XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
ABFS 2001-1, INC.,
Unaffiliated Seller
and
AMERICAN BUSINESS CREDIT, INC.
HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
AMERICAN BUSINESS MORTGAGE SERVICES, INC.
Originators
---------------------------
UNAFFILIATED SELLER'S AGREEMENT
Dated as of March 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.....................................................................................1
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Agreement to Purchase the Mortgage Loans........................................................4
Section 2.02. [Reserved]......................................................................................4
Section 2.03. Purchase Price..................................................................................4
Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage Files......................................5
Section 2.05. Delivery of Mortgage Loan Documents.............................................................6
Section 2.06. Acceptance of Mortgage Loans....................................................................7
Section 2.07. Transfer of Mortgage Loans; Assignment of Agreement.............................................8
Section 2.08. Examination of Mortgage Files...................................................................8
Section 2.09. Books and Records...............................................................................9
Section 2.10. Cost of Delivery and Recordation of Documents...................................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the Originators............................................9
Section 3.02. Representations and Warranties as to the Unaffiliated Seller...................................11
Section 3.03. Representations and Warranties Relating to the Mortgage Loans..................................13
Section 3.04. Representations and Warranties of the Depositor................................................20
Section 3.05. Repurchase Obligation for Defective Documentation and for Breach of a Representation
or Warranty................................................................................21
Section 3.06. Limited Purpose and Corporate Separateness of Unaffiliated Seller..............................24
ARTICLE IV
THE UNAFFILIATED SELLER
Section 4.01. Covenants of the Originators and the Unaffiliated Seller.......................................25
Section 4.02. Merger or Consolidation........................................................................26
Section 4.03. Costs..........................................................................................26
Section 4.04. Indemnification................................................................................26
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01. Conditions of Depositor's Obligations..........................................................27
Section 5.02. Conditions of Unaffiliated Seller's Obligations................................................29
Section 5.03. Termination of Depositor's Obligations.........................................................29
ARTICLE VI
MISCELLANEOUS
Section 6.01. Notices........................................................................................30
Section 6.02. Severability of Provisions.....................................................................30
Section 6.03. Agreement of Unaffiliated Seller...............................................................30
Section 6.04. Survival.......................................................................................30
Section 6.05. Effect of Headings and Table of Contents.......................................................30
Section 6.06. Successors and Assigns.........................................................................30
Section 6.07. Confirmation of Intent; Grant of Security Interest.............................................30
Section 6.08. Miscellaneous..................................................................................31
Section 6.09. Amendments.....................................................................................31
Section 6.10. Third-Party Beneficiaries......................................................................32
Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...................................32
Section 6.12. Execution in Counterparts......................................................................33
Exhibit A - Mortgage Loan Schedule
THIS UNAFFILIATED SELLER'S AGREEMENT, dated as of March 1, 2001, by
and among XXXXXX XXXXXXX ABS CAPITAL I, INC., a Delaware corporation, its
successors and assigns (the "Depositor"), ABFS 2001-1, INC., a Delaware
corporation and its successors (the "Unaffiliated Seller"), AMERICAN BUSINESS
CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, a Pennsylvania corporation ("Upland") and AMERICAN
BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation ("ABMS", and
together with ABC and Upland, the "Originators").
WHEREAS, Exhibit A attached hereto and made a part hereof lists
certain fixed rate business purpose and consumer purpose first and second lien
mortgage loans (the "Mortgage Loans") owned by the Originators that the
Originators desire to sell to the Unaffiliated Seller and the Unaffiliated
Seller desires to sell to the Depositor and that the Depositor desires to
purchase; and
WHEREAS, it is the intention of the Originators, the Unaffiliated
Seller and the Depositor that simultaneously with the Originators' conveyance
of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's
conveyance of the Mortgage Loans to the Depositor on the Closing Date, (a) the
Depositor shall deposit the Mortgage Loans in a trust pursuant to a Pooling
and Servicing Agreement to be dated as of March 1, 2001 (the "Pooling and
Servicing Agreement"), to be entered into by and among the Depositor, as
depositor, American Business Credit, Inc., as servicer (in such capacity, the
"Servicer") and The Chase Manhattan Bank, as trustee and collateral agent (in
each such capacity, as applicable, the "Trustee" and the "Collateral Agent")
and (b) the Trustee shall issue certificates evidencing beneficial ownership
interests in the property of the trust fund formed by the Pooling and
Servicing Agreement to the Depositor;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the meanings
specified in this Article I:
"Accepted Servicing Practices" means the Servicer's normal servicing
practices, which in general will conform to the mortgage servicing practices
of prudent mortgage lending institutions which service for their own account
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties are located; provided, that such
policies shall at all times conform to the Credit Policy Manual.
"Agreement" means this Unaffiliated Seller's Agreement, as amended or
supplemented in accordance with the provisions hereof.
"Appraised Value" means the appraised value of the Mortgaged Property
based upon the appraisal made by or on behalf of the Originators.
"Certificate Insurer" means MBIA Insurance Corporation, a New York
stock insurance company.
"Closing Date" shall have the meaning ascribed thereto in Section
2.01(c).
"Commission" means the Securities and Exchange Commission.
"Cut-Off Date" means, with respect to the Mortgage Loans, the close
of business on February 28, 2001 or, with respect to Mortgage Loans originated
after February 28, 2001, the date of origination of such Mortgage Loans.
"Cut-Off Date Aggregate Principal Balance" means the aggregate unpaid
principal balance of the Mortgage Loans as of the Cut-Off Date (or, with
respect to Mortgage Loans which were originated after the Cut-Off Date, as of
the date of origination). The Cut-Off Date Aggregate Principal Balance is
$275,000,025.80.
"Cut-Off Date Principal Balance" means as to each Mortgage Loan, its
unpaid principal balance as of the Cut-Off Date (or, with respect to Mortgage
Loans which were originated after the Cut-Off Date, as of the date of
origination).
"Deleted Mortgage Loan" means a Mortgage Loan replaced by or to be
replaced by a Qualified Substitute Mortgage Loan pursuant to the terms of the
Pooling and Servicing Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Monthly Payment" means, as to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment 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).
"Mortgage" means the mortgage or deed of trust creating a first or
second lien on an estate in fee simple in real property, and securing a
Mortgage Note, as amended or modified.
"Mortgage Interest Rate" means, as to any Mortgage Loan, the fixed
per annum rate at which interest accrues on the unpaid principal balance
thereof as set forth in the related Mortgage Note.
"Mortgage Loans" means such of the mortgage loans to be sold,
transferred and assigned to the Depositor on the Closing Date pursuant to
Article II hereof (including the related Mortgage Notes and related
Mortgages), all as identified in the Mortgage Loan Schedule, and including any
mortgage loan substituting or replacing a Mortgage Loan pursuant to the terms
of the Pooling and Servicing Agreement.
"Mortgage Loan Schedule" shall have the meaning ascribed thereto in
Section 2.01(b).
"Mortgage Note" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan, as amended
or modified.
"Mortgaged Property" means the property subject to a Mortgage.
"Mortgagor" means the obligor on a Mortgage Note.
"Pooling and Servicing Agreement" shall have the meaning ascribed
thereto in the recitals hereof.
"Prospectus" means the Prospectus dated March 9, 2001 relating to the
offering by the Depositor from time to time of its Mortgage-Backed
Certificates (Issuable in Series) in the form in which it was or will be filed
with the Securities Exchange Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.
"Prospectus Supplement" means the Prospectus Supplement dated March
9, 2001, relating to the offering of the Certificates in the form in which it
was or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.
"Qualified Appraiser" means an appraiser, duly appointed by the
Unaffiliated Seller, 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.
"Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 333-77215) relating to the offering by
the Depositor from time to time of its Mortgage-Backed Certificates (Issuable
in Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of the
following conditions:
(a) a stop order suspending the effectiveness of the
Registration Statement shall have been issued or a proceeding for
that purpose shall have been initiated or threatened by the
Commission; or
(b) subsequent to the execution and delivery of this
Agreement, a downgrading, or public notification of a possible
change, without indication of direction, shall have occurred in the
rating afforded any of the debt securities or claims paying ability
of any person providing any form of credit enhancement for any of the
Certificates, by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act; or
(c) subsequent to the execution and delivery of this
Agreement, there shall have occurred an adverse change in the
condition, financial or otherwise, earnings, affairs, regulatory
situation or business prospects of the Certificate Insurer or the
Unaffiliated Seller reasonably determined by the Depositor to be
material; or
(d) subsequent to the date of this Agreement there shall
have occurred any of the following: (i) a suspension or material
limitation in trading in securities substantially similar to the
Certificates; (ii) a general moratorium on commercial banking
activities in the State of New York declared by either Federal or New
York State authorities; or (iii) the engagement by the United States
in hostilities, or the escalation of such hostilities, or any
calamity or crisis, if the effect of any such event specified in this
clause (iii) in the judgment of the Depositor makes it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Certificates on the terms and in the manner contemplated in the
Prospectus Supplement.
"Unaffiliated Seller" means ABFS 2001-1, Inc., in its capacity as
Unaffiliated Seller of the Mortgage Loans under this Agreement and any
successor to ABFS 2001-1, Inc., whether through merger, consolidation,
purchase and assumption of ABFS 2001-1, Inc. or all or substantially all of
its assets or otherwise.
Capitalized terms used herein that are not otherwise defined shall
have the respective meanings ascribed thereto in the Pooling and Servicing
Agreement.
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Agreement to Purchase the Mortgage Loans.
(a) Subject to the terms and conditions of this Agreement, the
Originators agree to sell, and the Unaffiliated Seller agrees to purchase on
the Closing Date and immediately subsequent thereto, the Unaffiliated Seller
agrees to sell, and the Depositor agrees to purchase, the Mortgage Loans
having the Cut-Off Date Aggregate Principal Balance or, in accordance with
Section 2.08 hereof, such other balance as is evidenced by the actual Cut-Off
Date Aggregate Principal Balance of the Mortgage Loans accepted by the
Depositor on the Closing Date and listed in the Mortgage Loan Schedule.
(b) Subject to Section 2.08 hereof, the Depositor and the
Unaffiliated Seller have agreed upon which of the Unaffiliated Seller's
Mortgage Loans are to be purchased by the Depositor on the Closing Date
pursuant to this Agreement, and the Unaffiliated Seller has prepared a
schedule describing the Mortgage Loans (the "Mortgage Loan Schedule") setting
forth all of the Mortgage Loans to be purchased under this Agreement, which
schedule is attached hereto as Exhibit A. The Mortgage Loan Schedule shall
conform to the requirements of the Depositor and to the definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement.
