INDENTURE
dated as of March 1, 2001
by and among
TRIPLE-A ONE FUNDING CORPORATION,
as Initial Purchaser,
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2001-1,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. General Definitions...........................................................................2
ARTICLE II
THE NOTE; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01. Forms Generally...............................................................................2
Section 2.02. Form of Certificate of Authentication.........................................................3
Section 2.03. General Provisions With Respect to Principal and Interest Payment.............................3
Section 2.04. Denominations.................................................................................3
Section 2.05. Execution, Authentication, Delivery and Dating................................................3
Section 2.06. Registration, Registration of Transfer and Exchange...........................................4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes....................................................5
Section 2.08. Payments of Principal and Interest............................................................6
Section 2.09. Persons Deemed Owner..........................................................................8
Section 2.10. Cancellation..................................................................................8
Section 2.11. Authentication and Delivery of the Note.......................................................8
Section 2.12. Limitations on Transfer of the Note..........................................................10
Section 2.13. Reserved.....................................................................................11
Section 2.14. Subsequent Advances..........................................................................11
Section 2.15. Release of Collateral........................................................................13
Section 2.16. Breakage Costs...............................................................................13
Section 2.17. Book-Entry Note..............................................................................14
Section 2.18. Termination of Book Entry System.............................................................14
ARTICLE III
COVENANTS
Section 3.01. Payment of the Note..........................................................................15
Section 3.02. Maintenance of Office or Agency..............................................................15
Section 3.03. Money for Note Payments to Be Held In Trust..................................................16
Section 3.04. Existence of Trust...........................................................................17
Section 3.05. Protection of Trust Estate...................................................................18
Section 3.06. Opinions as to the Trust Estate..............................................................19
Section 3.07. Performance of Obligations...................................................................19
Section 3.08. [Reserved]...................................................................................19
Section 3.09. Negative Covenants...........................................................................19
Section 3.10. Annual Statement as to Compliance............................................................20
Section 3.11. Restricted Payments..........................................................................20
Section 3.12. Treatment of the Note as Indebtedness for Tax Purposes.......................................21
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Section 3.13. Notice of Events of Default..................................................................21
Section 3.14. Further Instruments and Acts.................................................................21
Section 3.15. Required Collateral Coverage Ratio...........................................................21
Section 3.16. Limited Guaranty of Performance..............................................................21
Section 3.17. Representations, Warranties and Covenants of Guarantor.......................................23
ARTICLE IV
CONDITIONS OF CLOSING;
SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. Conditions of Initial Purchaser's Obligations................................................25
Section 4.02. Termination of Initial Purchaser's Obligations...............................................26
Section 4.03. Satisfaction and Discharge of Indenture......................................................27
Section 4.04. Application of Trust Money...................................................................28
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default.............................................................................28
Section 5.02. Acceleration of Maturity; Rescission and Annulment...........................................30
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee....................31
Section 5.04. Remedies.....................................................................................31
Section 5.05. Indenture Trustee May File Proofs of Claim...................................................32
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of the Note..........................33
Section 5.07. [Reserved]...................................................................................33
Section 5.08. Limitation on Suits..........................................................................33
Section 5.09. Unconditional Rights of the Noteholder to Receive Principal and Interest.....................34
Section 5.10. Restoration of Rights and Remedies...........................................................34
Section 5.11. Rights and Remedies Cumulative...............................................................34
Section 5.12. Delay or Omission Not Waiver.................................................................34
Section 5.13. Controlling Party............................................................................34
Section 5.14. Waiver of Past Defaults......................................................................35
Section 5.15. Undertaking for Costs........................................................................35
Section 5.16. Waiver of Stay or Extension Laws.............................................................35
Section 5.17. Sale of Trust Estate.........................................................................35
Section 5.18. Action on Notes..............................................................................37
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee..................................................................37
Section 6.02. Notice of Default............................................................................39
Section 6.03. Rights of Indenture Trustee..................................................................39
Section 6.04. Not Responsible for Recitals or Issuance of the Note.........................................40
Section 6.05. May Hold the Note............................................................................40
Section 6.06. Money Held in Trust..........................................................................40
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Section 6.07. [Reserved]...................................................................................41
Section 6.08. Indenture Trustee's Capital and Surplus......................................................41
Section 6.09. Resignation and Removal; Appointment of Successor............................................41
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.....................................42
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.............43
Section 6.12. [Reserved]...................................................................................43
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees........................................43
Section 6.14. Authenticating Agents........................................................................44
Section 6.15. Review of Mortgage Files.....................................................................45
Section 6.16. Indenture Trustee Fees and Expenses..........................................................46
ARTICLE VII
NOTEHOLDER' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee the Name and Address of the Noteholder...........46
Section 7.02. Preservation of Information; Communications to Noteholder....................................47
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys...................................................47
Section 8.02. Payments.....................................................................................49
Section 8.03. Claims against the Note Insurance Policy.....................................................50
Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans.........................52
Section 8.05. Releases of Deleted Mortgage Loans...........................................................53
Section 8.06. Reports by Indenture Trustee to the Noteholder; Access to Certain Information................53
Section 8.07. Release of Trust Estate......................................................................54
Section 8.08. Amendment to Sale and Servicing Agreement....................................................54
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement......................54
Section 8.10. Servicer as Agent............................................................................54
Section 8.11. Termination of Servicer......................................................................55
Section 8.12. Opinion of Counsel...........................................................................55
Section 8.13. Appointment of Collateral Agents.............................................................55
Section 8.14. Trust Estate and Accounts Held for Benefit of the Note Insurer...............................55
Section 8.15. Certain Rights of the Controlling Party and the Note Insurer.................................55
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of the Noteholder....................................58
Section 9.02. Supplemental Indentures With Consent of the Noteholder.......................................58
Section 9.03. Execution of Supplemental Indentures.........................................................60
Section 9.04. Effect of Supplemental Indentures............................................................60
Section 9.05. [Reserved]...................................................................................60
Section 9.06. Reference in Notes to Supplemental Indentures................................................60
Section 9.07. Amendments to Governing Documents............................................................60
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ARTICLE X
REDEMPTION OF THE NOTE
Section 10.01. Redemption...................................................................................61
Section 10.02. Form of Redemption Notice....................................................................63
Section 10.03. Note Payable on Optional Redemption..........................................................63
Section 10.04. Dispositions.................................................................................63
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.........................................................65
Section 11.02. Form of Documents Delivered to Indenture Trustee.............................................66
Section 11.03. Acts of the Noteholder.......................................................................67
Section 11.04. Notices, etc., to Indenture Trustee, the Initial Purchaser, the Note Insurer and Trust.......67
Section 11.05. Notices and Reports to a Noteholder; Waiver of Notices.......................................69
Section 11.06. [Reserved]...................................................................................69
Section 11.07. [Reserved]...................................................................................69
Section 11.08. Effect of Headings and Table of Contents.....................................................69
Section 11.09. Successors and Assigns.......................................................................69
Section 11.10. Separability.................................................................................69
Section 11.11. Benefits of Indenture........................................................................69
Section 11.12. Legal Holidays...............................................................................70
Section 11.13. Recording of Indenture.......................................................................70
Section 11.14. Trust Obligation.............................................................................70
Section 11.15. No Petition..................................................................................70
Section 11.16. Inspection...................................................................................71
Section 11.17. Usury........................................................................................71
Section 11.18. Third-Party Beneficiary......................................................................71
Section 11.19. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.................................72
Section 11.20. Counterparts.................................................................................72
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APPENDICES, SCHEDULES AND EXHIBITS
Appendix I Defined Terms
Schedule I Mortgage Loan Schedule
Exhibit A Form of Class A Note
Exhibit B Form of Subsequent Pledge Agreement
Exhibit C Form of Rule 144A Transfer Certificate
Exhibit D Form of Purchaser's Letter for Institutional Accredited Investor
Exhibit E Notice of Borrowing
Exhibit F Wire Instructions
Exhibit G Market Value Calculation
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This INDENTURE, dated as of March 1, 2001 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between ABFS MORTGAGE LOAN WAREHOUSE TRUST 2001-1, a Delaware statutory business
trust (together with its permitted successors and assigns, the "Trust" or the
"Issuer"), TRIPLE-A ONE FUNDING CORPORATION, a Delaware corporation, as initial
purchaser (the "Initial Purchaser"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as indenture trustee (together with its permitted
successors in the trust hereunder, the "Indenture Trustee") and acknowledged and
agreed to by AMERICAN BUSINESS FINANCIAL SERVICES, INC., as guarantor ("ABFS"
and the "Guarantor").
Preliminary Statement
The Trust has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its Mortgage Backed Note, Series
2001-1, (the "Note"), issuable as provided in this Indenture. All covenants and
agreements made by the Trust herein are for the benefit and security of the
Holder of the Note and the Note Insurer. The Trust is entering into this
Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement
of the Trust in accordance with its terms have been done.
Granting Clause
The Trust hereby Grants to the Indenture Trustee, for the
exclusive benefit of the Holder of the Note and the Note Insurer, all of the
Trust's right, title and interest in and to (a) the Mortgage Loans listed in the
Mortgage Loan Schedule attached as Schedule I to this Indenture and any
Subsequent Mortgage Loans and any Qualified Substitute Mortgage Loans (including
property that secures a Mortgage Loan that becomes an REO Property), including
the related Mortgage Files delivered or to be delivered to the Collateral Agent,
on behalf of the Indenture Trustee, pursuant to the Sale and Servicing
Agreement, including all payments of principal received, collected or otherwise
recovered after the Closing Date for each Mortgage Loan, all payments of
interest due on each Mortgage Loan after the Closing Date therefor whenever
received and all other proceeds received in respect of such Mortgage Loans, (b)
the Sale and Servicing Agreement, (c) the Insurance Policies, (d) all cash,
instruments or other property that are held or required to be deposited in the
Collection Account, the Note Insurance Payment Account and the Payment Account,
including all investments made with funds in such Accounts and (e) all proceeds
of the conversion, voluntary or involuntary, of any of the foregoing into cash
or other liquid assets, including, without limitation, all insurance proceeds
and condemnation awards. Such Grants are made, however, in trust, to secure the
Note and for the benefit of the Noteholder and the Note Insurer to secure (x)
the payment of all amounts due on the Note in accordance with its terms, (y) the
payment of all other sums payable under this Indenture and the Insurance
Agreement and (z) compliance with the provisions of this Indenture and the
Insurance Agreement, all as provided in this Indenture. All terms used in the
foregoing Granting Clause that are defined in Appendix I are used with the
meanings given in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the
trusts hereunder in accordance with the provisions of this Indenture and agrees
to perform the duties herein required to the end that the interests of the
Holder of the Note and the Note Insurer may be adequately and effectively
protected. In addition, the Indenture Trustee agrees that it will acknowledge
the Grant on each Subsequent Purchase Date of the related Subsequent Mortgage
Loans pursuant to the terms of the related Subsequent Pledge Agreement, provided
that the conditions precedent to the pledge of such Subsequent Mortgage Loans
contained in this Indenture and in the Sale and Servicing Agreement are
satisfied on or prior to such Subsequent Purchase Date. The Indenture Trustee
agrees that it will hold the Note Insurance Policy in trust and that it will
hold any proceeds of any claim upon the Note Insurance Policy, solely for the
use and benefit of the Noteholder in accordance with the terms hereof and the
Note Insurance Policy.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the defined terms have the respective
meanings set forth in Appendix I for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of Default
or a Default known to the Indenture Trustee or of which the Indenture Trustee
has notice or knowledge, such reference shall be construed to refer only to an
Event of Default or a Default of which the Indenture Trustee is deemed to have
notice or knowledge pursuant to Section 6.01(d). All other terms used herein
that are defined in the Trust Indenture Act (as hereinafter defined), either
directly or by reference therein, have the meanings assigned to them therein.
ARTICLE II
THE NOTE; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01. Forms Generally. The Note shall be substantially in the
form set forth as Exhibit A attached hereto and shall be initially issued solely
in the form of a fully registered definitive note and not in book-entry form.
The Note may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may be required to comply with
the rules of any securities exchange on which the Note may be listed, or as may,
consistently herewith, be determined by the Trust, as evidenced by its execution
thereof. Any portion of the text of the Note may be set forth on the reverse
thereof with an appropriate reference on the face of the Note. The Definitive
Note may be produced in any manner determined by the Trust, as evidenced by its
execution thereof.
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Section 2.02. Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Note attached hereto at Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. (a) The Note shall be designated generally as the "ABFS Mortgage
Loan Warehouse Trust 2001-1, Mortgage Backed Note, Series 2001-1".
(b) The Note shall be issued in the form specified in Section
2.01 hereof. The Note shall be issued in one Class, the Class A Notes. The
aggregate Note Principal Balance of the Class A Notes that may be authenticated
and delivered under the Indenture is limited to $200,000,000 and provided
further that the amount due under the Class A Note at any time shall be equal to
the Class A Note Principal Balance.
(c) Subject to the provisions of Sections 3.01, 5.09 and 8.02
of this Indenture, the principal of the Note shall be payable in installments
ending no later than the related Final Stated Maturity Date, unless the unpaid
principal of such Note becomes due and payable at an earlier date by declaration
of acceleration or call for redemption or otherwise.
(d) All payments made with respect to any Note shall be applied
first to the interest then due and payable on such Note and then to the
principal thereof. All computations of interest accrued on the Class A Note
shall be made on the basis of a year of 360 days and the actual number of days
elapsed; provided, that, after a Rate Fixing Date, such calculations shall be
made on the basis of a year of 360 days consisting of twelve 30-day months.
(e) Notwithstanding any of the foregoing provisions with
respect to payments of principal of and interest on the Note, if the Note has
become or been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Note shall be made
in accordance with Section 8.02 hereof.
Section 2.04. Denominations. The Note shall be issuable only as
registered definitive Note in the denominations equal to the Authorized
Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating(a) . (a)
The Note shall be executed on behalf of the Trust by an Authorized Officer of
the Owner Trustee, acting at the direction of the Certificateholders. The
signature of such Authorized Officer of the Owner Trustee on the Note may be
manual or by facsimile.
(b) The Note bearing the manual or facsimile signature of an
individual who was at any time an Authorized Officer of the Owner Trustee shall
bind the Trust, notwithstanding that such individual has ceased to be an
Authorized Officer of the Owner Trustee prior to the authentication and delivery
of such Note or was not an Authorized Officer of the Owner Trustee at the date
of such Note.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Trust may deliver the Note executed on behalf of
the Trust to the Authenticating Agent for authentication, and the Authenticating
Agent shall authenticate and deliver such Note as provided in this Indenture and
not otherwise.
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(d) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Note a certificate of authentication substantially in the form provided for
in Section 2.02 hereof, executed by the Authenticating Agent by the manual
signature of one of its Authorized Officers or employees, and such certificate
of authentication upon the Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange(a) .
(a) The Trust shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of the Note and the registration of transfers of
the Note. The Indenture Trustee is hereby initially appointed "Note Registrar"
for the purpose of registering the Note and transfers of the Note as herein
provided. The Indenture Trustee shall remain the Note Registrar throughout the
term hereof. Upon any resignation of the Indenture Trustee, the Servicer, on
behalf of the Trust, shall promptly appoint a successor, with the approval of
the Controlling Party, or, in the absence of such appointment, the Servicer, on
behalf of the Trust, shall assume the duties of the Note Registrar.
(b) Upon surrender for registration of transfer of any Note at
the office or agency of the Trust to be maintained as provided in Section 3.02
hereof, the Owner Trustee on behalf of the Trust, acting at the direction of the
Certificateholders, shall execute, and the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any Authorized Denominations and of a like
aggregate initial Note Principal Balance.
(c) At the option of the Holder, the Note may be exchanged for
other Notes of the same class of any Authorized Denominations, and of a like
aggregate Note Principal Balance, and with the same right to payment upon
surrender of the Note to be exchanged at such office or agency; provided,
however, that until the occurrence of the Final Purchase Date, the Note shall
not be exchanged for multiple Notes except with the consent or at the request of
the Initial Purchaser. Whenever a Note is so surrendered for exchange, the Owner
Trustee shall execute, and the Authenticating Agent shall authenticate and
deliver, the Note that the Noteholder making the exchange is entitled to
receive.
(d) At the option of the Noteholder, the Note may be exchanged
for Notes to be reissued as Book-Entry Notes as provided in Section 2.17;
provided, however, that unless the Liquidity Provider, its successors or assigns
is the Noteholder, the Note shall not be exchanged for Book-Entry Notes.
(e) All Notes issued upon any registration of transfer or
exchange of the Note shall be the valid obligations of the Trust, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Note
surrendered upon such registration of transfer or exchange.
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(f) Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in the form of the Assignment included in Exhibit A
attached hereto, duly executed by the Holder thereof or its attorney duly
authorized in writing.
(g) No service charge shall be made for any registration of
transfer or exchange of the Note, but the Note Registrar, on behalf of the
Trust, may require payment of a sum sufficient to cover any tax or other
governmental charge as may be imposed in connection with any registration of
transfer or exchange of the Note.
(h) No transfer of a Note shall be made to the Depositor or, to
the actual knowledge of a Responsible Officer of the Indenture Trustee, to any
of the Depositor's Affiliates, successors or assigns.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. (a) If
(i) any mutilated Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Note Registrar such
security or indemnity as may be required by the Note Registrar to save each of
the Trust, the Owner Trustee, the Note Insurer and the Note Registrar harmless,
then, in the absence of notice to the Note Registrar that such Note has been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust,
acting at the direction of the Certificateholders, shall execute and upon its
delivery of a Trust Request the Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note or Notes of the same tenor and aggregate initial
principal amount bearing a number not contemporaneously outstanding. If, after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note,
the Note Registrar, shall be entitled to recover such new Note from the person
to whom it was delivered or any person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expenses incurred
by the Trust, the Owner Trustee, the Note Insurer or the Note Registrar in
connection therewith. If any such mutilated, destroyed, lost or stolen Note
shall have become or shall be about to become due and payable, or shall have
become subject to redemption in full, instead of issuing a new Note, the Trust
may pay such Note without surrender thereof, except that any mutilated Note
shall be surrendered.
(b) Upon the issuance of any new Note under this Section 2.07,
the Note Registrar, may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Trust, the
Indenture Trustee or the Note Registrar) connected therewith.
(c) Every new Note issued pursuant to this Section 2.07 in lieu
of any destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Trust, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
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(d) The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Payments of Principal and Interest. (a) Payments on Notes
issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee
to the Clearing Agency or its nominee. Any installment of interest or principal
payable on any Note that is punctually paid or duly provided for by the Trust on
the applicable Payment Date shall be paid to the Person in whose name such Note
(or one or more Predecessor Notes) is registered at the close of business on the
Record Date for such Note and such Payment Date by either (i) check mailed to
such Person's address as it appears in the Note Register on such Record Date, or
(ii) by wire transfer of immediately available funds to the account of a
Noteholder, if such Noteholder (A) is the registered holder of a definitive Note
having an initial principal amount of at least $1,000,000 and (B) has provided
the Indenture Trustee with wiring instructions in writing by five (5) Business
Days prior to the related Record Date or has provided the Indenture Trustee with
such instructions for any previous Payment Date, except for the final
installment of principal payable with respect to such Note, which shall be
payable as provided in subsection (b) of this Section 2.08. A fee may be charged
by the Indenture Trustee to a Holder of the Note for any payment made by wire
transfer. Any installment of interest or principal not punctually paid or duly
provided for shall be payable as soon as funds are available to the Indenture
Trustee for payment thereof, or if Section 8.02 applies, pursuant to Section
8.02. Notwithstanding the forgoing, as long as Triple-A One Funding Corporation
is the holder of 100% of the aggregate outstanding principal balance of the
Note, all installments of principal and interest shall be paid by wire transfer
in immediately available funds to the Chase Manhattan Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C
#: 323309968, Account Name: Operating Account-The Chase Manhattan Bank, as
Collateral Agent, Ref: 160051.1.
(b) All reductions in the Note Principal Balance of a Note (or
one or more Predecessor Notes) effected by payments of installments of principal
made on any Payment Date shall be binding upon all Holders of such Note and of
any Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not such payment is noted on such Note.
The final installment of principal of each Note shall be payable only upon
presentation and surrender thereof on or after the Payment Date therefor at the
Corporate Trust Office of the Indenture Trustee located within the United States
of America pursuant to Section 3.02. Notwithstanding the forgoing, as long as
Triple-A One Funding Corporation is the holder of 100% of the aggregate
outstanding principal balance of the Note, all installments of principal and
interest shall be paid by wire transfer in immediately available funds to the
Chase Manhattan Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 323309968, Account Name: Operating
Account-The Chase Manhattan Bank, as Collateral Agent, Ref: 160051.1.
(c) Whenever the Indenture Trustee expects that the entire
unpaid Note Principal Balance of any Note will become due and payable on the
next Payment Date, other than pursuant to a redemption pursuant to Article X, it
shall, no later than two (2) Business Days prior to such Payment Date, telecopy
or hand deliver to each Person in whose name a Note to be so retired is
registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
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(i) the Indenture Trustee expects that funds sufficient to
pay such final installment will be available in the Payment Account on
such Payment Date; and
(ii) if such funds are available, (A) such final
installment will be payable on such Payment Date, but only upon
presentation and surrender of such Note at the office or agency of the
Note Registrar maintained for such purpose pursuant to Section 3.02
(the address of which shall be set forth in such notice) and (B) no
interest shall accrue on such Note after such Payment Date.
Notwithstanding the forgoing, as long as Triple-A One Funding
Corporation is the holder of 100% of the aggregate outstanding
principal balance of the Note, all installments of principal and
interest shall be paid by wire transfer in immediately available funds
to the Chase Manhattan Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 323309968, Account
Name: Operating Account-The Chase Manhattan Bank, as Collateral Agent,
Ref: 160051.1.
A copy of such form of notice shall be sent to the Note Insurer by the Indenture
Trustee.
(d) Notices in connection with redemptions of the Note shall be mailed
to the Noteholder in accordance with Section 10.02 hereof.
(e) Subject to the foregoing provisions of this Section 2.08, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) of this Section 2.08 and returned undelivered shall be held in
accordance with Section 3.03 hereof.
(f) Each of (i) the Noteholder Statement, (which shall be prepared by
the Servicer based on the Servicer calculations of the loan level data provided
in the Servicer Remittance Report delivered to the Indenture Trustee pursuant to
Section 7.16(b) of the Sale and Servicing Agreement) and (ii) the Servicer
Remittance Report shall be delivered by the Indenture Trustee to the Rating
Agencies, the Liquidity Provider, the Note Insurer, the Owner Trustee, the
Depositor, the Back-up Servicer and each Noteholder as the statements required
pursuant to Section 8.06 hereof. Neither the Indenture Trustee, the Back-up
Servicer nor the Collateral Agent shall have any responsibility to recalculate,
verify or recompute information contained in any such tape, electronic data file
or disk or any such Servicer Remittance Report or Noteholder Statement.
(g) Within ninety (90) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a), (b)
and (c) in the definition of "Noteholder Statement," aggregated by the Servicer
for such calendar year or the applicable portion thereof during which such
person was a Noteholder. Such obligation will be deemed to have been satisfied
to the extent that substantially comparable information is provided pursuant to
any requirements of the Code as are from time to time in force.
(h) From time to time (but no more than once per calendar month), upon
the written request of the Depositor, the Liquidity Provider, the Servicer, the
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Back-up Servicer or the Initial Purchaser and/or the Note Insurer, the Indenture
Trustee shall report to the Depositor, the Servicer, the Back-up Servicer, the
Liquidity Provider, the Initial Purchaser and/or the Note Insurer (either one of
which or both may have made such request), the amount then held in each Account
(including investment earnings accrued thereon) held by the Indenture Trustee
and the identity of the investments included therein. From time to time, at the
request of the Initial Purchaser, the Liquidity Provider and/or the Note
Insurer, the Indenture Trustee shall report to the Initial Purchaser and/or the
Note Insurer (either one of which or both may have made such request) with
respect to the actual knowledge of a Responsible Officer, without independent
investigation, of any breach of any of the representations or warranties
relating to individual Mortgage Loans set forth in Section 4.01 of the Sale and
Servicing Agreement. The Indenture Trustee shall also provide the Initial
Purchaser, the Liquidity Provider and the Note Insurer such other information
within its control as may be reasonably requested by it.
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Trust including
but not limited to the Indenture Trustee, may treat the Person in whose name any
Note is registered as the owner of such Note (a) on the applicable Record Date
for the purpose of receiving payments of the principal of and interest on such
Note and (b) on any other date for all other purposes whatsoever, and none of
the Trust, the Indenture Trustee or any other agent of the Trust, or the Note
Insurer, shall be affected by notice to the contrary.
Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly canceled by the Note Registrar. No Notes shall be
authenticated in lieu of or in exchange for any Note cancelled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All
cancelled Notes held by the Note Registrar shall be held by the Note Registrar
in accordance with its standard retention policy, unless the Owner Trustee, on
behalf of the Trust shall direct by a Trust Order that they be destroyed or
returned to it.
Section 2.11. Authentication and Delivery of the Note. The Note shall
be executed by an Authorized Officer of the Owner Trustee, on behalf of the
Trust, and delivered to the Authenticating Agent for authentication, and
thereupon the same shall be authenticated and delivered by the Authenticating
Agent, upon receipt by the Authenticating Agent of all of the following:
(a) A Trust Order authorizing the execution, authentication and
delivery of the Note and specifying the Note Principal Balance and the
Percentage Interest of such Note to be authenticated and delivered.
(b) With respect to the initial issuance of the Note on the
Closing Date, a Trust Order authorizing the execution and delivery of this
Indenture, the Sale and Servicing Agreement and the Insurance Agreement.
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(c) One or more Opinions of Counsel (which opinion shall not be
at the expense of the Indenture Trustee or the Trust) addressed to the
Authenticating Agent, the Initial Purchaser, and the Note Insurer or upon which
the Authenticating Agent and the Note Insurer are expressly permitted to rely,
complying with the requirements of Section 11.01, reasonably satisfactory in
form and substance to the Authenticating Agent, the Initial Purchaser, and the
Note Insurer.
In rendering the opinions set forth above, such counsel may
rely upon Officer's Certificates of the Trust, the Owner Trustee, the
Originators, the Depositor, the Servicer, the Back-up Servicer, and the
Indenture Trustee, without independent confirmation or verification with respect
to factual matters relevant to such opinions. In rendering the opinions set
forth above, such counsel need express no opinion as to (A) the existence of, or
the priority of the security interest created by the Indenture against, any
liens or other interests that arise by operation of law and that do not require
any filing or similar action in order to take priority over a perfected security
interest or (B) the priority of the security interest created by this Indenture
with respect to any claim or lien in favor of the United States or any agency or
instrumentality thereof (including federal tax liens and liens arising under
Title IV of ERISA).
The acceptability to the Note Insurer of the Opinion of
Counsel delivered to the Authenticating Agent and the Note Insurer at the
Closing Date shall be conclusively evidenced by the delivery on the Closing Date
of the Note Insurance Policy.
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture and
the issuance of the Note will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
Trust's Certificate of Trust or any indenture, mortgage, deed of trust
or other agreement or instrument to which the Trust is a party or by
which it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Trust is a party or by which it
may be bound or to which it may be subject, and that all conditions
precedent provided in this Indenture relating to the authentication and
delivery of the Note has been complied with;
(ii) the Trust is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan
Schedule attached as Schedule I to this Indenture is correct;
(iv) the Trust has Granted to the Indenture Trustee all of
its right, title and interest in each Mortgage Loan; and
(v) as of the Closing Date (or any Subsequent Purchase
Date), no lien in favor of the United States described in Section 6321
9
of the Code, or lien in favor of the Pension Benefit Guaranty
Corporation described in Section 4068(a) of the ERISA, has been filed
as described in subsections 6323(f) and 6323(g) of the Code upon any
property belonging to the Trust.
(e) An executed counterpart of the Sale and Servicing
Agreement.
(f) An executed counterpart of the Trust Agreement.
(g) An executed copy of the Insurance Agreement.
(h) An original executed copy of the Note Insurance Policy.
