EXECUTION VERSION
--------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED INDENTURE
dated as of October 16, 2003
by and between
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2000-2,
as Issuer
and
JPMORGAN CHASE BANK,
as Indenture Trustee
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions............................................2
ARTICLE II
THE NOTES
Section 2.01. Forms Generally................................................2
Section 2.02. Form of Certificate of Authentication..........................2
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 Secured 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 Secured Notes...................8
Section 2.12. Limitations on Transfer of the Secured Notes..................10
Section 2.13. Holding of Secured Notes......................................11
Section 2.14. Reserved......................................................11
Section 2.15. Release of Collateral.........................................11
ARTICLE III
COVENANTS
Section 3.01. Payment of Secured Notes......................................12
Section 3.02. Maintenance of Office or Agency...............................12
Section 3.03. Money for Secured Note Payments to Be Held In Trust...........12
Section 3.04. Existence of Trust............................................15
Section 3.05. Protection of Trust Estate....................................15
Section 3.06. Opinions as to the Trust Estate...............................16
Section 3.07. Performance of Obligations....................................16
Section 3.08. Investment Company Act........................................17
Section 3.09. Negative Covenants............................................17
Section 3.10. Annual Statement as to Compliance.............................18
Section 3.11. Restricted Payments...........................................18
Section 3.12. Treatment of Secured Notes as Debt for Tax Purposes...........19
Section 3.13. Notice of Events of Default...................................19
Section 3.14. Further Instruments and Acts..................................19
Section 3.15. Purpose.......................................................19
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.......................19
Section 4.02. Application of Trust Money....................................20
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default..............................................20
Section 5.02. Acceleration of Maturity; Rescission and Annulment............22
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee......................................23
Section 5.04. Remedies......................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim....................24
Section 5.06. Indenture Trustee May Enforce Claims Without
Possession of Secured Notes...............................25
Section 5.07. Application of Money Collected................................25
Section 5.08. Limitation on Suits...........................................26
Section 5.09. Unconditional Rights of Noteholders to Receive
Principal and Interest....................................27
Section 5.10. Restoration of Rights and Remedies............................28
Section 5.11. Rights and Remedies Cumulative................................28
Section 5.12. Delay or Omission Not Waiver..................................28
Section 5.13. Control by Noteholders........................................28
Section 5.14. Waiver of Past Defaults.......................................29
Section 5.15. Undertaking for Costs.........................................29
Section 5.16. Waiver of Stay or Extension Laws..............................29
Section 5.17. Sale of Trust Estate..........................................29
Section 5.18. Action on Secured Notes.......................................31
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee...................................31
Section 6.02. Notice of Default.............................................33
Section 6.03. Rights of Indenture Trustee...................................34
Section 6.04. Not Responsible for Recitals or Issuance of Secured Notes.....34
Section 6.05. May Hold Secured Notes........................................35
Section 6.06. Money Held in Trust...........................................35
-ii-
Section 6.07. Reserved......................................................35
Section 6.08. Indenture Trustee's Capital and Surplus.......................35
Section 6.09. Resignation and Removal; Appointment of Successor.............35
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee......37
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.............................37
Section 6.12. Reserved......................................................37
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.........37
Section 6.14. Authenticating Agents.........................................39
Section 6.15. Review of Custodial Loan Files................................40
Section 6.16. Indenture Trustee Fees and Expenses...........................40
Section 6.17. Representations and Warranties of the Indenture Trustee.......41
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee
Names and Addresses of Noteholders........................41
Section 7.02. Preservation of Information; Communications
to Noteholders............................................42
Section 7.03. Reports by Trust..............................................42
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Account.......................................................42
Section 8.02. Payments; Statements..........................................42
Section 8.03. Interest Payments.............................................42
Section 8.04. Principal Payments; Payment on Maturity Date..................43
Section 8.05. Releases of Deleted Mortgage Loans............................43
Section 8.06. Recourse Payment..............................................44
Section 8.07. Reports by Indenture Trustee to Noteholders;
Access to Certain Information.............................44
Section 8.08. Release of Trust Estate.......................................44
Section 8.09. Amendment to the Servicing Agreement..........................44
Section 8.10. Delivery of the Custodial Loan Files
Pursuant to Sale and Servicing Agreement..................44
Section 8.11. Termination of Servicer.......................................45
Section 8.12. Opinion of Counsel............................................45
Section 8.13. Appointment of Collateral Agents..............................45
Section 8.14. Trust Estate and Accounts Held for
Benefit of the Note Purchaser.............................46
-iii-
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders........46
Section 9.02. Supplemental Indentures With Consent of Noteholders...........47
Section 9.03. Execution of Supplemental Indentures..........................48
Section 9.04. Effect of Supplemental Indentures.............................48
Section 9.05. Reserved......................................................48
Section 9.06. Reference in Secured Notes to Supplemental Indentures.........48
Section 9.07. Amendments to Governing Documents.............................49
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption....................................................49
Section 10.02. Form of Redemption Notice.....................................50
Section 10.03. Secured Notes Payable on Redemption...........................50
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions..........................50
Section 11.02. Form of Documents Delivered to Indenture Trustee..............51
Section 11.03. Acts of Noteholders...........................................52
Section 11.04. Notices, etc., to Indenture Trustee, the Note
Purchaser and Trust.......................................53
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.........54
Section 11.06. Rules by Indenture Trustee....................................54
Section 11.07. Reserved......................................................54
Section 11.08. Effect of Headings and Table of Contents......................54
Section 11.09. Successors and Assigns........................................54
Section 11.10. Separability..................................................54
Section 11.11. Benefits of Indenture.........................................54
Section 11.12. Legal Holidays................................................54
Section 11.13. Governing Law.................................................55
Section 11.14. Counterparts..................................................55
Section 11.15. Recording of Indenture........................................55
Section 11.16. Trust Obligation..............................................55
Section 11.17. No Petition...................................................56
Section 11.18. Inspection....................................................56
Section 11.19. Usury.........................................................57
Section 11.20. Third Party Beneficiary.......................................57
-iv-
APPENDICES, SCHEDULES AND EXHIBITS
Appendix I Defined Terms
Exhibit A Form of Secured Note
Exhibit B Reserved
Exhibit C Form of Rule 144A Transfer Certificate
Exhibit D Form of Purchaser's Letter for Institutional Accredited Investor
Exhibit E Form of Transferee Certification-- Investment Company Act of 1940
-v-
This SECOND AMENDED AND RESTATED INDENTURE, dated as of October 16,
2003 (as amended or supplemented from time to time as permitted hereby, this
"Indenture"), is between ABFS MORTGAGE LOAN WAREHOUSE TRUST 2000-2, a Delaware
statutory trust (together with its permitted successors and assigns, the "Trust"
or the "Issuer"), and JPMORGAN CHASE BANK, a New York banking corporation, as
indenture trustee (together with its permitted successors in the trust
hereunder, the "Indenture Trustee").
PRELIMINARY STATEMENT
The Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Secured Notes, Series 2000-2 (the
"Secured Notes"), as provided in this Indenture. All covenants and agreements
made by the Trust herein are for the benefit and security of the Holders of the
Secured Notes. 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 Holders of the Secured Notes, all of the Trust's right, title and
interest (whether now owned or existing or at any time hereafter acquired or
arising) in and to (a) the Mortgage Loans in the Mortgage Loan Schedule attached
as Schedule I to the Assignments (including property that secures a Mortgage
Loan that becomes an REO Property), including the related Mortgage File, (and
including any surety agreements, in the case of the Mortgage Loans secured by
Business Purpose Properties) including all payments of principal received,
collected or otherwise recovered after the Cut-Off Date for each Mortgage Loan,
all payments of interest due on each Mortgage Loan after the Cut-Off Date
therefor whenever received and all other proceeds received in respect of such
Mortgage Loans, including any prepayment penalties and any Qualified Substitute
Mortgage Loan, (b) the Sale and Servicing Agreement, (c) Insurance Proceeds, (d)
any Assignments, (e) the servicing rights relating to such Mortgage Loans, (f)
all "accounts," "general intangibles," "instruments," "deposit accounts," and
"investment property" (as such terms are defined in the UCC) constituting or
relating to any of the foregoing, and (g) all proceeds of the foregoing,
including without limitation, 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 Secured Notes equally and
ratably without prejudice, priority or distinction between any Secured Note and
any other Secured Note by reason of difference in time of issuance or otherwise
to secure (x) the payment of all amounts due on the Secured Notes in accordance
with their terms, (y) the payment of all other sums payable under this Indenture
and (z) compliance with the provisions of this Indenture, all as provided in
this Indenture. All terms used in the foregoing granting clauses 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 Holders
of the Secured Notes may be adequately and effectively protected. In addition,
the Indenture Trustee agrees that it will acknowledge the Grant on each Transfer
Date of the related Mortgage Loans pursuant to the terms of the related
Assignment, provided that the conditions precedent to the pledge of such
Mortgage Loans contained in the Sale and Servicing Agreement are satisfied on or
prior to such Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the following 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,
an Amortization Event 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, an Amortization Event 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 NOTES
Section 2.01. Forms Generally. The Secured Notes shall be substantially
in the form set forth at Exhibit A attached hereto and shall be issued solely in
the form of fully registered Definitive Notes and not in book-entry form. Each
Secured Note shall bear a sequential number. (For example, the first Secured
Note would be labeled 1, the second 2, and so forth). Any portion of the text of
any Secured Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Secured Note.
The Secured Notes may be produced in any manner determined by
the Trust, as evidenced by its execution thereof.
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 Secured Note attached hereto at Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Secured Notes shall be designated generally as the "ABFS Mortgage
Loan Warehouse Trust 2000-2, Secured Notes, Series 2000-2".
-2-
The Secured Notes shall be issued in the form specified in Section 2.01
hereof. The aggregate Note Principal Balance of Secured Notes that may be
authenticated and delivered under the Indenture is limited to the Maximum Note
Balance (as defined in Appendix I to the Sale and Servicing Agreement).
Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of this
Indenture, the principal of the Secured Notes shall be payable in installments
ending no later than the related Final Stated Maturity Date, unless the unpaid
principal of such Secured Notes become due and payable at an earlier date by
declaration of acceleration or call for redemption or otherwise.
All payments made with respect to any Secured Note shall be applied
first to the interest then due and payable on such Secured Note and then to the
principal thereof. All computations of interest accrued on any Secured Note
shall be made on the basis of a year of 360 days and the actual number of days
elapsed in the related Accrual Period.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Secured Notes, if the Secured Notes
have become or been declared due and payable following an Event of Default or an
Amortization Event and such acceleration of maturity and its consequences have
not been rescinded and annulled, then payments of principal of and interest on
the Secured Notes shall be made in accordance with Section 5.07 hereof.
The Servicer will deliver to each Noteholder and the Indenture Trustee,
at the time of issuance of each Secured Note and in connection with (i) the
execution of the related Assignment by the Depositor, the Issuer and the
Indenture Trustee to effect the delivery by the Depositor to the Issuer (and the
Grant by the Issuer to the Indenture Trustee) of Mortgage Loans pursuant to
Section 2.12(b) and (ii) the issuance by the Issuer of a Trust Order to
authenticate additional Secured Notes pursuant to Section 2.11 hereof, the
Mortgage Loan Schedule that relates to such Secured Note. Each Secured Note
shall be secured by all of the Collateral, equally and ratably with each other
Secured Note issued hereunder.
Section 2.04. Denominations. The Secured Notes shall be issuable only
as registered Definitive Notes in the denominations equal to the Authorized
Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The
Secured Notes 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 Secured Notes
may be manual or by facsimile.
Secured Notes 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 Secured Notes or was not an Authorized Officer of the Owner Trustee at
the date of such Secured Notes.
-3-
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Secured Notes executed on behalf of the
Trust to the Authenticating Agent for authentication, and the Authenticating
Agent shall authenticate and deliver such Secured Notes as provided in this
Indenture and not otherwise.
Each Secured Note authenticated on the Closing Date shall be dated the
Closing Date. All other Secured Notes that are authenticated after the Closing
Date for any other purpose hereunder shall be dated the date of their
authentication.
No Secured Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Secured
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 any Secured Note shall be conclusive evidence, and the
only evidence, that such Secured Note has been duly authenticated and delivered
hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange. 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 Secured Notes and the registration of transfers of Secured
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Secured Notes and transfers of Secured Notes 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 Note Purchaser, or, in the absence of such appointment, the
Servicer, on behalf of the Trust, shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Secured 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 Secured Notes of any authorized denominations and
of a like aggregate Note Principal Balance.
At the option of the Holder, Secured Notes may be exchanged for other
Secured Notes of any authorized denominations, and of a like aggregate Note
Principal Balance, upon surrender of the Secured Notes to be exchanged at such
office or agency. Whenever any Secured Notes are so surrendered for exchange,
the Owner Trustee shall execute, and the Authenticating Agent shall authenticate
and deliver, the Secured Notes that the Noteholder making the exchange is
entitled to receive.
All Secured Notes issued upon any registration of transfer or exchange
of Secured Notes shall be the valid obligations of the Trust, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Secured Notes surrendered upon such registration of transfer or exchange.
Every Secured 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 at Exhibit A
attached hereto, duly executed by the Holder thereof or its attorney duly
authorized in writing.
-4-
No service charge shall be made for any registration of transfer or
exchange of Secured Notes, 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 Secured Notes, other than exchanges pursuant to Section 2.07 hereof
not involving any transfer or any exchange made by the Note Purchaser.
Solely for the purposes of giving any consent, waiver, request or
demand pursuant hereto, any Secured Note registered in the name of the Servicer
or any Subservicer, or any Affiliate of any of them, shall be deemed not to be
outstanding and the undivided Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of Secured
Notes necessary to effect any such consent, waiver, request or demand has been
obtained. For purposes of any consent, waiver, request or demand of Noteholders
pursuant hereto, upon the Indenture Trustee's request, the Servicer shall
provide to the Indenture Trustee a notice identifying any of its Affiliates of
the Affiliates of any Subservicer that is a Noteholder as of the date(s)
specified by the Indenture Trustee in such request.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Secured Notes. If
(1) any mutilated Secured Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Secured Note, and (2) 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 Purchaser and the Note Registrar
harmless, then, in the absence of notice to the Note Registrar that such Secured
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 Secured Note, a new Secured Note or Secured Notes of the same tenor
and aggregate initial principal amount bearing a number not contemporaneously
outstanding. If, after the delivery of such new Secured Note, a bona fide
purchaser of the original Secured Note in lieu of which such new Secured Note
was issued presents for payment such original Secured Note, the Note Registrar,
shall be entitled to recover such new Secured 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 Purchaser or the Note Registrar in connection therewith.
If any such mutilated, destroyed, lost or stolen Secured 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 Secured Note, the Trust may pay
such Secured Note without surrender thereof, except that any mutilated Secured
Note shall be surrendered.
Upon the issuance of any new Secured 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.
Every new Secured Note issued pursuant to this Section 2.07 in lieu of
any destroyed, lost or stolen Secured Note shall constitute an original
contractual obligation of the Trust, whether or not the destroyed, lost or
stolen Secured 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 Secured Notes duly issued hereunder.
-5-
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 Secured Notes.
Section 2.08. Payments of Principal and Interest. (a) Any installment
of interest or principal payable on any Secured Notes 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 Secured Note (or one or more Predecessor Notes) is
registered at the close of business on the Record Date for such Secured 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 Definitive Notes 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 Secured Note, which shall be payable as provided in
subsection (b) of this Section 2.08. No fee may be charged by the Indenture
Trustee to a Holder 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 5.07 applies, pursuant to Section 5.07. Notwithstanding the forgoing,
as long as JPMorgan Chase Bank is the holder of 100% of the aggregate
outstanding principal balance of the Secured Notes, all installments of
principal and interest shall be paid by wire transfer in immediately available
funds to JPMorgan Chase Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 144 089 059, Account Name:
ABFS Greenmont Inc., Note Payment Account, Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Associate, Ref:
ABFS Warehouse Trust.
(b) All reductions in the Note Principal Balance of a Secured 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 Secured Note
and of any Secured 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 Secured Note. The final installment of principal of each Secured 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 JPMorgan Chase Bank is the holder of 100% of the
aggregate outstanding principal balance of the Secured Notes, all installments
of principal and interest shall be paid by wire transfer in immediately
available funds JPMorgan Chase Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 144 089 059,
Account Name: ABFS Greenmont Inc., Note Payment Account, Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Associate, Ref: ABFS Warehouse Trust.