(c) The closing for the purchase and sale of the Mortgage Loans shall
take place at the offices of Xxxxx & Xxxx LLP, New York, New York, at 10:00
a.m., New York time, on March 21, 2001 or such other place and time as the
parties shall agree (such time being herein referred to as the "Closing
Date").
Section 2.02. [Reserved].
Section 2.03. Purchase Price.
(a) On the Closing Date, as full consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
99.98442% of the aggregate principal balance as of the Closing Date of the
Class A-1 Certificates and (B) accrued interest on such principal balance at
the rate of 6.28% per annum, on the Class A-1 Certificates from (and
including) March 1, 2001 to (but not including) March 21, 2001, payable by
wire transfer of same day funds.
On the Closing Date, as full consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will
deliver to the Unaffiliated Seller (i) an amount in cash equal to the sum of
(A) 99.98442% of the aggregate principal balance as of the Closing Date of the
Class A-1 Certificates and (B) accrued interest on such principal balance at
the rate of 6.28% per annum, on the Class A-1 Certificates from (and
including) March 1, 2001 to (but not including) March 21, 2001, payable by
wire transfer of same day funds and (ii) the Class X and Class R Certificates
to be issued pursuant to the Pooling and Servicing Agreement.
(b) On the Closing Date, as full consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
13.48996% of the notional amount as of the Closing Date of the Class A-IO
Certificates and (B) accrued interest on such notional amount at the rate of
6.00% per annum, on the Class A-IO Certificates from (and including) March 1,
2001 to (but not including) March 21, 2001, payable by wire transfer of same
day funds.
On the Closing Date, as full consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will
deliver to the Unaffiliated Seller (i) an amount in cash equal to the sum of
(A) 13.48996% of the notional amount as of the Closing Date of the Class A-IO
Certificates and (B) accrued interest on such notional amount at the rate of
6.00% per annum, on the Class A-IO Certificates from (and including) March 1,
2001 to (but not including) March 21, 2001, payable by wire transfer of same
day funds and (ii) the Class X and Class R Certificates to be issued pursuant
to the Pooling and Servicing Agreement.
Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage
Files.
(a) On the Closing Date the Originators shall sell, transfer, assign,
set over and convey to the Unaffiliated Seller, without recourse but subject
to the terms of this Agreement, all right, title and interest in and to the
applicable Mortgage Loans, including all principal outstanding as of, and all
interest due and accruing after, the Cut-Off Date, the Insurance Policies
relating to each such Mortgage Loan and all right, title and interest in and
to the proceeds of such Insurance Policies from and after the Cut-Off Date and
the Unaffiliated Seller shall sell, transfer, assign, set over and convey to
the Depositor, without recourse but subject to the terms of this Agreement,
all right, title and interest in and to the applicable Mortgage Loans,
including all principal outstanding as of, and all interest due after, the
Cut-Off Date, the Insurance Policies relating to each such Mortgage Loan, all
right, title and interest in and to the proceeds of such Insurance Policies
and all of its rights under this Agreement with respect to the Mortgage Loans
from and after the Cut-Off Date. Upon payment of the purchase price for such
Mortgage Loans as provided in Section 2.03 of this Agreement, the Originators
and the Unaffiliated Seller shall have hereby, and shall be deemed to have,
sold, transferred, assigned, set over and conveyed such Mortgage Loans, the
Insurance Policies relating to each such Mortgage Loan, all right, title and
interest in and to the proceeds of such Insurance Policies and all of its
rights under this Agreement with respect to the Mortgage Loans from and after
the Cut-Off Date.
(b) Upon the sale of such Mortgage Loans, the ownership of each
related Mortgage Note, each related Mortgage and the contents of the related
Mortgage File shall immediately vest in the Depositor and the ownership of all
related records and documents with respect to each Mortgage Loan prepared by
or which come into the possession of the Originators or the Unaffiliated
Seller shall immediately vest in the Depositor. The contents of any Mortgage
File in the possession of the Originators or the Unaffiliated Seller at any
time after such sale, and any principal collected and interest due on the
Mortgage Loans after the Cut-Off Date and received by the Originators or the
Unaffiliated Seller, shall be held in trust by the Originators or the
Unaffiliated Seller for the benefit of the Depositor as the owner thereof, and
shall be promptly delivered by the Originators or the Unaffiliated Seller to
or upon the order of the Depositor.
(c) Pursuant to the Pooling and Servicing Agreement, the Depositor
shall, on the Closing Date, assign all of its right, title and interest in and
to the applicable Mortgage Loans, the related insurance policies and any
proceeds whereof and all of its rights under this Agreement to the Trustee for
the benefit of the Certificateholders and the Certificate Insurer.
Section 2.05. Delivery of Mortgage Loan Documents.
(a) On or prior to the Closing Date the related Originator shall
deliver to the Unaffiliated Seller, and the Unaffiliated Seller shall deliver
to the Collateral Agent, on behalf of the Trustee (as assignee of the
Depositor pursuant to the Pooling and Servicing Agreement), each of the
documents described in clauses (i) through (vi) of Section 2.05 of the Pooling
and Servicing Agreement for each applicable Mortgage Loan in accordance with
the provisions of Section 2.05 of the Pooling and Servicing Agreement.
(b) Pursuant to the Pooling and Servicing Agreement, the Unaffiliated
Seller shall be required to promptly submit, or cause to be submitted by the
related Originator, for recording in the appropriate public office for real
property records, each assignment referred to in Section 2.05(a) of the
Pooling and Servicing Agreement. The Collateral Agent, on behalf of the
Trustee, shall be required to retain a copy of each assignment submitted for
recording. In the event that any such assignment is lost or returned
unrecorded because of a defect therein, the Unaffiliated Seller or such
Originator shall promptly prepare a substitute assignment or cure such defect,
as the case may be, and thereafter the Unaffiliated Seller or such Originator
shall be required to submit each such assignment for recording.
(c) The Unaffiliated Seller or the related Originator shall, within
five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Trustee (pursuant to the
Pooling and Servicing Agreement): (i) the original recorded Mortgage and
related power of attorney, if any, in those instances where a copy thereof
certified by the related Originator was delivered to the Collateral Agent, on
behalf of the Trustee (pursuant to the Pooling and Servicing Agreement); (ii)
the original recorded assignment of Mortgage from the related Originator to
the Trustee (pursuant to the Pooling and Servicing Agreement), which, together
with any intervening assignments of Mortgage, evidences a complete chain of
assignment from the originator of the Mortgage Loan to the Trustee in those
instances where copies of such assignments certified by the related Originator
were delivered to the Collateral Agent, on behalf of the Trustee, (pursuant to
Section 2.05 of the Pooling and Servicing Agreement); and (iii) the title
insurance policy or title opinion required in Section 2.05(a)(vi) of the
Pooling and Servicing Agreement.
Notwithstanding anything to the contrary contained in this Section
2.05, in those instances where the public recording office retains the
original Mortgage, power of attorney, if any, assignment or assignment of
Mortgage after it has been recorded or such original has been lost, the
Unaffiliated Seller or the related Originator shall be deemed to have
satisfied its obligations hereunder upon delivery to the Collateral Agent, on
behalf of the Trustee (pursuant to the Pooling and Servicing Agreement), of a
copy of such Mortgage, power of attorney, if any, assignment or assignment of
Mortgage certified by the public recording office to be a true copy of the
recorded original thereof.
From time to time the Unaffiliated Seller or the related Originator
may forward or cause to be forwarded to the Collateral Agent, on behalf of the
Trustee (pursuant to the Pooling and Servicing Agreement), additional original
documents evidencing an assumption or modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that are
not delivered to the Collateral Agent, on behalf of the Trustee (pursuant to
the Pooling and Servicing Agreement), as permitted by Section 2.05 (a) hereof
are and shall be held by the Servicer, the Unaffiliated Seller or the related
Originator in trust for the benefit of the Trustee on behalf of the
Certificateholders and the Certificate Insurer. In the event that any such
original document is required pursuant to the terms of this Section 2.05 to be
a part of a Mortgage File, such document shall be delivered promptly to the
Collateral Agent, on behalf of the Trustee (as assignee of the Depositor
pursuant to the Pooling and Servicing Agreement). From and after the sale of
the Mortgage Loans to the Depositor pursuant hereto, to the extent that the
Unaffiliated Seller or the related Originator retains legal title of record to
any Mortgage Loans prior to the vesting of legal title in the Trustee (as
assignee of the Depositor pursuant to the Pooling and Servicing Agreement),
such title shall be retained in trust for the Depositor as the owner of the
Mortgage Loans and the Trustee, as the Depositor's assignee.
Section 2.06. Acceptance of Mortgage Loans.
(a) To evidence the transfer of the Mortgage Loans and related
Mortgage Files to the Collateral Agent, on behalf of the Trustee, the
Collateral Agent shall deliver the acknowledgement of receipt, the Initial
Certification and the Final Certification required to be delivered pursuant to
Section 2.06(b) of the Pooling and Servicing Agreement.