(i) A copy of a letter or confirmation satisfactory to the
Note Insurer from ▇▇▇▇▇'▇ that it has assigned a rating of "Aaa" to the Note and
a copy of a letter or confirmation satisfactory to the Note Insurer from S&P
that it has assigned a rating of "AAA" to the Note and that ▇▇▇▇▇'▇ has assigned
a rating to the Note of at least Baa2 and S&P has assigned a rating to the Note
of at least BBB, in each case without giving effect to the Note Insurance
Policy.
Section 2.12. Limitations on Transfer of the Note. (a) Any transfer of
a Note shall be made in accordance with the Securities Act. Each prospective
purchaser (other than the Initial Purchaser) and any subsequent transferee of a
Note other than the Depositor, the Liquidity Provider or an affiliate of the
Depositor (each, a "Prospective Owner") shall represent and warrant in writing,
to the Indenture Trustee and the Note Registrar and any of their respective
successors that:
(i) Such Person is duly authorized to purchase the Note and
its purchase of investments having the characteristics of the Note is
authorized under, and not directly or indirectly in contravention of,
any law, charter, trust instrument or other operative document,
investment guidelines or list of permissible or impermissible
investments that is applicable to the investor.
(ii) Such Person understands that each holder of a Note, by
virtue of its acceptance thereof, assents to the terms, provisions and
conditions of the Indenture.
(b) Each Prospective Owner of a Note (other than an Initial
Purchaser and the Liquidity Provider) shall represent and warrant in writing, to
the Indenture Trustee and the Note Registrar and any of their respective
successors that:
(i) Such Person is a Qualified Purchaser and either (A) a
QIB and is aware that the seller of such Note may be relying on the
exemption from the registration requirements of the Securities Act
provided by Rule 144A and is acquiring such Note for its own account or
for the account of one or more qualified institutional buyers, for whom
it is authorized to act, or (B) an institutional investor that is an
"accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
(ii) It understands that such Note has not been registered
under the Securities Act, and the Trust has not been registered under
the Investment Company Act, and that, if in the future it decides to
offer, resell, pledge or otherwise transfer such Note, such Note may be
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offered, resold, pledged or otherwise transferred only (A) pursuant to
a Registration Statement which has been declared effective under the
Securities Act, (B) to a Qualified Purchaser, and (C) for so long as
such Note is eligible for resale pursuant to Rule 144A under the
Securities Act, to a person whom the seller reasonably believes is a
QIB, which is purchasing such Note for its own account or for the
account of a qualified institutional buyer, to whom notice is given
that the transfer is being made in reliance on Rule 144A, or (D) to an
institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act, which is
acquiring such Note for its own account or for the account of such an
institutional "accredited investor," for investment purposes and not
with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, in each case in
compliance with the requirements of the Indenture.
(c) In the event that a transfer of a Note is to be made in
reliance upon an exemption from the Securities Act, Investment Company Act or
state securities laws, in order to assure compliance with the Securities Act and
such laws, the prospective transferor and transferee shall certify to the
Indenture Trustee in writing the facts surrounding the transfer in substantially
the forms set forth in Exhibit C and Exhibit D.
(d) The Servicer on behalf of the Depositor shall provide to
any Holder of a Note and any prospective transferee designated by any such
Holder, information regarding the Note and the Mortgage Loans and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Note without registration
under the Securities Act pursuant to the registration exemption provided
thereunder. Each Holder of a Note desiring to effect such a transfer shall, and
does hereby agree to, indemnify the Issuer, the Owner Trustee, the Indenture
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with federal and state securities
laws.
(e) Each Note shall contain a legend substantially similar to
the applicable legend provided in Exhibit A stating that transfer of such Note
is subject to certain restrictions and referring prospective purchasers of the
Note to this Section 2.12 with respect to such restrictions.
Section 2.13. Reserved.
Section 2.14. Subsequent Advances. (a) On any Subsequent Purchase Date
during the Purchase Period, subject to the satisfaction of the conditions set
forth in paragraph (b) of this Section 2.14 and Section 2.2 of the Insurance
Agreement, the Noteholder shall pay to or upon the order of the Trust, a sum
equal to its Percentage Interest of the Purchase Price of the related Subsequent
Mortgage Loans (each a "Subsequent Advance") and in consideration thereof, the
Trust hereby pledges, to the Indenture Trustee, for the benefit of the
Noteholder and the Note Insurer, all right, title and interest of the Trust in
and to all Subsequent Mortgage Loans now and hereafter arising, including the
outstanding principal of, and interest due on and after the related Subsequent
Purchase Date on, such Subsequent Mortgage Loans, and all other assets in the
Trust Estate relating to the Subsequent Mortgage Loans. In connection with such
pledge, and pursuant to Section 2.09 of the Sale and Servicing Agreement, the
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Trust does hereby also irrevocably pledge to the Indenture Trustee, for the
benefit of the Noteholder and the Note Insurer, all of its rights under the Sale
and Servicing Agreement, the related Subsequent Contribution Agreement and the
related Subsequent Transfer Agreement, including, without limitation, its right
to exercise the remedies created by Section 4.02 of the Sale and Servicing
Agreement for defective documentation and for breaches of representations and
warranties with respect to the Mortgage Loans contained in Sections 3.01, 3.02,
3.03 and 4.01 of the Sale and Servicing Agreement.
(b) Each transfer of Mortgage Loans to the Trust, and each
Subsequent Advance shall be made only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Purchase Date:
(i) in the case of a Subsequent Advance, the Originators
shall have (x) provided the Trust, the Depositor, the Indenture
Trustee, the Collateral Agent, the Note Insurer and the Initial
Purchaser with a Notice of Borrowing at least three (3) Business Days
prior to the Subsequent Purchase Date, which notice shall include a
Mortgage Loan Schedule listing the Subsequent Mortgage Loans, (y)
provided to the Note Insurer and the Liquidity Agent acting on its
behalf, such loan level information as is generally provided to the
lead underwriter for securitizations entered into by the Servicer and
the Originators for purposes of calculation of the Market Value of the
Mortgage Loans and (z) provided any other information reasonably and
timely requested by any of the foregoing parties with respect to the
Subsequent Mortgage Loans;
(ii) the Servicer shall have delivered to the Note Insurer
the report described in Section 7.16(a) of the Sale and Servicing
Agreement;
(iii) as of each Subsequent Purchase Date, neither the
Originators nor the Depositor shall be insolvent, neither shall be made
insolvent by such transfer and neither shall be aware of any pending
insolvency;
(iv) such Subsequent Transfer shall not result in a
material adverse tax consequence to the Trust or the Holder of the
Note;
(v) in the case of a Subsequent Advance, no Default or
Event of Default shall have occurred and be continuing;
(vi) the Depositor and the Trust shall have delivered to
the Indenture Trustee an executed copy of a Subsequent Transfer
Agreement, substantially in the form of Exhibit F to the Sale and
Servicing Agreement,
(vii) the Trust and the Indenture Trustee shall have
executed a Subsequent Pledge Agreement, substantially in the form of
Exhibit B hereto;
(viii) in the case of a Subsequent Advance, a Trigger Event
shall not have occurred and be continuing on such Subsequent Purchase
Date, nor shall a Trigger Event occur as a result of such transfer and
no event has occurred and is continuing or would result from such
Subsequent Advance which, with the giving of notice or the passage of
time, or both, would constitute a Trigger Event;
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(ix) in the case of a Subsequent Advance, the Class A Note
Principal Balance after giving effect to the Subsequent Advance in
respect of such Subsequent Purchase Date would not exceed $200 million;
(x) the amount of the Subsequent Advance is at least $5
million;
(xi) all of the documents required to be delivered pursuant
to Section 2.05 of the Sale and Servicing Agreement have been so
delivered in accordance with the terms thereof and the Note Insurer
shall have received a Certification from the Collateral Agent pursuant
to Section 2.06(b) of the Sale and Servicing Agreement confirming such
delivery (with no exceptions) not later than 2:00 P.M. (New York City,
New York time) on the Business Day preceding the date on which such
Subsequent Advance is to be made;
(xii) the Final Purchase Date shall not have occurred;
(xiii) in the case of a Subsequent Advance, the Holder
shall have received a Notice of Borrowing in the form attached hereto
as Exhibit E, duly executed by the Originators, not later than 2:00
P.M. (New York City, New York time) on the Business Day preceding the
date on which such Subsequent Advance is requested to be made;
(xiv) the Indenture Trustee and the Note Insurer shall have
received an Officer's Certificate of the Depositor certifying that all
of the conditions precedent in this Section 2.14(b) have been
satisfied; and
(xv) the Note Insurer, or Liquidity Agent acting on its
behalf, shall prepare and deliver a report determining the Market Value
of the Mortgage Loans to the Note Insurer and the Servicer.
(c) In connection with the transfer, assignment and pledge of
the Subsequent Mortgage Loans, the Originators and the Depositor shall satisfy
the document delivery requirements set forth in Section 2.05 of the Sale and
Servicing Agreement.
Section 2.15. Release of Collateral. The Issuer or the Servicer, on
behalf of the Issuer, shall be entitled to obtain a release from the lien of
this Indenture for any Collateral at any time, (i) after liquidation of the
Collateral in accordance with Section 7.06 of the Sale and Servicing Agreement
and the deposit of all Liquidation Proceeds and Insurance Proceeds in the
Collection Account or (ii) upon the payment in full of the Mortgage Loans or the
sale or other disposition of the Collateral with the consent of the Controlling
Party. Any such release shall be subject to the condition that the Issuer shall
have delivered to the Indenture Trustee a Trust Request (A) identifying the
Collateral to be released, (B) requesting the release thereof, (C) setting forth
the amount deposited in the Collection Account with respect thereto, and (D)
certifying that the amount deposited in the Collection Account equals the entire
amount of Insurance Proceeds and Liquidation Proceeds received with respect to
such Collateral.
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Section 2.16. Breakage Costs. The Trust shall, in accordance with
Section 8.02(h), reimburse each Holder, upon its written request, for all
losses, expenses and liabilities incurred by such Holder on account of any
liquidation or reemployment of deposits or other funds acquired by such Holder
to make, fund or maintain a Subsequent Advance hereunder if for any reason
(other than the default by such Holder) the funding of any Subsequent Advance
does not occur on a date specified therefor in the Notice of Borrowing
("Breakage Costs"). The Indenture Trustee may conclusively rely and shall be
protected in relying on any such written request without any further
investigation.
Section 2.17. Book-Entry Note. In accordance with Section 2.06, the
Note may be issued as one or more notes in the name of Cede & Co., as nominee
for the Clearing Agency maintaining book-entry records with respect to ownership
and transfer of such Notes, and registration of the Notes may not be transferred
by the Note Registrar except upon Book-Entry Termination. In such case, the Note
Registrar shall deal with the Clearing Agency as representative of the
Beneficial Owners of such Notes for purposes of exercising the rights of
Noteholders hereunder. Each payment of principal of and interest on a Book-Entry
Note shall be paid to the Clearing Agency, which shall credit the amount of such
payments to the accounts of its Clearing Agency Participants in accordance with
its normal procedures. Each Clearing Agency Participant shall be responsible for
disbursing such payments to the Beneficial Owners of the Book-Entry Notes that
it represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm shall be responsible for disbursing funds to the Beneficial
Owners of the Book-Entry Notes that it represents. All such credits and
disbursements are to be made by the Clearing Agency and the Clearing Agency
Participants in accordance with the provisions of the Notes. None of the
Indenture Trustee, the Note Registrar, if any, the Trust or the Note Insurer
shall have any responsibility therefor except as otherwise provided by
applicable law. Requests and directions from, and votes of, such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Beneficial Owners.
Section 2.18. Termination of Book Entry System. (a) The book-entry
system through the Clearing Agency with respect to the Book-Entry Notes may be
terminated upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that
the Clearing Agency is no longer willing or able to discharge properly
its responsibilities as nominee and depositary with respect to the
Notes and the Indenture Trustee is unable to locate a qualified
successor Clearing Agency satisfactory to the Servicer, on behalf of
the Trust;
(ii) The Certificateholder, on behalf of the Trust, in its
sole discretion, elects to terminate the book-entry system by notice to
the Clearing Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event
of Default), the Beneficial Owners of no less than 51% of the Note
Principal Balance of the Book-Entry Notes advise the Indenture Trustee
in writing, through the related Clearing Agency Participants and the
Clearing Agency, that the continuation of a book-entry system through
14
the Clearing Agency to the exclusion of any Definitive Notes being
issued to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection
(a) of this Section 2.18, the Indenture Trustee shall use all reasonable efforts
to notify all Beneficial Owners, through the Clearing Agency, of the occurrence
of such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same, in an aggregate outstanding Note Principal Balance
representing the interest of each, making such adjustments and allowances as it
may find necessary or appropriate as to accrued interest and previous calls for
redemption. Definitive Notes shall be issued only upon surrender to the
Indenture Trustee of the global Note by the Clearing Agency, accompanied by
registration instructions for the Definitive Notes. Neither the Trust nor the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Notes, all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall cease
to be applicable and the provisions relating to Definitive Notes shall be
applicable.
ARTICLE III
COVENANTS
Section 3.01. Payment of the Note. The Paying Agent, on behalf of the
Trust will pay or cause to be duly and punctually paid the principal of, and
interest on, the Note in accordance with the terms of the Note and this
Indenture. The Note shall be a non-recourse obligation of the Trust and shall be
limited in right of payment to amounts available from the Trust Estate as
provided in this Indenture and the Trust shall not otherwise be liable for
payments on the Note. No person shall be personally liable for any amounts
payable under the Note. If any other provision of this Indenture conflicts or is
deemed to conflict with the provisions of this Section 3.01, the provisions of
this Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency. (a) The Indenture
Trustee will always maintain its corporate trust office at a location in the
United States of America where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Trust in
respect of the Note and this Indenture may be served. Such location shall be the
Corporate Trust Office of the Indenture Trustee.
(b) The Owner Trustee, at the direction of the Majority
Certificateholder, on behalf of the Trust may also from time to time, at the
expense of the Majority Certificateholders, designate one or more other offices
or agencies within the United States of America where the Note may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, any designation of an office or agency for
payment of the Note shall be subject to Section 3.03 hereof. The Owner Trustee,
at the direction of the Majority Certificateholders, on behalf of the Trust will
give prompt written notice to the Indenture Trustee, Initial Purchaser and the
Note Insurer of any such designation or rescission and of any change in the
location of any such other office or agency.
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Section 3.03. Money for Note Payments to Be Held In Trust. (a) All
payments of amounts due and payable with respect to any Note that are to be made
from amounts withdrawn from the related Payment Account pursuant to Section 8.02
hereof shall be made on behalf of the Trust by the Indenture Trustee, and no
amounts so withdrawn from the related Payment Account for payments on the Note
shall be paid over to the Trust under any circumstances except as provided in
this Section 3.03 or in Section 8.02 hereof.
(b) If the Trust shall have a Note Registrar that is not also
the Indenture Trustee, such Note Registrar shall furnish, no later than the
fifth (5th) calendar day after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the name and address of the Holder
of the Note.
(c) Whenever the Trust shall have a Paying Agent other than
the Indenture Trustee, the Servicer, on behalf of the Trust, will, on or before
the Business Day next preceding each Payment Date, direct the Indenture Trustee
in writing to deposit with such Paying Agent an aggregate sum sufficient to pay
the amounts then becoming due (to the extent funds are then available for such
purpose in the related Payment Account), such sum to be held in trust for the
benefit of the Persons entitled thereto. Any moneys deposited with a Paying
Agent in excess of an amount sufficient to pay the amounts then becoming due on
the Note with respect to which such deposit was made shall, upon Trust Order, be
paid over by such Paying Agent to the Indenture Trustee for application in
accordance with Article VIII hereof.
(d) Subject to the prior written consent of the Controlling
Party, any Paying Agent other than the Indenture Trustee may be appointed by
Trust Order and at the expense of the Trust. The Trust shall not appoint any
Paying Agent (other than the Indenture Trustee) that is not, at the time of such
appointment, a depository institution or trust company whose obligations would
be Permitted Investments pursuant to clause (b) of the definition of the term
"Permitted Investments". The Servicer, on behalf of the Trust, will cause each
Paying Agent other than the Indenture Trustee to execute and deliver to the
Indenture Trustee and the Owner Trustee, on behalf of the Trust, an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.03, that such Paying Agent will:
(i) allocate all sums received for payment to the Holder of
the Note on each Payment Date among such Holder in the proportion
specified in the applicable Noteholder's Statement, in each case to the
extent permitted by applicable law;
(ii) hold all sums held by it for the payment of amounts
due with respect to the Note in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(iii) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of the Note if at
any time the Paying Agent ceases to meet the standards set forth above
required to be met by a Paying Agent at the time of its appointment;
16
(iv) if such Paying Agent is not the Indenture Trustee,
give the Indenture Trustee notice of any Default by the Trust (or any
other obligor upon the Note) in the making of any payment required to
be made with respect to any Note for which it is acting as Paying
Agent;
(v) if such Paying Agent is not the Indenture Trustee, at
any time during the continuance of any such Default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent; and
(vi) comply with all requirements of the Code, and all
regulations thereunder, with respect to withholding from any payments
made by it on any Note of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in
connection therewith; provided, however, that with respect to
withholding and reporting requirements applicable to original issue
discount (if any) on the Note, the Servicer, on behalf of the Trust,
has provided the calculations pertaining thereto to the Indenture
Trustee and the Paying Agent.
(e) The Trust may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
(f) Any money held by the Indenture Trustee or any Paying
Agent in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two and one-half years after such amount has become due
and payable to the Holder of such Note (or if earlier, three months before the
date on which such amount would escheat to a governmental entity under
applicable law) shall be discharged from such trust and paid to the Trust, for
distribution to the Certificateholder; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Trust for payment
thereof (but only to the extent of the amounts so paid to the Trust), and all
liability of the Indenture Trustee or such Paying Agent with respect to such
trust money shall thereupon cease. The Indenture Trustee may adopt and employ,
at the expense of the Trust, any reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
the Noteholder whose Note has been called but has not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or any Paying
Agent, at the last address of record for each such Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c) of
this Section 3.04, the Trust will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware or under
the laws of any other state of the United States of America, and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Note and the other Basic Documents.
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(b) Subject to Section 3.09(g) hereof, and with the prior
written consent of the Controlling Party, any entity into which the Trust may be
merged or with which it may be consolidated, or any entity resulting from any
merger or consolidation to which the Trust shall be a party, shall be the
successor issuer under this Indenture without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything in any agreement relating to such merger or consolidation, by which any
such Trust may seek to retain certain powers, rights and privileges therefore
obtaining for any period of time following such merger or consolidation to the
contrary notwithstanding (other than Section 3.09(g)).
(c) Upon any consolidation or merger of or other succession to
the Trust in accordance with this Section 3.04, the Person formed by or
surviving such consolidation or merger (if other than the Trust) may exercise
every right and power of, and shall have all of the obligations of, the Trust
under this Indenture with the same effect as if such Person had been named as
the issuer herein.
Section 3.05. Protection of Trust Estate. (a) The Trust will, from time
to time, execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action as may be
necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans or the Sale and
Servicing Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholder and the Note Insurer in
the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
(b) The Indenture Trustee shall not, and shall not permit the
Collateral Agent to, remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the Closing Date or cause or permit
ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such time unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
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Section 3.06. Opinions as to the Trust Estate. In the event the Final
Purchase Date is extended beyond April 30, 2002, on or before April 30th in each
calendar year, beginning in 2002, the Servicer, on behalf of the Trust, shall
furnish to the Indenture Trustee, the Note Insurer and the Initial Purchaser an
Opinion of Counsel reasonably satisfactory in form and substance to the
Indenture Trustee, the Note Insurer and the Initial Purchaser either stating
that, in the opinion of such counsel, such action has been taken as is necessary
to maintain the lien and security interest created by this Indenture and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe all such action, if any, that will,
in the opinion of such counsel, be required to be taken to maintain the lien and
security interest of this Indenture with respect to the Trust Estate until May
1st in the following calendar year.
Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and
the other Basic Documents.
(b) The Trust shall not take any action and will use its Best
Efforts not to permit any action to be taken by others that would release any
Person from any of such Person's covenants or obligations under any of the
Mortgage Files or under any instrument included in the Trust Estate, or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the documents
or instruments contained in the Mortgage Files, except as expressly permitted in
this Indenture, the other Basic Documents or such document included in the
Mortgage File or other instrument.
(c) If the Servicer or the Owner Trustee, on behalf of the
Trust, shall have knowledge of the occurrence of a default under the Sale and
Servicing Agreement, the Servicer or the Owner Trustee, as applicable, shall
promptly notify the Indenture Trustee, Rating Agencies, the Initial Purchaser,
and the Note Insurer thereof, and, in the case of the Servicer, shall specify in
such notice the action, if any, the Servicer is taking with respect to such
default.
(d) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall
promptly notify the Note Insurer and the Rating Agencies. As soon as any
successor Servicer is appointed, the Indenture Trustee shall notify the Note
Insurer and the Rating Agencies, specifying in such notice the name and address
of such successor Servicer.
Section 3.08. [Reserved].
Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate, except as expressly permitted by this Indenture and
the other Basic Documents;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any Note by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
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(c) engage in any business or activity other than as permitted
by the Trust Agreement or other than in connection with, or relating to, the
issuance of the Note pursuant to this Indenture, or amend the Trust Agreement,
as in effect on the Closing Date, other than with the consent of the Controlling
Party in accordance with Section 11.01 of the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for any
indebtedness other than as provided under this Indenture and the Insurance
Agreement;
(e) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such indebtedness as
may be incurred by the Trust in connection with the issuance of the Note
pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or
liquidate in whole or in part (until the Note is paid in full);
(g) (i) permit the validity or effectiveness of this Indenture
or any Grant to be impaired, or permit the lien of this Indenture to be
impaired, amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (ii) permit any lien,
charge, security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or burden
the Trust Estate or any part thereof or any interest therein or the proceeds
thereof, or (iii) permit the lien of this Indenture not to constitute a valid
perfected first priority security interest in the Trust Estate; or
(h) take any other action that should reasonably be expected
to, or fail to take any action if such failure should reasonably be expected to,
cause the Trust to be taxable as (x) an association pursuant to Section 7701 of
the Code or (y) a taxable mortgage pool pursuant to Section 7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance. (a) In the event the
Final Purchase Date is extended beyond April 30, 2002, on or before April 30,
2002, and each April 30 thereafter, the Servicer, on behalf of the Trust, shall
deliver to the Indenture Trustee, the Note Insurer and the Depositor a written
statement, signed by an Authorized Officer of the Servicer, on behalf of the
Trust, stating that:
(b) a review of the fulfillment by the Trust during such year
of its obligations under this Indenture has been made under such Authorized
Officer's supervision; and
(c) to the best of such Authorized Officer's knowledge, based
on such review, the Trust has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a Default in the
fulfillment of any such covenant or condition, specifying each such Default
known to such Authorized Officer and the nature and status thereof.
Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust
or otherwise with respect to any ownership or equity interest or security in or
of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
20
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Trust may make, or cause to be made, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under this Indenture and the other Basic Documents and the Trust
will not, directly or indirectly, make or cause to be made payments to or
distributions from any Payment Account except in accordance with this Indenture.
Section 3.12. Treatment of the Note as Indebtedness for Tax Purposes.
For purposes of federal, state and local income, franchise and any other income
taxes, the Trust will treat the Note as indebtedness, and hereby instructs the
Indenture Trustee, Paying Agent and the Servicer, on behalf of the Trust to
treat the Note as indebtedness for all applicable tax reporting purposes, and by
its acceptance of a Note issued pursuant hereto, each Noteholder also so agrees
to treat the Note.
Section 3.13. Notice of Events of Default. Pursuant to Section 7.01(c)
of the Sale and Servicing Agreement, the Servicer, on behalf of the Trust, shall
give the Indenture Trustee, the Note Insurer, the Rating Agencies, the Initial
Purchaser, the Liquidity Provider, the Back-up Servicer and the Depositor prompt
written notice of each Event of Default and Trigger Event, each event which with
the giving of notice or the passage of time, or both, would constitute an Event
of Default or Trigger Event and each default on the part of the Servicer or the
Originators of their obligations.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the
Trust, and at the direction of the Certificateholders, will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
Section 3.15. Required Collateral Coverage Ratio. (a) The Issuer
covenants and agrees that so long as any Note is outstanding, it will at all
times maintain sufficient Collateral pledged to the Indenture Trustee hereunder
such that a Collateral Deficiency Event (as determined by the Controlling Party
in its sole and absolute discretion) will not occur.
(b) If a Collateral Deficiency Event occurs, the Issuer shall
on the following Business Day pledge to the Indenture Trustee additional
Mortgage Loans or cash having an aggregate Market Value at least equal to the
Restoration Amount. If the Issuer fails to satisfy the requirements of the
preceding sentence, an Event of Default shall be deemed to have occurred.
Section 3.16. Limited Guaranty of Performance. (a) The Guarantor hereby
unconditionally and irrevocably guarantees, as primary obligor, to the Note
Insurer, each Noteholder and the Indenture Trustee, the performance of the
obligations of each Originator, the Servicer, the Depositor and the Issuer (the
"Obligor Parties"), including all covenants, agreements, terms, conditions and
other obligations to be performed and observed by any Obligor Party under the
Basic Documents, and shall include without limitation the due and punctual
payment when due of all sums that are or may become owing by each Obligor Party,
whether in respect of fees, expenses (including counsel fees), indemnified
amounts, amounts required to be paid by any Obligor Party including any such
21
amounts that mature after the commencement of any bankruptcy, involuntary or
similar proceeding with respect to any Obligor Party (whether or not allowed as
a claim in such proceeding) (but excluding the payment of any amounts payable by
the Issuer in respect of the items set forth in Sections 8.02(d)-(h), (k) and
(n)-(o) of this Indenture) (the "Guaranteed Obligations"), in each case at the
place of such payment or performance. Upon failure by the Issuer to pay or
perform fully and punctually any such Guaranteed Obligation, the Guarantor shall
within three (3) Business Days of written demand pay the amount not so paid and
perform or cause to be performed such other Guaranteed Obligation, in each case
at the place, in the manner and at the time specified in the Indenture. This
guaranty is a guaranty of payment and performance and not of collection.
(b) The obligations of the Guarantor hereunder are
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by the
Issuer, as a result of:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect of any Guaranteed Obligation or any related
document in connection with the transactions contemplated hereby or
thereby, whether by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Indenture, the Sale and Servicing Agreement or any related documents;
(iii) any change in the corporate existence, structure or
ownership of any Obligor Party, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Issuer, or its
assets and properties or any resulting release or discharge of any
Guaranteed Obligation;
(iv) the existence of any claim, set-off, defense or other
right which the Guarantor may have at any time against any Obligor
party, the Initial Purchaser, the Note Insurer, the Trust or its
affiliates, or any other Person, whether in connection herewith or any
unrelated transactions; provided, however, that nothing herein shall
prevent the assertion of any such claim, set-off, defense or other
right by separate suit or compulsory counterclaim;
(v) any invalidity or unenforceability relating to or
against any Obligor Parties for any reason of this Indenture, the Sale
and Servicing Agreement or any related documents, or any provision of
applicable law purporting to prohibit the performance of any Guaranteed
Obligation;
(vi) any other act, or omission to act, or delay of any
kind, by any Obligor Party, the Indenture Trustee, the Note Insurer or
any other Person; or
(vii) any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor's obligations hereunder. The guarantee
provided in this Section 3.16 shall encompass any modification or
amendment of, or supplement to, this Indenture, the Sale and Servicing
Agreement or any related documents.
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(d) The Guarantor's obligations hereunder shall remain in full
force and effect until this Indenture and Note Insurance Policy have been
terminated in accordance with their respective terms. If at any time any payment
of any amount payable by any Obligor Party is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of any
Obligor Party, the Guarantor's obligations hereunder with respect to such
payment shall be reinstated as though such payment had been due but not made at
such time.
(e) The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action first be taken by any Person against
any Obligor Parties, or any other Person, including that any action first be
taken to pursue other remedies or to mitigate damages resulting from a failure
by the Note to perform any Guaranteed Obligation, prior to seeking performance
by the Guarantor of its obligations hereunder.
