EXHIBIT 4.2
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EXECUTION COPY
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
TRUST AGREEMENT
among
THE MONEY STORE COMMERCIAL MORTGAGE INC.,
as Seller and Servicer
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of May 31, 1999
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS
SECTION 1.1. Capitalized Terms...................................2
SECTION 1.2. Other Definitional Provisions.......................6
ARTICLE II - ORGANIZATION
SECTION 2.1. Name.....................................................7
SECTION 2.2. Office...................................................7
SECTION 2.3. Purposes and Powers......................................7
SECTION 2.4. Appointment of Owner Trustee.............................8
SECTION 2.5. Initial Capital Contribution of Trust Estate.............8
SECTION 2.6. Declaration of Trust.....................................8
SECTION 2.7. Transfer of Interest to the Holder of the
Special Interests; Liability of the Holder of
the Special Interests....................................9
SECTION 2.8. Title to Trust Property..................................9
SECTION 2.9. Situs of Trust...........................................9
SECTION 2.10. Representations and Warranties of the Seller............10
SECTION 2.11. Voting Interest.........................................10
SECTION 2.12. Pool II Federal Income Tax Allocations..................12
SECTION 2.13. Certain REMIC Matters...................................12
SECTION 2.14. Miscellaneous REMIC Provisions..........................14
SECTION 2.15 Investment Company......................................15
ARTICLE III - TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership.......................................15
SECTION 3.2. The Trust Certificates..................................15
SECTION 3.3. Authentication of Trust Certificates....................16
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates............................................16
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates............................................17
SECTION 3.6. Persons Deemed Certificateholders.......................17
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses...............................................18
SECTION 3.8. Appointment of Authenticating Agent.....................18
SECTION 3.9. Appointment of Paying Agent.............................18
SECTION 3.10. Restrictions on Transfer................................19
SECTION 3.11. [Reserved]..............................................22
SECTION 3.12. Disposition by the Holder of the Special
Interests...............................................22
ARTICLE IV - ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Owners with Respect to Certain
Matters.................................................23
SECTION 4.2. Action by the Owner Trustee with Respect to
Certain Matters.........................................24
SECTION 4.3. Action by Holder of Voting Interest with Respect
to Bankruptcy...........................................24
SECTION 4.4. Restrictions on Power...................................24
SECTION 4.5. Control by Holder of the Voting Interest................25
SECTION 4.6. Execution of Documents..................................25
ARTICLE V - APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account.......26
SECTION 5.2. Application of Funds in Certificate Distribution
Account.................................................26
SECTION 5.3. [Reserved.].............................................27
SECTION 5.4. Method of Payment.......................................27
SECTION 5.5. No Segregation of Monies; No Interest...................27
SECTION 5.6. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service
and Others..............................................27
SECTION 5.7. Signature on Returns; Tax Matters Partner;
Tax Matters Person......................................28
ARTICLE VI - AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.......................................28
SECTION 6.2. Action upon Instruction.................................29
SECTION 6.3. No Duties Except as Specified in this Agreement
or in Instructions......................................30
SECTION 6.4. No Action Except under Specified Documents
or Instructions.........................................31
SECTION 6.5. Restrictions............................................31
SECTION 6.6. Notice of Default Under Indenture.......................31
ARTICLE VII - CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties.........................31
SECTION 7.2. Furnishing of Documents.................................33
SECTION 7.3. Representations and Warranties..........................33
SECTION 7.4. Reliance; Advice of Counsel.............................33
SECTION 7.5. Not Acting in Individual Capacity.......................34
SECTION 7.6. Owner Trustee Not Liable for Trust Certificates
or Loans................................................34
SECTION 7.7. Owner Trustee May Own Trust Certificates and
Series 1999-1 Notes.....................................35
SECTION 7.8. Payments from Owner Trust Estate........................35
SECTION 7.9. Doing Business in Other Jurisdictions...................35
ARTICLE VIII - COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.......................35
SECTION 8.2. Indemnification.........................................36
SECTION 8.3. Payments to the Owner Trustee...........................36
SECTION 8.4. Non-recourse Obligations................................36
ARTICLE IX - DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. Termination of Trust Agreement..........................36
ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee..............38
SECTION 10.2. Resignation or Removal of Owner Trustee.................38
SECTION 10.3. Successor Owner Trustee.................................39
SECTION 10.4. Merger or Consolidation of Owner Trustee................39
SECTION 10.5. Appointment of Co-Trustee or Separate Indenture
Trustee.................................................40
SECTION 10.6. Resignation or Removal of Holder of the Voting
Interest................................................41
ARTICLE XI - MISCELLANEOUS
SECTION 11.1. Supplements and Amendments..............................42
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders......................................43
SECTION 11.3. Limitations on Rights of Others.........................43
SECTION 11.4. Notices.................................................43
SECTION 11.5. Severability............................................44
SECTION 11.6. Separate Counterparts...................................44
SECTION 11.7. Successors and Assigns..................................44
SECTION 11.8. [Reserved.].............................................44
SECTION 11.9. No Petition.............................................44
SECTION 11.10. No Recourse.............................................44
SECTION 11.11. Headings................................................45
SECTION 11.12. Governing Law...........................................45
SECTION 11.13. Servicer................................................45
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Investment Letter
Exhibit D Form of Transferee Affidavit
TRUST AGREEMENT dated as of May 31, 1999 among The Money Store
Commercial Mortgage Inc., as Seller and Servicer, and Chase Manhattan Bank
Delaware, as Owner Trustee.
ARTICLE 1.
DEFINITIONS
SECTION CAPITALIZED TERMS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Authenticating Agent" shall mean any authenticating agent or
co-authenticating agent appointed pursuant to Section 3.8 and shall initially be
HSBC Bank USA.
"Bank" shall mean Chase Manhattan Bank Delaware, or any successor
thereto, in its individual capacity.
"Basic Documents" shall mean the Sale and Servicing Agreement, the
Indenture, the Note Depository Agreement, the Certificate of Trust, this Trust
Agreement, the Letters of Credit Agreement and the other documents and
certificates delivered in connection therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE ss. 3801 eT SEq., as the same may be amended from
time to time.
"Certificate" means any of the Class I, Class R or Class II
Certificates, each of which evidence the beneficial interest of the related
Certificateholder in either Pool I (in the case of a Class I or Class R
Certificate) or Pool II (in the case of a Class II Certificate) each comprising
a portion of the Trust, substantially in the forms of Exhibits X-0, X-0 xxx X-0,
respectively, attached hereto.
"Certificate Distribution Accounts" shall have the meaning assigned to
such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned in and the registrar appointed pursuant to Section 3.4.
"Class" or "Classes" means the reference to any one or more the Class
I, Class R or Class II Certificates, or if specified, to any class or classes of
Notes.
"Class I Certificates" means the Class I Certificates, substantially
in the form of Exhibit A hereto.
"Class II Certificates" means the Class II Certificates substantially
in the form of Exhibit A hereto.
"Class R Certificates" means the Class R Certificates, substantially
in the form of Exhibit A hereto, which shall represent both the Class R-I and
Class R-II Interests described in Section 2.13.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration; or at such other address as the Owner Trustee may designate by
notice to the Certificateholders, and the Representative, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Certificateholders and the
Representative); and (ii) with respect to the Authenticating Agent, the
principal corporate trust office of the Authenticating Agent located at 000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Department, or at such other address as the Authenticating Agent may designate
by notice to the Owner Trustee.
"Delaware Trustee" shall have the meaning assigned to such term in
Section 10.1.
"Disqualified Person" shall mean any of the following: (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax, and, except for the Federal Home Loan Mortgage Corporation, a majority of
its board of directors is not selected by such governmental unit), (ii) any
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Trust Administrator based
upon an Opinion of Counsel that a transfer of a Class R Certificate to such
Person may cause either REMIC I or REMIC II to fail to qualify as a REMIC at any
time that the Pool I Notes and/or Class I Certificates are outstanding. For
purposes of this definition, the terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register and the Holder of
the Special Interests.
"Holder of the Special Interests" shall mean First Union National
Bank, a national banking association.
"Holder of the Voting Interest" shall mean Norwest Bank Minnesota,
National Association, and any permitted successor, assignee or transferee
thereof.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of May 31, 1999 between
the Trust and HSBC Bank USA, as Indenture Trustee, as the same may be amended or
supplemented from time to time.
"Indenture Trustee" shall mean HSBC Bank USA, as Indenture Trustee
under the Indenture, or any successor thereto.
"Letter of Credits": " shall mean the two separate letters of credit
issued by First Union National Bank in favor of the Indenture Trustee for the
benefit of the Noteholders.
"Loan" shall have the meaning set forth in the Sale and Servicing
Agreement.
"Note Depository Agreement" shall mean the agreement among the Trust,
the Indenture Trustee, the Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated as of one Business Day prior to the Closing Date,
relating to The Money Store Business Loan Backed Notes, Series 1999-1, as the
same may be amended or supplemented from time to time.
"Note" shall mean any of The Money Store Business Loan Backed Notes,
Series 1999-1, Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2, Class
BS, Class AN, Class MN or Class BN issued by The Money Store Business Loan
Backed Trust 1999-1 pursuant to the Indenture.
"Originator" shall mean each entity listed on Annex I attached hereto.
"Ownership Percentage" shall mean with respect to any
Certificateholder, the proportion (expressed as a percentage) of the aggregate
beneficial ownership interests in any Class of Certificates held of record by
such Certificateholder, as evidenced by such Holder's Certificates.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Trust
pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9 and shall initially be HSBC Bank USA.
"Pool I" and "Pool II" shall have the meanings set forth in the Sale
and Servicing Agreement.
"Record Date" shall mean, with respect to any Remittance Date, the
close of business on the last day of the month immediately preceding the month
of the related Remittance Date.
"REMIC" shall mean a real estate mortgage investment conduit within
the meaning of Section 860D of the Code.
"REMIC I" shall mean the segregated portion of assets, consisting of
the Owner Trust Estate with respect to Pool I (excluding the REMIC I Regular
Interests, the Rounding Account and the Interest Carryover Account), for which a
REMIC election is made in accordance with the terms of Section 2.13.
"REMIC I Regular Interests" shall have the meaning ascribed to such
term in Section 2.13.
"REMIC II" shall mean the segregated portion of assets, consisting of
the REMIC I Regular Interests, for which a REMIC election is made in accordance
with the terms of Section 2.13.
"Representative" shall mean The Money Store Inc., a New Jersey
corporation, as Representative of the Seller, and, its successors and assigns.
