EXHIBIT 4.2
EXECUTION COPY
THE MONEY STORE TRUST 1998-C
TRUST AGREEMENT
among
THE ORIGINATORS LISTED HEREIN
Originators
and
CHASE MANHATTAN BANK DELAWARE
Owner Trustee
Dated as of August 31, 1998
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 Special Interest;
Liability of the Holder of the Special Interest.................7
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 ▇.▇▇.▇▇▇▇▇▇ Interest ................................................9
SECTION 2.12.Federal Income Tax Allocations ................................10
SECTION 2.13.Investment Company ............................................10
ARTICLE III - TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership .............................................11
SECTION 3.2. The Trust Certificates ........................................11
SECTION 3.3. Authentication of Trust Certificates ..........................11
SECTION 3.4. Registration of Transfer and Exchange of Trust Certificates ...12
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust Certificates .......12
SECTION 3.6. Persons Deemed Certificateholders .............................13
SECTION 3.7. Access to List of Certificateholders' Names and Addresses .....13
SECTION 3.8. Appointment of Authenticating Agent ...........................14
SECTION 3.9. Appointment of Paying Agent ...................................14
SECTION 3.10.Restrictions on Transfer ......................................14
SECTION 3.11.[Reserved] ....................................................16
SECTION 3.12.Disposition by the Holder of the Special Interest .............16
ARTICLE IV - ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Owners with Respect to Certain Matters ........17
SECTION 4.2. Action by Holder of the Voting Interest with Respect to
Certain Matters................................................18
SECTION 4.3. Action by Holder of Voting Interest with Respect to
Bankruptcy.....................................................18
SECTION 4.4. Restrictions on Power .........................................19
SECTION 4.5. Control by Holder of the Voting Interest ......................19
SECTION 4.6. Execution of Documents ........................................19
ARTICLE V - APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account .............20
SECTION 5.2. Application of Funds in Certificate Distribution Account ......20
SECTION 5.3. [Reserved.] ...................................................21
SECTION 5.4. Method of Payment .............................................21
SECTION 5.5. No Segregation of Monies; No Interest .........................21
SECTION 5.6. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others....22
SECTION 5.7. Signature on Returns; Tax Matters Partner .....................22
ARTICLE VI - AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority .............................................22
SECTION 6.2. Action upon Instruction .......................................23
SECTION 6.3. No Duties Except as Specified in this Agreement or in
Instructions...................................................24
SECTION 6.4. No Action Except under Specified Documents or Instructions ....25
SECTION 6.5. Restrictions ..................................................25
SECTION 6.6. Notice of Default Under Indenture .............................25
ARTICLE VII - CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties ...............................25
SECTION 7.2. Furnishing of Documents .......................................27
SECTION 7.3. Representations and Warranties ................................27
SECTION 7.4. Reliance; Advice of Counsel ...................................27
SECTION 7.5. Not Acting in Individual Capacity .............................28
SECTION 7.6. Owner Trustee Not Liable for Trust Certificates or Loans ......28
SECTION 7.7. Owner Trustee May Own Trust Certificates and Series 1997-
C Notes........................................................29
SECTION 7.8. Payments from Owner Trust Estate ..............................29
SECTION 7.9. Doing Business in Other Jurisdictions .........................29
ARTICLE VIII - COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses .............................29
SECTION 8.2. Indemnification ...............................................30
SECTION 8.3. Payments to the Owner Trustee .................................30
SECTION 8.4. Non-recourse Obligations ......................................30
ARTICLE IX - DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. Termination of Trust Agreement ................................31
ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES
SECTION 10.1.Eligibility Requirements for Owner Trustee ....................32
SECTION 10.2.Resignation or Removal of Owner Trustee .......................32
SECTION 10.3.Successor Owner Trustee .......................................33
SECTION 10.4.Merger or Consolidation of Owner Trustee ......................34
SECTION 10.5.Appointment of Co-Trustee or Separate Indenture Trustee .......34
SECTION 10.6.Resignation or Removal of Owner Trustee .......................35
ARTICLE XI - MISCELLANEOUS
SECTION 11.1.Supplements and Amendments ....................................36
SECTION ▇▇.▇.▇▇ Legal Title to Owner Trust Estate in Certificateholders ....37
SECTION 11.3.Limitations on Rights of Others ...............................38
SECTION 11.4.Notices .......................................................38
SECTION 11.5.Severability ..................................................38
SECTION 11.6.Separate Counterparts .........................................39
SECTION 11.7.Successors and Assigns ........................................39
SECTION 11.8.[Reserved.] ...................................................39
SECTION ▇▇.▇.▇▇ Petition ...................................................39
SECTION ▇▇.▇▇.▇▇ Recourse...................................................39
SECTION 11.11.Headings......................................................39
SECTION 11.12.Governing Law.................................................39
SECTION 11.13.The Note Insurer..............................................40
SECTION 11.14.Servicer......................................................40
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 August 31, 1998 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, the Insurance Agreement, the Spread Account 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 ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration;
or at such other address as the Owner Trustee may designate by notice to the
Certificateholders, the Note Insurer 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.
"Holder" or "Certificateholder" shall mean the Person in whose name a Trust
Certificate is registered on the Certificate Register and the Holder of the
Special Interest.
"Holder of the Special Interest" shall mean First Union National Bank, a
national banking association.
"Holder of the Voting Interest" shall mean Norwest Bank Minnesota, National
Association, and any permitted successor, assignee or transferee thereof.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of August 31, 1998 between
the Trust and The Bank of New York, as Indenture Trustee, as the same may be
amended or supplemented from time to time.