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Secured 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 Secured Note to be so retired is
registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
-6-
(i) the Ind enture Trustee expects that funds sufficient to pay
such final installment will be available in the Collection 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 Secured 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 Secured Note after such Payment Date.
Notwithstanding the forgoing, as long as JPMorgan Chase Bank is the
holder of 100% of the aggregate outstanding principal balance of the
Secured Notes, all installments of principal and interest shall be
paid by wire transfer in immediately available funds to JPMorgan Chase
Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 144 089 059, Account Name: ABFS
Greenmont Inc., Note Payment Account, Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Associate,
Ref: ABFS Warehouse Trust.
Notices in connection with redemptions of Secured Notes shall be mailed
to Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08,
each Secured Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Secured Note shall carry the
rights to unpaid principal and interest that were carried by such other Secured
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.
(d) Each (i) Monthly Report delivered to the Indenture Trustee
pursuant to the Sale and Servicing Agreement, (ii) Remittance Report, and (iii)
report regarding the Mortgage Loans delivered to the Indenture Trustee by the
Servicer pursuant to Section 7.16(b) of the Sale and Servicing Agreement, shall
be delivered by the Indenture Trustee to the Note Purchaser, the Servicer, the
Owner Trustee, the Depositor and each Noteholder as the statements required
pursuant to Section 8.07 hereof. Neither the Indenture Trustee 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 Monthly Report or Remittance Report.
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 "Monthly Report," aggregated 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.
-7-
From time to time (but no more than once per calendar month),
upon the written request of the Depositor and the Servicer or the Note
Purchaser, the Indenture Trustee shall report to the Depositor, the Servicer and
the Note Purchaser 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 Note
Purchaser, the Indenture Trustee shall report to the Note Purchaser 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 Note Purchaser
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 Secured Note, any agent on behalf of the Trust
including but not limited to the Indenture Trustee may treat the Person in whose
name any Secured Note is registered as the owner of such Secured Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Secured 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 shall be affected by notice to the contrary.
Section 2.10. Cancellation. All Secured 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 Secured Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Secured Notes so
delivered shall be promptly canceled by the Note Registrar. No Secured Notes
shall be authenticated in lieu of or in exchange for any Secured Notes cancelled
as provided in this Section 2.10, except as expressly permitted by this
Indenture. All cancelled Secured 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 Secured Notes. The
Secured Notes 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 a Trust Request and upon receipt by the
Authenticating Agent of all of the following:
(a) A Trust Order authorizing the execution, authentication and
delivery of the Secured Notes and specifying the Note Principal Balance and the
Percentage Interest of such Secured Notes to be authenticated and delivered.
(b) With respect to the initial issuance of the Secured Notes on
the Closing Date, a Trust Order authorizing the execution and delivery of this
Indenture and the Sale and Servicing Agreement.
(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 and the Note Purchaser or upon which the Authenticating
Agent and the Note Purchaser are expressly permitted to rely, complying with the
requirements of Section 11.01, reasonably satisfactory in form and substance to
the Authenticating Agent and the Note Purchaser.
-8-
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 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).
(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 Secured Notes 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 Secured Notes have 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 the Assignments 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 Transfer Date), no lien in
favor of the United States described in Section 6321 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 Assignments.
-9-
Section 2.12. Limitations on Transfer of the Secured Notes. (a)
Any transfer of a Secured Note shall be made in accordance with the Securities
Act and the Investment Company Act. Each prospective purchaser (other than the
Note Purchaser) and any subsequent transferee of a Secured Note other than the
Depositor 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 Secured Notes
and its purchase of investments having the characteristics of the
Secured Notes 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 Secured Note,
by virtue of its acceptance thereof, assents to the terms, provisions
and conditions of the Indenture.
(b) Each Prospective Owner of a Secured Note (other than an Note
Purchaser) 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 Secured Note may be relying on the
exemption from the registration requirements of the Securities Act
provided by Rule 144A and is acquiring such Secured 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 Secured Notes have 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
Secured Notes, such Secured Notes may be 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 Secured Notes are
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 Secured Notes 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 Secured Notes 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.
-10-
In the event that a transfer of a Secured 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,
the Investment Company 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 or
Exhibit D and Exhibit E.
The Servicer on behalf of the Depositor shall provide to any
Holder of a Secured Note and any prospective transferee designated by any such
Holder, information regarding the Secured Notes 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) and Section 3(c)(7) of the Investment Company Act
for transfer of any such Secured Note without registration under the Securities
Act or the Investment Company Act pursuant to the registration exemption
provided thereunder. Each Holder of a Secured 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.
Each Secured Note shall contain a legend substantially similar to
the applicable legend provided in Exhibit A stating that transfer of such
Secured Notes is subject to certain restrictions and referring prospective
purchasers of the Secured Notes to this Section 2.12 with respect to such
restrictions.
(c) Notwithstanding anything herein to the contrary, no
Originator, or any of their Affiliates or agents, may be the transferee of a
Secured Note.
Section 2.13. Holding of Secured Notes. With respect to each
Secured Note executed as provided in Section 2.05, the Indenture Trustee shall
cause the Authorized Representative who executed such Secured Note to deliver
such Secured Note to the Note Purchaser or such other Person as the Note
Purchaser shall designate in writing from time to time. The Note Purchaser
hereby initially directs that, until further notice, each Secured Note be
delivered to its custodian, as follows:
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account: ABFS Mortgage Loan Warehouse Trust 2000-2
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Section 2.14. Reserved.
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. 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.
-11-
ARTICLE III
COVENANTS
Section 3.01. Payment of Secured Notes. The Servicer, on behalf
of the Trust will pay or cause to be duly and punctually paid the principal of,
and interest on, the Secured Notes in accordance with the terms of the Secured
Notes and this Indenture. The Secured Notes shall be recourse obligations of the
Trust. 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. The Indenture
Trustee will always maintain its corporate trust office at a location in the
United States of America where Secured Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Trust in
respect of the Secured Notes and this Indenture may be served. Such location
shall be the Corporate Trust Office of the Indenture Trustee.
Section 3.03. Money for Secured Note Payments to Be Held In
Trust. All payments of amounts due and payable with respect to any Secured Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Sections 5.07 or 8.02 hereof shall be made on behalf of the Trust by the
Indenture Trustee, and no amounts so withdrawn from the Collection Account for
payments on the Secured Notes shall be paid over to the Trust under any
circumstances except as provided in this Section 3.03 or in Sections 5.07 or
8.02 hereof.
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 such
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Secured Notes and of the number of individual Secured Notes held by
each such Holder.
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 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 Collection 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 Secured Notes
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.
-12-
Subject to the prior written consent of the Note Purchaser, 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:
(a) allocate all sums received for payment to the Holders of
Secured Notes on each Payment Date among such Holders in the proportion
specified in the Remittance Report, in each case to the extent permitted by
applicable law;
(b) hold all sums held by it for the payment of amounts due with
respect to the Secured Notes 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;
(c) 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 Secured Notes 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;
(d) 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 Secured Notes) in the making of any payment required to be made with respect
to any Secured Notes for which it is acting as Paying Agent;
(e) 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;
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it on any
Secured Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith;
provided, further, however, that with respect to withholding and reporting
requirements applicable to any of the Secured Notes, the Servicer, on behalf of
the Trust, has provided the calculations pertaining thereto to the Indenture
Trustee and the Paying Agent;
(g) on the Determination Date, the Paying Agent shall prepare and
provide to the Indenture Trustee, the Servicer, the Owner Trustee and the Note
Purchaser a Remittance Report containing the following information;
(i) the amount of the payment with respect to the Secured Notes
and the Trust Certificates;
-13-
(ii) the amount of such payments allocable to principal,
separately identifying the aggregate amount of anyPrepayments or other
unscheduled recoveries of principal included therein;
(iii) the amount of such payments allocable to interest and the
calculation thereof; and
(iv) the Note Principal Balance of each Secured Note as of such
Payment Date after giving effect to any payment of principal on such
Payment Date.
Such information shall, with respect to the Secured Notes, be
presented on the basis of each Secured Note's actual denomination. In addition,
by January 31 of each calendar year following any year during which the Secured
Notes are outstanding, the Paying Agent 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 (i), (ii), (iii) and (iv) with
respect to the Secured Notes for such calendar year.
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.
Any money held by the Indenture Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Secured Note and
remaining unclaimed for two and one-half years after such amount has become due
and payable to the Holder of such Secured 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;
and the Holder of such Secured 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 Holders whose Secured Notes have been
called but have 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).
-14-
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 statutory 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 Secured Notes and the other
Basic Documents.
(b) The Trust is not permitted under the Trust Agreement to
consolidate or merge with any other entity. Nevertheless, should the Trust merge
or consolidate with another entity involuntarily, or in contravention of the
Trust Agreement, whether by operation of law or otherwise, subject to Section
3.09(g) hereof, and with the prior written consent of the Note Purchaser, 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)).
For the avoidance of doubt, the parties hereto acknowledge that
the Indenture Trustee does not have the authority, acting alone, to enter into
any agreement for the merger or consolidation of the Trust with any other
entity.
(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) On or before the
initial Transfer Date, the Trust shall cause to be filed UCC-1 Financing
Statements naming the Indenture Trustee as "secured party" and the Trust as
"debtor" and describing the Mortgage Loans being pledged by the Trust to the
Indenture Trustee with the office of the Secretary of State in which the Trust
was formed and such other jurisdictions as shall be necessary to perfect a
security interest in the Trust Estate.
(b) 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 Noteholders and the Note Purchaser in
the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
-15-
(c) 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.
Section 3.06. Opinions as to the Trust Estate. On or before April
30th in each calendar year, beginning in 2004, the Servicer, on behalf of the
Trust, shall furnish to the Indenture Trustee and the Note Purchaser an Opinion
of Counsel reasonably satisfactory in form and substance to the Indenture
Trustee and the Note 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 not 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 Servicer's Loan 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 Servicer's Loan Files, except as expressly permitted in this Indenture,
the other Basic Documents or such document included in the Servicer's Loan File
or other instrument or unless such action will not adversely affect the
interests of the Noteholders and the Note Purchaser.
(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 and the Note Purchaser 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.
-16-
(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 Purchaser. As soon as any successor Servicer is
appointed, the Indenture Trustee shall notify the Note Purchaser, specifying in
such notice the name and address of such successor Servicer.
Section 3.08. Investment Company Act. The Trust shall at all
times conduct its operations so as not to be subject to, or shall comply with,
the requirements of the Investment Company Act of 1940, as amended (or any
successor statute), and the rules and regulations thereunder.
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 of the Secured Notes by reason of the payment
of any taxes levied or assessed upon any portion of the Trust Estate;
(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 Secured Notes pursuant to this Indenture, or amend the Trust
Agreement, as in effect on the Closing Date, other than in accordance with
Section 11.01 of the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an
indebtedness other than the Secured Notes;
(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 Secured Notes
pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or
liquidate in whole or in part (until the Secured Notes are 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;
(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;
-17-
(i) merge with or into or consolidate with any other Person;
(j) change its name, chief executive office or location where its
books and records are kept with respect to the Mortgage Loans without filing
UCC-1 financing statements, amendments and continuation statements required to
be filed to create in favor of the Indenture Trustee, for the benefit of the
Noteholders, a perfected security interest in the Trust Estate and delivering to
the Indenture Trustee, the Servicer and the Note Purchaser an Opinion of Counsel
to such effect;
(k) without obtaining the prior written consent of the Note
Purchaser in each case, either (i) amend, supplement or otherwise modify (or
agree to amend, supplement or otherwise modify) the Trust's organizational
documents (unless such amendment, supplement or other modification cannot
reasonably be expected to have a Material Adverse Effect on the interests of the
Noteholders or (ii) amend, supplement or otherwise modify (or agree to amend,
supplement or otherwise modify, or, to the extent its consent is required
therefor, consent to any amendment or supplement to or modification of) any
Basic Document;
(l) make any distributions to any security holder other than as
provided in the Basic Documents;
(m) liquidate any Permitted Investment prior to its stated
maturity;
(n) engage in activity contrary to the status of the Trust as a
qualified special purpose entity under the accounting literature then in effect:
or
(o) engage in activity contrary to Section 2.03(b) of the Trust
Agreement.
Section 3.10. Annual Statement as to Compliance. On or before
April 30, 2004, and each April 30 thereafter, the Servicer, on behalf of the
Trust, shall deliver to the Indenture Trustee, the Note Purchaser and the
Depositor a written statement, signed by an Authorized Officer of the Servicer,
on behalf of the Trust, stating that:
(i) 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
(ii) 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
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 and the holder of
Certificates 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 Collection Account except in accordance with this
Indenture.
-18-
Section 3.12. Treatment of Secured Notes as Debt for Tax
Purposes. For purposes of federal, state and local income, franchise and any
other income taxes, the Trust will treat the Secured Notes as indebtedness, and
hereby instructs the Indenture Trustee, the Paying Agent and the Servicer, on
behalf of the Trust to treat the Secured Notes as indebtedness for all
applicable tax reporting purposes.
Section 3.13. Notice of Events of Default. The Servicer, on
behalf of the Trust, shall give the Indenture Trustee, the Note Purchaser and
the Depositor prompt written notice of each Event of Default hereunder 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 Purchaser, 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. Purpose. The funds derived from issuing and selling
the Secured Notes will be used solely to purchase Mortgage Loans and other
Collateral from the Depositor.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever
the following conditions shall have been satisfied:
(a) the entire unpaid Note Principal Balance of the Secured Notes
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 by the Servicer; and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Purchaser an Officers' Certificate and an Opinion
of Counsel satisfactory in form and substance to the Indenture Trustee and the
Note Purchaser 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.
-19-
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Indenture Trustee and any Paying Agent to the Trust and
the Holders of Secured Notes under Section 3.03 hereof, the obligations of the
Indenture Trustee to the Holders of Secured Notes under Section 4.02 hereof and
the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or
mutilated Secured Notes, registration of transfers of Secured Notes and rights
to receive payments of principal of and interest on the Secured Notes shall
survive.
Section 4.02. Application of Trust Money. All money deposited
with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be
held in trust and applied by it, in accordance with the provisions of the
Secured Notes 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 Secured Notes 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 distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of the
Secured Notes, on any Payment Date, any Interest Payment Amount due and payable
on the Secured Notes on such Payment Date;
(b) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of the
Secured Notes, (x) on any Payment Date, an amount equal to the Principal Payment
Amount due on the Secured Notes 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 any Secured Notes, the aggregate outstanding Note
Principal Balance of such Secured Notes;
(c) if the Trust shall breach or default in the due observance of
any one or more of the covenants set forth in Section 3.09 hereof;
(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;
-20-
(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 thirty (30) 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
thirty (30) 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 which has not been cured or waived;
(i) a Shortfall exists under Section 2.19 of the Sale and
Servicing Agreement and such Shortfall has not been cured within the applicable
cure period, or if, prior to expiration of such period, the Depositor has
notified the Note Purchaser in writing that the Depositor does not intend to
effect the Minimum Margin Contribution;
(j) the Trust shall have become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or shall have
come under the "control" of an "investment company" under the Investment Company
Act of 1940, as amended;
(k) the failure on the part of any of the Sponsor, the
Originators or the Depositor to observe or perform in any material respect any
material covenants or agreements of any of the Sponsor, the Originators or
Depositor under the Sale and Servicing Agreement which failure continues for a
period of fifteen (15) days after written notice or actual knowledge thereof;
(l) any representation or warranty made by any of the Sponsor,
the Originators or the Depositor pursuant to the Sale and Servicing Agreement
shall prove to have been incorrect when made in any material respect when made
or delivered and which continues to be incorrect in any material respect for a
period of fifteen (15) days after written notice or actual knowledge thereof;
-21-
(m) any representation or warranty made or deemed to be made by
the Trust in any Basic Document or in any written certificates or statement made
or entered into in connection therewith shall prove to have been incorrect when
made in any material respect and continues to be incorrect in any material
respect for a period of fifteen (15) days after the Trust shall have written
notice thereof; or
(n) the Trust fails to comply with any of its other agreements or
covenants in, or provisions of, the Secured Notes or this Indenture and the
failure to so comply materially and adversely affects the interests of the
Holders of the Secured Notes and continues to materially and adversely affect
the interests of the Holders of the Secured Notes for a period of thirty (30)
days after the earlier of the date on which (i) the Trust obtains knowledge
thereof or (ii) the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Trust by the Indenture Trustee
or the Trust and the Indenture Trustee by the Majority Noteholders.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default or an Amortization Event occurs and is continuing, then
and in every such case, but with the consent of the Note Purchaser, the
Indenture Trustee may, and on request of the Note Purchaser, or, with the prior
written consent of the Note Purchaser, the Holders of Secured Notes representing
not less than 50% of the Note Principal Balance of the Outstanding Secured Notes
of the Secured Notes, shall, declare all the Secured Notes to be immediately due
and payable by a notice in writing to the Trust (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration such Secured Notes, in an
amount equal to the entire unpaid Note Principal Balance of such Secured Notes,
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 Note Purchaser.