(b) Pursuant to the Pooling and Servicing Agreement, the Collateral
Agent has agreed to execute and deliver on or prior to the Closing Date, an
acknowledgment of receipt of, for each Mortgage Loan, the original Mortgage
Note with respect to each Mortgage Loan (with any exceptions noted), in the
form attached as Exhibit E to the Pooling and Servicing Agreement and declares
that it will hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund in the Pooling and Servicing Agreement and delivered to the
Collateral Agent, on behalf of the Trustee in trust upon and subject to the
conditions set forth in the Pooling and Servicing Agreement for the benefit of
the Certificateholders and the Certificate Insurer. Pursuant to the Pooling
and Servicing Agreement, the Collateral Agent, on behalf of the Trustee has
agreed, for the benefit of the Certificateholders and the Certificate Insurer,
to review (or cause to be reviewed) each Trustee's Mortgage File within thirty
(30) days after the Closing Date (or, with respect to any Qualified Substitute
Mortgage Loan, within 30 days after the receipt by the Collateral Agent, on
behalf of the Trustee thereof), and to deliver to the Unaffiliated Seller, the
Servicer and the Certificate Insurer a certification in the form attached to
the Pooling and Servicing Agreement as Exhibit H to the effect that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in
such certification as not covered by such certification), (i) all documents
required to be delivered to it pursuant to the Pooling and Servicing Agreement
are in its possession, (ii) each such document has been reviewed by it and has
not been mutilated, damaged, torn or otherwise physically altered (handwritten
additions, changes or corrections shall not constitute physical alteration if
initiated by the Mortgagor), appears regular on its face and relates to such
Mortgage Loan, and (iii) based on its examination and only as to the foregoing
documents, the information set forth on the Mortgage Loan Schedule accurately
reflects the information set forth in the Trustee's Mortgage File delivered on
such date. Pursuant to the Pooling and Servicing Agreement, the Collateral
Agent, on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate
for the represented purpose or that they are other than what they purport to
be on their face. Pursuant to the Pooling and Servicing Agreement, within
ninety (90) days of the Closing Date, with respect to the Mortgage Loans, the
Collateral Agent, on behalf of the Trustee, shall be required to deliver (or
cause to be delivered) to the Servicer, the Unaffiliated Seller and the
Certificate Insurer a final certification in the form attached to the Pooling
and Servicing Agreement as Exhibit I to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in full or any Mortgage Loan specifically identified in such certification as
not covered by such certification), (i) all documents required to be delivered
to it pursuant to the Pooling and Servicing Agreement are in its possession,
(ii) each such document has been reviewed by it and has not been mutilated,
damaged, torn or otherwise physically altered (handwritten additions, changes
or corrections shall not constitute physical alteration if initialed by the
Mortgagor), appears regular on its face and relates to such Mortgage Loan, and
(iii) based on its examination and only as to the foregoing documents, the
information set forth on the Mortgage Loan Schedule accurately reflects the
information set forth in the Trustee's Mortgage File delivered on such date.
(c) The Pooling and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Trustee's Mortgage Files
finds any document constituting a part of a Trustee's Mortgage File which is
not executed, has not been received, is unrelated to the Mortgage Loan
identified in the Mortgage Loan Schedule, or does not conform to the
requirements of Section 2.05 or the description thereof as set forth in the
Mortgage Loan Schedule, the Collateral Agent shall promptly so notify the
Servicer, the Trustee, the Unaffiliated Seller, the related Originator and the
Certificate Insurer. The Unaffiliated Seller agrees that in performing any
such review, the Collateral Agent may conclusively rely on the Unaffiliated
Seller as to the purported genuineness of any such document and any signature
thereon. Each of the Originators and the Unaffiliated Seller agrees to use
reasonable efforts to remedy a material defect in a document constituting part
of a Mortgage File of which it is notified. If, however, within sixty (60)
days after such notice neither the Unaffiliated Seller nor any Originator has
remedied the defect and the defect materially and adversely affects the
interest of the Certificateholders in the related Mortgage Loan or the
interests of the Certificate Insurer, then the Unaffiliated Seller and the
Originators shall be obligated to either substitute in lieu of such Mortgage
Loan a Qualified Substitute Mortgage Loan or purchase such Mortgage Loan in
the manner and subject to the conditions set forth in Section 3.05 hereof.
(d) The failure of the Collateral Agent, the Trustee or the
Certificate Insurer to give any notice contemplated herein within the time
periods specified above shall not affect or relieve the Unaffiliated Seller's
or the Originators' obligation to repurchase for any Mortgage Loan pursuant to
this Section 2.06 or Section 3.05 of this Agreement.
Section 2.07. Transfer of Mortgage Loans; Assignment of Agreement.
The Originators and the Unaffiliated Seller each hereby acknowledges and
agrees that the Depositor may assign its interest under this Agreement to the
Trustee as may be required to effect the purposes of the Pooling and Servicing
Agreement, without further notice to, or consent of, the Unaffiliated Seller
or the Originators, and the Trustee shall succeed to such of the rights and
obligations of the Depositor hereunder as shall be so assigned. The Depositor
shall, pursuant to the Pooling and Servicing Agreement, assign all of its
right, title and interest in and to the Mortgage Loans and its right to
exercise the remedies created by this Agreement, including, without
limitation, its rights to exercise remedies created by Sections 2.06 and 3.05
hereof for breaches of the representations, warranties, agreements and
covenants of the Unaffiliated Seller or the Originators contained in Sections
2.05, 2.06, 3.01, 3.02 and 3.03 hereof to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer. Each of the Originators and
the Unaffiliated Seller agrees that, upon such assignment to the Trustee, such
representations, warranties, agreements and covenants will run to and be for
the benefit of the Trustee and the Trustee may enforce, without joinder of the
Depositor, the repurchase obligations of the Unaffiliated Seller and the
Originators set forth herein with respect to breaches of such representations,
warranties, agreements and covenants.
Section 2.08. Examination of Mortgage Files. Prior to the Closing
Date, the Unaffiliated Seller shall make the Mortgage Files available to the
Depositor or its designee for examination at the Unaffiliated Seller's offices
or at such other place as the Unaffiliated Seller shall reasonably specify.
Such examination may be made by the Depositor or its designee at any time on
or before the Closing Date. If the Depositor or its designee makes such
examination prior to the Closing Date and identifies any Mortgage Loans that
do not conform to the requirements of the Depositor as described in this
Agreement, such Mortgage Loans shall be deleted from the Mortgage Loan
Schedule and may be replaced, prior to the Closing Date, by substitute
Mortgage Loans acceptable to the Depositor. The Depositor may, at its option
and without notice to the Unaffiliated Seller, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The
fact that the Depositor, the Collateral Agent or the Trustee has conducted or
has failed to conduct any partial or complete examination of the Mortgage
Files shall not affect the rights of the Depositor or the Trustee to demand
repurchase or other relief as provided in this Agreement.
Section 2.09. Books and Records. The sale of each Mortgage Loan shall
be reflected on each of the Originators' and the Unaffiliated Seller's
accounting and other records, balance sheet and other financial statements as
a sale of assets by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be
clearly marked to reflect the ownership of each Mortgage Loan by the Trustee
for the benefit of the Certificateholders and the Certificate Insurer.
Section 2.10. Cost of Delivery and Recordation of Documents. The
costs relating to the delivery and recordation of the documents specified in
this Article II in connection with the Mortgage Loans shall be borne by the
Unaffiliated Seller or the Originators.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the Originators.
Each of the Originators hereby represents and warrants to the Unaffiliated
Seller and the Depositor, as of the Closing Date, that:
(a) The Originator is a corporation duly organized, validly existing
and in good standing under the laws of (i) the State of Pennsylvania (with
respect to ABC and Upland) or (ii) with respect to ABMS, the State of New
Jersey and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state where
a Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Originator and to perform its obligations as the Originator hereunder, and in
any event the Originator is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage
Loan; the Originator has the full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Originator or the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences the valid, binding
and enforceable obligation of the Originator; and all requisite corporate
action has been taken by the Originator to make this Agreement valid and
binding upon the Originator in accordance with its terms;
(b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the sale of the Mortgage Loans pursuant to the terms of this
Agreement or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the
Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Originator or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, has or will conflict with or
result in a breach of any of the terms, conditions or provisions of the
Originator's charter or by-laws or any legal restriction or any agreement or
instrument to which the Originator is now a party or by which it is bound or
to which its property is subject, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Originator or
its property is subject, or impair the ability of the Trustee (or the Servicer
as the agent of the Trustee) to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in the
Prospectus Supplement (other than information under the caption "Plan of
Distribution") nor any statement, report or other document prepared by the
Originator and furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement or alleged untrue statement of any material fact or omits to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation pending or,
to the knowledge of the Originator, threatened before a court, administrative
agency or government tribunal against the Originator which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the
Originator, or in any material impairment of the right or ability of the
Originator to carry on its business substantially as now conducted, or in any
material liability on the part of the Originator, or which would draw into
question the validity of this Agreement, the Mortgage Loans, or of any action
taken or to be taken in connection with the obligations of the Originator
contemplated herein, or which would impair materially the ability of the
Originator to perform under the terms of this Agreement or that will prohibit
its entering into this Agreement or the consummation of any of the
transactions contemplated hereby;
(f) The Originator is not in violation of or in default with respect
to, and the execution and delivery of this Agreement by the Originator and its
performance of and compliance with the terms hereof will not constitute a
violation or default with respect to, any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Originator or its properties or might have consequences that
would materially and adversely affect its performance hereunder or under any
subservicing agreement;
(g) Upon the receipt of each Trustee's Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee) will
have good title on behalf of the Trust Fund to each related Mortgage Loan and
such other items comprising the corpus of the Trust Fund free and clear of any
lien created by the Originator (other than liens which will be simultaneously
released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator pursuant to this Agreement are not subject to the bulk transfer
or any similar statutory provisions in effect in any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the Originator,
the Originator acquired title to the Mortgage Loan in good faith, without
notice of any adverse claim;
(j) The Originator does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement. The Originator is solvent and the sale of the Mortgage Loans
by the Originator pursuant to the terms of this Agreement will not cause the
Originator to become insolvent. The sale of the Mortgage Loans by the
Originator pursuant to the terms of this Agreement was not undertaken with the
intent to hinder, delay or defraud any of the Originator's creditors;
(k) The Mortgage Loans are not intentionally selected in a manner so
as to affect adversely the interests of the Depositor or of any transferee of
the Depositor (including the Trustee);
(l) The Originator has determined that it will treat the disposition
of the Mortgage Loans pursuant to this Agreement as a sale for accounting and
tax purposes;
(m) The Originator has not dealt with any broker or agent or anyone
else that may be entitled to any commission or compensation in connection with
the sale of the Mortgage Loans to the Depositor other than to the Depositor or
an affiliate thereof; and
(n) The consideration received by the Originator upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans.