(f) Until one year and one day have passed since the
Guaranteed Obligations of the Obligor Parties are satisfied in full, the
Guarantor shall not enforce or otherwise exercise any right of subrogation to
any of the rights of any other Person or any indemnified Person against any
Obligor Party and, notwithstanding anything to the contrary contained herein,
the Guarantor hereby waives all rights of subrogation (whether contractual,
under Section 509 of the U.S. Bankruptcy Code, at law or in equity or otherwise)
to the claims of the Noteholder, the Note Insurer or any other Person against
any Obligor Party and all contractual, statutory or legal or equitable rights of
contribution, reimbursement, indemnification and similar rights and "claims" (as
that term is defined in the U.S. Bankruptcy Code) which the Guarantor might now
have or hereafter acquire against any Obligor Party that arise from the
existence or performance of the Guarantor's obligations hereunder.
Section 3.17. Representations, Warranties and Covenants of Guarantor.
The Guarantor represents and warrants to the Indenture Trustee, the Note Insurer
and each Noteholder that as of each Closing Date and at all times while any Note
remains outstanding:
(a) It has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(b) It is duly licensed as a "Licensee" or is otherwise
qualified in each state in which it transacts business to the extent
required under applicable law unless, in either instance, the failure
to take such action is not reasonably likely (either individually or in
the aggregate) to cause a material adverse effect on the ability of the
Guarantor to perform its obligations under the Basic Documents, and is
not in default of such state's applicable laws, rules and regulations.
It has the requisite power and authority and legal right to own and
▇▇▇▇▇ ▇ ▇▇▇▇ on all of its right, title and interest in and to the
Collateral, and to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of,
this Indenture, the Sale and Servicing Agreement, the Insurance
Agreement and the other documents evidencing or securing the Note (the
"Transaction Documents").
23
(c) At all times after the Indenture Trustee has received a
Mortgage Loan until payment in full of the Class A Note, the
Originators will comply in all material respects with all applicable
laws, and regulations promulgated with respect thereto.
(d) The Guarantor is solvent (the Guarantor's assets exceed
its liabilities and the Guarantor is able to pay its debts as such
debts become due). As of the date of this Agreement, the Guarantor is
not in default under any mortgage, guaranty, borrowing agreement or
other document evidencing or securing indebtedness or any contingent
liability of the Guarantor to the Initial Purchaser, its affiliates or
another lender (each, an "Other Debt Agreement" and, collectively,
"Other Debt Agreements"). The performance by the Guarantor of this
Indenture and the other Transaction Documents do not conflict with any
term or provision of the certificate of incorporation or by-laws of the
Guarantor or any law, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Guarantor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Guarantor and will not result in any violation of
any of the Other Debt Agreements.
(e) All financial statements or certificates of the Guarantor
or the officers of either entity furnished to the Note Insurer are true
and complete in all material respects and do not omit to disclose any
material liabilities or material contingent liabilities or other facts
relevant to the Guarantor's financial condition. All such financial
statements have been prepared in accordance with GAAP; provided, that
interim financial statements do not need to include footnotes.
(f) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the
execution, delivery and performance by the Guarantor of this Indenture
or the Sale and Servicing Agreement.
(g) There is no action, proceeding or investigation pending
with respect to which the Guarantor has received service of process or,
to the best of the Guarantor's knowledge, threatened against it before
any court, administrative agency or other tribunal (A) asserting the
invalidity of this Indenture or the Sale and Servicing Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Indenture or the Sale and Servicing Agreement, or
(C) which might materially and adversely affect the validity or
collectibility of the Mortgage Loans or the performance by the
Guarantor of its obligations under, or the validity or enforceability
of, this Indenture or the Sale and Servicing Agreement.
(h) There has been no material adverse change in the business,
operations, financial condition, properties or prospects of the
Guarantor since the date set forth in the most recent financial
statements and other notices supplied to the Note Insurer which
constitutes an impairment of the Guarantor's ability to perform its
obligations under this Agreement or the Sale and Servicing Agreement.
(i) This Agreement and the Sale and Servicing Agreement have
been duly authorized, executed and delivered by the Guarantor, all
requisite corporate action having been taken, and each is valid,
binding and enforceable against the Guarantor in accordance with its
terms except as such enforcement may be affected by bankruptcy, by
other insolvency laws, or by general principles of equity.
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ARTICLE IV
CONDITIONS OF CLOSING;
SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase the Note will be subject to the
satisfaction on the Initial Closing Date of the following conditions:
(a) Each of the obligations of the Originators and the
Depositor required to be performed by it on or prior to the Closing Date
pursuant to the terms of the Basic Documents shall have been duly performed and
complied with and all of the representations and warranties of the Depositor and
the Originators under the Basic Documents shall be true and correct as of the
Closing Date and no event shall have occurred which, with notice or the passage
of time, would constitute a default under any Basic Documents, and the Note
Insurer shall have received a certificate to the effect of the foregoing signed
by an authorized officer of each of the Depositor and Originators.
(b) All fees and expenses set forth in Section 5.03 of the
Sale and Servicing Agreement have been paid by the Originators and/or the
Depositors.
(c) The Indenture Trustee shall have received the following
additional closing documents, in form and substance reasonably satisfactory to
the Note Insurer and its counsel:
(i) the Mortgage Loan Schedule;
(ii) this Agreement, the Sale and Servicing Agreement,
the Trust Agreement, and the Insurance Agreement
and all documents required thereunder, duly
executed and delivered by each of the parties
thereto;
(iii) officer's certificates of an officer of each of
the Originators and the Depositor, dated as of
the Initial Closing Date, and attached thereto
resolutions of the board of directors and a copy
of the charter and by-laws;
(iv) copy of each of the Originators and the
Depositor's charter and all amendments, revisions
and supplements thereof, certified by a secretary
of each entity;
(v) an opinion of counsel for the Originators and the
Depositor as to various corporate matters in a
form acceptable to the Note Insurer and its
counsel;
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(vi) opinions of counsel for the Originators and the
Depositor relating to certain bankruptcy matters,
in forms acceptable to the Note Insurer and its
counsel;
(vii) an opinion of counsel for the Indenture Trustee
and Collateral Agent in form and substance
acceptable to the Note Insurer and its counsel;
(viii) an opinion of counsel for the Back-up Servicer in
form and substance acceptable to the Note Insurer
and its counsel;
(ix) an opinion of counsel for the Owner Trustee in
form and substance acceptable to the Note Insurer
and its counsel;
(x) an opinion or opinions of counsel for the
Servicer, in form and substance acceptable to the
Note Insurer and its counsel;
(xi) confirmation from S&P that the Note has been or
will upon issuance be rated AAA (and at least BBB
without giving effect to the Note Insurance
Policy);
(xii) confirmation from ▇▇▇▇▇'▇ that the Note has been
or will upon issuance be rated Aaa (and at least
Baa2 without giving effect to the Note Insurance
Policy); and
(xiii) confirmation from S&P and ▇▇▇▇▇'▇ that the
execution and delivery of this Indenture by the
Initial Purchaser will not result in the
reduction or withdrawal of the then current
ratings on the Initial Purchaser's commercial
paper notes.
(d) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
satisfactory in form and substance to the Note Insurer and its counsel.
(e) The Originators and the Depositor shall have furnished the
Note Insurer with such other certificates of its officers or others and such
other documents or opinions as the Note Insurer or its counsel may reasonably
request.
(f) In the case of the obligation of the Initial Purchaser,
the Note Insurer shall have issued the Note Insurance Policy.
Section 4.02. Termination of Initial Purchaser's Obligations. The
Initial Purchaser may terminate its obligations hereunder by written notice to
the Originators and the Depositor at any time: (a) any of the conditions set
forth in Section 4.01 are not satisfied when and as provided therein or a
Trigger Event has occurred and is continuing; (b) there shall have been the
entry of a decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
26
liabilities or similar proceedings of or relating to the Depositor, the Trust,
the Liquidity Provider or any Originator, or for the winding up or liquidation
of the affairs of the Depositor, the Trust, the Liquidity Provider or any
Originator; (c) there shall have been the consent by the Depositor, the Trust,
the Liquidity Provider or any Originator to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Depositor,
the Trust, the Liquidity Provider or any Originator or of or relating to
substantially all of the property of the Depositor, the Trust, the Liquidity
Provider or any Originator; or (d) the Liquidity Provider (i) ceases to be rated
at least "A-1" by S&P and "P-1" by ▇▇▇▇▇'▇, (ii) defaults on any of its
obligations to the Initial Purchaser under any master repurchase agreement or
other liquidity agreement to which it is a party or (iii) no longer provides the
full amount of liquidity funding to the Initial Purchaser necessary in order to
enable it to issue commercial paper to fund its purchase of the Note held by it
and Subsequent Advances required to be made hereunder; provided, however, that,
(a) with respect to this clause (iii), a partial reduction of liquidity funding
shall only result in a pro rata reduction in the Initial Purchaser's obligation
to make Subsequent Advances hereunder and (b) in the event a replacement
Liquidity Provider rated A-1 by S&P and P-1 by ▇▇▇▇▇'▇ and otherwise acceptable
to the Obligors and the Initial Purchaser assumes the obligations of the
existing Liquidity Provider under the applicable master repurchase agreement or
other liquidity agreements, and each Rating Agency shall have confirmed that
continued making of Subsequent Advances by the Initial Purchaser hereunder will
not result in the reduction or withdrawal of the then current ratings on its
commercial paper in their sole discretion, the Initial Purchaser's obligations
hereunder will not be terminated. The termination of the Initial Purchaser's
obligations hereunder shall not terminate the Initial Purchaser's rights
hereunder or its right to exercise any remedy available to it at law or in
equity.
Section 4.03. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) the entire unpaid Note Principal Balance of the Note not
theretofore delivered to the Indenture Trustee for cancellation has been paid
and discharged;
(b) the Servicer, on behalf of the Trust, has paid or caused
to be paid all other sums payable hereunder and under the other Basic Documents
by the Trust (including, without limitations, amounts due the Indenture Trustee
and the Note Insurer); and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Insurer an Officers' Certificate and an Opinion
of Counsel satisfactory in form and substance to the Indenture Trustee and the
Note Insurer each stating that all conditions precedent herein providing for the
satisfaction and discharge of this Indenture have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Trust (or of the Servicer in the
case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Trust or upon Trust Order all cash, securities and
other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (a) and (b) above.
27
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Indenture Trustee and any Paying Agent to the
Trust and the Holder of the Note under Section 3.03 hereof, the obligations of
the Indenture Trustee to the Holder of the Note under Section 4.04 hereof, the
rights and protections of the Indenture Trustee under Article VI, and the
provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or
mutilated Notes, registration of transfers of the Note and rights to receive
payments of principal of and interest on the Note shall survive.
Section 4.04. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.03 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Note and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to the Note issued hereunder, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) if the Trust shall fail to pay or cause to pay to the
Indenture Trustee, for the benefit of the Holder of the Note, on any Payment
Date, any Interest Payment Amount;
(b) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the Holder of the Note,
(x) on any Payment Date, an amount equal to the Class A Principal Payment Amount
due on the Note on such Payment Date, to the extent that sufficient funds are on
deposit in the Collection Account or (y) on the Final Stated Maturity Date for
the Note, the aggregate Outstanding Note Principal Balance of the Note;
(c) (i) the Trust shall be in material breach or default in
the due observance of any one or more of the covenants set forth in this
Indenture or (ii) any of the Originators, ABFS, or the Depositor shall be in
material breach or default of any one or more of the covenants set forth in the
Sale and Servicing Agreement (and in respect of both clauses (i) and (ii) such
breach or Default remains uncured for a period of 30 days after the discovery
thereof).
(d) if the Trust shall consent to the appointment of a
custodian, receiver, trustee or liquidator (or other similar official) of
itself, or of a substantial part of its property, or shall admit in writing its
inability to pay its debts generally as they come due, or a court of competent
jurisdiction shall determine that the Trust is generally not paying its debts as
they come due, or the Trust shall make a general assignment for the benefit of
creditors;
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(e) if the Trust shall file a voluntary petition in bankruptcy
or a voluntary petition or an answer seeking reorganization in a proceeding
under any bankruptcy laws (as now or hereafter in effect) or an answer admitting
the material allegation of a petition filed against the Trust in any such
proceeding, or the Trust shall, by voluntary petition, answer or consent, seek
relief under the provisions of any now existing or future bankruptcy or other
similar law providing for the reorganization or winding-up of debtors, or
providing for an agreement, composition, extension or adjustment with its
creditors;
(f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent (express or legally implied) of the Trust, a custodian, receiver,
trustee or liquidator (or other similar official) of the Trust or any
substantial part of its property, or sequestering any substantial part of its
respective property, and any such order, judgment or decree or appointment or
sequestration shall remain in force undismissed, unstayed or unvacated for a
period of forty-five (45) days after the date of entry thereof;
(g) if a petition against the Trust in a proceeding under
applicable bankruptcy laws or other insolvency laws, as now or hereafter in
effect, shall be filed and shall not be stayed, withdrawn or dismissed within
forty-five (45) days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of debtors which may apply to the
Trust, any court of competent jurisdiction shall assume jurisdiction, custody or
control of the Trust or any substantial part of its property, and such
jurisdiction, custody or control shall remain in force unrelinquished, unstayed
or unterminated for a period of thirty (30) days;
(h) if there shall have occurred a Servicer Event of Default
under the Sale and Servicing Agreement;
(i) with respect to any Other Debt Agreement which evidences
debt owed by the Guarantor in excess of $1,000,000 and after the expiration of
any applicable grace and/or cure period provided therein, (i) a monetary "event
of default" by the Guarantor under such agreement, or (ii) a non-monetary "event
of default" by the Guarantor under such agreement which has resulted in the
acceleration of the underlying debt;
(j) the filing by the Guarantor of a petition for liquidation,
reorganization, arrangement or adjudication as a bankrupt or similar relief
under the bankruptcy, insolvency or similar laws of the United States or any
state or territory thereof or of any foreign jurisdiction; the failure of the
Guarantor to secure dismissal of any such petition filed against it within
thirty (30) days of such filing; the making of any general assignment by the
Guarantor, or any Affiliate for the benefit of creditors; the appointment of a
receiver or trustee for the Guarantor, or for any part of the Guarantor's
assets; the institution by the Guarantor of any other type of insolvency
proceeding (under the Bankruptcy Code or otherwise) or of any formal or informal
proceeding, for the dissolution or liquidation of, settlement of claims against,
or winding up of the affairs of, the Guarantor; the institution of any such
proceeding against the Guarantor if the Guarantor shall fail to secure dismissal
thereof within thirty (30) days thereafter; the consent by the Guarantor to any
type of insolvency proceeding against the Guarantor (under the Bankruptcy Code
or otherwise); the occurrence of any event or existence of any condition which
could be the ground, basis or cause for any proceeding or petition described in
this clause (j);
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(k) any material adverse change in the financial condition of
the Guarantor or the existence of any other condition which, in the Note
Insurer's sole and reasonable determination, constitutes an impairment of the
Guarantor's ability to perform its obligations under this Agreement, the
Insurance Agreement or the Sale and Servicing Agreement and which condition is
not remedied within thirty (30) days after written notice to the Guarantor;
(l) a Collateral Deficiency Event which is not cured within
two (2) Business Days;
(m) failure of the Redemption Date to have occurred on or
before the Final Purchase Date; or
(n) a Trigger Event.
Section 5.02. Acceleration of Maturity; Rescission and Annulment(a) .
(a) If an Event of Default occurs and is continuing, then and in every such
case, but with the consent of the Controlling Party, the Indenture Trustee may,
and at the written request of the Controlling Party, the Indenture Trustee
shall, declare the Note to be immediately due and payable by a notice in writing
to the Trust (and to the Indenture Trustee if given by the Noteholder), and upon
any such declaration such Note, in an amount equal to the entire unpaid Note
Principal Balance of such Note, together with accrued and unpaid interest
thereon to the date of such acceleration, shall become immediately due and
payable, all subject to the prior written consent of the Controlling Party.
(b) At any time after such a declaration of acceleration of
maturity of the Note has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Controlling Party, by written notice to the
Trust and the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Trust has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of, and interest on, the
Outstanding Note and all other amounts that would then be due
hereunder or upon such Note if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its
agents and counsel; and
(c) all Events of Default, other than the nonpayment of the
principal of the Note that have become due solely by such acceleration, have
been cured or waived as provided in Section 5.14 hereof.
(d) No such rescission shall affect any subsequent Default or
impair any right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default occurs and is continuing, the
Indenture Trustee may, with the prior written consent of the Controlling Party,
proceed to protect and enforce its rights and the rights of the Noteholder and
the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholder and the Note Insurer, against
the Trust shall be limited to the preservation, enforcement and foreclosure of
the liens, assignments, rights and security interests under the Indenture and no
attachment, execution or other unit or process shall be sought, issued or levied
upon any assets, properties or funds of the Trust, other than the Trust Estate
relative to the Note in respect of which such Event of Default has occurred. If
there is a foreclosure of any such liens, assignments, rights and security
interests under this Indenture, by private power of sale or otherwise, no
judgment for any deficiency upon the indebtedness represented by the Note may be
sought or obtained by the Indenture Trustee or any Noteholder against the Trust.
The Indenture Trustee shall be entitled to recover the costs and expenses
expended by it pursuant to this Article V including reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel from the Trust in accordance with the priorities set forth in Section
8.02 hereof.
Section 5.04. Remedies. (a) If an Event of Default shall have occurred
and be continuing and the Note been declared due and payable and such
declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee, at the direction of the Controlling Party (subject to Section
5.17 hereof, to the extent applicable) shall, for the benefit of the Noteholder
and the Note Insurer, do one or more of the following:
(i) institute Proceedings for the collection of all amounts
then payable on the Note, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03 hereof;
(ii) in accordance with Section 5.17 hereof, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law (which sale may be conducted by the Liquidity
Provider, as agent for the Indenture Trustee in accordance with Section
5.17 hereof);
(iii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iv) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or
the Holder of the Note and the Note Insurer hereunder; and
(v) refrain from selling the Trust Estate and apply all
funds on deposit in each of the Accounts pursuant to Section 8.02
hereof.
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(b) Upon the occurrence of an Event of Default under Section
5.01 that has not been cured by the Depositor or the Issuer within the
applicable cure period provided in the Sale and Servicing Agreement, the
Indenture Trustee, if so directed by the Controlling Party shall take any or all
of the following courses of action: (i) subject to providing seven Business
Days' prior notice thereof to the Depositor, the Noteholder and the Note
Insurer, sell the Pledged Mortgage Loans in the manner set forth in accordance
with the Basic Documents; (ii) apply all collections in accordance with the
priority of payments in Section 8.02; (iii) increase the per annum interest rate
on the Note to LIBOR plus 4.00% or any lesser rate the Note Insurer determines
in its sole discretion to be appropriate; (iv) arrange for the transfer of
servicing of the Mortgage Loans to an newly appointed successor servicer; (v)
terminate the Purchase Period; or (vi) waive any such Event of Default
indefinitely or for a specific period of time as it deems appropriate.
(c) Upon the occurrence of an Event of Default under Section
5.01 that has not been cured by the Depositor or the Issuer within the
applicable cure period provided in the Sale and Servicing Agreement, the Note
Insurer may take action in the manner set forth in the Basic Documents.
(d) If an Event of Default has occurred and is continuing, in
accordance with this Section 5.04 and Section 5.17, the Liquidity Provider shall
receive a one time payment of the Liquidity Provider Placement and Expense Fee
in accordance with Section 8.02 if one of the following occurs: (i) a sale of
the Trust Estate is conducted through the Liquidity Provider, (ii) the Liquidity
Provider becomes the holder of the Class A Note and is unable to conduct a sale
pursuant to clause (iii), or (iii) a sale of the Class A Note to a purchaser
other than the Initial Purchaser is conducted through the Liquidity Provider.
Section 5.05. Indenture Trustee May File Proofs of Claim. (a) In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative
to the Trust or any other obligor upon the Note or the property of the Trust or
of such other obligor or their creditors, the Indenture Trustee (irrespective of
whether the Note shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand on the Trust for the payment of any overdue principal or
interest) shall, with the prior written consent of the Controlling Party, be
entitled and empowered, by intervention in such Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Note and file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel), the Noteholder and
the Note Insurer allowed in such Proceeding, and
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or
other similar official) in any such Proceeding is hereby authorized by
each Noteholder and the Note Insurer to make such payments to the
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Indenture Trustee and, in the event that the Indenture Trustee shall
consent to the making of such payments directly to the Noteholder and
the Note Insurer, to pay to the Indenture Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel.
(b) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting the Note or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of the Note. All rights of action and claims under this Indenture or the Note
may be prosecuted and enforced by the Indenture Trustee without the possession
of the Note or the production thereof in any Proceeding relating thereto, and
any such Proceeding instituted by the Indenture Trustee, at the direction of the
Controlling Party, shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable benefit of the
Holder of the Note and the Note Insurer in respect of which such judgment has
been recovered after payment of amounts required to be paid pursuant to clause
(b) of Section 8.02 hereof.
Section 5.07. [Reserved]
Section 5.08. Limitation on Suits. No Holder of a Note shall have any
right to institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee and the Note Insurer of a continuing Event of Default;
(b) the Holder or Holders of the Notes representing not less
than 25% of the Note Principal Balance of the Outstanding Note shall have made
written request to the Indenture Trustee to institute Proceedings in respect of
such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder has offered to the Indenture Trustee indemnity
in full against the costs, expenses and liabilities to be incurred in compliance
with such request;
(d) the Indenture Trustee, for sixty (60) days after its
receipt of such notice, request and offer of indemnity, has failed to institute
any such Proceeding;
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such sixty (60) day period by the
Noteholder; and
(f) the consent of the Controlling Party shall have been
obtained; it being understood and intended that no Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holder of
the Note or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of the Noteholder.
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Section 5.09. Unconditional Rights of the Noteholder to Receive
Principal and Interest. Subject to the provisions in this Indenture (including
Sections 3.01 and 5.03 hereof) limiting the right to recover amounts due on a
Note to recovery from amounts in the Trust Estate, the Holder of any Note shall
have the right, to the extent permitted by applicable law, which right is
absolute and unconditional, to receive payment of each installment of interest
on such Note on the respective Payment Date for such installments of interest,
to receive payment of each installment of principal of such Note when due (or,
in the case of any Note called for redemption, on the date fixed for such
redemption) and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Insurer and the Noteholder
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee, the Note Insurer and the Noteholder shall
continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Noteholder is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee, the Note Insurer or the Noteholder may be exercised from time
to time, and as often as may be deemed expedient, by the Indenture Trustee, the
Note Insurer or the Noteholder with the prior consent of the Note Insurer, as
the case may be.
Section 5.13. Controlling Party. The Controlling Party shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture; and
(b) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee or as directed by the Controlling Party that is
not inconsistent with such direction; provided, however, that, subject to
Section 6.01 hereof, the Indenture Trustee need not take any action that it
determines might involve it in liability for which it is not adequately
indemnified or be unjustly prejudicial to the Noteholder not consenting.
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Section 5.14. Waiver of Past Defaults. The Controlling Party may waive
any past Default hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest
on any Note; or
(b) in respect of a covenant or provision hereof that under
Section 9.02 hereof cannot be modified or amended without the consent of the
Holders of the Note representing 100% of the outstanding Note Principal Balance.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by the Initial Purchaser or any
Noteholder, or group of the Noteholder, holding in the aggregate Notes
representing more than 10% of the Note Principal Balance of the Outstanding
Note, or to any suit instituted by the Initial Purchaser or any Noteholder for
the enforcement of the payment of any Interest Payment Amount or Class A
Principal Payment Amount on any Note on or after the related Payment Date or for
the enforcement of the payment of principal of any Note on or after the Final
Stated Maturity Date (or, in the case of any Note called for redemption, on or
after the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension of law wherever enacted, now or at any time hereafter in
force, that may affect the covenants in, or the performance of, this Indenture;
and the Trust (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Sections 5.04 or 10.04
hereof shall not be exhausted by any one or more Sales as to any portion of the
Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Note and under
this Indenture with respect thereto shall have been paid. The Indenture Trustee
may from time to time postpone any public Sale by public announcement made at
the time and place of such Sale.
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(b) To the extent permitted by law, (i) the Indenture Trustee
or (ii) the Liquidity Provider, as agent for the Indenture Trustee for a sale
pursuant to Section 5.04, shall not in any private Sale, sell or otherwise
dispose of the Trust Estate, or any portion thereof, unless:
(i) the Controlling Party consents to or directs the
Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Holder of the Note and the
Note Insurer, in full payment thereof in accordance with Section 8.02
hereof, on the Payment Date next succeeding the date of such Sale, as
set forth in a written notice to the Indenture Trustee from the Note
Insurer.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or disposition thereof for purposes
of this Section 5.17(b). No Sale hereunder shall be effective without the
consent of the Controlling Party.
(c) Unless the Holder of the Outstanding Note has otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (ii) of subsection (b) of this Section 5.17 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee in the manner set forth in
Section 5.17(d)(ii), acting in its capacity as Indenture Trustee (i) on behalf
of the Noteholder and the Note Insurer, shall prevent such Sale and bid an
amount at least $1.00 more than the highest other bid in order to preserve the
Trust Estate on behalf of the Noteholder and the Note Insurer.
(d) In connection with a Sale of all or any portion of the
Trust Estate:
(i) any Holder of the Note may bid for and purchase the
property offered for Sale, and upon compliance with the terms of sale
may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money therefor,
deliver any Outstanding Note or claims for interest thereon in lieu of
cash up to the amount that shall, upon distribution of the net proceeds
of such Sale, be payable thereon, and such Note, in case the amounts so
payable thereon shall be less than the amount due thereon, shall be
returned to the Holder thereof after being appropriately stamped to
show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale thereof,
and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A)
the amount that would be payable to the Holder of the Note as a result
of such Sale in accordance with Section 8.02 hereof on the Payment Date
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next succeeding the date of such Sale and (B) the expenses of the Sale
and of any Proceedings in connection therewith which are reimbursable
to it, without being required to produce the Note in order to complete
any such Sale or in order for the net Sale price to be credited against
such Note, and any property so acquired by the Indenture Trustee shall
be held and dealt with by it in accordance with the provisions of this
Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of the Trust to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale;
(v) no purchaser or transferee at such a Sale shall be
bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys; and
(vi) no Sale may be affected without the prior written
consent of the Controlling Party.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek
and recover judgment under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee, the Note Insurer or the Holder of the Note shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Trust or by
the levy of any execution under such judgment upon any portion of the Trust
Estate.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
of which a Responsible Officer of the Indenture Trustee has actual knowledge has
occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee need perform only those duties
that are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
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statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection
(b) of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless
it is proved that the Indenture Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Sections 5.13 or
5.17 hereof or exercising any trust or power or remedy conferred upon
the Indenture Trustee under this Indenture.
(d) The Indenture Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Sections 5.01(c), (d), (e),
(f), (g), (h), (i), (j), (k), (l), (m) or (n) hereof or of any event described
in Section 3.05 hereof unless a Responsible Officer assigned to and working in
the Indenture Trustee's corporate trust department and having direct
responsibility for this Indenture has actual knowledge thereof or unless written
notice of any event that is in fact such an Event of Default, or Default is
received by the Indenture Trustee at the Corporate Trust Office, and such notice
references the Note generally, the Trust, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it under this Indenture or the other
Basic Documents.
