Agreement;
(c) no provision of this Agreement or any Basic Document shall require
the Bank to expend or risk funds or otherwise incur any financial liability in
the performance of any of its rights or powers hereunder or under any Basic
Document if the Bank shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Bank be liable for the
Certificates or any amount due and owing thereon, any other interest in or
indebtedness of the Trust, or indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest on the Series
1997-II Notes;
(e) the Bank shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by any
other party hereto, or for the form, character, genuineness, sufficiency, value
or validity of any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Bank shall in no event assume
or incur any liability, duty or obligation to any Noteholder or to any
Certificateholder or other Person, other than as expressly provided for herein;
(f) the Bank shall not be liable for the default or misconduct of the
Trustee or the Servicer or the Holder of the GP Interest or the Originators or
the Representative or the Holder of the Voting Interest or the Holders or the
Certificate Registrar (if not the Owner Trustee) or the Paying Agent (if not the
Owner Trustee) under any of the Basic Documents or otherwise and the Bank shall
have no obligation or liability to monitor or insure compliance by the Trustee
or the Servicer or the Holder of the GP Interest or the Originators or the
Representative or the Holder of the Voting Interest or the Holders or the
Certificate Registrar (if not the Owner Trustee) or the Paying Agent (if not the
Owner Trustee) with any agreement to which it is a party or to perform the
obligations of the Trust under this Agreement or the Basic Documents that are
required to be performed by the Trustee under the Indenture or the Servicer
under the Sale and Servicing Agreement or the Holder of the GP Interest under
this Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of any of
the Trustee, the Certificateholders or Majority Securityholders or the Holder of
the Voting Interest, unless such Trustee, Certificateholders, Majority
Securityholders or Holder of the Voting Interest have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and, except
as otherwise provided in the third sentence of this Section 7.1, the Bank shall
not be answerable in the performance of any such act.
SECTION 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. REPRESENTATIONS AND WARRANTIES. The Bank hereby
represents and warrants to the Representative, and for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has its principal
office within the State of Delaware. It has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party or other entity as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such persons.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created Chase Manhattan Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES OR LOANS.
The recitals contained herein and in the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates)
shall be taken as the statements of the Representative and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations or warranties as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates) or
the Series 1997-II Notes, or of any Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Note, or the perfection and
priority of any security interest created by any Loan in any Mortgaged Property
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any Loan
on any computer or other record thereof; the validity of the assignment of any
Loan to the Trust or of any intervening assignment; the completeness of any
Loan; the performance or enforcement of any Loan; the compliance by the
Representative, or the Servicer with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Trustee or the Servicer or any
subservicer taken in the name of the Owner Trustee.
SECTION 7.7. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND SERIES
1997-II NOTES. The Owner Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Series 1997-II Notes and
may deal with the Trustee and the Servicer in banking transactions with the same
rights as it would have if it were not Owner Trustee.
SECTION 7.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trustee
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Chase Manhattan Bank Delaware, or
any successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained to the contrary, neither Chase Manhattan Bank Delaware or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Chase Manhattan Bank Delaware (or any successor
thereto); or (iii) subject Chase Manhattan Bank Delaware (or any successor
thereto) to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by Chase Manhattan Bank Delaware (or any successor thereto) or
the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VIII.
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. To the extent not
received by the Owner Trustee pursuant to Section 7.04(b) of the Sale and
Servicing Agreement, the Owner Trustee and the Holder of the Voting Interest
shall receive from the Representative as compensation for their respective
services hereunder such fees as have been separately agreed upon before the date
hereof between the Representative and the Owner Trustee or the Holder of the
Voting Interest, as applicable, and the Owner Trustee and the Holder of the
Voting Interest shall be entitled to be reimbursed by the Representative for
their respective other reasonable expenses hereunder and under the Basic
Documents, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee or the
Holder of the Voting Interest, as applicable, may employ in connection with the
exercise and performance of their respective rights and duties hereunder.
SECTION 8.2. INDEMNIFICATION. The Representative shall be liable as
primary obligor for, and shall indemnify, defend and hold harmless the Bank and
the Holder of the Voting Interest and their respective successors, assigns,
directors, officers, employees, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee or the Holder of the
Voting Interest hereunder, except only that the Representative shall not be
liable for or required to indemnify the Owner Trustee from and against Expenses
arising or resulting from any of the matters described in the third sentence of
Section 7.1. The indemnities contained in this Section shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement. In any event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the Representative, which approval
shall not be unreasonably withheld.
