EXHIBIT 3.3
TRUST AGREEMENT
dated as of September 1, 2001
by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
ABFS 2001-3, INC.,
as Unaffiliated Seller,
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
as Owner Trustee
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Capitalized Terms...........................................................................1
Section 1.02. Other Definitional Provisions...............................................................4
ARTICLE II ORGANIZATION...........................................................................................5
Section 2.01. Name........................................................................................5
Section 2.02. Office......................................................................................5
Section 2.03. Purposes and Powers.........................................................................5
Section 2.04. Appointment of Owner Trustee................................................................6
Section 2.05. Initial Capital Contribution of Owner Trust Estate..........................................6
Section 2.06. Declaration of Trust........................................................................6
Section 2.07. Liability of the Holders....................................................................7
Section 2.08. Title to Trust Property.....................................................................7
Section 2.09. Situs of Trust..............................................................................7
Section 2.10. Representations and Warranties of the Unaffiliated Seller and the Depositor;
Covenant of the Certificateholders........................................................7
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS................................................................9
Section 3.01. Initial Ownership...........................................................................9
Section 3.02. The Certificates............................................................................9
Section 3.03. Execution, Authentication and Delivery of Trust Certificates...............................10
Section 3.04. Registration of Transfer and Exchange of Trust Certificates................................10
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates..........................................11
Section 3.06. Persons Deemed Owners......................................................................11
Section 3.07. Access to List of Holders' Names and Addresses.............................................12
Section 3.08. Maintenance of Office or Agency............................................................12
Section 3.09. Restrictions on Transfer of Certificates...................................................12
ARTICLE IV ACTIONS BY OWNER TRUSTEE..............................................................................14
Section 4.01. Prior Notice to Holders with Respect to Certain Matters....................................14
Section 4.02. Action by Holders with Respect to Bankruptcy...............................................16
Section 4.03. Restrictions on Holders' Power.............................................................16
Section 4.04. Majority Control...........................................................................16
ARTICLE V TAX PROVISIONS; CERTAIN DUTIES.........................................................................16
Section 5.01. Federal Income Tax Provisions..............................................................16
Section 5.02. Withholding Taxes..........................................................................17
Section 5.03. Accounting and Records to the Noteholders, Owners, the Internal Revenue Service and
Others...................................................................................17
Section 5.04. Signature on Returns.......................................................................18
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ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE.................................................................18
Section 6.01. General Authority..........................................................................18
Section 6.02. General Duties.............................................................................18
Section 6.03. Action upon Instruction....................................................................19
Section 6.04. No Duties Except as Specified in this Agreement, the Basic Documents or any
Instructions.............................................................................20
Section 6.05. No Action Except Under Specified Documents or Instructions.................................20
Section 6.06. Restrictions...............................................................................20
ARTICLE VII CONCERNING THE OWNER TRUSTEE.........................................................................20
Section 7.01. Acceptance of Trusts and Duties............................................................20
Section 7.02. Furnishing of Documents....................................................................22
Section 7.03. Representations and Warranties.............................................................22
Section 7.04. Reliance; Advice of Counsel................................................................23
Section 7.05. Not Acting in Individual Capacity..........................................................23
Section 7.06. Owner Trustee Not Liable for Certificates or Mortgage Loans................................23
Section 7.07. Owner Trustee May Own Certificates and Notes...............................................24
Section 7.08. Licenses...................................................................................24
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE.......................................................................24
Section 8.01. Owner Trustee's Fees and Expenses..........................................................24
Section 8.02. Indemnification............................................................................24
Section 8.03. Payments to the Owner Trustee..............................................................25
ARTICLE IX TERMINATION OF TRUST AGREEMENT........................................................................25
Section 9.01. Termination of Trust Agreement.............................................................25
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES.................................................26
Section 10.01. Eligibility Requirements for Owner Trustee.................................................26
Section 10.02. Resignation or Removal of Owner Trustee....................................................27
Section 10.03. Successor Owner Trustee....................................................................27
Section 10.04. Merger or Consolidation of Owner Trustee...................................................28
Section 10.05. Appointment of Co-Trustee or Separate Trustee..............................................28
ARTICLE XI MISCELLANEOUS.........................................................................................29
Section 11.01. Supplements and Amendments.................................................................29
Section 11.02. No Legal Title to Owner Trust Estate in Holders............................................31
Section 11.03. Limitations on Rights of Others............................................................31
Section 11.04. Notices....................................................................................31
Section 11.05. Severability...............................................................................31
Section 11.06. Separate Counterparts......................................................................32
Section 11.07. Successors and Assigns.....................................................................32
Section 11.08. No Petition................................................................................32
Section 11.09. No Recourse................................................................................32
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Section 11.10. Headings...................................................................................32
Section 11.11. GOVERNING LAW..............................................................................32
Section 11.12. Grant of Certificateholder Rights to Note Insurer..........................................32
Section 11.13. Third-Party Beneficiary....................................................................33
Section 11.14. Suspension and Termination of Note Insurer's Rights........................................33
Section 11.15. Servicer...................................................................................33
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Investment Letter
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This TRUST AGREEMENT, dated as of September 1, 2001, by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., as depositor (the "Depositor"), ABFS
2001-3, INC., a Delaware corporation, as unaffiliated seller (the
"Unaffiliated Seller"), and FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a
national banking association, as owner trustee (the "Owner Trustee").
ARTICLE I
DEFINITIONS
Section 1.01. 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 may be amended and
supplemented from time to time.
"Authorized Officer" shall have the meaning assigned thereto in
Appendix I to the Indenture.
"Basic Documents" shall mean this Agreement, the Sale and Servicing
Agreement, the Unaffiliated Seller's Agreement, the Indenture, the
Indemnification Agreement, and the Insurance Agreement.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day that is either a legal holiday or a day on which the Note
Insurer or banking institutions in the State of New York, State of Texas, the
State of Delaware, the State of Pennsylvania, the State of New Jersey, or the
state in which the Indenture Trustee's office from which payments will be made
to Certificateholders, are authorized or obligated by law, regulation or
executive order to be closed.
"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" shall mean a certificate evidencing the beneficial
interest of a Holder in the Trust, substantially in the form attached hereto
as Exhibit A.
"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 and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a
Certificate or Certificates is registered.
"Class" shall mean the Class A Notes.
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"Class A Notes" shall mean the ABFS Mortgage Loan Trust 2001-3,
Mortgage Backed Notes, Series 2001-3, Class A.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and, where appropriate in context, Treasury Regulations promulgated
thereunder.
"Collateral Agent" shall mean The Chase Manhattan Bank, a New York
banking corporation.
"Collection Account" shall have the meaning assigned thereto in
Appendix I to the Indenture.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
One ▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration; or at such other address in the
State of Delaware as the Owner Trustee may designate by notice to the
Certificateholders and the Unaffiliated Seller, or the principal corporate
trust office of any successor Owner Trustee (the address (which shall be in
the State of Delaware) of which the successor owner trustee will notify the
Certificateholders and the Unaffiliated Seller).
"Depositor" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware
corporation.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning assigned to such term in Section
8.02.
"Indenture" shall mean the Indenture, dated as of September 1, 2001,
by and between the Trust and the Indenture Trustee.
"Indenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as Indenture Trustee under the Indenture.
"Insurance Agreement" means the Insurance and Reimbursement
Agreement, dated as of September 26, 2001, among the Note Insurer, the
Indenture Trustee, the Trust, the Depositor, the Servicer, the Unaffiliated
Seller and the Originators.
"Investment Letter" shall have the meaning assigned to such term in
Section 3.04.
"Non-U.S. Person" shall mean any other person other than (i) a
citizen or resident of the United States; (ii) a corporation, partnership or
other entity created or organized in, or under the laws of, the United States
or any state thereof (including for this purpose the District of Columbia);
(iii) an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within
the United States; or (iv) a trust if a court within the United
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States can exercise primary jurisdiction over its administration and at least
one United States Person has the authority to control all substantial
decisions of the trust. Notwithstanding the last clause of the preceding
sentence, to the extent provided in Treasury regulations, certain trusts in
existence on August 20, 1996, and treated as U.S. Persons prior to such date,
may elect to continue to be U.S. Persons.
"Note Insurer" shall mean MBIA Insurance Corporation, a New York
stock insurance company.
"Note Insurer Default" shall have the meaning assigned thereto in
Appendix I to the Indenture.
"Notes" shall mean the Class A Notes.
"Originators" means American Business Credit, Inc., a Pennsylvania
corporation, HomeAmerican Credit, Inc. d/b/a Upland Mortgage, a Pennsylvania
corporation, and American Business Mortgage Services, Inc., a New Jersey
corporation.