At any time after such a declaration of acceleration of maturity
of the Secured Notes 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 Note Purchaser, or the Holders of Secured Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Secured Notes, with the prior written consent of the Note Purchaser, by written
notice to the Trust and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(i) all payments of principal of, and interest on, all
Outstanding Secured Notes and all other amounts that would then be due
hereunder or upon such Secured Notes if the Event of Default or
Amortization Event giving rise to such acceleration had not occurred;
and
-22-
(ii) all sums paid by the Indenture Trustee hereunder and the
reasonable compensation, expenses and disbursements of the Indenture
Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of Secured Notes that have become due solely by such acceleration,
have been cured or waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or
impair any right consequent thereon.
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 or an Amortization
Event occurs and is continuing, the Indenture Trustee may, and at the prior
written direction of Majority Noteholders and with the prior written consent of
the Note Purchaser shall, proceed to protect and enforce its rights and the
rights of the Noteholders 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 Noteholders, or
any Noteholder 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 Secured Notes in
respect of which such Event of Default or an Amortization Event 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 Secured
Notes may be sought or obtained by the Indenture Trustee or any Noteholder
against the Trust; provided, that notwithstanding the foregoing, nothing shall
limit the ability of the Indenture Trustee from proceeding against the Sponsor
in respect of its obligations set forth in Section 4.03 of the Sale and
Servicing Agreement. The Indenture Trustee shall be entitled to recover the
costs and expenses expended by it pursuant to this Article V including
reasonable compensation, expenses and disbursements of the Indenture Trustee,
its agents and counsel.
Section 5.04. Remedies. (a) If an Event of Default or
Amortization Event shall have occurred and be continuing and the Secured Notes
have been declared due and payable and such declaration and its consequences
have not been rescinded and annulled, the Indenture Trustee may, and at the
prior written direction of Majority Noteholders and with the prior written
consent of the Note Purchaser (subject to Section 5.17 hereof, to the extent
applicable) shall, for the benefit of the Noteholders, do one or more of the
following:
(i) institute Proceedings for the collection of all amounts then
payable on the Secured Notes, 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;
-23-
(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 and as permitted by the Sale and Servicing Agreement;
(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
Holders of the Secured Notes and the Note Purchaser hereunder; and
(v) refrain from selling the Trust Estate and apply all funds on
deposit in each of the Accounts pursuant to Section 5.07 hereof.
(b) Upon the occurrence of an Amortization Event or an Event of
Default under Section 5.01 that has not been cured by the Depositor or the Trust
within the applicable cure period provided in the Sale and Servicing Agreement,
the Indenture Trustee may, and at the prior written direction of Majority
Noteholders and with the prior written consent of the Note Purchaser shall take
any one of the following courses of action: (i) subject to providing prior
written notice thereof to the Depositor, the Noteholders and the Note Purchaser,
sell the Sold Mortgage Loans in the manner set forth in Section 13.01 of the
Sale and Servicing Agreement; (ii) apply all collections on the Sold Mortgage
Loans to pay outstanding principal on the Secured Notes (but solely after
payment of any outstanding Servicing Fees, Indenture Trustee Fees, and interest
payments on the Secured Notes due on such Payment Date); (iii) apply the
collections on the Sold Mortgage Loans in the priorities set forth in Section
5.07; provided that the payment of any outstanding Indenture Trustee Fees and
Servicing Fees shall not be made subordinate to payment of principal or interest
on the Secured Notes; (iv) require the Depositor to transfer additional Mortgage
Loans to the Trust in accordance with the procedures set forth in the Sale and
Servicing Agreement and this Indenture; (v) increase the per annum interest rate
on the Secured Notes to LIBOR plus 5.00% or any lesser rate the Note Purchaser
determines in its sole discretion to be appropriate; (vi) arrange for the
transfer of servicing of the Mortgage Loans to an newly appointed successor
servicer; or (vii) waive any such Amortization Event or an 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 Trust within the applicable cure
period provided in the Sale and Servicing Agreement, the Note Purchaser may take
action in the manner set forth in Section 12.16 of the Sale and Servicing
Agreement.
Section 5.05. Indenture Trustee May File Proofs of Claim. 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 any of the Secured Notes or the property
of the Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Secured Notes 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 Note
Purchaser, be entitled and empowered, by intervention in such Proceeding or
otherwise to:
-24-
(a) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Secured Notes 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 and disbursements of the Indenture Trustee, its agents and counsel),
the Noteholders and the Note Purchaser allowed in such Proceeding, and
(b) 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
Purchaser to make such payments to the Indenture Trustee and, in the event that
the Indenture Trustee shall consent to the making of such payments directly to
the Noteholders and the Note Purchaser, to pay to the Indenture Trustee any
amount due to it for the reasonable compensation, expenses and disbursements of
the Indenture Trustee, its agents and counsel.
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 Purchaser any plan of reorganization, arrangement,
adjustment or composition affecting any of the Secured Notes or the rights of
any Holder thereof, or the Note Purchaser, or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder or the Note Purchaser in any
such Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without
Possession of Secured Notes. All rights of action and claims under this
Indenture or any of the Secured Notes may be prosecuted and enforced by the
Indenture Trustee without the possession of any of the Secured Notes or the
production thereof in any Proceeding relating thereto, and any such Proceeding
instituted by the Indenture Trustee, at the direction of the Note Purchaser,
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 Holders of the
Secured Notes in respect of which such judgment has been recovered after payment
of amounts required to be paid pursuant to clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. (a) If the Secured
Notes have been declared due and payable following an Event of Default or an
Amortization Event and such declaration and its consequences have not been
rescinded and annulled, any money collected by the Indenture Trustee with
respect to the Secured Notes pursuant to this Article V or otherwise and any
other monies that may then be held or thereafter received by the Indenture
Trustee as security for such Secured Notes (including any amounts then on
deposit in either Account) shall be applied in the following order, at the date
or dates fixed by the Indenture Trustee and, in case of the payment of the
entire amount due on account of principal of, and interest on, the Secured
Notes, upon presentation and surrender thereof:
-25-
(i) first, to the Indenture Trustee, any unpaid Indenture Trustee
Fees then due and any other amounts payable and due to the Indenture
Trustee under this Indenture, including any costs or expenses incurred
by it in connection with the enforcement of the remedies provided for
in this Article V and to the Collateral Agent, any unpaid Collateral
Agent Fees;
(ii) second, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount then due and unpaid through the day preceding
the date on which such payment is made;
(iii) third, from amounts collected from non-Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount remaining after the distribution in clause
(ii) is made;
(iv) fourth, to the Note Purchaser such other amounts (except for
principal) including, without limitation, the Facility Fee, then due
and owing to the Note Purchaser under the Basic Documents as the Note
Purchaser may have given written notice of to the Indenture Trustee
and the Servicer not later than noon Eastern time on such date;
(v) fifth, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of the
related unpaid Note Principal Balance;
(vi) sixth, from amounts collected from the non-Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of the
related unpaid Note Principal Balance;
(vii) seventh, to the extent not paid pursuant to clause (i)
above, to the Indenture Trustee, any unpaid Indenture Trustee Fees
then due and any other amounts payable and due to the Indenture
Trustee under this Indenture, including any costs or expenses incurred
by it in connection with the enforcement of the remedies provided for
in this Article V;
(viii) eighth, to the Servicer, any amounts required to pay the
Servicer for any unpaid Servicing Fees then due and to reimburse the
Servicer for Servicing Advances, Periodic Advances and Compensating
Interest previously made by, and not previously reimbursed to or
retained by, the Servicer and, upon the final liquidation of the
related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances, Periodic Advances and Compensating Interest
previously made by, and not previously reimbursed to or retained by,
the Servicer; and
(ix) ninth, the remainder to the Holder of Trust Certificates.
(b) Amounts which are to be paid out of collections generally
pursuant to clauses (i), (iii), (vi), (vii), (viii) and (ix) above shall be
allocated among the groups of Related Mortgage Loans pro rata in relation to the
unpaid principal balances of the related Secured Notes immediately prior to such
distribution.
Section 5.08. Limitation on Suits. No Holder of a Secured 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:
-26-
(a) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default or Amortization Event;
(b) the Holders of Secured Notes representing not less than 25%
of the Note Principal Balance of the Outstanding Secured Notes shall have made
written request to the Indenture Trustee to institute Proceedings in respect of
such Event of Default or Amortization Event in its own name as Indenture Trustee
hereunder;
(c) such Holder or Holders have 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 five (5) 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 five (5) day period by the Holders of
Secured Notes representing more than 50% of the Note Principal Balance of the
Outstanding Secured Notes; and
(f) the consent of the Note Purchaser shall have been obtained;
it being understood and intended that no one or more Holders of Secured Notes
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 Holders of Secured Notes 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
all the Holders of Secured Notes.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Secured Notes, each representing less than 50% of the Note Principal Balances of
the Outstanding Secured Notes, the Indenture Trustee shall take the action
prescribed by the group representing a greater percentage of the Note Principal
Balances of the Outstanding Secured Notes.
Section 5.09. Unconditional Rights of Noteholders to Receive
Principal and Interest. The Holder of any Secured 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
Secured Note on the respective Payment Date for such installments of interest,
to receive payment of each installment of principal of such Secured Note when
due (or, in the case of any Secured 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.
-27-
Section 5.10. Restoration of Rights and Remedies. If the
Indenture Trustee, the Note Purchaser 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 Purchaser or to such
Noteholder, then and in every such case the Indenture Trustee, the Note
Purchaser and the Noteholders 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 Purchaser and the Noteholders 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 Purchaser
or to the Noteholders 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 Purchaser or of any Holder of any Secured
Note to exercise any right or remedy accruing upon any Event of Default or
Amortization Event shall impair any such right or remedy or constitute a waiver
of any such Event of Default or Amortization Event or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee, the Note Purchaser or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee, the
Note Purchaser or by the Noteholders with the prior consent of the Note
Purchaser, as the case may be.
Section 5.13. Control by Noteholders. The Holders of Secured
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Secured Notes on the applicable Record Date shall, with the consent
of the Note Purchaser, 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;
(b) any direction to the Indenture Trustee to undertake a Sale of
the Trust Estate shall be by the Holders of Secured Notes representing the
percentage of the Note Principal Balance of the Outstanding Secured Notes
specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is
applicable; and
(c) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee or as directed by the Note Purchaser 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 or be unjustly prejudicial to the Noteholders not
consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Secured
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Secured Notes on the applicable Record Date may on behalf of the
Holders of all the Secured Notes, and with the consent of the Note Purchaser,
waive any past Default hereunder and its consequences, except a Default:
-28-
(a) in the payment of principal or any installment of interest on
any Secured 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
Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default or Amortization Event 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 Secured 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 Note Purchaser or any
Noteholder, or group of Noteholders, holding in the aggregate Secured Notes
representing more than 10% of the Note Principal Balance of the Outstanding
Secured Notes, or to any suit instituted by the Note Purchaser or any Noteholder
for the enforcement of the payment of any Interest Payment Amount or Principal
Payment Amount on any Secured Note on or after the related Payment Date or for
the enforcement of the payment of principal of any Secured Note on or after the
Final Stated Maturity Date (or, in the case of any Secured 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 Section 5.04 or
5.17 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 Secured
Notes 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.
-29-
(b) To the extent permitted by law, the Indenture Trustee shall
not in any private Sale sell or otherwise dispose of the Trust Estate, or any
portion thereof, unless:
(i) the Holders of Secured Notes representing not less than 50%
of the Note Principal Balance of the Secured Notes then Outstanding
consent to or direct 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 Holders of the Secured Notes, in
full payment thereof in accordance with Section 5.07 hereof, on the
Payment Date next succeeding the date of such Sale.
In making such a determination, the Indenture Trustee may rely on
an opinion of an independent investment banking firm obtained and delivered to
the Indenture Trustee not at the expense of the Indenture Trustee.
No Sale hereunder shall be effective without the consent of the
Note Purchaser.
(c) Unless the Holders of all Outstanding Secured Notes have
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, acting in
its capacity as Indenture Trustee (i) on behalf of the Noteholders and the Note
Purchaser, shall prevent such Sale and bid an amount (which shall include the
Indenture Trustee's right, in its capacity as Indenture Trustee, to credit bid)
at least $1.00 more than the highest other bid in order to preserve the Trust
Estate on behalf of the Noteholders and the Note Purchaser.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Holder or Holders of Secured Notes 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 Secured Notes 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 Secured Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned
to the Holders 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 Holders of the Secured Notes as a
result of such Sale in accordance with Section 5.07 hereof on the
Payment Date next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in connection therewith
-30-
which are reimbursable to it, without being required to produce the
Secured Notes in order to complete any such Sale or in order for the
net Sale price to be credited against such Secured Notes, 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;
(vi) no Sale may be affected without the prior written consent of
the Note Purchaser; and
(vii) no Sale shall be made to any Originator or any of their
Affiliates or agents.
Section 5.18. Action on Secured 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 Purchaser or the Holders of Secured Notes
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 or an Amortization Event 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 or an
Amortization Event:
-31-
(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
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 grossly negligent action, its own grossly 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) For all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Event of Default or
Amortization Event or any Default 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, Amortization Event or Default is
received by the Indenture Trustee at the Corporate Trust Office, and such notice
references the Secured Notes 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
or Amortization Event and a consequent declaration of acceleration of the
maturity of the Secured Notes, 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 Noteholders and the Note Purchaser and the rights of Noteholders and the
Note Purchaser shall continue to be governed by the terms of this Indenture.
-32-
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 11.08 of the Sale and Servicing
Agreement shall at all times retain possession of the Custodial Loan Files in
the State of Texas except for those Custodial Loan Files or portions thereof
released to the Servicer or the Note Purchaser 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 rerecording, 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 Collection
Account 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.
(j) In the event the Trust shall be required to file tax returns,
the Servicer shall prepare or shall cause to be prepared any tax returns
required to be filed by the Trust and shall remit such returns to the Owner
Trustee for signature at least five days before such returns are due to be
filed. The Indenture Trustee, upon request, will furnish the Servicer with all
such information known to the Indenture Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no event
shall the Indenture Trustee or the Owner Trustee in their respective individual
capacities be liable for any liabilities, costs or expenses of the Trust, the
Noteholders or the Servicer arising under any tax law or regulation, including,
without limitation, federal, state or local income or excise taxes or any other
tax imposed on or measured by income (or any interest or penalty with respect
thereto or arising from any failure to comply therewith).
Section 6.02. Notice of Default. Immediately after the occurrence
of any Default known to the Indenture Trustee, the Indenture Trustee shall
transmit by mail to the Note Purchaser 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
Holders of Secured Notes 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.
-33-
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 Note Purchaser, 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.
(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 any of the Noteholders or the Note Purchaser,
pursuant to the provisions of this Indenture, unless such Noteholders or the
Note Purchaser 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 Noteholders or the Note Purchaser; 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
gross negligence or willful misconduct in the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Secured
Notes. The recitals contained herein and in the Secured Notes, except, with
respect to the Indenture Trustee, the certificates of authentication on the
Secured Notes, 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 Secured Notes. Neither the
Indenture Trustee nor the Owner Trustee shall be accountable for the use or
application by the Trust of the Secured Notes or the proceeds thereof or any
money paid to the Trust or upon a Trust Order pursuant to the provisions hereof.
-34-
Section 6.05. May Hold Secured Notes. 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 Secured Notes and, subject to Sections 6.07
and 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 shall be segregated from other funds as provided in
this Indenture, the Sale and Servicing Agreement and otherwise as required 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.