"Indenture Trustee" shall mean The Bank of New York, as Indenture Trustee
under the Indenture, or any successor thereto.
"Insurance Agreement" shall mean the agreement dated as of September 1,
1998 among the Note Insurer, The Money Store Inc., the Originators, First Union
National Bank, as Custodian, and the Indenture Trustee, as amended from time to
time by the parties thereto.
"Loan" shall have the meaning set forth in the Sale and Servicing
Agreement.
"Note Depository Agreement" shall mean the agreement among the Trust, the
Indenture Trustee, the Servicer and The Depository Trust Company, as the initial
Clearing Agency, dated as of one Business Day prior to the Closing Date,
relating to the Series 1998-C Notes, as the same may be amended or supplemented
from time to time.
"Note" shall mean a Class AF-1 Adjustable Rate Note, Class AF-2 Auction
Rate Note or Class AV Adjustable Rate Note issued by The Money Store Trust
1998-C pursuant to the Indenture dated as of August 31, 1998 between The Money
Store Trust 1998-C and The Bank of New York, as Indenture Trustee.
"Note Insurance Policy" shall mean, collectively, the note insurance
guaranty policies relating to the Notes of Pool I and Pool II, each dated the
Closing Date and issued by the Note Insurer for the benefit of the Holders of
the Notes of the related Pool.
"Note Insurer" shall mean MBIA Insurance Corporation, a New York stock
insurance corporation, or any successors thereof, as issuer of the Note
Insurance Policy.
"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.
` "Rate Agreement" shall mean the interest rate agreement dated September
17, 1998 between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Derivative Products AG and The Money Store Inc.,
which was assigned to the Trust on the Closing Date, pursuant to which
Supplemental Interest Payments (as defined in the Sale and Servicing Agreement)
are required to be paid, as amended from time to time by the parties thereto.
"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 August 31, 1998, among the Trust, the Originators listed therein and
The Money Store Inc., as Representative and Servicer, 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 1998-C Notes" shall mean The Money Store Trust 1998-C Asset Backed
Notes, Series 1998-C, Class AF-1, Class AF-2 and Class AV.
"Servicer" means The Money Store Inc., a New Jersey corporation, or any
successor servicer under the Sale and Servicing Agreement.
"Special Interest" shall have the meaning assigned to such term in Section
2.7.
"Spread Account Agreement" shall mean the Spread Account Agreement dated as
of September 29, 1998 between First Union National Bank and the Indenture
Trustee, as the same may be amended or supplemented from time to time.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
"Voting Interest" shall have the meaning assigned to such term in Section
2.11.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS. Capitalized terms used and not
otherwise defined herein have the meanings assigned to them in the Sale and
Servicing Agreement or, if not defined therein, in the Indenture.
All terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
The words "hereof," "herein," "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; Section and Exhibit references contained
in this Agreement are references to Sections and Exhibits in or to this
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
ARTICLE II.
ORGANIZATION
SECTION 2.1. NAME. The name of the Trust created hereby shall be "The Money
Store Trust 1998-C", 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 ▇▇▇ and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholders, the Note
Insurer and the Representative.
SECTION 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust is, and the
Trust shall have the power and authority, and the Owner Trustee shall have power
and authority, and is hereby authorized and empowered in the name and on behalf
of the Trust, to do or cause to be done all acts and things necessary,
appropriate or convenient to cause the Trust to engage in the following
activities:
to execute, deliver and issue the Series 1998-C Notes pursuant to the
Indenture and to authorize, execute, authenticate, issue and deliver the
Trust Certificates, the Special Interest and the Voting Interest pursuant
to this Agreement, and to sell the Series 1998-C Notes, the Trust
Certificates, the Special Interest and the Voting Interest;
with the proceeds of the sale of the Series 1998-C Notes and the Trust
Certificates, 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;
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;
to enter into, execute, deliver, file and perform its obligations
under the Basic Documents;
to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and
subject to compliance with the Basic Documents to which the Trust is a
party, to engage in such other activities as may be required in connection
with conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The 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 if, for federal income tax purposes, the
Trust is considered to have more than one Certificateholder, or as a division of
the Certificateholder that is ignored as an entity separate from the
Certificateholder if, for federal income tax purposes, there is a single
Certificateholder. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership or division of the
Certificateholder, as just described, for such tax purposes. Effective as of the
date hereof, the Owner Trustee shall have all rights, powers, authority and
authorization set forth herein and to the extent not inconsistent herewith, in
the Business Trust Statute with respect to accomplishing the purposes of the
Trust. The Owner Trustee shall file the Certificate of Trust with the Secretary
of State.
SECTION 2.7. TRANSFER OF INTEREST TO THE HOLDER OF THE SPECIAL INTEREST;
LIABILITY OF THE HOLDER OF THE SPECIAL INTEREST. (a) First Union National Bank,
as holder of no less than 1% Ownership Percentage in the Trust (the "Special
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 obligations of the Holder of the Special Interest under this
paragraph shall be evidenced by the Trust Certificate representing a 1%
Ownership Percentage issued to the Holder of the Special Interest as described
in Section 3.12, which solely 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 Special 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 Special 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.
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 and the Note Insurer, as of the Closing Date, that:
(a) It is duly organized and validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its properties and to conduct
its business as such properties are currently owned and such business
presently conducted.
(b) It is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such
qualifications.