SECTION 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Originator, the Representative, any
Certificateholder.
ARTICLE IX.
DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. TERMINATION OF TRUST AGREEMENT. (a) This Agreement (other
than Article VIII) and the Trust shall terminate and be of no further force or
effect, (i) upon the final distribution by the Paying Agent and/or Owner Trustee
of all moneys or other property or proceeds of the Owner Trust Estate in
accordance with the terms of the Indenture, the Sale and Servicing Agreement and
Article V or (ii) at the time provided in Section 9.2; PROVIDED, HOWEVER, that
the rights to indemnification under Section 8.2 and other rights and protections
of the Owner Trustee and the Bank shall survive the termination of the Trust.
The Servicer shall promptly notify the Owner Trustee of any prospective
termination pursuant to this Section 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder or Owner, other than
the Holder of the GP Interest as described in Section 9.2, shall not (x) operate
to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's or Owner's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding up of all or any part of the Trust or Owner Trust Estate nor (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Representative, nor
the Holder of the GP Interest nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Remittance
Date upon which the Certificateholders shall surrender their Trust Certificates
to the Paying Agent for payment of the final distribution and cancellation,
shall be given by the Owner Trustee by letter to Certificateholders mailed
within five Business Days of receipt of notice of such termination from the
Servicer given pursuant to Section 11.01 of the Sale and Servicing Agreement,
stating as set forth in such notice from the Servicer (i) the Remittance Date
upon or with respect to which final payment of the Trust Certificates shall be
made upon presentation and surrender of the Trust Certificates at the office of
the Paying Agent therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such Remittance Date is
not applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Paying Agent therein specified. The
Owner Trustee shall give such notice to the Certificate Registrar (if other than
the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the
time such notice is given to Certificateholders. Upon presentation and surrender
of the Trust Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Remittance Date pursuant to
Section 5.2.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the Holder of the GP Interest.
Certificateholders shall thereafter look solely to the Holder of the GP Interest
as general unsecured creditors.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Holder of the GP Interest.
(e) Upon termination and completion of the winding up of the Trust,
the Owner Trustee shall cause the Certificate of Trust to be canceled by filing
a certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute and thereupon the Trust
and this Agreement shall terminate. The Owner Trustee shall furnish notice of
such filing to each Rating Agency.
SECTION 9.2. DISSOLUTION UPON BANKRUPTCY OF THE HOLDER OF THE GP
INTEREST. In the event that an Insolvency Event shall occur with respect to the
Holder of the GP Interest, the Trust shall dissolve and this Agreement shall be
terminated in accordance with Section 9.1 90 days after the date of such
Insolvency Event, unless, before the end of such 90-day period, the Owner
Trustee shall have received written instructions from the Holder of the Voting
Interest to the effect that each such party disapproves of the liquidation of
the Loans and dissolution of the Trust. Promptly after the occurrence of any
Insolvency Event with respect to the Holder of the GP Interest, (i) the Holder
of the GP Interest shall give the Trustee and the Owner Trustee written notice
of such Insolvency Event and (ii) the Owner Trustee shall, upon the receipt of
such written notice from the Holder of the GP Interest, give prompt written
notice to the Certificateholders and the Trustee of the occurrence of such
event; PROVIDED, HOWEVER, that any failure to give a notice required by this
sentence shall not prevent or delay, in any manner, a termination of the Trust
pursuant to the first sentence of this Section 9.2. Upon a termination pursuant
to this Section, the Owner Trustee on behalf of the Trust shall direct the
Trustee promptly to sell the assets of the Owner Trust Estate in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections under the Sale
and Servicing Agreement and shall be distributed in accordance with Section
11.01(c) thereof.
ARTICLE X.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation or association (i) authorized to
exercise corporate trust powers; and (ii) having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal or
state authorities; PROVIDED that with respect to the initial Owner Trustee (but
not any successor trustee) the combined capital and surplus of the parent
organization of such banking association shall be included in the determination
of the combined capital and surplus of such banking association. If such
association shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2. In addition, at all times (i) the Owner
Trustee or a co-trustee shall be a person that satisfies the requirements of
Section 3807(a) of the Business Trust Statute (the "Delaware Trustee") and (ii)
in the event that First Union Trust Company, National Association is not the
Co-Trustee under the Indenture, the Owner Trustee or a co-trustee shall hold a
valid Contract of Insurance from the FHA relating to the FHA Title I loan
program.