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
▇▇▇▇▇'▇;
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 and the Note Purchaser. 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 Note
Purchaser or, with the consent of the Note Purchaser, by Act of the Holders
representing more than 50% of the Note Principal Balance of the Outstanding
Secured Notes, by written notice delivered to the Indenture Trustee and to the
Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 hereof and shall fail to resign or
eliminate such conflicting interest in accordance with Section 6.07
hereof after written request therefor by the Trust or by any
Noteholder; or
-35-
(ii) 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 Note Purchaser, 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 Note Purchaser 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 Note Purchaser 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 or Amortization Event 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, any Noteholder who has been a bona fide Holder of a Secured Note for at
least six (6) months or the Note Purchaser may, on behalf of himself and all
others similarly situated, with the consent of the Note Purchaser, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(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
Note Purchaser. If within one (1) year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture Trustee
shall be appointed by the Note Purchaser or, with the consent of the Note
Purchaser, by Act of the Holders of Secured Notes representing more than 50% of
the Note Principal Balance of the Outstanding Secured Notes 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 Note Purchaser or Noteholders and shall have
accepted appointment in the manner hereinafter provided, any Noteholder who has
been a bona fide Holder of a Secured Note for at least six (6) months may, on
behalf of himself and all others similarly situated, with the consent of the
Note Purchaser, 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 Holders of Secured Notes and the Note
Purchaser. Each notice shall include the name of the successor Indenture Trustee
and the address of its Corporate Trust Office.
-36-
Section 6.10. Acceptance of Appointment by Successor Indenture
Trustee. Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Trust, the Note Purchaser 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 its charges,
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 Note Purchaser,
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.
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.
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 Secured Notes
have 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
Secured Notes so authenticated with the same effect as if such successor
Indenture Trustee had authenticated such Secured Notes.
Section 6.12. Reserved.
Section 6.13. Co-Indenture Trustees and Separate Indenture
Trustees. At any time or times, the Indenture Trustee shall have power to
appoint, and, upon the written request of the Indenture Trustee, the Note
Purchaser or of the Holders of Secured Notes representing more than 50% of the
Note Principal Balance of the Outstanding Secured Notes with respect to which a
co-trustee or separate trustee is being appointed, with the written consent of
the Note Purchaser, 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 or Amortization Event has occurred and
is continuing, the Indenture Trustee alone shall have power to make such
appointment. All fees and expenses of any co-trustee or separate trustee shall
be payable by the Indenture Trustee.
-37-
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 Note Purchaser.
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:
(a) The Secured Notes 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.
(b) 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.
(c) 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 or Amortization Event 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,
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.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture Trustee, or
any other such trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
-38-
Section 6.14. Authenticating Agents. 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 Secured Notes 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 Secured Notes of the authority of an Authenticating Agent
appointed after the initial authentication and delivery of such Secured Notes)
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 Secured
Notes. For all purposes of this Indenture (other than in connection with the
authentication and delivery of Secured Notes pursuant to Sections 2.05 and 2.11
hereof in connection with their initial issuance), the authentication and
delivery of Secured Notes by the Authenticating Agent pursuant to this Section
6.14 shall be deemed to be the authentication and delivery of Secured Notes "by
the Indenture Trustee." Such Authenticating Agent shall at all times be a Person
that both meets the requirements of Section 6.07 hereof for the Indenture
Trustee hereunder and has an office for presentation of Secured Notes 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
Note Registrar and Authenticating Agent shall be its Corporate Trust Office. Any
Authenticating Agent 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 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 gross 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.
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.
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 all Holders of Secured Notes.
-▇▇-
▇▇▇ ▇▇▇▇▇▇▇▇▇ 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 Custodial Loan Files. (a) The Indenture
Trustee shall cause the Collateral Agent to execute and deliver each Trust
Receipt and the Exceptions Report required by Section 2.07(a) of the Sale and
Servicing Agreement.
(b) In giving each of the Trust Receipts and Exceptions Reports
referred to in clause (a) 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 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 Custodial Loan 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.
(c) In the event that the Mortgage Loans are required to be
recorded in accordance with the provisions of Article II of the Sale and
Servicing Agreement, no later than the fifth Business Day of each month,
commencing in October 2003, the Indenture Trustee shall cause the Collateral
Agent to deliver to the Servicer and the Note Purchaser an exception 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. On each
Payment Date, pursuant to Section 7.08 of the Sale and Servicing Agreement, the
Servicer shall pay to the Indenture Trustee (i) the Indenture Trustee Fee and
(ii) payment of or reimbursement for expenses and disbursements incurred or made
by the Indenture Trustee in any preceding month 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). In the event that such fees and expenses
remain unpaid for 60 days or more, such fees and expenses as shall be disbursed
to the Indenture Trustee from amounts on deposit in the Collection Account,
pursuant to Section 8.06 of the Sale and Servicing Agreement. The Indenture
Trustee shall also be entitled to indemnification against losses, liability and
expenses, including reasonable attorney's fees, incurred, arising out of or in
connection with this Indenture, the Secured Notes and the Sale and Servicing
Agreement. The Indenture Trustee and any director, officer, employee or agent of
the Indenture Trustee 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 Secured Notes, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance by the Indenture Trustee of its duties
hereunder. The obligations of the Servicer and the Trust under this Section 6.16
shall survive termination of the Trust and payment of the Secured Notes, and
shall extend to any co-Indenture Trustee or separate-Indenture Trustee appointed
pursuant to this Article VI.
-40-
Section 6.17. Representations and Warranties of the Indenture
Trustee. The Indenture Trustee represents and warrants for the benefit of the
Noteholders that:
(a) Organization and Good Standing. The Indenture Trustee is a
banking corporation duly organized, validly existing and in good standing under
the laws of the state of New York.
(b) Authorization. The Indenture Trustee has the power, authority
and legal right to execute, deliver and perform this Indenture, and the
execution, delivery and performance of this Indenture have been duly authorized
by the Indenture Trustee by all necessary corporate action.
(c) Binding Obligations. This Indenture, assuming due
authorization, execution and delivery by all other parties thereto, constitutes
the legal, valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally and the rights of
trust companies in particular and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether in a proceeding at law or in equity.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names
and Addresses of Noteholders. (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 names and addresses of the Holders of Secured Notes, and (ii) at
such 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.
-41-
(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
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Secured
Notes contained in the most recent list, if any, furnished to the Indenture
Trustee as provided in Section 7.01 hereof and the names and addresses of the
Holders of Secured Notes 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.
(b) Noteholders may communicate with other Noteholders with
respect to their rights under this Indenture or under the Secured Notes.
Section 7.03. Reports by Trust. The Servicer, on behalf of the
Trust, (a) shall deliver to the Indenture Trustee within fifteen (15) days after
the Trust is required to file the same with the Commission copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Trust is required to file with the SEC pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended.
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Account. The Collection Account established
pursuant to Section 8.03 of the Sale and Servicing Agreement.
Section 8.02. Payments; Statements. On each Payment Date, the
Indenture Trustee shall effect the distributions described in Section 8.06 of
the Sale and Servicing Agreement.
Section 8.03. Interest Payments. (a) The Principal Amount of each
Secured Note shall bear interest, for each day, at the Note Rate, in each case
computed on the basis of a 360-day year for the actual number of days elapsed.
(b) All interest accrued on each Secured Note for each Interest
Period (the "Interest Payment Amount") shall be payable pursuant to Section
8.06(c) of the Sale and Servicing Agreement.
(c) If, by the terms of this Indenture or any Secured Note, the
Trust at any time is required or obligated to pay interest at a rate in excess
of the maximum rate permitted by applicable law, the rate of interest payable
with respect to the affected Secured Notes shall be immediately reduced to that
maximum rate and the portion of all prior applicable interest payments in excess
of the maximum rate permitted by applicable law shall be applied in reduction of
the Principal Amounts of the affected Secured Notes.
-42-
Section 8.04. Principal Payments; Payment on Maturity Date. (a)
The Trust will make payments of principal pursuant to Sections 2.20, 4.02 and
8.06(d) of the Sale and Servicing Agreement and Article X hereof.
(b) From time to time, the Note Purchaser may, in the exercise of
its rights under Article XII of the Sale and Servicing Agreement (and in
compliance therewith), direct that the Trust sell one or more Mortgage Loans to
one or more identified Persons and on specified terms and conditions, and apply
the proceeds of such sale (i) to the extent required to avoid the occurrence of
a Shortfall upon giving effect to such sale, to the prepayment of the principal
of the Secured Notes, and (ii) to the payment of accrued and unpaid interest on
that portion of the Secured Notes so prepaid, to the date of prepayment. The
Trust shall comply with all such directions, and, upon the closing of such sale,
shall apply the proceeds thereof in accordance with the preceding sentence.
(c) The Trust shall repay the Note Principal Balance of each
Secured Note in full on the Final Stated Maturity Date, together with all
accrued and unpaid interest thereon to the Final Stated Maturity Date and all
other accrued and unpaid obligations under the Basic Documents. In addition, if
an optional redemption is exercised pursuant to Section 10.01 hereof, the Trust
shall repay the respective Note Principal Balance of all issued and outstanding
Secured Notes in full on the related optional redemption date, together with all
accrued and unpaid interest thereon to such date and all other accrued and
unpaid obligations under the Basic Documents.
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. In the event that the
Originator or the Depositor fail to cure, repurchase or substitute, as required
by Section 4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall
direct the Sponsor to satisfy its obligations under Section 4.02 of the Sale and
Servicing Agreement. Upon any purchase of or substitution for a Deleted Mortgage
Loan by the Originators, the Sponsor 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 Custodial Loan File relating to such Deleted
Mortgage Loan to the Originators, the Sponsor 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, Sponsor 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, Sponsor or the
Depositor.
-43-
Section 8.06. Recourse Payment. In the event that any amounts
become due and owing under this Indenture and are not paid as requested by the
Trust, the Indenture Trustee shall direct the Sponsor to satisfy its obligations
under Section 4.03 of the Sale and Servicing Agreement.
Section 8.07. Reports by Indenture Trustee to Noteholders; Access
to Certain Information. On each Payment Date, the Indenture Trustee shall
deliver the written reports required by Section 2.08(d) to Noteholders of record
as of the related Record Date.
The Indenture Trustee will provide the above statement via the
Indenture Trustee's internet website, which will initially be located at
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇ and assistance in using the internet website can be
obtained by calling the trustee's investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. A
paper copy of the above statement will also be made available upon request.
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, after
reasonable notice, originals or copies of the following items: (a) the Indenture
and any amendments thereto, (b) all Monthly Reports, Remittance Reports and
other reports delivered since the Closing Date pursuant to Section 2.08(d)
hereof, (c) any Officers' Certificates delivered to the Indenture Trustee since
the Closing Date as described in the Indenture, to the extent they have been
received by the Indenture Trustee 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 8.08. 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 Secured
Notes pursuant to Section 3.03 or 4.02 hereof).
Section 8.09. Amendment to the Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder (other than the Note Purchaser),
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 Holders of the Secured Notes. 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 or (ii) if its own rights, duties or immunities would be
adversely affected.
Section 8.10. Delivery of the Custodial Loan Files Pursuant to
Sale and Servicing Agreement. (a) 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 Custodial Loan 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:
-44-
(i) such Officer's Certificates, if any, as are required by the
Sale and Servicing Agreement; and
(ii) a Request for Release, executed by the Servicer, providing
that the Servicer will hold or retain the Custodial Loan Files in
trust for the benefit of the Indenture Trustee, the Note Purchaser and
the Holders of Secured Notes.
(b) As is appropriate for the release for sale of any Mortgage
Loan, the Indenture Trustee shall direct the Collateral Agent to deliver to the
Disposition Participant the Custodial Loan Files for such Mortgage Loan upon
receipt by the Indenture Trustee and Collateral Agent on or prior to the date
such release is to be made of:
(i) a Request for Release, executed by the Note Purchaser (as
permitted by Section 2.12 of the Sale and Servicing Agreement),
providing that the Disposition Participant will hold or retain the
Custodial Loan Files in trust for the benefit of the Indenture
Trustee, the Note Purchaser and the Holders of Secured Notes; and
(ii) a Bailee Letter, executed by the Disposition Participant,
providing that the Disposition Participant will hold or retain the
Custodial Loan Files in trust for the benefit of the Indenture
Trustee, the Note Purchaser and the Holders of Secured Notes.
Section 8.11. Termination of Servicer. Upon 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 Note Purchaser or, with the prior written consent of the Note Purchaser,
the Holder of Secured Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Secured Notes, and shall, upon the direction of the
Note Purchaser (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 Indenture
Trustee 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 Note Purchaser 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 8.09 and 8.10 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 Note Purchaser, appoint one or more Collateral Agents to
hold all or a portion of the Custodial Loan 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. JPMorgan Chase Bank is hereby appointed as the
initial Collateral Agent hereunder.
-45-
Section 8.14. Trust Estate and Accounts Held for Benefit of the
Note Purchaser. The Collateral Agent, on behalf of the Indenture Trustee, shall
hold the Trust Estate and the Custodial Loan Files for the benefit of the
Noteholders.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of
Noteholders. With the consent of the Note Purchaser and without the consent of
the Holders of any Secured Notes, the Trust and the Indenture Trustee, 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; provided, however, that any such supplement shall not, as evidenced by
an Officer's Certificate acceptable to the Note Purchaser, adversely affect in
any respect the interests of any Noteholder:
(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 any Secured Notes, 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 Secured Notes contained;
(d) to add to the covenants of the Trust, for the benefit of the
Holders of all Secured Notes, 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 Holders of the Secured Notes or the Holders of the
Trust Certificates.
-46-
Section 9.02. Supplemental Indentures With Consent of
Noteholders. With the consent of the Note Purchaser and with the consent of
Holders of Secured Notes representing not less than a majority of the Note
Principal Balance of all Outstanding Secured Notes by Act of said Holders
delivered to the Trust and the Indenture Trustee, the Trust and the Indenture
Trustee may enter into an 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 Holders of the Secured Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(a) change any Payment Date or the Final Stated Maturity Date of
the Secured Notes or, with respect to the Secured Notes, reduce the Note
Principal Balance thereof or the Note Rate thereon, change the earliest date on
which any Secured Note may be redeemed at the option of the Servicer, change any
place of payment where, or the coin or currency in which, any Secured 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 Secured
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 Secured
Note on or after the Final Stated Maturity Date (or, in the case of redemption,
on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Secured Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders 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;
(c) 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 each Outstanding Note affected
thereby;
(d) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(e) 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 Secured Note of the security afforded by the lien of this Indenture;
(f) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the Interest Payment Amount or 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 Holders of the Secured
Notes to the benefits of any provisions for the mandatory redemption of Secured
Notes contained herein;
(g) incur any indebtedness, other than the Secured Notes, 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); or
(h) engage in any activities contrary to the status of the Trust
as a qualified special purpose entity under the existing accounting literature.
-47-
The Indenture Trustee may in its discretion determine whether or
not any Secured Notes would be affected by any supplemental indenture and any
such determination shall be conclusive upon the Holders of all Secured Notes,
whether theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders 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.
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 Holders of the Secured Notes 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 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 Purchaser.
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 Secured
Notes 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 Secured Notes to Supplemental
Indentures. Secured Notes 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 Secured 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 Outstanding Secured Notes.
-48-
Section 9.07. Amendments to Governing Documents. 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
any other document relating to the Trust's governing documents, such consent to
be given with the consent of the majority Holders of all the Outstanding Secured
Notes and the Note Purchaser, except that such consent to any proposed amendment
to or waiver of any of the Special Purpose Provisions (as such term is defined
in Section 11.01 of the Trust Agreement) shall be given with the consent of all
of the Holders of the Outstanding Secured Notes and the Note Purchaser, upon
receipt by the Indenture Trustee of 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 9.07 have been satisfied.
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.
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.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) If the Note Purchaser so elects in
its sole discretion (such election to be made by the Note Purchaser in writing
and delivered to the Trust and the Indenture Trustee at least two (2) Business
Days prior to the date specified in the writing as the Redemption Date), the
Trust shall repay the respective Note Principal Balance of all issued and
outstanding Secured Notes in full on the Optional Redemption Date, together with
all accrued and unpaid interest thereon to the Optional Redemption Date and all
other accrued and unpaid obligations under the Basic Documents. Pursuant to the
preceding sentence, the Note Purchaser hereby elects, and the Trust hereby
acknowledges receipt of such notice of election, to require the Trust to repay
the respective Note Principal Balances of all issued and outstanding Secured
Notes in full on the Optional Redemption Date (which shall be the Redemption
Date), together with all accrued and unpaid interest thereon to, but not
including, the Redemption Date and all other accrued and unpaid obligations
under the Basic Documents; provided, however, that the Note Purchaser and the
Trust may mutually agree to revoke such election on any date that is 90 or more
days prior to the Optional Redemption Date.