(c) It has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms and the execution,
delivery and performance of this Agreement has been duly authorized by
all necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under
its articles of incorporation or bylaws, or any material indenture,
agreement or other material instrument to which it is a party or by
which it is bound; nor result in the creation or imposition of any lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of its knowledge, any
order, rule or regulation applicable to it of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over it or its
properties.
SECTION 2.11. VOTING INTEREST. By acceptance and agreement to this
Agreement, Norwest Bank Minnesota, National Association, (the "Holder of the
Voting Interest") shall acquire a 100% voting interest in the Trust (the "Voting
Interest") and shall be deemed to have agreed to be bound by the terms and
conditions set forth herein concerning the Voting Interest and shall be entitled
to all rights of the Holder of the Voting Interests hereunder. Except as
otherwise provided herein, the Holder of the Voting Interest shall have the sole
power and authority to approve or disapprove actions requiring the approval or
disapproval of 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
Note Insurer or by the Indenture Trustee with the prior written consent of the
Note Insurer (on which the Holder of the Voting Interest shall conclusively rely
and shall be fully protected for all purposes in so relying). The Holder of the
Voting Interest shall have no duty or obligation other than to exercise such
power and authority in accordance with such written instructions and shall have
no liability or obligation to act in the absence of such written instructions;
provided, however, that should the written instructions of the Note Insurer or
the Indenture Trustee, as the case may be, instruct the Holder of the Voting
Interest to take any action that, in the reasonable judgment of the Holder of
the Voting Interests 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 the Holder of Voting Interest shall not be required to take
such action except upon receipt of the written consent of all Certificateholders
to such action (or, in connection with any requested action that the Holder of
Voting Interest believes may adversely affect the Federal or state tax
consequences to the Certificateholders, upon receipt of an opinion of counsel
acceptable to the Holder of Voting Interest, which opinion shall not be an
expense of the Holder of Voting Interest, to the effect that such action will
not adversely affect the Federal or state tax consequences to the
Certificateholders). The Owner Trustee shall cooperate with the Holder of the
Voting Interest in coordinating and providing any required communication with
Certificateholders, including providing to the Holder of Voting Interest, upon
request, a certified listing of names and addresses of Certificateholders upon
which the Holder of Voting Interest may conclusively rely.
Notwithstanding any provision herein or in any other document to the
contrary, the Holder of the Voting Interest shall not have any liability for any
duties, responsibilities, obligations or actions of the Trust or any other
person or entity, any action taken or omitted pursuant to any written
instructions of the Note Insurer or the Indenture Trustee with the written
consent of the Note Insurer, or otherwise relating to the Trust or its serving
as the Holder of the Voting Interest except for liability relating solely to its
own willful misconduct, bad faith or gross negligence. The Holder of the Voting
Interest may not sell, transfer, assign, pledge or otherwise convey, directly or
indirectly, all or any part of the Voting Interest without the prior written
consent of the Holder of the Special Interest and the Note Insurer; PROVIDED,
HOWEVER, that upon any merger, consolidation or transfer of the corporate trust
business of the Holder of the Voting Interest or sale of substantially all of
the assets of the corporate trust business of the Holder of the Voting Interest,
all rights, duties and obligations of the Holder of Voting Interest hereunder
shall transfer to any successor to the Holder of the Voting Interest or its
corporate trust business without any further action. The Holder of the Voting
Interest shall have no right to receive any amounts hereunder or under any other
Basic Document or any other economic rights as a beneficial owner of the Trust,
and, except as otherwise expressly set forth herein, the Voting Interest shall
not be deemed a Certificate 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.
The Holder of Special Interest hereby indemnifies and holds harmless each
of Norwest Bank Minnesota, National Association and each of its directors,
officers, employees and agents, and its and their respective successors and
assigns, as applicable, from and against any and all losses, liabilities,
claims, charges, damages, fines, penalties, judgments, actions, suits, costs and
expenses of any kind or nature (including reasonable attorneys' fees and
expenses and reasonable fees and expenses of experts) imposed on, incurred by,
or asserted against any such person or entity in any way related to or arising
out of Norwest Bank Minnesota, National Association acting as the Holder of
Voting Interest hereunder, except to the extent caused by such person's bad
faith, gross negligence or willful misconduct. In particular, the Holder of
Special Interest hereby agrees promptly to reimburse the Holder of Voting
Interest for all costs and expenses incurred by the Holder of Voting Interest in
connection with the performance of its obligations hereunder, including any
costs of notices or distributions to Certificateholders. These indemnification
and reimbursement provisions shall survive the termination of the this Trust
Agreement and the resignation or removal of the Holder of Voting Interest
hereunder.
SECTION 2.12. 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.
SECTION 2.13. INVESTMENT COMPANY.. No originator or Certificateholder shall
take any action that would cause the Trust to become an "investment company"
required to register under the Investment Company Act of 1940, as amended.
ARTICLE III.
