EXHIBIT 4.1
INDENTURE
dated as of March 1, 2000
by and between
ABFS MORTGAGE LOAN TRUST 2000-1,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01. General Definitions......................................................................2
ARTICLE II THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS.........................................................2
Section 2.01. Forms Generally..........................................................................2
Section 2.02. Form of Certificate of Authentication....................................................2
Section 2.03. General Provisions With Respect to Principal and Interest Payment........................3
Section 2.04. Denominations............................................................................3
Section 2.05. Execution, Authentication, Delivery and Dating...........................................3
Section 2.06. Registration, Registration of Transfer and Exchange......................................4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes...............................................5
Section 2.08. Payments of Principal and Interest.......................................................6
Section 2.09. Persons Deemed Owner.....................................................................7
Section 2.10. Cancellation.............................................................................8
Section 2.11. Authentication and Delivery of Notes.....................................................8
Section 2.12. Book-Entry Note..........................................................................9
Section 2.13. Termination of Book Entry System........................................................10
Section 2.14. Pledge of Subsequent Mortgage Loans.....................................................11
ARTICLE III COVENANTS............................................................................................13
Section 3.01. Payment of Notes........................................................................13
Section 3.02. Maintenance of Office or Agency.........................................................13
Section 3.03. Money for Note Payments to Be Held In Trust.............................................13
Section 3.04. Existence of Trust......................................................................15
Section 3.05. Protection of Trust Estate..............................................................16
Section 3.06. Opinions as to the Trust Estate.........................................................16
Section 3.07. Performance of Obligations..............................................................16
Section 3.08. Investment Company Act..................................................................17
Section 3.09. Negative Covenants......................................................................17
Section 3.10. Annual Statement as to Compliance.......................................................18
Section 3.11. Restricted Payments.....................................................................18
Section 3.12. Treatment of Notes as Debt for Tax Purposes.............................................18
Section 3.13. Notice of Events of Default.............................................................19
Section 3.14. Further Instruments and Acts............................................................19
ARTICLE IV SATISFACTION AND DISCHARGE............................................................................19
Section 4.01. Satisfaction and Discharge of Indenture.................................................19
Section 4.02. Application of Trust Money..............................................................20
ARTICLE V DEFAULTS AND REMEDIES..................................................................................20
Section 5.01. Event of Default........................................................................20
Section 5.02. Acceleration of Maturity; Rescission and Annulment......................................21
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...............22
Section 5.04. Remedies................................................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim..............................................23
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes........................24
Section 5.07. Application of Money Collected..........................................................24
Section 5.08. Limitation on Suits.....................................................................25
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest...................26
Section 5.10. Restoration of Rights and Remedies......................................................26
Section 5.11. Rights and Remedies Cumulative..........................................................26
Section 5.12. Delay or Omission Not Waiver............................................................26
Section 5.13. Control by Noteholders..................................................................27
Section 5.14. Waiver of Past Defaults.................................................................27
Section 5.15. Undertaking for Costs...................................................................27
Section 5.16. Waiver of Stay or Extension Laws........................................................28
Section 5.17. Sale of Trust Estate....................................................................28
Section 5.18. Action on Notes.........................................................................29
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust.........................29
Section 5.20. Application of the Trust Indenture Act..................................................30
Section 5.21. Note Insurer Default....................................................................30
ARTICLE VI THE INDENTURE TRUSTEE.................................................................................30
Section 6.01. Duties of Indenture Trustee.............................................................30
Section 6.02. Notice of Default.......................................................................32
Section 6.03. Rights of Indenture Trustee.............................................................32
Section 6.04. Not Responsible for Recitals or Issuance of Notes.......................................33
Section 6.05. May Hold Notes..........................................................................33
Section 6.06. Money Held in Trust.....................................................................33
Section 6.07. Eligibility, Disqualification...........................................................34
Section 6.08. Indenture Trustee's Capital and Surplus.................................................34
Section 6.09. Resignation and Removal; Appointment of Successor.......................................34
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee................................35
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee........36
Section 6.12. Preferential Collection of Claims Against Trust.........................................36
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees...................................36
Section 6.14. Authenticating Agents...................................................................38
Section 6.15. Review of Mortgage Files................................................................39
Section 6.16. Indenture Trustee Fees and Expenses.....................................................39
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................................40
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders..........40
Section 7.02. Preservation of Information; Communications to Noteholders..............................40
Section 7.03. Reports by Indenture Trustee............................................................41
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Section 7.04. Reports by Trust........................................................................41
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES..........................................41
Section 8.01. Accounts; Investment; Collection of Moneys..............................................41
Section 8.02. Payments; Statements....................................................................44
Section 8.03. Claims against the Policy...............................................................45
Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans....................47
Section 8.05. Releases of Deleted Mortgage Loans......................................................48
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information..............49
Section 8.07. Release of Trust Estate.................................................................49
Section 8.08. Amendment to Sale and Servicing Agreement...............................................49
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement.................49
Section 8.10. Servicer as Agent.......................................................................49
Section 8.11. Termination of Servicer.................................................................50
Section 8.12. Opinion of Counsel......................................................................50
Section 8.13. Appointment of Collateral Agents........................................................50
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders............................50
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer..........................51