(b) Any redemption shall be accomplished by a Disposition by the
Trust pursuant to Article XII of the Sale and Servicing Agreement, or if the
Indenture Trustee shall not have received notice of a Disposition within 2
Business Days prior to the Redemption Date, then the Indenture Trustee shall
sell the Trust Estate at one or more private Sales called and conducted in any
manner permitted by law. 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 5.07 hereof. No termination or redemption is permitted
without the prior written consent of the Note Purchaser.
-49-
(c) Any expenses associated with the compliance of the provisions
hereof in connection with a redemption of the Secured Notes shall be paid by the
Trust.
(d) Upon receipt of the notice from the Note Purchaser of its
election to cause the Trust to redeem the Secured Notes pursuant to Section
10.01(a) hereof, the Servicer shall prepare, and the Indenture Trustee shall
deliver to the Trust and the Note Purchaser, no later than the related
Redemption Date, a Monthly Report.
Section 10.02. Form of Redemption Notice. Notice of redemption
shall be given by the Indenture Trustee in the name of and at the expense of the
Trust by facsimile at least one Business Day prior to the Redemption Date to
each Holder of Secured Notes to be redeemed, such Holders being determined as of
the Record Date for such Payment Date, and to the Note Purchaser.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the price at which the Secured Notes will be redeemed; and
(c) the fact of payment in full on such Secured Notes, the place
where such Secured Notes are 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 Secured Note for any period
after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to
any Holder of any Secured Note selected for redemption shall not impair or
affect the validity of the redemption of any other Secured Note.
Section 10.03. Secured Notes Payable on Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Secured
Notes 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 Secured Notes 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.
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.
-50-
(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.
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.
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.
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.
-51-
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.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default, Event of Default or Amortization Event
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, Event of Default
or Amortization Event as provided in Section 6.01(d) hereof.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders 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 Noteholders 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 Secured Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Secured Notes shall bind
the Holder of every Secured 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 Secured Notes.
-52-
Section 11.04. Notices, etc., to Indenture Trustee, the Note
Purchaser and Trust. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture to be made upon, given or furnished to, or filed with:
(a) 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
(b) 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 2000-2, in care of
Wachovia 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.
(c) the Note Purchaser 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 JPMorgan Chase Bank, addressed to it at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
- ABFS Mortgage Loan Warehouse Trust 2000-2, (in each case in which notice or
other communication to the Note Purchaser refers to an Event of Default or an
Amortization Event, then a copy of such notice or other communication should
also be sent to the attention of JPMorgan Chase Bank--Mortgage Banking and
Warehouse Services, addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel's Office, 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 Purchaser; or
(d) the Depositor 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 ABFS Greenmont, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
any other address previously furnished in writing to the Indenture Trustee by
the Depositor; or
(e) the Originators 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., The ▇▇▇▇▇▇▇▇▇ Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel or at
any other address previously furnished in writing to the Indenture Trustee by
the Originators or the Servicer.
-53-
Section 11.05. Notices and Reports to Noteholders; Waiver of
Notices. Where this Indenture provides for notice to Noteholders of any event or
the mailing of any report to Noteholders, 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 Noteholders 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 other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
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 Noteholders 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.
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 Noteholders 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. Rules by Indenture Trustee. The Indenture Trustee
may make reasonable rules for any meeting of Noteholders.
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 Secured Notes 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 Secured Notes, 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 Noteholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
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 Secured Note is proposed to be paid shall not be a Business Day,
then (notwithstanding any other provision of the Secured Notes 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 Secured 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.
-54-
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT
NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES
AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
Section 11.14. 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.
Section 11.15. 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 hereof.
Section 11.16. Trust Obligation(a). (a) Except as set forth in
Section 4.03 of the Sale and Servicing Agreement with respect to the Sponsor, 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 Secured Notes 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.
-55-
(b) The recitals contained herein shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Indenture, of any other Basic Document or of the
Trust Certificates (other than the signature and countersignature of the Owner
Trustee on the Trust Certificates and as specified in Section 7.03 of the Trust
Agreement) or the Secured Notes, or of any Mortgage Loans or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Mortgage Loan,
or the perfection and priority of any security interest created by any Mortgage
Loan or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under the Trust Agreement or
the Noteholders under this Indenture, including, without limitation, the
existence, condition and ownership of any Mortgaged Property, the existence and
enforceability of any insurance thereon, the existence and contents of any
Mortgage Loan on any computer or other record thereof, the validity of the
assignment of any Mortgage Loan to the Trust or of any intervening assignment,
the completeness of any Mortgage Loan, the performance or enforcement of any
Mortgage Loan, the compliance by the Depositor or the Servicer with any warranty
or representation made under any Basic Document or in any related document or
the accuracy of any such warranty or representation or any action of the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee.
Section 11.17. No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder and beneficial owner, by accepting a
Secured Note, hereby covenant and agree that, prior to the date which is one
year and one day after the payment in full of the Secured Notes, 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
Secured Notes, this Indenture or any of the Basic Documents. In addition, the
Indenture Trustee will on behalf of the Holders of the Secured Notes, (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 Noteholders.
This Section 11.17 will survive for one year and one day
following the termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee and the
Note Purchaser, during the Trust's normal business hours, to examine all of
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 Note Purchaser, 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 11.18 shall be borne by the Trust.
-56-
Section 11.19. Usury. The amount of interest payable or paid on
any Secured 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 Secured 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
Secured 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 Secured
Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid
to the Indenture Trustee for the benefit of Holders of Secured Notes 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 Secured Notes.
Section 11.20. Third Party Beneficiary. The parties agree that
the Note Purchaser is intended and shall have all rights of a third-party
beneficiary of this Indenture, and may exercise its rights hereunder directly.
[Remainder of Page Intentionally Left Blank]
-57-
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 2000-2
By: WACHOVIA TRUST COMPANY,
NATIONAL ASSOCIATION (F/K/A
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION),not in
its individual capacity, but
solely as Owner Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Trust Officer
JPMORGAN CHASE BANK,
as Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Trust Officer
[Signature Page to Second Amended and Restated Indenture]
EXECUTION VERSION
APPENDIX I
DEFINED TERMS
"Accepted Servicing Practices": The Servicer's normal mortgage
servicing practices including practices regarding reconciliation of bank
accounts, processing of mortgage payments, processing of disbursements for tax
and insurance payments, maintenance of mortgage loan records, performance of
collection efforts including disposition of delinquent loans, foreclosure
activities and disposition of real estate owned and performance of investor
accounting and reporting processes, 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 jurisdiction in which the related Mortgage Properties are located.
"Account": Either of the Collection Account or the General Operating
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 Secured Notes and any Payment
Date, the period from and including the prior Payment Date (or, in the case of
the first Payment Date with respect to a Secured Note, from and including the
related Transfer Date) to and including the day immediately preceding such
Payment Date.
"Act": With respect to any Noteholder, as defined in Section 11.03 of
the Indenture.
"Additional Recourse Cap": The meaning assigned to such term in Section
4.03 of the Sale and Servicing Agreement.
"Adjusted Tangible Net Worth": With respect to any Person at the end of
any fiscal quarter:
(a) the excess of that Person's total assets over total
liabilities on that day, each being determined in accordance with GAAP
consistent with the accounting principles applied in the preparation of
financial statements referred to in (herein called "GAAP Net Worth");
(b) minus advances to shareholders, officers or Affiliates,
aggregate investments in Subsidiaries and Affiliates included in
financial statements;
(c) minus goodwill and all other assets not supported by or
representative of a tangible asset other than mortgage loan servicing
rights and capitalized excess mortgage loan servicing fees (the values
of which rights and fees shall not be subtracted from GAAP Net Worth to
determine Adjusted Tangible Net Worth), which intangible assets would
be deemed by HUD to be unacceptable for the purpose of calculating
adjusted net worth in accordance with its requirements in effect as of
such day, as such requirements appear in the "Audit Guide for Audit of
Approved Non-supervised Mortgagees";
(d) plus loan loss reserves and that portion of Subordinated
Debt that is not due within one (1) year of that day;
(e) plus net unrealized holding losses, if any, (and minus net
unrealized holding gains, if any) for available-for-sale debt
securities and equity securities owned (including those classified as
current assets) that are required by FASB 115 to be reported as a net
amount in a separate component of shareholders' equity until realized.
"Administration Agreement": The Amended and Restated Administration
Agreement, dated as of October 16, 2003, as it may be amended from time to time,
between the Trust, the Administrator, and the Servicer, relating to
administrating and servicing of the Trust.
"Administrator": American Business Credit, Inc., a Pennsylvania
corporation.
"Affiliate": With respect to a specified Person, any other Person:
(a) that directly or indirectly through one or more
intermediaries Controls, is Controlled by or is under common Control
with the specified Person (in this definition only, the term "Control"
means having the power to set or direct management policies, directly
or indirectly);
(b) that is a director, trustee, partner, member or officer of
the specified Person or serves in a similar capacity in respect of the
specified Person;
(c) of which the specified Person is a director, trustee,
partner, member or officer or with respect to which the specified
Person serves in a similar capacity and over whom the specified Person,
either alone or together with one or more other Persons similarly
situated, has Control; or
(d) that, directly or indirectly through one or more
intermediaries, is the beneficial owner of five percent (5%) or more of
any class of equity securities -- which does not include any Structured
Securities -- of the specified Person.
"Aged Loan": A Mortgage Loan secured by a first lien that is pledged
under the Indenture more than 90 days but not more than 120 days from the
Transfer Date.
"Agent": Any Note Registrar, Collateral Agent, or Authenticating Agent.
-2-
"Aggregate Principal Balance": With respect to any Mortgage Loans and
any date of determination, the aggregate of the Principal Balance of such
Mortgage Loans as of such date of determination.
"Amortization Event": Shall mean the occurrence of any of the
following:
(i) a Servicer Event of Default;
(ii) the Sponsor, together with its consolidated Subsidiaries,
shall fail to maintain a GAAP Net Worth of at least $25,000,000 up to
and including November 30, 2003 and $28,000,000 thereafter, and the
Sponsor, together with its consolidated Subsidiaries, fails to increase
such GAAP Net Worth by $2,000,000 each fiscal quarter thereafter
commencing with the quarter ending on December 31, 2003;
(iii) the Sponsor, together with its consolidated
Subsidiaries, shall fail to maintain a minimum Adjusted Tangible Net
Worth of $300,000,000;
(iv) the Sponsor, together with its consolidated Subsidiaries,
shall fail to maintain a ratio of Debt to Adjusted Tangible Net Worth
less than 4:1;
(v) the Sponsor, together with its consolidated Subsidiaries,
shall fail to maintain, at all times, cash or Cash Equivalents in an
amount of at least $25,000,000;
(vi) by October 14, 2003 or any time thereafter, the Sponsor
or any Affiliate thereof shall fail to enter into and or maintain an
additional (A) warehouse line of at least $200,000,000 for a 364-day
period from the Closing Date or (B) any event or circumstance shall
have occurred thereunder which would not, by the terms of the
applicable agreement, permit the Sponsor or such Affiliate to borrow or
draw money thereunder for any period during the 364-day period from the
Closing Date;
(vii) the aggregate cash flow from all securitization trusts
as to which the Sponsor or any Affiliate of the Sponsor is a party
shall fail to be greater than the average of the actual cash flow from
the immediately preceding four fiscal quarters;
(viii) any event of default or other event that has occurred
and is continuing for 90 days under any Securitization that the
Servicer or Sponsor fails to cure which interrupts cash flow from such
Securitization;
(ix) the Sponsor maintains Subordinated Debt at any time in
excess of $705,000,000;
(x) the Sponsor and its consolidated Subsidiaries on any day
own Repurchased Defaulted Mortgage Loans having an aggregate
outstanding Principal Balance of more than 1.5% of the sum of the
aggregate outstanding Principal Balance of the Sponsor's and its
consolidated Subsidiaries' aggregate portfolio of Serviced Loans;
-3-
(xi) the Sponsor, together with its consolidated Subsidiaries,
fail to maintain a Total Delinquency Rate at the end of each calendar
quarter of less than 12% of the Sponsor's and its consolidated
Subsidiaries' aggregate portfolio of Serviced Loans;
(xii) a breach of any of the representations, warranties or
covenants set forth in Article III of the Sale and Servicing Agreement;
(xiii) the occurrence of an Event of Default or a Default, if
the Note Purchaser so elects, provided that if any Default is cured
before it becomes an Event of Default, the Transfer Period shall be
reinstated, unless the last day of the Commitment Term has occurred or
an event described in clause (v) has occurred and has not been Deemed
Cured;
(xiv) the Sponsor fails to successfully complete its Form S-2
SEC filing related to its May 2003 $295 million public subordinated
debenture shelf registration on or prior to October 31, 2003;
(xv) the Sponsor or any of its Subsidiaries fails to pay when
due any principal or interest on any other debt or in the payment when
due of any contingent obligation if such default continues beyond any
period of grace provided under the papers evidencing such obligation;
or breach or default with respect to any other material term of any
other debt or of any promissory note, bond, loan agreement,
reimbursement agreement, mortgage, indenture or other agreement
relating thereto, if the effect of any such failure, default or breach
referred to in this clause (xv) is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder or
holders) to cause, debt of the Sponsor or any of its Subsidiaries in
the aggregate amount of Ten Million Dollars ($10,000,000) or more to
become or be declared due before its stated maturity;
(xvi) any money judgment, writ or warrant of attachment, or
similar process involving in any case an amount in excess of Two
Hundred Fifty Thousand Dollars ($250,000) shall be entered or filed
against the Sponsor or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days or in any event later than
five (5) days before the date of any proposed sale thereunder;
(xvii) any Plan maintained by the Sponsor or any of its
Subsidiaries shall be terminated within the meaning of Title IV of
ERISA or a trustee shall be appointed by an appropriate United States
district court to administer any such Plan, or the Pension Benefit
Guaranty Corporation (or any successor to it) shall institute
proceedings to terminate any such Plan or to appoint a trustee to
administer any such Plan if as of the date thereof the liability of the
Sponsor or its Subsidiaries (after giving effect to the tax
consequences thereof) to the Pension Benefit Guaranty Corporation (or
any successor to it) for unfunded guaranteed vested benefits under such
Plan exceeds the then-current value of assets accumulated in such Plan
by more than Twenty-Five Thousand Dollars ($25,000) (or in the case of
a termination involving the Sponsor or any of its Subsidiaries as a
"substantial employer", as defined in Section 4001(a)(2) of ERISA, the
withdrawing employer's proportionate share of such excess shall exceed
such amount);
-4-
(xviii) the Sponsor or any of its Subsidiaries as employer
under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an annual amount
exceeding Twenty-five Thousand Dollars ($25,000);
(xix) as of the end of each calendar quarter, commencing with
the quarter ending March 31, 2004, the Sponsor has failed to apply at
least 60% of the amount equal to the Sponsor's and its consolidated
Subsidiaries net cash flow from operations for such calendar quarter,
determined in accordance with GAAP to the Sponsor's and its
consolidated Subsidiaries' Subordinated Debt and any such failure
continues for 45 days after the end of such calendar quarter;
(xx) as of the end of any month commencing January 31, 2004
(a) the aggregate outstanding principal balance of Subordinated Debt of
the Sponsor and its Subsidiaries minus (b) any accrued interest added
to the outstanding principal balance of the Subordinated Debt as
permitted by the applicable governing documents is not less than the
aggregate outstanding principal balance of the Subordinated Debt of the
Sponsor and its Subsidiaries as of the end of the prior month
(xxi) a Change of Control shall occur;
(xxii) a Change of Executive Management shall occur; and
(xxiii) the end of the Commitment Term.
"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": Each Assignment of Mortgage Loans and other related
property, executed by the related Originators or the Depositor, as the case may
be, in substantially the form attached to the Sale and Servicing Agreement as
Exhibit J.
"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 Noteholders.
-5-
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Owner Trustee, acting at the direction of the Majority
Certificateholders, pursuant to Section 6.14 of the Indenture, until any
successor Authenticating Agent for the Secured Notes 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 the Indenture applicable to the Authenticating Agent.
"Authorized Company Representative": A representative of the Sponsor
duly authorized by its Board of Directors (or by an officer to whom such
authority has been delegated by its Board of Directors) to execute any
certificate, schedule or other document contemplated or required by the Sale and
Servicing Agreement or the Basic Documents on behalf of the Sponsor and as its
act and deed. A list of Authorized Company Representatives current as of the
Closing Date is attached as Schedule I to the Sale and Servicing Agreement. The
Sponsor will use its best efforts to provide an updated list of Authorized
Company Representatives to the Indenture Trustee promptly following each
addition to or subtraction from such list, and the Indenture Trustee and the
Note Purchaser shall be entitled to rely on each such list until such an updated
list is received by the Indenture Trustee.