(f) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Trust in and to the Trust Estate following an Event of Default
and a consequent declaration of acceleration of the maturity of the Note,
whether such extinguishment occurs through a Sale of the Trust Estate to another
Person, the acquisition of the Trust Estate by the Indenture Trustee or
otherwise, the rights, powers and duties of the Indenture Trustee with respect
to the Trust Estate (or the proceeds thereof), the Noteholder and the Note
Insurer and the rights of the Noteholder and the Note Insurer shall continue to
be governed by the terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any
successor Collateral Agent appointed pursuant to Section 11.08 of the Sale and
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Servicing Agreement shall at all times retain possession of the Indenture
Trustee's Mortgage Files in the State of Delaware, or the State of New York, (or
with respect to The Chase Manhattan Bank, as initial Collateral Agent, in the
State of Texas) except for those Indenture Trustee's Mortgage Files or portions
thereof released to the Servicer or the Note Insurer pursuant to this Indenture
or the Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and
without limiting the generality of this Section 6.01, the Indenture Trustee
shall have no duty (A) to see to any recording, filing, or depositing of this
Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording, filing or depositing or to any re-recording,
refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate from funds available in the Payment
Accounts or (D) to confirm or verify the contents of any reports or certificates
of the Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
Section 6.02. Notice of Default. Immediately after the occurrence of
any Default of which a Responsible Officer of the Indenture Trustee has actual
knowledge, the Indenture Trustee shall transmit by mail to the Note Insurer and
the Depositor notice of each such Default and, within ninety (90) days after the
occurrence of any Default known to the Indenture Trustee, the Indenture Trustee
shall transmit by mail to all Holder of the Note notice of each such Default,
unless such Default shall have been cured or waived; provided, however, that in
no event shall the Indenture Trustee provide notice, or fail to provide notice
of a Default known to the Indenture Trustee in a manner contrary to the
requirements of the Trust Indenture Act.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Controlling Party, which consent
shall not be unreasonably withheld, the Indenture Trustee may act through agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith that it believes to be authorized or
within its rights or powers.
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(e) The Indenture Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Indenture or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of the Controlling Party, pursuant to the
provisions of this Indenture, unless the Controlling Party shall have offered to
the Indenture Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
(f) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Controlling Party; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action.
(g) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed as a duty,
and the Indenture Trustee shall not be answerable for anything other than its
negligence or willful misconduct in the performance of such act.
(h) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Indenture Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits) even if the Indenture Trustee has been advised of
the likelihood of such loss or damage and regardless of the form of action.
Section 6.04. Not Responsible for Recitals or Issuance of the Note. The
recitals contained herein and in the Note, except, with respect to the Indenture
Trustee, the certificates of authentication on the Note, shall be taken as the
statements of the Trust, and the Owner Trustee, the Indenture Trustee and the
Authenticating Agent assume no responsibility for their correctness. The Owner
Trustee and the Indenture Trustee make no representations with respect to the
Trust Estate or as to the validity or sufficiency of this Indenture or of the
Note. Neither the Indenture Trustee nor the Owner Trustee shall be accountable
for the use or application by the Trust of the Note or the proceeds thereof or
any money paid to the Trust or upon a Trust Order pursuant to the provisions
hereof.
Section 6.05. May Hold the Note. The Indenture Trustee, any Agent, or
any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of the Note and, subject to Section 6.13 hereof, may
otherwise deal with the Trust or any Affiliate of the Trust with the same rights
it would have if it were not Indenture Trustee, Agent or such other agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by this Indenture or by law. The Indenture Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Trust and except to the extent of income or other gain on
investments that are obligations of the Indenture Trustee, in its commercial
capacity, and income or other gain actually received by the Indenture Trustee on
investments, which are obligations of others.
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Section 6.07. [Reserved].
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b)
be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by
Moody's. If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.08, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VI.
Section 6.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article VI shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10 hereof.
(b) The Indenture Trustee may resign at any time by giving
written notice thereof to the Trust, Note Insurer and each Rating Agency. If an
instrument of acceptance by a successor Indenture Trustee shall not have been
delivered to the Indenture Trustee within thirty (30) days after the giving of
such notice of resignation, the resigning Indenture Trustee may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(c) The Indenture Trustee may be removed at any time by the
Controlling Party by written notice delivered to the Indenture Trustee and to
the Trust.
(d) If at any time the Indenture Trustee shall cease to be
eligible under Section 6.08 hereof or shall become incapable of acting or shall
be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Indenture Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a
Trust Order, with the consent of the Controlling Party, may remove the Indenture
Trustee, and the Owner Trustee, on behalf of the Trust, by a Trust Order, shall
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint a successor
Indenture Trustee acceptable to the Controlling Party and to vest in such
successor Indenture Trustee any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Indenture; provided,
however, if the Owner Trustee, on behalf of the Trust, and the Controlling Party
do not join in such appointment within fifteen (15) days after the receipt by it
of a request to do so, or in case an Event of Default has occurred and is
continuing, the Indenture Trustee may petition a court of competent jurisdiction
to make such appointment, or (y) subject to Section 5.15 hereof, and, in the
case of a conflicting interest as described in clause (i) above, the Note
Insurer or any Noteholder who has been a bona fide Holder of a Note for at least
six (6) months or the Controlling Party may, on behalf of himself and all others
similarly situated, with the consent of the Controlling Party, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
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(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of the
Indenture Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a
Trust Order, shall promptly appoint a successor Indenture Trustee acceptable to
the Controlling Party. If within one (1) year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture Trustee has
not been approved by the Owner Trustee, a successor Indenture Trustee shall be
appointed by the Controlling Party or, with the consent of the Controlling
Party, by Act of the Noteholder delivered to the Trust and the retiring
Indenture Trustee. The successor Indenture Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Indenture Trustee
and supersede the predecessor Indenture Trustee appointed by the Trust. If no
successor Indenture Trustee shall have been so appointed by the Trust, the
Controlling Party, any Noteholder who has been a bona fide Holder of a Note for
at least six (6) months may or the Controlling Party, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
(f) The Servicer, on behalf of the Trust, shall give notice of
each resignation and each removal of the Indenture Trustee and each appointment
of a successor Indenture Trustee to the Holder of the Note, the Rating Agencies
and the Note Insurer. Each notice shall include the name of the successor
Indenture Trustee and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture
Trustee. (a) Every successor Indenture Trustee appointed hereunder shall
execute, acknowledge and deliver to the Trust, the Initial Purchaser, the Note
Insurer and the retiring Indenture Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective and such successor Indenture Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Indenture Trustee. Notwithstanding the
foregoing, upon a Trust Request of the Owner Trustee, on behalf of the Trust, or
the successor Indenture Trustee, such retiring Indenture Trustee shall, upon
payment of all amounts owing to it, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder. Upon a written request of any such
successor Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall,
with the written consent of the Controlling Party, execute and deliver any and
all instruments for more fully and certainly vesting in and confirming to such
successor Indenture Trustee all such rights, powers and trusts.
(b) No successor Indenture Trustee shall accept its
appointment unless at the time of such acceptance such successor Indenture
Trustee shall be qualified and eligible under this Article VI.
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Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into which
the Indenture 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 Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Note has been
authenticated, but not delivered, by the Indenture Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Indenture Trustee may adopt such authentication and deliver the Note so
authenticated with the same effect as if such successor Indenture Trustee had
authenticated such Note.
Section 6.12. [Reserved].
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.
(a) At any time or times, for the purpose of meeting the legal requirements of
any jurisdiction in which any of the Trust Estate may at the time be located,
the Indenture Trustee shall have power to appoint, and, upon the written request
of the Indenture Trustee, the Controlling Party and the Owner Trustee, on behalf
of the Trust, shall for such purpose join with the Indenture Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Indenture Trustee
either to act as co-trustee, jointly with the Indenture Trustee, of all or any
part of the Trust Estate, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 6.13. If the Owner Trustee, on behalf of
the Trust, does not join in such appointment within fifteen (15) days after the
receipt by it of a request to do so, or in case an Event of Default has occurred
and is continuing, the Indenture Trustee alone shall have power to make such
appointment.
(b) Should any written instrument from the Trust be required
by any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on written request, be executed, acknowledged
and delivered by the Owner Trustee, on behalf of the Trust, with the written
consent of the Controlling Party.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:
(i) The Note shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee
hereunder, shall be exercised, solely by the Indenture Trustee.
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(ii) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Indenture Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(iii) The Indenture Trustee at any time, by an instrument
in writing, executed by it, with the concurrence of the Owner Trustee,
on behalf of the Trust, evidenced by a Trust Order, may accept the
resignation of or remove any co-trustee or separate trustee appointed
under this Section 6.13, and, in case an Event of Default has occurred
and is continuing, the Indenture Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Trust or the Owner Trustee, but upon the
written request of the Indenture Trustee, the Owner Trustee, on behalf
of the Trust, shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed
in the manner provided in this Section 6.13.
(iv) No trustee hereunder shall be personally liable by
reason of any act or omission of any other such trustee hereunder.
(v) Any Act of the Noteholder delivered to the Indenture
Trustee shall be deemed to have been delivered to each such co-trustee
and separate trustee.
Section 6.14. Authenticating Agents. (a) The Owner Trustee, acting at
the direction of the Majority Certificateholders, shall appoint an
Authenticating Agent with power to act on the Trust's behalf, subject to the
direction of the Majority Certificateholders, in the authentication and delivery
of the Note designated for such authentication and, containing provisions
therein for such authentication (unless the Owner Trustee, acting at the
direction of the Majority Certificateholders, has made other arrangements,
satisfactory to the Indenture Trustee and such Authenticating Agent, for
notation on the Note of the authority of an Authenticating Agent appointed after
the initial authentication and delivery of such Note) in connection with
transfers and exchanges under Section 2.06 hereof, as fully to all intents and
purposes as though the Authenticating Agent had been expressly authorized by
Section 2.06 hereof to authenticate and deliver Notes. For all purposes of this
Indenture (other than in connection with the authentication and delivery of the
Note pursuant to Sections 2.05 and 2.11 hereof in connection with its initial
issuance), the authentication and delivery of the Note by the Authenticating
Agent pursuant to this Section 6.14 shall be deemed to be the authentication and
delivery of the Note "by the Indenture Trustee." Such Authenticating Agent shall
at all times be a Person that has an office for presentation of the Note in the
United States of America. The Indenture Trustee shall initially be the
Authenticating Agent and shall be the Note Registrar as provided in Section 2.06
hereof. The office from which the Indenture Trustee shall perform its duties as
44
Note Registrar and Authenticating Agent shall be its Corporate Trust Office. Any
Authenticating Agent (other than the Indenture Trustee) appointed pursuant to
the terms of this Section 6.14 or pursuant to the terms of any supplemental
indenture shall deliver to the Indenture Trustee as a condition precedent to the
effectiveness of such appointment an instrument accepting the trusts, duties and
responsibilities of Authenticating Agent and of the Note Registrar or co-Note
Registrar and indemnifying the Indenture Trustee for and holding the Indenture
Trustee harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance, administration of the trust or
exercise of authority by such Authenticating Agent, Note Registrar or co-Note
Registrar.
(b) Any corporation or banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any corporation or banking association succeeding to the corporate
trust business of any Authenticating Agent, shall be the successor of the
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14, without the execution or filing of any further
act on the part of the parties hereto or the Authenticating Agent or such
successor corporation or banking association.
(c) Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trust. The Owner Trustee, acting at the
direction of the Majority Certificateholders, may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Indenture Trustee. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
promptly appoint a successor Authenticating Agent, shall give written notice of
such appointment to the Indenture Trustee, and shall mail notice of such
appointment to the Noteholder.
(d) The Indenture Trustee agrees, subject to Section 6.01(e)
hereof, to pay to any Authenticating Agent from time to time reasonable
compensation for its services and the Indenture Trustee shall be entitled to be
reimbursed for such payments pursuant to Section 6.16 hereof. The provisions of
Sections 2.09, 6.04 and 6.05 hereof shall be applicable to any Authenticating
Agent.
Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee
shall, on or prior to the Closing Date, execute and deliver the acknowledgement
of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale
and Servicing Agreement.
(b) The Indenture Trustee shall cause the Collateral Agent to
(i) on or prior to each Closing Date, execute and deliver the Final
Certification required by Section 2.06(b) of the Sale and Servicing Agreement.
(c) In giving each of the acknowledgements and the Final
Certification referred to in clauses (a) and (b) of this Section 6.15, neither
the Indenture Trustee nor the Collateral Agent shall be under any duty or
obligation (i) to inspect, review or examine any such documents, instruments,
securities or other papers to determine that they or the signatures thereto are
45
genuine, enforceable, or appropriate for the represented purpose or that they
have actually been recorded or that they are other than what they purport to be
on their face or (ii) to determine whether any Mortgage File should include a
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
(d) No later than the fifth Business Day of each month,
commencing in May 2001, the Indenture Trustee shall cause the Collateral Agent
to deliver to the Servicer and the Note Insurer a recordation report dated as of
the first day of such month, identifying those Mortgage Loans for which it has
not yet received (i) an original recorded Mortgage or a copy thereof certified
to be true and correct by the public recording office in possession of such
Mortgage or (ii) an original recorded Assignment of Mortgage to the Indenture
Trustee and any required intervening Assignments of Mortgage or a copy thereof
certified to be a true and correct copy by the public recording office in
possession of such Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses. The Indenture
Trustee shall be entitled to receive the Indenture Trustee Fee on each Payment
Date as provided herein. The Indenture Trustee and the Collateral Agent also
shall be entitled to (i) payment of or reimbursement for expenses, disbursements
and advances incurred or made by the Indenture Trustee or the Collateral Agent,
as applicable, in accordance with any of the provisions of this Indenture
(including, but not limited to, the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
and (ii) indemnification against losses, liability and expenses, including
reasonable attorney's fees, incurred, arising out of or in connection with
acting as Indenture Trustee or Collateral Agent, as applicable, under this
Indenture, the Note and the Sale and Servicing Agreement and the other Basic
Documents. The Indenture Trustee or the Collateral Agent, as applicable, and any
director, officer, employee or agent of the Indenture Trustee or the Collateral
Agent, as applicable, shall be indemnified by, first, the Trust and, second, the
Servicer and held harmless against any loss, liability or reasonable expense
incurred in connection with this Indenture or the Note, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance by the Indenture Trustee or the Collateral Agent,
as applicable, of its duties hereunder. The obligations of the Servicer and the
Trust under this Section 6.16 shall survive termination of the Trust, payment of
the Note and the resignation and removal of the Indenture Trustee and the
Collateral Agent, and shall extend to any co-Indenture Trustee or
separate-Indenture Trustee appointed pursuant to this Article VI.
ARTICLE VII
NOTEHOLDER' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee the Name and
Address of the Noteholder. (a) The Note Registrar shall furnish or cause to be
furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Payment Date occurring closest
to six (6) months after the Closing Date and each Payment Date occurring at six
(6) month intervals thereafter, all information in the possession or control of
the Note Registrar, in such form as the Indenture Trustee may reasonably
require, as to name and address of the Holder of the Note, and (ii) at such
46
other times, as the Indenture Trustee may request in writing, within thirty (30)
days after receipt by the Note Registrar of any such request, a list of similar
form and content as of a date not more than ten (10) days prior to the time such
list is furnished; provided, however, that so long as the Indenture Trustee is
the Note Registrar, no such list shall be required to be furnished.
(b) In addition to furnishing to the Indenture Trustee the
Noteholder lists, if any, required under clause (a) of this Section 7.01, the
Note Registrar shall also furnish all Noteholder lists, if any, required under
Section 3.03 hereof at the times required by such Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholder. The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the name and address of the Holder of the Note contained
in the most recent list, if any, furnished to the Indenture Trustee as provided
in Section 7.01 hereof and the name and address of the Holder of the Note
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 hereof upon receipt of a new list so furnished.
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys. (a) The
Trust hereby directs the Indenture Trustee to establish, on or before the
Closing Date, at its Corporate Trust Office, one or more Eligible Accounts that
shall collectively be the "Payment Account". The Indenture Trustee shall
promptly deposit in the Payment Account (i) the Servicer Remittance Amount
received by it from the Servicer on the Servicer Payment Date pursuant to the
Sale and Servicing Agreement, (ii) any other funds from any deposits to be made
by the Servicer pursuant to the Sale and Servicing Agreement, (iii) any amount
required to be deposited in such Payment Account pursuant to this Section 8.01,
(iv) all amounts received pursuant to Section 8.03 hereof, (v) any amount
required to be deposited pursuant to Section 8.05 hereof, (vi) the Termination
Price received by it from either the Majority Certificateholder or the Servicer
on the Clean-up Call Date pursuant to Section 10.01, and (vii) all other amounts
received for deposit in the Payment Account, including the payment of any Loan
Repurchase Price for a Mortgage Loan received by the Indenture Trustee. All
amounts that are deposited from time to time in a Payment Account are subject to
withdrawal by the Indenture Trustee for the purposes set forth in Section 8.02
hereof. All funds withdrawn from the Payment Account pursuant to Section 8.02
hereof for the purpose of making payments to the Holder of the Note shall be
applied in accordance with Sections 3.03 and 8.02 hereof.
(b) So long as no Default or Event of Default shall have
occurred and be continuing, amounts held in the Accounts, other than the Note
Insurance Payment Account, shall at the written direction of the Servicer be
invested in Permitted Investments, which Permitted Investments shall mature no
later than the Business Day preceding the immediately following Payment Date.
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(c) All income or other gains, if any, from investment of
moneys deposited in the Payment and Collection Accounts shall be for the benefit
of the Servicer and on each Payment Date, any such amounts may be released from
the Accounts and paid to the Servicer as part of its compensation for acting as
Servicer. Any loss resulting from such investment of moneys deposited in an
Account shall be reimbursed immediately as incurred to the related Account by
the Servicer. Subject to Section 6.01 hereof and the preceding sentence, neither
the Indenture Trustee nor the Servicer shall in any way be held liable by reason
of any insufficiency in the Accounts.
(d) The Indenture Trustee shall not in any way be held liable
by reason of any insufficiency in any Account held by the Indenture Trustee
resulting from any investment loss on any Permitted Investment included therein
(except to the extent that the Indenture Trustee is the obligor and has
defaulted thereon).
(e) Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold
all such money and property received by it as part of the Trust Estate and shall
apply it as provided in this Indenture.
(f) If the Indenture Trustee shall not have received the
Servicer Remittance Amount by close of business on any related Servicer Payment
Date, the Indenture Trustee shall, unless the Servicer shall have made
provisions satisfactory to the Indenture Trustee for delivery to the Indenture
Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice,
with a copy to the Note Insurer, Liquidity Provider, and the Back-up Servicer,
to the Servicer of its failure to remit such Servicer Remittance Amount and that
such failure, if not remedied by the close of business on the Business Day after
the date upon which such notice is delivered to the Servicer, shall constitute a
Servicer Event of Default under the Sale and Servicing Agreement. If the
Indenture Trustee shall subsequently receive any such Servicer Remittance Amount
by the close of business on such Business Day, such Servicer Event of Default
shall not be deemed to have occurred. Notwithstanding any other provision
hereof, the Indenture Trustee shall deliver to the Servicer, or its designee or
assignee, any Servicer Remittance Amount received with respect to a Mortgage
Loan after the related Servicer Payment Date to the extent that the Servicer
previously made payment or provision for payment with respect to such Servicer
Remittance Amount in accordance with this Section 8.01, and any such Servicer
Remittance Amount shall not be deemed part of the Trust Estate.
(g) Except as otherwise expressly provided in this Indenture
and the Sale and Servicing Agreement, if, following delivery by the Indenture
Trustee of the notice described above, the Servicer shall fail to remit the
Servicer Remittance Amount on any Servicer Payment Date, the Indenture Trustee
shall deliver a second notice to the Servicer, Liquidity Provider, the Back-up
Servicer, the Trust and the Note Insurer by the close of business on the third
Business Day prior to the related Payment Date indicating that a Servicer Event
of Default occurred and is continuing under the Sale and Servicing Agreement.
Thereupon, the Indenture Trustee shall take such actions as are required of the
Indenture Trustee under Article VII of the Sale and Servicing Agreement. In
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addition, if a default occurs in any other performance required under the Sale
and Servicing Agreement, the Indenture Trustee may, and upon the request of the
Controlling Party or, with the consent of the Controlling Party shall, take such
action as may be appropriate to enforce such payment or performance including
the institution and prosecution of appropriate Proceedings. The Indenture
Trustee shall promptly notify the Liquidity Agent of such action taken by it.
Any such action shall be without prejudice to any right to claim a Default or,
Event of Default under this Indenture and to proceed thereafter as provided in
Article V hereof.
Section 8.02. Payments. Any money collected by the Indenture Trustee
with respect to the Note pursuant to this Article VIII or otherwise and any
other monies that may then be held or thereafter received by the Indenture
Trustee as security for such Note shall be applied in the following order (a)
prior to the declaration of any Event of Default or following the rescission and
annulment thereof, on each Payment Date or (b) during the pendency of any Event
of Default, at the date or dates fixed by the Controlling Party and, in case of
the payment of the entire amount due on account of principal of, and interest
on, the Note, to the extent required by Section 2.08, upon presentation and
surrender thereof:
(a) first, to the Servicer, any amounts required to pay the
Servicer for any unpaid Servicing Fees then due;
(b) second, any Back-Up Servicer Standby Fee then due;
(c) third, to the Indenture Trustee, any unpaid Indenture
Trustee Fees then due and any other amounts payable and due to the Indenture
Trustee and the Collateral Agent, as applicable, under this Indenture, including
any costs or expenses incurred by it in connection with the enforcement of the
remedies provided for in Article V and this Article VIII; provided, however,
that any amounts payable to the Indenture Trustee pursuant to this clause (c)
shall be limited in the aggregate to $150,000 per annum; provided, however,
following a Default or Event of Default and so long as a Note Insurer Default
has not occurred and is continuing all costs and expenses incurred at the
direction of the Controlling Party payable pursuant to this priority (c) shall
not be subject to any limitation and the Indenture Trustee shall be entitled to
all costs and expenses incurred at the direction of the Controlling Party owing
to it so long as the Indenture Trustee is acting at the direction of the Note
Insurer, and provided, further, following a Default or Event of Default where a
Note Insurer Default has occurred and is continuing the amounts payable pursuant
to this priority (c) shall not be subject to any limitation and the Indenture
Trustee shall be entitled to all amounts owing to it;
(d) fourth, to the payment of any Interest Payment Amount then
due and unpaid upon the Outstanding Note through the day preceding the date on
which such payment is made;
(e) fifth, to the Note Insurer, the amount of any unpaid
Premium Amount then due, together with interest thereon at the Late Payment Rate
from the date such amounts were due through the day preceding such Payment Date;
(f) sixth, to the Note Insurer, the Reimbursement Amount
limited to the portion described in clause (a) of the definition thereof;
(g) seventh, to the payment of any Class A Principal Payment
Amount;
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(h) eighth, to the payment of any Breakage Costs then due and
unpaid and any other amounts payable to any Holder of a Note under the Basic
Documents;
(i) ninth, to the extent not paid pursuant to clause (c)
above, to the Indenture Trustee, any unpaid Indenture Trustee Fees then due;
(j) tenth, to the Back-up Servicer, any unpaid Back-up
Servicing Supplemental Fee then due;
(k) eleventh, to the Note Insurer, any unpaid Premium
Supplement Amount;
(l) twelfth, following an Event of Default, in accordance with
Section 5.17, to the Liquidity Provider, any unpaid Liquidity Provider Placement
and Expense Fee then due;
(m) thirteenth, to the Back-up Servicer, the Liquidity
Provider, the Indenture Trustee, the Collateral Agent and the Note Insurer, the
pro rata payment of any other amounts payable and due to the Back-up Servicer,
the Liquidity Provider, the Indenture Trustee, the Collateral Agent and the Note
Insurer, as applicable, under the Basic Documents including any costs or
expenses incurred by them in connection with the enforcement of the remedies
provided for in Article V and this Article VIII and the unpaid Reimbursement
Amount owing to the Note Insurer;
(n) fourteenth, if the Purchase Period has expired, to the
payment of the Class A Note until the Class A Note Principal Balance is reduced
to $0;
(o) fifteenth, to the Servicer, any amounts required to
reimburse the Servicer for, upon the final liquidation of the related Mortgage
Loans or the final liquidation of the Trust Estate, nonrecoverable Servicing
Advances and nonrecoverable Periodic Advances previously made by, and not
previously reimbursed to or retained by, the Servicer; and
(p) sixteenth, the remainder to the Holders of Trust
Certificates.
Section 8.03. Claims against the Note Insurance Policy. (a) Within two
(2) Business Days of receipt of each Servicer Remittance Report and the
Noteholder Statement, the Indenture Trustee shall determine with respect to the
immediately following Payment Date, the amount to be on deposit in the Payment
Account on such Payment Date as a result of the Servicer's remittance of the
Servicer Remittance Amount on the related Servicer Payment Date, excluding the
amount of any Insured Payment and prior to the application of the amounts
described in clauses (a) through (c) of Section 8.02 hereof for the related
Payment Date.
(b) If on any Payment Date there is a Deficiency Amount, the
Indenture Trustee shall complete a Notice in the form of Exhibit A to the Note
Insurance Policy and submit such notice to the Note Insurer no later than 12:00
noon New York City time on the third Business Day preceding such Payment Date as
a claim for an Insured Payment in an amount equal to such Deficiency Amount.
(c) The Indenture Trustee shall establish a separate Eligible
Account for the benefit of the Holder of the Note and the Note Insurer referred
to
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herein as the "Note Insurance Payment Account" over which the Indenture Trustee
shall have exclusive control and sole right of withdrawal. The Indenture Trustee
shall deposit upon receipt any amount paid under the Note Insurance Policy in
the Note Insurance Payment Account and distribute such amount only for purposes
of payment to the Noteholder of the Insured Amount for which a claim was made
and such amount may not be applied to satisfy any costs, expenses or liabilities
of the Servicer, the Back-up Servicer, the Indenture Trustee or the Trust.
Amounts paid under the Note Insurance Policy, to the extent needed to pay the
Insured Amount shall be transferred to the Payment Accounts on the related
Payment Date and disbursed by the Indenture Trustee to the Noteholder in
accordance with Section 8.02. It shall not be necessary for such payments to be
made by checks or wire transfers separate from the checks or wire transfers used
to pay the Insured Amount with other funds available to make such payment.
However, the amount of any payment of principal or of interest on the Note to be
paid from funds transferred from the Note Insurance Payment Account shall be
noted as provided in subsection (d) of this Section 8.03 in the Note Register
and in the Noteholder Statement. Funds held in the Note Insurance Payment
Account shall not be invested. Any funds remaining in the Note Insurance Payment
Account on the first Business Day following a Payment Date shall be returned to
the Note Insurer pursuant to the written instructions of the Note Insurer by the
end of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Note from
moneys received under the Note Insurance Policy. The Note Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon one (1) Business Day's prior notice to the Indenture Trustee.
(e) In the event that the Indenture Trustee has received a
certified copy of an order of the appropriate court that any Insured Payment has
been voided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Note Insurer, shall
comply with the provisions of the Note Insurance Policy to obtain payment by the
Note Insurer of such voided Insured Payment, and shall, at the time it provides
notice to the Note Insurer, notify, by mail to the Noteholder of the affected
Notes that, in the event any Noteholder's Insured Payment is so recovered, such
Noteholder will be entitled to payment pursuant to the Note Insurance Policy, a
copy of which shall be made available through the Indenture Trustee, the Note
Insurer or the Note Insurer's fiscal agent, if any, and the Indenture Trustee
shall furnish to the Note Insurer or its fiscal agent, if any, its records
evidencing the payments which have been made by the Indenture Trustee and
subsequently recovered from the Noteholder, and dates on which such payments
were made.
(f) The Indenture Trustee shall promptly notify the Note
Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Indenture Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any payment made with
respect to the Note. Each Noteholder, by its purchase of the Note, the Servicer
and the Indenture Trustee agree that, the Note Insurer (so long as no Note
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to such Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
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without limitation of the foregoing, the Note Insurer shall be subrogated to,
and each Noteholder, the Servicer and the Indenture Trustee hereby delegate and
assign to the Note Insurer, to the fullest extent permitted by law, the rights
of the Servicer, the Indenture Trustee and each Noteholder in the conduct of any
such Preference Claim, including, without limitation, all rights of any party to
any adversary proceeding or action with respect to any court order issued in
connection with any such Preference Claim.
(g) The Indenture Trustee shall, upon retirement of the Note,
furnish to the Note Insurer a notice of such retirement, and, upon retirement of
the Note and the expiration of the term of the Note Insurance Policy, surrender
the Note Insurance Policy to the Note Insurer for cancellation.
(h) Unless a Note Insurer Default exists and is continuing,
the Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests hereunder without limiting the rights or
affecting the interests of the Noteholder as otherwise set forth herein.