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................51
Section 9.01. Supplemental Indentures Without Consent of Noteholders..................................51
Section 9.02. Supplemental Indentures With Consent of Noteholders.....................................52
Section 9.03. Execution of Supplemental Indentures....................................................53
Section 9.04. Effect of Supplemental Indentures.......................................................53
Section 9.05. Conformity With Trust Indenture Act.....................................................54
Section 9.06. Reference in Notes to Supplemental Indentures...........................................54
Section 9.07. Amendments to Governing Documents.......................................................54
ARTICLE X REDEMPTION OF NOTES....................................................................................55
Section 10.01. Redemption..............................................................................55
Section 10.02. Form of Redemption Notice...............................................................56
Section 10.03. Notes Payable on Optional Redemption....................................................56
ARTICLE XI MISCELLANEOUS.........................................................................................57
Section 11.01. Compliance Certificates and Opinions....................................................57
Section 11.02. Form of Documents Delivered to Indenture Trustee........................................57
Section 11.03. Acts of Noteholders.....................................................................58
Section 11.04. Notices, etc............................................................................59
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices...................................60
Section 11.06. Rules by Indenture Trustee..............................................................60
Section 11.07. Conflict With Trust Indenture Act.......................................................61
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Section 11.08. Effect of Headings and Table of Contents................................................61
Section 11.09. Successors and Assigns..................................................................61
Section 11.10. Separability............................................................................61
Section 11.11. Benefits of Indenture...................................................................61
Section 11.12. Legal Holidays..........................................................................61
Section 11.13. Governing Law...........................................................................61
Section 11.14. Counterparts............................................................................61
Section 11.15. Recording of Indenture..................................................................61
Section 11.16. Trust Obligation........................................................................62
Section 11.17. No Petition.............................................................................62
Section 11.18. Inspection..............................................................................62
Section 11.19. Usury...................................................................................62
Section 11.20. Note Insurer Default....................................................................63
Section 11.21. Third-Party Beneficiary.................................................................63
APPENDICES, SCHEDULES AND EXHIBITS
Appendix I........Defined Terms
Schedule l........Mortgage Loan Schedule
Exhibit A.........Form of Note
Exhibit B.........Form of Subsequent Pledge Agreement
Exhibit C.........Form of Note Insurer Consent for Subsequent Mortgage Loans
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the provisions
inserted pursuant to Sections 310 through 318(a) inclusive of the Trust
Indenture Act of 1939.1
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 310
(a)(1).......................................... 6.07
(a)(2).......................................... 6.07, 6.08
(a)(3).......................................... 6.13
(a)(4).......................................... Not Applicable
(a)(5).......................................... 6.07
(b)............................................. 6.07, 6.09
(c)............................................. Not Applicable
Section 311
(a)............................................. 6.12
(b)............................................. 6.12
(c)............................................. Not Applicable
Section 312
(a)............................................. 7.01(a), 7.02(a)
(b)............................................. 7.02(b)
(c)............................................. 7.02(c)
(d)............................................. 7.03(a)
Section 313
(a)............................................. 7.03(a)
(b)............................................. 7.03(a)
(c)............................................. 11.05
(d)............................................. 7.03(b)
Section 314
(a)(1).......................................... 7.04
(a)(2).......................................... 7.04
(a)(3).......................................... 7.04
(a)(4).......................................... 7.04
(b)(1).......................................... 2.11(c), 11.01
(b)(2).......................................... 3.06
(c)(1).......................................... 2.11(d), 4.01,
8.02(d), 11.01
(c)(2).......................................... 2.11(c), 4.01,
8.02(d), 11.01
(c)(3).......................................... 8.02(d)
(d)(1).......................................... 11.01(a)
(d)(2).......................................... 11.01(a)
(d)(3).......................................... 11.01(a)
-------------------
(1) This Cross-Reference Table is not part of the Indenture.
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Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
(e)............................................. 11.01(b)
Section 315
(a)............................................. 6.01(b), 6.01(c)(1)
(b)............................................. 6.02, 11.05
(c)............................................. 6.01(a)
(d)(1).......................................... 6.01(b), 6.01(c)
(d)(2).......................................... 6.01(c)(2)
(d)(3).......................................... 6.01(c)(3)
(e)............................................. 5.15
Section 316
(a)............................................. 5.20
(b)............................................. 5.09
(c)............................................. 5.20
Section 317
(a)(1).......................................... 5.03
(a)(2).......................................... 5.05
(b)............................................. 3.01
Section 318
(a)............................................. 11.07
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This INDENTURE, dated as of March 1, 2000 (as amended or supplemented
from time to time as permitted hereby, this "Indenture"), is between ABFS
MORTGAGE LOAN TRUST 2000-1, a Delaware statutory business trust (together with
its permitted successors and assigns, the "Trust"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as indenture trustee (together with its
permitted successors in the trusts hereunder, the "Indenture Trustee").
Preliminary Statement
The Trust has duly authorized the execution and delivery of this
Indenture to provide for its Mortgage Backed Notes, Series 2000-1 (the "Notes"),
issuable as provided in this Indenture. All covenants and agreements made by the
Trust herein are for the benefit and security of the Holders of the Notes and
the Note Insurer. The Trust is entering into this Indenture, and the Indenture
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Trust in accordance with its terms have been done.
Granting Clause
The Trust hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes and the Note Insurer, all of the Trust's
right, title and interest in and to (a) the Mortgage Loans in Pool I and Pool II
listed in the Mortgage Loan Schedule attached as Schedule I to this Indenture
(including property that secures a Mortgage Loan that becomes an REO Property),
including the related Mortgage Files delivered or to be delivered to the
Collateral Agent, on behalf of the Indenture Trustee, pursuant to the Sale and
Servicing Agreement, including all payments of principal received, collected or
otherwise recovered after the Cut-Off Date for each Mortgage Loan, all payments
of interest due on each Mortgage Loan after the Cut-Off Date therefor whenever
received and all other proceeds received in respect of such Mortgage Loans, any
Subsequent Mortgage Loans and any Qualified Substitute Mortgage Loan, (b) the
Unaffiliated Seller's Agreement and the Sale and Servicing Agreement, (c) the
Insurance Policies, (d) all cash, instruments or other property held or required
to be deposited in the Collection Account, the Payment Accounts, the Note
Insurance Payment Account, the Pre-Funding Accounts, the Capitalized Interest
Accounts and the Cross-collateralization Reserve Accounts, including all
investments made with funds in such Accounts (but not including any income on
funds deposited in, or investments made with funds deposited in, such Accounts
other than the Pre-Funding Accounts, which income shall belong to and be for the
account of the Servicer), and (e) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid assets,
including, without limitation, all insurance proceeds and condemnation awards.