"Authorized Denominations": A minimum Percentage Interest corresponding
to a minimum denomination of $5,000,000 or integral multiples of $1,000 in
excess thereof; provided, however, that one Secured Note is issuable in a
denomination equal to any such multiple plus an additional amount such that the
aggregate denomination of all Secured Notes 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
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 Collection
Account, the amount to be on deposit in such Account on such Payment Date as a
result of the Servicer's remittance of collections and proceeds on the Mortgage
Loans and the Servicer's deposit of Periodic Advances, Monthly Advances and
Compensating Interest. For purposes of calculating the Available Funds, any
Repurchase Price or Substitution Adjustment that is paid shall be deemed
deposited in the Collection Account in the Due Period preceding such
Determination Date.
"Bailee Letter": The Bailee Letter, in the form attached as Exhibit F
to the Sale and Servicing Agreement, for use by the Collateral Agent in
connection with the delivery of a Custodial Loan File, for the purpose of
delivering such Custodial Loan File to a Disposition Participant.
-6-
"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 Sale and
Servicing Agreement, the Purchase Agreement, the Note Purchase Agreement, the
Administration Agreement, the Secured Notes and the Fee Letter.
"Book Entry Note": A Permitted Investment issued in book entry form.
"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 banking institutions in the
State of Texas, the State of New York, the State of Delaware, the State of
Pennsylvania or the state in which the Indenture Trustee's office from which
payments will be made to Certificateholders, are authorized or obligated by law,
regulation or executive order to be closed.
"Business Purpose Property": Any mixed use property, commercial
property, or four or more unit multifamily property.
"Cash Equivalents": Any of (i) U.S. Treasury securities none of which
has a final maturity date later than one (1) year later than the Commitment
Term; (ii) certificates of deposit or investor certificates issued by the Agent
and (iii) any shares in a AAA rated short term cash investment fund.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"Certificateholder": Has the meaning ascribed thereto in Section 1.01
of the Trust Agreement.
"Change of Control": In respect of the Sponsor, the Servicer, the
Originators, the Depositor and their respective Subsidiaries means and includes:
(a) a sale of substantially all of the assets of any of the
Sponsor, the Servicer, the Originators, the Depositor and their
respective Subsidiaries to any Person or Persons;
(b) without the Indenture Trustee's and Note Purchaser's prior
written consent, any merger or consolidation of any of the Sponsor, the
Servicer, the Originators, the Depositor and their respective
Subsidiaries with or into another Person with the effect that the
Persons who have been represented to the Note Purchaser as owning all
of the Sponsor's, the Servicer's, the Originators', the Depositor's and
their respective Subsidiaries' equity interests on the Closing Date
(the "Current Company Equity Holders") or their Affiliates hold less
than fifty-one percent (51%) of the total voting power entitled to vote
in the election of directors, managers or trustees of the survivor of
such merger or consolidation;
-7-
(c) the occurrence of any other event after which the Sponsor,
the Servicer, the Originators or the Depositor no longer owns one
hundred percent (100%) of the total voting power entitled to vote in
the election of such company's directors, or the Current Company Equity
Holders or their Affiliates no longer own at least fifty-one percent
(51%) of the total voting power entitled to vote in the election of
such company's directors;
(d) the Sponsor's, the Servicer's, the Originators' or the
Depositor's own liquidation or dissolution; or (e) the Sponsor shall
fail to, directly or indirectly, own 100% of the outstanding common
stock of each of the Originators.
"Change of Executive Management": Any of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer of the Sponsor, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice
President of the Sponsor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President of the
Sponsor, or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer of the Sponsor, has been
removed from, or has ceased for any reason, voluntarily or involuntarily, to
occupy, any such office or to be responsible for and carry out its principal
duties, and has not been replaced or his or her absence accommodated for within
(i) one hundred twenty (120) days thereafter in the event of his or her death or
disability or ninety (90) days thereafter in any other event thereafter by
another Person or Persons and in a manner reasonably acceptable to and approved
by the Note Purchaser, such approval not to be unreasonably withheld,
conditioned or delayed.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Closing Date": October 16, 2003.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The Sold Mortgage Loans, Accounts and other collateral
described in the grant of security interest securing payment of the Secured
Notes.
"Collateral Agent": JPMorgan Chase Bank, a New York banking
corporation, in its capacity as Collateral Agent under the Sale and Servicing
Agreement, any successor-in-interest, or any successor Collateral Agent
appointed as provided in Section 11.08 of the Sale and Servicing Agreement.
"Collateral Agent Fee": As to any Payment Date the fee payable to the
Collateral Agent in respect of its services pursuant to Section 11.05 of the
Sale and Servicing Agreement, as set forth in the Fee Letter.
"Collateral Deficiency Event": A situation which shall be deemed to be
existing as of any day on which (a) the aggregate Note Principal Balance of the
Secured Notes as of such day exceeds, (b) the Mortgage Loan Base as of such day.
-8-
"Collection Account": The Eligible Account established and maintained
pursuant to Section 8.03 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.
"Commitment Term": That period of time commencing on the date hereof
and continuing until the earlier of (i) October 31, 2003, and (ii) the date upon
which the Obligations are declared to be, or become, due and payable in full in
accordance with Article X or Section 5.02 of the Indenture.
"Compensating Interest": As defined in Section 7.13 of the Sale and
Servicing
Agreement.
"Controlled Group": All members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Sponsor and the Originators, are treated as a single
employer under Section 414 of the Code.
"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 2000-2; (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: ▇▇▇▇▇ ▇▇▇▇, Associate.
"Credit Agreement": The Amended and Restated Senior Secured Credit
Agreement , dated as of March 15, 2002, as it may be amended from time to time,
between the Originators, Tiger Relocation Company, a Pennsylvania corporation,
the Sponsor and the Indenture Trustee, relating to the $50,000,000 senior,
secured, revolving line of credit.
"Custodial Loan File": For each Mortgage Loan, the mortgage loan
documents set forth in Section 2.06(a) of the Sale and Servicing Agreement that
are delivered to the Collateral Agent pursuant to Section 2.06(a) of the Sale
and Servicing Agreement or which at any time come into the possession of the
Collateral Agent.
"Custodial Delivery Failure": As defined in Section 11.10(b) of the
Sale and Servicing Agreement.
-9-
"Custodial Register": As defined in Section 2.08(d) of the Sale and
Servicing Agreement.
"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.
"Cut-Off-Date": With respect to each Mortgage Loan, the date designated
as such in the related Assignment.
"Daily Report": As defined in Section 8.02 of the Sale and Servicing
Agreement.
"Debt": With respect to any Person, on any day, the sum of the
following (without duplication):
(a) all of that Person's debt or other obligations which, in
accordance with GAAP, should be included in determining total
liabilities as shown on the liabilities side of that Person's balance
sheet for that day;
(b) all of that Person's debt or other obligations for
borrowed money or for the deferred purchase price of property or
services, except that Structured Securities Debt arising out of
transactions structured to qualify for GAAP sale treatment shall be
excluded;
(c) all of any other Person's debt or other obligations for
borrowed money or for the deferred purchase price of property or
services in respect of which such Person is liable -- contingently or
otherwise -- to pay or advance money or property as guarantor, surety,
endorser or otherwise (excluding such Person's contingent liability as
endorser of negotiable instruments for collection in the ordinary
course of business), or which such Person has agreed to purchase or
otherwise acquire; and
(d) all debt for borrowed money or for the deferred purchase
price of property or services secured by a Lien on any property owned
or being purchased by that Person (even though that Person has not
assumed or otherwise become liable for the payment of such debt) to the
extent that such debt would not be otherwise counted as a liability for
purposes of determining that Person's net worth and to the extent that
such debt is less than or equal to the net book value of such property;
provided that, for purposes of the Basic Documents, there shall be
excluded from the calculation of Debt for that day, (1) loan loss reserves and
indemnification reserves, (2) deferred taxes arising from capitalized excess
service fees, (3) gestation repurchase obligations and (4) the portion of
Subordinated Debt that is not due within one (1) year of that day.
"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.
-10-
"Default": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Defective Mortgage Loan": A Mortgage Loan which is subject to purchase
or replacement (i) as having one or more exceptions in the Exceptions Report as
contemplated by Section 2.07(b) of the Sale and Servicing Agreement or (ii) for
breaches of representations and warranties as contemplated by Section 4.02(b) or
4.02(c) of the Sale and Servicing Agreement.
"Deficient Mortgage Loan": Any Mortgage Loan that (i) has become 60 or
more days Delinquent, (ii) has been in default for a period of 30 days or more
(other than a Mortgage Loan referred to in the preceding clause (i)), (iii) does
not meet criteria established by independent rating agencies or surety agency
conditions for Dispositions which criteria have been established at the related
Transfer Date and may be modified only to match changed criteria of independent
rating agencies or surety agents, or (iv) is inconsistent with the intended tax
status of a Securitization.
"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 Notes": Secured Notes other than Book Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
"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 or the commencement of a case in bankruptcy involving any
Mortgagor has occurred and, measured from the most recent preceding month end,
had continued for more than thirty (30) days but less than sixty (60) days. 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.
"Delivery" When used with respect to any Permitted Investments means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit, promissory notes and writings that
constitute "instruments" within the meaning of Section 9-102(a)(47) of
the UCC, transfer thereof by physical delivery to the Indenture Trustee
endorsed to the Indenture Trustee or endorsed in blank by an effective
endorsement, and, with respect to a certificated security (as defined
in Section 8-102(a)(4) of the UCC) (i) the acquisition of possession by
the Indenture Trustee of the "security certificate" (as defined in
8-102(a)(16) of the UCC), or (ii) another person, other than a
"securities intermediary" (as defined in 8-102(a)(14) of the UCC),
either acquires possession of the security certificate on behalf of the
Indenture Trustee or, having previously acquired possession of a
certificate, acknowledges that it holds for the Indenture Trustee, or
(iii) a securities intermediary acting on behalf of the Indenture
Trustee acquires possession of the security certificate, only if the
certificate is in "registered form" (as defined in 8-102(a)(13) of the
UCC) and has been specially indorsed to the Indenture Trustee by an
effective "indorsement" (as defined in 8-102(a)(l1) of the UCC) (all of
the foregoing "Physical Property") and, in any event, any such Physical
Property in registered form shall be registered in the name of the
Indenture Trustee, and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of
ownership of or the creation and perfection of a first priority
security interest in any such Eligible Investment to the Indenture
Trustee, consistent with changes in applicable law or regulations or
the interpretation thereof;
-11-
(b) with respect to any security that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8
and 9 of the UCC, book-entry credit of such book-entry credit to an
appropriate Participant's Securities Account (as defined in such
applicable federal regulations) maintained with a Federal Reserve Bank
by a financial institution which is a "Participant" pursuant to
applicable federal regulations; and the indication by book-entry by
such financial institution (which shall be a securities intermediary)
that such book-entry has been credited to a securities account as to
which the Indenture Trustee is the "entitlement holder" (as defined in
Section 8-102(a)(8) of the UCC); and such additional or alternative
procedures as may be or hereafter become requisite or appropriate to
effect complete transfer of ownership of or the creation and perfection
of a first-priority security interest in any such Eligible Investment
to the Indenture Trustee, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any Eligible Investment that is an
uncertificated security under Article 8 of the UCC; (i) registration by
the issuer of the Indenture Trustee as the registered owner, upon
original issue or registration or transfer, or (ii) another person,
other than a securities intermediary, either becomes the registered
owner of the uncertificated security on behalf of the Indenture Trustee
or, having previously become the registered owner, acknowledges that it
holds for the Indenture Trustee; and such additional or alternative
procedures as may be or hereafter become requisite or appropriate to
effect complete transfer of ownership of or the creation of a
first-priority security interest in any such Eligible Investment to the
Indenture Trustee, consistent with changes in applicable law or
regulations or the interpretation thereof.
"Delivery Instructions": The written communications received by the
Collateral Agent from an authorized representative of the Note Purchaser,
including communications received by facsimile, or other telecommunications
device capable of transmitting or creating a written record.
"Depositor": ABFS Greenmont, Inc., a Delaware corporation.
"Determination Date": With respect to any Payment Date, the 10th day of
the month in which such Payment Date occurs, or if such 10th day is not a
Business Day, the Business Day preceding such 10th day.
"Disbursement Order": The disbursement order in the form attached as
Exhibit I to the Sale and Servicing Agreement.
-12-
"Disposition": A Securitization, Whole Loan Sale transaction, or other
disposition of Mortgage Loans, including, without limitation, any transfer of
Mortgage Loans to another financing facility maintained by the Sponsor or its
Affiliates (which may include a sale of the servicing rights), which, in each
case, occurs in connection with a redemption of the Secured Notes effected
pursuant to Section 10.01 of the Indenture.
"Disposition Agent": JPMorgan Chase Bank and its successors and assigns
acting at the written direction of the Majority Noteholders.
"Disposition Participant": As applicable, with respect to a
Disposition, any "depositor" with respect to such Disposition, the Majority
Noteholders, 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; it being understood that no Originator, their
Affiliates or agents may purchase the Mortgage Loans in connection with 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 Excess Interest 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 Note Purchaser, the Trust and the Servicer.
"Dollar" and "$": Lawful money of the United States of America.
"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 Period": With respect to each Payment Date, the calendar month
preceding the related Payment Date.
"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 or (iv) a principal subsidiary of a bank holding company 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 the
$50,000,000, acting in its fiduciary capacity.
-13-
"Eligible Mortgage Loan": Each Mortgage Loan: (i) as to which no
representation and warranty made pursuant to Section 4.01 of the Sale and
Servicing Agreement has been breached; and (ii) that is not more than 29 days
Delinquent.
"Eligible Servicer": Either (x) American Business Credit, Inc., for so
long as it is considered an approved servicer by at least two nationally
recognized rating agencies (S&P, ▇▇▇▇▇'▇ and/or Fitch) or (y) any other Person
to which the Majority Noteholders may consent in writing.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate": With respect to any Person, any Person which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which such Person is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which such Person
is a member.
"Exception": With respect to any Custodial Loan File, any of the
following: (i) any variance from the requirements of Section 2.06(a) of the Sale
and Servicing Agreement with respect to such Custodial Loan File; and (ii) a
Mortgage Loan for which a Responsible Officer of the Collateral Agent receives
written notice or has actual knowledge of a lien or security interest in respect
of the related Mortgage Loan in favor of a Person other than the Indenture
Trustee.
"Exceptions Report": A list generated by the Collateral Agent in
accordance with Section 2.07(a) of the Sale and Servicing Agreement, of Mortgage
Loans with respect to which the Collateral Agent holds the Custodial Loan File
for the benefit of the Indenture Trustee as of the close of business on the
prior Business Day, which list includes codes indicating all Exceptions with
respect to each Custodial Loan File listed thereon. Each Exceptions Report shall
set forth all Exceptions with respect to the Mortgage Loans covered by the
then-current Trust Receipt, and shall be attached to such Trust Receipt.
"Excess Interest Securities": With respect to a Securitization, any
subordinated securities backed by excess spread expected to be, or which could
be, issued, in connection therewith.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
-14-
"Event of Default": As defined in Section 5.01 of the Indenture.
"▇▇▇▇▇▇ ▇▇▇": The Federal National Mortgage Association, and any
successor thereto.
"FDIC": The Federal Deposit Insurance Corporation, and any successor
thereto.
"Fee Letter": The letter agreement between the Collateral Agent, the
Indenture Trustee, the Note Purchaser, the Servicer, the Sponsor and the
Originators setting forth certain fees contemplated in the Basic Documents.
"FICA": The Federal Insurance Contributions Act.
"FICO Score": With respect to any Mortgage Loan the credit score
reported by Fair ▇▇▇▇▇ and Co.
"Final Stated Maturity Date": The October 2033 Payment Date.
"Fitch": Fitch Ratings, Inc. or any successor thereto.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation, and any
successor thereto.
"GAAP": Generally accepted accounting principles, consistently applied.
"GAAP Net Worth": The meaning set forth in the definition of "Adjusted
Tangible Net Worth".
"General Operating Account": The account, designated as such,
established and maintained pursuant to Section 8.03 of the Sale and Servicing
Agreement.
"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 Purchase 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.
"High Cost Mortgage Loan": A Mortgage Loan classified as (a) a "high
cost" loan under the Home Ownership and Equity Protection Act of 1994 or (b) a
"high cost," "threshold," "covered," or "predatory" loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law, regulation or ordinance imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees).