Section 3.02. Representations and Warranties as to the Unaffiliated
Seller. The Unaffiliated Seller hereby represents and warrants to the
Depositor, as of the Closing Date, that:
(a) The Unaffiliated Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Unaffiliated Seller and to perform its obligations as the Unaffiliated Seller
hereunder, and in any event the Unaffiliated Seller is in compliance with the
laws of any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan; the Unaffiliated Seller has the full power and
authority, corporate and otherwise, to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Unaffiliated Seller and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Unaffiliated Seller; and all requisite corporate action has been taken by the
Unaffiliated Seller to make this Agreement valid and binding upon the
Unaffiliated Seller in accordance with its terms;
(b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Unaffiliated Seller of or compliance by the Unaffiliated
Seller with this Agreement or the sale of the Mortgage Loans pursuant to the
terms of this Agreement or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior to
the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Unaffiliated Seller
nor the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, has or will conflict with or
result in a breach of any of the terms, conditions or provisions of the
Unaffiliated Seller's charter or by-laws or any legal restriction or any
agreement or instrument to which the Unaffiliated Seller is now a party or by
which it is bound or to which its property is subject, or constitute a default
or result in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Unaffiliated Seller or its property is subject, or impair the ability of the
Trustee (or the Servicer as the agent of the Trustee) to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in the
Prospectus Supplement (other than information under the caption "Plan of
Distribution") nor any statement, report or other document prepared by the
Unaffiliated Seller and furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement or alleged untrue statement of any material fact or omits
to state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading;
(e) There is no action, suit, proceeding or investigation pending
nor, to the knowledge of the Unaffiliated Seller, threatened before a court,
administrative agency or government tribunal against the Unaffiliated Seller
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Unaffiliated Seller, or in any material impairment
of the right or ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or in any material liability on the part of
the Unaffiliated Seller, or which would draw into question the validity of
this Agreement, the Mortgage Loans, or of any action taken or to be taken in
connection with the obligations of the Unaffiliated Seller contemplated
herein, or which would impair materially the ability of the Unaffiliated
Seller to perform under the terms of this Agreement or that will prohibit its
entering into this Agreement or the consummation of any of the transactions
contemplated hereby or under any subservicing agreements;
(f) The Unaffiliated Seller is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the
Unaffiliated Seller and its performance of and compliance with the terms
hereof will not constitute a violation or default with respect to, any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which violation or default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Unaffiliated Seller or its
properties or might have consequences that would materially and adversely
affect its performance hereunder or under any Subservicing Agreement;
(g) Upon the receipt of each Trustee's Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee) will
have good title on behalf of the Trust Fund to each related Mortgage Loan and
such other items comprising the corpus of the Trust Fund free and clear of any
lien created by the Unaffiliated Seller (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Unaffiliated Seller,
and the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Unaffiliated Seller pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the Unaffiliated
Seller, the Unaffiliated Seller acquired title to the Mortgage Loan in good
faith, without notice of any adverse claim;
(j) The Unaffiliated Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Unaffiliated Seller is solvent and the sale
of the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this
Agreement will not cause the Unaffiliated Seller to become insolvent. The sale
of the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this
Agreement was not undertaken with the intent to hinder, delay or defraud any
of the Unaffiliated Seller's creditors;
(k) The Mortgage Loans are not intentionally selected in a manner so
as to affect adversely the interests of the Depositor or of any transferee of
the Depositor (including the Trustee);
(l) The Unaffiliated Seller has determined that it will treat the
disposition of the Mortgage Loans pursuant to this Agreement as a sale for
accounting and tax purposes;
(m) The Unaffiliated Seller has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans to the Depositor other than to
the Depositor or an affiliate thereof; and
(n) The consideration received by the Unaffiliated Seller upon the
sale of the Mortgage Loans under this Agreement constitutes fair consideration
and reasonably equivalent value for the Mortgage Loans.
Section 3.03. Representations and Warranties Relating to the Mortgage
Loans. The Originators represent and warrant to the Unaffiliated Seller and
the Unaffiliated Seller represents to the Depositor that, as of the Closing
Date, as to each Mortgage Loan, immediately prior to the sale and transfer of
such Mortgage Loan by the Unaffiliated Seller to the Depositor:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct;
(b) [Reserved]
(c) Each Mortgage is a valid first or second lien on a fee simple (or
its equivalent under applicable state law) estate in the real property
securing the amount owed by the Mortgagor under the Mortgage Note subject only
to (i) the lien of current real property taxes and assessments which are not
delinquent, (ii) with respect to any Mortgage Loan identified on the Mortgage
Loan Schedule as secured by a second lien, the related first mortgage loan,
(iii) covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such Mortgage,
such exceptions appearing of record being acceptable to mortgage lending
institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained in
connection with the origination of the related Mortgage Loan obtained by the
Unaffiliated Seller and (iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by such Mortgage;
(d) Immediately prior to the transfer and assignment by the related
Originator to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor, the Unaffiliated Seller or such Originator, as applicable, had good
title to, and was the sole owner of each Mortgage Loan, free of any interest
of any other Person, and the Unaffiliated Seller or such Originator has
transferred all right, title and interest in each Mortgage Loan to the
Depositor or the Unaffiliated Seller, as applicable;
(e) As of the Cut-Off Date, no payment of principal or interest on or
in respect of any Mortgage Loan remains unpaid for thirty (30) or more days
past the date the same was due in accordance with the related Mortgage Note
without regard to applicable grace periods;
(f) As of the Cut-Off Date, no Mortgage Loan has a Mortgage Interest
Rate less than 8.750% per annum and the weighted average Mortgage Interest
Rate of the Mortgage Loans is 11.958%;
(g) At origination, no Mortgage Loan had an original term to maturity
of greater than 360 months;
(h) As of the Cut-Off Date, the weighted average remaining term to
maturity of the Mortgage Loans is 251 months;
(i) To the best knowledge of the Unaffiliated Seller and each of the
Originators, there is no mechanics' lien or claim for work, labor or material
(and no rights are outstanding that under law could give rise to such lien)
affecting the premises subject to any Mortgage which is or may be a lien prior
to, or equal or coordinate with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in (ff) below;
(j) To the best knowledge of the Unaffiliated Seller and each of the
Originators, there is no delinquent tax or assessment lien against any
Mortgaged Property;
(k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
including, without limitation, the obligation of the Mortgagor to pay the
unpaid principal of and interest on the Mortgage Note, are each not subject to
any right of rescission (or any such rescission right has expired in
accordance with applicable law), set-off, counterclaim, or defense, including
the defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder, render
either the Mortgage Note or the Mortgage unenforceable, in whole or in part,
or subject to any right of rescission, set-off, counterclaim, or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim, or defense has been asserted with respect thereto;
(l) To the best knowledge of the Unaffiliated Seller and each of the
Originators, the Mortgaged Property is free of material damage and is in good
repair, and there is no pending or threatened proceeding for the total or
partial condemnation of the Mortgaged Property;
(m) Neither the Originators nor the Unaffiliated Seller has received
a notice of default of any first mortgage loan secured by the Mortgaged
Property which has not been cured by a party other than the Unaffiliated
Seller;
(n) Each Mortgage Note and Mortgage are in substantially the forms
previously provided to the Trustee on behalf of the Unaffiliated Seller;
(o) One Mortgage Loan had, at the date of origination, a Combined
Loan-to-Value Ratio in excess of 100%, and the weighted average Combined
Loan-to-Value ratio of all Mortgage Loans as of the Cut-Off Date is
approximately 75.84%;
(p) The Mortgage Loan was not originated in a program in which the
amount of documentation in the underwriting process was limited in comparison
to the originator's normal documentation requirements;
(q) No more than the following percentages of the Mortgage Loans by
Principal Balance as of the Cut-Off Date are secured by Mortgaged Properties
located in the following states:
-------------------------------------------------------------
Percent of
State Principal Balance
---------------------------- --------------------------
New York 26.89%
New Jersey 12.54
Pennsylvania 8.58
Florida 6.88
Ohio 6.15
Illinois 3.94
Massachusetts 5.79
Michigan 3.52
Georgia 3.26
North Carolina 2.94
Virginia 2.39
Maryland 2.31
Indiana 2.20
Tennessee 1.94
Missouri 1.57
Connecticut 1.34
Kentucky 1.28
South Carolina 1.10
Delaware 0.78
Minnesota 0.75
Other 3.89
Total -------------------------
100%
=========================
(r) The Mortgage Loans were not selected by the Unaffiliated Seller
or the Originators for sale hereunder or inclusion in the Trust Fund on any
basis adverse to the Trust Fund relative to the portfolio of similar mortgage
loans of the Unaffiliated Seller or the Originators;
(s) No more than 10% by Aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date constitutes a lien on leasehold interests;
(t) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of the
security including (A) in the case of a Mortgage designated as a deed of
trust, by trustee's sale and (B) otherwise by judicial foreclosure. To the
best of the Unaffiliated Seller's and the Originators' knowledge, there is no
homestead or other exemption available to the related Mortgagor which would
materially interfere with the right to sell the related Mortgaged Property at
a trustee's sale or the right to foreclose the related Mortgage. The Mortgage
contains customary and enforceable provisions for the acceleration of the
payment of the Principal Balance of such Mortgage Loan in the event all or any
part of the related Mortgaged Property is sold or otherwise transferred
without the prior written consent of the holder thereof;
(u) The proceeds of such Mortgage Loan have been fully disbursed,
including reserves set aside by the Unaffiliated Seller or the Originators,
there is no requirement for, and neither the Unaffiliated Seller nor the
Originators shall make any, future advances thereunder. Any future advances
made prior to the Cut-Off Date have been consolidated with the principal
balance secured by the Mortgage, ___ and such principal balance, as
consolidated, bears a single interest rate and single repayment term reflected
on the Mortgage Loan Schedule. The Principal Balance as of the Cut-Off Date
does not exceed the original principal amount of such Mortgage Loan. Except
with respect to no more than $150,000 of escrow funds, any and all
requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees, and expenses incurred in making, or recording such Mortgage Loan
have been paid;
(v) All Mortgage Loans were originated in compliance with the
Originators' Underwriting Guidelines;
(w) The terms of the Mortgage and the Mortgage Note have not been
impaired, waived, altered, or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest of
the Trustee and which has been delivered to the Collateral Agent, on behalf of
the Trustee. The substance of any such alteration or modification will be
reflected on the Mortgage Loan Schedule and, to the extent necessary, has been
or will be approved by (i) the insurer under the applicable mortgage title
insurance policy, and (ii) the insurer under any other insurance policy
required hereunder for such Mortgage Loan where such insurance policy requires
approval and the failure to procure approval would impair coverage under such
policy;
(x) No instrument of release, waiver, alteration, or modification has
been executed in connection with such Mortgage Loan, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement which has been approved by the insurer under any insurance policy
required hereunder for such Mortgage Loan where such policy requires approval
and the failure to procure approval would impair coverage under such policy,
and which is part of the Mortgage File and has been delivered to the
Collateral Agent, on behalf of the Trustee, and the terms of which are
reflected in the Mortgage Loan Schedule;
(y) Other than delinquencies described in clause (e) above, there is
no default, breach, violation, or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute
such a default, breach, violation or event of acceleration, and neither the
Originators nor the Unaffiliated Seller has waived any such default, breach,
violation or event of acceleration. All taxes, governmental assessments
(including assessments payable in future installments), insurance premiums,
water, sewer, and municipal charges, leaseholder payments, or ground rents
which previously became due and owing in respect of or affecting the related
Mortgaged Property have been paid. Neither the Originators nor the
Unaffiliated Seller has advanced funds, or induced, solicited, or knowingly
received any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage or the
Mortgage Note;
(z) All of the improvements which were included for the purposes of
determining the Appraised Value of the Mortgaged Property were completed at
the time that such Mortgage Loan was originated and lie wholly within the
boundaries and building restriction lines of such Mortgaged Property. Except
for de minimis encroachments, no improvements on adjoining properties encroach
upon the Mortgaged Property. To the best of the Unaffiliated Seller's and the
Originators' knowledge, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation.