(i) Each Noteholder, by its purchase of the Note, and the
Indenture Trustee hereby agree that, unless a Note Insurer Default exists and is
continuing, the Note Insurer shall have the right to direct all matters relating
to the Note in any proceeding in a bankruptcy of the Trust, including without
limitation any proceeding relating to a Preference Amount and the posting of any
surety or Note pending any such appeal.
(j) Anything herein to the contrary notwithstanding, any
payment with respect to principal of or interest on the Note which is made with
moneys received pursuant to the terms of the Note Insurance Policy shall not be
considered payment of the Note from the Trust. The Trust and the Indenture
Trustee acknowledge, and each Holder by its acceptance of a Note agrees, that
without the need for any further action on the part of the Note Insurer, the
Trust, the Indenture Trustee or the Note Registrar (x) to the extent the Note
Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Note to the Holders of such Note, the Note Insurer will be fully
subrogated to, and each Noteholder, the Trust and the Indenture Trustee hereby
delegate and assign to the Note Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest from the
Trust, including, without limitation, any amounts due to the Noteholder in
respect of securities law violations arising from the offer and sale of the
Note, and (y) the Note Insurer shall be paid such amounts from the sources and
in the manner provided herein for the payment of such amounts.
Section 8.04. General Provisions Regarding the Payment Accounts and
Mortgage Loans. (a) The Payment Accounts shall relate solely to the Note and to
the Mortgage Loans, Permitted Investments and other property securing the Note.
Funds and other property in the Payment Accounts shall not be commingled with
any other moneys or property of the Trust or any Affiliate thereof.
Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other
property received or held by it as part of the Payment Accounts in collective
accounts maintained by it in the normal course of its business and containing
funds or property held by it for other Persons (which may include the Trust or
an Affiliate); provided, that such accounts are under the sole control of the
Indenture Trustee and the Indenture Trustee maintains adequate records
52
indicating the ownership of all such funds or property and the portions thereof
held for credit to the Payment Accounts.
(b) If any amounts are needed for payment from a Payment
Account and sufficient uninvested funds are not available therein to make such
payment, the Indenture Trustee shall cause to be sold or otherwise converted to
cash a sufficient amount of the investments in such Payment Account.
(c) The Indenture Trustee shall, at all times while any Note
is Outstanding, maintain in its possession, or in the possession of an agent
whose actions with respect to such items are under the sole control of the
Indenture Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Payment Accounts. The Indenture Trustee shall
relinquish possession of such items, or direct its agent to do so, only for
purposes of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the
Payment Accounts, against delivery of the amount receivable in connection with
any sale.
(d) The Indenture Trustee shall not invest any part of the
Trust Estate in Permitted Investments that constitute uncertificated securities
(as defined in Section 8-102 of the Uniform Commercial Code, as enacted in the
relevant jurisdiction) or in any other book-entry securities unless it has
received an Opinion of Counsel reasonably satisfactory in form and substance to
the Indenture Trustee setting forth, with respect to each type of security for
which authority to invest is being sought, the procedures that must be followed
to maintain the lien and security interest created by this Indenture with
respect to the Trust Estate.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Originators or the Depositor set forth in
Section 4.01 of the Sale and Servicing Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Originators or the Depositor, as applicable,
to either cure, repurchase or substitute for such Mortgage Loan as provided in
Section 4.02 of the Sale and Servicing Agreement. Upon any purchase of or
substitution for a Deleted Mortgage Loan by the Originators or the Depositor in
accordance with Section 4.02 of the Sale and Servicing Agreement, the Indenture
Trustee shall cause the Collateral Agent to deliver the Indenture Trustee's
Mortgage File relating to such Deleted Mortgage Loan to the Originators or the
Depositor, as applicable, and the Trust, the Collateral Agent and the Indenture
Trustee shall execute such instruments of transfer as are necessary to convey
title to such Deleted Mortgage Loan to the Originators or the Depositor, as
applicable, from the lien of this Indenture. Nothing in this Section 8.05 should
be construed to obligate the Indenture Trustee to actively monitor the
correctness or accuracy of the representations and warranties of the Originators
or the Depositor.
Section 8.06. Reports by Indenture Trustee to the Noteholder; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports required by Section 2.08(f) to the Noteholder of record as
of the related Record Date.
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The Indenture Trustee shall make available at its Corporate
Trust Office, during normal business hours, for review by any Noteholder or any
person identified to the Indenture Trustee as a prospective Noteholder,
originals or copies of the following items: (a) the Indenture and any amendments
thereto, (b) all Noteholder Statements and other reports delivered since the
Closing Date pursuant to Section 2.08(f) hereof, (c) any Officers' Certificates
delivered to the Indenture Trustee since the Closing Date as described in the
Indenture and (d) any Accountants' reports delivered to the Indenture Trustee
since the Closing Date as required under the Sale and Servicing Agreement.
Copies of any and all of the foregoing items will be available from the
Indenture Trustee upon request; however, the Indenture Trustee will be permitted
to require payment of a sum sufficient to cover the reasonable costs and
expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid.
Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate to
the Trust (other than any cash held for the payment of the Note pursuant to
Section 3.03 or 4.04 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, with the consent the Controlling Party, enter into or consent to
any amendment or supplement to the Sale and Servicing Agreement for the purpose
of increasing the obligations or duties of any party other than the Indenture
Trustee or the Holder of the Note. The Indenture Trustee may, in its discretion,
decline to enter into or consent to any such supplement or amendment: (i) unless
the Indenture Trustee receives an Opinion of Counsel that the position of the
Holders would not be materially adversely affected and that such amendment is
authorized and permitted pursuant to the Basic Documents or written confirmation
of satisfaction of the Rating Agency Condition or (ii) if its own rights, duties
or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and
Servicing Agreement. As is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer the Mortgage Files for such Mortgage Loan upon receipt by the
Indenture Trustee and the Collateral Agent on or prior to the date such release
is to be made of:
(a) such Officer's Certificates, if any, as are required by
the Sale and Servicing Agreement; and
(b) a Request for Release, executed by the Servicer, providing
that the Servicer will hold or retain the Indenture Trustee's Mortgage Files in
trust for the benefit of the Indenture Trustee, the Note Insurer and the Holder
of the Note.
Section 8.10. Servicer as Agent. In order to facilitate the servicing
of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of
the Mortgage Loans has been appointed by the Trust to retain, in accordance with
the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into
the related Payment Account on or prior to the related Servicer Payment Date.
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Section 8.11. Termination of Servicer. In the event of the occurrence
and during the continuance of a Servicer Event of Default specified in Section
9.01 of the Sale and Servicing Agreement, the Indenture Trustee may, with the
consent of the Controlling Party and shall, upon the direction of the
Controlling Party (or as otherwise provided in the Sale and Servicing
Agreement), terminate the Servicer as provided in Section 9.01 of the Sale and
Servicing Agreement. If the Indenture Trustee terminates the Servicer, the
Back-up Servicer shall, pursuant to Section 9.02 of the Sale and Servicing
Agreement, assume the duties of the Servicer or appoint a successor Servicer
acceptable to the Trust and the Controlling Party and meeting the requirements
set forth in the Sale and Servicing Agreement.
Section 8.12. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to be
taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with
releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
Section 8.13. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Controlling Party, appoint one or more Collateral Agents to hold
all or a portion of the Indenture Trustee Mortgage Files, as Agent for the
Indenture Trustee. Such Collateral Agent shall meet the requirements of Article
XI of the Sale and Servicing Agreement. Matters concerning the Collateral Agents
shall be governed by said Article XI. The Chase Manhattan Bank is hereby
appointed as the initial Collateral Agent hereunder.
Section 8.14. Trust Estate and Accounts Held for Benefit of the Note
Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of
the Noteholder and the Note Insurer.
Section 8.15. Certain Rights of the Controlling Party and the Note
Insurer. (a) Except for any period during which a Note Insurer Default is
continuing, the Note Insurer shall be deemed to be the Holder of 100% of the
Percentage Interests of the Note for the purposes of giving any consents,
waivers, approvals, instructions, directions, declarations, notices and/or
taking any other action pursuant to the Indenture and the other Basic Documents
(other than a consent to the execution of a supplemental indenture described in
clauses (i) through (vii) of Section 9.02). So long as no Note Insurer Default
shall have occurred and be continuing, the Note Insurer shall have the right to
exercise all rights of the Holders of the Note under the Basic Documents without
any consent of such Holders, and such Holders may exercise such rights only with
the prior written consent of the Note Insurer, except as otherwise expressly
provided herein.
(b) Notwithstanding anything contained herein or in the other
Basic Documents to the contrary, except for any period during which a Note
55
Insurer Default is continuing, the Note Insurer shall have the right to
participate in, to direct the enforcement or defense of, and, at the Note
Insurer's sole option, to institute or assume the defense of, any action,
proceeding or investigation for any remedy available to the Indenture Trustee
with respect to any matter that could adversely affect the Trust, the Trust
Estate or the rights or obligations of the Note Insurer hereunder or under the
Insurance Policy or the Basic Documents, including (without limitation) any
insolvency or bankruptcy proceeding in respect of the Guarantor, the Servicer,
any Originator the Depositor, the Trust or any affiliate thereof, provided, that
such participation or direction shall not be in conflict with any rule of law or
with the terms of this Indenture or any of the Basic Documents. Following
written notice to the Indenture Trustee, except for any period during which a
Note Insurer Default is continuing, the Note Insurer shall have exclusive right
to determine, in its sole discretion, the actions necessary to preserve and
protect the Trust and the Trust Estate. All costs and expenses of the Note
Insurer in connection with such action, proceeding or investigation, including
(without limitation) any judgment or settlement entered into affecting the Note
Insurer or the Note Insurer's interests, shall be included in the Reimbursement
Amount.
(c) In connection with any such action, proceeding or
investigation for any remedy available to the Indenture Trustee with respect to
any matter that could adversely affect the Trust, the Trust Estate or the rights
or obligations of the Note Insurer hereunder or under the Insurance Policy or
the Basic Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of the Guarantor, the Servicer, any Originator, the
Depositor, the Trust or any affiliate thereof, except for any period during
which a Note Insurer Default is continuing, the Indenture Trustee hereby agrees
to cooperate with, and to take such action as reasonably directed by, the Note
Insurer, including (without limitation) entering into such agreements and
settlements as the Note Insurer shall direct, in its sole discretion, without
the consent of any Noteholder. The Indenture Trustee shall not be liable to the
Note Insurer or any Noteholder for any such action that conforms to the
direction of the Note Insurer. The Indenture Trustee's reasonable out-of-pocket
costs and expenses (including attorneys' fees and expenses) with respect to any
such action shall be reimbursed pursuant to Section 8.02.
(d) Any judgment or settlement entered against or affecting
the Trust or the Trust Estate in connection with any action, proceeding or
investigation shall be paid by the Indenture Trustee from the Trust Estate out
of funds that would otherwise be distributed to the holders of the Trust
Certificates pursuant to Section 8.02.
(e) The Indenture Trustee hereby agrees to provide to the Note
Insurer prompt written notice of any action, proceeding or investigation that
names the Trust or the Indenture Trustee as a party or that could adversely
affect the Trust, the Trust Estate or the rights or obligations of the Note
Insurer hereunder or under the Insurance Policy or the Basic Documents,
including (without limitation) any insolvency or bankruptcy proceeding in
respect of the Guarantor, the Servicer, any Originator, the Depositor, the Trust
or any affiliate thereof.
(f) Notwithstanding anything contained herein or in any of the
other Basic Documents to the contrary, the Indenture Trustee shall not, without
the Controlling Party's prior written consent or unless directed by the
Controlling Party, undertake or join any litigation or agree to any settlement
of any action, proceeding or investigation affecting the Trust, the Trust Estate
or the rights or obligations of the Note Insurer hereunder or under the
Insurance Policy or the Basic Documents.
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(g) Each Noteholder, by acceptance of its Note, and the
Indenture Trustee agree that the Note Insurer shall have such rights as set
forth in this Section, which are in addition to any rights of the Note Insurer
pursuant to the other provisions of the Basic Documents, that the rights set
forth in this Section may be exercised by the Note Insurer, in its sole
discretion, without the need for the consent or approval of any Noteholder or
the Indenture Trustee, notwithstanding any other provision contained herein or
in any of the other Basic Documents, and that nothing contained in this Section
shall be deemed to be an obligation of the Note Insurer to exercise any of the
rights provided for herein.
(h) In furtherance of and not in limitation of the Note
Insurer's equitable right of subrogation, each of the Indenture Trustee and the
Trust and, by its acceptance of a Note, each Noteholder, acknowledges and agrees
that, to the extent of any payment made by the Note Insurer under the Insurance
Policy with respect to interest on or principal of the Notes, the Note Insurer
is to be fully subrogated to the extent of such payment and any additional
interest due on any late payment, to the rights of the Noteholders. Each of the
Trust and the Indenture Trustee and, by its acceptance of a Note, each
Noteholder agrees to such subrogation and, further, agrees to take such actions
as the Note Insurer may reasonably request to evidence such subrogation.
(i) The Indenture Trustee shall provide to the Note Insurer
upon request copies of any report, notice, opinion of counsel, officer's
certificate, request for consent or request for amendment to any Basic Document
promptly upon the Indenture Trustee's production or receipt thereof (in each
case, to the extent that such documents are not expressly required to be
provided directly to the Note Insurer pursuant to the terms of the Basic
Documents).
(j) The Indenture Trustee shall cooperate in all respect with
any reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests under the Indenture and the other Basic
Documents, including, without limitation, a request to institute proceedings for
collection of all amounts then owing in respect of the Notes or the
Reimbursement Amount.
(k) The Indenture Trustee shall, upon reasonable prior written
request, permit any representative of the Note Insurer, during the Indenture
Trustee's normal business hours, to examine all books of accounts, records,
reports and other information of the Indenture Trustee relating to the Notes and
the Trust Estate, to make copies and extracts therefrom and to discuss the
Indenture Trustee's performance of its duties with respect to the Basic
Documents with the responsible officers and employees of the Indenture Trustee.
(l) Notwithstanding anything elsewhere in this Indenture or in
the Note to the contrary, if a Note Insurer Default exists, the provisions of
this Article VIII and all other provisions of this Indenture which (a) permit
the Note Insurer to exercise rights of the Noteholders, (b) restrict the ability
of the Noteholder or the Indenture Trustee to act without the consent or
approval of the Note Insurer, (c) provide that a particular act or thing must be
acceptable to the Note Insurer, (d) permit the Note Insurer to direct (or
otherwise to require) the actions of the Indenture Trustee or the Noteholder,
57
(e) provide that any action or omission taken with the consent, approval or
authorization of the Note Insurer shall be authorized hereunder or shall not
subject the party taking or omitting to take such action to any liability
hereunder or (f) shall have a similar effect, shall be of no further force and
effect and the Indenture Trustee shall administer the Trust Estate and perform
its obligations hereunder solely for the benefit of the Holders of the Note.
Nothing in the foregoing sentence, nor any action taken pursuant thereto or in
compliance therewith, shall be deemed to have released the Note Insurer from any
obligation or liability it may have to any party or to the Noteholder hereunder,
under any other agreement, instrument or document (including, without
limitation, the Policy) or under applicable law.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of the
Noteholder. With the consent of the Controlling Party, but without the consent
of the Holders of any Note during such time as they do not constitute the
Controlling Party hereunder (other than the Initial Purchaser so long as its is
a Noteholder), the parties hereto, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(a) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(b) to add to the conditions, limitations and restrictions on
the authorized amount, terms and purposes of the issuance, authentication and
delivery of the Note, as herein set forth, additional conditions, limitations
and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Trust
to the extent permitted herein, and the assumption by any such successor of the
covenants of the Trust herein and in the Note contained;
(d) to add to the covenants of the Trust, for the benefit of
the Holders of the Note and the Note Insurer, or to surrender any right or power
herein conferred upon the Trust; or
(e) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or questions
arising under this Indenture, which shall not be inconsistent with the
provisions of this Indenture, provided that such action shall not adversely
affect in any material respect the interests of the Holder of the Note, the Note
Insurer or the Holders of the Trust Certificates.
Section 9.02. Supplemental Indentures With Consent of the Noteholder.
(a) With the consent of the Controlling Party and with the consent of the Holder
of any Note representing not less than a majority of the Note Principal Balance
of the Outstanding Note by Act of said Holders delivered to the Trust and the
Indenture Trustee, the Trust and the Indenture Trustee may enter into an
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indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holder of the
Note under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of the Outstanding Note
affected thereby:
(i) change any Payment Date or the Final Stated Maturity
Date of the Note or, with respect to the Note, reduce the Note
Principal Balance thereof or the Note Rate thereon, change the earliest
date on which any Note may be redeemed at the option of the Servicer,
change any place of payment where, or the coin or currency in which,
any Note or any interest thereon is payable, or impair the right to
institute suit for the enforcement of the payment of any installment of
interest due on any Note on or after the Final Stated Maturity Date
thereof or for the enforcement of the payment of the entire remaining
unpaid principal amount of any Note on or after the Final Stated
Maturity Date (or, in the case of redemption, on or after the
applicable Redemption Date);
(ii) reduce the percentage of the Note Principal Balance of
the Outstanding Note, the consent of the Holder of which is required
for any such supplemental indenture, or the consent of the Holder of
which is required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(iii) modify any of the provisions of this Section 9.02 or
Sections 5.13 or 5.17(b) hereof, except to increase any percentage
specified therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of the Outstanding Note affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) permit the creation of any lien other than the lien of
this Indenture with respect to any part of the Trust Estate or
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
afforded by the lien of this Indenture;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the Interest Payment Amount or
Class A Principal Payment Amount for any Payment Date (including the
calculation of any of the individual components of such amounts) or to
affect rights of the Holder of the Note to the benefits of any
provisions for the mandatory redemption of the Note contained herein;
or
(vii) incur any indebtedness, other than the Note, that
would cause the Trust or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
(b) The Indenture Trustee may in its discretion determine
whether or not any Note would be affected by any supplemental indenture and any
such determination shall be conclusive upon the Holder of the Note, whether
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theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
(c) It shall not be necessary for any Act of the Noteholder
under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
(d) Promptly after the execution by the Trust and the
Indenture Trustee of any supplemental indenture pursuant to this Section 9.02,
the Indenture Trustee shall mail to the Holder of the Note to which such
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties or immunities under this Indenture or
otherwise. The Servicer, on behalf of the Trust, shall cause executed copies of
any supplemental indentures to be delivered to the Note Insurer and the Rating
Agencies.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of the Note to which
such supplemental indenture relates that have theretofore been or thereafter are
authenticated and delivered hereunder shall be bound thereby.
Section 9.05. [Reserved].
Section 9.06. Reference in Notes to Supplemental Indentures. Any Note
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Owner Trustee, acting at the
direction of the Majority Certificateholders, shall so determine, new Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Owner
Trustee, acting at the direction of the Majority Certificateholders, to any such
supplemental indenture may be prepared by the Servicer and executed by the Owner
Trustee, acting at the direction of the Majority Certificateholders, on behalf
of the Trust, and authenticated and delivered by the Indenture Trustee in
exchange for the Outstanding Note.
Section 9.07. Amendments to Governing Documents. (a) The Indenture
Trustee shall, upon a Trust Request, consent to any proposed amendment to the
Trust's governing documents, or an amendment to or waiver of any provision of
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any other document relating to the Trust's governing documents, such consent to
be given without the necessity of obtaining the consent of the Holders of any
Note upon receipt by the Indenture Trustee of:
(i) an Officer's Certificate, to which such proposed
amendment or waiver shall be attached, stating that such attached copy
is a true copy of the proposed amendment or waiver and that all
conditions precedent to such consent specified in this Section 9.06
have been satisfied;
(ii) written consent of the Controlling Party; and
(iii) written confirmation of the satisfaction of the
Rating Agency Condition with respect to such proposed amendment.
(b) Notwithstanding the foregoing, the Indenture Trustee may
decline to consent to a proposed waiver or amendment that adversely affects its
own rights, duties or immunities under this Indenture or otherwise.
(c) Nothing in this Section 9.07 shall be construed to require
that any Person obtain the consent of the Indenture Trustee to any amendment or
waiver or any provision of any document where the making of such amendment or
the giving of such waiver without obtaining the consent of the Indenture Trustee
is not prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.
(d) Prior to consenting to any amendment pursuant to this
Section 9.07, the Indenture Trustee shall be entitled to receive and rely upon
any Opinion of Counsel stating that such amendment is authorized and permitted
pursuant to the Basic Documents.
ARTICLE X
REDEMPTION OF THE NOTE
Section 10.01. Redemption. (a) (i) (i) At the option of Holders of 100%
of the Percentage Interests of the Trust Certificates or, if such Holders fail
to exercise such option, at the option of the Servicer, and, in each case at
such parties' sole cost and expense, this Indenture may be terminated and the
Note may be redeemed in whole, but not in part, on any Redemption Date on and
after the Clean-Up Call Date at the Termination Price.
(ii) At the option of the Holders of 100% of the Percentage
Interests of the Note, and at the sole cost and expense of the Trust
Certificateholder, the Note may be redeemed in whole, or in part pursuant to a
Disposition (and, in the case of any redemption in whole, this Indenture may be
terminated) on any Redemption Date at the Termination Price if: (A) no Event of
Default is then in effect, unless the Note will be fully redeemed and (B) the
Trust sells on such Redemption Date some or all of the Mortgage Loans, at the
direction of the Noteholder, pursuant to a whole-loan transfer or other
liquidation or to an entity that transfers such Mortgage Loans to a trust that
issues securities in a securitization transaction, in each case for an amount
necessary to prevent a Collateral Deficiency Event from occurring.
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(iii) At the option of the Holders of 100% of the Percentage
Interests of the Note, and at the sole cost and expense of the Trust
Certificateholder, the Note may be redeemed in whole, or in part pursuant to a
Disposition (and, in the case of any redemption in whole, this Indenture may be
terminated) on any Optional Redemption Date. If the Noteholder so elects in its
sole discretion (such election to be made by the Noteholder in writing and
delivered to the Trust at least ten (10) Business Days prior to the date
specified in the writing as the Optional Redemption Date), the Trust shall repay
the Note Principal Balance of the portion of the Note to be redeemed on the
Optional Redemption Date, together with all accrued and unpaid interest thereon
on the Optional Redemption Date and all other accrued and unpaid obligations
under the Basic Documents.
(b) Any such purchase or redemption shall be accomplished by
deposit by (i) the exercising party, in the case of a redemption pursuant to
Section 10.01(a)(i), of the Termination Price and (ii) the Trust, in the case of
a redemption pursuant to Sections 10.01(a)(ii) or 10.01(a)(iii), of the
Disposition Proceeds, into the related Payment Account or Accounts on or prior
to the Redemption Date. The amounts on deposit therein shall be distributed by
the Indenture Trustee on such Redemption Date in accordance with the priority
set forth in Section 8.02 hereof. No termination or redemption is permitted
without the prior written consent of the Controlling Party if any termination or
redemption would result in a draw on the Note Insurance Policy.
(c) Notice by the Trust Certificateholders referred to in
paragraph (a) of this Section 10.01 of the election to redeem the Note pursuant
to subsection (a) of this Section 10.01 shall be furnished to the Indenture
Trustee not later than thirty (30) days prior to the Payment Date selected for
such redemption. Upon receiving such notice, the Indenture Trustee shall notify
each Holder of such Note and the Note Insurer of such election pursuant to
Section 10.02 hereof. Any expenses associated with the compliance of the
provisions hereof in connection with a redemption of the Note shall be paid by
the Majority Certificateholder exercising such redemption or the Servicer, as
the case may be.
If the Indenture Trustee does not receive notice from the
Trust Certificateholders referred to in paragraph (a) of this Section 10.01 that
they intend to exercise their option to redeem the Note at least thirty (30)
days prior to the first Payment Date on which they are entitled to do so, the
Indenture Trustee shall promptly notify the Servicer that it may effect a
redemption of the Note by responding to the Indenture Trustee's notice no later
than fifteen (15) days prior to the next succeeding Payment Date.
(d) Upon the redemption of the Note in whole pursuant to
Section 10.01(a)(i), the Mortgage Loans in the Trust Estate shall be released
and delivered to the Certificateholders effecting such redemption or the
Servicer, as the case may be.
(e) Upon receipt of the notice from the relevant
Certificateholders or the Servicer of their respective election to redeem the
Note pursuant to Section 10.01(a) hereof (which shall state, in the case of an
election by the Servicer, that the Servicer has determined that the conditions
to redemption at the option of the Servicer have been satisfied and setting
forth the amount, if any, to be withdrawn from each Payment Account and paid to
the Servicer as reimbursement for Nonrecoverable Advances in respect of the
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related Mortgage Loans and such other information as may be required to
accomplish such redemption), the Servicer shall prepare, and the Indenture
Trustee shall deliver to the Trust, the Servicer and the Note Insurer, no later
than the related Redemption Date, a Noteholder Statement.
Section 10.02. Form of Redemption Notice. (a) Notice of redemption
shall be given by the Indenture Trustee in the name of and at the expense of the
Trust by first class mail, postage prepaid, mailed not less than ten days prior
to the Redemption Date to each Holder of the Note to be redeemed, such Holders
being determined as of the Record Date for such Payment Date, and to the Note
Insurer.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the price at which the Note will be redeemed; and
(iii) the fact of payment in full on such Note, the place
where such Note is to be surrendered for final payment (which shall be
the office or agency of the Trust to be maintained as provided in
Section 3.02 hereof), and that no interest shall accrue on such Note
for any period after the date fixed for redemption.
(c) Failure to give notice of redemption, or any defect
therein, to any Holder of any Note selected for redemption shall not impair or
affect the validity of the redemption of any other Note.
Section 10.03. Note Payable on Optional Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Note to be
redeemed shall, on the applicable Redemption Date, become due and payable and
(unless the Trust shall default in such payment) no interest shall accrue on
such Note for any period after such Redemption Date; provided, however, that if
such payment is not made on the Redemption Date, the Note Principal Balance
shall, until paid, bear interest from the Redemption Date at the applicable Note
Rate.
Section 10.04. Dispositions. (a) Following the exercise of the Majority
Noteholder's right to redeem the Note in whole or in part, under Section
10.01(a)(ii)-(a)(iii), in the event the Trust is unable to make payments on the
Note Principal Balance of the portion of the Note to be redeemed, the Trust will
effect a Disposition.
(b) In connection with any Disposition effectuated in good
faith and upon the reasonable advance written request of the Majority
Noteholder, the Originators, the Depositor and the Trust may, in their sole
discretion, elect to effect any of the following:
(i) to make such representations and warranties concerning
the Mortgage Loans as of the "cut-off date" of the related Disposition
and such additional representations and warranties as may be necessary,
in the reasonable opinion of any of the Disposition Participants, to
effect such Disposition; provided, that the Originators, the Depositor
and the Trust shall not be required to make any representations or
warranty beyond the scope or substance of the representations and
warranties delineated in the Basic Documents; and provided, further,
that, to the extent that the Originators, the Depositor and the Trust
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have at the time of the Disposition actual knowledge of any facts or
circumstances that would render any of such representations and
warranties materially false, the Originators, the Depositor and the
Trust may notify the Disposition Participants of such facts or
circumstances and, in such event, shall have no obligation to make such
materially false representations and warranty;
(ii) to supply such information, opinions of counsel,
letters from law and/or accounting firms and other documentation and
certificates regarding the origination of the Mortgage Loans as any
Disposition Participant shall reasonably request to effect a
Disposition and enter into such indemnification agreements customary
for such transaction relating to or in connection with the Disposition
as the Disposition Participants may reasonably require;
(iii) to make itself available for and engage in good faith
consultation with the Disposition Participants concerning information
to be contained in any document, agreement, private placement
memorandum, or filing with the Securities and Exchange Commission
relating to the Originators, the Depositor, the Trust or the Mortgage
Loans in connection with a Disposition and shall use reasonable efforts
to compile any information and prepare any reports and certificates,
into a form, whether written or electronic, suitable for inclusion in
such documentation;
(iv) to implement the foregoing and to otherwise effect a
Disposition, enter into, or arrange for its Affiliates to enter into
insurance and indemnity agreements, underwriting or placement
agreements, servicing agreements, purchase agreements and any other
documentation which may reasonably be required of or reasonably deemed
appropriate by the Disposition Participants in order to effect a
Disposition; and
(v) to take such further actions as may be reasonably
necessary to effect the foregoing;
provided, that notwithstanding anything to the contrary, (a) the Originators,
the Trust and the Depositor shall have no liability for the Mortgage Loans
arising from or relating to the ongoing ability of the related Mortgagor to pay
under the Mortgage Loans; (b) none of the indemnities hereunder shall constitute
an unconditional guarantee by the Originators, the Trust and the Depositor of
collectibility of the Mortgage Loans; (c) the Originators, the Trust and the
Depositor shall have no obligation with respect to the financial inability of
any Mortgagor to pay principal, interest or other amount owing by such Mortgagor
under a Mortgage Loan; and (d) the Originators, the Depositor and the Trust
shall only be required to enter into documentation in connection with
Dispositions that are consistent with the prior public securitizations of
affiliates of the Originators, the Depositor and the Trust, provided that to the
extent an Affiliate of the Noteholder acts as "depositor" or performs a similar
function in a securitization, additional indemnities and informational
representations and warranties are provided which are consistent with those in
the Basic Documents and may upon request of the Originators, the Depositor and
the Trust be set forth in a separate agreement between an Affiliate of the
Noteholder and the Originators, the Depositor and the Trust.