"Responsible Officer" shall mean, when used with respect to the Owner
Trustee or the Authenticating Agent, any officer assigned to the Corporate Trust
Office of the Owner Trustee or the Authenticating Agent, as the case may be,
including any Vice President, any Assistant Vice President, any Assistant
Secretary, any trust officer or any other officer of the Owner Trustee or the
Authenticating Agent, as the case may be, customarily performing functions
similar to those performed by any of the above designated officers or any agent
acting under a power of attorney from the Owner Trustee or the Authenticating
Agent, as the case may be, having responsibility for the administration of this
Trust Agreement and also, with respect to a particular matter relating to the
Trust, any other officer of the Owner Trustee or the Authenticating Agent, as
the case may be, to whom such matter is referred because of such officer's
knowledge of and familiarity with such matter. Any notice given to the Owner
Trustee at the address and in the manner specified in Section 11.4 hereof shall
be deemed to be given to a Responsible Officer.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of May 31, 1999, among the Trust, The Money Store Commercial
Mortgage Inc., as Seller and Servicer, and The Money Store Inc., as
Representative, as the same may be amended and supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Seller" means The Money Store Commercial Mortgage Inc., in its
capacity as Seller.
"Series 1999-1 Notes" shall mean The Money Store Business Loan Backed
Trust 1999-1 Business Loan Backed Notes, Series 1999-1, Class AS-1, Class AS-2,
Class AS-3, Class MS-1, Class MS-2, Class BS, Class AN, Class MN and Class BN.
"Servicer" means The Money Store Commercial Mortgage Inc., a New
Jersey corporation, in its capacity as Servicer, or any successor servicer under
the Sale and Servicing Agreement.
"Special Interests" shall have the meaning assigned to such term in
Section 2.7.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
"Voting Interest" shall have the meaning assigned to such term in
Section 2.11.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. Capitalized terms used
and not otherwise defined herein have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II.
ORGANIZATION
SECTION 2.1. NAME. The name of the Trust created hereby shall be "The
Money Store Business Loan Backed Trust 1999-1", in which name the Owner Trustee,
on behalf of the Trust, shall have power and authority, and is hereby authorized
and empowered, to engage in the transactions contemplated hereby, conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and xxx and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Representative.
SECTION 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, and the Owner Trustee shall have
power and authority, and is hereby authorized and empowered in the name and on
behalf of the Trust, to do or cause to be done all acts and things necessary,
appropriate or convenient to cause the Trust to engage in the following
activities:
to execute, deliver and issue the Series 1999-1 Notes pursuant to
the Indenture and to authorize, execute, authenticate, issue and
deliver each Class of the Trust Certificates, the Special Interests
and the Voting Interest pursuant to this Agreement, and to sell the
Series 1999-1 Notes, the Trust Certificates, the Special Interests and
the Voting Interest;
with the proceeds of the sale of the Series 1999-1 Notes and the
Trust Certificates, to pay the organizational, start-up and
transactional expenses of the Trust and to pay the balance to the
Seller pursuant to the Sale and Servicing Agreement;
to acquire, receive and accept from time to time the Owner Trust
Estate, and to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate (including the Collateral) pursuant to the
Indenture and to hold, manage and distribute to the Certificateholders
pursuant to the terms of the Sale and Servicing Agreement any portion
of the Owner Trust Estate released from the lien of, and remitted to
the Trust pursuant to, the Indenture;
to enter into, execute, deliver, file and perform its obligations
under the Basic Documents;
to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
subject to compliance with the Basic Documents to which the Trust
is a party, to engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and the making
of distributions to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers, authority, authorization and duties set forth
herein.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Seller as of the date hereof, of the foregoing contribution,
which shall constitute the initial Owner Trust Estate and shall be deposited in
the Certificate Distribution Account. The Seller shall pay all organizational
expenses of the Trust as they may arise.
SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents to which the
Trust is a party. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust, as it relates to the assets in Pool II, the Pool II Notes
and the Class II Certificates, shall be treated as a partnership if, for federal
income tax purposes, the Trust is considered to have more than one Class II
Certificateholder, or as a division of the Class II Certificateholder that is
ignored as an entity separate from the Certificateholder if, for federal income
tax purposes, there is a single Class II Certificateholder. The parties agree
that, unless otherwise required by appropriate tax authorities, the Trust will
file or cause to be filed annual or other necessary returns, reports and other
forms consistent with the characterization of the Trust, as it relates to the
assets in Pool II, the Pool II Notes and the Class II Certificates, as a
partnership or division of the Class II Certificateholder, as just described,
for such tax purposes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers, authority and authorization set forth herein and to the
extent not inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
In addition, for federal income tax purposes and with respect to Pool
I, the Owner Trustee shall execute and deliver all documents required to make
and maintain effective REMIC elections with respect to Pool I as described in
Section 2.13; and the Trust will file or cause to be filed annual or other
necessary returns, reports or other forms consistent with the characterization
of the Pool I assets as two REMICs, as described in Section 2.13.
SECTION 2.7. TRANSFER OF INTEREST TO THE HOLDER OF THE SPECIAL
INTERESTS; LIABILITY OF THE HOLDER OF THE SPECIAL INTERESTS. (a) First Union
National Bank shall be the holder of no less than a 1% non-transferable
Ownership Percentage in each of the Class I and Class II Certificates (each, a
"Special Interest" and collectively, the "Special Interests"). For purposes of
the Business Trust Statute, each of the Special Interests shall be deemed a
separate class of beneficial ownership interest in the Trust from all other
beneficial ownership interests in the Trust, and the Holder of the Special
Interests, as such, shall be deemed a separate class of beneficial owner of the
Trust from all other beneficial owners of the Trust.
(b) No Holder or Holder of the Voting Interest shall have any
personal liability for any liability or obligation of the Trust.
SECTION 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) No Holder shall have legal title to any part of the Owner
Trust Estate. The Holders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest by any Certificateholder of its
beneficial ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the States of Delaware, North
Carolina or New York. Payments will be received by the Trust only in Delaware,
New York or North Carolina, and payments will be made by the Trust only from
Delaware, New York or North Carolina. The only office of the Trust will be at
the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
hereby represents and warrants, to the Owner Trustee as of the Closing Date,
that:
(a) It is duly organized and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and to conduct its
business as such properties are currently owned and such business presently
conducted.
(b) It is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of
its business shall require such qualifications.
(c) It has the corporate power and authority to execute and deliver
this Agreement and to carry out its terms and the execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under its articles of
incorporation or bylaws, or any material indenture, agreement or other
material instrument to which it is a party or by which it is bound; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to
the best of its knowledge, any order, rule or regulation applicable to it
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it or
its properties.
SECTION 2.11. VOTING INTEREST. By acceptance and agreement to this
Agreement, Norwest Bank Minnesota, National Association (the "Holder of the
Voting Interest") shall acquire a 100% voting interest in the Trust (the "Voting
Interest") and shall be deemed to have agreed to be bound by the terms and
conditions set forth herein concerning the Voting Interest and shall be entitled
to all rights of the Holder of the Voting Interest hereunder. Except as
otherwise provided herein, the Holder of the Voting Interest shall have the sole
power and authority to approve or disapprove actions requiring the approval or
disapproval of any Class of Certificateholders. Except as otherwise provided
herein, any action requiring the consent, approval or vote of any Class of
Certificateholders shall be taken only upon the written consent, approval or
vote of the Holder of the Voting Interest. In exercising such power and
authority to give or withhold such consent, approval or vote, the Holder of the
Voting Interest shall act only in accordance with and upon receipt of written
instructions delivered to it by the Indenture Trustee (on which the Holder of
the Voting Interest shall conclusively rely and shall be fully protected for all
purposes in so relying). The Holder of the Voting Interest shall have no duty or
obligation other than to exercise such power and authority in accordance with
such written instructions and shall have no liability or obligation to act in
the absence of such written instructions; provided, however, that should the
written instructions of the Indenture Trustee, instruct the Holder of the Voting
Interest to take any action that, in the reasonable judgment of the Holder of
the Voting Interest would increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Loans or
distributions required to be made for the benefit of any Class of
Certificateholders, or would adversely affect the federal or state tax
consequences to any Class of Certificateholders, the Holder of Voting Interest
shall not be required to take such action except upon receipt of the written
consent of all Certificateholders of each Class affected thereby to such action
(or, in connection with any requested action that the Holder of Voting Interest
believes may adversely affect the federal or state tax consequences to the
Certificateholders, upon receipt of an opinion of counsel acceptable to the
Holder of Voting Interest, which opinion shall not be an expense of the Holder
of Voting Interest, to the effect that such action will not adversely affect the
federal or state tax consequences to such Class or Classes of
Certificateholders). The Owner Trustee shall cooperate with the Holder of the
Voting Interest in coordinating and providing any required communication with
any Class of Certificateholders, including providing to the Holder of Voting
Interest, upon request, a certified listing of names and addresses of all
Certificateholders upon which the Holder of Voting Interest may conclusively
rely.
Notwithstanding any provision herein or in any other document to the
contrary, the Holder of the Voting Interest shall not have any liability for any
duties, responsibilities, obligations or actions of the Trust or any other
person or entity, any action taken or omitted pursuant to any written
instructions of the Indenture Trustee, or otherwise relating to the Trust or its
serving as the Holder of the Voting Interest except for liability relating
solely to its own willful misconduct, bad faith or gross negligence. The Holder
of the Voting Interest may not sell, transfer, assign, pledge or otherwise
convey, directly or indirectly, all or any part of the Voting Interest without
the prior written consent of the Holder of the Special Interests; PROVIDED,
HOWEVER, that upon any merger, consolidation or transfer of the corporate trust
business of the Holder of the Voting Interest or sale of substantially all of
the assets of the corporate trust business of the Holder of the Voting Interest,
all rights, duties and obligations of the Holder of Voting Interest hereunder
shall transfer to any successor to the Holder of the Voting Interest or its
corporate trust business without any further action. The Holder of the Voting
Interest shall have no right to receive any amounts hereunder or under any other
Basic Document or any other economic rights as a beneficial owner of the Trust,
and, except as otherwise expressly set forth herein, the Voting Interest shall
not be deemed a Certificate of any Class and the Holder of the Voting Interest
shall not be deemed a Holder (except as to benefit afforded Holders). For
purposes of the Business Trust Statute, the Voting Interest shall be deemed a
separate class of beneficial ownership interest in the Trust from all other
beneficial ownership interests in the Trust, and the Holder of the Voting
Interest, as such, shall be deemed a separate class of beneficial owner of the
Trust from all other beneficial owners of the Trust. The Voting Interest shall
not be represented by a certificate.