All inspections, licenses, and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property (including all such
improvements which were included for the purpose of determining such Appraised
Value) and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy and fire underwriters certificates,
have been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law;
(aa) To the best of the Unaffiliated Seller's and the Originators'
knowledge, there do not exist any circumstances or conditions with respect to
the Mortgage, the Mortgaged Property, the Mortgagor, or the Mortgagor's credit
standing that can be reasonably expected to cause such Mortgage Loan to become
delinquent or adversely affect the value or marketability of such Mortgage
Loan, other than any such circumstances or conditions permitted under the
Originator's Underwriting Guidelines;
(bb) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (i) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located and (ii) (A) organized under the laws of
such state, (B) qualified to do business in such state, (C) federal savings
and loan associations or national banks having principal offices in such
state, (D) not doing business in such state, or (E) not required to qualify to
do business in such state;
(cc) The Mortgage Note and the Mortgage are genuine, and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and except that the
equitable remedy of specific performance and other equitable remedies are
subject to the discretion of the courts. All parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage
and convey the estate therein purported to be conveyed, and the Mortgage Note
and the Mortgage have been duly and properly executed by such parties or
pursuant to a valid power-of-attorney that has been recorded with the
Mortgage;
(dd) The transfer of the Mortgage Note and the Mortgage as and in the
manner contemplated by this Agreement is sufficient either (i) fully to
transfer to the Depositor all right, title, and interest of the Unaffiliated
Seller and the Originators thereto as note holder and mortgagee or (ii) to
grant to the Depositor the security interest referred to in Section 6.07
hereof. The Mortgage has been duly assigned and the Mortgage Note has been
duly endorsed. The assignment of Mortgage delivered to the Collateral Agent,
on behalf of the Trustee pursuant to Section 2.05(a)(iv) of the Pooling and
Servicing Agreement is in recordable form and is acceptable for recording
under the laws of the applicable jurisdiction. The endorsement of the Mortgage
Note, the delivery to the Collateral Agent, on behalf of the Trustee of the
endorsed Mortgage Note, and such assignment of Mortgage, and the delivery of
such assignment of Mortgage for recording to, and the due recording of such
assignment of Mortgage in, the appropriate public recording office in the
jurisdiction in which the Mortgaged Property is located are sufficient to
permit the Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Unaffiliated Seller and the Originators, and are sufficient to prevent any
other sale, transfer, assignment, pledge, or hypothecation of the Mortgage
Note and Mortgage by the Unaffiliated Seller or the Originators from being
enforceable;
(ee) Any and all requirements of any federal, state, or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, or
disclosure laws applicable to such Mortgage Loan have been complied with, and
the Servicer shall maintain in its possession, available for the Trustee's
inspection, and shall deliver to the Trustee or its designee upon demand,
evidence of compliance with all such requirements. The consummation of the
transactions contemplated by this Agreement will not cause the violation of
any such laws;
(ff) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy or such other generally used and acceptable form of policy,
issued by and the valid and binding obligation of a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located,
insuring the Unaffiliated Seller, and its successors and assigns, as to the
first or second priority lien, as applicable, of the Mortgage in the original
principal amount of such Mortgage Loan. The assignment to the Trustee of the
Unaffiliated Seller's interest in such mortgage title insurance policy does
not require the consent of or notification to the insurer. Such mortgage title
insurance policy is in full force and effect and will be in full force and
effect and inure to the benefit of the Trustee upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under
such mortgage title insurance policy and none of the Unaffiliated Seller, the
Originators nor any prior holder of the Mortgage has done, by act or omission,
anything which would impair the coverage of such mortgage title insurance
policy;
(gg) All improvements upon the Mortgaged Property are insured against
loss by fire, hazards of extended coverage, and such other hazards as are
customary in the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of Section 3.05 hereof. If
the Mortgaged Property at origination was located in an area identified on a
flood hazard boundary map or flood insurance rate map issued by the Federal
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available), such Mortgaged Property was covered by
flood insurance at origination. Each individual insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and will
be in full force and effect and inure to the benefit of the Trustee upon the
consummation of the transactions contemplated by this Agreement, and contain a
standard mortgage clause naming the originator of such Mortgage Loan, and its
successors and assigns, as mortgagee and loss payee. All premiums thereon have
been paid. The Mortgage obligates the Mortgagor to maintain all such insurance
at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor, and none of the Unaffiliated Seller, the related
Originator or any prior holder of the Mortgage has acted or failed to act so
as to impair the coverage of any such insurance policy or the validity,
binding effect, and enforceability thereof;
(hh) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly designated
and currently so serves and is named in such Mortgage, as no fees or expenses
are or will become payable by the Trustee or the Certificateholders to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(ii) The Mortgaged Property consists of one or more parcels of real
property separately assessed for tax purposes. To the extent there is erected
thereon a detached or an attached one-family residence or a detached
two-to-six-family dwelling, or an individual condominium unit in a low-rise
condominium, or an individual unit in a planned unit development, or a
commercial property, a manufactured dwelling, or a mixed use or multiple
purpose property, such residence, dwelling or unit is not (i) a unit in a
cooperative apartment, (ii) a property constituting part of a syndication,
(iii) a time share unit, (iv) a property held in trust, (v) a mobile home,
(vi) a log-constructed home, or (vii) a recreational vehicle;
(jj) There exist no material deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made or which the Unaffiliated Seller or
the related Originator expects not to be cured, and no escrow deposits or
payments of other charges or payments due the Unaffiliated Seller have been
capitalized under the Mortgage or the Mortgage Note;
(kk) Such Mortgage Loan was not originated at a below market interest
rate. Such Mortgage Loan does not have a shared appreciation feature, or other
contingent interest feature;
(ll) The origination and collection practices used by the
Unaffiliated Seller, the Originators or the Servicer with respect to such
Mortgage Loan have been in all respects legal, proper, prudent, and customary
in the mortgage origination and servicing business;
(mm) The Mortgagor has, to the extent required by applicable law,
executed a statement to the effect that the Mortgagor has received all
disclosure materials, if any, required by applicable law with respect to the
making of fixed-rate mortgage loans. The Servicer shall maintain or cause to
be maintained such statement in the Mortgage File;
(nn) All amounts received by the Unaffiliated Seller or the
Originators with respect to such Mortgage Loan after the Cut-Off Date and
required to be deposited in the Certificate Account have been so deposited in
the Certificate Account and are, as of the Closing Date, in the Certificate
Account;
(oo) The appraisal report with respect to the Mortgaged Property
contained in the Mortgage File was signed prior to the approval of the
application for such Mortgage Loan by a qualified appraiser, duly appointed by
the originator of such Mortgage Loan, 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 such
application;
(pp) When measured by the Cut-Off Date Balances of all Mortgage Loans
as of the Cut-Off Date, the Mortgagors with respect to at least 88.84% of the
Mortgage Loans represented at the time of origination that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence;
(qq) Each of the Originators and the Unaffiliated Seller has no
knowledge with respect to the Mortgaged Property of any governmental or
regulatory action or third party claim made, instituted or threatened in
writing relating to a violation of any applicable federal, state or local
environmental law, statute, ordinance, regulation, order, decree or standard;
(rr) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code;
(ss) With respect to second lien Mortgage Loans:
(i) neither the Unaffiliated Seller nor the Originators have
any knowledge that the Mortgagor has received notice from the holder
of the prior mortgage that such prior mortgage is in default,
(ii) no consent from the holder of the prior mortgage is
needed for the creation of the second lien Mortgage or, if required,
has been obtained and is in the related Mortgage File,
(iii) if the prior mortgage has a negative amortization, the
Combined Loan-to-Value Ratio was determined using the maximum loan
amount of such prior mortgage,
(iv) the related first mortgage loan encumbering the related
Mortgaged Property does not have a mandatory future advance
provision, and
(v) the Mortgage Loans conform in all material respects to
the description thereof in the Prospectus Supplement.
(tt) [Reserved]
(uu) To the best of the Unaffiliated Seller's and the Originators'
knowledge, no error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of any
person, including without limitation the Mortgagor, any appraiser, any builder
or developer, or any other party involved in the origination of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage Loan;
(vv) Each Mortgaged Property is in compliance with all environmental
laws, ordinances, rules, regulations and orders of federal, state or
governmental authorities relating thereto. No hazardous material has been or
is incorporated in, stored on or under (other than properly stored materials
used for reasonable residential purposes), released from, treated on,
transported to or from, or disposed of on or from, any Mortgaged Property such
that, under applicable law (A) any such hazardous material would be required
to be eliminated before the Mortgaged Property could be altered, renovated,
demolished or transferred, or (B) the owner of the Mortgaged Property, or the
holder of a security interest therein, could be subjected to liability for the
removal of such hazardous material or the elimination of the hazard created
thereby. Neither the Unaffiliated Seller nor any Mortgagor has received
notification from any federal, state or other governmental authority relating
to any hazardous materials on or affecting the Mortgaged Property or to any
potential or known liability under any environmental law arising from the
ownership or operation of the Mortgaged Property. For the purposes of this
subsection, the term "hazardous materials" shall include, without limitation,
gasoline, petroleum products, explosives, radioactive materials,
polychlorinated biphenyls or related or similar materials, asbestos or any
material containing asbestos, lead, lead-based paint and any other substance
or material as may be defined as a hazardous or toxic substance by any
federal, state or local environmental law, ordinance, rule, regulation or
order, including, without limitation, CERCLA, the Clean Air Act, the Clean
Water Act, the Resource Conservation and Recovery Act, the Toxic Substances
Control Act and any regulations promulgated pursuant thereto;
(ww) With respect to any business purpose loan, the related Mortgage
Note contains an acceleration clause, accelerating the maturity date under the
Mortgage Note to the date the individual guarantying such loan, if any,
becomes subject to any bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting the enforcement of creditors' rights generally;
and
(xx) To the best of the Unaffiliated Seller's knowledge, none of the
Mortgage Loans are Section 32 loans subject to the Home Ownership and Equity
Protection Act.