-15-
"Highest Lawful Rate": As defined in Section 11.19 of the Indenture.
"HUD": The U.S. Department of Housing and Urban Development or any
successor.
"Indenture": The Second Amended and Restated Indenture, dated as of
October 16, 2003, as it may be amended from time to time, between the Trust and
the Indenture Trustee, relating to the issuance of the Secured Notes.
"Indenture Trustee": JPMorgan Chase 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 0.00875% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.
"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 Secured Notes, (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 (ii) 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, 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.
"Insurance Proceeds": Proceeds paid by any 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.
"Interest Amount Available": The aggregate amount on deposit in the
Collection Account as of the close of business on a Determination Date (A) that
are designated by the Servicer as "interest collections" on deposit in the
Collection Account on such Payment Date which relate to the prior Due Period,
(B) that constitute the interest portion of Disposition Proceeds, (C) that are
prepayment fees deposited into the Collection Account, (D) that constitute
investment earnings on amounts in deposit in the Collection Account and (E)
deposited by the Servicer as Servicing Advances, Periodic Advances or
Compensating Interest. The Interest Amount Available with respect to an
individual Secured Note is the portion of the amount described above which
related to the Related Mortgage Loans.
-16-
"Interest Payment Amount": As to each Secured Note with respect to a
Payment Date, the amount distributed to the related Noteholder respecting
interest, as contemplated by Section 8.06(c) of the Sale and Servicing Agreement
and calculated in accordance with Section 8.03 of the Indenture.
"Investment Company Act": The Investment Company Act of 1940, as
amended.
"Jumbo Mortgage Loan": A Mortgage Loan that satisfies the Underwriting
Guidelines and whose original principal amount is more than the maximum
principal amount allowable for purchase by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac but not
more than Five Hundred Thousand Dollars ($500,000).
"LIBOR": For each day, the rate of interest per annum for dollar
deposits with a duration of one month that is displayed (i) on the Telerate Page
3750 at about 11:00 a.m. (London time) on the second LIBOR Business Day prior to
such day, or (ii) if that page ceases to display the necessary information, then
on whatever page replaces it on that service for the purpose of displaying that
information (the "Telerate Rate"). If the Telerate Rate cannot be determined,
then the one-month LIBOR rate" for any day means the arithmetic mean of the
rates of interest offered by two prime banks in the London interbank market
(selected by the Indenture Trustee) of dollar deposits with a duration of one
month at about 11:00 a.m. (London time) the second LIBOR Business Day prior to
such day. Each determination of the one-month LIBOR rate by the Indenture
Trustee pursuant to the provisions of this Agreement shall be conclusive and
binding absent manifest error.
"LIBOR Business Day": A Business Day on which trading in U.S. dollars
is conducted between banks in the London interbank market.
"Lien": Any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any finance lease or other contract in the nature thereof
and any agreement to give any security interest).
"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.
-17-
"Liquidation Expenses": Expenses reasonably 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 a 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; provided that in no event shall net Liquidation
Proceeds be less than zero.
"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.
"Lost Note Affidavit": The lost note affidavit substantially in the
form attached to the Sale and Servicing Agreement as Exhibit M.
"Majority Certificateholders": The Holder or Holders of Trust
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
"Majority Noteholders": The Holder or Holders of Notes evidencing
Percentages Interests in excess of 50% in the aggregate.
"Manufactured Housing Loan": A manufactured home, including all
accessions thereto, that is legally classified as real property under state law.
"Margin": A rate per annum equal to 2.00%.
"Margin Option": As defined in Section 2.20 of the Sale and Servicing
Agreement.
"Market Value": The meaning assigned to such term in Section 8.10(a) of
the Sale and Servicing Agreement; provided, however, that to the extent that on
any day a Sold Mortgage Loan is not an Eligible Mortgage Loan, the fair market
value of such Mortgage Loan will be deemed zero.
"Material Adverse Effect": A material adverse effect on (a) the
property, business, operations, financial condition or prospects of the Sponsor
or any Affiliate, (b) the ability of the Sponsor or any Affiliate to perform its
obligations under any of the Basic Documents to which it is a party, (c) the
validity or enforceability of any of the Basic Documents, (d) the rights and
remedies of the Note Purchaser or any Noteholder under any of the Basic
Documents, (e) the timely payment of any amounts payable under the Basic
Documents, or (f) the Market Value of the Mortgage Loans taken as a whole.
-18-
"Maximum Note Balance": $164,000,000.
"Minimum Margin Contribution": As defined in Section 2.20 of the Sale
and Servicing Agreement.
"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 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 and containing the following information:
(a) the total of any Substitution Adjustments and any
Repurchase Price amounts included in such payment;
(b) any Restoration Amount then outstanding;
(c) the aggregate Principal Balance of all Mortgage Loans that
have ceased to be Eligible Mortgage Loans since the initial Cut-Off
Date (such Principal Balance measured as of the day immediately
preceding the date on which each such Mortgage Loan ceased to be an
Eligible Mortgage Loan), 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;
(d) the number and Principal Balance of Mortgage Loans which
are 30-59 days Delinquent and which are 60-89 days Delinquent and which
are 90 days or more Delinquent;
(e) LIBOR for each day during the related Collection Period
together with a calculation of the daily amount of interest due based
on such rate; and
(f) the total amount of principal and interest scheduled to be
received on the Mortgage Loans during the related Collection Period.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., a corporation organized and
existing under Delaware law.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on the Mortgaged Property.
-19-
"Mortgage File": As described in Exhibit E to the Sale and Servicing
Agreement.
"Mortgage Insurance Policies": With respect to any Mortgaged Property
or Mortgage Loan, the insurance policies required pursuant to Section 4.01 of
the Sale and Servicing Agreement.
"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 Base": 94.5% of the least of: (i) the net cash amount
paid for the Eligible Mortgage Loan, (2) the Principal Balance of the Mortgage
Loan or (3) the Market Value for such Mortgage Loan.
"Mortgage Loan Documents": Each Mortgage, each Mortgage Note and each
other agreement, instrument or other document executed by one or more Mortgagors
or other obligors (including the surety agreement in the case of a Mortgage Loan
secured by a Business Purpose Property) that constitutes a portion of the
related security with respect to any Mortgage Loan.
"Mortgage Loan Schedule": The schedule of Mortgage Loans as of the
related Cut-Off Date attached as Schedule I to the related Assignment, 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 Mortgage Loan, pursuant to the terms hereof. The Mortgage Loan
Schedule shall be transmitted either electronically or in hard copy, and shall
set forth the following information with respect to each Mortgage Loan so
pledged:
(i) the Originator's Mortgage Loan identifying number;
(ii) the Mortgagor's name and social security number;
(iii) the street address of the Mortgaged Property, including
the state and zip code;
(iv) a code indicating whether the Mortgaged Property was
represented by the Mortgagor as being owner-occupied on the date of
origination;
(v) the type of Residential Dwelling constituting the
Mortgaged Property; (vi) the months to maturity at origination, based
on the original amortization schedule;
(vii) the loan-to-value ratio at origination;
(viii) the rate of interest in effect on the Transfer Date;
-20-
(ix) the day of the month on which the first monthly payment
was due, and, if different, the day of the month on which monthly
payments are due as of the Transfer Date;
(x) the stated maturity date;
(xi) the amount of the monthly payment due at origination;
(xii) the amount of the monthly payment due on the first due date after
the Transfer Date;
(xiii) the interest paid-through date;
(xiv) the last monthly payment date on which any portion of
the monthly payment was applied to the reduction of principal;
(xv) the original principal amount;
(xvi) the Principal Balance as of the close of business on the
Transfer Date;
(xvii) if the Mortgage Loan is an adjustable-rate loan, the
initial adjustment date thereunder, including the look-back period;
(xviii) if the Mortgage Loan is an adjustable-rate loan, the
gross margin over the applicable interest rate index;
(xix) a code indicating the purpose of the Mortgage Loan, as
indicated by the Mortgagor (i.e., purchase financing, rate/term
refinancing or cash-out refinancing);
(xx) if the Mortgage Loan is an adjustable-rate loan, the
maximum interest rate;
(xxi) if the Mortgage Loan is an adjustable-rate loan, the
minimum interest rate;
(xxii) the interest rate at origination;
(xxiii) if the Mortgage Loan is an adjustable-rate loan, the
periodic rate cap and the maximum adjustment in the interest rate that
may be made on the first adjustment date immediately following the
Transfer Date;
(xxiv) a code indicating the documentation program (i.e., full
documentation, limited documentation or stated income);
(xxv) if the Mortgage Loan is an adjustable-rate loan, the
applicable interest rate index to which the gross margin is added,
including the source of such index;
-21-
(xxvi) if the Mortgage Loan is an adjustable-rate loan, the
first adjustment date thereunder to occur after the Transfer Date;
(xxvii) the risk grade; (xxviii) any risk upgrade;
(xxix) the appraised value of the Mortgaged Property at
origination;
(xxx) if different from the appraised value, the dollar value
of the review appraisal of the Mortgaged Property at origination;
(xxxi) the sale price of the Mortgaged Property, if
applicable;
(xxxii) the product type code (e.g., 3/27, 2/28, balloon,
etc.);
(xxxiii) a code indicating whether the Mortgage Loan is a
first-lien loan or a second-lien loan;
(xxxiv) if the Mortgage Loan is a second-lien loan, the
outstanding principal balance of the first lien on the date of
origination of such Mortgage Loan;
(xxxv) if the Mortgage Loan is a second-lien loan, the
combined loan-to-value ratio of such Mortgage Loan and the first lien
to which it is subject, as of the origination date of such Mortgage
Loan;
(xxxvi) the prepayment penalty code; (xxxvii) the prepayment
penalty term; (xxxviii) the late charge;
(xxxix) the rounding code (next highest or nearest 0.125%);
and (xl) the Mortgagor's FICO score, if any;
(xli) if there is mortgage insurance with respect to the
Mortgage Loan, a code so indicating;
(xlii) the date the Mortgage Loan was originated;
(xliii) if the Mortgage Loan is negatively amortizing, a code
so indicating;
(xliv) if the Mortgage Loan is a Section 32 Loan, a code so
indicating;
(xlv) the Mortgagor's debt to income ratio;
(xlvi) the number of units included in the Mortgaged Property;
-22-
(xlvii) the remaining term of the Mortgage Loan, stated in
months;
(xlviii) the age of the Mortgage Loan, in months;
(xlix) the first monthly payment date under the Mortgage Loan;
(l) if the Mortgage Loan is an adjustable-rate loan, the
frequency at which the interest rate is adjusted;
(li) if the Mortgage Loan is an adjustable-rate loan, the
frequency at which the monthly payment amount is adjusted;
(lii) if the Mortgage Loan is an adjustable-rate loan, the
next reset date to occur after the Transfer Date;
(liii) if the Mortgage Loan is an adjustable-rate loan, the
maximum change that may be made in the interest rate on any adjustment
date; and
(liv) if the Mortgage Loan is a business purpose loan, a code
so indicating.
"Mortgage Loans": The mortgage loans, including the rights to receive
collections of principal and interest, to service such mortgage loans and to
receive prepayment penalties thereunder, and including the related Mortgage Loan
Documents, together with any Qualified Substitute Mortgage Loans substituted
therefor in accordance with the Basic Documents, as from time to time are held
as a part of the Trust. When used in respect of any Payment Date, the term
Mortgage Loans shall mean all Mortgage 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 or were not purchased
or replaced by the Originators, the Depositor or the Sponsor prior to such
related Due Period.
"Mortgage Note": The original executed note or other evidence of any
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgaged Property": The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple interest in one or more parcels of
land.
"Mortgagor": The obligor on a Mortgage Note.
"Multiemployer Plan": With respect to any Person, a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA which is or was at any time
during the current year or the immediately preceding five years contributed to
by the Originators, Depositor, Sponsor or any ERISA Affiliate thereof on behalf
of its employees and which is covered by Title IV of ERISA.
"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. 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.
-23-
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds net of
any related expenses of the Servicer.
"Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 7.02 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 Indenture Trustee no later than the
Business Day following such determination, would not ultimately be recoverable
pursuant to Section 7.02 of the Sale and Servicing Agreement.
"Noteholder" or "Holder": Initially, the Note Purchaser. Upon a
transfer of Secured Notes by the Note Purchaser, each Person in whose name a
Secured Note is registered in the Note Register, except that, solely for the
purposes of giving any consent, waiver, request or demand pursuant to the
Indenture, any Secured Note registered in the name of the Servicer or any
Subservicer, or any Affiliate of any of them, shall be deemed not to be
outstanding and the undivided Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of Notes
necessary to effect any such consent, waiver, request or demand has been
obtained.
"Note Principal Balance": As to any particular Secured Note and date of
determination, an amount equal to the sum of (i) the Sale Amount (disregarding
clause (ii) of the definition thereof) of such Secured Note, minus (ii) all
payments of principal on such Secured Note pursuant to the terms of the
Indenture.
"Note Purchase Agreement": The Purchase Agreement, dated as of October
16, 2003, between the Note Purchaser and the Seller.
"Note Purchaser": JPMorgan Chase Bank, or its Affiliate.
"Note Rate": With respect to each Business Day, the per annum rate
equal to the LIBOR rate for such day plus the Margin; provided, that on any day
on or after the occurrence and during the continuance of an Event of Default,
the rate shall be LIBOR plus 5.00% (or any lesser rate that the Note Purchaser
may require).
"Note Register": As defined in Section 2.06 of the Indenture.
"Note Registrar": As defined in Section 2.06 of the Indenture.
"Notice of Issue": A notice with respect to each sale of Mortgage Loans
and issue of Secured Notes, in the form set forth as Exhibit L to the Sale and
Servicing Agreement, delivered by the Trust to the Note Purchaser, the Indenture
Trustee and the Collateral Agent.
-24-
"Obligations": Shall mean all amounts due and owing by the Trust to the
Note Purchaser in connection with any Basic Document, including: (i) the unpaid
principal and, interest (including interest accruing thereon after the Maturity
Date and after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceedings, relating to the Trust,
whether or not a claim for post-filing or post-petition interest is allowed in
the proceeding) on any Secured Note, when and as due, whether at maturity, by
acceleration or otherwise; and (ii) all other obligations and liabilities of
every nature of the Trust from time to time owing to the Note Purchaser, in each
case whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred (including any monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in the
proceeding).
"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
Certificateholders 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,
the Owner Trustee, 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": With respect to any Secured Note and at any
time, the day on which the Commitment Term is scheduled to end or, if such date
is not a Business Day, then the immediately preceding Business Day.
"Originators": American Business Credit, Inc., American Business
Mortgage Services, Inc., and HomeAmerican Credit, Inc., d/b/a Upland Mortgage.
"Other Mortgage Loan Document" As defined in Section 4.01(a)(iv) of the
Sale and Servicing Agreement.
"Outstanding": As of the date of determination, all Secured Notes
theretofore authenticated and delivered under the Indenture except:
(a) Definitive Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(b) Secured 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 Holders of such Secured
Notes; provided, however, that if such Secured Notes are 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) Secured Notes in exchange for or in lieu of which other
Secured Notes have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Secured Notes are held by a bona fide purchaser
(as defined by the Uniform Commercial Code of the applicable
jurisdiction); and
-25-
(d) Secured 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 Holders of the requisite
percentage of the Note Principal Balance of the Outstanding Secured Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder. Secured Notes owned by the Trust, any other obligor upon the Secured
Notes 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
Secured Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Secured Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes the pledgee's right to act
with respect to such Secured Notes and that the pledgee is not the Trust, any
other obligor upon the Secured Notes or any Affiliate of the Trust, the Servicer
or the Depositor or such other obligor.
"Owner-Occupied Mortgage Property": A Residential Dwelling as to which
(a) the related Mortgagor represented an intent to occupy as such Mortgagors
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.
"Owner Trustee": Wachovia Trust Company, National Association (f/k/a
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 described in Section 8.01 of the Trust
Agreement.
"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 pass-through or other
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, any Secured Notes
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 Date": The 25th day of any month (or if such 25th day is not a
Business Day, the first Business Day immediately following) commencing on
October 25, 2003, or the day on which a Mortgage Loan is sold by the Trust.