Such Grants are made, however, in trust, to secure the Notes equally and ratably
without prejudice, priority or distinction between any Note and any other Note
by reason of difference in time of issuance or otherwise, and for the benefit of
the Note Insurer to secure (x) the payment of all amounts due on the Notes in
accordance with their terms, (y) the payment of all other sums payable under
this Indenture and (z) compliance with the provisions of this Indenture, all as
provided in this Indenture. All terms used in the foregoing Granting Clause that
are defined in Appendix I are used with the meanings given in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Notes may be adequately and effectively protected. The Indenture Trustee
agrees that it will hold the Policy in trust and that it will hold any proceeds
of any claim upon the Policy, solely for the use and benefit of the Noteholders
in accordance with the terms hereof and the Policy. In addition, the Indenture
Trustee agrees that it will acknowledge the Grant on each Subsequent Transfer
Date of the related Subsequent Mortgage Loans pursuant to the terms of the
related Subsequent Pledge Agreement, provided that the conditions precedent to
the pledge of such Subsequent Mortgage Loans contained in this Indenture and in
the Sale and Servicing Agreement are satisfied on or prior to such Subsequent
Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01 General Definitions. Except as otherwise specified or
as the context may otherwise require, the terms defined in Appendix I have the
respective meanings set forth in such Appendix I for all purposes of this
Indenture, and the definitions of such terms are applicable to the singular as
well as to the plural forms of such terms and to the masculine as well as to the
feminine genders of such terms. Whenever reference is made herein to an Event of
Default or a Default known to the Indenture Trustee or of which the Indenture
Trustee has notice or knowledge, such reference shall be construed to refer only
to an Event of Default or Default of which the Indenture Trustee is deemed to
have notice or knowledge pursuant to Section 6.01(d). All other terms used
herein that are defined in the Trust Indenture Act (as hereinafter defined),
either directly or by reference therein, have the meanings assigned to them
therein.
ARTICLE II
THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01 Forms Generally. The Notes shall be substantially in the
form set forth as Exhibit A attached hereto. Each Note may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
on which the Notes may be listed, or as may, consistently herewith, be
determined by the Trust, as evidenced by its execution thereof. Any portion of
the text of any Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Note.
The Definitive Notes may be produced in any manner determined by the
Trust, as evidenced by its execution thereof.
Section 2.02 Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Note attached hereto as Exhibit A.
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Section 2.03 General Provisions With Respect to Principal and Interest
Payment. The Notes shall be designated generally as the "ABFS Mortgage Loan
Trust 2000-1, Mortgage Backed Notes, Series 2000-1".
The Notes shall be issued in the form specified in Section 2.01 hereof.
The Notes shall be issued in two Classes, the Class A-1 Notes and the Class A-2
Notes. The aggregate Original Note Principal Balance of Notes that may be
authenticated and delivered under the Indenture is limited to $200,000,000 of
Class A-1 Notes and $35,000,000 of Class A-2 Notes, except for the Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this
Indenture.
Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of this
Indenture, the principal of each Class of Notes shall be payable in installments
ending no later than the related Final Stated Maturity Date, unless the unpaid
principal of such Notes become due and payable at an earlier date by declaration
of acceleration or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to the
interest then due and payable on such Note and then to the principal thereof.
All computations of interest accrued on any Class A-1 Note shall be made on the
basis of a year of 360 days and twelve 30-day months. All computations of
interest accrued on any Class A-2 Note shall be made on the basis of a year of
360 days and the actual number of days elapsed in the related Accrual Period.
Notwithstanding any of the foregoing provisions with respect to payments
of principal of and interest on the Notes, if the Notes have become or been
declared due and payable following an Event of Default and such acceleration of
maturity and its consequences have not been rescinded and annulled, then
payments of principal of and interest on the Notes shall be made in accordance
with Section 5.07 hereof.
Section 2.04 Denominations. The Notes shall be issuable only as
registered Notes in the denominations equal to the Authorized Denominations.
Section 2.05 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, acting at the direction of the Certificateholders. The signature of
such Authorized Officer of the Owner Trustee on the Notes may be manual or by
facsimile.
Notes bearing the manual or facsimile signature of an individual who was
at any time an Authorized Officer of the Owner Trustee shall bind the Trust,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or was
not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Notes executed on behalf of the Trust to
the Authenticating Agent for authentication, and the Authenticating Agent shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
3
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in Section
2.02 hereof, executed by the Authenticating Agent by the manual signature of one
of its Authorized Officers or employees, and such certificate of authentication
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
Section 2.06 Registration, Registration of Transfer and Exchange. The
Trust shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Trust shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee is hereby initially appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Indenture
Trustee shall remain the Note Registrar throughout the term hereof. Upon any
resignation of the Indenture Trustee, the Servicer, on behalf of the Trust,
shall promptly appoint a successor, with the approval of the Note Insurer, or,
in the absence of such appointment, the Servicer, on behalf of the Trust, shall
assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Note at the office or
agency of the Trust to be maintained as provided in Section 3.02 hereof, the
Owner Trustee on behalf of the Trust, acting at the direction of the
Certificateholders, shall execute, and the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate initial Note Principal Balance.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations, and of a like aggregate Note Principal Balance,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Owner Trustee shall execute, and
the Authenticating Agent shall authenticate and deliver, the Notes that the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Trust, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form included in Exhibit A attached hereto, duly executed by the
Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar, on behalf of the Trust, may require
payment of a sum sufficient to cover any tax or other governmental charge as may
be imposed in connection with any
4
registration of transfer or exchange of Notes, other than exchanges pursuant to
Section 2.07 hereof not involving any transfer or any exchange made by the Note
Insurer.