"Ownership Interest" means, with respect to any Certificate, any
ownership or security interest in such Certificate, including any interest in
such Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
"Owner Trust Estate" shall mean the Trust Estate (as defined in
Appendix I to the Indenture), including the contribution of $1000 referred to
in Section 2.05 hereof.
"Owner Trustee" shall mean First Union Trust Company, National
Association, a national banking association, not in its individual capacity
but solely as owner trustee under this Agreement, and any successor owner
trustee hereunder.
"Payment Date" shall mean the fifteenth day of each month or, if
such fifteenth day is not a Business Day, the next succeeding Business Day,
commencing October 15, 2001.
"Percentage Interest" shall mean with respect to any Certificate,
the percentage portion of all of the Trust Interest evidenced thereby as
stated on the face of such Certificate.
"Policy" shall mean the financial guaranty insurance policy issued
by the Note Insurer for the benefit of the holders of the Notes.
"Prospective Holder" shall have the meaning set forth in Section
3.09(a).
"Rating Agency Condition" means, with respect to any action to which
a Rating Agency Condition applies, that each Rating Agency shall have been
given ten (10) days (or such shorter period as is acceptable to each Rating
Agency) prior notice thereof and that each of the Rating Agencies shall have
notified the Indenture Trustee, the Unaffiliated Seller, the Servicer, the
Note Insurer, the Owner Trustee and the Trust in writing that such action will
not result in a reduction or withdrawal of the then current "implied" rating
of the Notes that it maintains without taking into account the Policy.
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"Record Date" shall mean, with respect to the Certificates and any
Payment Date, the last Business Day of the month immediately preceding the
month in which such Payment Date occurs.
"REMIC" means a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of September 1, 2001, among the Depositor, the Trust, the
Indenture Trustee, the Collateral Agent and the Servicer.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Servicer" means American Business Credit, Inc., a Pennsylvania
corporation.
"Transfer" means any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"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 ABFS Mortgage Loan Trust 2001-3 established
by this Agreement.
"Trust Interest" shall mean the right to receive, on each Payment
Date, distributions of the amounts, if any, to the Holders of the Certificates
pursuant to Section 8.02 of the Indenture. Holders of the Certificates will be
entitled to distributions of the Trust.
"Unaffiliated Seller" shall mean ABFS 2001-3, Inc., a Delaware
corporation.
"Unaffiliated Seller's Agreement" means the Unaffiliated Seller's
Agreement, dated as of September 1, 2001, among the Originators, the
Unaffiliated Seller and the Depositor.
Section 1.02. Other Definitional Provisions. (a) Capitalized
terms used herein and not otherwise defined herein have the meanings assigned
to them in Appendix I to the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the
4
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
ORGANIZATION
Section 2.01. Name. The Trust governed hereby shall be known as
"ABFS Mortgage Loan Trust 2001-3," in which name the Owner Trustee may conduct
the business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued on behalf of the Trust.
Section 2.02. Office. The office of the Trust shall be in care of
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the
Certificateholders, the Indenture Trustee, the Note Insurer and the
Unaffiliated Seller.
Section 2.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(a) to issue the Notes pursuant to the Indenture and to sell such
Notes;
(b) with the proceeds of the sale of the Notes, to pay the
organizational, startup and transactional expenses of the Trust and to
purchase the Mortgage Loans to be included in the Owner Trust Estate from the
Depositor with the balance of such funds pursuant to the Sale and Servicing
Agreement;
(c) to assign, grant, transfer, pledge, mortgage and convey the
Owner Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the
5
Certificateholders any portion of the Owner Trust Estate released from the
lien of, and remitted to the Trust pursuant to, the Indenture;
(d) to enter into and perform its obligations under the Basic
Documents to which it is or is to be a party;
(e) 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;
(f) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation of
the Owner Trust Estate and the making of distributions and payments to the
Holders and the Noteholders; and
(g) to issue the Certificates pursuant to this Agreement.
The Trust is hereby authorized by the initial beneficiary and the
Certificateholders 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 other
Basic Documents.
Section 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust Estate.
The Unaffiliated Seller hereby sells, assigns, transfers, conveys and sets
over to the Owner Trustee, as of the date hereof, the sum of $1,000. The Owner
Trustee hereby acknowledges receipt in trust from the Unaffiliated Seller, as
of the date hereof, of the foregoing contribution, which shall constitute the
initial Owner Trust Estate. The Certificateholders shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the
Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid
by the Owner Trustee. Concurrently with the execution of this Agreement, the
Trust will enter into the Sale and Servicing Agreement pursuant to which it
will purchase the Mortgage Loans which comprise the remainder of the Owner
Trust Estate.
Section 2.06. 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 initial
beneficiary and the Holders, subject to the obligations of the Trust under the
Basic Documents.
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. The parties agree
that no election will be made to treat the Trust or the portion of the Owner
Trust Estate consisting of the Mortgage Loan Pool as a REMIC. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, after issuance of the Certificates, the Trust shall be treated as an
investment trust of the type described in Treasury Regulation ss.
301.7701-4(c) that is classified as a trust for federal income tax purposes (a
6
"Grantor Trust"). Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.
Section 2.07. Liability of the Holders. Subject to Section 2.05, no
Holder shall have any personal liability for any liability or obligation of
the Trust. The Certificates shall be fully paid and nonassessable.
Section 2.08. Title to Trust Property. (a) Legal title to all of
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 and/or a
separate trustee, as the case may be.
(b) Neither the initial beneficiary nor the Certificateholders shall
have legal title to any part of the Owner Trust Estate. No transfer by
operation of law or otherwise of any interest of the Certificateholders shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of any part of the Owner
Trust Estate.
Section 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All accounts maintained at a bank by
the Owner Trustee or the Indenture Trustee on behalf of the Trust shall be
located in the State of Delaware, the State of New York or the State of
Pennsylvania. The Trust shall not have any employees; provided, however,
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. The only office of the
Trust will be at the Corporate Trust Office in the State of Delaware.
Section 2.10. Representations and Warranties of the Unaffiliated
Seller and the Depositor; Covenant of the Certificateholders(a) . (a) The
Unaffiliated Seller hereby represents and warrants to the Owner Trustee and
the Note Insurer that:
(i) The Unaffiliated Seller is duly organized and validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are currently owned
and such business is presently conducted.
(ii) The Unaffiliated Seller has the power and authority
to execute and deliver this Agreement and to carry out its terms;
the Unaffiliated Seller has full power and authority to transfer and
assign the property to be transferred and assigned to and deposited
with the Trust and the Unaffiliated Seller has duly authorized such
transfer and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Unaffiliated Seller
by all necessary corporate action.
(iii) 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
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the terms and provisions of, or constitute (with or without notice
or lapse of time) a default under, the certificate of incorporation
or by-laws of the Unaffiliated Seller, or any indenture, agreement
or other instrument to which the Unaffiliated Seller 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 the
Unaffiliated Seller's knowledge, any order, rule or regulation
applicable to the Unaffiliated Seller of any court or of any Federal
or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Unaffiliated Seller or its properties.
(iv) There are no proceedings or investigations pending or
notice of which has been received in writing before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Unaffiliated Seller or
its properties: (x) asserting the invalidity of this Agreement, (y)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (z) seeking any determination or
ruling that should reasonably be expected to materially and
adversely affect the performance by the Unaffiliated Seller of its
obligations under, or the validity or enforceability of, this
Agreement.
(v) The representations and warranties of the Unaffiliated
Seller in Article III of the Unaffiliated Seller's Agreement are
true and correct.
(vi) The Unaffiliated Seller has duly executed and
delivered this Agreement, and this Agreement constitutes the legal,
valid and binding obligation of the Unaffiliated Seller, enforceable
against the Unaffiliated Seller, in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the application of
equitable principles.
(b) The Depositor hereby represents and warrants to the Owner
Trustee and the Note Insurer that:
(i) The Depositor is duly organized and validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) The Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms; the Depositor
has full power and authority to transfer and assign the property to
be transferred and assigned to and deposited with the Trust and the
Depositor has duly authorized such transfer and assignment and
deposit to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary corporate action.
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(iii) 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, the certificate of incorporation or by-laws
of the Depositor, or any indenture, agreement or other instrument to
which the Depositor 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 the Depositor's knowledge, any order,
rule or regulation applicable to the Depositor of any court or of
any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor
or its properties.