-26-
"PBGC": The Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage Interest": With respect to a Secured Note, expressed as a
percentage rounded to four decimal places, equal to a fraction the numerator of
which is the current Note Principal Balance of such Secured Note and the
denominator of which is the current aggregate Note Principal Balance of all
outstanding Secured Notes. 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 required to be made
by the Servicer on any Determination 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 Determination 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, and
(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, for the most recently ended Due
Period over (ii) the net proceeds from the REO Property transferred to
the Collection Account for such Payment Date;
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
"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 the day prior to the Payment Date, 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 the day prior to the
Payment Date) of any U.S. depository institution or trust company,
incorporated under the laws of the United States of 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;
-27-
(d) the VISTA U.S. Government Money Market Fund, the VISTA
Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as
any such fund is rated in the highest rating category by ▇▇▇▇▇'▇ or
S&P;
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 provided 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 (i) be purchased at a price greater
than par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity or (ii) provide any voting right or
substantially equivalent interest in the producer of such investment, whether
directly or indirectly, through conversion or any other manner or method.
"Person": Any individual, corporation, limited liability company,
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.
"Portfolio Composition Criteria": As of any date of determination with
respect to any subcategory of Mortgage Loans, the maximum percentage (as
measured by the Principal Balance as of such date) of the category set forth
opposite such subcategory in the table set forth below that, as of such
determination, have been pledged to the Indenture Trustee on behalf of the Note
Purchaser under the Indenture and not released pursuant to the provisions
thereof, that may be represented by such product category, as set forth below:
------------------------------------------------------------------------------------------------------------
Product Maximum Percentage, Category
------------------------------------------------------------------------------------------------------------
Mortgage Loans with an LTV in excess of 80% 50% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Mortgage Loans with a credit grade of C 15% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Mortgage Loans with a CLTV in excess of 90% 5% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Mortgage Loans Delinquent in payment more than 30 days and 5% of the Outstanding Note Principal Balance
less than 60 days
------------------------------------------------------------------------------------------------------------
Mortgage Loans that are Manufactured Housing Loans with a 3% of the Outstanding Note Principal Balance
Principal Balance up to $150,000
------------------------------------------------------------------------------------------------------------
Jumbo Mortgage Loans 15% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Super Jumbo Mortgage Loans 5% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Jumbo Mortgage Loans and Super Jumbo Mortgage Loans in the 15% of the Outstanding Note Principal Balance
aggregate
------------------------------------------------------------------------------------------------------------
Second Lien Mortgage Loans 10% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Second Lien Mortgage Loans pledged under the Indenture for 0% of the Outstanding Note Principal Balance
60 days or more
------------------------------------------------------------------------------------------------------------
Aged Loans 10% of the Outstanding Note Principal Balance
------------------------------------------------------------------------------------------------------------
Mortgage Loans secured by non Owner-Occupied Mortgage 10% of the Outstanding Note Principal Balance
Property
------------------------------------------------------------------------------------------------------------
-28-
"Predecessor Notes": With respect to any particular Secured Note, every
previous Secured Note evidencing all or a portion of the same debt as that
evidenced by such particular Secured Note; and, for the purpose of this
definition, any Secured Note authenticated and delivered under Section 2.07 of
the Indenture in lieu of a lost, destroyed or stolen Secured Note shall be
deemed to evidence the same debt as the lost, destroyed or stolen Secured Note.
"Preference Amount": Any amounts paid in respect of the Secured Notes
which are recovered from any Holder of a Secured 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.
"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 Monthly Payment.
"Prepayment Interest Shortfall": With respect to any Payment Date, for
each Mortgage Loan that was the subject during the related Due Period of a
Prepayment, an amount equal to the excess, if any, of (a) 30 days' interest on
the Principal Balance of such Mortgage Loan at a per annum rate equal to (i) the
Mortgage Interest Rate (or at such lower rate as may be in effect for such
Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient
Valuation and/or any Debt Service Reduction) minus (ii) the Servicing Fee Rate
over (b) the amount of interest actually remitted by the Mortgagor in connection
with such Prepayment less the Servicing Fee for such Mortgage Loan in such
month.
"Principal Amount Available": The aggregate amount on deposit in the
Collection Account as of the close of business on a Determination Date that has
been designated by the Servicer as "principal collections" with respect to the
prior Due Period as of the related Determination Date, or that constitute the
principal portion of Disposition Proceeds. The Principal Amount Available with
respect to an individual Secured Note is the portion of the amount described
above which relates to the Related Mortgage Loans.
"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 and Deficient Valuations incurred prior to
such date of determination. The Principal Balance of a Mortgage Loan that is not
an Eligible Mortgage Loan or that becomes a Liquidated Mortgage Loan on or prior
to such date of determination shall be zero.
-29-
"Principal Payment Amount": As to each Secured Note with respect to a
Payment Date, the amount actually distributed to the related Noteholder
respecting principal, as contemplated by Section 8.06(d) of the Sale and
Servicing Agreement.
"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.
"PUHC Act": The Public Utility Holding Company Act of 1935, as amended.
"Purchase Agreement": The Purchase Agreement, dated as of October 16,
2003 between the Note Purchaser, the Trust and the Depositor.
"Purchase Price": With respect to any Mortgage Loan, the Sales Price
with respect thereto.
"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 144A 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 2.07(b) 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 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 (g) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01 of
the Sale and Servicing Agreement.
-30-
"Rating Agency": Any of S&P, ▇▇▇▇▇'▇ or Fitch.
"Record Date": The Business Day immediately preceding the related
Payment Date.
"Redemption Date": The Payment Date, if any, on which the Indenture is
terminated and all of the Secured Notes are redeemed pursuant to Article X of
the Indenture, which date may occur on or after the Optional Redemption Date,
but on or before the Final Stated Maturity Date.
"Related Mortgage Loans": With respect to a particular Secured Note,
the Mortgage Loans listed on the Trust Receipt issued concurrently with such
Secured Note.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"Remittance Report": The report required to be made by the Paying Agent
pursuant to Section 3.03(a) and (g) of the Indenture.
"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 Noteholders through foreclosure
or deed-in-lieu of foreclosure.
"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, plus
the amount of any unreimbursed Servicing 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 Determination 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.
-31-
"Repurchased Defaulted Mortgage Loan": A defaulted single-family
Mortgage Loan purchased by the Sponsor from an investor or out of a pool of
Mortgage Loans pursuant to the Sponsor's contractual obligation or election as
seller or servicer to do so.
"Request for Release": A request for release in substantially the form
attached as Exhibit D of the Sale and Servicing Agreement.
"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
Vice President, Senior Trust Officer, Trust Officer, Assistant Trust Officer,
any Assistant Secretary, any trust officer or any other officer of the Indenture
Trustee or the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers 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, 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 Collateral Agent and the Note Purchaser by the Servicer, as such
list may from time to time be amended.
"Restoration Amount": As of any date of determination, the amount, if
any, by which (a) the outstanding principal amount of the Secured Notes
(including accrued interest thereon) as of such day exceeds, (b) the Sale Amount
as of such day.
"Review Procedures": The procedures regarding the Collateral Agent's
review of the Custodial Loan Files attached to the Sale and Servicing Agreement
as Exhibit K.
"S&P": Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies Inc.
"Sale": The meaning specified in Section 5.17 of the Indenture.
"Sale Amount": The principal amount of the Secured Notes to be issued
on a Transfer Date pursuant to the Indenture; provided, that such amount shall
not cause a Collateral Deficiency Event to occur on such Transfer Date.
"Sales Price": For any Transfer Date: (i) with respect to the sale of
the related Mortgage Loans from the Depositor to the Trust the sum of the
Mortgage Loan Base with respect to each Mortgage Loan conveyed on such Transfer
Date; (ii) with respect to the sale of the related Mortgage Loans from the
Originators to the Depositor, the sum of the Market Values with respect to each
Mortgage Loan conveyed on such Transfer Date.
"Sale and Servicing Agreement": The Second Amended and Restated Sale
and Servicing Agreement, dated as of October 16, 2003, among the Trust, the
Servicer, the Originators, the Subservicers, the Sponsor, the Depositor, the
Collateral Agent 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, as the same may be amended from time to time with the
consent of the Majority Noteholder.
-32-
"SEC": The Securities and Exchange Commission, or any successor
thereto.
"Second Lien Mortgage Loan": A Mortgage Loan secured by a second lien
on the related Mortgaged Property.
"Secured Note": Any note designated as a "Secured Note" on the face
thereof, in the form of Exhibit A to the Indenture.
"Securities Act": The Securities Act of 1933, as amended.
"Securitization": The retirement of the Secured Notes issued by the
Trust through the offering of new securities secured or otherwise backed by the
Mortgage Loans through a owner trust, REMIC, FASIT, collateralized mortgage
obligation or other securitization vehicle.
"Securitization Agreement": The agreement or agreements entered into by
the Servicer and certain third parties on the Securitization Date(s) with
respect to any or all of the Mortgage Loans serviced hereunder, in connection
with a Pass-Through Transfer as set forth in Section 13.01 of the Sale and
Servicing Agreement, including, but not limited to, a pooling and servicing
agreement, trust agreement or indenture and/or a subservicing/master servicing
agreement and related custodial/trust agreement and related documents with
respect to a Pass-Through Transfer. Such agreement or agreements shall prescribe
the rights and obligations of the Servicer in servicing the related Mortgage
Loans and shall provide for servicing compensation to the Servicer (calculated
on a weighted average basis for all the related Mortgage Loans as of the
Securitization Date) at least equal to the Servicing Fee due the Servicer in
accordance with this Agreement. The form of relevant Securitization Agreement to
be entered into by the master servicer or trustee and the Servicer with respect
to Pass-Through Transfers shall be reasonably satisfactory in form and substance
to the Note Purchaser and the Servicer (giving due regard to any rating or
master servicing requirements) and the representations and warranties and
servicing provisions contained therein shall be substantially similar to those
contained in this Agreement, unless otherwise mutually agreed by the parties.
"Securityholder": Any Noteholder or Certificateholder.
"Seller": UBS Warburg Real Estate Securities Inc.
"Serviced Loans": All Mortgage Loans serviced or required to be
serviced by the Sponsor and its consolidated Subsidiaries under any Servicing
Agreement, irrespective of whether the actual servicing is done by another
Person (a subservicer) retained by the Sponsor and its consolidated Subsidiaries
for that purpose.
"Servicer": American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.
-33-
"Servicer Call": The optional purchase by the Servicer as contemplated
by Section 7.15 of the Sale and Servicing Agreement.
"Servicer Event of Default": As defined in Section 9.01 of the Sale and
Servicing Agreement.
"Servicer Extension Notice": As defined in Section 9.01(c) of the Sale
and Servicing Agreement.
"Servicer Remittance Amount": With respect to any Determination Date,
an amount equal to the sum of (i) all collections of principal and interest on
the Mortgage Loans (including 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.
"Servicer's Loan File": With respect to each Mortgage Loan, the file
held by the Servicer, consisting of all documents (or electronic images thereof)
relating to such Mortgage Loan, including, without limitation, copies of all of
the Mortgage Loan Documents included in the related Custodial Loan File.
"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 Section 8.06(e)(i) of the Sale and Servicing Agreement.
"Servicing Agreement": With respect to any Person, the arrangement,
whether or not in writing, pursuant to which that Person acts as servicer of
Mortgage Loans, whether owned by that Person or by others.
"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.
"Servicing Fee Rate": 0.50% per annum.
-34-
"Shortfall": The meaning assigned to such term in Section 2.20 of the
Sale and Servicing Agreement.
"Sold Mortgage Loans": The Mortgage Loans sold by the Originators to
the Depositor, sold by the Depositor to the Trust and pledged to the Indenture
Trustee pursuant to the Indenture.
"Sponsor": American Business Financial Services, Inc. a Delaware
corporation.
"Statement Date": December 31, 2002, the date of the Sponsor's and the
Originators'most recent consolidated and consolidating financial statements for
a regular financial reporting period before the Closing Date.
"Statement Date Financial Statements": As defined in Section 3.01(u) of
the Sale and Servicing 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.
"Structure Fee": As set forth in the Fee Letter.
"Structured Securities": Collateralized mortgage obligations and other
mortgage-backed securities.
"Subordinated Debt": Debt of the Sponsor, the Originators, the
Servicer, the Depositor or any of their respective Subsidiaries to any Person
(i) the papers evidencing, securing, governing or otherwise related to which
Debt impose covenants and conditions on the debtor under them that are no more
restrictive or onerous than the covenants and conditions imposed on the Sponsor,
the Originators, the Servicer, the Depositor or any of their respective
Subsidiaries by the Basic Documents, and (ii) that is not secured by the
Sponsor's, the Originators', the Servicer's, the Depositor's or any of their
respective Subsidiaries' property.
"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.
"Subsidiary": Any corporation, association or other business entity
(including a trust) in which any Person (directly or through one or more other
Subsidiaries or other types of intermediaries), owns or controls:
(a) more than fifty percent (50%) of the total voting power or
shares of stock entitled to vote in the election of its directors,
managers or trustees; or
-35-
(b) more than ninety percent (90%) of the total assets and
more than ninety percent (90%) of the total equity through the
ownership of capital stock (which may be non-voting) or a similar
device or indicia of equity ownership.
"Substitution Adjustment": As to any date on which a substitution
occurs pursuant to Sections 2.19 or 4.02 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": The successor servicer appointed by the Majority
Noteholders with the consent of the Note Purchaser, pursuant to Section 9.02 of
the Sale and Servicing Agreement.
"Super Jumbo Mortgage Loan": A Mortgage Loan with an unpaid principal
balance in excess of $500,000 but not greater than $1,500,000.
"Take-out Commitment": A commitment by the Originator to sell one or
more Mortgage Loans to a Disposition Participant and the corresponding
Disposition Participant commitment back to the applicable Originator to
effectuate the foregoing.
"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).
"Total Delinquency Rate": The (x) the total delinquencies (Mortgage
Loans and Leases with at least one payment due for thirty (30) days or more,
excluding REO Properties) in the Sponsor's and its consolidated Subsidiaries'
total (managed and owned) portfolio of Serviced Loans expressed as a percentage
of (y) the aggregate amount of such total portfolio.
"Transfer Date": With respect to each Mortgage Loan, the day such
Mortgage Loan is sold and conveyed to the Depositor by the Originator and to the
Trust by the Depositor, which results in the issuance of a Secured Note in an
original principal amount equal to the related Sale Amount, subject to any
limitations in frequency and minimum amounts as may be imposed by the Indenture.
With respect to any Qualified Substitute Mortgage Loan, the Transfer Date shall
be the day such Mortgage Loan is conveyed to the Trust pursuant to Section 2.07
or 4.02 of the Sale and Servicing Agreement.
"Transfer Period": Shall mean the period commencing on the Closing Date
and ending on the earliest to occur of (i) the last day of the Commitment Term,
(ii) an Amortization Event or (iii) the early termination thereof by the Note
Purchaser pursuant to Section 2.16 of the Sale and Servicing Agreement.
"Trust": ABFS Mortgage Loan Warehouse Trust 2000-2, a Delaware
statutory trust.
-36-
"Trust Agreement": The Third Amended and Restated Trust Agreement,
dated as of October 16, 2003, between the Depositor and the Owner Trustee,
relating to the governance of the Trust, as it may be amended or restated from
time to time.
"Trust Certificate": A certificate evidencing beneficial ownership
interest in the assets of the Trust.
"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
Noteholders, as of any particular time, including, without limitation, all
property and interest, including all proceeds thereof, Granted to the Indenture
Trustee, for the benefit of the Noteholders, pursuant to the Granting Clauses of
the Indenture.
"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, at the direction of the related Majority Certificateholders and
delivered to the Indenture Trustee or the Authenticating Agent, as applicable.
"Trust Receipt": A document substantially in the form of Exhibit B to
the Sale and Servicing Agreement.
"Underwriting Guidelines": Has the meaning set forth in Section 8.09 of
the Sale and Servicing Agreement.
"Unfunded Liabilities": With respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of the Sponsor or any member of the Controlled Group to the PBGC or a Plan under
Title IV of ERISA. With respect to multi-employer Plans, the term "Unfunded
Liabilities" shall also include contingent liability for withdrawal liability
under Section 4201 of ERISA to all multi-employer Plans to which the Sponsor or
any member of a Controlled Group for employees of the Sponsor or the Originators
contributes in the event of complete withdrawal from such plans.
"Uniform Commercial Code": The Uniform Commercial Code as in affect in
the State of New York.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust 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 a
trust if a court within the United States can exercise primary jurisdiction over
its administration and at least one United States fiduciary has the authority to
control all substantial decisions of the trust.
"Whole Loan Sale": A Disposition of Mortgage Loans pursuant to a
whole-loan sale.
-37-