The Holder of Special Interests hereby indemnifies and holds harmless
each of Norwest Bank Minnesota, National Association and each of its directors,
officers, employees and agents, and its and their respective successors and
assigns, as applicable, from and against any and all losses, liabilities,
claims, charges, damages, fines, penalties, judgments, actions, suits, costs and
expenses of any kind or nature (including reasonable attorneys' fees and
expenses and reasonable fees and expenses of experts) imposed on, incurred by,
or asserted against any such person or entity in any way related to or arising
out of Norwest Bank Minnesota, National Association acting as the Holder of
Voting Interest hereunder, except to the extent caused by such person's bad
faith, gross negligence or willful misconduct. In particular, the Holder of
Special Interests hereby agrees promptly to reimburse the Holder of Voting
Interest for all costs and expenses incurred by the Holder of Voting Interest in
connection with the performance of its obligations hereunder, including any
costs of notices or distributions to any of Certificateholders. These
indemnification and reimbursement provisions shall survive the termination of
the this Trust Agreement and the resignation or removal of the Holder of Voting
Interest hereunder.
SECTION 2.12. POOL II FEDERAL INCOME TAX ALLOCATIONS. Net income of
the Trust with respect to Pool II for any month as determined for federal income
tax purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated to the Class II
Certificateholders, and apportioned among the Certificateholders of such Class
pro rata based upon their respective Ownership Percentage.
SECTION 2.13. CERTAIN REMIC MATTERS. (a) The Trust shall elect that
each of REMIC I and REMIC II (each as described below) shall be treated as a
real estate mortgage investment conduit ("REMIC") under Section 860D of the
Code. Each such election will be made on Form 1066 or other appropriate federal
tax or information return for the taxable year ending December 31, 1999, and on
any appropriate state return. Any inconsistencies or ambiguities in this
Agreement or in the administration of this Agreement shall be resolved in a
manner that preserves the validity of such REMIC elections. The Owner Trust
Estate with respect to Pool I (excluding the REMIC I Regular Interests, the
Rounding Account and the Interest Carryover Account) shall constitute the assets
of REMIC I. The REMIC I Regular Interests (as defined below) shall constitute
the assets of REMIC II.
(b) REMIC I will be evidenced by (x) the Class X-XX-0, Xxxxx X-XX-0,
Class I-AS-3, Class X-XX-0, Xxxxx X-XX-0, Class I-BS and Class I-M Interests
(the "REMIC I Regular Interests"), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in REMIC I
and (y) the Class R-I Interests, which are hereby designated as the single
"residual interest" in REMIC I (the REMIC I Regular Interests, together with the
Class R-I Interests, the "REMIC I Interests"). The REMIC I Regular Interests
shall be recorded on the records of REMIC I as being issued to and held by the
Owner Trustee on behalf of REMIC II.
(c) The REMIC I Interests will have the following designations,
initial principal balances and pass-through rates, and distributions of interest
thereon shall be allocated from such REMIC I Interests to the Class I
Certificates in the following manner:
PASS- ALLOCATIONS
REMIC I INITIAL THROUGH OF
INTERESTS BALANCE RATE INTEREST
--------- ------- ------- ------------
I-AS-1 $ 1,377,880 (1) (2)
I-AS-2 $ 1,410,570 (1) (2)
I-AS-3 $ 1,904,430 (1) (2)
I-MS-1 $ 220,840 (1) (2)
I-MS-2 $ 234,630 (1) (2)
I-BS $ 124,230 (1) (2)
I-M $ 546,864,364.03 (1) (2)
R-I $ 0 0% (3) NA
------------
(1) The Pass-Through Rate on these REMIC I Regular Interests shall at any time
of determination equal the Weighted Average Coupon Cap of the Pool I Loans
("WAC I").
(2) Any interest with respect to this REMIC I Regular Interest in excess of the
product of (i) 100 times the weighted average Pass-Through Rate of the
REMIC I Regular Interests, where the Class X-XX-0, Xxxxx X-XX-0, Class
I-AS-3, Class I-MS-1, Class I-MS-2 and Class I-BS Interests are first
subject to a cap equal to the Remittance Rates (determined without regard
to the Net Funds Cap) on the Class AS-1, Class AS-2, Class AS-3, Class
MS-1, Class MS-2 and Class BS Notes, respectively and the Class I-M
Interest is subject to a cap equal to 0%, and (ii) the principal balance of
this REMIC I Regular Interest, shall be allocated to the Class I
Certificates. The Class I Certificates will also be entitled to a portion
of the principal paid on the REMIC I Regular Interests in an amount equal
to the initial principal balance of the Class I Certificates (as described
in (e) below).
(3) On each Distribution Date, available funds, if any remaining in REMIC I
after payments of interest and principal, as designated above, and expenses
of the Trust that are payable from the assets in Pool I will be distributed
to the Class R-I Certificates. It is expected that there will not be any
distributions on the Class R-I Certificates.
(d) The Accelerated Principal Distribution Amount for Pool I will not
be paid directly as principal to the REMIC I Regular Interests, but instead a
portion of the interest payable with respect to the Class I-M Interest which
equals 1% of the such Accelerated Principal Distribution Amount will be payable
as a reduction of the principal balances of the Class X-XX-0, Xxxxx X-XX-0,
Class I-AS-3, Class I-MS-1, Class I-MS-2 and Class I-BS Interests, in the same
manner in which the Accelerated Principal Distribution Amount is allocated among
the Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and Class BS
Notes, respectively (and will be accrued and added to the principal balance of
the Class I-M Interest). Principal payments on the Pool I Loans shall be
allocated 99% to the Class I-M Interest, and 1% to the other REMIC I Regular
Interests, until paid in full. The aggregate amount of principal allocated among
the Class X-XX-0, Xxxxx X-XX-0, Class I-AS-3, Class I-MS-1, Class I-MS-2 and
Class I-BS Interests shall be apportioned among such Interests in the same
manner in which principal on the Pool I Loans is payable with respect to the
Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and Class BS Notes,
respectively. Notwithstanding the above, principal payments that are
attributable to the Subordination Reduction Amount for Pool I shall be allocated
to the Class I-M Interest, until paid in full. Realized losses shall be applied
such that after all distributions have been made on each Distribution Date (i)
the principal balances of the Class X-XX-0, Xxxxx X-XX-0, Class I-AS-3, Class
I-MS-1, Class I-MS-2 and Class I-BS Interests are each 1% of the principal
balances of the Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2 and
Class BS Notes, respectively; and (ii) the principal balance of the Class I-M
Interest is equal to the aggregate principal balances of the Loans in Pool I,
less an amount equal to the sum of the principal balances of the REMIC I Regular
Interests, other than the Class I-M Interest.
(e) REMIC II will be evidenced by (x) the Class AS-1, Class AS-2,
Class AS-3, Class MS-1, Class MS-2 and Class BS Notes (exclusive of any rights
to receive Noteholders' Interest Carryover, to receive current interest at a
rate exceeding WAC I and in the case of the Class AS-3 Notes, to receive amounts
from the Rounding Account) and the Class I Certificates (together, the "REMIC II
Regular Interests"), which are hereby designated as the "regular interests" in
REMIC II and (y) the Class R-II Interests, which are hereby designated as the
single "residual interest" in REMIC II (the REMIC II Regular Interests, together
with the Class R-II Interests, the "REMIC II Interests"). The REMIC II Regular
Interests (other than the Class I Certificates) shall have the principal
balances set forth for the Class AS-1, Class AS-2, Class AS-3, Class MS-1,
Class MS-2 and Class BS Notes in the Indenture and each such Class shall bear
interest at the lesser of its Remittance Rate (determined without regard to the
Net Funds Cap) and WAC I. The Class I Certificates shall have an initial
principal balance equal to the initial Spread Amount for Pool I and additionally
shall be entitled to the specified portion of interest described in note (2) of
Section 2.13(c) above. The Class R-II Interests shall have a zero principal
balance and a 0% interest rate, but will be entitled on each Remittance Date to
any available funds remaining in REMIC II after all distributions have been made
with respect to the Pool I Notes and the Class I Certificates.
(f) Solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
I Regular Interests and REMIC II Regular Interests is June 15, 2033.
SECTION 2.14. MISCELLANEOUS REMIC PROVISIONS. (a) The Closing Date is
hereby designated as the "startup day" of each REMIC created hereunder within
the meaning of Section 860G(a)(9) of the Code.
(b) The owner of a majority of the Percentage Interest in the Class R
Certificates is hereby designated as the "tax matters person" (within the
meaning of Treasury Regulations Section 1.860F-4(d) with respect to each of
REMIC I and REMIC II.
(c) Each REMIC created hereunder shall, for federal income tax
purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(d) For all federal income tax purposes, amounts transferred to the
Class R Certificates shall be treated as distributions by each of REMIC I and
REMIC II with respect to the Class R-I and Class R-II Interests, respectively
(each to the extent that the amount transferred is from assets held by the
respective REMIC).
(f) The Owner Trustee shall provide to the Internal Revenue Service
and to the persons described in Sections 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any
successor regulation thereto, with respect to each of REMIC I and REMIC II. Such
information shall be prepared by the Trust Administrator and provided in the
manner described in Treasury Regulation Section 1.860E-2(a)(5), or any
successor regulation thereto.
SECTION 2.15. INVESTMENT COMPANY. Neither the Seller nor any
Certificateholder shall take any action that would cause the Trust to become an
"investment company" required to register under the Investment Company Act of
1940, as amended.
ARTICLE III.
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Seller pursuant to Section 2.5 and until the issuance of the
Trust Certificates and the Voting Interest, the Seller shall be the sole
beneficial owner of the Trust. Upon such issuance of the Trust Certificates and
the Voting Interest, the Seller shall cease to be the beneficial owner of the
Trust, and their respective beneficial interests in the Trust shall be and shall
be deemed canceled, void, and of no further force and effect.
SECTION 3.2 THE TRUST CERTIFICATES. Subject to Section 3.3, each Class
of Trust Certificates shall be issued in minimum denominations corresponding to
an Ownership Percentage of 10% in each such Class and integral multiples of 1%
in excess thereof; PROVIDED, HOWEVER, that Trust Certificates may be issued to
the Holder of the Special Interests in minimum denominations corresponding to an
Ownership Percentage of 1% of each of the Class I and Class II Certificates.
Each Class of Trust Certificates shall be executed in the name and on behalf of
the Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee, and the Owner Trustee shall have power and authority and is hereby
authorized and empowered, in the name and on behalf of the Trust, to authorize,
execute, authenticate, issue and deliver each Class of Trust Certificates, the
Special Interests and the Voting Interest. Trust Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Trust Certificates
or did not hold such offices at the date of authentication and delivery of such
Trust Certificates. Except as provided in Section 3.10, a transferee of a Class
of Trust Certificates shall become a Certificateholder of such Class and shall
be entitled to the rights and subject to the obligations of a Certificateholder
of such Class hereunder, upon due registration of such Class of Trust
Certificates in such transferee's name pursuant to Section 3.4.