Section 3.04. Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Unaffiliated
Seller, as of the date of execution of this Agreement and the Closing Date,
that:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to purchase
each Mortgage Loan and to execute, deliver and perform, and to enter into and
consummate all the transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, and, assuming the due authorization, execution and
delivery hereof by the Unaffiliated Seller and the Originators, constitutes
the legal, valid and binding agreement of the Depositor, enforceable against
the Depositor in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except such as have been made on or prior to
the Closing Date;
(e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with Rule 424(b) under
the Securities Act; and
(f) None of the execution and delivery of this Agreement, the
purchase of the Mortgage Loans from the Unaffiliated Seller, the consummation
of the other transactions contemplated hereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement, (i) conflicts or
will conflict with the charter or bylaws of the Depositor or conflicts or will
conflict with or results or will result in a breach of, or constitutes or will
constitute a default or results or will result in an acceleration under, any
term, condition or provision of any indenture, deed of trust, contract or
other agreement or other instrument to which the Depositor is a party or by
which it is bound and which is material to the Depositor, or (ii) results or
will result in a violation of any law, rule, regulation, order, judgment or
decree of any court or governmental authority having jurisdiction over the
Depositor.
Section 3.05. Repurchase Obligation for Defective Documentation and
for Breach of a Representation or Warranty.
(a) Each of the representations and warranties contained in Sections
3.01, 3.02 and 3.03 shall survive the purchase by the Depositor of the
Mortgage Loans and the subsequent transfer thereof by the Depositor to the
Trustee and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement or the Pooling and Servicing
Agreement.
(b) With respect to any representation or warranty contained in
Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the
best of the Unaffiliated Seller's knowledge, if it is discovered by the
Servicer, the Collateral Agent, any Subservicer, the Trustee, the Certificate
Insurer or any Certificateholder that the substance of such representation and
warranty was inaccurate as of the Closing Date and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan, then
notwithstanding the Originators' or the Unaffiliated Seller's lack of
knowledge with respect to the inaccuracy at the time the representation or
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty. Upon discovery by the Originators, ___ the
Unaffiliated Seller, the Collateral Agent, the Servicer, any Subservicer, the
Trustee, the Certificate Insurer or any Certificateholder of a breach of any
of such representations and warranties which materially and adversely affects
the value of Mortgage Loans or the interest of the Certificateholders, or
which materially and adversely affects the interests of the Certificate
Insurer or the Certificateholders in the related Mortgage Loan in the case of
a representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' or the Unaffiliated Seller's best knowledge), the party
discovering such breach shall give pursuant to this Section 3.05(b) and
pursuant to Section 3.03 of the Pooling and Servicing Agreement shall promptly
(and in any event of discovery, five (5) Business Days) give written notice to
the others. Subject to the last paragraph of this Section 3.05(b), within
sixty (60) days of the earlier of its discovery or its receipt of notice of
any breach of a representation or warranty, the Unaffiliated Seller and the
Originators shall (a) promptly cure such breach in all material respects, or
(b) purchase such Mortgage Loan at a purchase price equal to the Principal
Balance of such Mortgage Loan as of the date of purchase, plus the greater of
(i) all accrued and unpaid interest on such Principal Balance and (ii) 30
days' interest on such Principal Balance, computed at the Mortgage Interest
Rate, net of the Servicing Fee if the Unaffiliated Seller is the Servicer,
plus the amount of any unreimbursed Servicing Advances made by the Servicer
with respect to such Mortgage Loan, or (c) remove such Mortgage Loan from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans; provided, that,
such substitution is effected not later than the date which is 2 years after
the Startup Day or at such later date, if the Trustee and the Certificate
Insurer receive an Opinion of Counsel to the effect set forth below in this
Section. Any such substitution shall be accompanied by payment by the
Unaffiliated Seller of the Substitution Adjustment, if any, to be deposited in
the Collection Account pursuant to the Pooling and Servicing Agreement.
The Originators shall cooperate with the Unaffiliated Seller to cure
any breach and shall reimburse the Unaffiliated Seller for the costs and
expenses related to any cure, substitution (including any Substitution
Adjustment) or repurchase incurred by the Unaffiliated Seller pursuant to this
Section 3.05.
(c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
or an Originator substitutes a Qualified Substitute Mortgage Loan or Loans,
the Unaffiliated Seller or such Originator shall effect such substitution by
delivering to the Trustee and the Certificate Insurer a certification in the
form attached to the Pooling and Servicing Agreement as Exhibit H, executed by
a Servicing Officer and the documents described in Section 2.06(d) for such
Qualified Substitute Mortgage Loan or Loans. Pursuant to the Pooling and
Servicing Agreement, upon receipt by the Trustee and the Collateral Agent of a
certification of a Servicing Officer of such substitution or purchase and, in
the case of a substitution, upon receipt by the Collateral Agent, on behalf of
the Trustee, of the related Trustee's Mortgage File, and the deposit of
certain amounts in the Certificate Account pursuant to Section 2.07(b) of the
Pooling and Servicing Agreement (which certification shall be in the form of
Exhibit H to the Pooling and Servicing Agreement), the Collateral Agent, on
behalf of the Trustee shall be required to release to the Servicer for release
to the Unaffiliated Seller the related Trustee's Mortgage File and shall be
required to execute, without recourse, and deliver such instruments of
transfer furnished by the Unaffiliated Seller as may be necessary to transfer
such Mortgage Loan to the Unaffiliated Seller or such Originator.
(d) Pursuant to the Pooling and Servicing Agreement, the Servicer
shall deposit in the Certificate Account all payments received in connection
with such Qualified Substitute Mortgage Loan or Loans after the date of such
substitution. Monthly Payments received with respect to Qualified Substitute
Mortgage Loans on or before the date of substitution will be retained by the
Unaffiliated Seller. The Trust Fund will own all payments received on the
Deleted Mortgage Loan on or before the date of substitution, and the
Unaffiliated Seller or the Originator, as applicable, shall thereafter be
entitled to retain all amounts subsequently received in respect of such
Deleted Mortgage Loan. Pursuant to the Pooling and Servicing Agreement, the
Servicer shall be required to give written notice to the Trustee, the
Collateral Agent and the Certificate Insurer that such substitution has taken
place and shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of the Pooling and Servicing
Agreement and the substitution of the Qualified Substitute Mortgage Loan. The
parties hereto agree to amend the Mortgage Loan Schedule accordingly. Upon
such substitution, such Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of the Pooling and Servicing Agreement and this Agreement
in all respects, and the Unaffiliated Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Sections 3.02
and 3.03 herein. On the date of such substitution, the Unaffiliated Seller
will remit to the Servicer and pursuant to the Pooling and Servicing Agreement
the Servicer will deposit into the Certificate Account an amount equal to the
Substitution Adjustment, if any.
(e) With respect to any Mortgage Loan that has been converted to an
REO Mortgage Loan, all references in this Section 3.05 or Section 2.06 to
"Mortgage Loan" shall be deemed to refer to such REO Mortgage Loan. With
respect to any Mortgage Loan that the Originator or affiliated Seller is
required to repurchase that is or becomes a Liquidated Mortgage Loan, in lieu
of repurchasing such Mortgage Loan, the Originator or Unqualified Seller shall
deposit into the related Certificate Account, pursuant to Section 6.01 of the
Pooling and Servicing Agreement an amount equal to the amount of the
Liquidated Loan Loss, if any, incurred in connection with the liquidation of
such Mortgage Loan within the same time period in which the Originator or
Unaffiliated Seller would have otherwise been required to repurchase such
Mortgage Loan.
(f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originator set forth in Section 2.06 and this
Section 3.05 to cure, purchase or substitute for a defective Mortgage Loan as
provided in Section 2.06 and this Section 3.05 constitute the sole remedies of
the Depositor, the Trustee, the Certificate Insurer and the Certificateholders
respecting a breach of the foregoing representations and warranties.
(g) Any cause of action against the Unaffiliated Seller or an
Originator relating to or arising out of the breach of any representations and
warranties or covenants made in Sections 2.06, 3.02 or 3.03 shall accrue as to
any Mortgage Loan upon (i) discovery of such breach by any party and notice
thereof to the Unaffiliated Seller or such Originator, (ii) failure by the
Unaffiliated Seller or such Originator to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Unaffiliated Seller or such Originator by the Trustee for all amounts payable
in respect of such Mortgage Loan.
(h) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan which is not in default or as to which no default
is imminent, no purchase, or substitution pursuant to Section 2.06(b) or this
Section 3.05 shall be made unless the Unaffiliated Seller provides to the
Trustee and the Certificate Insurer an Opinion of Counsel to the effect that
such purchase or substitution would not (i) result in the imposition of taxes
on "prohibited transactions" of the REMIC Trust, as defined in Section 860F of
the Code or a tax on contributions to the REMIC Trust under the REMIC
Provisions, or (ii) cause the REMIC Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
purchase or substitution was delayed pursuant to this paragraph shall be
purchased or substituted (subject to compliance with Section 2.06 and this
Section 3.05) upon the earlier of (a) the occurrence of a default or imminent
default with respect to such loan and (b) receipt by the Trustee and the
Certificate Insurer of an Opinion of Counsel to the effect that such purchase
or substitution will not result in the events described in clauses (i) and
(ii) of the preceding sentence.
(i) Pursuant to the Pooling and Servicing Agreement, upon discovery
by the Unaffiliated Seller, the Servicer, the Trustee, the Certificate Insurer
or any Certificateholder that any Mortgage Loan does not constitute a
Qualified Mortgage, the party discovering such fact shall promptly (and in any
event within 5 days of the discovery) give written notice thereof to the other
parties. In connection therewith, the Unaffiliated Seller or the related
Originator shall repurchase or substitute a Qualified Substitute Mortgage Loan
for the affected Mortgage Loan within ninety (90) days of the earlier of such
discovery by any of the foregoing parties, or the Trustee's or the
Unaffiliated Seller's receipt of notice, in the same manner as it would a
Mortgage Loan for a breach of representation or warranty contained in Sections
3.02 or 3.03. Pursuant to the Pooling and Servicing Agreement the Trustee
shall reconvey to the Unaffiliated Seller or the related Originator the
Mortgage Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Mortgage Loan repurchased for breach
of a representation or warranty contained in Sections 3.02 or 3.03.