SECTION 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation (or after removal pursuant to the following paragraph), the Owner
Trustee so resigning or being removed may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer may remove the Owner Trustee. If the Servicer
shall remove the Owner Trustee under the authority of the immediately preceding
sentence, the Servicer shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee along with payment of all fees and other amounts, if any, owed to
the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses and any
other amounts due to it hereunder deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation or association into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from or surviving any merger, conversion or consolidation
to which the Owner Trustee shall be a party, or any corporation or association
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation or association shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger, sale,
conversion or consolidation to the Rating Agencies.
SECTION 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Mortgaged Property may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power,
authority and authorization to, and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Owner Trust Estate, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 10.1 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be
conferred upon and exercised or performed by the Owner
Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee
joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding
of title to the Owner Trust Estate or any portion thereof in
any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be
personally liable by reason of any act or omission of any
other trustee under this Agreement; and
(iii) the Servicer and the Owner Trustee acting
jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by the Representative and the Owner Trustee, with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder or the Holder of the Voting Interest.
(b) This Agreement may also be amended from time to time by the
Representative and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders of Series 1997-II Notes evidencing not
less than a majority of the Outstanding Amount of the Series 1997-II Notes and,
to the extent the Certificates or the rights, benefits or duties of the Holder
of the Voting Interest are affected thereby, the consent of the Holder of the
Voting Interest for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Loans or distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Series 1997-II Notes and the Ownership Percentage
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Series 1997-II Notes and Holders of all outstanding
Certificates. Promptly after the execution of any such amendment or its receipt
of any such consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or its receipt of any consent to each
Certificateholder, the Trustee and each of the Rating Agencies.
(c) It shall not be necessary for the consent of the Holder of the
Voting Interest, the Certificateholders, the Noteholders or the Trustee pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of the
Holder of the Voting Interest and the Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(d) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(e) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise. The Owner Trustee shall furnish copies of any such
amendments to this Agreement to each Rating Agency.
SECTION 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided beneficial ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of the
Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Sections 2.7
and 8.2, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Bank, the Representative, the Certificateholders, the
Servicer and, to the extent expressly provided herein, the Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.4. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
personally delivered, delivered by overnight courier or mailed certified mail,
return receipt requested or telecopied and shall be deemed to have been duly
given upon receipt, if to the Trust, addressed to the Owner Trustee at the
Corporate Trust Office; if to the Owner Trustee, addressed to the Corporate
Trust Office; if to the Originators, the Representative or the Holder of the GP
Interest, addressed to The Money Store Inc., 0000 X Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Executive Vice President; if to the Holder of the
Voting Interest, addressed to First Union Bank of Delaware, One Xxxxxx Square,
Suite 100, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate
Trust Administration; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(a) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Representative, the Holder of the GP Interest, the Owner Trustee and its
successors, each Certificateholder and its successors and permitted assigns and
the Holder of the Voting Interest and its successors and permitted assigns., all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 11.8. [Reserved.]
SECTION 11.9. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, the Holder of the Voting
Interest and the Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any time institute
against the Holder of the GP Interest, or join in any institution against the
Holder of the GP Interest of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Series 1997-II Notes, this
Agreement or any of the Basic Documents.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial ownership interests in the Trust only and do not represent
interests in or obligations of the Representative, the Originators, the
Servicer, the Holder of the GP Interest, the Holder of the Voting Interest, the
Owner Trustee, the Bank, the Trustee or any Affiliate thereof and no recourse by
such Certificateholder may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the Trust
Certificates or the Basic Documents.
SECTION 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.13. [Reserved.]
SECTION 11.14. SERVICER. The Servicer is authorized and empowered to
execute, prepare, file and/or deliver in the name and on behalf of the Trust all
such documents, reports, filings, tax returns, instruments, certificates and
opinions as it shall be the duty of the Trust to prepare, file or deliver
pursuant to the Basic Documents. Upon written request of the Servicer, the Owner
Trustee on behalf of the Trust shall execute and deliver to the Servicer a power
of attorney appointing the Servicer the Trust's agent and attorney-in-fact to
execute, prepare, file and deliver all such documents, reports, filings, tax
returns, instruments, certificates and opinions.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE, as Owner
Trustee
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Trust Officer
ORIGINATORS
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President
ACCEPTED AND AGREED:
TMS SPV, INC., Holder of the GP Interest
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President
FIRST UNION BANK OF DELAWARE,
Holder of The Voting Interest
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Assistant Vice President
THE MONEY STORE INC.,
Representative
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
EXHIBIT A
NUMBER
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST
CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED
INVESTOR, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY
TO (1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT
ACCOUNTS OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.