SECTION 3.3. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial contribution of the Loans to the Trust pursuant to the Sale and
Servicing Agreement, and without further action by the Seller, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, in
the name and on behalf of the Trust, shall cause, and shall have power and
authority and is hereby authorized and empowered to cause, the Special Interests
(which shall include a 1% Ownership Percentage in each of the Class I and Class
II Certificates) and Trust Certificates therefor and the Voting Interest to be
issued to, and registered on the Certificate Register in the name of, the Holder
of the Special Interests and the Holder of the Voting Interest, respectively,
and the balance of the Trust Certificates of each Class to be executed by an
Authorized Officer of the Owner Trustee, or the Authenticating Agent at the
direction of the Owner Trustee, and authenticated, issued and delivered to and
in the names of, and registered on the Certificate Register in the names of, the
following: (i) 99% of the Ownership Percentage in each of the Class I and Class
II Certificates, to TMS SBA Holdings, Inc., and (ii) 100% of the Ownership
Percentage in the Class R Certificates to First Union National Bank. Thereupon,
all Classes of such Certificates, the Special Interests, and the Voting Interest
shall be validly issued and entitled to the benefits of this Agreement. No Trust
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Trust
Certificate a certificate of authentication substantially in the form set forth
in Exhibits X-0, X-0, and A-3, as applicable, executed by the Owner Trustee, or
the Authenticating Agent at the direction of the Owner Trustee, by manual
signature; such authentication shall constitute conclusive evidence that such
Trust Certificate shall have been duly executed, authenticated, authorized,
issued and delivered hereunder. All Trust Certificates shall be dated the date
of their authentication.
SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at its
offices located at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office,
the address of which the Certificate Registrar shall provide in writing to the
Owner Trustee and the Holders, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of each Class of Trust Certificates and the Voting
Interest and of transfers and exchanges of each Class of Trust Certificates and
the Voting Interest as herein provided. HSBC Bank USA shall be the initial
Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at such office and, upon satisfaction of the conditions set forth below, the
Owner Trustee, in the name and on behalf of the Trust, shall execute,
authenticate, issue and deliver, in the name of the designated transferee or
transferees, one or more new Trust Certificates of the same Class and of a like
Ownership Percentage dated the date of authentication by the Owner Trustee or
any authenticating agent. At the option of a Holder, Trust Certificates of a
Class may be exchanged for other Trust Certificates of the same Class and of a
like Ownership Percentage upon surrender of the Trust Certificates to be
exchanged at such office.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements may include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may, but shall not be obligated to, require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
SECTION 3.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee or
the Authenticating Agent such security or indemnity as may be required by them
to save each of them harmless, then in the absence of actual knowledge by a
Responsible Officer of the Owner Trustee or the Authenticating Agent that such
Trust Certificate shall have been acquired by a bona fide purchaser, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, in
the name and on behalf of the Trust shall execute, authenticate, issue and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like Class, tenor and
Ownership Percentage. In connection with the issuance of any new Trust
Certificate under this Section, the Owner Trustee, or the Authenticating Agent
at the direction of the Owner Trustee, or the Certificate Registrar may, but
shall not be obligated to, require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Certificate issued pursuant to this Section shall be duly
authorized, validly issued and entitled to the benefits of this Agreement, and
shall constitute conclusive evidence of a beneficial ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
SECTION 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Trust Certificate of any Class for registration of transfer, the Owner
Trustee, or the Authenticating Agent at the direction of the Owner Trustee, and
the Certificate Registrar may treat the Person in whose name any Trust
Certificate of any Class shall be registered in the Certificate Register as the
Holder of such Trust Certificate of such Class for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes whatsoever, and
neither the Owner Trustee, or the Authenticating Agent if acting at the
direction of the Owner Trustee, nor the Certificate Registrar shall be bound by
any notice to the contrary.
SECTION 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished to
the Servicer, the Representative, and the Holder of the Special Interests,
within 15 days after receipt by the Certificate Registrar of a request therefor
from the Servicer, the Representative, or the Holder of the Special Interests in
writing, a list, in such form as the Servicer, the Representative, or the Holder
of the Special Interests may reasonably require, of the names and addresses of
the Certificateholders as of the most recent Record Date. If three or more
Holders of Trust Certificates of any Class or Classes or one or more Holders of
Trust Certificates evidencing not less than 25% of the aggregate Ownership
Percentage of any Class or Classes apply in writing to the Certificate
Registrar, and such application states that the applicants desire to communicate
with other Certificateholders of the same or different Classes with respect to
their rights under this Agreement or under the Trust Certificates and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Certificate Registrar shall, within five Business
Days after the receipt of such application, afford such applicants access during
normal business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Trust Certificate, shall be deemed to have agreed not to
hold either the Representative, the Certificate Registrar, the Indenture
Trustee, the Owner Trustee, or the Bank accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
SECTION 3.8. APPOINTMENT OF AUTHENTICATING AGENT. The Authenticating
Agent shall, at the direction of the Owner Trustee, execute and deliver such
Trust Certificates on behalf of the Trust as are to be issued by the Trust in
accordance with the terms of this Agreement. HSBC Bank USA, shall be the initial
Authenticating Agent.
SECTION 3.9. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Certificateholders of each Class from the appropriate
sub-account of the Certificate Distribution Account pursuant to Section 5.2 and
shall report the amounts of such distributions to the Owner Trustee. Any Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions referred to
above. The Owner Trustee may revoke such power and remove the Paying Agent if
the Owner Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be HSBC Bank USA, and any co-paying
agent chosen by the Owner Trustee and Certificate Registrar and acceptable to
the Servicer. The Paying Agent shall be permitted to resign upon 30 days'
written notice to the Owner Trustee, and the Servicer. In the event that HSBC
Bank USA shall no longer be the Paying Agent, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that as Paying Agent, such successor Paying
Agent or additional Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Articles VII and VIII shall apply to the Paying Agent and The Chase Manhattan
Bank also in its roles as Authenticating Agent and Certificate Registrar and in
any other capacities under the Basic Documents and, to the extent applicable, to
any other paying agent or certificate registrar appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 3.10. RESTRICTIONS ON TRANSFER. (a) The Trust Certificates may
not be offered or sold except to institutional "accredited investors" (as
defined in Rule 501(a)(1)-(3) under the Securities Act of 1933, as amended, who
are United States persons (as defined in Section 7701(a)(30) of the Code) in
reliance on an exemption from the registration requirements of the Securities
Act. Except for the initial issuance of the Trust Certificates to First Union
National Bank, no offer, sale, transfer or other disposition (including pledge)
of Trust Certificates shall be made to any Person unless such Person executes
and delivers to the Certificate Registrar, the Owner Trustee and the Holder of
the Special Interests an Investment Letter substantially in the form set forth
as Exhibit C hereto.
(b) No offer, sale, transfer or other disposition (including pledge)
of the Trust Certificates shall be made to any Person which is, or is purchasing
for, or on behalf of (1) an employee benefit plan, retirement arrangement,
individual retirement account or Xxxxx plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, or (2) an entity (including an
insurance company general account) whose underlying assets include plan assets
by reason of any such plan's arrangements or account's investment in any such
entity.
(c) Each Certificateholder must be a United States person as defined
in Section 7701(a)(30) of the Code.
(d) No sale or other transfer of record or beneficial ownership of a
Class R Certificate (whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agreement or otherwise) shall be made to a
Disqualified Person or an agent of a Disqualified Person. The transfer, sale or
other disposition of a Class R Certificate (whether pursuant to a purchase, a
transfer resulting from a default under a secured lending agreement or
otherwise) to a Disqualified Person shall be deemed to be of no legal force or
effect whatsoever and such transferee shall not be deemed to be the owner for
any purpose hereunder, including, but not limited to, the receipt of
distributions on such Class R Certificates. Furthermore, in no event shall the
Owner Trustee accept surrender for transfer, registration of transfer, or
register the transfer, of any Class R Certificate nor authenticate and make
available any new Class R Certificate unless the Owner Trustee has received an
affidavit from the proposed transferee in the form attached hereto as Exhibit D.
Each holder of a Class R Certificate by his acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this Section 3.10(d). No
sale or other transfer of a Class R Certificate shall be made unless the
transferee accepts the appointment as "tax matters person" pursuant to Section
2.14(b). All references to the Class R Certificates in this Section 3.10(d)
include individual references to the Class R-I Interests and the Class R-II
Interests in the event that the Class R Certificates are split into their
component parts.
(e) Each Trust Certificate will bear legends substantially to the
following effect:
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
(f) In addition to the legends provided in Section 3.10(e), the Class
I Certificates shall bear a legend substantially to the following effect:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.
(g) In addition to the legends provided in Section 3.10(e), the Class
R Certificates shall bear legends substantially to the following effect:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.
SECTION 3.11. [Reserved.]
SECTION 3.12. DISPOSITION BY THE HOLDER OF THE SPECIAL INTERESTS. On
and after the Closing Date, the Holder of the Special Interests shall retain
beneficial and record ownership of Trust Certificates representing at least 1%
of the Ownership Percentage in each of the Class I and Class II Certificates,
respectively, including the Special Interests. Any attempted transfer of any
Trust Certificate that would reduce such interest of the Holder of the Special
Interests below 1% of the Ownership Percentage in each of the Class I and Class
II Certificates respectively, shall be void unless the Rating Agency Condition
is satisfied. The Trust Certificate representing the 1% Special Interest in each
of the Class I and Class II Certificates issued to the Holder of the Special
Interests shall contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 PRIOR NOTICE TO OWNERS WITH RESPECT TO CERTAIN MATTERS.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders, and the Holder of the Voting
Interest in writing of the proposed action and the Holder of the Voting Interest
shall not have notified the Owner Trustee in writing prior to the 30th day after
such notice is given that it has withheld consent or, provided alternative
direction:
the initiation of any material claim or lawsuit by the
Trust, except claims or lawsuits brought in connection with the collection of
the Loans, and the compromise of any material action, claim or lawsuit brought
by or against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Loans);
the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute);
the amendment of any Basic Document;
the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or, pursuant to this
Agreement, of a successor Certificate Registrar or Certificate Paying Agent or
the consent to the assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar or Certificate Paying Agent of its obligations
under the Indenture or this Agreement, as applicable;
the consent to the calling or waiver of any default under
any Basic Document;
the consent to the assignment by the Indenture Trustee or
Servicer of their respective obligations under any Basic Document;
except as provided in Article IX hereof, dissolve, terminate
or liquidate the Trust in whole or in part;
merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the Trust's assets to
any other entity;
cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in the Basic Documents;
perform any act that conflicts with any other Basic
Document;
perform any act which would make it impossible to carry on
the ordinary business of the Trust as described in Section 2.3 hereof;
confess a judgment against the Trust;
possess Trust assets or assign the Trust's right to property
for other than a Trust purpose;
cause the Trust to lend any funds to any entity; or
change the Trust's purpose and powers from those enumerated
in this Agreement.