No transfer of a Note shall be made to the Unaffiliated Seller or, to
the actual knowledge of a Responsible Officer of the Indenture Trustee, to any
of the Unaffiliated Seller's Affiliates, successors or assigns.
The Note Registrar shall not register the transfer of a Note unless the
Note Registrar has received a representation letter from the transferee to the
effect that either (i) the transferee is not, and is not acquiring the Note on
behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of the Note by the transferee qualifies for exemptive
relief under a Department of Labor Prohibited Transaction Class Exemption. Each
Beneficial Owner of a Note which is a Book-Entry Note shall be deemed to make
one of the foregoing representations.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Notes. If (1) any
mutilated Note is surrendered to the Note Registrar or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (2) there is delivered to the Note Registrar such security or
indemnity as may be required by the Note Registrar to save each of the Trust,
the Owner Trustee, the Note Insurer and the Note Registrar harmless, then, in
the absence of notice to the Note Registrar that such Note has been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust, acting at the
direction of the Certificateholders, shall execute and upon its delivery of a
Trust Request the Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
new Note or Notes of the same tenor and aggregate initial principal amount
bearing a number not contemporaneously outstanding. If, after the delivery of
such new Note, a bona fide purchaser of the original Note in lieu of which such
new Note was issued presents for payment such original Note, the Note Registrar,
shall be entitled to recover such new Note from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expenses incurred by the Trust, the
Owner Trustee, the Note Insurer or the Note Registrar in connection therewith.
If any such mutilated, destroyed, lost or stolen Note shall have become or shall
be about to become due and payable, or shall have become subject to redemption
in full, instead of issuing a new Note, the Trust may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section 2.07, the Note
Registrar, may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trust, the Indenture
Trustee or the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Trust, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
5
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08 Payments of Principal and Interest. (a) Payments on
Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture
Trustee to the Clearing Agency or its nominee. Any installment of interest or
principal payable on any Definitive Notes that is punctually paid or duly
provided for by the Trust on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date for such Class of Notes and such
Payment Date by either (i) check mailed to such Person's address as it appears
in the Note Register on such Record Date, or (ii) by wire transfer of
immediately available funds to the account of a Noteholder, if such Noteholder
(A) is the registered holder of Definitive Notes having an initial principal
amount of at least $1,000,000 and (B) has provided the Indenture Trustee with
wiring instructions in writing by five (5) Business Days prior to the related
Record Date or has provided the Indenture Trustee with such instructions for any
previous Payment Date, except for the final installment of principal payable
with respect to such Note, which shall be payable as provided in subsection (b)
of this Section 2.08. A fee may be charged by the Indenture Trustee to a Holder
of Definitive Notes for any payment made by wire transfer. Any installment of
interest or principal not punctually paid or duly provided for shall be payable
as soon as funds are available to the Indenture Trustee for payment thereof, or
if Section 5.07 applies, pursuant to Section 5.07.
(b) All reductions in the Note Principal Balance of a Note (or one or
more Predecessor Notes) effected by payments of installments of principal made
on any Payment Date shall be binding upon all Holders of such Note and of any
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Note. The final
installment of principal of each Note shall be payable only upon presentation
and surrender thereof on or after the Payment Date therefor at the Corporate
Trust Office of the Indenture Trustee located within the United States of
America pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Note will become due and payable on the next Payment
Date, other than pursuant to a redemption pursuant to Article X, it shall, no
later than two (2) Business Days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Note to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that:
(i) the Indenture Trustee expects that funds sufficient to pay such
final installment will be available in the related Payment Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment will be
payable on such Payment Date, but only upon presentation and surrender of
such Note at the office or agency of the Note Registrar maintained for such
purpose pursuant to Section 3.02 (the address of which shall be set forth in
such notice) and (B) no interest shall accrue on such Note after such
Payment Date.
6
A copy of such form of notice shall be sent to the Note Insurer by the
Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) of this Section 2.08 and returned undelivered shall be held in
accordance with Section 3.03 hereof.
(d) Each (i) Noteholder Statement, shall be prepared by the Servicer
based on the Servicer calculations of the loan level data provided in the
Servicer Remittance Report delivered to the Indenture Trustee pursuant to the
Sale and Servicing Agreement, and (ii) the Servicer Remittance Report shall be
delivered by the Indenture Trustee to the Note Insurer, the Rating Agencies, the
Owner Trustee, the Depositor and each Noteholder as the statements required
pursuant to Section 8.06 hereof. Neither the Indenture Trustee nor the
Collateral Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or disk
or any such Servicer Remittance Report except to the extent necessary to satisfy
all obligations under this Section 2.08(d).
Within ninety (90) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a), (b)
and (c) in the definition of "Noteholder Statement," aggregated for such
calendar year or the applicable portion thereof during which such person was a
Noteholder. Such obligation will be deemed to have been satisfied to the extent
that substantially comparable information is provided pursuant to any
requirements of the Code as are from time to time in force.