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the 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
Special 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
Special 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 Special 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 Special 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 First Union
National Bank. Thereupon, all such Certificates, the Special 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 ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 the Voting Interest and
of transfers and exchanges of Trust Certificates and the Voting Interest 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, the Note Insurer and the Holder of the Special Interest,
within 15 days after receipt by the Certificate Registrar of a request therefor
from the Servicer, the Representative, the Note Insurer or the Holder of the
Special Interest in writing, a list, in such form as the Servicer, the
Representative, or the Holder of the Special 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 Note Insurer 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, the Note
Insurer 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) The Trust Certificates may not
be offered or sold except to institutional "accredited investors" (as defined in
Rule 501(a)(1)-(3) under the Securities Act of 1933, as amended, who are United
States persons (as defined in Section 7701(a)(30) of the Code) in reliance on an
exemption from the registration requirements of the Securities Act. Except for
the initial issuance of the Trust Certificates to First Union National Bank, no
offer, sale, transfer or other disposition (including pledge) of Trust
Certificates shall be made to any Person unless such Person executes and
delivers to the Certificate Registrar, the Owner Trustee and the Holder of the
Special 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 ▇▇▇▇▇ 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) Notwithstanding anything contained herein to the contrary, First Union
National Bank, as holder of the Trust Certificates, shall not sell, transfer or
otherwise dispose of some or all of the Trust Certificates unless either (i) the
Note Insurer consents in writing to such sale, transfer or other disposition or
(ii) First Union National Bank contributes and transfers the Spread Account to
the Trust (or other entity acceptable to the Note Insurer) and provides the Note
Insurer with an opinion of counsel (and amendments to any Basic Documents, if
necessary) satisfactory to the Note Insurer to the effect that in the event of
the bankruptcy or insolvency of the proposed transferee of the Trust
Certificates, the Spread Account would not be deemed property of the estate of
such transferee and the Trust would not be consolidated with such transferee.
Further, if while First Union National Bank owns some or all of the Trust
Certificates, an event described in Section 7.05(a) of the Sale and Servicing
Agreement occurs that requires the Spread Account to be transferred from First
Union National Bank to another entity, First Union National Bank shall, upon the
written direction of the Note Insurer (i) contribute and transfer the Trust
Certificates to a "bankruptcy remote" special purpose entity acceptable to the
Note Insurer and (ii) provide the Note Insurer with an opinion of counsel (and
amendments to any Basic Documents, if necessary) satisfactory to the Note
Insurer to the effect that in the event of the insolvency of First Union
National Bank (or the parent of the special purpose entity if not First Union
National Bank) the assets and liabilities of such special purpose entity would
not be consolidated with the assets and liabilities of First Union National Bank
(or the parent of the special purpose entity if not First Union National Bank).
(e) 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 IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR ▇▇▇▇▇ 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 SPECIAL INTEREST. On and
after the Closing Date, the Holder of the Special Interest shall retain
beneficial and record ownership of Trust Certificates representing at least 1%
of the Ownership Percentage, including the Special Interest. Any attempted
transfer of any Trust Certificate that would reduce such interest of the Holder
of the Special Interest below 1% of the Ownership Percentage shall be void. The
Trust Certificate representing the 1% Special Interest issued to the Holder of
the Special 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, the Holder of the Voting Interest and the Note
Insurer in writing of the proposed action and (i) the Note Insurer shall have
consented thereto and (ii) 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, with the written consent of the Note
Insurer, provided alternative direction:
the initiation of any material claim or lawsuit by the Trust, except claims
or lawsuits brought in connection with the collection of the Loans, and the
compromise of any material action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Loans);
the election by the Trust to file an amendment to the Certificate of Trust
(unless such amendment is required to be filed under the Business Trust
Statute);
the amendment of any Basic Document;
the appointment pursuant to the Indenture of a successor Note Registrar,
Paying Agent or Indenture Trustee or, pursuant to this Agreement, of a successor
Certificate Registrar or Certificate Paying Agent or the consent to the
assignment by the Note Registrar, Paying Agent, Indenture Trustee, Certificate
Registrar or Certificate Paying Agent of its obligations under the Indenture or
this Agreement, as applicable;
the consent to the calling or waiver of any default under any Basic
Document;
the consent to the assignment by the Indenture Trustee or Servicer of their
respective obligations under any Basic Document;
except as provided in Article IX hereof, dissolve, terminate or liquidate
the Trust in whole or in part;
merge or consolidate the Trust with or into any other entity, or convey or
transfer all or substantially all of the Trust's assets to any other entity;
cause the Trust to incur, assume or guaranty any indebtedness other than as
set forth in the Basic Documents;
perform any act that conflicts with any other Basic Document;
perform any act which would make it impossible to carry on the ordinary
business of the Trust as described in Section 2.3 hereof;
confess a judgment against the Trust;
possess Trust assets or assign the Trust's right to property for other than
a Trust purpose;
cause the Trust to lend any funds to any entity; or
change the Trust's purpose and powers from those enumerated in this
Agreement.
SECTION 4.2. ACTION BY 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, and with the written consent of the
Note Insurer, to (a) remove the Servicer under the Sale and Servicing Agreement
pursuant to Section 10.01 thereof, (b) except as expressly provided in the Basic
Documents, sell the Loans after the termination of the Indenture, (c) institute
proceedings to have the Trust declared or adjudicated to be bankrupt or
insolvent, (d) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (e) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (f) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or any similar official)
of the Trust or a substantial portion of the property of the Trust, (g) make any
assignment for the benefit of the Trust's creditors, (h) cause the Trust to
admit in writing its inability to pay its debts generally as they become due,
(i) take any action or cause the Trust to take any action, in furtherance of any
of the foregoing clauses (c) through (i) (any of such clauses, a "Bankruptcy
Action"). So long as the Indenture and the Insurance Agreement remain in effect,
no Certificateholder nor the Indenture Trustee nor the Note Insurer shall be
entitled to direct the Holder of the Voting Interests to take any Bankruptcy
Action with respect to the Trust or to direct the Owner Trustee to take any
Bankruptcy Action with respect to the Trust. The Owner Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the Holder of the Voting Interests and the Note Insurer.