(iv) There are no proceedings or investigations pending or
notice of which has been received in writing before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties: (x) asserting the invalidity of this Agreement, (y)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (z) seeking any determination or
ruling that should reasonably be expected to materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement.
(v) The representations and warranties of the Depositor in
Article III of the Unaffiliated Seller's Agreement are true and
correct.
(vi) The Depositor has duly executed and delivered this
Agreement, and this Agreement constitutes the legal, valid and
binding obligation of the Depositor, enforceable against the
Depositor, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by the application of equitable principles.
(c) Each Certificateholder covenants with the Owner Trustee and the
Note Insurer that during the continuance of this Agreement, and while it holds
Certificates, it will comply in all respects with the provisions of its
governing instruments in effect from time to time.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership. Upon the formation of the Trust by
the contribution by the Unaffiliated Seller pursuant to Section 2.05 and the
filing of the Certificate of Trust with the Secretary of State and until the
issuance of the Certificates, the Unaffiliated Seller shall be the sole
beneficiary of the Trust.
Section 3.02. The Certificates. The Certificates shall be issued
without a principal amount and shall together evidence the entire beneficial
ownership interest in the Trust.
9
The Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Owner Trustee, as
evidenced by its execution thereof. The Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of an Authorized Officer
of the Owner Trustee. 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 valid,
notwithstanding that such individuals or any of them shall have ceased to be
so authorized prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of authentication and delivery of such
Certificates.
A transferee of a Certificate shall become a Certificateholder, and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.04.
Section 3.03. Execution, Authentication and Delivery of Trust
Certificates. Concurrently with the initial transfer of the Mortgage Loans to
the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee
shall cause the Certificates, representing 100% of the Percentage Interests of
the Trust Interest, to be executed on behalf of the Trust, authenticated and
delivered, at the direction of the Depositor, to the Unaffiliated Seller as
initial Certificateholder. No Certificate shall entitle its holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Certificate a certificate of authentication substantially
in the form set forth in Exhibit A, executed by the Owner Trustee or the Owner
Trustee's authenticating agent, by manual or facsimile signature; such
authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.
Section 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and
of transfers and exchanges of Certificates as herein provided. The Owner
Trustee shall be the initial "Certificate Registrar".
Upon surrender for registration of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.08, the Owner Trustee,
at the written direction of the Depositor and upon the prior written consent
of the Note Insurer as required by Section 3.09(c), shall execute,
authenticate and deliver (or shall cause its authenticating agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates of a like Percentage Interest dated
the date of authentication by the Owner Trustee or any authenticating agent.
At the option of a Certificateholder, Certificates may be exchanged for other
Certificates of a like Percentage Interest upon surrender of the Certificates
to be exchanged at the office or agency maintained pursuant to Section 3.08.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form, attached to the form of Certificate attached hereto as Exhibit A, or
such other form satisfactory to the Note Insurer, or, upon the occurrence and
continuation of a Note Insurer Default, satisfaction of the Rating Agency
Condition, duly executed by the Certificateholder or his attorney duly
authorized in
10
writing. In addition, each Certificate presented or surrendered for
registration of transfer and exchange must be accompanied by a representation
letter (an "Investment Letter") from the Prospective Holder, in the form of
Exhibit C hereto, certifying as to the representations set forth in Section
3.09(a), (b) and (c). Each Certificate surrendered for registration of
transfer or exchange shall be canceled and 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 Certificates, but the Owner Trustee or the Certificate Registrar
may 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
Certificates.
The preceding provisions of this Section 3.04 notwithstanding, the
Certificate Registrar shall not register transfers or exchanges of
Certificates for a period of fifteen (15) days preceding the Payment Date with
respect to the Certificates.
Notwithstanding anything contained herein to the contrary, neither
the Certificate Registrar nor the Owner Trustee shall be responsible for
ascertaining whether any transfer complies with the registration provisions or
exemptions from the Securities Act of 1933, as amended, the Securities Act of
1934, as amended, applicable state securities law or the Investment Company
Act of 1940, as amended; provided, however, that if an Investment Letter is
specifically required to be delivered to the Owner Trustee by a purchaser or
transferee of a Certificate, the Owner Trustee shall be under a duty to
examine the same to determine whether it conforms to the form of Investment
Letter set forth as Exhibit C hereto and shall promptly notify the party
delivering the same if such Investment Letter does not so conform.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated 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 Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee, or the Owner Trustee's authenticating
agent, shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Percentage Interest. In connection with the issuance of any new Certificate
under this Section 3.05, the Owner Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of
ownership in the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Each 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
Certificate for registration of transfer, the Owner Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be
registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving
11
distributions pursuant to Section 5.02 and for all other purposes whatsoever,
and neither the Owner Trustee nor the Certificate Registrar shall be bound by
any notice to the contrary.
Section 3.07. Access to List of Holders' Names and Addresses. The
Certificate Registrar shall furnish or cause to be furnished to the Owner
Trustee, the Servicer, the Unaffiliated Seller and the Indenture Trustee
immediately prior to each Payment Date, a list of the names and addresses of
the Certificateholders as of the most recent Record Date. If one or more
Holders of Certificates, together evidencing Percentage Interests totaling not
less than 25%, apply in writing to the Certificate Registrar, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the 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 (5) Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Certificateholder, by receiving and
holding a Certificate, shall be deemed to have agreed not to hold any of the
Unaffiliated Seller, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 3.08. Maintenance of Office or Agency. The Owner Trustee
shall maintain an office or offices or agency or agencies where notices and
demands to or upon the Owner Trustee in respect of the Basic Documents may be
served, and so long as the Owner Trustee is the Certificate Registrar, where
Certificates may be surrendered for registration of transfer or exchange and
notices and demands to or upon the Certificate Registrar in respect of the
Certificates, may be served. The Owner Trustee initially designates the
Corporate Trust Office as its principal corporate trust office for such
purposes. The Owner Trustee shall give prompt written notice to the
Unaffiliated Seller and to the Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
Section 3.09. Restrictions on Transfer of Certificates. (a) Each
prospective purchaser and any subsequent transferee of a Certificate (each, a
"Prospective Holder"), other than the Unaffiliated Seller, shall represent and
warrant, in writing, to the Owner Trustee and the Certificate Registrar and
any of their respective successors that:
(i) Such Person is (A) a "qualified institutional buyer"
as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and is aware that the seller of the
Certificate may be relying on the exemption from the registration
requirements of the Securities Act provided by Rule 144A and is
acquiring such Certificate for its own account or for the account of
one or more qualified institutional buyers for whom it is authorized
to act, or (B) a Person involved in the organization or operation of
the Trust or an affiliate of such Person within the meaning of Rule
3a-7 of the Investment Company Act of 1940, as amended (including,
but not limited to, the Unaffiliated Seller).
(ii) Such Person understands that the Certificates have
not been and will not be registered under the Securities Act and may
be offered, sold, pledged or otherwise transferred only to a person
whom the seller reasonably believes is (A) a qualified institutional
buyer or (B) a Person involved in the organization or operation of
the Trust
12
or an affiliate of such Person, in a transaction meeting the
requirements of Rule 144A under the Securities Act and in accordance
with any applicable securities laws of any state of the United
States.
(iii) Such Person understands that the Certificates bear a
legend to the following effect:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED
OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY
TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE ACT, IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT PURSUANT TO RULE 144A OR (II) A PERSON
INVOLVED IN THE ORGANIZATION OR OPERATION OF THE
TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3a-7 OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT
NOT LIMITED TO, ABFS 2001-3, INC.) IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO
REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY
STATE SECURITIES LAWS."
(b) By its acceptance of a Certificate, each Prospective Holder
agrees and acknowledges that no legal or beneficial interest in all or any
portion of any Certificate may be transferred directly or indirectly to an
entity that holds residual securities as nominee to facilitate the clearance
and settlement of such securities through electronic book-entry changes in
accounts of participating organizations (a "Book-Entry Nominee") and any such
purported transfer shall be void and have no effect.
(c) No transfer of a Certificate or any beneficial interest therein
shall be made to any person unless the Note Insurer has given its prior
written consent to such transfer (or, upon the occurrence and continuance of a
Note Insurer Default, satisfaction of the Rating Agency Condition) and the
Owner Trustee has received a representation letter from the Transferee to the
effect that such transferee (i) is not a person which is an employee benefit
plan, trust or account subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Code or a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law which is, to a material extent, similar to the
foregoing provisions of ERISA or the Code (any such person being a "Plan"),
(ii) is not an
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entity, including an insurance company separate account or general account,
whose underlying assets include "plan assets" by reason of a Plan's investment
in the entity and (iii) is not directly or indirectly purchasing such
Certificate or interest therein on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with the assets of a Plan.