[THIS TRUST CERTIFICATE IS NOT TRANSFERABLE]1
-------------
1 To be inserted on the Certificate to be held by the Holder of the GP
Interest.
THE MONEY STORE RESIDENTIAL TRUST 1997-II
TRUST CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of Loans
contributed to the Trust by the Originators.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
MONEY STORE INC. OR ANY OF ITS AFFILIATES.)
THIS CERTIFIES THAT ________________ is the registered owner of ____%
of the aggregate Ownership Percentage as a nonassessable, fully-paid, beneficial
ownership interest in The Money Store Residential Trust 1997-II (the "Trust")
formed by the entities listed on Annex I attached to the Trust Agreement (each
an "Originator").
The Trust was created pursuant to that certain Trust Agreement dated
as of November 30, 1997 (the "Trust Agreement") between the Originators, and
Chase Manhattan Bank Delaware, not in its individual capacity but solely as
owner trustee (the "Owner Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized Trust Certificates
(herein called the "Trust Certificates"). Also issued under the Indenture dated
as of November 30, 1997, between the Trust and The Bank of New York, as trustee,
are Series 1997-II Asset Backed Notes (collectively, the "Series 1997-II
Notes"). This Trust Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Trust Certificate by virtue of the acceptance hereof assents and
by which such holder is bound. The property of the Trust includes a portfolio of
residential loans contributed by the Originators (the "Loans"), all monies
received on the Loans on or after the Cut-Off Date with respect to Initial
Loans, or the Subsequent Cut-Off Date with respect to Subsequent Loans, security
interests in certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and certain other rights under the Trust
Agreement and the Sale and Servicing Agreement.
Under the Trust Agreement, there will be distributed on the
15th day of each month or, if such 15th day is not a Business Day, the next
Business Day (the "Remittance Date"), commencing in January 15, 1998, to the
Person in whose name this Trust Certificate is registered at the close of
business on the day immediately preceding the Remittance Date (the "Record
Date") such Certificateholder's fractional undivided interest in the amount to
be distributed to Certificateholders on such Remittance Date.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Representative, Servicer, the Originators, the
Holder of the GP Interest and Certificateholders that, for purposes of Federal
income taxes, the Trust will be treated as a partnership and the
Certificateholders (including the Holder of the GP Interest) will be treated as
partners in that partnership. The Holder of the GP Interest and the other
Certificateholders by acceptance of a Trust Certificate, agree to treat, and to
take no action inconsistent with the treatment of, the Trust Certificates for
such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust or the Holder of the GP Interest, or join in any institution
against the Trust or the Holder of the GP Interest of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Series 1997-II Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Paying Agent by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Trust Certificate or the making of any notation hereon.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, in the name and on behalf of
the Trust and not in its individual capacity, has caused this Trust Certificate
to be duly executed.
Date: December ___, 1997
THE MONEY STORE RESIDENTIAL TRUST 1997-II
By: CHASE MANHATTAN BANK DELAWARE
solely as Owner Trustee and not in its
individual capacity
[or THE CHASE MANHATTAN BANK, as Authenticating
Agent and not in its individual capacity]
By: __________________________________________
Authorized Signatory
OWNER TRUSTEE'S [OR AUTHENTICATING AGENT'S] CERTIFICATE
OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
Date: December ___, 1997
[CHASE MANHATTAN BANK DELAWARE,
solely as Owner Trustee and not in its individual
capacity]
or [THE CHASE MANHATTAN BANK, as Authenticating
Agent and not in its individual capacity]
By:_____________________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________ Attorney to transfer said Trust
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
--------------------------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Trust Certificate in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
THE MONEY STORE RESIDENTIAL TRUST 1997-II
THIS Certificate of Trust of The Money Store Residential Trust 1997-II
(the "Trust"), is being duly executed and filed by Chase Manhattan Bank
Delaware, a Delaware banking corporation, not in its individual capacity but
solely as trustee, to form a business trust under the Delaware Business Trust
Act (12 DEL. CODE, ss. 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is THE MONEY
STORE RESIDENTIAL TRUST 1997-II.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust which has its principal place of business in the State of Delaware is
Chase Manhattan Bank Delaware, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust Administration.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust.