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(c) The Trust and the Indenture Trustee shall effect
Dispositions at the direction of the Majority Noteholder in accordance with the
terms of this Agreement and the Basic Documents. In connection therewith, the
Trust and the Indenture Trustee agree to assist the Originators and the
Depositor in such Dispositions and accordingly it shall, at the request and
direction of the Majority Noteholder:
(i) transfer, deliver and sell all or a portion of the
Mortgage Loans and any proceeds thereof, as of the "cut-off dates" of
the related Dispositions, to such Disposition Participants as may be
necessary to effect the Dispositions;
(ii) on any Redemption Date, deposit the cash Disposition
Proceeds into the Payment Account, and distribute such Disposition
Proceeds in the priority set forth in Section 8.02 herein pursuant to a
Disposition Statement from the Servicer which shall be provided to the
Indenture Trustee no later than 2:00 p.m. New York, New York on any
Redemption Date; and
(iii) take such further actions as may be reasonably
necessary to effect such Dispositions.
(d) Except as otherwise expressly set forth under this Section
10.04, the parties' rights and obligations under this Section 10.04 shall
continue notwithstanding the occurrence of an Event of Default.
(e) For the avoidance of doubt, the Majority Noteholder is not
an agent of the Originators or any of their Affiliates and, when directing the
Trust to effect such Dispositions, is acting in its sole discretion and not for
or on behalf of the Originators or any of its Affiliates.
(f) The Disposition Participants (and the Noteholder to the
extent directing the Disposition Participants) shall be independent contractors
to the Trust and shall have no fiduciary obligations to the Trust or any of its
Affiliates. In that connection, the Disposition Participants shall not be liable
for any error of judgment made in good faith and shall not be liable with
respect to any action they take or omit to take in good faith in the performance
of their duties.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any action
under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
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(b) Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture,
including one furnished pursuant to specific requirements of this Indenture
relating to a particular application or request shall include and shall be
deemed to include (regardless of whether specifically stated therein) the
following:
(i) a statement that each individual signing such
certificate, opinion or letter has read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. (a) In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
(b) Any certificate or opinion of the Trust may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any Opinion of Counsel may be based on the written opinion of other
counsel, in which event such Opinion of Counsel shall be accompanied by a copy
of such other counsel's opinion and shall include a statement to the effect that
such counsel believes that such counsel and the Indenture Trustee may reasonably
rely upon the opinion of such other counsel.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Wherever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Trust shall deliver any document as a condition of the granting of such
application, or as evidence of the Trust's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Trust to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Section 6.01(b)(ii) hereof.
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(e) Whenever in this Indenture it is provided that the absence
of the occurrence and continuation of a Default or Event of Default is a
condition precedent to the taking of any action by the Indenture Trustee at the
request or direction of the Trust, then, notwithstanding that the satisfaction
of such condition is a condition precedent to the Trust's right to make such
request or direction, the Indenture Trustee shall be protected in acting in
accordance with such request or direction if it does not have knowledge of the
occurrence and continuation of such Default or Event of Default as provided in
Section 6.01(d) hereof.
Section 11.03. Acts of the Noteholder. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by a Noteholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholder in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Trust. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholder signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of the Note shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Note shall bind the Holder
of every Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Trust in reliance thereon, whether or
not notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, the Initial
Purchaser, the Note Insurer and Trust. (a) Any request, demand, authorization,
direction, notice, consent, waiver or Act of the Noteholder or other documents
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with:
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(i) the Indenture Trustee by any Noteholder or by the Trust
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Indenture
Trustee at its Corporate Trust Office; or
(ii) the Trust by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder (except as
provided in Section 5.01(c) and (d)) hereof if in writing and mailed,
first-class postage prepaid, to the Trust addressed to it at ABFS
Mortgage Loan Warehouse Trust 2001-1, in care of First Union Trust
Company, National Association, One ▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing
to the Indenture Trustee by the Trust.
(iii) the Initial Purchaser or the Note Insurer by the
Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage
prepaid, to Triple-A One Funding Corporation or MBIA Insurance
Corporation, respectively, addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Insured Portfolio Management - Mortgage
Backed Securities] (in each case in which notice or other communication
to the Note Insurer refers to an Event of Default, a claim on the Note
Insurance Policy or with respect to which failure on the part of the
Note Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should
also be sent to the attention of the General Counsel and shall be
marked to indicate "URGENT MATERIAL ENCLOSED"), or at any other address
previously furnished in writing to the Indenture Trustee by the Note
Insurer;
(iv) the Depositor, the Originators, ABFS, or the Servicer
by the Indenture Trustee or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed, first-class, postage
paid, to such party, in care of American Business Financial Services,
Inc., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel or at any
other address previously furnished in writing to the Indenture Trustee
by the Originators or the Servicer; or
(v) the Liquidity Provider or the Liquidity Agent by the
Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage paid,
to such party, in care of Bear, ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Senior
Managing Director, or at any other address furnished in writing to the
Indenture Trustee by the Liquidity Provider or the Liquidity Agent.
(b) Notices required to be given to the Rating Agencies by the
Trust or the Indenture Trustee shall be in writing, personally delivered or
mailed first-class postage pre-paid, to (i) in the case of Moody's, at the
following address: ▇▇▇▇▇'▇ Investors Service, Inc., Residential Mortgage
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (ii) in
the case of S&P, at the following address: Standard & Poor's Ratings Services,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Asset-Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designed by written notice to the other parties.
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Section 11.05. Notices and Reports to a Noteholder; Waiver of Notices.
(a) Where this Indenture provides for notice to a Noteholder of any event or the
mailing of any report to a Noteholder, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to a Noteholder is mailed
in the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to any other
Noteholder, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by a Noteholder shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
(c) In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to a Noteholder when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Section 11.06. [Reserved].
Section 11.07. [Reserved].
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether so
expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Note shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Note, expressed or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any separate trustee or co-trustee
appointed under Section 6.14 hereof and the Noteholder, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
69
Section 11.12. Legal Holidays. In any case where the date of any
Payment Date, Redemption Date or any other date on which principal of or
interest on any Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of the Note or this Indenture) payment need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the nominal date of any such
Payment Date, Redemption Date or other date for the payment of principal of or
interest on any Note and no interest shall accrue for the period from and after
any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
Section 11.13. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or
3.06.
Section 11.14. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust, the Owner Trustee or
the Indenture Trustee on the Note or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Trust or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Trust
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
Section 11.15. No Petition. (a) The Indenture Trustee and the Initial
Purchaser, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against
the Trust, or join in any institution against the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Note, this Indenture or any
of the Basic Documents. In addition, the Indenture Trustee will on behalf of the
Holders of the Note, (a) file a written objection to any motion or other
proceeding seeking the substantive consolidation of any Originator with the
Trust, (b) file an appropriate memorandum of points and authorities or other
brief in support of such objection, or (c) endeavor to establish at the hearing
on such objection that the substantive consolidation of such entity would be
materially prejudicial to the Noteholder. This Section 11.15 will survive for
one year and one day following the termination of this Indenture.
70
(b) Each party hereto (other than the Initial Purchaser)
covenants and agrees that it will not institute against the Initial Purchaser,
or join any other Person in instituting against the Initial Purchaser, any
bankruptcy, insolvency or similar proceeding so long as any commercial paper
notes of the Initial Purchaser shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such commercial
paper notes shall have been outstanding.
Section 11.16. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the
Controlling Party, during the Trust's normal business hours, to examine all
books of account, records, reports and other papers of the Trust, to make copies
and extracts therefrom, to cause such books to be audited by Independent
Accountants selected by the Indenture Trustee or the Controlling Party, as the
case may be, and to discuss its affairs, finances and accounts with its
officers, employees and Independent Accountants (and by this provision the Trust
hereby authorizes its Accountants to discuss with such representatives such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any expense incident to the exercise by the
Indenture Trustee of any right under this Section 11.16 shall be borne by the
Trust.
Section 11.17. Usury. The amount of interest payable or paid on any
Note under the terms of this Indenture shall be limited to an amount that shall
not exceed the maximum nonusurious rate of interest allowed by the applicable
laws of the United States or the State of New York (whichever shall permit the
higher rate), that could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Note exceeds
the Highest Lawful Rate, the Trust stipulates that such excess amount will be
deemed to have been paid as a result of an error on the part of both the
Indenture Trustee, acting on behalf of the Holder of such Note, and the Trust,
and the Holder receiving such excess payment shall promptly, upon discovery of
such error or upon notice thereof from the Trust or the Indenture Trustee,
refund the amount of such excess or, at the option of the Indenture Trustee,
apply the excess to the payment of principal of such Note, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee
for the benefit of the Holder of the Note for the use, forbearance or detention
of money shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such Note.
Section 11.18. Third-Party Beneficiary. (a) The Note Insurer is
intended as a third- party beneficiary of this Indenture which shall be binding
upon and inure to the benefit of 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 Note Insurance Policy, the
Noteholder shall succeed to the Note Insurer's rights hereunder. Without
limiting the generality of the foregoing, all covenants and agreements in this
Indenture 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 Indenture.
(b) The Liquidity Agent is intended as a third- party
beneficiary of this Indenture which shall be binding upon and inure to the
benefit of the Liquidity Provider. Without limiting the generality of the
foregoing, all covenants and agreements in this Indenture that expressly confer
rights upon the Liquidity Agent shall be for the benefit of and run directly to
the Liquidity Provider, and the Liquidity Provider shall be entitled to rely on
and enforce such covenants to the same extent as if it were a party to this
Indenture.
71
Section 11.19. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE TRUST, THE INITIAL PURCHASER AND THE INDENTURE TRUSTEE
HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 11.05 HEREOF AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE TRUST, THE
INITIAL PURCHASER AND THE INDENTURE TRUSTEE EACH HEREBY WAIVE ANY OBJECTION
BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 11.19
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE TRUST, THE SERVICER, THE BACK-UP
SERVICER, THE DEPOSITOR, THE SERVICER, ABFS, THE COLLATERAL AGENT, THE NOTE
INSURER OR THE INDENTURE TRUSTEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS TO BRING ANY ACTION OR PROCEEDING
IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE TRUST, THE INITIAL PURCHASER AND THE INDENTURE TRUSTEE
EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY
DISPUTE WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 11.20. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
[Remainder of Page Intentionally Left Blank]
72
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN WAREHOUSE
TRUST 2001-1
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner
Trustee under the Trust Agreement
By:
--------------------------------------------
Name:
Title:
TRIPLE-A ONE FUNDING CORPORATION,
as Initial Purchaser
By: MBIA INSURANCE CORPORATION,
as its attorney-in-fact
By:
--------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
--------------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO BY:
AMERICAN BUSINESS FINANCIAL
SERVICES, INC.
as Guarantor
By:
-----------------------------------------
Name:
Title:
[Signature Page to Indenture]
APPENDIX I
DEFINED TERMS
"ABC": American Business Credit, Inc.
"ABFS" or "Guarantor": American Business Financial Services, Inc.
"ABFS Company": As defined in Section 5.05 of the Sale and Servicing
Agreement.
"ABMS": American Business Mortgage Services, Inc.
"Accepted Servicing Practices": The Servicer's normal servicing
practices, which in general will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service, for their own account,
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties are located, as the same may be adjusted
from time to time, provided, that such practices shall at all times be
consistent with the Credit Policy Manual.
"Account": Any of the Collection Account, the Payment Accounts or the
Note Insurance Payment Account.
"Accountant": A Person engaged in the practice of accounting who
(except when the Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Trust or an Affiliate of the Trust.
"Accredited Investor": The meaning assigned to such term in Section
2.12(b)(i) of the Indenture.
"Accrual Period": With respect to the Class A Note and any Payment
Date, the period from and including the prior Payment Date (or, in the case of
the first Payment Date, from and including the applicable Closing Date) to and
including the day immediately preceding such Payment Date provided, that after a
Rate Fixing Date, such accrual period shall convert from the accrual period set
forth above to an accrual period that will be the preceding calendar month
calculated on the basis of a 360-day year consisting of twelve 30-day months
provided, further that in the event of such change the Indenture Trustee will
reconcile the change in accrual periods to prevent any loss of accrual days.
"Act": With respect to any Noteholder, as defined in Section 11.03 of
the Indenture.
"Adjusted Eligible Mortgage Loan Balance": The sum of (a) the aggregate
Principal Balance of the Eligible Mortgage Loans; minus (b) the product of (i)
10.00% and (ii) the aggregate Principal Balance of Delinquent Mortgage Loans
with respect to which any payment of principal or interest is 31-59 days past
due; minus (c) the product of (i) 50.00% and (ii) the aggregate Principal
A-1
Balance of Delinquent Mortgage Loans with respect to which any payment of
principal or interest is 60-89 days past due; minus (d) the aggregate Principal
Balance of Delinquent Mortgage Loans with respect to which any payment of
principal or interest is 90 or more days past due. For purposes of this
definition, the determination of whether any payment is "past due" shall be made
on the basis of the original Due Date for such payment without giving effect to
any extensions of such Due Date and without giving effect to any Servicer
Advances or Periodic Advances made with respect to the applicable Mortgage Loan.
"Administrative Agent": MBIA Insurance Corporation, in its capacity as
administrative agent for the Initial Purchaser, and any successor thereto in
such capacity.
"Administrative Costs": With respect to the Note and any Payment Date,
the sum of the Indenture Trustee Fee, the Premium Amount, the Back-up Servicing
Supplemental Fee, the Back-up Servicer Standby Fee, and the Servicing Fee for
such Payment Date.
"Advance Amount": The lesser of (i) the product of (a) the weighted
average Par Advance Rate and (b) the Adjusted Eligible Mortgage Loan Balance, or
(ii) 95.00% of the aggregate Market Value of the Eligible Mortgage Loans, in
each case as of the date of determination.
"Affiliate": With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent": Any Note Registrar, Collateral Agent, or Authenticating Agent.
"Aggregate Mortgage Interest" means, with respect to any Due Period, an
aggregate amount equal to the cash collections of interest on the Eligible Loans
received during such Due Period.
"Aggregate Principal Balance": With respect to any Mortgage Loans and
any date of determination, the aggregate of the Principal Balances of such
Mortgage Loans as of such date of determination.
"Appraised Value": As to any Mortgaged Property, the appraised value of
the Mortgaged Property based upon the appraisal made by or on behalf of the
related Originator at the time referred to in the related Basic Documents or, in
the case of a Mortgage Loan that is a purchase money mortgage loan, the sales
price of the Mortgaged Property, if such sales price is less than such appraised
value.
"Assignment of Mortgage": With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the
Indenture Trustee, for the benefit of the Noteholder and the Note Insurer.
A-2
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Owner Trustee, acting at the direction of the Majority
Certificateholder, pursuant to Section 6.14 of the Indenture, until any
successor Authenticating Agent for the Note is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Indenture Trustee. Any Authenticating Agent other than the
Indenture Trustee shall sign an instrument under which it agrees to be bound by
all of the terms of this Indenture applicable to the Authenticating Agent.
"Authorized Denominations": The minimum Percentage Interest
corresponding to a minimum denomination of $1,000 or integral multiples of
$1,000 in excess thereof; provided, however, that one Class A Note is issuable
in a denomination equal to any such multiple plus an additional amount such that
the aggregate denomination of the Note shall be equal to the Original Note
Principal Balance.
"Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee or the Collateral Agent, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer,
any financial services officer or any other officer of the Owner Trustee or the
Collateral Agent customarily performing functions similar to those performed by
the above officers and (iii) any other Person, the chairman, chief operating
officer, president or any vice president of such Person.
"Available Funds": With respect to any Payment Date and the Payment
Account, the amount to be on deposit in the Payment Account on such Payment Date
(excluding the amount of any Insured Payment and prior to the application of
such amounts as described in Section 8.02 of the Indenture for such Payment
Date) as a result of the Servicer's remittance of the Servicer Remittance Amount
related to the Payment Account on the related Servicer Payment Date. For
purposes of calculating the Available Funds, any Loan Repurchase Price or
Substitution Adjustment that is paid shall be deemed deposited in the Payment
Account in the Due Period preceding such Servicer Payment Date.
"Available Funds Shortfall": With respect to any Payment Date, an
amount equal to the excess of the Insured Payment Amount for such Payment Date
over the Available Funds for such Payment Date available for distribution in
respect of such Insured Payment Amount.
"Back-up Servicer": EMC Mortgage Corporation, a Delaware corporation,
its successor-in-interest, or any successor Back-up Servicer appointed as
provided for in Section 7.22 of the Sale and Servicing Agreement.
"Back-up Servicer Standby Fee": Means with respect to each Payment
Date, the fee payable to the Back-up Servicer for services rendered under the
Sale and Servicing Agreement which shall be equal to the product of (a) the
Back-up Servicer Standby Fee Rate and (b) the average daily Class A Note
Principal Balance during such Accrual Period. For purposes of the foregoing, the
Principal Balance of a Mortgage Loan that has become a Liquidated Mortgage Loan
shall be deemed to be zero. Such fee shall be paid by wire in accordance with
Exhibit F to the Indenture.
A-3
"Back-up Servicer Standby Fee Rate": 0.05% per annum.
"Back-up Servicing Supplemental Fee": As to any Payment Date, the
supplemental fee payable to the Back-up Servicer, if the Back-up Servicer is
then acting as the Servicer pursuant to the Sale and Servicing Agreement, which
shall be equal to the product of (a) the Back-up Servicing Supplemental Fee Rate
and (b) the average daily Class A Note Principal Balance during such Accrual
Period. For purposes of the foregoing, the Principal Balance of a Mortgage Loan
that has become a Liquidated Mortgage Loan shall be deemed to be zero. Such fee
shall be paid by wire in accordance with Exhibit F to the Indenture.
"Back-up Servicing Supplemental Fee Rate": 0.25% per annum.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Basic Documents": The Indenture, the Trust Agreement, the Insurance
Agreement and the Sale and Servicing Agreement.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who
is the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Note or on the books of a Person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant, in
accordance with the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Trust, the
Servicer, the Back-up Servicer or any other agent of the Trust, as the case may
be, in its reasonable discretion. Such efforts do not require the Trust or the
Servicer or any other agent of the Trust, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding (except, in the
case of the Servicer in accordance with Accepted Servicing Practices), nor do
they require the Trust or the Servicer or any other agent of the Trust, as the
case may be, to advance or expend fees or sums of money in addition to those
specifically set forth in this Indenture and the Sale and Servicing Agreement.
"Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant in
accordance with the rules of such Clearing Agency).
"Book-Entry Termination": The time at which the book-entry registration
of the Book-Entry Notes shall terminate, as specified in Section 2.18 of the
Indenture.
"Breakage Cost": The meaning assigned to such term in Section 2.16 of
the Indenture.
"Business Day": 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, the State of Delaware (in the case of the
Trust), the State of Texas (in the case of the Collateral Agent and the Back-up
Servicer), the State of New Jersey, the State of Pennsylvania or the state in
which the Indenture Trustee's office from which payments will be made to the
Noteholder, are authorized or obligated by law, regulation or executive order to
be closed.
A-4
"Business Purpose Property": Any mixed-use property, commercial
property, or four or more unit multifamily property.
"Cash Equivalent": shall mean (a) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any commercial bank having capital
and surplus in excess of $250,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States government, (d) commercial
paper of a domestic issuer rated at least "A-1" or the equivalent thereof by S&P
or "P-1" or the equivalent thereof by Moody's and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least "A" by S&P or "A" by Moody's, (f) securities with maturities of
90 days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition, or (g) shares of money market, mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Cash Portion": As defined under Originator Purchase Price.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"Change of Control": Any of the following: (i) any transaction or event
as a result of which ABFS ceases to own, beneficially and of record, 100% of the
Stock of each of the Depositor and the Servicer or the Depositor ceases to own,
beneficially and of record, 100% of the Stock of the Trust; (ii) the sale,
transfer, or other disposition of all or substantially all of the Depositor's or
the Servicer's assets (excluding any such action taken in connection with any
securitization transactions); (iii) the consummation of a merger or
consolidation of ABFS with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the continuing
or surviving entity's Stock outstanding immediately after such merger,
consolidation or such other reorganization is owned by persons who were not
stockholders of ABFS immediately prior to such merger, consolidation or other
reorganization; or (iv) the sale, transfer, or other disposition of all or
substantially all of ABFS's assets (it being understood that a securitization of
mortgage loans in and of itself, shall not constitute a Change of Control).
"Class": The class of Notes designated as the Class A Note.
A-5
"Class A Carry-Forward Amount": As of any Payment Date, the sum of (a)
the amount, if any, by which (i) the Class A Interest Payment Amount as of the
immediately preceding Payment Date exceeded (ii) the amount of interest actually
paid to the Noteholder on such immediately preceding Payment Date and (b)
interest on the amount described in clause (a) accrued during the related
Accrual Period, calculated at an interest rate equal to the Class A Note Rate.
"Class A Current Interest": With respect to the Class A Note for any
Payment Date, the interest accrued during the related Accrual Period at the
Class A Note Rate applicable to such Payment Date on the average daily Class A
Note Principal Balance during such Accrual Period.
"Class A Interest Payment Amount": With respect to the Class A Note for
any Payment Date, an amount equal to (a) the related Class A Current Interest,
plus (b) the Class A Carry-Forward Amount, minus (c) any amounts paid by the
Note Insurer in respect of such Class A Carry-Forward Amount, in each case, as
of such Payment Date.
"Class A Note": Any Note designated as a "Class A Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A Note shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A Note Principal Balance": As of any date of determination, the
sum of (a) the aggregate Original Note Principal Balance, plus (b) the amount of
any Subsequent Advance minus (c) any amounts actually paid with respect to
principal thereon on all prior Payment Dates.
"Class A Note Rate": With respect to the Note and any Accrual Period,
an interest rate per annum equal to (a) prior to the occurrence of a Rate Fixing
Date, the Cost of Funds plus 0.49% or such other rate as may be determined
pursuant to Section 5.04(b) of the Indenture following the occurrence of an
Event of Default and (b) from and after the occurrence of a Rate Fixing Date,
the Fixed Rate determined as of the last Market Value Determination Date to
occur prior to such Rate Fixing Date. If there is a second Rate Fixing Date,
then at all times thereafter the Class A Note Rate shall be equal to the Fixed
Rate determined as of the last Market Value Determination Date to occur prior to
such second Rate Fixing Date.
"Class A Payment Amount": With respect to the Class A Note for any
Payment Date, the amount to be paid to the Holder of the Class A Note on such
Payment Date, applied first to interest and then to principal, which amount
shall be the sum of the Class A Interest Payment Amount and the Class A
Principal Payment Amount.
"Class A Principal Payment Amount": For any Payment Date, the amount
necessary to reduce the Class A Note Principal Balance to an amount equal to the
Advance Amount as of such Payment Date; provided, however, that for purposes of
calculating the Class A Principal Payment Amount on any Payment Date, the
Principal Balance of Pledged Mortgage Loans that are not Eligible Mortgage Loans
shall equal zero.
"Clean-Up Call Date": The first Payment Date after the Class A Note
Principal Balance is less than or equal to 10% of the Maximum Collateral Amount.
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"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Notes, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"Closing Date": The Initial Closing Date and any Subsequent Purchase
Date thereafter.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The Pledged Mortgage Loans, Accounts and other collateral
described in the Granting Clause securing payment of the Note.
"Collateral Agent": The Chase Manhattan Bank, a New York banking
corporation, in its capacity as Collateral Agent under the Sale and Servicing
Agreement, or its successor-in-interest, or any successor Collateral Agent
appointed as provided in Section 11.08 of the Sale and Servicing Agreement.
"Collateral Deficiency Event": A situation which shall be deemed to be
existing as of any day on which (a) the outstanding principal amount of the
Class A Note as of such day exceeds (b) the Advance Amount as of such day.
"Collection Account": The Eligible Account established and maintained
by the Servicer pursuant to Section 7.02(b) of the Sale and Servicing Agreement.
"Combined Loan-to-Value Ratio" or "CLTV": As to any Mortgage Loan at
any time, the fraction, expressed as a percentage, the numerator of which is the
sum of (i) the Principal Balance thereof at such time and (ii) if such Mortgage
Loan is subject to a second mortgage, the unpaid principal balance of any
related first mortgage loan or loans, if any, as of such time, and the
denominator of which is the Appraised Value of any related Mortgaged Property or
Properties as of the date of the appraisal used by or on behalf of the
Originators to underwrite such Mortgage Loan.
"Compliance Certificate": A certificate duly completed and signed by a
Responsible Officer of the Servicer in the form attached to the Sale and
Servicing Agreement as Exhibit H.
"Controlling Party": The Note Insurer, unless a Note Insurer Default
has occurred and is continuing. If a Note Insurer Default has occurred and is
continuing, the Majority Noteholder shall be the Controlling Party.
A-7
"Corporate Trust Office": With respect to (x) the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be principally administered, which office at
the date of the execution of the Basic Documents is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Institutional Trust
Services, ABFS Mortgage Loan Warehouse Trust 2001-1; (y) the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be principally administered, which office at the
date of the execution of the Basic Documents is located at One ▇▇▇▇▇▇ Square,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Administration; and (z) the Collateral Agent, the principal office of the
Collateral Agent at which at any particular time its corporate trust business
shall be principally administered, which office at the date of the execution of
the Basic Documents is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, Attention: Institutional Trust Services, ABFS Mortgage Loan Warehouse
Trust 2001-1.
"Cost of Funds": With respect to any Accrual Period, (a) to the extent
the Holder of such Note is the Initial Purchaser and the Initial Purchaser funds
its interest in such Note through the issuance of commercial paper notes, the CP
Rate and (b) otherwise, the LIBOR rate determined as of the second Business Day
immediately preceding the first day of such Accrual Period.
"CP Rate": Means, for any period the per annum rate equivalent to the
weighted average of the per annum rates paid or payable by the Initial Purchaser
from time to time as interest on its commercial paper notes (taking into
consideration any incremental carrying costs associated with commercial paper
notes issued by the Initial Purchaser maturing on dates other than those certain
dates on which the Initial Purchaser is to receive funds) in respect of
commercial paper notes issued by the Initial Purchaser that are allocated, in
whole or in part, by the Administrative Agent (on behalf of the Initial
Purchaser) to fund or maintain the interest of the Initial Purchaser in the
Class A Note during such period, as determined by the Administrative Agent (on
behalf of the Initial Purchaser) and reported to the Servicer, which rates shall
reflect and give effect to (i) the commissions of placement agents and dealers
in respect of such commercial paper notes, to the extent such commissions are
allocated, in whole or in part, to such commercial paper notes by the
Administrative Agent (on behalf of the Initial Purchaser) and (ii) other
borrowings by the Initial Purchaser, including, without limitations, borrowings
to fund small or odd dollar amounts that are not easily accommodated in the
commercial paper market; provided, that if any component of such rate is a
discount rate, in calculating the CP Rate the Administrative Agent shall for
such component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum.