(d) The Owner Trustee shall not execute, and shall not countersign
and deliver, a Certificate in connection with any transfer thereof unless the
transferor shall have provided to the Owner Trustee an Investment Letter,
signed by the transferee, which certificate shall contain the consent of the
transferee to any amendments of this Agreement as may be required to
effectuate further the foregoing restrictions on transfer of the Certificates
to Book-Entry Nominees, and an agreement by the transferee that it will not
transfer a Certificate without providing to the Owner Trustee an Investment
Letter.
(e) The Certificates shall bear an additional legend referring to
the restrictions contained in paragraph (b) above.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Holders with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not
take action (and the Certificateholders shall not direct the Owner Trustee to
take any action) unless at least thirty (30) days before the taking of such
action, the Owner Trustee shall have notified the Certificateholders (unless
the Certificateholders have directed the Owner Trustee to take action) and the
Note Insurer in writing of the proposed action and neither the
Certificateholders nor the Note Insurer shall have notified the Owner Trustee
in writing prior to the 30th day after such notice is given that such
Certificateholders and/or the Note Insurer have withheld consent or the
Certificateholders have provided alternative written direction (any direction
by the Certificateholders shall require the prior written consent of the Note
Insurer):
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection
of the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Mortgage
Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment or other change to this Agreement or any
Basic Document in circumstances where the consent of any Holder is
required; provided, that notwithstanding this Section 4.01, the
prior written consent of the Note Insurer must be obtained for any
amendment or change to this Agreement or any other Basic Document;
(d) the amendment or other change to this Agreement or any
other Basic Document in circumstances where the consent of any
Holder or the Note Insurer is not
14
required and such amendment materially adversely affects the
interest of the Certificateholders;
(e) the appointment pursuant to the Indenture of a
successor Note Registrar, or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Registrar or the consent to the
assignment by the Note Registrar or Indenture Trustee or Certificate
Registrar of their respective obligations under the Indenture or
this Agreement, as applicable;
(f) the consent to the waiver of any default of any Basic
Document;
(g) the consent to the assignment by the Indenture Trustee
or Servicer of their respective obligations under any Basic
Document;
(h) except as provided in Article IX hereof, dissolve,
terminate or liquidate the Trust in whole or in part;
(i) 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;
(j) cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement or the other
Basic Documents;
(k) do any act which would make it impossible to carry on
the ordinary business of the Trust as described in Section 2.03
hereof;
(l) confess a judgment against the Trust;
(m) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(n) cause the Trust to lend any funds to any entity; or
(o) change the Trust's purpose and powers from those set
forth in this Trust Agreement.
In addition 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 Servicer, on
behalf of the Trust, shall maintain appropriate minutes or other records of
all appropriate action. The Trust shall maintain its office separate from the
offices of the Unaffiliated Seller and the Servicer.
Notwithstanding the other provisions of this Section 4.01, the Owner
Trustee shall not have the power, except upon the written direction of all of
the Certificateholders with the prior written consent of the Note Insurer, and
to the extent otherwise consistent with the Basic
15
Documents, to (i) remove or replace the Servicer or the Indenture Trustee,
(ii) institute proceedings to have the Trust declared or adjudicated bankrupt
or insolvent, (iii) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (iv) 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, (v) 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,
(vi) make any assignment for the benefit of the Trust's creditors, (vii) cause
the Trust to admit in writing its inability to pay its debts generally as they
become due, (viii) take any action, or cause the Trust to take any action, in
furtherance of any of the foregoing (any of the above, a "Bankruptcy Action").
So long as the Indenture and the Insurance Agreement remain in effect and no
Note Insurer Default exists, no Certificateholder shall have the power to
take, and shall not take, any Bankruptcy Action with respect to the Trust or
direct the Owner Trustee to take any Bankruptcy Action with respect to the
Trust.
Section 4.02. Action by Holders with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior written direction
of all Certificateholders and the prior written consent of the Note Insurer
and the delivery to the Owner Trustee by a "Big Five" accounting firm of a
certification that such accounting firm reasonably believes that the Trust is
insolvent.
Section 4.03. Restrictions on Holders' Power. The Certificateholders
shall not direct the Owner Trustee to take or refrain from taking any action
if such action or inaction would be contrary to any obligation of the Trust or
the Owner Trustee under this Agreement or any of the other Basic Documents or
would be contrary to Section 2.03 nor shall the Owner Trustee be obligated to
follow any such direction, if given.
Section 4.04. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement
may be taken by the Holders of Certificates evidencing more than 50% of the
Percentage Interest in each of the Trust Interests and such action shall be
binding upon all Certificateholders. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by Holders of Certificates evidencing more than
50% of the Percentage Interest in each of the Trust Interests at the time of
the delivery of such notice and such action shall be binding upon all
Certificateholders.
ARTICLE V
TAX PROVISIONS; CERTAIN DUTIES
Section 5.01. Federal Income Tax Provisions. The Owner Trustee shall
treat the Trust as a Grantor Trust. Moreover, each person who acquires an
Ownership Interest in any Certificate is deemed to agree to the treatment of
the Trust as a Grantor Trust by virtue of the acquisition of such Ownership
Interest. If at any time there is more than one Certificateholder, all items
of income, gain, deduction, and loss shall be allocated among the
Certificateholders in accordance with their Percentage Interests.
16
Section 5.02. Withholding Taxes. In the event that any withholding
tax is imposed under federal, state, or local law on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the
amount otherwise distributable to such Certificateholder in accordance with
this Section 5.02. The Indenture Trustee, on behalf of the Owner Trustee, is
hereby authorized and directed to retain in the Payment Account 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 Indenture Trustee 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 Certificate Registrar will
provide the Indenture Trustee with a statement indicating the amount of any
such withholding tax. 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 Indenture Trustee and
remitted to the appropriate taxing authority from the Payment Account at the
direction of the Indenture Trustee, on behalf of the Owner Trustee. If there
is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a Certificateholder who is a Non-U.S.
Person), the Indenture Trustee may in its sole discretion withhold such
amounts in accordance with this paragraph. In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax,
the Owner Trustee and the Indenture Trustee shall reasonably cooperate with
such Certificateholder in making such claim so long as such Certificateholder
agrees in writing to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
Any Holder which is organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date such Holder becomes a
Holder, (a) so notify the Owner Trustee and the Indenture Trustee, on behalf
of the Trust, (b) (i) provide the Owner Trustee and the Indenture Trustee, on
behalf of the Trust, with Internal Revenue Service Form ▇-▇-▇▇▇, ▇-▇▇▇▇,
W-8EXP, as appropriate, or (ii) notify the Owner Trustee and the Indenture
Trustee, on behalf of the Trust, that it is not entitled to an exemption from
United States withholding tax or a reduction in the rate thereof on payments
of interest. Any such Holder agrees by its acceptance of a Certificate, on an
ongoing basis, to provide like certification for each taxable year and to
notify the Owner Trustee and the Indenture Trustee, on behalf of the Trust,
should subsequent circumstances arise affecting the information provided. The
Trust, the Owner Trustee and the Indenture Trustee shall be fully protected in
relying upon, and each Holder by its acceptance of a Certificate hereunder
agrees to indemnify and hold the Trust, the Owner Trustee and the Indenture
Trustee harmless against all claims or liability of any kind arising in
connection with or related to their reliance upon any documents, forms or
information provided by any Holder. In addition, if the Indenture Trustee has
not withheld taxes on any payment made to any Holder, and the Indenture
Trustee is subsequently required to remit to any taxing authority any such
amount not withheld, such Holder shall return such amount to the Indenture
Trustee upon written demand by the Indenture Trustee. Neither the Owner
Trustee nor the Indenture Trustee shall be liable for damages to any Holder
due to a violation of the Code unless and only to the extent such liability is
caused by the Owner Trustee's or the Indenture Trustee's failure to act in
accordance with its standard of care under this Agreement.
Section 5.03. Accounting and Records to the Noteholders, Owners, the
Internal Revenue Service and Others. The Unaffiliated Seller shall (i)
maintain (or cause to be maintained) the books of the Trust on a June 30
fiscal year basis on the accrual method of
17
accounting, including, without limitation, the allocations under Section 5.01,
(ii) deliver (or cause to be delivered) to each Holder, as may be required by
the Code and applicable Treasury Regulations, such information as may be
required (including Schedule K-1, if applicable) to enable each Holder to
prepare its Federal and state income tax returns and (iii) file or cause to be
filed, if necessary, such tax returns relating to the Trust (including a U.S.