CHASE MANHATTAN BANK DELAWARE
not in its individual capacity but
solely as owner trustee of the Trust.
By:______________________________________
Name:
Title:
EXHIBIT C
INVESTMENT LETTER
The Money Store, Inc.
TMS SPV, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Administration
Re: THE MONEY STORE RESIDENTIAL TRUST 1997-II
Ladies and Gentlemen:
In connection with its purchase of certain Trust Certificates (the
"Certificates") of The Money Store Residential Trust 1997-II (the "Issuer"), the
purchaser named below (the "Purchaser") or, if an investment adviser is
executing this Investment Letter on the Purchaser's behalf, such investment
adviser represents, warrants and certifies that:
(i) it understands that the Certificates are not being and will
not be registered under the Securities Act of 1933, as
amended (the "1933 Act"), and are not being registered or
qualified under any state securities or "blue sky" laws and
are being sold to the Purchaser in a transaction that is
exempt from the registration requirements of the 1933 Act.
The Purchaser is an "accredited investor" as defined in Rule
501(a)(1)-(3) of the 1933 Act and a sophisticated
institutional investor that is experienced in purchasing
securities similar to the Certificates. The Purchaser is
able to bear the economic risk of investment in the
Certificates;
(ii) any information it desired concerning the Certificates, the
issuer thereof or any other matter it deemed relevant to its
decision to purchase the Certificates has been made
available to it. In this regard, it has carefully reviewed
with its counsel and understands the terms of the Trust
Agreement pursuant to which the Issuer was formed and agrees
to be bound by all the terms thereof, including those
relating to restrictions on transfer;
(iii) the Purchaser's purchase of the Certificates would not cause
it to fail to comply fully with all applicable requirements
of each regulatory body having supervisory or other
authority over its operations or over its purchase of the
Certificates. In reaching its decision to purchase the
Certificates, it has conducted, with its experts and
counsel, an independent analysis of the economic and
regulatory effects of the transaction on the Purchaser based
on the Purchaser's circumstances and has concluded that the
purchase of the Certificates is appropriate for the
Purchaser's circumstances;
(iv) the Purchaser has independently confirmed the federal, state
and local tax consequences of owning the Certificates;
(v) the Purchaser is acquiring the Certificates for its own
account, not as nominee for any other person, and not with a
present view to any distribution or other disposition of the
Certificates in violation of the provisions of the 1933 Act;
(vi) the Purchaser agrees the Certificates must be held
indefinitely by it (and may not be sold, pledged,
hypothecated or in any way disposed of) unless subsequently
registered under the 1933 Act or an exemption from the
registration requirements of the 1933 Act is available and
such transaction is exempt from all applicable state
securities or "blue sky" laws;
(vii) the Purchaser agrees that in the event that at some future
time it wishes to dispose of or exchange the Certificates
(such disposition or exchange not being currently foreseen
or contemplated), it will not transfer or exchange the
Certificates unless:
(A) (1) a letter to substantially the same effect as
this letter is executed and delivered by the purchaser
before the transfer or exchange is consummated, and (2) all
offers or solicitations in connection with the sale, whether
directly or through any agent acting on the Purchaser's
behalf, are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or general
advertising whatsoever; and
(B) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and a
satisfactory opinion of counsel is furnished to such effect;
(viii) the Purchaser is not, and is not purchasing for, or on
behalf of, (1) an employee benefit plan, retirement
arrangement, individual retirement account or Xxxxx Plan
subject to either Title I of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended, or (2) an entity
(including an insurance company general account) whose
underlying assets include plan assets by reason of any such
plan's arrangements or account's investment in any such
entity.
(ix) the Purchaser understands that the Certificates bear, and
will continue to bear, a legend to substantially the
following effect:
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE.
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which it has reasonable grounds to believe and does believe can make
representations with respect to itself to substantially the same effect as the
representations set forth herein.
Terms not otherwise defined shall have the meanings assigned to them
in the Trust Agreement.
Very truly yours,
---------------------------
By: ________________________
(Authorized Officer)
ANNEX I
LIST OF ORIGINATORS
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