"Credit Policy Manual": With respect to an Originator, its written
policies and procedures regarding underwriting, origination and servicing of
mortgage loans, as delivered to the Note Insurer on the Initial Closing Date,
with such changes notified to the Note Insurer (a) that do not have a material
adverse effect on such policies and procedures, or (b) that are approved by the
Controlling Party, such approval not to be unreasonably withheld, delayed or
conditioned or (c) that the Servicer does not apply to the Mortgage Loans.
"Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
Delinquency nor is it intended as a future payment.
A-8
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"Default": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Deficiency Amount": With respect to any Payment Date, the excess, if
any of Required Distributions over the Net Available Funds.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding Principal Balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Note": Note other than Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan pursuant to Section 4.02 of the Sale and
Servicing Agreement.
"Delinquency Ratio": With respect to any Due Period, the percentage
equivalent of a fraction (a) the numerator of which equals the aggregate
Principal Balances of all Mortgage Loans that are Delinquent, in foreclosure or
converted to REO property as of the last day of such Due Period and (b) the
denominator of which is the aggregate Principal Balance of the Mortgage Loans in
the Trust Estate as of the last day of such Due Period.
"Delinquent": A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on. For purposes of this definition, the determination
of whether any payment is "past due" shall be made on the basis of the original
Due Date for such payment without giving effect to any extensions of such Due
Date and without giving effect to any Servicing Advances or Periodic Advances
made with respect to the applicable Mortgage Loan.
"Demand Note": Each subordinated demand note issued by ABFS to
the related Originator which shall be in the form of a "grid note" attached as
Exhibit H to the Sale and Servicing Agreement, on which such Originator shall
make appropriate entries to evidence the Non-Cash Portion of such Originator's
Originator Purchase Prices.
"Depositor": ABFS OSO, Inc., a Delaware corporation.
A-9
"Direct Participant": Any broker-dealer, bank or other financial
institution for which the Clearing Agency holds Notes from time to time as a
securities depositary.
"Disposition": The disposition, at the direction of the Majority
Noteholder pursuant to Section 10.04 of the Indenture, of sufficient Collateral
to pay down the portion of the Note redeemed pursuant to Sections
10.01(a)(ii)-(iii) of the Indenture, including pursuant to a securitization,
whole loan sale transaction, or other disposition of Mortgage Loans.
"Disposition Participant": As applicable, with respect to a
Disposition, any "depositor" with respect to such Disposition, the Noteholder,
the Trust, the Servicer, the related trustee and the related custodian, any
nationally recognized credit rating agency, the related underwriters, the
related placement agent, the related credit enhancer, the related whole-loan
purchaser, the related purchaser of securities and/or any other party necessary
or, in the good faith belief of any of the foregoing, desirable to effect a
Disposition.
"Disposition Proceeds": With respect to a Disposition, (x) the proceeds
of the Disposition remitted to the Trust in respect of the Mortgage Loans
transferred on the date of and with respect to such Disposition, including
without limitation, any cash and retained securities created in any related
securitization less all costs, fees and expenses incurred in connection with
such Disposition, including, without limitation, all amounts deposited into any
reserve accounts upon the closing thereof, minus (y) all other amounts agreed
upon in writing by the Majority Noteholder, the Controlling Party, the Trust and
the Servicer.
"Disposition Statement": Means written instructions from the Servicer
directing the Trust and Indenture Trustee as to effecting a Disposition and the
distribution of Disposition Proceeds.
"Due Date": With respect to each Mortgage Loan and any Payment Date,
the day of the calendar month preceding the calendar month in which such Payment
Date occurs on which the Monthly Payment for such Mortgage Loan was due.
"Due for Payment": Means the Payment Date on which Insured Amounts are
due.
"Due Period": With respect to each Payment Date, the calendar month
preceding the related Payment Date or, with respect to any Initial Mortgage
Loans or Subsequent Mortgage Loans that were acquired after such date, the Due
Period shall commence on the date of acquisition of such Initial Mortgage or
Subsequent Mortgage Loan.
"Eligible Account": Either (A) an account or accounts maintained with
an institution (which may include the Indenture Trustee; provided, that the
Indenture Trustee otherwise meets these requirements) whose deposits are insured
by the FDIC, the unsecured and uncollateralized debt obligations of which
institution shall be rated "AA" or better by S&P and "Aa2" or better by ▇▇▇▇▇'▇
and in the highest short term rating category by S&P and ▇▇▇▇▇'▇, and which is
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution (including
the Indenture Trustee) duly organized, validly existing and in good standing
under the applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing under the
federal banking laws, (iv) a principal subsidiary of a bank holding company, or
A-10
(v) approved in writing by the Note Insurer and the Rating Agencies or (B) a
trust account or accounts maintained with the trust department of a federal or
state chartered depository institution or trust company (which may include the
Indenture Trustee; provided, that the Indenture Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.
"Eligible Liquid Assets": Means the sum of (i) mortgage loans to the
extent that ABFS has committed financing available to it under existing
warehouse facilities and such mortgage loans qualify for funding under such
existing warehouse facilities, (ii) mortgage loans for which ABFS has a
commitment to purchase from it to the extent of the purchase price required to
be paid it and (iii) cash and Cash Equivalents.
"Eligible Mortgage Loans": As of any date, all Pledged Mortgage Loans
as to which each representation and warranty made pursuant to Section 4.01 of
the Sale and Servicing Agreement is true and correct as though made on and as of
such date.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default": As defined in Section 5.01 of the Indenture.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Facility Costs": Means, with respect to any Due Period, the sum of (i)
the aggregate amount of interest accrued on the Class A Note at the Class A Note
Rate during such Due Period, plus (ii) the aggregate amount of Administrative
Costs accrued during such Due Period plus (iii) the aggregate of all other
amounts (excluding the principal amount of the Class A Note) owing to the
Indenture Trustee, the Collateral Agent, the Servicer, Back-up Servicer, the
Note Insurer or any other Noteholder pursuant to the Basic Documents and accrued
during such Due Period. For purposes of the foregoing, the Class A Note Rate
shall be deemed to be the greater of (i) the actual Class A Note Rate for such
Due Period or (ii) the Fixed Rate that would have been in effect had a Rate
Fixing Date occurred on the first day of such Due Period, as determined by the
Liquidity Agent and notified to the Servicer.
"▇▇▇▇▇▇ ▇▇▇": The Federal National Mortgage Association, and any
successor thereto.
"FDIC": The Federal Deposit Insurance Corporation, and any successor
thereto.
"FICO": The consumer credit scoring scale developed by Fair ▇▇▇▇▇▇ Co.
and generally referred to in the consumer lending industry by such name or a
comparable scoring system.
"Final Certification": A certification as to the completeness of each
Indenture Trustee's Mortgage File prepared by the Collateral Agent, on behalf of
the Indenture Trustee, and provided by the Collateral Agent prior to the
applicable Closing Date pursuant to Section 2.06(b) of the Sale and Servicing
Agreement.
A-11
"Final Purchase Date": March 27, 2002 or such later date as specified
in writing by the Liquidity Provider, the Note Insurer and the Initial
Purchaser, each in their sole discretion.
"Final Stated Maturity Date": The March 2031 Payment Date.
"Fixed Rate": As of any date on which a Market Value determination is
made by the Note Insurer, or the Liquidity Agent acting on its behalf, a per
annum rate equal to the sum of (i) the Interpolated Benchmark Treasury Rate as
of such date plus (ii) 2.40%. In the event the Note Insurer, or the Liquidity
Agent acting on its behalf, determines that there is a distortion in the
Treasury market or a change in the historical relationship between treasury and
swap rates, the Note Insurer or the Liquidity Agent, as the case may be, may
elect to calculate the Fixed Rate based upon the sum of (i) the Interpolated
Benchmark Swap Rate as of such date plus (ii) a comparable margin such that the
Fixed Rate is approximately equal to the rate per annum that would have been
determined pursuant to the preceding sentence if no such distortion or change
had occurred.
"Foreclosure Profits": As to any Payment Date, the excess, if any, of
(i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a
Liquidated Mortgage Loan during the related Due Period over (ii) the sum of the
unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and
unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal
Balance thereof from the Due Date on which interest was last paid by the
Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO
Mortgage Loan, from the Due Date on which interest was last deemed to have been
paid pursuant to Section 7.06 of the Sale and Servicing Agreement) to the next
succeeding Due Date following the date such Loan became a Liquidated Mortgage
Loan.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation, and any
successor thereto.
"GAAP": Generally accepted accounting principles, consistently applied,
as of the date of such application.
"Grant": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan
and the related Mortgage Files, a Permitted Investment, the Sale and Servicing
Agreement, or any other instrument shall include all rights, powers and options
(but none of the obligations) of the Granting party thereunder, including
without limitation the immediate and continuing right to claim for, collect,
receive and give receipts for principal and interest payments thereunder,
Insurance Proceeds, Loan Repurchase Prices and all other moneys payable
thereunder and all proceeds thereof, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Indenture": The Indenture, dated as of March 1, 2001, between the
Trust, the Initial Purchaser and the Indenture Trustee, relating to the issuance
of the Note, as amended.
A-12
"Indenture Trustee": The Chase Manhattan Bank, a New York banking
corporation, in its capacity as Indenture Trustee under the Indenture, its
successor-in-interest, or any successor Indenture Trustee appointed as provided
for in Section 6.09 of the Indenture.
"Indenture Trustee Fee": As to any Payment Date, the fee payable to the
Indenture Trustee in respect of its services as Indenture Trustee pursuant to
Section 6.16 of the Indenture that accrues at a monthly rate equal to
one-twelfth of 0.00625% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.
"Indenture Trustee's Mortgage File": The documents from each Mortgage
File delivered to the Collateral Agent, on behalf of the Indenture Trustee,
pursuant to Section 2.05 of the Sale and Servicing Agreement.
"Independent": When used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Trust and any other obligor
upon the Note, (ii) does not have any direct financial interest or any material
indirect financial interest in the Trust or in any such other obligor or in an
Affiliate of the Trust or such other obligor, and (iii) is not connected with
the Trust or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee or the Note Insurer,
such Person shall be appointed by a Trust Order and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Note.
"Individual Note": A Note of an Original Note Principal Balance of
$1,000; a Note of an Original Note Principal Balance in excess of $1,000 shall
be deemed to be a number of Individual Notes equal to the quotient obtained by
dividing such Original Note Principal Balance amount by $1,000.
"Initial Closing Date": The date of the Initial Purchase hereunder.
"Initial Depositor Conveyed Assets": As defined in Section 2.01(b) of
the Sale and Servicing Agreement.
"Initial Mortgage Loans": The mortgage loans sold on the Initial
Closing Date pursuant to Section 2.01 of the Sale and Servicing Agreement.
"Initial Originator Conveyed Assets": As defined in Section 2.01(a) of
the Sale and Servicing Agreement.
"Initial Purchase": The occurrence of the first purchase of Mortgage
Loans by the Trust pursuant to Section 2.01 of the Sale and Servicing Agreement.
"Initial Purchaser": Triple-A One Funding Corporation, a Delaware
corporation.
A-13
"Insurance Agreement": The Insurance and Reimbursement Agreement dated
as of March 30, 2001 among ABFS, the Note Insurer, the Initial Purchaser, the
Depositor, the Trust, the Indenture Trustee, the Servicer, and the Originators
as such agreement may be amended or supplemented in accordance with the
provisions thereof.
"Insurance Policies": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Trust or the Indenture Trustee has any
interest therein.
"Insurance Proceeds": Proceeds paid by any insurer other than the Note
Insurer pursuant to any insurance policy covering a Mortgage Loan to the extent
such proceeds are not applied to the restoration of the related Mortgaged
Property or released to the related Mortgagor in accordance with Accepted
Servicing Practices. "Insurance Proceeds" do not include "Insured Payments."
"Insured Amount": With respect to any Payment Date, the Deficiency
Amount for such payment date.
"Insured Payment": Has the meaning ascribed thereto in the Insurance
Agreement.
"Interest Determination Date": With respect to any Accrual Period for
the Class A Note the second London Business Day preceding the first day of such
Accrual Period; provided, however, that with respect to the initial Payment
Date, the Interest Determination Date shall be the second London Business Day
preceding the Initial Closing Date.
"Interest Payment Amount": The Class A Interest Payment Amount.
"Interpolated Benchmark Treasury Rate": As of any date on which a
Market Value determination is made by the Note Insurer, or the Liquidity Agent
acting on its behalf, the average over the preceding three Business Days of the
interpolated U.S. treasury rate as determined by reference to the appropriate
Bloomberg Treasury screens with the "PX" prefix. For purposes of the foregoing
calculation and each Business Day, a linear interpolation will be performed
between the yield on the treasury note having the next longer maturity and the
treasury note having the next shorter maturity with reference to the weighted
average life of the hypothetical senior "AAA" security created for purposes of
calculating the Market Value on such date according to the Market Value
Methodology Determination.
"Interpolated Benchmark Swap Rate": As of any date on which a Market
Value determination is made by the Note Insurer, or the Liquidity Agent acting
on its behalf, the average over the preceding three Business Days of the
interpolated swap rate as determined by reference to Telerate Page 19901. For
purposes of the foregoing calculation and each Business Day, a linear
interpolation will be performed between the mid-market swap rate having the next
longer maturity and the mid-market swap rate having the next shorter maturity
with reference to the weighted average life of the hypothetical senior "AAA"
security created for purposes of calculating the Market Value on such date
according to the Market Value Methodology Determination.
"Investment Company Act": The Investment Company Act of 1940, as
amended.
A-14
"Late Payment Rate": The meaning specified in the Insurance Agreement.
"Leverage Ratio" At the end of a fiscal quarter of ABFS, for ABFS and
its subsidiaries on a consolidated basis, the ratio of (i) total liabilities
(excluding Subordinated Debt), determined in accordance with GAAP to (ii)
Tangible Net Worth plus Subordinated Debt.
"LIBOR": With respect to any Business Day, the rate determined by the
Administrative Agent on the basis of the offered rates for one-month U.S. dollar
deposits, as such rates appear on Telerate Page 3750, as of 11:00 a.m. (London
time) on such day. If on any Business Day the Administrative Agent is unable to
determine LIBOR by reference to Telerate Page 3750, LIBOR will be established by
the Administrative Agent as follows:
(a) If on such Business Day two or more Reference Banks provide such
offered quotations, LIBOR shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%).
(b) If on such Business Day fewer than two Reference Banks provide such
offered quotations, LIBOR shall be the higher of (i) LIBOR as determined on the
previous Business Day or (ii) the Reserve Interest Rate.
"Liquidated Loan Loss": With respect to any Payment Date, the aggregate
of the amount of losses with respect to each Mortgage Loan which became a
Liquidated Mortgage Loan prior to the Due Date preceding such Payment Date,
equal to the excess of (i) the unpaid Principal Balance of each such Liquidated
Mortgage Loan, plus accrued interest thereon in accordance with the amortization
schedule at the time applicable thereto at the applicable Mortgage Interest Rate
from the Due Date as to which interest was last paid with respect thereto
through the next succeeding Due Date following the date such Loan became a
Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines that all Liquidation Proceeds which it
expects to recover have been recovered.
"Liquidation Expenses": Expenses incurred by the Servicer in connection
with the liquidation of any defaulted Mortgage Loan or property acquired in
respect thereof (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to
Sections 7.04 and 7.06 of the Sale and Servicing Agreement respecting the
related Mortgage Loan and any unreimbursed expenditures for real property taxes
or for property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds.
"Liquidation Proceeds": The amount (other than Insurance Proceeds)
received by the Servicer in connection with (i) the taking of all or a part of
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan through an Indenture Trustee's
sale, foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of
any other security for such Mortgage Loan, including, without limitation,
pledged equipment, inventory and working capital and assignments of rights and
interests made by the related Mortgagor.
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"Liquidity Agent": Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("Bear ▇▇▇▇▇▇▇") and its
successors and permitted assigns under the master repurchase agreement dated as
of March 12, 2001 (the "Repo Agreement") between Bear ▇▇▇▇▇▇▇ and the Initial
Purchaser; provided that if the Repo Agreement is terminated for any reason, the
Liquidity Agent shall be the Person or Persons specified by the Initial
Purchaser.
"Liquidity Provider": Bear, ▇▇▇▇▇▇▇ & Co. Inc. or its designee ("Bear
▇▇▇▇▇▇▇") and its successors and permitted assigns under the master repurchase
agreement dated as of March 12, 2001 (the "Repo Agreement") between Bear ▇▇▇▇▇▇▇
and the Initial Purchaser; provided that if the Repo Agreement is terminated for
any reason, the Liquidity Provider shall be the Person or Persons specified by
the Initial Purchaser.
"Liquidity Provider Placement and Expense Fee": means the fee payable
to the Liquidity Provider in connection with the sale of any Mortgage Loans or
the Class A Note conducted by the Liquidity Provider pursuant to Section 5.04 of
the Indenture which shall be equal to the product of (a) the Liquidity Provider
Placement and Expense Fee Rate and (b) monies received from the sale of the
Mortgage Loans or Class A Note so sold by it. Such fee shall be paid by wire in
accordance with Exhibit F to the Indenture.
"Liquidity Provider Placement and Expense Fee Rate": 0.50%.
"Loan Repurchase Price": With respect to any Mortgage Loan, the
Principal Balance of such Mortgage Loan as of the date of purchase, plus all
accrued and unpaid interest on such Principal Balance computed, as of the next
succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest
Rate, net of the Servicing Fee if the Depositor or any of its Affiliates is the
Servicer, plus the amount of any unreimbursed Servicing Advances and Periodic
Advances made by the Servicer with respect to such Mortgage Loan, which purchase
price shall be deposited in the Collection Account on the next succeeding
Servicer Payment Date, after deducting therefrom any amounts received in respect
of such repurchased Mortgage Loan or Loans and being held in the Collection
Account for future payment to the extent such amounts have not yet been applied
to principal or interest on such Mortgage Loan.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan as of
its date of origination, the ratio on such date borne by the outstanding
Principal Balance of the Mortgage Loan to the Appraised Value of the related
Mortgaged Property.
"London Business Day": A day on which banks are open for dealing in
foreign currency and the exchange in London and New York City.
"Losses" means, with respect to any Due Period, the aggregate amount of
Liquidated Loan Losses arising with respect to the Pledged Mortgage Loans during
such Due Period.
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"Majority Certificateholder": The Holder or Holders of Trust
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
"Majority Noteholder": The Holder or Holders of Notes evidencing
Percentage Interests in excess of 51% in the aggregate.
Market Value": As of any date and with respect to the aggregate
Eligible Mortgage Loans, an amount based on the par amount of such loans equal
to the lesser of (i) the hypothetical securitized economic value of such
Mortgage Loans (such value being comprised of gross note proceeds plus residual
value) calculated according to the assumptions set forth in the Market Value
Methodology Determination run to maturity, and (ii) the value of such Mortgage
Loans if sold on a whole-loan basis to a third party, as determined by the Note
Insurer, or the Liquidity Agent acting on its behalf. At the reasonable
discretion of the Note Insurer and the Liquidity Provider, such Market Value may
be reduced by the product of (x) the increase in yield of the Interpolated
Benchmark Treasury Rate or the Interpolated Benchmark Swap Rate, as applicable,
since the last Market Value Determination Date, (y) the greater of (i) 3 or (ii)
the weighted average life of the hypothetical senior "AAA" security that would
be issued in a securitization of the Mortgage Loans as described in the
definition of the Market Value Methodology Determination, and (z) the aggregate
principal amount of the Eligible Mortgage Loans. Notwithstanding the foregoing,
if the Note Insurer, the Servicer and the Liquidity Agent do not agree on a
Market Value Methodology Determination, then the Note Insurer may at any time in
its discretion obtain 3 market bids for the Eligible Mortgage Loans and the
average of such bids shall constitute the Market Value thereof.
"Market Value Determination Date" means any date specified by the Note
Insurer or the Liquidity Agent on its behalf on which the Market Value of the
Eligible Mortgage Loans is determined and notified to the Servicer by the Note
Insurer or the Liquidity Agent.
"Market Value Methodology Determination": For purposes of the
calculation of Market Value, the Note Insurer, or the Liquidity Agent acting on
its behalf, will utilize a discount rate of 18%, a prepayment assumption equal
to the sum of the Servicer's security pricing speed for its most recent term
securitization plus approximately 12% CPR and other assumptions employed in the
Servicer's most recent term securitization, a loss rate of at least 0.75% per
annum, an assumed yield equal to the Fixed Rate for such date and assumed
collateral characteristics based upon the Eligible Mortgage Loans as of such
date to effect a net present value calculation consistent with the methodology
typically employed for the Servicer's term securitizations. The calculation of
Market Value is illustrated on Exhibit G to the Indenture, and the parties
hereto acknowledge and agree that such calculation is complete and correct. The
aforementioned modeling assumptions and the collateral characteristics (WAC,
WAM) will be used by the Note Insurer, or the Liquidity Agent acting on its
behalf, to determine the appropriate weighted average life for the senior AAA
security that would be issued in a hypothetical securitization of the Mortgage
Loans. The above variables (prepayment rate, loss rate, discount rate) will be
subject to adjustment based upon the actual composition of the Eligible Mortgage
Loans as determined by the Note Insurer or the Liquidity Agent on its behalf in
their reasonable discretion.
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"Maximum Collateral Amount": The sum of the Principal Balances of all
Mortgage Loans as of their related Purchase Dates.
"Monthly Payment": As to any Mortgage Loan (including any REO Mortgage
Loan) and any Due Date, the payment of principal and interest due thereon as
specified for such Due Date in the related amortization schedule at the time
applicable thereto (after adjustment, if any, for any Curtailments and Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than Deficient
Valuations, or similar proceeding or any moratorium or similar waiver or grace
period).
"Monthly Servicing Fee": As defined in Section 7.08 of the Sale and
Servicing Agreement.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto
and if such corporation no longer for any reason performs the services of a
securities rating agency, "Moody's" shall be deemed to refer to any other
nationally recognized rating agency designated by the Controlling Party.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on the Mortgaged Property.
"Mortgage File": The file originally maintained by each Originator and
the Servicer containing the various documents referred to in the Sale and
Servicing Agreement as required to be held therein, except for such documents
transferred to the Collateral Agent to be maintained in the Indenture Trustee's
Mortgage Files.
"Mortgage Interest Rate": As to any Mortgage Loan, the per annum fixed
rate at which interest accrues on the unpaid Principal Balance thereof.
"Mortgage Loan Schedule": The schedule of Initial Mortgage Loans as of
the Initial Closing Date attached as Schedule I to the Indenture, which will be
deemed to be modified automatically to reflect any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage Loan, including
the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The
initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and
any subsequent Mortgage Loan Schedule provided in connection with the Subsequent
Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its
identifying number and the name of the related Mortgagor; (ii) the billing
address for the related Mortgaged Property including the state and zip code;
(iii) its date of origination; (iv) the original number of months to stated
maturity; (v) the original stated maturity; (vi) the original Principal Balance;
(vii) its Principal Balance as of the applicable Closing Date or applicable
Subsequent Purchase Date; (viii) the Mortgage Interest Rate; (ix) the scheduled
monthly payment of principal and interest; and (x) the Originator thereof.
"Mortgage Loans": The Initial Mortgage Loans and the Subsequent
Mortgage Loans, together with any Qualified Substitute Mortgage Loans
substituted therefor in accordance with the Basic Documents, as from time to
time are held as part of the Trust, the Initial Mortgage Loans originally so
held being identified in the initial Mortgage Loan Schedule. When used in
respect of any Payment Date, the term Mortgage Loans shall mean all Mortgage
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Loans (including those in respect of which the Indenture Trustee has acquired
the related Mortgaged Property) which have not been repaid in full prior to the
related Due Period, did not become Liquidated Mortgage Loans prior to such
related Due Period and were not repurchased or replaced by the Originators (or
the Depositor) prior to such related Due Period.
"Mortgaged Property": The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple interest in one or more parcels of
land.
"Mortgage Note": The original, executed note or other evidence of any
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Available Funds": With respect to any Payment Date, the excess of
the Available Funds available to pay the Required Distributions on such date in
accordance with the priority of payments set forth in Section 8.02 of the
Indenture.
"Net Excess Spread": With respect to any Due Period an amount equal to
a fraction (expressed as a percentage) the numerator of which is equal to (a)
the Aggregate Mortgage Interest, minus (b) Losses, minus (c) Facility Costs, and
the denominator of which is the Aggregate Principal Balance of the Pledged
Mortgage Loans.
"Net Foreclosure Profits": As to any Payment Date, the excess, if any,
of (i) the aggregate Foreclosure Profits with respect to such Payment Date over
(ii) Liquidated Loan Losses with respect to such Payment Date.
"Net Income": For any fiscal quarter of ABFS, the net income (or loss)
of ABFS and its consolidated subsidiaries for such period determined in
accordance with GAAP.
"Net Liquidation Proceeds": As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances and Servicing Advances made by the Servicer with respect to
such Liquidated Mortgage Loan. For all purposes of the Basic Documents, Net
Liquidation Proceeds shall be allocated first to accrued and unpaid interest on
the related Mortgage Loan and then to the unpaid Principal Balance thereof.
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds net of
any related expenses of the Servicer.
"Non-Cash Portion": As defined under Originator Purchase Price.
"Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 7.03 of the Sale and Servicing Agreement, or (b) a Periodic
Advance proposed to be made in respect of a Mortgage Loan or REO Property either
of which, in the good faith business judgment of the Servicer, as evidenced by
an Officer's Certificate delivered to the Note Insurer and the Indenture Trustee
no later than the Business Day following such determination, would not
ultimately be recoverable pursuant to Section 7.03 of the Sale and Servicing
Agreement.
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"Note": Any Class A Note executed by the Owner Trustee on behalf of the
Trust and authenticated by the Indenture Trustee.
"Noteholder" or "Holder": Initially, the Initial Purchaser. Upon a
transfer of the Note by the Initial Purchaser, the Person in whose name a Note
is registered in the Note Register. For purposes of any consent, waiver, request
or demand of the Noteholder pursuant to the Indenture, upon the Indenture
Trustee's request, the Servicer shall provide to the Indenture Trustee a notice
identifying any of its Affiliates or the Affiliates of any Subservicer is the
Noteholder as of the date(s) specified by the Indenture Trustee in such request.
If payments are made on the Note under the Note Insurance Policy, the Note shall
be deemed to be Outstanding and held by the Note Insurer to the extent of such
payment.
"Noteholder's Statement": The statement prepared pursuant to Section
2.08(f) of the Indenture, containing the following information with respect to
the Note:
(a) the amount of the payment with respect to the Note and the
Trust Certificates;
(b) the amount of such payments allocable to principal,
separately identifying the aggregate amount of any prepayments or other
unscheduled recoveries of principal included therein;
(c) the amount of such payments allocable to interest and the
actual calculation thereof;
(d) the Note Principal Balance of the Note as of such Payment
Date, after giving effect to any payment of principal on such Payment
Date;
(e) the amount of any Insured Payment included in the amounts
paid to the Noteholder on such Payment Date;
(f) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in such payment;
(g) any Restoration Amount then outstanding;
(h) the aggregate Principal Balance of all Mortgage Loans that
have become Delinquent since the Initial Closing Date (such Principal
Balance measured as of the day immediately preceding the date on which
each such Mortgage Loan became Delinquent), provided that each such
Mortgage Loan was Delinquent more than 30 days at the time such
Mortgage Loan ceased to be an Eligible Mortgage Loan, but excluding any
Mortgage Loans that have been released from the lien of the Indenture
due to the disposition of such Mortgage Loans in a securitization or as
part of a whole loan sale; and
(i) the Cost of Funds, as determined by the Administrative
Agent or if the Initial Purchaser is no longer the Holder of the Note,
the Liquidity Provider, for the related Accrual Period together with a
calculation of the daily amount of interest due based on such rate.
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Items (a), (b) and (c) above shall, with respect to the Note, be
presented on the basis of a Note having a $1,000 denomination. In addition, by
January 31 of each calendar year following any year during which the Note is
outstanding, the Indenture Trustee shall furnish a report to each Holder of
record if so requested in writing at any time during each calendar year as to
the aggregate of amounts reported pursuant to (a), (b) and (c) with respect to
the Note for such calendar year.