Income Tax Return for Estates and Trusts Form 1041), and direct the Owner
Trustee or the Servicer, as the case may be, in writing to make such elections
as may from time to time be required or appropriate under any applicable state
or Federal statute or rule or regulation thereunder so as to maintain the
Trust's characterization as a Grantor Trust for Federal income tax purposes.
The Owner Trustee or the Servicer, as the case may be, shall make all
elections pursuant to this Section 5.03 as directed in writing by the
Unaffiliated Seller. An Authorized Officer of the Trust shall sign all tax
information returns, if any, filed pursuant to this Section 5.03 and any other
returns as may be required by law, and in doing so shall rely entirely upon,
and shall have no liability for information provided by, or calculations
provided by, the Unaffiliated Seller or the Servicer.
Section 5.04. Signature on Returns. The Owner Trustee shall sign, on
behalf of the Trust, the tax returns of the Trust, as directed in writing by
the Unaffiliated Seller.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the
Notes, the Certificates and the Basic Documents to which the Trust is to be a
party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and
any amendment or other agreement or instrument described in Article III, in
each case, as the Unaffiliated Seller shall approve, as evidenced conclusively
by the Owner Trustee's execution thereof. In addition, the Owner Trustee is
authorized and directed, on behalf of the Trust, to execute and deliver to the
Authenticating Agent and the Indenture Trustee the Trust Request and the Trust
Orders referred to in Section 2.11 of the Indenture to execute the Indenture,
the Sale and Servicing Agreement, the Insurance Agreement, any other documents
contemplated thereby and to authenticate and deliver Class A Notes in the
Original Aggregate Principal Balance of $306,000,000. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust, pursuant to the Basic Documents.
Section 6.02. General Duties. (a) It shall be the duty of the
Owner Trustee:
(i) to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the
Basic Documents to which the Trust is a party and to administer the
Trust in the interest of the initial beneficiary and the
Certificateholders, subject to the Basic Documents and in accordance
with the provisions of this Agreement; and
(ii) to obtain and preserve the Trust's qualification to
do business in the State of Delaware.
18
(b) The Owner Trustee shall not be responsible for taking any action
on behalf of the Trust under any Basic Document unless specifically directed
in writing to do so in accordance with Section 6.03 of this Agreement.
(c) The Owner Trustee shall not be responsible for any matter
regarding the Securities Act, the Exchange Act or the Investment Company Act
of 1940, as amended, or the rules or regulations thereunder.
Section 6.03. Action upon Instruction. (a) Subject to Article IV
hereof, and in accordance with the terms of the Basic Documents, the
Certificateholders may by written instruction direct the Owner Trustee in the
management of the Trust but only to the extent consistent with the limited
purpose of the Trust. Such direction may be exercised at anytime by written
instruction of the Certificateholders pursuant to Article IV hereof. Without
limiting the generality of the foregoing, the Owner Trustee shall act as
directed in writing by the Certificateholders in connection with Note
redemptions requested by the Certificateholders, and shall take all actions
and deliver all documents that the Trust is required to take and deliver in
accordance with Section 4.01 and Article X of the Indenture in order to effect
any redemption requested by the Certificateholders.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other 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 other Basic Document or is otherwise
contrary to law.
(c) Subject to Article IV hereof, whenever the Owner Trustee is
unable to decide between alternative courses of action permitted or required
by the terms of this Agreement or under any other Basic Document, the Owner
Trustee shall promptly give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders and the Note Insurer requesting
instruction from the Certificateholders 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 Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten (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,
not inconsistent with this Agreement or the Basic Documents, 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) Subject to Article IV hereof, in the event that the Owner
Trustee is unsure as to the application of any provision of this Agreement or
any other 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 requesting instruction and,
to the extent that the Owner Trustee acts or refrains from acting in good
faith in
19
accordance with any such instruction received, 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 instruction within ten (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, not
inconsistent with this Agreement or the other Basic Documents, 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 6.04. No Duties Except as Specified in this Agreement, the
Basic Documents or any 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,
this Agreement or any document contemplated hereby to which the Trust is a
party, except as expressly provided by the terms of this Agreement, any other
Basic Document or in any document or written instruction received by the Owner
Trustee pursuant to Section 6.03; and no implied duties or obligations shall
be read into this Agreement or any other Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation 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 other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any
liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee in its individual capacity that are not
related to the ownership or the administration of the Owner Trust Estate.
Section 6.05. 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 other
Basic Documents and (iii) in accordance with any document or written
instruction delivered to the Owner Trustee pursuant to Section 6.03.
Section 6.06. Restrictions. Neither the Owner Trustee nor the
Unaffiliated Seller shall take any action (a) that violates or results in a
breach of or is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Unaffiliated Seller
and the Owner Trustee, would result in the Trust's becoming taxable as a
corporation or failure to qualify as a Grantor Trust for Federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee or the
Unaffiliated Seller to take action that would violate the provisions of this
Section 6.06.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01. 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
20
only upon the terms of this Agreement and the other Basic Documents. 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 other Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful breach or misconduct or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee in its
individual capacity. In particular, but not by way of limitation (and subject
to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Unaffiliated Seller, the Certificateholders or
the Note Insurer given in accordance with this Agreement;
(c) no provision of this Agreement or any other Basic
Document shall require the Owner Trustee 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 other Basic Document if
the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the
Basic Documents, including the principal of and interest on the
Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Unaffiliated Seller or the Depositor 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 Certificates, and the Owner
Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any Certificateholder, other than
as expressly provided for herein and in the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Unaffiliated Seller, the Indenture Trustee, the
Collateral Agent, or the Servicer under any of the Basic Documents
or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this
Agreement or the other Basic Documents that are required to be
performed by the Indenture Trustee, the Servicer or the Collateral
Agent;
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any Basic
Document, at the request, order or direction of the Unaffiliated
Seller, any of the
21
Certificateholders or the Note Insurer, unless such
Certificateholders, the Unaffiliated Seller or the Note Insurer have
offered to the Owner Trustee security or indemnity reasonably
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 other Basic Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for other
than its gross negligence or willful breach or misconduct in the
performance of any such act; and
(h) notwithstanding anything contained herein to the
contrary, neither First Union Trust Company, National Association in
its individual capacity nor as 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 (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 any
jurisdiction or any political subdivisions thereof in existence on
the date hereof other than the State of Delaware becoming payable by
First Union Trust Company, National Association; or (iii) subject
First Union Trust Company, National Association 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 First Union Trust Company, National
Association in its individual capacity or as Owner Trustee, as the
case may be, contemplated hereby. The Owner Trustee shall be
entitled to obtain advice of counsel (which advice shall be an
expense of the Servicer) to determine whether any action required to
be taken pursuant to this Agreement or the other Basic Documents
results in the consequences described in clauses (i), (ii) and (iii)
of the preceding sentence. In the event that said counsel advises
the Owner Trustee that such action will result in such consequences,
the Owner Trustee will appoint an additional trustee pursuant to
Section 10.05 hereof to proceed with such action.
Section 7.02. Furnishing of Documents. Subject to Section 3.07, 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. On
behalf of the Owner Trustee, the Unaffiliated Seller shall furnish to
Noteholders promptly upon written request therefor, copies of the Sale and
Servicing Agreement and the Indenture.
Section 7.03. Representations and Warranties. The Owner Trustee
hereby represents and warrants to the Unaffiliated Seller and the
Certificateholders, that:
(a) It is a national banking association duly organized
and validly existing in good standing under the laws of the United
States of America. It has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement.
22
(b) It has taken all action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any Federal or Delaware 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.
Section 7.04. 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,
note, 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 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 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
other 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 written opinion
or advice of any such counsel, Accountants or other such persons and not
contrary to this Agreement or any other Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as provided
in Section 7.03, in accepting the trusts hereby created, First Union Trust
Company, National Association 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
other Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 7.06. Owner Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Owner Trustee on the Certificates) shall
be taken as the statements of the Unaffiliated Seller, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Agreement,
23
of any other Basic Document or of the Certificates (other than the signature
and countersignature of the Owner Trustee on the Certificates and as specified
in Section 7.03 hereof) or the Notes, or of any Mortgage Loans 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 Mortgage Loan, or the perfection and priority of any security interest
created by any Mortgage Loan 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 Mortgage Loan on any
computer or other record thereof, the validity of the assignment of any
Mortgage Loan to the Trust or of any intervening assignment, the completeness
of any Mortgage Loan, the performance or enforcement of any Mortgage Loan, the
compliance by the Unaffiliated Seller 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 7.07. Owner Trustee May Own Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Unaffiliated Seller,
the Indenture Trustee and the Servicer in banking transactions with the same
rights as it would have if it were not Owner Trustee.