From time to time (but no more than once per calendar month), upon the
written request of the Depositor, the Servicer or the Note Insurer, the
Indenture Trustee shall report to the Depositor, the Servicer and the Note
Insurer the amount then held in each Account (including investment earnings
accrued) held by the Indenture Trustee and the identity of the investments
included therein. From time to time, at the request of the Note Insurer, the
Indenture Trustee shall report to the Note Insurer with respect to the actual
knowledge of a Responsible Officer, without independent investigation, of any
breach of any of the representations or warranties relating to individual
Mortgage Loans set forth in Section 3.03 of the Unaffiliated Seller's Agreement.
The Indenture Trustee shall also provide the Note Insurer such other information
within its control as may be reasonably requested by it.
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Trust including
but not limited to the Indenture Trustee, or the Note Insurer, may treat the
Person in whose name any Note is registered as the owner of such Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Note and (b) on any other date for all
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other purposes whatsoever, and none of the Trust, the Indenture Trustee or any
other agent of the Trust, or the Note Insurer shall be affected by notice to the
contrary.
Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly canceled by the Note Registrar. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All
cancelled Notes held by the Note Registrar shall be held by the Note Registrar
in accordance with its standard retention policy, unless the Owner Trustee, on
behalf of the Trust shall direct by a Trust Order that they be destroyed or
returned to it.
Section 2.11. Authentication and Delivery of Notes. The Notes shall be
executed by an Authorized Officer of the Owner Trustee, on behalf of the Trust,
and delivered to the Authenticating Agent for authentication, and thereupon the
same shall be authenticated and delivered by the Authenticating Agent, upon a
Trust Request and upon receipt by the Authenticating Agent of all of the
following:
(a) A Trust Order authorizing the execution, authentication and delivery
of the Notes and specifying the Note Principal Balance and the Percentage
Interest of such Notes to be authenticated and delivered.
(b) A Trust Order authorizing the execution and delivery of this
Indenture and the Sale and Servicing Agreement.
(c) One or more Opinions of Counsel (which opinion shall not be at the
expense of the Indenture Trustee or the Trust) addressed to the Authenticating
Agent and the Note Insurer or upon which the Authenticating Agent and the Note
Insurer are expressly permitted to rely, complying with the requirements of
Section 11.01, reasonably satisfactory in form and substance to the
Authenticating Agent and the Note Insurer.
In rendering the opinions set forth above, such counsel may rely upon
Officer's Certificates of the Trust, the Owner Trustee, the Unaffiliated Seller,
the Originators, the Depositor, the Servicer and the Indenture Trustee, without
independent confirmation or verification with respect to factual matters
relevant to such opinions. In rendering the opinions set forth above, such
counsel need express no opinion as to (A) the existence of, or the priority of
the security interest created by the Indenture against, any liens or other
interests that arise by operation of law and that do not require any filing or
similar action in order to take priority over a perfected security interest or
(B) the priority of the security interest created by this Indenture with respect
to any claim or lien in favor of the United States or any agency or
instrumentality thereof (including federal tax liens and liens arising under
Title IV of ERISA).
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The acceptability to the Note Insurer of the Opinion of Counsel
delivered to the Authenticating Agent and the Note Insurer at the Closing Date
shall be conclusively evidenced by the delivery on the Closing Date of the
Policy.
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture and the issuance of
the Notes will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Trust's Certificate of
Trust or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Trust is a party or by which it is bound, or any
order of any court or administrative agency entered in any proceeding to
which the Trust is a party or by which it may be bound or to which it may be
subject, and that all conditions precedent provided in this Indenture
relating to the authentication and delivery of the Notes have been complied
with;
(ii) the Trust is the owner of each Mortgage Loan, free and clear of any
lien, security interest or charge, has not assigned any interest or
participation in any such Mortgage Loan (or, if any such interest or
participation has been assigned, it has been released) and has the right to
Grant each such Mortgage Loan to the Indenture Trustee;
(iii) the information set forth in the Mortgage Loan Schedule attached
as Schedule I to this Indenture is correct;
(iv) the Trust has Granted to the Indenture Trustee all of its right,
title and interest in each Mortgage Loan; and
(v) as of the Closing Date, no lien in favor of the United States
described in Section 6321 of the Code, or lien in favor of the Pension
Benefit Guaranty Corporation described in Section 4068(a) of the ERISA, has
been filed as described in subsections 6323(f) and 6323(g) of the Code upon
any property belonging to the Trust.
(e) An executed counterpart of the Sale and Servicing Agreement.
(f) An executed counterpart of the Unaffiliated Seller's Agreement.
(g) An executed counterpart of the Trust Agreement.
(h) An executed copy of the Insurance Agreement.
(i) An original executed copy of the Policy.
(j) A copy of a letter from Xxxxx'x that is has assigned a rating of
"Aaa" to the Notes, a copy of a letter from S&P that it has assigned a rating of
"AAA" to the Notes and a copy of a letter from DCR that it has assigned a rating
of "AAA" to the Notes.