(j) Notwithstanding anything in this Agreement or the Pooling and
Servicing Agreement to the contrary, the Unaffiliated Seller's repurchase
obligations hereunder shall not include failure of the Trustee to record
assignments of the Mortgage Loans referenced in clause (a)(iii) in Section
2.05. All parties hereto acknowledge and agree that the Trustee has the
responsibility to record all such assignments of the Mortgage Loans to the
Trustee.
(k) Each of the Originators and the Unaffiliated Seller shall be
jointly and severally responsible for any repurchase, cure or substitution
obligation of any of the Originators or the Unaffiliated Seller under this
Agreement and the Pooling and Servicing Agreement.
(l) The Unaffiliated Seller and the Originators hereby agree, jointly
and severally, to indemnify the Trustee, the Depositor, the Certificateholders
and the Certificate Insurer and their successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable out of pocket costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against any Indemnified Party in any way relating to
or arising out of a breach by the Unaffiliated Seller or the related
Originator of the representations or warranties in Article III hereof. The
indemnities contained in this Section 3.05 shall survive the resignation or
termination of the Trustee or the termination of this Agreement.
Section 3.06. Limited Purpose and Corporate Separateness of
Unaffiliated Seller.
(a) The Unaffiliated Seller covenants to the Trustee, the Depositor,
the Servicer, the Certificateholders and the Certificate Insurer as follows:
(i) The Unaffiliated Seller shall not engage in any business
or activity of any kind or enter into any transaction or indenture,
mortgage, instrument, agreement contract, lease or other undertaking
other than the transactions contemplated and authorized by this
Agreement. Without limiting the generality of the foregoing, the
Unaffiliated Seller shall not create, incur, guarantee, assume or
suffer to exist any indebtedness or other liabilities, whether direct
or contingent, other than (i) as a result of the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (ii) the incurrence
of obligations under this Agreement and the Insurance and Indemnity
Agreement and (iii) the incurrence of operating expenses in the
ordinary course of business permitted under this Agreement;
(ii) The Unaffiliated Seller shall not amend its certificate
of incorporation or by-laws in any respect without the prior written
consent of the Certificate Insurer;
(iii) The Unaffiliated Seller has been formed for, and shall
limit its activities to, the following purposes: (i) to purchase the
Mortgage Loans from the Originators and to sell such Mortgage Loans
to the Depositor, in each case pursuant to this Agreement; (ii) in
the event of the occurrence of a breach of certain representations
and warranties, to cause the substitution of repurchase of the
related Mortgage Loans by the Originators; (iii) to enter into and
perform its obligations under this Agreement and the Insurance and
Indemnity Agreement and (iv) to engage in those activities that are
necessary, suitable of convenient to accomplish the foregoing or are
incidental thereto or connected therewith;
(iv) The Unaffiliated Seller shall not incur, assume or
guarantee any indebtedness or other liabilities except under the
provisions of this Agreement and the Insurance and Indemnity
Agreement;
(v) The Unaffiliated Seller shall maintain separate
corporate records and books of account from those of the Originators
or any of their Affiliates;
(vi) The Unaffiliated Seller shall not become involved in
the day to day management of any other Person, and it shall operate
so as not to be substantively consolidated with any other Person;
(vii) The Unaffiliated Seller shall maintain its assets
separate from those of the Originators or any of their Affiliates;
(viii) The Unaffiliated Seller shall conduct correspondence
in its own name on its own stationery;
(ix) The Unaffiliated Seller shall not act as an agent of
any other entity or Person except pursuant to contractual documents
indicating such capacity; and
(x) The Unaffiliated Seller shall take all other actions
necessary on its part in order to ensure that all of the facts and
assumptions set forth in the opinion issued by Xxxxx & Xxxx LLP in
connection with the closing or initial purchase under this Agreement
and relating to true sale and substantive consolidation issues, and
in the certificates accompanying such opinion, remain true and
correct at all times.
(b) The Originators will operate in such a manner that the
Unaffiliated Seller would not be substantively consolidated in the trust
estate of the Originators, ABFS or any of their respective Affiliates (each an
"ABFS Company") and the separate existence of Unaffiliated Seller would not be
disregarded in the event of a bankruptcy or insolvency of any ABFS Company.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, each Originator shall take, and shall cause each
of their Affiliates to take, all actions required on its part to ensure that:
(i) the Unaffiliated Seller shall conduct its business
solely in its own name and make all written and oral communications
solely in its name;
(ii) the Unaffiliated Seller shall provide for its expenses
and liabilities from its own funds;
(iii) the Unaffiliated Seller shall not be contractually
liable for the payment of any liability of any ABFS Company nor
generally hold its assets nor creditworthiness as being available for
the payment of any liability of any ABFS Company;
(iv) the Unaffiliated Seller shall maintain an arm's-length
relationship with each other ABFS Company;
(v) the Unaffiliated Seller shall not transfer any assets
between itself and any other ABFS Company without fair consideration
or with the intent to hinder, delay or defraud the creditors of any
other ABFS Company; and
(vi) any consolidated financial statements of any ABFS
Company that include the Unaffiliated Seller have notes clearly
stating that the Unaffiliated Seller is a corporation separate and
distinct from each of the other ABFS Companies and that the assets of
the Unaffiliated Seller will be available first and foremost to
satisfy the claims of the creditors of the Unaffiliated Seller.
ARTICLE IV
THE UNAFFILIATED SELLER
Section 4.01. Covenants of the Originators and the Unaffiliated
Seller. Each of the Originators and the Unaffiliated Seller covenants to the
Depositor as follows:
(a) The Originators and the Unaffiliated Seller shall cooperate with
the Depositor and the firm of independent certified public accountants
retained with respect to the issuance of the Certificates in making available
all information and taking all steps reasonably necessary to permit the
accountants' letters required hereunder to be delivered within the times set
for delivery herein.
(b) The Unaffiliated Seller agrees to satisfy or cause to be
satisfied on or prior to the Closing Date, all of the conditions to the
Depositor's obligations set forth in Section 5.01 hereof that are within the
Unaffiliated Seller's (or its agents') control.
(c) The Originators and the Unaffiliated Seller hereby agree to do
all acts, transactions, and things and to execute and deliver all agreements,
documents, instruments, and papers by and on behalf of the Originators or the
Unaffiliated Seller as the Depositor or its counsel may reasonably request in
order to consummate the transfer of the Mortgage Loans to the Depositor and
the subsequent transfer thereof to the Trustee, and the rating, issuance and
sale of the Certificates.
Section 4.02. Merger or Consolidation. Each of the Originators and
the Unaffiliated Seller will keep in full effect its existence, rights and
franchises as a corporation and will obtain and preserve its qualification to
do business as a foreign corporation, in each jurisdiction necessary to
protect the validity and enforceability of this Agreement or any of the
Mortgage Loans and to perform its duties under this Agreement. Any Person into
which any of the Originators or the Unaffiliated Seller may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Originators or the Unaffiliated Seller shall be a
party, or any Person succeeding to the business of the Originators or the
Unaffiliated Seller, shall be approved by the Certificate Insurer which
approval shall not be unreasonably withheld. If the approval of the
Certificate Insurer is not required, the successor shall be an established
mortgage loan servicing institution that is a Permitted Transferee and in all
events shall be the successor of the Originators or the Unaffiliated Seller
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
The Originators and the Unaffiliated Seller shall send notice of any such
merger or consolidation to the Trustee and the Certificate Insurer.
Section 4.03. Costs. In connection with the transactions contemplated
under this Agreement and the Pooling and Servicing Agreement, the Unaffiliated
Seller shall promptly pay (or shall promptly reimburse the Depositor to the
extent that the Depositor shall have paid or otherwise incurred): (a) the fees
and disbursements of the Depositor's (100% of fees in excess of $30,000 but
not to exceed $65,000), the Unaffiliated Seller's and the Originators'
counsel; (b) the fees of S&P and Xxxxx'x; (c) any of the fees of the Trustee
and the fees and disbursements of the Trustee's counsel; (d) expenses incurred
in connection with printing the Prospectus, the Prospectus Supplement, any
amendment or supplement thereto, any preliminary prospectus and the
Certificates; (e) fees and expenses relating to the filing of documents with
the Securities and Exchange Commission (including without limitation periodic
reports under the Exchange Act); (f) the shelf registration amortization fee
of 0.04% of the Class A Certificate Principal Balance on the Closing Date,
paid in connection with the issuance of Certificates; (g) the fees and
disbursements for Deloitte & Touche LLP, accountants for the Originators; and
(h) all of the initial expenses of the Certificate Insurer including, without
limitation, legal fees and expenses, accountant fees and expenses and expenses
in connection with due diligence conducted on the Mortgage Files but not
including the initial premium paid to the Certificate Insurer. For the
avoidance of doubt, the parties hereto acknowledge that it is the intention of
the parties that the Depositor shall not pay any of the Trustee's fees and
expenses in connection with the transactions contemplated by the Pooling and
Servicing Agreement. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expenses.
Section 4.04. Indemnification. The Originators and the Unaffiliated
Seller, jointly and severally, agree to indemnify and to hold the Depositor
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and
expenses that the Depositor may sustain in any way related to the failure of
any of the Originators or the Unaffiliated Seller to perform its duties in
compliance with the terms of this Agreement. The Originators or the
Unaffiliated Seller shall immediately notify the Depositor if a claim is made
by a third party with respect to this Agreement, and the Originators or the
Unaffiliated Seller shall assume the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Depositor in respect of such claim. Pursuant to the
Pooling and Servicing Agreement, the Trustee shall reimburse the Unaffiliated
Seller in accordance with the Pooling and Servicing Agreement for all amounts
advanced by the Unaffiliated Seller pursuant to the preceding sentence except
when the claim relates directly to the failure of the Unaffiliated Seller to
perform its duties in compliance with the terms of this Agreement.
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01. Conditions of Depositor's Obligations. The obligations
of the Depositor to purchase the Mortgage Loans will be subject to the
satisfaction on the Closing Date of the following conditions. Upon payment of
the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the Unaffiliated Seller required to be
performed by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Unaffiliated Seller and the Originators
under this Agreement shall be true and correct as of the Closing Date and no
event shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement, and the Depositor shall have
received a certificate to the effect of the foregoing signed by an authorized
officer of the Unaffiliated Seller and the Originators.
(b) The Depositor shall have received a letter dated the date of this
Agreement, in form and substance acceptable to the Depositor and its counsel,
prepared by Deloitte & Touche LLP, independent certified public accountants,
regarding the numerical information contained in the Prospectus Supplement
including, but not limited to the information under the captions "Prepayment
and Yield Considerations" and "The Mortgage Loan Pool" regarding any numerical
information in any marketing materials relating to the Certificates and
regarding any other information as reasonably requested by the Depositor.