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 Note Insurer
and the delivery to the Owner Trustee and the Note Insurer 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 Owner Trustee shall not take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to Section 2.3.
(b) None of the Certificateholders, the Indenture Trustee or the Note
Insurer, acting independently or through the Holder of the Voting Interest, nor
the Holder of the Voting Interest, shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document unless the Holder of the Voting Interest, acting pursuant
to Section 2.11, previously shall have given to the Owner Trustee and the Note
Insurer a written notice of default and of the continuance thereof, as provided
in this Agreement, and the Note Insurer shall have consented thereto, or unless
Certificateholders evidencing not less than 25% of the aggregate Ownership
Percentage shall have made with the prior written consent of the Note Insurer,
written request upon the Owner Trustee to institute such action, suit or
proceeding in its own name as Owner Trustee under this Agreement and shall have
offered to the Owner Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Owner Trustee, for 30 days after its receipt of such notice, request, and offer
of indemnity, shall have neglected or refused to institute any such action,
suit, or proceeding, and during such 30-day period no request or waiver
inconsistent with such written request has been given to the Owner Trustee
pursuant to and in compliance with this Section; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder, the Holder of the Voting Interest and the Owner
Trustee, that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any provisions
of this Agreement to affect, disturb, or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 4.4, but subject to the terms of
this Agreement, each and every Certificateholder, the Holder of the Voting
Interest and the Owner Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 4.5. CONTROL BY HOLDER OF THE VOTING INTEREST. Except as otherwise
specifically provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Holder of the Voting
Interest pursuant to Section 2.11. Except as otherwise specifically provided
herein, any written notice to the Certificateholders delivered pursuant to this
Agreement shall be effective if written evidence is received that Holders of
Certificates evidencing not less than a majority of the aggregate Ownership
Percentage 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 1998-C 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 after a Responsible Officer of the Owner
Trustee obtains actual knowledge thereof, establish a new Certificate
Distribution Account to be held in an account with a Designated Depository
Institution, and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT. (a)
On each Remittance Date, the Paying Agent will, based on the information
contained in the 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.
(d) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders and the Note Insurer.
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 Special
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 Special 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, if the Trust is treated as a partnership for federal income tax
purposes, as described in Section 2.6) to enable each Certificateholder to
prepare its Federal and state income tax returns, (c) prepare or cause to be
prepared, and file or cause to be filed, all tax returns relating to the Trust
(including a partnership information return, Form 1065, if the Trust is treated
as a partnership for federal income tax purposes, as described in Section 2.6),
and direct the Owner Trustee in writing to make such elections as may from time
to time be required or appropriate under any applicable state or Federal statute
or rule or regulation thereunder so as to maintain the Trust's characterization
as a partnership or division of a single Certificateholder, as described in
Section 2.6, as the case may be, 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 Special Interest. The Owner
Trustee shall sign all tax information returns, if any, furnished to it in
execution form by the Holder of the Special Interest and any other returns as
may be required by law and so furnished to it by the Holder of the Special
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 Special 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, if any, of the Trust furnished to it in execution form by
the Holder of the Special 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 Special Interest.
(b) If the Trust is characterized as a partnership for federal income tax
purposes, as described in Section 2.6, the Holder of the Special 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 Indenture Trustee to authenticate and deliver Class
AF-1 Notes in the aggregate principal amount of $401,250,000, Class AF-2 Notes
in the aggregate principal amount of $133,750,000 and Class AV Notes in the
aggregate principal amount of $360,000,000. 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 and the Rate Agreement. The Owner Trustee
further shall have power and authority and hereby is authorized and empowered
from time to time to take such action as the Servicer recommends to it in
writing with respect to the Basic Documents.
It shall be the duty of the Owner Trustee, and the Owner Trustee shall have
power and authority and is hereby authorized and empowered, to discharge (or
cause to be discharged) all of its responsibilities pursuant to the terms of
this Agreement and the Sale and Servicing Agreement and to administer the Trust
in the interest of the Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement, or the Holder of the
Special 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 Special 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, and subject to the terms of this Agreement,
the Majority Securityholders, the Indenture Trustee and (subject to Article IV)
the Holder of the Voting Interest, may, by written instruction, direct the Owner
Trustee in the management of the Trust, and the Owner Trustee shall have power
and authority, and is hereby authorized and empowered, to follow, and shall be
fully protected in following, any such instruction.
(b) Notwithstanding any provisions hereof to the contrary, the Owner
Trustee shall not be required to take any action hereunder or under any Basic
Document if the Owner Trustee shall have reasonably determined, or shall have
been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders, the
Note Insurer 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 Note Insurer or,
with the prior written consent of the Note Insurer, the Holder of the Voting
Interest, the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate written
instruction within ten days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders, the
Note Insurer 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 Note Insurer or,
with the prior written consent of the Note Insurer, 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 Owner Trustee and the Bank nevertheless agrees, each as to
itself only, that it will, at its own cost and expense, promptly take all action
as may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Bank or the Owner Trustee,
as the case may be, that are not related to the ownership or the administration
of the Owner Trust Estate or the Owner Trustee's serving as owner trustee of the
Trust.
SECTION 6.4. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any direction or instruction delivered to the Owner Trustee
pursuant to Section 6.2.