SECTION 4.2 ACTION BY THE OWNER TRUSTEE WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Holder of Voting Interest, to (a) remove the Servicer under the Sale and
Servicing Agreement pursuant to Section 10.01 thereof, (b) except as expressly
provided in the Basic Documents, sell the Loans after the termination of the
Indenture, (c) institute proceedings to have the Trust declared or adjudicated
to be bankrupt or insolvent, (d) consent to the institution of bankruptcy or
insolvency proceedings against the Trust, (e) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy, (f) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (g) make any assignment for the benefit of the Trust's creditors, (h)
cause the Trust to admit in writing its inability to pay its debts generally as
they become due, (i) take any action or cause the Trust to take any action, in
furtherance of any of the foregoing clauses (c) through (i) (any of such
clauses, a "Bankruptcy Action"). The Owner Trustee shall take the actions
referred to in the preceding sentence only upon written instructions signed by
the Holder of the Voting Interest.
SECTION 4.3 ACTION BY HOLDER OF VOTING INTEREST WITH RESPECT TO
BANKRUPTCY. The Owner Trustee shall not have the power to, and shall not,
commence a voluntary proceeding in bankruptcy relating to the Trust without the
prior written approval of the Holder of the Voting Interest and the delivery to
the Owner Trustee by the Holder of the Voting Interest of a certificate
certifying that, after review of and reliance upon information provided to the
Holder of the Voting Interest by the Indenture Trustee, the Owner Trustee or a
Certificateholder, it reasonably believes that the Trust is insolvent. So long
as the Indenture remains in effect, no Certificateholder nor the Indenture
Trustee shall be entitled to direct the Holder of the Voting Interest to take
any Bankruptcy Action with respect to the Trust or to direct the Owner Trustee
to take any Bankruptcy Action with respect to the Trust.
SECTION 4.4 RESTRICTIONS ON POWER. (a) The Owner Trustee shall not
take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Basic Documents or would be contrary to Section 2.3.
(b) None of the Certificateholders, or the Indenture Trustee, acting
independently or through the Holder of the Voting Interest, nor the Holder of
the Voting Interest, shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any Basic
Document unless the Holder of the Voting Interest, acting pursuant to Section
2.11, previously shall have given to the Owner Trustee a written notice of
default and of the continuance thereof, as provided in this Agreement, or unless
Certificateholders evidencing not less than 25% of the aggregate Ownership
Percentage shall have made written request upon the Owner Trustee to institute
such action, suit or proceeding in its own name as Owner Trustee under this
Agreement and shall have offered to the Owner Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Owner Trustee, for 30 days after its receipt of such
notice, request, and offer of indemnity, shall have neglected or refused to
institute any such action, suit, or proceeding, and during such 30-day period no
request or waiver inconsistent with such written request has been given to the
Owner Trustee pursuant to and in compliance with this Section; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder, the Holder of the Voting
Interest and the Owner Trustee, that no one or more Holders of Certificates of
any Class of Certificates shall have any right in any manner whatever by virtue
or by availing itself or themselves of any provisions of this Agreement to
affect, disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, but subject to the terms of this Agreement, each and every
Certificateholder, the Holder of the Voting Interest and the Owner Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 4.5 CONTROL BY HOLDER OF THE VOTING INTEREST. Except as
otherwise specifically provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Holder of the Voting
Interest pursuant to Section 2.11. Except as otherwise specifically provided
herein, any written notice to the Certificateholders delivered pursuant to this
Agreement shall be effective if written evidence is received that Holders of
Certificates evidencing not less than a majority of the aggregate Ownership
Percentage of the affected Class or Classes of Certificates have been delivered
of such notice.
SECTION 4.6 EXECUTION OF DOCUMENTS. Notwithstanding anything herein to
the contrary, the Owner Trustee shall have power and authority and hereby is
authorized, empowered and directed, in the name and on behalf of the Trust, to
execute, deliver, issue and authenticate each Class of Certificates, to execute,
deliver and issue the Series 1999-1 Notes, and to execute and deliver each Basic
Document to which the Trust or the Owner Trustee is or is to be a party and any
other document, instrument, certificate or other writing that may be necessary,
convenient or incidental thereto. Any such execution, delivery, issuance and
authentication is hereby ratified and confirmed in all respects and does not and
will be deemed not to conflict with, constitute or result in a breach or
violation of, or a default under, any provision of or any duty under this Trust
Agreement.
ARTICLE V.
APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.1. ESTABLISHMENT OF CERTIFICATE DISTRIBUTION ACCOUNT. (a)
The Owner Trustee, for the benefit of the Certificateholders, shall establish
and maintain at a Designated Depository Institution in the name of the Trust an
eligible deposit account (the "Certificate Distribution Account"), which shall
have two sub-accounts, one for funds received from Pool Available Remittance
Amounts with respect to Pool I for distribution to the Class I and Class R
Certificates, as applicable, and the second for funds received from Pool
Available Remittance Amounts with respect to Pool II for distribution to the
Class II Certificates, in each case as set forth in Section 7.08(d) of the Sale
and Servicing Agreement. Each sub-account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
related Certificateholders. Except as otherwise provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders.
(b) The Trust shall possess all right, title and interest in all funds
on deposit from time to time in each sub-account of the Certificate Distribution
Account and in all proceeds thereof. If, at any time, the Certificate
Distribution Account ceases to be held in an account with a Designated
Depository Institution, the Owner Trustee shall within ten Business Days after a
Responsible Officer of the Owner Trustee obtains actual knowledge thereof,
establish a new Certificate Distribution Account to be held in an account with a
Designated Depository Institution, and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT.
(a) On each Remittance Date, the Paying Agent will, based on the information
contained in the Trust Administrator's Certificate delivered on the related
Determination Date pursuant to Section 7.10 of the Sale and Servicing Agreement,
distribute to each Class of Certificateholders, and within each Class pro rata,
based on the related Ownership Percentage of such Class, to the extent of the
funds available, and in accordance with Section 7.08(d) of the Sale and
Servicing Agreement, amounts deposited in the applicable sub-account of the
Certificate Distribution Account pursuant to Section 7.08(d) of the Sale and
Servicing Agreement on such Remittance Date.
(b) On each Remittance Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Trust
Administrator pursuant to Section 7.10 of the Sale and Servicing Agreement on
such Remittance Date.
(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this
Section. The Paying Agent is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee or the Paying Agent from contesting any such
tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a Certificateholder shall be treated as
cash distributed to such Certificateholder at the time it is withheld by the
Trust and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution (such
as a distribution to a non-US Certificateholder), the Paying Agent may in its
sole discretion withhold such amounts in accordance with this clause (c). In the
event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee and the Paying Agent shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee and the Paying Agent for
any out-of-pocket expenses incurred. The Servicer shall facilitate compliance
with this Section 5.2(c) by performance of its duties under Section 12.01 of the
Sale and Servicing Agreement.
(d) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
SECTION 5.3. [Reserved.]
SECTION 5.4. METHOD OF PAYMENT. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Remittance Date
shall be made by the Paying Agent on each Remittance Date to each
Certificateholder of record as shown on the Certificate Register on the
preceding Record Date either (a) by wire transfer, in immediately available
funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if (i) such Certificateholder shall have
provided to the Paying Agent appropriate written instructions at least five
Business Days prior to such Remittance Date and such Holder's Trust Certificates
in the aggregate evidence an Ownership Percentage of the applicable Class of not
less than 20% or (ii) such Certificateholder is the Holder of the Special
Interests, or has been identified to the Owner Trustee and Paying Agent in
writing as an Affiliate thereof, or, (b) if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
SECTION 5.5. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law. Neither the
Paying Agent nor the Owner Trustee shall be liable for any interest thereon.
SECTION 5.6. ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to Sections
12.01(b)(iii) and 12.01(c) of the Sale and Servicing Agreement, the Trust
Administrator shall (a) maintain (or cause to be maintained) the books of the
Trust on a calendar year basis on the accrual method of accounting, (b) deliver
(or cause to be delivered) to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1 to IRS Form 1065, if the Trust, as it relates to the
assets in Pool II, the Pool II Notes and the Class II Certificates, is treated
as a partnership for federal income tax purposes, as described in Section 2.6)
to enable each Certificateholder to prepare its federal and state income tax
returns, (c) prepare or cause to be prepared, and file or cause to be filed, all
tax returns relating to the Trust (including a partnership information return,
IRS Form 1065, if the Trust, as it relates to the assets in Pool II, the Pool II
Notes and the Class II Certificates, is treated as a partnership for federal
income tax purposes, as described in Section 2.6), and direct the Owner Trustee
in writing to make such elections as may from time to time be required or
appropriate under any applicable state or federal statute or rule or regulation
thereunder so as to maintain the characterization of the Trust (as it relates to
the assets in Pool II, the Pool II Notes and the Class II Certificates) as a
partnership or division of a single Class II Certificateholder, as described in
Section 2.6, as the case may be, for federal income tax purposes, (d) collect or
cause to be collected any withholding tax as described in and in accordance with
Section 5.2(c) with respect to income or distributions to Certificateholders,
(e) prepare or cause to be prepared, and file or cause to be filed, all tax
returns relating to each of REMIC I and REMIC II (including returns on IRS Form
1066 and Schedule Q thereto and IRS Form 8811), and (f) prepare or cause to be
prepared, and file or cause to be filed, deliver or cause to be delivered any
annual or other necessary returns, reports or forms relating to the Notes, the
Class I Certificates (including information returns on IRS Form 1099) and the
Class R Certificates. The Trust shall make all elections pursuant to this
Section as directed in writing by the Trust Administrator. The Owner Trustee
shall sign all tax information returns relating to REMIC I, REMIC II, the Class
I Certificates or the Class R Certificates, if any, furnished to it in execution
form by the Trust Administrator and any other returns as may be required by law
and so furnished to it by and at the direction of the Trust Administrator, and
in doing so shall be entitled to, and shall be fully protected if it shall, rely
entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Trust Administrator.
SECTION 5.7. SIGNATURE ON RETURNS; TAX MATTERS PARTNER; TAX MATTERS
PERSON. . All tax returns relating to REMIC I, REMIC II, the Class I
Certificates and the Class R Certificates shall be signed by the Owner Trustee
and all tax returns relating to Pool II and the Class II Certificates shall be
signed by the Holder of the Special Interests, unless some other party is
required by law to sign such return (in which case such other party shall sign).
(b) If the Trust, as it relates to the assets in Pool II, the Pool II
Notes and the Class II Certificates, is characterized as a partnership for
federal income tax purposes, as described in Section 2.6, the Holder of the
Special Interests shall be the "tax matters partner" of the Trust pursuant to
the Code. The owner of a majority of the Percentage Interests in the Class R
Certificates shall be the "tax matters person" (within the meaning of Treasury
Regulations Section 1.860F-4(d)) with respect to each of REMIC I and REMIC II.