Section 7.08. Licenses. The Unaffiliated Seller shall cause the
Trust to use its best efforts to obtain and maintain the effectiveness of any
licenses required in connection with this Agreement and the other Basic
Documents and the transactions contemplated hereby and thereby until such time
as the Trust shall terminate in accordance with the terms hereof.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Servicer and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by
the Servicer for its other reasonable expenses hereunder as separately agreed.
Section 8.02. Indemnification. The Certificateholders and the
Servicer shall be jointly and severally liable as obligor for, and shall
jointly and severally indemnify the Owner Trustee (in its individual and trust
capacities) and its successors, assigns, 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 any Indemnified Party in any way relating to or arising out of this
Agreement, the other Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or
24
inaction of the Owner Trustee hereunder, except only that the
Certificateholders and the Servicer shall not be liable for or required to
indemnify an Indemnified Party from and against Expenses arising or resulting
from any of the matters described in the third sentence of Section 7.01. The
indemnities contained in this Section 8.02 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Certificateholders and the Servicer will be
entitled to participate therein, with counsel selected by such Holders and the
Servicer and reasonably satisfactory to the Indemnified Parties, but after
notice from an Indemnified Party to the Certificateholders and the Servicer of
its election to assume the defense thereof, the Certificateholders and the
Servicer shall not be liable to the Indemnified Party under this Section 8.02
for any legal or other expenses subsequently incurred by such Indemnified
Party in connection with the defense of such action; provided, however, that
this sentence shall not be in effect if (1) the Certificateholders and the
Servicer shall not have employed counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action, (2) the Certificateholders and the
Servicer shall have authorized the employment of counsel for the Indemnified
Party at the expense of the Certificateholders and the Servicer or (3) in the
event any such claim involves a possible imposition of criminal liability or
penalty or a material civil penalty on such Indemnified Party, a conflict of
interest between such Indemnified Party and the Certificateholders or the
Servicer or another indemnitee or the granting of material injunctive relief
against such Indemnified Party, and such Indemnified Party informs the
Certificateholders and the Servicer that such Indemnified Party desires to be
represented by separate counsel, in which case, the reasonable fees and
expenses of such separate counsel shall be born by the Certificateholders and
the Servicer. If the Certificateholders or the Servicer assume the defense of
any such proceeding, they shall be entitled to settle such proceeding without
any liability being assessed against any Indemnified Party or, if such
settlement provides for release of any such Indemnified Party without any
liability being assessed against any Indemnified Party in connection with all
matters relating to the proceeding which have been asserted against such
Indemnified Party in such proceeding by the other parties to such settlement,
without the prior written consent of such Indemnified Party, but otherwise
only with the prior written consent of such Indemnified Party.
Section 8.03. 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.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement(a) . (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect on the earlier of: (i) the final payment or other liquidation
of the Mortgage Loans and the disposition of all REO Properties and the
remittance of all funds due hereunder with respect to such Mortgage Loans and
REO Properties or the disposition of the Mortgage Loans and REO Properties at
the direction of a majority of the Certificateholders, in either case after
the satisfaction and discharge
25
of the Indenture pursuant to Section 4.01 of the Indenture; and (ii) the
expiration of 21 years from the death of the last survivor of the descendants
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the late ambassador of the United States to the Court of
St. ▇▇▇▇▇). The bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder or the Unaffiliated Seller shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle the Unaffiliated
Seller's or such Certificateholder'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 Section 9.01(a) above, none of the
Unaffiliated Seller, the Servicer, the Note Insurer nor any Certificateholder
shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Certificates to
the Indenture Trustee for payment of the final distributions and cancellation,
shall be given by the Owner Trustee to the Certificateholders, the Note
Insurer, the Rating Agencies and the Indenture Trustee mailed within five (5)
Business Days of receipt by the Owner Trustee from the Servicer of notice of
such termination pursuant to Section 9.01(a) above, which notice given by the
Owner Trustee shall state (i) the Payment Date upon or with respect to which
final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of the Indenture Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Payment Date is not applicable,
payments being made only upon presentation and surrender of the Certificates
at the office of the Indenture Trustee therein specified. The Owner Trustee
shall give such notice to the Certificate Registrar (if other than the Owner
Trustee) and the Indenture Trustee at the time such notice is given to
Certificateholders. The Indenture Trustee shall give notice to the Owner
Trustee of each presentation and surrender of Certificates promptly, and the
Indenture Trustee shall promptly cause to be distributed to the related
Certificateholders, subject to Section 3808 of the Business Trust Statute,
amounts distributable on such Payment Date pursuant to the terms of the
Indenture.
(d) Upon the winding up of the Trust in accordance with Section 3808
of the Business Trust Statute and its termination, 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.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation or banking association satisfying
the provisions of Section 3807(a) of the Business Trust Statute; authorized to
exercise trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or state
authorities; and having (or having a parent that has) a rating of at least
"Baa3" by Moody's and "A-1" by S&P (or otherwise acceptable to the Rating
Agencies) and being acceptable to the Note Insurer. If such entity shall
publish reports of condition at least annually,
26
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 10.01, the combined
capital and surplus of such entity 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 10.01, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.
Section 10.02. 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 Unaffiliated Seller, the
Servicer, the Indenture Trustee and the Note Insurer. Upon receiving such
notice of resignation, the Servicer shall promptly appoint a successor Owner
Trustee (acceptable to the Note Insurer) by written instrument, in duplicate,
one copy of which instrument shall be delivered to the 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 thirty (30)
days after the giving of such notice of resignation, the resigning Owner
Trustee or the Note Insurer 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 10.01 and shall fail to resign after
written request therefor by the Certificateholders or 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 Note Insurer, or the
Certificateholders or the Servicer with the written consent of the Note
Insurer, may remove the Owner Trustee. If the Certificateholders or the
Servicer or the Note Insurer shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Note Insurer, or the
Servicer with the written consent of the Note Insurer, 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 and payment of all fees 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
10.02 shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 10.03, written approval by the
Note Insurer 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, the Indenture Trustee, the
Collateral Agent and the Note Insurer.
Section 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Unaffiliated Seller, the Indenture Trustee, the Note Insurer and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon, subject to the payment of all fees and expenses owed
to the outgoing Owner Trustee, the resignation or removal of the predecessor
Owner Trustee shall become effective and such successor Owner Trustee (if
acceptable to the Note Insurer), without any further act, deed or conveyance,
shall
27
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 deliver to the successor Owner Trustee all documents and
statements and moneys held by it under this Agreement; and the Unaffiliated
Seller 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 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section 10.03, the Unaffiliated Seller shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Collateral Agent, the Noteholders, the Note Insurer and the
Rating Agencies. If the Unaffiliated Seller fails to mail such notice within
ten (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 Unaffiliated Seller.
Any successor Owner Trustee appointed pursuant to this Section 10.03
shall file an amendment to the Certificate of Trust with the Secretary of
State identifying the name and principal place of business of such successor
Owner Trustee in the State of Delaware.
Section 10.04. Merger or Consolidation of Owner Trustee. Any
corporation or banking association into which the Owner Trustee may be merged
or converted or with which it may be consolidated or any corporation or
banking association resulting from any merger, conversion or consolidation to
which the Owner Trustee shall be a party, or any corporation or banking
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 banking association shall be eligible
pursuant to Section 10.01, without the execution or filing of any instrument
or any further act on the part of any of the parties hereto, except the filing
of an amendment to the Certificate of Trust, if appropriate, anything herein
to the contrary notwithstanding; provided, further, that the Owner Trustee
shall mail notice of such merger, conversion or consolidation to the Rating
Agencies.
Section 10.05. Appointment of Co-Trustee or Separate Trustee(a) .