SECTION 6.5. RESTRICTIONS. (a) The Owner Trustee shall not take any action
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of a Responsible Officer of the Owner Trustee,
would result in the Trust's becoming taxable as a corporation for Federal income
tax purposes. Neither the Holder of the Voting Interest nor the
Certificateholders shall knowingly direct the Owner Trustee to take action that
would violate the provisions of this Section.
(b) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of any other entity.
SECTION 6.6. NOTICE OF DEFAULT UNDER INDENTURE. Within 5 days of receipt of
a written notice of Default under the Indenture from the Indenture Trustee, the
Owner Trustee shall provide notice thereof to each Certificateholder by letter.
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all moneys actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Bank shall not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except to the Trust and the Certificateholders
(i) for its own willful misconduct, bad faith or gross negligence or (ii) in the
case of the inaccuracy of any representation or warranty contained in Section
7.3 expressly made by the Bank. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
the Bank shall not be liable for any error of judgment made by a
Responsible Officer of the Owner Trustee;
the Bank shall not be liable with respect to any action taken or omitted to
be taken by the Owner Trustee in accordance with the instructions of the
Indenture Trustee, the Servicer, the Holder of the Special Interest, the Holder
of the Voting Interest, Majority Securityholders, the Note Insurer or any
Certificateholder or in reliance on any provision of this Agreement;
no provision of this Agreement or any Basic Document shall require the Bank
to expend or risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under any Basic Document
if the Bank shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
under no circumstances shall the Bank be liable for the Certificates or any
amount due and owing thereon, any other interest in or indebtedness of the
Trust, or indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Series 1998-C Notes;
the Bank shall not be responsible for or in respect of the validity or
sufficiency of this Agreement or for the due execution hereof by any other party
hereto, or for the form, character, genuineness, sufficiency, value or validity
of any of the Owner Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificate of authentication
on the Trust Certificates, and the Bank shall in no event assume or incur any
liability, duty or obligation to any Noteholder or to any Certificateholder or
other Person, other than as expressly provided for herein;
the Bank shall not be liable for the default or misconduct of the Indenture
Trustee or the Servicer or the Holder of the Special 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 Indenture
Trustee or the Servicer or the Holder of the Special 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 Indenture Trustee under the Indenture or the
Servicer under the Sale and Servicing Agreement or the Holder of the Special
Interest under this Agreement; and
the Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of any of
the Indenture Trustee, the Certificateholders or Majority Securityholders or the
Holder of the Voting Interest, unless such Indenture Trustee,
Certificateholders, Majority Securityholders or Holder of the Voting Interest
have offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic Document shall
not be construed as a duty, and, except as otherwise provided in the third
sentence of this Section 7.1, the Bank shall not be answerable in the
performance of any such act.
SECTION 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish to
the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. REPRESENTATIONS AND WARRANTIES. The Bank hereby represents and
warrants to the Representative, the Note Insurer and for the benefit of the
Certificateholders, that:
It is a banking corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has its principal office
within the State of Delaware. It has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement.
It has taken all corporate action necessary to authorize the execution and
delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and deliver
this Agreement on its behalf.
Neither the execution nor the delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the terms or provisions hereof will contravene any federal or
Delaware state law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
SECTION 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party or other entity as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such persons.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in this
Agreement, in accepting the trusts hereby created Chase Manhattan Bank Delaware
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES OR LOANS. The
recitals contained herein and in the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates)
shall be taken as the statements of the Representative and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations or warranties as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates) or
the Series 1998-C Notes, or of any Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Note, or the perfection and
priority of any security interest created by any Loan in any Mortgaged Property
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any Loan
on any computer or other record thereof; the validity of the assignment of any
Loan to the Trust or of any intervening assignment; the completeness of any
Loan; the performance or enforcement of any Loan; the compliance by the
Representative, or the Servicer with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 7.7. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND SERIES 1998-C
NOTES. The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Trust Certificates or Series 1998-C Notes and may deal with
the Indenture Trustee and the Servicer in banking transactions with the same
rights as it would have if it were not Owner Trustee.
SECTION 7.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trustee
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Chase Manhattan Bank Delaware, or
any successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained to the contrary, neither Chase Manhattan Bank Delaware nor
any successor thereto, nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Chase Manhattan Bank Delaware (or any successor
thereto); or (iii) subject Chase Manhattan Bank Delaware (or any successor
thereto) to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by Chase Manhattan Bank Delaware (or any successor thereto) or
the Owner Trustee, as the case may be, contemplated hereby.
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 7.03(b) of the Sale and Servicing
Agreement, the Owner Trustee and the Holder of the Voting Interest shall receive
from the Representative as compensation for their respective services hereunder
such fees as have been separately agreed upon before the date hereof between the
Representative and the Owner Trustee or the Holder of the Voting Interest, as
applicable, and the Owner Trustee and the Holder of the Voting Interest shall be
entitled to be reimbursed by the Representative for their respective other
reasonable expenses hereunder and under the Basic Documents, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee or the Holder of the
Voting Interest, as applicable, may employ in connection with the exercise and
performance of their respective rights and duties hereunder.
SECTION 8.2. INDEMNIFICATION. The Representative shall be liable as primary
obligor for, and shall indemnify, defend and hold harmless the Bank, in its
individual capacity and as Owner Trustee and the Holder of the Voting Interest
and their respective successors, assigns, directors, officers, employees, agents
and servants (collectively, the "Indemnified Parties") from and against, any and
all liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee or the Holder of the Voting Interest hereunder, except only
that the Representative shall not be liable for or required to indemnify the
Owner Trustee from and against Expenses arising or resulting from any of the
matters described in the third sentence of Section 7.1. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee, the Holder of the Voting Interest or the termination of this
Agreement. In any event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the Representative, which approval
shall not be unreasonably withheld.