Section 2.12. Book-Entry Note. The Notes will be issued initially as
one or more certificates in the name of Cede & Co., as nominee for the Clearing
Agency maintaining
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book-entry records with respect to ownership and transfer of such Notes, and
registration of the Notes may not be transferred by the Note Registrar except
upon Book-Entry Termination. In such case, the Note Registrar shall deal with
the Clearing Agency as representative of the Beneficial Owners of such Notes for
purposes of exercising the rights of Noteholders hereunder. Each payment of
principal of and interest on a Book-Entry Note shall be paid to the Clearing
Agency, which shall credit the amount of such payments to the accounts of its
Clearing Agency Participants in accordance with its normal procedures. Each
Clearing Agency Participant shall be responsible for disbursing such payments to
the Beneficial Owners of the Book-Entry Notes that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Beneficial Owners of the Book-Entry
Notes that it represents. All such credits and disbursements are to be made by
the Clearing Agency and the Clearing Agency Participants in accordance with the
provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if
any, the Trust or the Note Insurer shall have any responsibility therefor except
as otherwise provided by applicable law. Requests and directions from, and votes
of, such representatives shall not be deemed to be inconsistent if they are made
with respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System. (a) The book-entry
system through the Clearing Agency with respect to the Book-Entry Notes may be
terminated upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that the Clearing
Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depositary with respect to the Notes and the
Indenture Trustee is unable to locate a qualified successor Clearing Agency
satisfactory to the Servicer, on behalf of the Trust;
(ii) The Majority Certificateholders, on behalf of the Trust, in their
sole discretion, elects to terminate the book-entry system by notice to the
Clearing Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which time the
Indenture Trustee shall use all reasonable efforts to promptly notify each
Beneficial Owner through the Clearing Agency of such Event of Default), the
Beneficial Owners of no less than 51% of the Note Principal Balance of the
Book-Entry Notes advise the Indenture Trustee in writing, through the
related Clearing Agency Participants and the Clearing Agency, that the
continuation of a book-entry system through the Clearing Agency to the
exclusion of any Definitive Notes being issued to any person other than the
Clearing Agency or its nominee is no longer in the best interests of the
Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) of this
Section 2.13, the Indenture Trustee shall use all reasonable efforts to notify
all Beneficial Owners, through the Clearing Agency, of the occurrence of such
event and of the availability of Definitive Notes to Beneficial Owners
requesting the same, in an aggregate outstanding Note Principal Balance
representing the interest of each, making such adjustments and allowances as it
may find necessary or appropriate as to accrued interest and previous calls for
redemption. Definitive Notes shall be issued only upon surrender to the
Indenture Trustee of the global Note
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by the Clearing Agency, accompanied by registration instructions for the
Definitive Notes. Neither the Trust nor the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon issuance of the
Definitive Notes, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall cease to be applicable and the provisions
relating to Definitive Notes shall be applicable.
Section 2.14. Pledge of Subsequent Mortgage Loans. (a) Subject to
the satisfaction of the conditions set forth in paragraph (b) of this Section
2.14, in consideration of the Indenture Trustee's delivery on the related
Subsequent Transfer Dates to or upon the order of the Servicer, on behalf of the
Trust, of all or a portion of the balance of funds in either Pre-Funding
Account, the Trust shall on any Subsequent Transfer Date pledge, without
recourse, to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer, all right, title and interest of the Trust in and to the related
Subsequent Mortgage Loans, including the outstanding principal of, and interest
due on, such Subsequent Mortgage Loans, and all other assets in the Trust Estate
relating to the Subsequent Mortgage Loans. In connection with such pledge, and
pursuant to Section 2.07 of the Unaffiliated Seller's Agreement and Section 2.09
of the Sale and Servicing Agreement, the Trust does hereby also irrevocably
pledge to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, all of its rights under the Sale and Servicing Agreement, the
Unaffiliated Seller's Agreement, the related Subsequent Contribution Agreement
and the related Subsequent Transfer Agreement, including, without limitation,
its right to exercise the remedies created by Sections 2.06 and 3.05 of the
Unaffiliated Seller's Agreement for defective documentation and for breaches of
representations and warranties, agreement and covenants of the Unaffiliated
seller contained in Section 3.01, 3.02 and 3.03 of the Unaffiliated Seller's
Agreement.
The amount released from either Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of the
Aggregate Principal Balances of the Subsequent Mortgage Loans so pledged, as of
the related Subsequent Cut-Off Date.
(b) The Subsequent Mortgage Loans and the other property and rights
related thereto described in paragraph (a) of this Section 2.14 shall be pledged
by the Trust to the Indenture Trustee, for the benefit of the Noteholders and
the Note Insurer, only upon the satisfaction of each of the following conditions
on or prior to the related Subsequent Transfer Date:
(i) the Unaffiliated Seller shall have provided the Trust, the
Depositor, the Indenture Trustee, the Collateral Agent, the Rating Agencies
and the Note Insurer with an Addition Notice at least two (2) Business Days
prior to the Subsequent Transfer Date, which shall include a Mortgage Loan
Schedule listing the Subsequent Mortgage Loans, and shall have provided any
other information reasonably requested by any of the foregoing parties with
respect to the Subsequent Mortgage Loans;
(ii) the Unaffiliated Seller shall have caused the Servicer to deposit
in the Collection Account all collections of (x) principal in respect of the
Subsequent Mortgage
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Loans received after the related Subsequent Cut-Off Date and (y) interest
due on the Subsequent Mortgage Loans after the related Subsequent Cut-Off
Date;
(iii) as of each Subsequent Transfer Date, neither the Unaffiliated
Seller nor the Depositor shall be insolvent, neither shall be made insolvent
by such transfer and neither shall be aware of any pending insolvency;
(iv) such Subsequent Transfer shall not result in a material adverse tax
consequence to the Trust or the Holders of the Notes;
(v) the related Pre-Funding Period shall not have terminated;
(vi) the Unaffiliated Seller shall have delivered to the Indenture
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and each complies with
the terms of the Unaffiliated Seller's Agreement, including each of the
representations and warranties made with respect thereto in Section 3.03 of
the Unaffiliated Seller's Agreement; provided, that each representation in
Section 3.03(tt) (other than clause (v)) may be waived or modified with the
prior written consent of the Note Insurer;
(vii) there shall have been delivered to the Note Insurer, the Trust,
the Collateral Agent, the Rating Agencies and the Indenture Trustee,
Independent Opinions of Counsel with respect to the transfer of the
Subsequent Mortgage Loans substantially in the form of the Opinions of
Counsel delivered to the Depositor, the Note Insurer, the Trust, the
Collateral Agent, the Rating Agencies and the Indenture Trustee on the
Closing Date (i.e. bankruptcy, corporate and tax opinions);
(viii) the Indenture Trustee shall have received a written consent from
the Note Insurer in the form of Exhibit C hereto;
(ix) the Originators, the Unaffiliated Seller and the Depositor shall
have delivered to the Indenture Trustee an executed copy of a Subsequent
Transfer Agreement, substantially in the form of Exhibit A to the
Unaffiliated Seller's Agreement;
(x) the Depositor and the Trust shall have delivered to the Indenture
Trustee an executed copy of a Subsequent Contribution Agreement,
substantially in the form of Exhibit G to the Sale and Servicing Agreement,
and
(xi) the Trust and the Indenture Trustee shall have executed a
Subsequent Pledge Agreement, substantially in the form of Exhibit B hereto.