(a) 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, and for the purpose of performing certain duties and obligations of
the Owner Trustee with respect to the Trust and the Certificates, the Owner
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee and acceptable to
the Note Insurer 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 Trust,
or any part thereof, and, subject to the other provisions of this Section
10.05, such powers, duties, obligations, rights and trusts as the Note Insurer
and the Owner Trustee may consider necessary or desirable. No co-trustee or
separate trustee under this Agreement shall be required
28
to meet the terms of eligibility as a successor trustee pursuant to Section
10.01 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.03.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provision and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act
or acts are to be performed, the Owner Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Owner Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to the separate trustees and co-trustees,
as if given to each of them. Every instrument appointing any separate trustee
or co-trustee, other than this Agreement, shall refer to this Agreement and to
the conditions of this Article X. Each separate trustee and co-trustee, upon
its acceptance of appointment, shall be vested with the estates 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.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Supplements and Amendments. This Agreement may be
amended by the Unaffiliated Seller, the Depositor and the Owner Trustee, with
the prior written
29
consent of the Note Insurer, and with prior written notice to the Rating
Agencies, but without the consent of any of the Noteholders or the
Certificateholders or the Indenture Trustee, to cure any ambiguity, 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, such action shall
not adversely affect in any material respect the interests of any Noteholder
or Certificateholder or the rights of the Note Insurer. An amendment described
above shall be deemed not to adversely affect in any material respect the
interests of any Noteholder if the party requesting the amendment satisfies
the Rating Agency Condition with respect to such amendment.
This Agreement may also be amended from time to time by the
Unaffiliated Seller and the Owner Trustee, with the prior written consent of
the Rating Agencies and with the prior written consent of the Indenture
Trustee, the Note Insurer, the Noteholders evidencing more than 50% of the
Outstanding Principal Balance of the Notes, the Holders of Certificates
evidencing more than 50% of the Percentage Interests of the Trust Interest and
if the party requesting such amendment satisfies the Rating Agency Condition
with respect to such amendment, 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, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Mortgage Loans or distributions that shall be
required to be made for the benefit of the Noteholders, the Certificateholders
or the Note Insurer, (b) reduce the aforesaid percentage of the Outstanding
Principal Balance of the Notes or the Percentage Interests required to consent
to any such amendment, in either case of clause (a) or (b) without the consent
of the holders of all the outstanding Notes, the Note Insurer and the Holders
of all the outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Unaffiliated Seller shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee,
the Note Insurer and each of the Rating Agencies.
It shall not be necessary for the consent of 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 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.
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.
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. The Owner
30
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.
Section 11.02. No Legal Title to Owner Trust Estate in Holders. 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 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 11.03. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the
Unaffiliated Seller, the Certificateholders, the Note Insurer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement, whether express or implied, shall be construed
to give to any other Person any legal or equitable right, remedy or claim in
the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 11.04. Notices. (a) Unless otherwise expressly specified
or permitted by the terms hereof, all communications provided for or permitted
hereunder shall be in writing and shall be deemed to have been given if (1)
personally delivered, (2) upon receipt by the intended recipient or three
Business Days after mailing if mailed by certified mail, postage prepaid
(except that notice to the Owner Trustee shall be deemed given only upon
actual receipt by the Owner Trustee), (3) sent by express courier delivery
service and received by the intended recipient or (4) except with respect to
notices sent to the Owner Trustee, transmitted by telex or facsimile
transmission (or any other type of electronic transmission agreed upon by the
parties and confirmed by a writing delivered by any of the means described in
(1), (2) or (3), at the following addresses: (i) if to the Owner Trustee, at
its Corporate Trust Office; (ii) if to the Unaffiliated Seller, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (iii) if to the Note Insurer, MBIA
Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopy (914)
765-3810; (iv) if to the Depositor, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇; or, as to each
such party, at such other address as shall be designated by such party in a
written notice to each other party.
(b) 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 Certificateholder 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 11.05. 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.
31
Section 11.06. 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 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Unaffiliated Seller, the Note Insurer, the Owner Trustee and its successors
and each owner 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 11.08. No Petition. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Certificate, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Unaffiliated Seller or the Trust, or join in any institution
against the Unaffiliated Seller or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy law in
connection with any obligations relating to the Certificates, the Notes, this
Agreement or any of the other Basic Documents.
Section 11.09. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificate represents
a beneficial interest in the Trust only and does not represent an interest in
or an obligation of the Servicer, the Unaffiliated Seller, the Owner Trustee
or any Affiliate thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificates or the other Basic Documents.
Section 11.10. 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 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE 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 11.12. Grant of Certificateholder Rights to Note Insurer(a)
. (a) In consideration for the issuance of the Certificates and for the
guarantee of the Notes by the Note Insurer pursuant to the Policy, the Holders
of the Certificates hereby grant to the Note Insurer the right to act as the
Holder of 100% of the outstanding Certificates for the purpose of exercising
the rights hereunder of the Certificateholders under this Agreement without
the consent of the Certificateholders, including the voting rights of such
Holders hereunder, but excluding those rights requiring the consent of all
such Holders, and any rights of such Holders to distributions under the
Indenture; provided, that the preceding grant of rights to the Note Insurer by
the Holders of the Certificates shall be subject to Section 11.14.
32
(b) The rights of the Note Insurer to direct certain actions and
consent to certain actions of the Certificateholders hereunder will terminate
at such time as the outstanding Principal Balance of the Notes has been
reduced to zero and the Note Insurer has been reimbursed for any amounts owed
under the Policy and the Insurance Agreement and the Note Insurer has no
further obligation under the Policy.
(c) The duties and responsibilities of the Owner Trustee shall be
limited to those expressly provided for in this Agreement. The parties hereto
agree that except for purposes of the foregoing sentence, the Owner Trustee
shall have no management responsibilities or owe any fiduciary duties to the
Note Insurer (or the Noteholders in the event they succeed to the Note
Insurer's rights).
(d) Whenever in connection with its performance under this Agreement
the Owner Trustee receives inconsistent notices or advice from the Note
Insurer and the Certificateholders, the Owner Trustee shall, in the absence of
a Note Insurer Default, take the action required by the notices or advice
received from the Note Insurer.
Section 11.13. Third-Party Beneficiary. The Indenture Trustee and
the Note Insurer are intended third-party beneficiaries of this Agreement, and
this Agreement shall be binding upon and inure to the benefit of the Indenture
Trustee and the Note Insurer; provided, that, notwithstanding the foregoing,
for so long as a Note Insurer Default is continuing with respect to its
obligations under the Policy, the Certificateholders shall succeed to the Note
Insurer's rights hereunder. Without limiting the generality of the foregoing,
all covenants and agreements in this Agreement that expressly confer rights
upon the Note Insurer shall be for the benefit of and run directly to the Note
Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Agreement.
Section 11.14. Suspension and Termination of Note Insurer's Rights.
During the continuation of a Note Insurer Default, rights granted or reserved
to the Note Insurer hereunder shall vest instead in the Certificateholders;
provided, that the Note Insurer shall be entitled to any distributions of
reimbursements as set forth in the Insurance Agreement and the Note Insurer
shall retain those rights under Section 11.01 to consent to any amendment of
this Agreement.
At such time as either (i) the outstanding Note Principal Balance of
the Notes has been reduced to zero or (ii) the Policy has been terminated and
in either case of (i) or (ii) the Note Insurer has been reimbursed for all
amounts owed under the Policy and the Insurance Agreement (and the Note
Insurer no longer has any obligation under the Policy, except for breach
thereof by the Note Insurer), then the rights and benefits granted or reserved
to the Note Insurer hereunder (including the rights to direct certain actions
and receive certain notices) shall terminate and the Certificateholders shall
be entitled to the exercise of such rights and to receive such benefits of the
Note Insurer following such termination to the extent that such rights and
benefits are applicable to the Certificateholders.
Section 11.15. Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust, the Unaffiliated Seller or Owner Trustee to
prepare, file or deliver pursuant to the Basic Documents. Upon written
33
request, the Owner Trustee shall execute and deliver to the Servicer a limited
power of attorney appointing the Servicer the Trust's agent and
attorney-in-fact to prepare, or cause to be prepared, execute and deliver all
such documents, reports, filings, instruments, certificates and opinions.
[Remainder of Page Intentionally Left Blank]
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
ABFS 2001-3, INC., as Unaffiliated Seller
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
/s/ ▇▇▇▇▇▇ ▇ . ▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
[Signature Page to the Trust Agreement]
35
EXHIBIT A
FORM OF CERTIFICATE
CERTIFICATE
THE EQUITY INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. THIS EQUITY INTEREST MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE
HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING, BUT NOT LIMITED TO, ABFS 2001-3, INC.) IN A TRANSACTION THAT IS
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON
IS OBLIGATED TO REGISTER THIS EQUITY INTEREST UNDER THE ACT OR ANY STATE
SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE
MADE TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A REPRESENTATION
LETTER FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS NOT A
PERSON WHICH IS AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION
3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY
SUCH PERSON BEING A "PLAN"), (II) IS NOT AN ENTITY, INCLUDING AN INSURANCE
COMPANY SEPARATE ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY AND (III) IS NOT
DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR A BENEFICIAL INTEREST
HEREIN ON BEHALF OR, AS INVESTMENT MANAGER OF, AS TRUSTEE OF, OR WITH THE
ASSETS OF A PLAN.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER
TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH
TRANSFEREE (A) AGREES TO BE BOUND BY
AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B)
IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE
CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC BOOK-ENTRY
CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND (C) UNDERSTANDS THAT
IT MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE TAXABLE INCOME
RELATING TO THIS CERTIFICATE.