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, upon the final distribution by the Paying Agent and/or Owner Trustee of
all moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture, the Sale and Servicing Agreement and Article V
and the termination of the Indenture and the Insurance Agreement; PROVIDED,
HOWEVER, that the rights to indemnification under Section 8.2 and other rights
and protections of the Owner Trustee and the Bank shall survive the termination
of the Trust. The Servicer shall promptly notify the Owner Trustee of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder or Owner,
including the Holder of the Special Interest, 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, any
Originator nor the Holder of the Special 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 and the Note
Insurer mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 11.01 of the Sale and
Servicing Agreement, stating as set forth in such notice from the Servicer (i)
the Remittance Date upon or with respect to which final payment of the Trust
Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Trust Certificates at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if
other than the Owner Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Trust Certificates,
the Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Remittance Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not surrender their
Trust Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their Trust
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Trust Certificates
shall not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the Holder of the Special
Interest. Certificateholders shall thereafter look solely to the Holder of the
Special 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 Special 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.
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 reasonably acceptable to the
Note Insurer and (i) authorized to exercise corporate trust powers; and (ii)
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or state authorities; PROVIDED that with
respect to the initial Owner Trustee (but not any successor trustee) the
combined capital and surplus of the parent organization of such banking
association shall be included in the determination of the combined capital and
surplus of such banking association. If such association shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Owner Trustee
shall resign immediately in the manner and with the effect specified in Section
10.2. In addition, at all times the Owner Trustee or a co-trustee shall be a
person that satisfies the requirements of Section 3807(a) of the Business Trust
Statute (the "Delaware Trustee").
SECTION 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Servicer and the Note Insurer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor Owner Trustee with the consent of the Note Insurer, which will not be
unreasonably withheld, 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
reasonably acceptable to the Note Insurer.
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 the Note Insurer, 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 with
the consent of the Note Insurer, which will not be unreasonably withheld, and
shall remove the Owner Trustee at the written direction of the Note Insurer. If
the Servicer shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Servicer, with the consent of the Note
Insurer, which will not be unreasonably withheld, shall promptly appoint a
successor Owner Trustee acceptable to the Note Insurer 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 and
the Note Insurer.
SECTION 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses and any
other amounts due to it hereunder deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Noteholders, the
Note Insurer 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 and the Note Insurer.
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 or the Note
Insurer 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
with the consent of the Note Insurer, which consent will not be unreasonably
withheld. 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, except that notice to, and
the written consent of, the Note Insurer shall be required for the appointment
of a co-trustee.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner Trust Estate
or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this
Agreement; and
the Servicer and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees or co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee or co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Owner Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Owner Trustee.
Each such instrument shall be filed with the Owner Trustee and a copy thereof
given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 10.6. RESIGNATION OR REMOVAL OF HOLDER OF THE VOTING INTEREST. The
Holder of the Voting Interest may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Owner Trustee, the
Holder of the Special Interest and the Note Insurer. Upon receiving such notice
of resignation, the Holder of the Special Interest shall promptly appoint a
successor Holder of the Voting Interest with the consent of the Note Insurer,
which will not be unreasonably withheld, by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Holder of the
Voting Interest and one copy to the successor Holder of the Voting Interest. If
no successor Holder of the Voting Interest shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation (or after removal pursuant to the following paragraph), the Holder
of the Voting Interest so resigning or being removed may petition any court of
competent jurisdiction for the appointment of a successor Holder of the Voting
Interest reasonably acceptable to the Note Insurer.
If at any time the Holder of the Voting Interest shall be legally unable to
act, or shall be adjudged bankrupt or insolvent, or a receiver of the Holder of
the Voting Interest or of its property shall be appointed, or any public officer
shall take charge or control of the Holder of the Voting Interest or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Holder of the Special Interest may remove the Holder of
the Voting Interest with the consent of the Note Insurer, which will not be
unreasonably withheld, and shall remove the Holder of the Voting Interest at the
written direction of the Note Insurer. If the Holder of the Special Interest
shall remove the Holder of the Voting Interest under the authority of the
immediately preceding sentence, the Holder of the Special Interest, with the
consent of the Note Insurer, which will not be unreasonably withheld, shall
promptly appoint a successor Holder of the Voting Interest acceptable to the
Note Insurer by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Holder of the Voting Interest so removed and
one copy to the successor Holder of the Voting Interest along with payment of
all fees and other amounts, if any, owed to the outgoing Holder of the Voting
Interest.
Any resignation or removal of the Holder of the Voting Interest and
appointment of a successor Holder of the Voting Interest pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Holder of the Voting Interest and payment of all
fees and expenses owed to the outgoing Holder of the Voting Interest. The Owner
Trustee shall provide notice of such resignation or removal of the Holder of the
Voting Interest to each of the Rating Agencies and the Note Insurer.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be amended
by the Representative and the Owner Trustee, with the prior written consent of
the Note Insurer and prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity or defect, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder or the Holder of the Voting Interest.