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. GENERAL AUTHORITY. The Owner Trustee shall have power and
authority and hereby is authorized, empowered and directed to execute and
deliver the Basic Documents to which the Trust is named as a party and each
certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Trust is named as a party and any amendment
thereto, in each case, in such form as the Representative shall approve as
evidenced conclusively by the Owner Trustee's execution thereof, and on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Class
AS-1 Notes in the aggregate principal amount of $137,788,000, Class AS-2 Notes
in the aggregate principal amount of $141,057,000, Class AS-3 Notes in the
aggregate principal amount of $190,443,000, Class MS-1 Notes in the aggregate
principal amount of $22,084,000, Class MS-2 Notes in the aggregate principal
amount of $23,463,000, Class BS Notes in the aggregate principal amount of
$12,423,000, Class AN Notes in the aggregate principal amount of $55,395,000,
Class MN Notes in the aggregate principal amount of $2,229,000, Class BN Notes
in the aggregate principal amount of $4,457,000. In addition to the foregoing,
the Owner Trustee shall have power and authority and hereby is authorized and
empowered, but shall not be obligated, to take all actions required of the Trust
pursuant to the Basic Documents. The Owner Trustee further shall have power and
authority and hereby is authorized and empowered from time to time to take such
action as the Servicer recommends to it in writing with respect to the Basic
Documents.
It shall be the duty of the Owner Trustee, and the Owner Trustee shall
have power and authority and is hereby authorized and empowered, to discharge
(or cause to be discharged) all of its responsibilities pursuant to the terms of
this Agreement and the Sale and Servicing Agreement and to administer the Trust
in the interest of the Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement, or the Holder of the
Special Interests has agreed hereunder or thereunder, to perform any act or to
discharge any duty of the Owner Trustee hereunder or of the Trust under any
Basic Document, and the Owner Trustee shall not be liable for the default or
failure of the Servicer or the Holder of the Special Interests to carry out its
obligations hereunder or thereunder.
SECTION 6.2.ACTION UPON INSTRUCTION. (a) In accordance with Section
10.05 of the Sale and Servicing Agreement, and subject to the terms of this
Agreement, the Majority Securityholders, the Indenture Trustee and (subject to
Article IV) the Holder of the Voting Interest, may, by written instruction,
direct the Owner Trustee in the management of the Trust, and the Owner Trustee
shall have power and authority, and is hereby authorized and empowered, to
follow, and shall be fully protected in following, any such instruction.
(b) Notwithstanding any provisions hereof to the contrary, the Owner
Trustee shall not be required to take any action hereunder or under any Basic
Document if the Owner Trustee shall have reasonably determined, or shall have
been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders, and the
Holder of the Voting Interest requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Holder of the Voting Interest,
the Owner Trustee shall not be liable on account of such action to any Person.
If the Owner Trustee shall not have received appropriate written instruction
within ten days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders, the Indenture Trustee, and the Holder of the Voting Interest
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any written instruction
received from the Holder of the Voting Interest (who shall provide such
instruction pursuant to Section 2.11 of this Agreement), the Owner Trustee shall
not be liable, on account of such action or inaction, to any Person. If the
Owner Trustee shall not have received appropriate written instruction within 10
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, as it
shall deem to be in the best interests of the Certificateholders, and shall have
no liability to any Person for such action or inaction.
SECTION 6.3. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS.. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Trust or the Owner Trustee is a party, except as expressly provided
by the terms of this Agreement or in any direction or written instruction
received by the Owner Trustee pursuant to Section 6.2; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation or termination statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder or to prepare or file any Securities and
Exchange Commission filing for the Trust or to record this Agreement or any
Basic Document. The Owner Trustee and the Bank nevertheless agrees, each as to
itself only, that it will, at its own cost and expense, promptly take all action
as may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Bank or the Owner Trustee,
as the case may be, that are not related to the ownership or the administration
of the Owner Trust Estate or the Owner Trustee's serving as owner trustee of the
Trust.
SECTION 6.4. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any direction or instruction delivered to the Owner
Trustee pursuant to Section 6.2.
SECTION 6.5. RESTRICTIONS. (a) The Owner Trustee shall not take any
action that is inconsistent with the purposes of the Trust set forth in Section
2.3 or (b) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust or any portion of the Trust becoming taxable
as a corporation for federal income tax purposes or would result in either REMIC
I or REMIC II not being treated as a REMIC for federal income tax purposes.
Neither the Holder of the Voting Interest nor the Certificateholders shall
knowingly direct the Owner Trustee to take action that would violate the
provisions of this Section.
(b) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of any other entity.
SECTION 6.6 NOTICE OF DEFAULT UNDER INDENTURE. Within 5 days of
receipt of a written notice of Default under the Indenture from the Indenture
Trustee, the Owner Trustee shall provide notice thereof to each
Certificateholder by letter.
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Bank shall not be answerable or accountable hereunder or under
any Basic Document under any circumstances, except to the Trust and the
Certificateholders (i) for its own willful misconduct, bad faith or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Bank. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
the Bank shall not be liable for any error of judgment made
by a Responsible Officer of the Owner Trustee;
the Bank shall not be liable with respect to any action
taken or omitted to be taken by the Owner Trustee in accordance with the
instructions of the Indenture Trustee, the Servicer, the Holder of the Special
Interests, the Holder of the Voting Interest, Majority Securityholders, or any
Certificateholder or in reliance on any provision of this Agreement;
no provision of this Agreement or any Basic Document shall
require the Bank to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or under
any Basic Document if the Bank shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
under no circumstances shall the Bank be liable for the
Certificates or any amount due and owing thereon, any other interest in or
indebtedness of the Trust, or indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest on the Series
1999-1 Notes;
the Bank shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by any
other party hereto, or for the form, character, genuineness, sufficiency, value
or validity of any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Bank shall in no event assume
or incur any liability, duty or obligation to any Noteholder or to any
Certificateholder or other Person, other than as expressly provided for herein;
the Bank shall not be liable for the default or misconduct
of the Indenture Trustee or the Servicer or the Holder of the Special Interests
or the Originators or the Representative or the Holder of the Voting Interest or
the Holders or the Certificate Registrar (if not the Owner Trustee) or the
Paying Agent (if not the Owner Trustee) under any of the Basic Documents or
otherwise and the Bank shall have no obligation or liability to monitor or
insure compliance by the Indenture Trustee or the Servicer or the Holder of the
Special Interests or the Originators or the Representative or the Holder of the
Voting Interest or the Holders or the Certificate Registrar (if not the Owner
Trustee) or the Paying Agent (if not the Owner Trustee) with any agreement to
which it is a party or to perform the obligations of the Trust under this
Agreement or the Basic Documents that are required to be performed by the
Indenture Trustee under the Indenture or the Servicer under the Sale and
Servicing Agreement or the Holder of the Special Interests under this Agreement;
and
the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Indenture Trustee, the Certificateholders or Majority
Securityholders or the Holder of the Voting Interest, unless such Indenture
Trustee, Certificateholders, Majority Securityholders or Holder of the Voting
Interest have offered to the Owner Trustee security or indemnity satisfactory to
it against the costs, expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic Document shall
not be construed as a duty, and, except as otherwise provided in the third
sentence of this Section 7.1, the Bank shall not be answerable in the
performance of any such act.
SECTION 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. REPRESENTATIONS AND WARRANTIES. The Bank hereby
represents and warrants to the Representative, and for the benefit of the
Certificateholders, that:
It is a banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has its
principal office within the State of Delaware. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party or other entity as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such persons.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Agreement, in accepting the trusts hereby created Chase Manhattan Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES OR LOANS.
The recitals contained herein and in the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates)
shall be taken as the statements of the Representative and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations or warranties as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and authentication of the Owner Trustee on the Trust Certificates) or
the Series 1999-1 Notes, or of any Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Note, or the perfection and
priority of any security interest created by any Loan in any Mortgaged Property
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any Loan
on any computer or other record thereof; the validity of the assignment of any
Loan to the Trust or of any intervening assignment; the completeness of any
Loan; the performance or enforcement of any Loan; the compliance by the
Representative, or the Servicer with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 7.7. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND SERIES
1999-1 NOTES. The Owner Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Series 1999-1 Notes and may
deal with the Indenture Trustee and the Servicer in banking transactions with
the same rights as it would have if it were not Owner Trustee.
SECTION 7.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trustee
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Chase Manhattan Bank Delaware, or
any successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained to the contrary, neither Chase Manhattan Bank Delaware nor
any successor thereto, nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Chase Manhattan Bank Delaware (or any successor
thereto); or (iii) subject Chase Manhattan Bank Delaware (or any successor
thereto) to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by Chase Manhattan Bank Delaware (or any successor thereto) or
the Owner Trustee, as the case may be, contemplated hereby.
ARTICLEVIII.
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. To the extent not
received by the Owner Trustee pursuant to Section 7.03(b) of the Sale and
Servicing Agreement, the Owner Trustee and the Holder of the Voting Interest
shall receive from the Representative as compensation for their respective
services hereunder such fees as have been separately agreed upon before the date
hereof between the Representative and the Owner Trustee or the Holder of the
Voting Interest, as applicable, and the Owner Trustee and the Holder of the
Voting Interest shall be entitled to be reimbursed by the Representative for
their respective other reasonable expenses hereunder and under the Basic
Documents, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee or the
Holder of the Voting Interest, as applicable, may employ in connection with the
exercise and performance of their respective rights and duties hereunder.
SECTION 8.2. INDEMNIFICATION. Except as set forth in Section 2.11
hereof, the Representative shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Bank, in its individual capacity and as
Owner Trustee, and the Holder of the Voting Interest and their respective
successors, assigns, directors, officers, employees, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee or the Holder of the Voting Interest hereunder, except only that the
Representative shall not be liable for or required to indemnify the Owner
Trustee from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 7.1. The indemnities contained in
this Section shall survive the resignation or termination of the Owner Trustee,
the Holder of the Voting Interest or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Representative, which approval shall not be
unreasonably withheld. In the event the Owner Trustee has notice of a claim for
Expenses it shall give prompt written notice thereof to the Representative and
the Representative shall promptly confirm to the Owner Trustee whether it shall
defend such claim.
SECTION 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Originator, the Representative, any
Certificateholder.
ARTICLE IX.