(c) The Mortgage Loans will be acceptable to the Depositor, in its
sole reasonable discretion.
(d) The Depositor shall have received the following additional
closing documents, in form and substance reasonably satisfactory to the
Depositor and its counsel:
(i) the Mortgage Loan Schedule;
(ii) the Pooling and Servicing Agreement dated as of March
1, 2001 and the Underwriting Agreement dated as of March 9, 2001
between the Depositor and the Representative and all documents
required thereunder, duly executed and delivered by each of the
parties thereto other than the Depositor;
(iii) officer's certificates of an officer of each of the
Originators and the Unaffiliated Seller, dated as of the Closing
Date, and attached thereto resolutions of the board of directors and
a copy of the charter and by-laws;
(iv) copy of each of the Originators and the Unaffiliated
Seller's charter and all amendments, revisions, and supplements
thereof, certified by a secretary of each entity;
(v) an opinion of the counsel for the Originators and the
Unaffiliated Seller as to various corporate matters in a form
acceptable to the Depositor, its counsel, the Certificate Insurer,
S&P and Xxxxx'x (it being agreed that the opinion shall expressly
provide that the Trustee shall be entitled to rely on the opinion);
(vi) opinions of counsel for the Unaffiliated Seller, in
forms acceptable to the Depositor, its counsel, the Certificate
Insurer, S&P and Xxxxx'x as to such matters as shall be required for
the assignment of a rating to the Class A Certificates of "AAA" by
S&P, and Aaa by Xxxxx'x (it being agreed that such opinions shall
expressly provide that the Trustee shall be entitled to rely on such
opinions);
(vii) a letter from Xxxxx'x to the effect that it has
assigned a rating of Aaa to the Class A Certificates;
(viii) a letter from S&P to the effect that it has assigned
a rating of "AAA" to the Class A Certificates;
(ix) an opinion of counsel for the Trustee in form and
substance acceptable to the Depositor, its counsel, Xxxxx'x and S&P
(it being agreed that the opinion shall expressly provide that the
Unaffiliated Seller shall be entitled to rely on the opinion);
(x) an opinion or opinions of counsel for the Servicer, in
form and substance acceptable to the Depositor, its counsel, the
Certificate Insurer, Xxxxx'x and S&P (it being agreed that the
opinion shall expressly provide that the Unaffiliated Seller shall be
entitled to rely on the opinion);
(xi) an opinion or opinions of counsel for the Servicer, in
each case in form and substance acceptable to the Depositor, its
counsel, Xxxxx'x and S&P (it being agreed that the opinion shall
expressly provide that the Unaffiliated Seller shall be entitled to
rely on the opinion); and
(xii) an opinion or opinions of counsel for the Certificate
Insurer, in each case in form and substance acceptable to the
Depositor, its counsel, Xxxxx'x and S&P (it being agreed that the
opinion shall expressly provide that the Unaffiliated Seller shall be
entitled to rely on the opinion).
(e) The Certificate Insurance Policy shall have been duly executed,
delivered and issued with respect to the Class A Certificates.
(f) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto shall be satisfactory in
form and substance to the Depositor and its counsel.
(g) The Unaffiliated Seller shall have furnished the Depositor with
such other certificates of its officers or others and such other documents or
opinions as the Depositor or its counsel may reasonably request.
Section 5.02. Conditions of Unaffiliated Seller's Obligations. The
obligations of the Unaffiliated Seller under this Agreement shall be subject
to the satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor required to be performed
by it at or prior to the Closing Date pursuant to the terms of this Agreement
shall have been duly performed and complied with and all of the
representations and warranties of the Depositor contained in this Agreement
shall be true and correct as of the Closing Date and the Unaffiliated Seller
shall have received a certificate to that effect signed by an authorized
officer of the Depositor.
(b) The Unaffiliated Seller shall have received the following
additional documents:
(i) the Pooling and Servicing Agreement, and all documents
required thereunder, in each case executed by the Depositor as
applicable; and
(ii) a copy of a letter from Xxxxx'x to the Depositor to the
effect that it has assigned a rating of "Aaa" to the Class A
Certificates and a copy of a letter from S&P to the Depositor to the
effect that it has assigned a rating of "AAA" to the Class A
Certificates.
(iii) an opinion of counsel for the Trustee in form and
substance acceptable to the Unaffiliated Seller and its counsel;
(iv) an opinion or opinions of counsel for the Certificate
Insurer, in each case in form and substance acceptable to the
Unaffiliated Seller and its counsel;
(v) an opinion of the counsel for the Depositor as to
securities and tax matters; and
(vi) an opinion of the counsel for the Depositor as to true
sale matters.
(c) The Depositor shall have furnished the Unaffiliated Seller with
such other certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Agreement as the
Unaffiliated Seller may reasonably request.
Section 5.03. Termination of Depositor's Obligations. The Depositor
may terminate its obligations hereunder by notice to the Unaffiliated Seller
at any time before delivery of and payment of the purchase price for the
Mortgage Loans if: (a) any of the conditions set forth in Section 5.01 are not
satisfied when and as provided therein; (b) there shall have been the entry of
a decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Unaffiliated Seller,
or for the winding up or liquidation of the affairs of the Unaffiliated
Seller; (c) there shall have been the consent by the Unaffiliated Seller to
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Unaffiliated Seller or of or relating to
substantially all of the property of the Unaffiliated Seller; (d) any purchase
and assumption agreement with respect to the Unaffiliated Seller or the assets
and properties of the Unaffiliated Seller shall have been entered into; or (e)
a Termination Event shall have occurred. The termination of the Depositor's
obligations hereunder shall not terminate the Depositor's rights hereunder or
its right to exercise any remedy available to it at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing,
if to the Depositor, addressed to the Depositor at Xxxxxx Xxxxxxx ABS Capital
I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel,
or to such other address as the Depositor may designate in writing to the
Unaffiliated Seller and if to the Unaffiliated Seller, addressed to the
Unaffiliated Seller at ABFS 2001-1, Inc., Xxxxxxxxxx Xxxxxx Xxxxxx, 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xx. Xxxxxxx X. Xxxxx, or to such other address as the Unaffiliated Seller may
designate in writing to the Depositor.
Section 6.02. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant
of this Agreement which is prohibited or unenforceable or is held to be void
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any
provision of law which prohibits or renders void or unenforceable any
provision hereof.
Section 6.03. Agreement of Unaffiliated Seller. The Unaffiliated
Seller agrees to execute and deliver such instruments and take such actions as
the Depositor may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
Section 6.04. Survival. The parties to this Agreement agree that the
representations, warranties and agreements made by each of them herein and in
any certificate or other instrument delivered pursuant hereto shall be deemed
to be relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05. 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 6.06. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any
party hereto to a third party without the written consent of the other party
to this Agreement and the Certificate Insurer; provided, however, that the
Depositor may assign its rights hereunder without the consent of the
Unaffiliated Seller.
Section 6.07. Confirmation of Intent; Grant of Security Interest. It
is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated
Seller's Agreement be, and be treated for all purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators or the Unaffiliated Seller, as the
case may be. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to continue to be property of the
Originators or the Unaffiliated Seller then (a) this Unaffiliated Seller's
Agreement shall also be deemed to be a security agreement within the meaning
of Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of the
Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor of a security interest in all of such parties' right, title and
interest in and to the Mortgage Loans and all amounts payable on the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property; (c) the possession by the Depositor of Mortgage Notes and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the Uniform Commercial Code; and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents
(as applicable) of the Depositor for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the Depositor
pursuant to any provision hereof shall also be deemed to be an assignment of
any security interest created hereby. The Originators, the Unaffiliated Seller
and the Depositor shall, to the extent consistent with this Unaffiliated
Seller's Agreement, take such actions as may be necessary to ensure that, if
this Unaffiliated Seller's Agreement were deemed to create a security interest
in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement.
Section 6.08. Miscellaneous. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.
Section 6.09. Amendments.
(a) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor by written agreement,
upon the prior written consent of the Certificate Insurer, without notice to
or consent of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, to comply with any changes in the Code, or
to make any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of
this Agreement; provided, however, that such action shall not, as evidenced by
(i) an Opinion of Counsel, at the expense of the party requesting the change,
delivered to the Trustee or (ii) a letter from each Rating Agency confirming
that such amendment will not result in the reduction, qualification or
withdrawal of the current rating of the Class A Certificates, adversely affect
in any material respect the interests of any Certificateholder; and provided,
further, that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, or change the rights or obligations of any other party hereto
without the consent of such party.
(b) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor with the consent of the
Certificate Insurer, the Majority Certificateholders and the Holders of the
majority of the Percentage Interest in the Class R Certificates for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders; provided, however, that no such amendment shall be made
unless the Trustee receives an Opinion of Counsel, at the expense of the party
requesting the change, that such change will not adversely affect the status
of the REMIC Trust as a REMIC or cause a tax to be imposed on the REMIC, and
provided further, that no such amendment shall reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the
Holder of such Certificate or reduce the percentage for each Class the Holders
of which are required to consent to any such amendment without the consent of
the Holders of 100% of each Class of Certificates affected thereby.
(c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 6.10. Third-Party Beneficiaries. The parties agree that each
of the Certificate Insurer, the Collateral Agent and the Trustee is an
intended third-party beneficiary of this Agreement to the extent necessary to
enforce the rights and to obtain the benefit of the remedies of the Depositor
under this Agreement which are assigned to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer pursuant to the Pooling and
Servicing Agreement and to the extent necessary to obtain the benefit of the
enforcement of the obligations and covenants of the Unaffiliated Seller under
Section 4.01 and 4.04(a)(ii) of this Agreement. The parties further agree that
the Underwriters and their directors and each person or entity who controls
the Underwriters or any such person, within the meaning of Section 15 of the
Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller
with respect to each Underwriter Entity under Section 4.04(a)(i) of this
Agreement.
Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF NEW YORK.
(b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE
UNAFFILIATED SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT ANY SUCH PARTIES' RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE
RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 6.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties, to this Unaffiliated Seller's
Agreement have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By:/s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice-President
ABFS 2001-1, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice-President
AMERICAN BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
HOMEAMERICAN CREDIT, INC.,
D/B/A UPLAND MORTGAGE
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
AMERICAN BUSINESS MORTGAGE
SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