"Note Insurance Payment Account": The Note Insurance Payment Account
established in accordance with Section 8.03(c) of the Indenture and maintained
by the Indenture Trustee.
"Note Insurance Policy": The Financial Guaranty Insurance Policy No.
34772, and all endorsements thereto dated the Initial Closing Date, issued by
the Note Insurer for the benefit of the Noteholder.
"Note Insurer": MBIA Insurance Corporation, and any successors thereto.
"Note Insurer Default": The existence and continuance of any of the
following:
(a) the Note Insurer shall have failed to make a required
payment when due under the Note Insurance Policy;
(b) the Note Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation, or reorganization
that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance, or any other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, indenture trustee, agent, or receiver for the
Note Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, indenture trustee,
agent, or receiver of the Note Insurer or of all or any material
portion of its property.
"Note Principal Balance": As to any particular Note and date of
determination, the product of the Percentage Interest evidenced thereby and the
aggregate principal balance of all Notes of the same Class as of such date of
determination. The Trust Certificates do not have a "Note Principal Balance."
"Note Rate": The Class A Note Rate.
"Note Register": As defined in Section 2.06 of the Indenture.
"Note Registrar": As defined in Section 2.06 of the Indenture.
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"Note": The Class A Note.
"Notice of Borrowing": A written notice, in the form attached as
Exhibit E to the Indenture, to the Depositor, the Trust, the Indenture Trustee,
the Collateral Agent, the Note Insurer and the Initial Purchaser that the
Originators desire to make a Subsequent Transfer.
"Officer's Certificate": A certificate signed by the chairman of the
board, the president or a vice president and the treasurer, the secretary or one
of the assistant treasurers or assistant secretaries, the Servicer, or the
Depositor, or, with respect to the Trust, a certificate signed by a Responsible
Officer of the Owner Trustee, at the direction of the related Majority
Certificateholder as required by any Basic Document.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Servicer, the Depositor, the Indenture Trustee,
Back-up Servicer, the Owner Trustee, the Note Insurer, a Noteholder or a
Noteholder's prospective transferee (including except as otherwise provided
herein, in-house counsel) reasonably acceptable to each addressee of such
opinion and experienced in matters relating to the subject of such opinion.
"Optional Redemption Date": Any date five Business Days after the date
the Noteholder has delivered notice of its intent to cause a Disposition as
provided in Section 10.01(a)(iii) of the Indenture.
"Original Note Principal Balance": The Note Principal Balance of the
Class A Notes, as of the Initial Closing Date.
"Originator Purchase Price": In respect of any Originator on any
Purchase Date, the consideration to be received by such Originator, which shall
equal the Market Value of the Mortgage Loans, and shall consist of the sum of
(i) the Cash Portion applicable to such Originator and Purchase Date and (ii)
the Non-Cash Portion applicable to such Originator and Purchase Date. The "Cash
Portion" for any Originator and Purchase Date shall be the product of (A) a
fraction, the numerator of which is the Market Value of the Mortgage Loans sold
by that Originator and the denominator of which is the Market Value of the
Mortgage Loans being sold by all Originators, in each case on the related
Purchase Date, and (B) the aggregate Purchase Price received by the Depositor on
such Purchase Date. The "Non-Cash Portion" for any Originator shall be the
excess, if any, of (x) the Market Value of the Mortgage Loans sold by such
Originator over (y) the Cash Portion received by such Originator, in each case
on the related Purchase Date. The Non-Cash Portion shall be reflected as an
increase in the aggregate principal amount of the related Originator's Demand
Note.
"Originators": American Business Credit, Inc., HomeAmerican Credit,
Inc. d/b/a Upland Mortgage and American Business Mortgage Services, Inc.
"Other Debt Agreement": The meaning assigned to such term in section
3.17(a)(iv) of the Indenture.
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:
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(a) Definitive Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Holder of such Note; provided,
however, that if such Note is to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made;
(c) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that such Note
is held by a bona fide purchaser (as defined by the Uniform Commercial
Code of the applicable jurisdiction); and
(d) Notes alleged to have been destroyed, lost or stolen that
have been paid as provided for in Section 2.07 of the Indenture;
provided, however, that in determining whether the Holder of the requisite
percentage of the Note Principal Balance of the Outstanding Note has given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
the Note owned by the Trust, any other obligor upon the Note or any Affiliate of
the Trust, the Servicer or the Depositor or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only the
Note that the Indenture Trustee knows to be so owned shall be so disregarded.
The Note so owned that has been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Note and that the
pledgee is not the Trust, any other obligor upon the Note or any Affiliate of
the Trust, the Servicer or the Depositor or such other obligor; provided,
further, however, that if the Note has been paid with the proceeds of the Note
Insurance Policy, it shall be deemed to be Outstanding for the purposes of this
Indenture, such payment to be evidenced by written notice from the Note Insurer
to the Indenture Trustee, and the Note Insurer shall be deemed to be the Holder
thereof to the extent of any payments thereon made by the Note Insurer which
have not been reimbursed.
"Owner-Occupied Mortgaged Property": A Residential Dwelling as to which
(a) the related Mortgagor represented an intent to occupy as such Mortgagor's
primary residence at the origination of the Mortgage Loan, and (b) the
Originators have no actual knowledge that such Residential Dwelling is not so
occupied.
"Ownership Interest": As to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
"Owner Trustee": First Union Trust Company, National Association, a
national banking association, not in its individual capacity, but solely as
owner trustee under the Trust Agreement, and any successor owner trustee
thereunder.
"Owner Trustee Fee": As defined in Section 8.01 of the Trust Agreement.
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"Par Advance Rate": (a) With respect to the Mortgage Loans held in the
Trust for a period of less than 150 days, the Par Advance Rate is 98.00%; (b)
with respect to the Mortgage Loans held in the Trust for a period of 150-179
days, the Par Advance Rate is 97.00%; (c) with respect to the Mortgage Loans
held in the Trust for a period of 180-209 days, the Par Advance Rate is 96.00%;
and (d) with respect to the Mortgage Loans held in the Trust for 210 or more
days, the Par Advance Rate is zero.
"Pass-Through Transfer": The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly issued and/or
privately placed, rated or unrated, mortgage-backed securities transaction,
retaining the Servicer as "servicer" (with or without a master servicer)
thereunder.
"Paying Agent": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Trust pursuant to Section
3.03 of the Indenture to pay the principal of, or interest on, the Note on
behalf of the Trust, which agent, if not the Indenture Trustee, shall have
signed an instrument agreeing to be bound by the terms of the Indenture
applicable to such Paying Agent.
"Payment Account": With respect to the Note, the segregated trust
account, which shall be an Eligible Account, established and maintained pursuant
to Section 8.01(a) of the Indenture and entitled "The Chase Manhattan Bank, as
Indenture Trustee for ABFS Mortgage Loan Warehouse Trust 2001-1 Mortgage Backed
Note, Series 2001-1, Class A Payment Account," on behalf of the Noteholder and
the Note Insurer.
"Payment Amount": The Class A Payment Amount.
"Payment Date": The 20th day of any month (or if such 20th day is not a
Business Day, the first Business Day immediately following) commencing on April
20, 2001.
"Percentage Interest": With respect to a Class A Note, the portion
evidenced by such Note, expressed as a percentage rounded to four decimal
places, equal to a fraction the numerator of which is the outstanding principal
balance of such Note and the denominator of which is the Class A Note Principal
Balance. With respect to a Trust Certificate, the portion evidenced thereby as
stated on the face of such Trust Certificate.
"Periodic Advance": The aggregate of the advances the Servicer may make
(or is required to make if an Event of Default has occurred or would occur in
the absence of a Periodic Advance) on any Servicer Payment Date pursuant to
Section 7.18 of the Sale and Servicing Agreement, the amount of any such
advances being equal to the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Servicer Payment Date, the product of (i) the Principal
Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage
Interest Rate for such Mortgage Loan net of the Servicing Fee allocable
to such Mortgage Loan; and
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(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee allocable to such Mortgage Loan,
for the most recently ended Due Period over (ii) the net proceeds from
the REO Property transferred to the Payment Account for such Payment
Date.
"Permitted Investments": As used herein, Permitted Investments shall
include the following:
(a) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(b) repurchase agreements on obligations specified in clause
(a) maturing not more than three months from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated in one of the two
highest rating categories by the Rating Agencies;
(c) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States or any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
(d) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated in the highest short-term rating category by the Rating
Agencies; and
(e) any money market fund rated in the highest rating category
applicable to such type of fund by the Rating Agencies;
provided, that no instrument described hereunder shall evidence either the right
to receive (x) only interest with respect to the obligations underlying such
instrument or (y) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument providing a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price to stated maturity; provided, that, such investment matures not
later than the next Payment Date.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": A pension or benefit plan or individual retirement arrangement
that is subject to ERISA or Section 4975 of the Code.
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"Pledged Mortgage Loans": The Mortgage Loans pledged to the Indenture
Trustee pursuant to the Indenture.
"Predecessor Notes": With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.07 of the Indenture in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note.
"Preference Amount": Any amounts paid in respect of the Note which are
recovered from any Holder of a Note as a voidable preference by a trustee in
bankruptcy pursuant to the Bankruptcy Code or other similar law in accordance
with a final, nonappealable order of a court having competent jurisdiction and
which have not theretofore been repaid to such Holder.
"Preference Claim": As defined in Section 8.03(f) of the Indenture.
"Premium Amount": With respect to any Payment Date, the sum of (i) the
product of the Premium Rate and the average daily Class A Note Principal Balance
during the related Accrual Period plus (ii) the product of (A) the Unused
Premium Rate (as defined in the Premium Supplement) and (B) an amount, not less
than zero, equal to $100,000,000 minus the average daily Class A Note Principal
Balance during the three Accrual Periods then most recently ended.
"Premium Rate": The rate at which the "Premium" is determined, as
defined in the Premium Supplement.
"Premium Supplement": As defined in the Insurance Agreement.
"Premium Supplement Amount": As defined in the Premium Supplement.
"Premium Supplement Event": Means any Event of Default, Servicer Event
of Default or an "Event of Default" as defined in the Insurance Agreement.
"Principal Balance": As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to prepayments received prior to
the end of the related Due Period but without giving effect to any Deficient
Valuations incurred prior to such date of determination.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date, other
than an early future payment.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Prospective Owner": The meaning assigned to such term in section
2.12(a) of the Indenture.
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"Purchase Date": Means with respect to (a) the Initial Mortgage Loans,
the Initial Closing Date and (b) the Subsequent Mortgage Loans, the same day of
the week (if not a Business Day, the following day in such week) and each week
thereafter until the end of the Purchase Period.
"Purchase Period": means the period of time commencing with the Initial
Closing Date until the earlier to occur of (i) the termination of the Purchase
Period following the occurrence and during the continuation of an Event of
Default or (ii) the Final Purchase Date.
"Purchase Price": With respect to any Mortgage Loan, the portion of the
Advance Amount which would be allocable thereto assuming such Mortgage Loan had
become a Pledged Mortgage Loan.
"Qualified Appraiser": An appraiser, duly appointed by the Originators,
who had no interest, direct or indirect, in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
"Qualified Institutional Buyer": As defined in Rule 144 under the
Securities Act.
"Qualified Purchaser": A "qualified purchaser" as defined in Section
2(a)(51) of the Investment Company Act.
"Qualified Substitute Mortgage Loan": A Mortgage Loan or Mortgage Loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.06 or 4.02(b) of
the Sale and Servicing Agreement, which (a) has or have an interest rate at
least equal to those applicable to the Deleted Mortgage Loan, (b) relates or
relate to a detached one-family residence or to the same type of Residential
Dwelling or Business Purpose Property, or any combination thereof, as the
Deleted Mortgage Loan and in each case has or have the same or a better lien
priority as the Deleted Mortgage Loan and has or have the same occupancy status
as the Deleted Mortgage Loan or is or are Owner-Occupied Mortgaged
Property(ies), (c) matures or mature no later than (and not more than one year
earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio
or Loan-to-Value Ratios at the time of such substitution no higher than the
Loan-to-Value of the Deleted Mortgage Loan, (e) has or have a Combined
Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such
substitution no higher than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan, (f) has or have a FICO no lesser than the FICO of the Deleted
Mortgage Loan, (g) has or have a Principal Balance or Principal Balances (after
application of all payments received on or prior to the date of substitution)
not substantially less and not more than the Principal Balance of the Deleted
Mortgage Loan as of such date, and (h) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01,
3.02, 3.03 and 4.01 of the Sale and Servicing Agreement, as set forth in a
Certificate signed by a Responsible Officer of each of the Servicer and the
applicable Originator and delivered to the Note Insurer prior to substitution.
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"Rate Fixing Date": Any date specified as such by the Controlling Party
(acting in its sole discretion) following the occurrence of a Trigger Event upon
not less than two Business Days' written notice to the Indenture Trustee, the
Servicer and the Liquidity Agent; provided, that, there may be no more than two
Rate Fixing Dates hereunder, and the second Rate Fixing Date must occur within
six months of the first Rate Fixing Date.
"Rating Agency": S&P or ▇▇▇▇▇'▇.
"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 Servicer, the Depositor, the Note Insurer and the
Trust in writing that such action will not result in a reduction, qualification
or withdrawal of the then current "implied" rating of the Note that it maintains
without taking into account the Note Insurance Policy.
"Record Date": The Business Day immediately preceding the related
Payment Date.
"Redemption Date": The Payment Date, if any, on which the Note in whole
or in part is redeemed pursuant to Article X of the Indenture, which date may
occur on or after the Clean-Up Call Date or an Optional Redemption Date.
"Reference Banks": Citibank, ▇▇▇▇▇▇▇'▇ Bank PLC, The Bank of
Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Administrative Agent which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Originators or any affiliate thereof, (iii)
whose quotations appear on the Telerate Page 3750 on the relevant Interest
Determination Date and (iv) which have been designated as such by the Indenture
Trustee.
"Reimbursement Amount": With respect to any Payment Date, equals the
sum of (a)(i) the aggregate of all payments made by the Note Insurer pursuant to
the Note Insurance Policy or Section 2.5 of the Insurance Agreement in each case
not previously repaid to the Note Insurer pursuant to Section 8.02 of the
Indenture, plus (ii) interest accrued on each such payment not previously repaid
calculated at the Late Payment Rate from the date the Indenture Trustee received
the Insured Payment or Preference Amounts paid by the Note Insurer, (b)(i) any
other amounts then due and owing to the Note Insurer under the Insurance
Agreement, as certified to the Indenture Trustee by the Note Insurer plus (ii)
interest on such amounts at the rate specified in the Insurance Agreement and
(c) to the extent not otherwise included, all costs and expenses of the Note
Insurer in connection with any action, proceeding or investigation, including
(without limitation) any judgment or settlement entered into affecting the Note
Insurer or the Note Insurer's interests under the Basic Documents. The Note
Insurer shall notify the Indenture Trustee and the Servicer of the amount of any
Reimbursement Amount.
"Relief Act": The Soldiers' and Sailors' Relief Act of 1940, as
amended.
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"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REO Disposition": The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed-in-lieu of
foreclosure.
"REO Mortgage Loan": Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust.
"REO Proceeds": Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
"REO Property": A Mortgaged Property acquired by the Servicer in the
name of the Indenture Trustee on behalf of the Noteholder through foreclosure or
deed-in-lieu of foreclosure.
"Request for Release": A request for release of documents in
substantially the form attached as Exhibit D of the Sale and Servicing
Agreement.
"Required Distribution": With respect to (1) any Payment Date occurring
prior to the Final Stated Maturity Date, the Class A Interest Payment Amount,
and (2) the Final Stated Maturity Date, the sum of (x) the amount set forth in
clause (1) above and (y) the Class A Note Principal Balance, if any, of the
Note, after giving effect to all other payments of principal on the Note on that
Payment Date.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Controlling Party determines to be either (i)
the arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of 1/16%) of the one-month U.S. dollar lending rates which three New York City
banks selected by the Controlling Party are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Controlling Party can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
which three New York City banks selected by the Controlling Party are quoting on
such Interest Determination Date to leading European banks.
"Residential Dwelling": A one- to four-family dwelling, a unit in a
planned unit development, a unit in a condominium development or a townhouse.
"Responsible Officer": When used with respect to the Indenture Trustee,
the Collateral Agent or the Owner Trustee, any officer assigned to the Corporate
Trust division (or any successor thereto), including any Vice President, Second
or Assistant Vice President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Indenture Trustee, the Collateral Agent or the Owner Trustee customarily
performing functions similar to those performed by any of the above designated
officers and in each case having direct responsibility for the administration of
the Basic Documents and to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject. When used with respect to the Servicer, the president or
any vice president, assistant vice president, or any secretary or assistant
secretary.
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"Restoration Amount": As of any date of determination, the amount, if
any, by which (a) the outstanding principal amount of the Class A Note as of
such day exceeds, (b) the Advance Amount as of such day.
"Retained Interest": An interest in a pool of promissory notes,
mortgage loans, or other financial assets which entitles the holder to receive
excess cash flows derived from such assets after payments to senior holders of
direct or indirect beneficial or other interests in such assets as well as
expenses and other payments accorded priority in right or payment to such
residual interest.
"Sale": The meaning specified in Section 5.17 of the Indenture.
"Sale and Servicing Agreement": The Sale and Servicing Agreement, dated
as of March 1, 2001, among the Trust, the Servicer, ABFS, the Originators, the
Depositor, the Collateral Agent, the Back-up Servicer and the Indenture Trustee,
providing for, among other things, the sale of the Mortgage Loans from the
Depositor to the Trust and the servicing of the Mortgage Loans.
"Sales Agent": Bear, ▇▇▇▇▇▇▇ & Co. Inc. and its successors and
permitted assigns.
"Securities Act": The Securities Act of 1933, as amended.
"Servicer": American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.
"Servicer Event of Default": As defined in Section 9.01 of the Sale and
Servicing Agreement.
"Servicer Payment Date": With respect to any Payment Date, the 15th day
of the month in which such Payment Date occurs, or if such 15th day is not a
Business Day, the Business Day preceding such 15th day.
"Servicer Remittance Amount": With respect to any Servicer Payment
Date, an amount equal to the sum of (i) all collections of principal and
interest on the Mortgage Loans (including Insurance Proceeds, Principal
Prepayments, Net REO Proceeds and Net Liquidation Proceeds, if any) collected by
the Servicer during the related Due Period, (ii) all Periodic Advances made by
the Servicer with respect to interest payments due to be received on the
Mortgage Loans on the related Due Date and (iii) any other amounts required to
be placed in the Collection Account by the Servicer pursuant to the Sale and
Servicing Agreement but excluding the following:
(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously
made an unreimbursed Periodic Advance, to the extent of such
unreimbursed Periodic Advance;
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(b) amounts received on a particular Mortgage Loan with
respect to which the Servicer has previously made an unreimbursed
Servicing Advance, to the extent of such unreimbursed Servicing
Advance;
(c) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(d) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee allocable to the related
Mortgage Loan;
(e) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(f) all amounts in respect of late payment charges, assumption
fees, prepayment premiums, extension or other administrative charges
payable by obligors and similar fees;
(g) certain other amounts which are reimbursable to the
Servicer, as provided in this Sale and Servicing Agreement;
(h) Net Foreclosure Profits; and
(i) the proceeds of any hedge obtained pursuant to Section
7.22 of the Sale and Servicing Agreement.
"Servicer Remittance Report": The monthly report prepared by the
Servicer and delivered to the parties specified in Section 7.16(a) of the Sale
and Servicing Agreement.
"Servicing Advances": All reasonable and customary "out-of-pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and liquidation
of the REO Property, including reasonable fees paid to any independent
contractor in connection therewith, (d) compliance with the obligations under
Section 7.06 of the Sale and Servicing Agreement, all of which reasonable and
customary out-of-pocket costs and expenses are reimbursable to the Servicer to
the extent provided in Sections 7.03 and 7.06 of the Sale and Servicing
Agreement.
"Servicing Compensation": The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 7.08 of the Sale and Servicing
Agreement.
"Servicing Fee": As to each Mortgage Loan, the annual fee payable to
the Servicer, which is calculated as an amount equal to the product of (a)
Servicing Fee Rate, and (b) the Principal Balance thereof. Such fee shall be
calculated and payable monthly only from the amounts received in respect of
interest on such Mortgage Loan and shall be computed on the basis of the same
Principal Balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Servicing Fee includes any servicing
fees owed or payable to any Subservicer. For purposes of the Foregoing, the
Principal Balance of a Mortgage Loan that has become a Liquidated Mortgage Loan
shall be deemed to be zero.
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"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee, the Note Insurer and the Collateral Agent by the
Servicer, as such list may from time to time be amended.
"Servicing Transfer": means the transfer of the servicing of the
Mortgage Loans.
"Standard & Poor's" or "S&P": Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
statistical rating organization designated by the Controlling Party.
"Startup Day": The day designated as such pursuant to Section 2.07(a)
of the Trust Agreement.
"Stock": All shares, options, warrants, interests, participation or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, convertible debentures and all agreements, instruments and
documents convertible, in whole or in part, into any one or more or all of the
foregoing.
"Subordinated Debt": Unsecured indebtedness of ABFS or any of its
consolidated subsidiaries which (i) matures more than one year from the date of
determination and (ii) is subordinated to the prior payment in full of all
obligations owed by ABFS, the Servicer and the Originators under the Basic
Documents.
"Subsequent Advance": As defined in Section 2.14 of the Indenture.
"Subsequent Depositor Conveyed Assets": In respect of the Depositor on
any Subsequent Purchase Date after the Initial Closing Date, the related
Subsequent Originator Conveyed Assets and the Sale and Servicing Agreement.
"Subsequent Mortgage Loans": The mortgage loans sold after the Initial
Closing Date pursuant to Section 2.02 of the Sale and Servicing Agreement or
transferred in connection with a substitution pursuant to Section 2.06 or 4.02
of the Sale and Servicing Agreement.
"Subsequent Originator Conveyed Assets": In respect of any Originator
on any Subsequent Purchase Date after the Initial Closing Date, all of the
right, title and interest in and to (a) the Subsequent Mortgage Loans (including
property that secures a Mortgage Loan that becomes an REO Property), including
the related Mortgage Files delivered or to be delivered to the Collateral Agent,
on behalf of the Indenture Trustee, pursuant to the Sale and Servicing
Agreement, including all payments of principal received, collected or otherwise
recovered after the applicable Subsequent Purchase Date for each Subsequent
Mortgage Loan, all payments of interest due on each Subsequent Mortgage Loan
after the applicable Subsequent Purchase Date therefor whenever received and all
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other proceeds received in respect of such Subsequent Mortgage Loans, (b) the
Insurance Policies and (c) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid assets,
including, without limitation, all insurance proceeds and condemnation awards.
"Subsequent Pledge Agreement": Any Subsequent Pledge Agreement, between
the Trust and the Indenture Trustee, in the form of Exhibit B to the Indenture,
relating to the pledge to the Indenture Trustee, on behalf of the Noteholder and
the Note Insurer, of Subsequent Mortgage Loans.
"Subsequent Purchase Date": Any Purchase Date on which Subsequent
Mortgage Loans are purchased or acquired by the Trust after the Initial Closing
Date.
"Subsequent Sale Agreement": Any Subsequent Sale Agreement, between the
Depositor and the Trust, in the form of Exhibit G to the Sale and Servicing
Agreement, relating to the contribution or transfer to the Trust of Subsequent
Mortgage Loans.
"Subsequent Transfer": The purchase by the Trust and pledge to the
Indenture Trustee of the Subsequent Mortgage Loans.
"Subsequent Transfer Agreement": Any Subsequent Transfer Agreement,
among the Originators and the Depositor, in the form of Exhibit A to the Sale
and Servicing Agreement, relating to the transfer to the Depositor of any
Subsequent Mortgage Loans.
"Subservicers": HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a
Pennsylvania corporation, or its successor in interest, and American Business
Mortgage Services, Inc., a New Jersey corporation, or its successor in interest.
"Subservicing Agreement": The agreement between the Servicer and the
Subservicers relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 7.13 of the Sale and Servicing Agreement, a copy of
which shall be delivered, along with any modifications thereto, to the Indenture
Trustee and the Note Insurer.
"Substitution Adjustment": As to any date on which a substitution
occurs pursuant to Sections 2.06 or 4.02(b) of the Sale and Servicing Agreement,
the amount (if any) by which the aggregate principal balances (after application
of principal payments received on or before the date of substitution) of any
Qualified Substitute Mortgage Loans as of the date of substitution, are less
than the aggregate of the Principal Balances of the related Deleted Mortgage
Loans together with 30-days' interest thereon at the Mortgage Interest Rate.
"Successor Servicer": means any entity appointed as successor to the
Back-up Servicer in the event that the Back-up Servicer is unable so to act
pursuant to Section 9.02 of the Sale & Servicing Agreement.
"Tangible Net Worth": As of any date, total stockholder's equity of
ABFS and its consolidated subsidiaries determined in accordance with GAAP,
excluding the portion thereof attributable to assets which would be classified
as intangible assets under GAAP except for Retained Interests.
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"Telerate Page 3750": The display designated as Telerate Page 3750 on
the Telerate Service (or such other page as may replace the Telerate page on
that service for the purpose of displaying London interbank offered rates of
major banks).
"Telerate Page 19901": The display designated as Telerate Page 19901 on
the Telerate Service (or such other page as may replace the Telerate page on
that service for the purpose of displaying London interbank offered rates of
major banks).
"Termination Price": The sum of (i) 100% of the Aggregate Principal
Balance of each outstanding Mortgage Loan, (ii) the greater of (A) the aggregate
amount of accrued and unpaid interest on the Mortgage Loans through the related
Due Period and (B) thirty (30) days' interest thereon, computed at a rate equal
to the related Mortgage Interest Rate, in each case net of the Servicing Fee,
(iii) any unpaid Reimbursement Amount or other amount due the Note Insurer and
(iv) any unpaid Liquidity Provider Placement and Expense Fee and any other
amounts owing to any transaction party.
"Trigger Event": Each occurrence of any of the following events shall
be a separate Trigger Event:
(a) the Net Excess Spread shall be less than 2.70% for five
(5) consecutive Business Days;
(b) as of the Final Purchase Date, the Note Principal Balance
of the Class A Note shall be greater than zero or any accrued interest
on the Class A Note shall remain unpaid (determined, in each case,
without giving effect to any payments on the Class A Note made with
funds obtained from the Note Insurer pursuant to the Note Insurance
Policy or otherwise);
(c) the aggregate Principal Balance of Mortgage Loans that
have been Pledged Mortgage Loans for more than 240 days shall at any
time exceed $5,000,000;
(d) any Servicer Event of Default, Event of Default or "Event
of Default" under (and as defined in) the Insurance Agreement;
(e) a Collateral Deficiency Event; or
(f) the aggregate Purchase Price of the Mortgage Loans
purchased pursuant to Section 7.15 of the Sale and Servicing Agreement
shall exceed 5% of the cumulative Purchase Price on all Mortgage Loans.
"Trust": ABFS Mortgage Loan Warehouse Trust 2001-1, a Delaware
statutory business trust.
"Trust Agreement": The Trust Agreement, dated as of March 1, 2001,
between the Depositor and the Owner Trustee, relating to the establishment of
the Trust.
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"Trust Certificate": The certificate evidencing the entire beneficial
ownership interest in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Trust Certificateholder" or "Holder": A Person in whose name a Trust
Certificate is registered.
"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of the Indenture, for the benefit of the
Noteholder and the Note Insurer, as of any particular time, including, without
limitation, all property and interests, including all proceeds thereof, Granted
to the Indenture Trustee, for the benefit of the Noteholder and the Note
Insurer, pursuant to the Granting Clauses of the Indenture.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it
may be amended from time to time.
"Trust Order" and "Trust Request": A written order or request of the
Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, pursuant to Section 6.01 of the Trust Agreement or at the direction of
the Majority Certificateholder and delivered to the Indenture Trustee or the
Authenticating Agent, as applicable.
"Underwriting Guidelines": The underwriting guidelines of the
Originators as approved by the Note Insurer and the Depositor.
"Uniform Commercial Code": The Uniform Commercial Code as in effect in
the State of New York.
"United States Person": Shall mean (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 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.
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