(b) This Agreement may also be amended from time to time by the
Representative and the Owner Trustee, with the prior written consent of the Note
Insurer and prior written notice to the Rating Agencies, with the consent of the
Holders of Series 1998-C Notes evidencing not less than a majority of the
Outstanding Amount of the Series 1998-C 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 1998-C Notes and the Ownership Percentage
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Series 1998-C Notes and Holders of all outstanding
Certificates. Promptly after the execution of any such amendment or its receipt
of any such consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or its receipt of any consent to each
Certificateholder, the Indenture Trustee, the Note Insurer and each of the
Rating Agencies.
(c) It shall not be necessary for the consent of the Holder of the Voting
Interest, the Certificateholders, the Noteholders or the Indenture Trustee
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of the Holder of the Voting Interest and the Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
(d) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(e) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise. The Owner Trustee shall furnish copies of any such
amendments to this Agreement to each Rating Agency.
SECTION 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN CERTIFICATEHOLDERS.
The Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Sections 2.7 and
8.2, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Bank, the Representative, the Certificateholders, the Servicer, the
Note Insurer and, to the extent expressly provided herein, the Indenture 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 Special Interest,
addressed to The Money Store Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Executive Vice President; if to the Rating Agencies, addressed
to Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance,
and to ▇▇▇▇▇'▇ Investors Service, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance; if to the Note Insurer, addressed to
MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Insured Portfolio Management-SF (Mortgage-Backed) (The Money Store Trust
1998-C); if to the Holder of the Voting Interest, addressed to Norwest Bank
Minnesota, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department (Money Store 98-C), or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
Any notice required or permitted to be given to a Certificateholder shall
be given by first-class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
SECTION 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Representative, the Holder of the Special Interest, the Note Insurer, 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.]
SECTION11.9. NO PETITION. The Owner Trustee (not in its individual capacity
but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, the Holder of the Voting
Interest, the Bank, the Originators and the Indenture Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not at any time institute against the Trust, or join in
any institution against the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a Trust
Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial ownership interests in the Trust only and do not represent
interests in or obligations of the Representative, the Originators, the
Servicer, the Holder of the Special Interest, the Holder of the Voting Interest,
the Owner Trustee, the Bank, the Indenture Trustee, the Note Insurer 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. THE NOTE INSURER. The Note Insurer shall be a third party
beneficiary hereof and shall be entitled to enforce the provisions hereof as if
a party hereto. Notwithstanding anything contained herein to the contrary, the
Owner Trustee shall not owe any fiduciary duties to the Note Insurer; this
provision shall not be construed to limit or modify in any way the fiduciary
obligation of the Owner Trustee to the beneficial owners of the Trust.
Notwithstanding the foregoing, any right conferred to the Note Insurer shall be
suspended during any period in which the Note Insurer is in default in its
payment obligations under any Note Insurance Policy. At such time as the Notes
are no longer outstanding, and no amounts owed to the Note Insurer under the
Basic Documents remain unpaid, the Note Insurer's rights hereunder shall
terminate.
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/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
ACCEPTED AND AGREED:
FIRST UNION NATIONAL BANK,
Holder of the Special Interest and
Certificateholder
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
Holder of The Voting Interest
By: /s/ ▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Assistant Vice President
THE MONEY STORE INC.,
Representative and Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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 IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND
TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR ▇▇▇▇▇ 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 Special
Interest.
THE MONEY STORE TRUST 1998-C
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 Trust 1998-C (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
August 31, 1998 (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
August 31, 1998, between the Trust and The Bank of New York, as Indenture
Trustee, are Series 1998-C Asset Backed Notes (collectively, the "Series 1998-C
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 after the Cut-Off Date, 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 October 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 Special 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 Special Interest) will be
treated as partners in that partnership if, for federal income tax purposes,
there is more than one Certificateholder, or the Trust will be treated as a
division of the Certificateholder and ignored as an entity separate from the
Certificateholder if, for federal income tax purposes, there is a single
Certificateholder. The Holder of the Special Interest and the other
Certificateholders by acceptance of a Trust Certificate, agree to treat, and to
take no action inconsistent with the treatment for such tax purposes of, the
Trust Certificates for such tax purposes as partnership interests in the Trust
and the Trust as a partnership if the Trust is a partnership as just described,
and the Trust as a division of the Certificateholder if there is a single
Certificateholder for federal income tax purposes.
Each Certificateholder, by its acceptance of a Trust Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust or the Holder of the Special Interest, or join in any institution
against the Trust or the Holder of the Special 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 1998-C 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: September ___, 1998
THE MONEY STORE TRUST 1998-C
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: September ___, 1998
[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 TRUST 1998-C
THIS Certificate of Trust of The Money Store Trust 1998-C (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
TRUST 1998-C.
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, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration.
3. EFFECTIVE DATE. This certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust.
CHASE MANHATTAN BANK DELAWARE
not in its individual capacity but
solely as owner trustee of the Trust.
By:______________________________________
Name:
Title:
EXHIBIT C
INVESTMENT LETTER
The Money Store, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chase Manhattan Bank Delaware
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
Re: THE MONEY STORE TRUST 1998-C
Ladies and Gentlemen:
In connection with its purchase of certain Trust Certificates (the
"Certificates") of The Money Store Trust 1998-C (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 ▇▇▇▇▇ Plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as amended, or
Section 4975 of the Internal Revenue Code of 1986, as amended, or (2)
an entity (including an insurance company general account) whose
underlying assets include plan assets by reason of any such plan's
arrangements or account's investment in any such entity.
(ix) the Purchaser understands that the Certificates bear, and will
continue to bear, a legend to substantially the following effect:
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED
ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR, OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR ▇▇▇▇▇ 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.