(c) In connection with the transfer, assignment and pledge of the
Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the document
delivery requirements set forth in Section 2.05 of the Sale and Servicing
Agreement.
(d) On each Subsequent Transfer Date upon written instruction from the
Unaffiliated Seller, the Indenture Trustee shall withdraw from the related
Capitalized Interest Account and pay to the Unaffiliated Seller on such
Subsequent Transfer Date the Overfunded
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Interest Amount for such Subsequent Transfer Date, as calculated by the Servicer
and subject to the approval of the Note Insurer.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes. The Servicer, on behalf of the Trust
will pay or cause to be duly and punctually paid the principal of, and interest
on, the Notes in accordance with the terms of the Notes and this Indenture. The
Notes shall be non-recourse obligations of the Trust and shall be limited in
right of payment to amounts available from the Trust Estate as provided in this
Indenture and the Trust shall not otherwise be liable for payments on the Notes.
No person shall be personally liable for any amounts payable under the Notes. If
any other provision of this Indenture conflicts or is deemed to conflict with
the provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.
Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
will always maintain its corporate trust office at a location in the United
States of America where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Trust in respect of the
Notes and this Indenture may be served. Such location shall be the Corporate
Trust Office of the Indenture Trustee.
The Owner Trustee, at the direction of the Majority Certificateholder,
on behalf of the Trust may also from time to time, at the expense of the
Majority Certificateholders, designate one or more other offices or agencies
within the United States of America where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, any designation of an office or agency for
payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at
the direction of the Majority Certificateholders, on behalf of the Trust will
give prompt written notice to the Indenture Trustee and the Note Insurer of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust. All payments
of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the related Payment Account pursuant to Sections 5.07 or
8.02 hereof shall be made on behalf of the Trust by the Indenture Trustee, and
no amounts so withdrawn from the related Payment Account for payments on the
Notes shall be paid over to the Trust under any circumstances except as provided
in this Section 3.03 or in Sections 5.07 or 8.02 hereof.
With respect to Definitive Notes, if the Trust shall have a Note
Registrar that is not also the Indenture Trustee, such Note Registrar shall
furnish, no later than the fifth (5th) calendar day after each Record Date, a
list, in such form as such Indenture Trustee may reasonably require, of the
names and addresses of the Holders of Notes and of the number of Individual
Notes held by each such Holder.
Whenever the Trust shall have a Paying Agent other than the Indenture
Trustee, the Servicer, on behalf of the Trust, will, on or before the Business
Day next preceding each
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Payment Date, direct the Indenture Trustee to deposit with such Paying Agent an
aggregate sum sufficient to pay the amounts then becoming due (to the extent
funds are then available for such purpose in the related Payment Account), such
sum to be held in trust for the benefit of the Persons entitled thereto. Any
moneys deposited with a Paying Agent in excess of an amount sufficient to pay
the amounts then becoming due on the Notes with respect to which such deposit
was made shall, upon Trust Order, be paid over by such Paying Agent to the
Indenture Trustee for application in accordance with Article VIII hereof.
Subject to the prior written consent of the Note Insurer, any Paying
Agent other than the Indenture Trustee may be appointed by Trust Order and at
the expense of the Trust. The Trust shall not appoint any Paying Agent (other
than the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (b) of the definition of the term "Permitted
Investments". The Servicer, on behalf of the Trust, will cause each Paying Agent
other than the Indenture Trustee to execute and deliver to the Indenture Trustee
and the Owner Trustee, on behalf of the Trust, an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(a) allocate all sums received for payment to the Holders of Notes on
each Payment Date among such Holders in the proportion specified in the
applicable Noteholder Statement, in each case to the extent permitted by
applicable law;
(b) hold all sums held by it for the payment of amounts due with respect
to the Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided;
(c) if such Paying Agent is not the Indenture Trustee, immediately
resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums
held by it in trust for the payment of the Notes if at any time the Paying Agent
ceases to meet the standards set forth above required to be met by a Paying
Agent at the time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give the
Indenture Trustee notice of any Default by the Trust (or any other obligor upon
the Notes) in the making of any payment required to be made with respect to any
Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, at any time
during the continuance of any such Default, upon the written request of the
Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in
trust by such Paying Agent; and
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements applicable
to original issue discount (if any) on any of the Notes, the Servicer, on
14
behalf of the Trust, has provided the calculations pertaining thereto to the
Indenture Trustee and the Paying Agent.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust for
the payment of any amount due with respect to any Note and remaining unclaimed
for two and one-half years after such amount has become due and payable to the
Holder of such Note (or if earlier, three months before the date on which such
amount would escheat to a governmental entity under applicable law) shall be
discharged from such trust and paid to the Trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Trust for
payment thereof (but only to the extent of the amounts so paid to the Trust),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease. The Indenture Trustee may adopt and
employ, at the expense of the Trust, any reasonable means of notification of
such repayment (including, but not limited to, mailing notice of such repayment
to Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or any Paying
Agent, at the last address of record for each such Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c)
of this Section 3.04, the Trust will keep in full effect its existence, rights
and franchises as a business trust under the laws of the State of Delaware or
under the laws of any other state of the United States of America, and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the other Basic Documents.