DISSOLUTION AND TERMINATION OF TRUST
SECTION 9.1. TERMINATION OF TRUST AGREEMENT. (a) This Agreement (other
than Article VIII) and the Trust shall dissolve, wind-up and terminate and be of
no further force or effect, upon the final distribution by the Paying Agent
and/or Owner Trustee of all moneys or other property or proceeds of the Owner
Trust Estate in accordance with the terms of the Indenture, the Sale and
Servicing Agreement and Article V and the termination of the Indenture;
PROVIDED, HOWEVER, that the rights to indemnification under Section 8.2 and
other rights and protections of the Owner Trustee and the Bank shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
of any prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder or Owner,
including the Holder of the Special Interests, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such Certificateholder's
or Owner's legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of all or any
part of the Trust or Owner Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), none of the
Representative, the Seller or the Holder of the Special Interests nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Remittance Date upon which the Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 11.01 of the Sale and
Servicing Agreement, stating as set forth in such notice from the Servicer (i)
the Remittance Date upon or with respect to which final payment of the Trust
Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Trust Certificates at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if
other than the Owner Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Trust Certificates,
the Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Remittance Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Trust Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the Holder of the Special
Interests to the extent the funds are attributable to Pool II, and to those
Class R Certificateholders who surrendered their Class R Certificates to the
extent the funds are attributable to Pool I. Class II Certificateholders shall
thereafter look solely to the Holder of the Special Interests as general
unsecured creditors.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Class R Certificateholders, in the case
of funds attributable to Pool I, and to the Holder of the Special Interests, in
the case of funds attributable to Pool II.
(e) Upon termination and completion of the winding up of the
Trust, in accordance with Section 3808 of the Business Trust Statute, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute and thereupon the Trust
and this Agreement shall terminate. The Owner Trustee shall furnish notice of
such filing to each Rating Agency.
ARTICLE X.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation or association (i) authorized to
exercise corporate trust powers; and (ii) having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authorities; PROVIDED that with respect to the initial Owner Trustee (but
not any successor trustee) the combined capital and surplus of the parent
organization of such banking association shall be included in the determination
of the combined capital and surplus of such banking association. If such
association shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2. In addition, at all times the Owner
Trustee or a co-trustee shall be a person that satisfies the requirements of
Section 3807(a) of the Business Trust Statute (the "Delaware Trustee").
SECTION 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation (or after removal pursuant to the following paragraph), the Owner
Trustee so resigning or being removed may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer may remove the Owner Trustee. If the Servicer
shall remove the Owner Trustee under the authority of the immediately preceding
sentence, the Servicer, shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee along with payment of all fees and other amounts, if any, owed to
the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses and any
other amounts due to it hereunder deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Noteholders, and
the Rating Agencies. If the Servicer shall fail to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Servicer.
SECTION 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation or association into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from or surviving any merger, conversion or consolidation
to which the Owner Trustee shall be a party, or any corporation or association
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation or association shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger, sale,
conversion or consolidation to the Rating Agencies.
SECTION 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Mortgaged Property may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power,
authority and authorization to, and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Owner Trust Estate, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 10.1 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.3.
Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions: all rights, powers,
duties and obligations conferred or imposed upon the Owner
Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner
Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner
Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee
under this Agreement; and
the Servicer and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees or
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee or co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 10.6. RESIGNATION OR REMOVAL OF HOLDER OF THE VOTING INTEREST.
The Holder of the Voting Interest may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Owner Trustee
and the Holder of the Special Interest. Upon receiving such notice of
resignation, the Holder of the Special Interest shall promptly appoint a
successor Holder of the Voting Interest by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Holder of the
Voting Interest and one copy to the successor Holder of the Voting Interest. If
no successor Holder of the Voting Interest shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation (or after removal pursuant to the following paragraph), the Holder
of the Voting Interest so resigning or being removed may petition any court of
competent jurisdiction for the appointment of a successor Holder of the Voting
Interest.
If at any time the Holder of the Voting Interest shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Holder of the Voting Interest or of its property shall be appointed, or any
public officer shall take charge or control of the Holder of the Voting Interest
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Holder of the Special Interests may remove the Holder of
the Voting Interest. If the Holder of the Special Interests shall remove the
Holder of the Voting Interest under the authority of the immediately preceding
sentence, the Holder of the Special Interests, shall promptly appoint a
successor Holder of the Voting Interest by written instrument, in duplicate, one
copy of which instrument shall be delivered to the outgoing Holder of the Voting
Interest so removed and one copy to the successor Holder of the Voting Interest
along with payment of all fees and other amounts, if any, owed to the outgoing
Holder of the Voting Interest.
Any resignation or removal of the Holder of the Voting Interest and
appointment of a successor Holder of the Voting Interest pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Holder of the Voting Interest and payment of all
fees and expenses owed to the outgoing Holder of the Voting Interest. The Owner
Trustee shall provide notice of such resignation or removal of the Holder of the
Voting Interest to each of the Rating Agencies.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by the Representative and the Owner Trustee, with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder or the Holder of the Voting Interest.
(b) This Agreement may also be amended from time to time by
the Representative and the Owner Trustee, with the prior written notice to the
Rating Agencies, with the consent of the Holders of Series 1999-1 Notes
evidencing not less than a majority of the Outstanding Amount of the Series
1999-1 Notes and, to the extent the Certificates or the rights, benefits or
duties of the Holder of the Voting Interest are affected thereby, the consent of
the Holder of the Voting Interest for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Loans or distributions that shall be required to be
made for the benefit of the Noteholders or the Certificateholders or (ii) reduce
the aforesaid percentage of the Outstanding Amount of the Series 1999-1 Notes
and the Ownership Percentage required to consent to any such amendment, without
the consent of the Holders of all the outstanding Series 1999-1 Notes and
Holders of all outstanding Certificates. Promptly after the execution of any
such amendment or its receipt of any such consent, the Owner Trustee shall
furnish written notification of the substance of such amendment or its receipt
of any consent to each Certificateholder, the Indenture Trustee, and each of the
Rating Agencies.
(c) It shall not be necessary for the consent of the Holder
of the Voting Interest, the Certificateholders, the Noteholders or the Indenture
Trustee pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of the Holder of the Voting Interest and the Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
(d) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
(e) Prior to the execution of any amendment to this
Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise. The Owner Trustee shall furnish copies of any
such amendments to this Agreement to each Rating Agency.
SECTION 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided beneficial ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of the
Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Sections 2.7
and 8.2, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Bank, the Representative, the Certificateholders, the
Servicer, and, to the extent expressly provided herein, the Indenture Trustee
and the Noteholders, and nothing in this Agreement, whether express of implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.4. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
personally delivered, delivered by overnight courier or mailed certified mail,
return receipt requested or telecopied and shall be deemed to have been duly
given upon receipt, if to the Trust, addressed to the Owner Trustee at the
Corporate Trust Office; if to the Owner Trustee, addressed to the Corporate
Trust Office; if to the Originators, the Representative or the Holder of the
Special Interests, addressed to The Money Store Inc., 000 Xxxxx Xxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention: Executive Vice President; if to the
Rating Agencies, addressed to Duff & Xxxxxx Credit Rating Co., 00 Xxxx Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Monitoring Group (Small
Business Loans) and to Xxxxx'x Investors Service, 00 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance; if to the Holder of the
Voting Interest, addressed to Norwest Bank Minnesota, National Association,
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Department (Money Store 99-1); or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Representative, the Holder of the Special Interests , the Owner Trustee and its
successors, each Certificateholder and its successors and permitted assigns and
the Holder of the Voting Interest and its successors and permitted assigns., all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 11.8. [Reserved.]
SECTION 11.9. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, the Holder of the Voting
Interest, the Bank, the Seller and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenants and agrees that they
will not at any time institute against the Trust, or join in any institution
against the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial ownership interests in the Trust only and do not represent
interests in or obligations of the Representative, the Originators, the
Servicer, the Holder of the Special Interests, the Holder of the Voting
Interest, the Owner Trustee, the Bank, the Indenture Trustee, or any Affiliate
thereof and no recourse by such Certificateholder may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, the Trust Certificates or the Basic Documents.
SECTION 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.13. SERVICER. The Servicer is authorized and empowered to
execute, prepare, file and/or deliver in the name and on behalf of the Trust all
such documents, reports, filings, tax returns, instruments, certificates and
opinions as it shall be the duty of the Trust to prepare, file or deliver
pursuant to the Basic Documents. Upon written request of the Servicer, the Owner
Trustee on behalf of the Trust shall execute and deliver to the Servicer a power
of attorney appointing the Servicer the Trust's agent and attorney-in-fact to
execute, prepare, file and deliver all such documents, reports, filings, tax
returns, instruments, certificates and opinions.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
THE MONEY STORE COMMERCIAL MORTGAGE
INC., as Seller and Servicer
By: /s/ Xxxxxx Xxxx
--------------------------------
Name: Xxxxxx Xxxx
Title: Senior Vice President/CFO
ACCEPTED AND AGREED:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Holder of the Voting Interest
By: /s/ Xxx Xxxx
-------------------------------
Name: Xxx Xxxx
Title: Assistant Vice President
ACCEPTED AND AGREED:
HSBC BANK USA, Authenticating Agent,
Certificate Registrar and Paying Agent
By: /s/ Xxxxx Barstock
-------------------------------
Name: Xxxxx Barstock
Title: Assistant Vice President
ACCEPTED AND AGREED:
FIRST UNION NATIONAL BANK,
as Holder of the Special Interests
By: /s/ Xx X. Xxxx
-------------------------------
Name: Xx X. Xxxx
Title: Senior Vice President
ACCEPTED AND AGREED:
THE MONEY STORE INC.,
as Representative
By: /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Senior Vice President/CFO
EXHIBIT A
CLASS ____ CERTIFICATE
NUMBER ___
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE IS SUBJECT TO THE TERMS OF THE TRUST AGREEMENT AND TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN ARTICLE III OF THE TRUST
AGREEMENT. THIS TRUST CERTIFICATE AND ANY RIGHTS REPRESENTED THEREBY MAY BE
SUBJECT TO LIENS GRANTED BY A PRIOR HOLDER THEREOF.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
[SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.]
[SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.]
[THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.]
[THIS TRUST CERTIFICATE IS NOT TRANSFERABLE]1
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
SERIES 1999-1, CLASS ____ BUSINESS LOAN BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes two pool of Loans
contributed to the Trust by the Seller.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE MONEY STORE INC., THE MONEY STORE COMMERCIAL MORTGAGE INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES.)
THIS CERTIFIES THAT ________________ is the registered owner of ____%
of the aggregate Ownership Percentage as a nonassessable, fully-paid, beneficial
ownership interest in the Class ___ Certificates issued by The Money Store
Business Loan Backed Trust 1999-1 (the "Trust") formed by The Money Store
Commercial Mortgage Inc., as seller (the "Seller").
The Trust was created pursuant to that certain Trust Agreement dated
as of May 31, 1999 (the "Trust Agreement") between the Seller, and Chase
Manhattan Bank Delaware, not in its individual capacity but solely as owner
trustee (the "Owner Trustee"), a summary of certain
of the pertinent provisions of which is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement.
---------------------
1 To be inseted on the Certificate to be held by the Holder of the Special
Interest.