A-2
Certificate No. [1] Percentage Interest: [100.00%]
THIS CERTIFIES THAT ______________ (the "Holder") is the registered
owner of a 100% Percentage Interest of the Trust Interest in ABFS Mortgage
Loan Trust 2001-3 (the "Trust") existing under the laws of the State of
Delaware and created pursuant to that certain Trust Agreement, dated as of
September 1, 2001 (the "Trust Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor, ABFS 2001-3, Inc., as unaffiliated seller, and
First Union Trust Company, National Association, not its individual capacity
but solely as owner trustee under the Trust Agreement (the "Owner Trustee").
Capitalized terms used but not otherwise defined herein have the meanings
assigned to such terms in the Trust Agreement. The Owner Trustee, on behalf of
the Trust and not in its individual capacity, has executed this Certificate by
one of its duly authorized signatories as set forth below. This Certificate is
one of the Certificates referred to in the Trust Agreement and is issued under
and is subject to the terms, provisions and conditions of the Trust Agreement
to which the Holder of this Certificate by virtue of the acceptance hereof
agrees and by which the Holder hereof is bound. Reference is hereby made to
the Trust Agreement for the rights of the Holder of this Certificate, as well
as for the terms and conditions of the Trust created by the Trust Agreement.
The recitals contained herein (other than the signature and
countersignature of the Owner Trustee) shall be taken as the statements of the
Unaffiliated Seller, and the Owner Trustee assumes no responsibility for the
correctness thereof.
The Holder, by its acceptance hereof, agrees not to transfer this
Certificate except in accordance with the terms and provisions of the Trust
Agreement.
The Holder, by its acceptance hereof, acknowledges that such
Holder's Certificate represents a beneficial interest in the Trust only and
does not represent an interest in or an obligation of the Servicer, the
Unaffiliated Seller, the Owner Trustee or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or the
other Basic Documents.
THIS CERTIFICATE SHALL BE 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.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be duly
executed.
ABFS MORTGAGE LOAN TRUST 2001-3
By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:
---------------------------------------------------
Authorized Signatory
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement, as
Authenticating Agent
By:
--------------------------------------------------
Authorized Signatory
Dated:
A-4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
------------------------------------------------------------------------------
the within Instrument, and all rights thereunder, hereby irrevocably
constituting and appointing __________ Attorney to transfer said Instrument 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 as
it appears upon the face of the within Instrument in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
A-5
EXHIBIT B
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF
ABFS MORTGAGE LOAN TRUST 2001-3
THIS CERTIFICATE OF TRUST OF ABFS MORTGAGE LOAN TRUST 2001-3 (the
"Trust"), dated as of September __, 2001, is being duly executed and filed by
First Union Trust Company, National Association, a national banking
association, as owner trustee (the "Owner 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
ABFS Mortgage Loan Trust 2001-3.
2. Delaware Trustee. The name and business address of the
Owner Trustee of the Trust in the State of Delaware is First Union
Trust Company, National Association, One ▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Administration.
3. Effective Date. This Certificate of Trust shall be
effective immediately upon filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner
Trustee under a Trust Agreement.
By:
---------------------------------------------------
Name:
Title:
B-1
EXHIBIT C
FORM OF INVESTMENT LETTER
-------------------, ----
ABFS 2001-3, Inc.
c/o American Business Financial Services, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Bala Cynwyd, Pennsylvania 19004
First Union Trust Company, National Association
One ▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: ABFS Mortgage Loan Trust 2001-3 (the "Trust")
Mortgage Backed Notes, Series 2001-3
Ladies and Gentlemen:
_________________________________________ (the "Holder") has
purchased or acquired, or intends to purchase or acquire from
________________, the current Holder (the "Current Holder"), a Certificate
representing a ___% Percentage Interest (the "___% Certificate") in the Trust
Interest for the referenced Trust, which represents an interest in the Trust
created pursuant to that certain Trust Agreement, dated as of September 1,
2001 (the "Trust Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as Depositor, ABFS 2001-3, Inc., as Unaffiliated Seller, and First Union Trust
Company, National Association, as Owner Trustee. Capitalized terms used and
not otherwise defined herein have the meanings assigned to such terms in the
Trust Agreement.
CERTIFICATION
The undersigned, as an authorized officer or agent of the Holder,
hereby certifies, represents, warrants and agrees on behalf of the Holder as
follows:
1. The Holder is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was formed and is
authorized to invest in the ___% Certificate. The person executing this letter
on behalf of the Holder is duly authorized to do so on behalf of the Holder.
2. The Holder hereby acknowledges that no transfer of the ___%
Certificate may be made unless such transfer is exempt from the registration
requirements of the Securities Act
C-1
of 1933, as amended (the "Securities Act"); and applicable state securities
laws, or is made in accordance with the Securities Act and such laws.
3. The Holder understands that the ___% Certificate has not been and
will not be registered under the Securities Act and may be offered, sold,
pledged or otherwise transferred apply to a person whom the transferor
reasonably believes is (A) a qualified institutional buyer (as defined in Rule
144A under the Securities Act) or (B) a Person involved in the organization or
operation of the Trust or an affiliate of such Person, in a transaction
meeting the requirements of Rule 144A under the Securities Act and in
accordance with any applicable securities laws of any state of the United
States. The Holder understands that the ___% Certificate bears a legend to the
foregoing effect.
4. The Holder is acquiring the ___% Certificate for its own account
or for accounts for which it exercises sole investment discretion, and not
with a view to or for sale or other transfer in connection with any
distribution of the ___% Certificate in any manner that would violate Section
5 of the Securities Act or any applicable state securities laws, subject
nevertheless to any requirement of law that the disposition of the Holder's
property shall at all times be and remain within its control.
5. The Holder is (A) a "qualified institutional buyer" (a "QIB") as
defined in Rule 144A under the Securities Act, and is aware that the
transferor of the ___% Certificate may be relying on the exemption from the
registration requirements of the Securities Act provided by Rule 144A and is
acquiring such ___% Certificate for its own Account or for the Account of one
or more qualified institutional buyers for whom it is authorized to act, or
(B) a Person involved in the organization or operation of the Trust or an
affiliate of such Person within the meaning of Rule 3a-7 of the Investment
Company Act of 1940, as amended (including, but not limited to, the
Transferor). The Holder is able to bear the economic risks of such an
investment. The Holder is a QIB because [STATE FACTUAL BASIS FOR QIB STATUS]
_________________.
6. If the Holder sells or otherwise transfers the registered
ownership of such ___% Certificate, the Holder will comply with the
restrictions and requirements with respect to the transfer of the ownership of
the ___% Certificate under the Trust Agreement, and the Holder will obtain
from any subsequent purchaser or transferee substantially the same
certifications, representations, warranties and covenants as required under
the Trust Agreement in connection with such subsequent sale or transfer
thereof.
7. The Holder is not an entity that will hold a ___% Certificate as
nominee (a "Book Entry Nominee") to facilitate the clearance and settlement of
such security through electronic book-entry changes in Accounts or
participating organizations.
8. The Holder (i) is not a person which is an employee benefit plan,
trust or account subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Code or a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law which is, to a material extent, similar to the
foregoing provisions of ERISA or the Code (any such person being a "Plan"),
(ii) is not an entity, including an insurance company separate account or
general account, whose underlying assets include "plan assets" by reason of a
Plan's investment in the entity and (iii) is not directly or
C-2
indirectly purchasing such ___% Certificate on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with assets of a Plan.
9. The Holder hereby agrees to indemnify each of the Trust, the
Indenture Trustee and the Owner Trustee against any liability that may result
if the Holder's transfer of a ___% Certificate (or any portion thereof) is not
exempt from the registration requirements of the Securities Act and any
applicable state securities laws or is not made in accordance with such
federal and state laws. Such indemnification of the Trust, the Indenture
Trustee and the Owner Trustee shall survive the termination of the related
Trust Agreement.
IN WITNESS WHEREOF, the Holder has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors,
by its duly authorized signatory this ____ day of __________, 200_.
[NAME OF HOLDER]
By:
-------------------------------------------------
Name:
Title:
C-3