This Certificate is one of the duly authorized Class ____ Certificates
(herein called the "Trust Certificates"). Also issued under the Indenture, dated
as of May 31, 1999, between the Trust and HSBC Bank USA, as Indenture Trustee
(the "Indenture Trustee"), are the Series 1999-1 Business Loan Backed Notes,
Class AS-1, Class AS-2, Class AS-3, Class MS-1, Class MS-2, Class BS, Class AN,
Class MN and Class BN (collectively, the "Series 1999-1 Notes"). This Trust
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Trust Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a portfolio of business
loans contributed by the Seller (the "Loans"), all monies received on the Loans
after the Cut-Off Date, security interests in certain bank accounts and the
proceeds thereof, and certain other rights under the Trust Agreement and the
Sale and Servicing Agreement dated as of May 31, 1999, among, the Trust, the
Seller, as seller and as servicer (in such capacity, "the Servicer"), The Money
Store, Inc., as Representative (the "Representative") and the Indenture Trustee
(the "Sale and Servicing Agreement").
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(the "Remittance Date"), commencing in July 15, 1999, to the Person in whose
name this Trust Certificate is registered at the close of business on the day
immediately preceding the Remittance Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to the Class ____ Certificateholders on such Remittance Date.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Representative, the Servicer, the Seller, the
Holder of the Special Interests and the Certificateholders that (i) for purposes
of federal income taxes, the Trust, as it relates to the asset in Pool II, the
Pool II Notes and the Class II Certificates, will be treated as a partnership
and the Class II Certificateholders will be treated as partners in that
partnership if, for federal income tax purposes, there is more than one Class II
Certificateholder, or as a division of the Class II Certificateholder and
ignored as an entity separate from the Class II Certificateholder if, for
federal income tax purposes, there is a single Class II Certificateholder; and
(ii) certain portions of the assets in Pool I will be treated as "real estate
mortgage investment conduits" ("REMICs") within the meaning of Section 860D of
the Internal Revenue Code of 1986, as amended (the "Code"), the Pool I Notes and
the Class I Certificates will be "regular interests" in a REMIC, within the
meaning of Section 860G(a)(1) of the Code, and the Class R Certificates will be
"residual interests" in a REMIC, within the meaning of Section 860G(a)(2) of the
Code. The Holder of the Special Interests and the other Certificateholders, by
acceptance of their Trust Certificates, agree to treat, and to take no action
inconsistent with, the tax treatment just described.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust or the Holder of the Special Interests, or join in any
institution against the Trust or the Holder of the Special Interests of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Series 1999-1 Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Paying Agent named therein by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, in the name and on behalf of
the Trust and not in its individual capacity, has caused this Trust Certificate
to be duly executed.
Date: June 29, 1999
THE MONEY STORE BUSINESS LOAN BACKED TRUST
1999-1
By: CHASE MANHATTAN BANK DELAWARE
solely as Owner Trustee and not in its individual
capacity
[or HSBC BANK USA, as Authenticating
Agent and not in its individual capacity]
By:
-------------------------------
Authorized Signatory
OWNER TRUSTEE'S [OR AUTHENTICATING AGENT'S] CERTIFICATE OF AUTHENTICATION
This is one of the Class ____ Certificates referred to in the
within-mentioned Trust Agreement.
Date: June 29, 1999
[CHASE MANHATTAN BANK DELAWARE
solely as Owner Trustee and not in its individual
capacity]
[or HSBC BANK USA, as Authenticating
Agent and not in its individual capacity]
By:
----------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto:______________________________________________________________________,
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing _______________________________________________
Attorney to transfer said Trust Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
____________________________*
Signature Guaranteed:
--------------------------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Trust Certificate in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
THIS Certificate of Trust of The Money Store Trust 1999-1 (the
"Trust"), is being duly executed and filed by Chase Manhattan Bank Delaware, a
Delaware banking corporation, not in its individual capacity but solely as
trustee, to form a business trust under the Delaware Business Trust Act (12 DEL.
CODE, ss. 3801 eT SEq.).
1. NAME. The name of the business trust formed hereby is THE MONEY
STORE BUSINESS LOAN BACKED TRUST 1999-1.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust which has its principal place of business in the State of Delaware is
Chase Manhattan Bank Delaware, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
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.
The Money Store Commercial Mortgage Inc.
000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
HSBC Bank USA,
as Certificate Registrar
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
The Money Store Business Loan Backed Trust 0000-0
x/x Xxxxx Xxxxxxxxx Xxxx Xxxxxxxx,
as Owner Trustee
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Administration
Re: THE MONEY STORE BUSINESS LOAN BACKED TRUST 1999-1
Ladies and Gentlemen:
In connection with its purchase of certain Trust Certificates (the
"Certificates") of The Money Store Business Loan Backed Trust 1999-1 (the
"Issuer"), the purchaser named below (the "Purchaser") or, if an investment
adviser is executing this Investment Letter on the Purchaser's behalf, such
investment adviser represents, warrants and certifies that:
(i) it understands that the Certificates are not being and will not
be registered under the Securities Act of 1933, as amended (the
"1933 Act"), and are not being registered or qualified under any
state securities or "blue sky" laws and are being sold to the
Purchaser in a transaction that is exempt from the registration
requirements of the 1933 Act. The Purchaser is an "accredited
investor" as defined in Rule 501(a)(1)-(3) of the 1933 Act and a
sophisticated institutional investor that is experienced in
purchasing securities similar to the Certificates. The Purchaser
is able to bear the economic risk of investment in the
Certificates;
(ii) any information it desired concerning the Certificates, the
issuer thereof or any other matter it deemed relevant to its
decision to purchase the Certificates has been made available to
it. In this regard, it has carefully reviewed with its counsel
and understands the terms of the Trust Agreement pursuant to
which the Issuer was formed and agrees to be bound by all the
terms thereof, including those relating to restrictions on
transfer;
(iii) the Purchaser's purchase of the Certificates would not cause it
to fail to comply fully with all applicable requirements of each
regulatory body having supervisory or other authority over its
operations or over its purchase of the Certificates. In reaching
its decision to purchase the Certificates, it has conducted, with
its experts and counsel, an independent analysis of the economic
and regulatory effects of the transaction on the Purchaser based
on the Purchaser's circumstances and has concluded that the
purchase of the Certificates is appropriate for the Purchaser's
circumstances;
(iv) the Purchaser has independently confirmed the federal, state and
local tax consequences of owning the Certificates;
(v) the Purchaser is acquiring the Certificates for its own account,
not as nominee for any other person, and not with a present view
to any distribution or other disposition of the Certificates in
violation of the provisions of the 1933 Act;
(vi) the Purchaser agrees the Certificates must be held indefinitely
by it (and may not be sold, pledged, hypothecated or in any way
disposed of) unless subsequently registered under the 1933 Act or
an exemption from the registration requirements of the 1933 Act
is available and such transaction is exempt from all applicable
state securities or "blue sky" laws;
(vii) the Purchaser agrees that in the event that at some future time
it wishes to dispose of or exchange the Certificates (such
disposition or exchange not being currently foreseen or
contemplated), it will not transfer or exchange the Certificates
unless:
(A) (1) a letter to substantially the same effect as
this letter is executed and delivered by the purchaser before
the transfer or exchange is consummated, and (2) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on the Purchaser's behalf, are limited
only to Eligible Purchasers and are not made by means of any
form of general solicitation or general advertising whatsoever;
and
(B) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and a
satisfactory opinion of counsel is furnished to such effect;
(viii) the Purchaser is not, and is not purchasing for, or on behalf
of, (1) an employee benefit plan, retirement arrangement,
individual retirement account or Xxxxx Plan subject to either
Title I of the Employee Retirement Income Security Act of 1974,
as amended, or Section 4975 of the Internal Revenue Code of 1986,
as amended, or (2) an entity (including an insurance company
general account) whose underlying assets include plan assets by
reason of any such plan's arrangements or account's investment in
any such entity.
(ix) the Purchaser understands that the Certificates bear, and will
continue to bear, a legend to substantially the following effect:
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE,
AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER THE ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE 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 XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
[With respect to Class I Certificates:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS OF THE CODE.]
[With respect to Class R Certificates:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE SALE AND
SERVICING AGREEMENT AND THE TRUST AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT
AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE UNDERSIGNED OWNER
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1997, ALL
PARTNERS OF CERTAIN ELECTING PARTNERSHIPS HAVING 100 OR MORE PARTNERS ("ELECTING
LARGE PARTNERSHIPS") HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS
DISQUALIFIED ORGANIZATIONS FOR PURPOSES OF THE TAX IMPOSED ON PASS-THROUGH
ENTITIES UNDER SECTION 860E(E)(6) OF THE CODE. HOWEVER, THE ELECTING LARGE
PARTNERSHIP WOULD BE ENTITLED TO EXCLUDE EXCESS INCLUSION INCOME FROM GROSS
INCOME FOR PURPOSES OF DETERMINING THE TAXABLE INCOME OF ITS PARTNERS.
THIS TRUST CERTIFICATE HAS NO PRINCIPAL BALANCE.]
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which it has reasonable grounds to believe and does believe can make
representations with respect to itself to substantially the same effect as the
representations set forth herein.
Terms not otherwise defined shall have the meanings assigned to them in
the Trust Agreement.
Very truly yours,
---------------------------
By:
------------------------
(Authorized Officer)
EXHIBIT D
FORM OF TRANSFEREE AFFIDAVIT
STATE OF )
) : ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is a of , the proposed transferee (the
"Transferee") of ____% Percentage Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Trust Agreement (the "Agreement"), dated
as of May 31, 1999, between The Money Store Commercial Mortgage Inc. (the
"Seller") and Chase Manhattan Bank Delaware, as Owner Trustee (the "Owner
Trustee"), pursuant to which The Money Store Business Loan Backed Trust 1999-1
(the "Trust") was formed and the Trust issued its Class I, Class II, and Class R
Certificates. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the transfer, a Permitted Transferee. The Transferee is acquiring its
Percentage Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is a record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of the Agreement and the
restrictive legends contained on the face of the Certificate (which are
incorporated herein by reference) and understands the legal consequences of the
acquisition of a Percentage Interest in the Certificate including, without
limitation, the restrictions on subsequent transfers and the provisions
regarding voiding the transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to transfer any or all of its Percentage
Interest in the Certificate, and in connection with any transfer by a Person for
whom the Transferee is acting as nominee, trustee or agent, and the Transferee
will not transfer its Percentage Interest or cause any Percentage Interest to be
transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate (a "Transferor
Certificate") to the effect that it has no actual knowledge that the Person to
which the transfer is to be made is not a Permitted Transferee.
7. The Transferee's taxpayer identification number is _______________.
8. Defined terms not defined herein have the meanings ascribed thereto
in the Agreement.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer, this ________________ day of ____, [19___] [20___].
-----------------------------
[Name of Transferee]
By:
-------------------------
Name:
Title:
STATE OF )
) : ss:
COUNTY OF )
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ______, _____.
NOTARY PUBLIC
My Commission expires:___________________________