(b) Subject to Section 3.09(g) hereof, and with the prior written
consent of the Note Insurer, any entity into which the Trust may be merged or
with which it may be consolidated, or any entity resulting from any merger or
consolidation to which the Trust shall be a party, shall be the successor issuer
under this Indenture without the execution or filing of any paper, instrument or
further act to be done on the part of the parties hereto, anything in any
agreement relating to such merger or consolidation, by which any such Trust may
seek to retain certain powers, rights and privileges therefore obtaining for any
period of time following such merger or consolidation to the contrary
notwithstanding (other than Section 3.09(g)).
(c) Upon any consolidation or merger of or other succession to the Trust
in accordance with this Section 3.04, the Person formed by or surviving such
consolidation or merger (if other than the Trust) may exercise every right and
power of, and shall have all of the obligations of, the Trust under this
Indenture with the same effect as if such Person had been named as the issuer
herein.
15
Section 3.05. Protection of Trust Estate. (a) The Trust will, from
time to time, execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action as may be
necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate as
made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Sale and Servicing
Agreement, or the Unaffiliated Seller's Agreement; or
(v) preserve and defend title to the Trust Estate and the rights of the
Indenture Trustee, the Noteholders and the Note Insurer in the Mortgage
Loans and the other property held as part of the Trust Estate against the
claims of all Persons and parties.
(b) The Indenture Trustee shall not, and shall not permit the Collateral
Agent to, remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the Closing Date or cause or permit ownership or the
pledge of any portion of the Trust Estate that consists of book-entry securities
to be recorded on the books of a Person located in a different jurisdiction from
the jurisdiction in which such ownership or pledge was recorded at such time
unless the Indenture Trustee shall have first received an Opinion of Counsel to
the effect that the lien and security interest created by this Indenture with
respect to such property will continue to be maintained after giving effect to
such action or actions.
Section 3.06. Opinions as to the Trust Estate. On or before April 30th
in each calendar year, beginning in 2001, the Servicer, on behalf of the Trust,
shall furnish to the Indenture Trustee and the Note Insurer an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture Trustee
and the Note Insurer either stating that, in the opinion of such counsel, such
action has been taken as is necessary to maintain the lien and security interest
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain such
lien and security interest. Such Opinion of Counsel shall also describe all such
action, if any, that will, in the opinion of such counsel, be required to be
taken to maintain the lien and security interest of this Indenture with respect
to the Trust Estate until May 1st in the following calendar year.
Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and
the other Basic Documents.
(b) The Trust shall not take any action and will use its Best Efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any of the Mortgage
Files or under any instrument included in the
16
Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents or instruments contained in the Mortgage
Files, except as expressly permitted in this Indenture, the other Basic
Documents or such document included in the Mortgage File or other instrument or
unless such action will not adversely affect the interests of the Noteholders
and the Note Insurer.
(c) If the Servicer or the Owner Trustee, on behalf of the Trust, shall
have knowledge of the occurrence of a default under the Sale and Servicing
Agreement or the Unaffiliated Seller's Agreement, the Servicer or the Owner
Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note
Insurer and the Rating Agencies thereof, and, in the case of the Servicer, shall
specify in such notice the action, if any, the Servicer is taking with respect
to such default.
(d) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify
the Note Insurer and the Rating Agencies. As soon as any successor Servicer is
appointed, the Indenture Trustee shall notify the Note Insurer and the Rating
Agencies, specifying in such notice the name and address of such successor
Servicer.
Section 3.08. Investment Company Act. The Trust shall at all times
conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any successor
statute), and the rules and regulations thereunder.
Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any portion of the
Trust Estate, except as expressly permitted by this Indenture and the other
Basic Documents;
(b) claim any credit on, or make any deduction from, the principal of,
or interest on, any of the Notes by reason of the payment of any taxes levied or
assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than as permitted by the
Trust Agreement or other than in connection with, or relating to, the issuance
of the Notes pursuant to this Indenture, or amend the Trust Agreement, as in
effect on the Closing Date, other than in accordance with Section 11.01 of the
Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an indebtedness
other than the Notes;
(e) incur, assume, guaranty or agree to indemnify any Person with
respect to any indebtedness of any Person, except for such indebtedness as may
be incurred by the Trust in connection with the issuance of the Notes pursuant
to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or liquidate
in whole or in part (until the Notes are paid in full);
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(g) (i) permit the validity or effectiveness of this Indenture or any
Grant to be impaired, or permit the lien of this Indenture to be impaired,
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (ii) permit any lien, charge,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the proceeds
thereof, or (iii) permit the lien of this Indenture not to constitute a valid
perfected first priority security interest in the Trust Estate; or
(h) take any other action that should reasonably be expected to, or fail
to take any action if such failure should reasonably be expected to, cause the
Trust to be taxable as (x) an association pursuant to Section 7701 of the Code
or (y) a taxable mortgage pool pursuant to Section 7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance. (a) On or before
April 30, 2001, and each April 30 thereafter, the Servicer, on behalf of the
Trust, shall deliver to the Indenture Trustee, the Note Insurer and the
Depositor a written statement, signed by an Authorized Officer of the Servicer,
on behalf of the Trust, stating that:
(b) a review of the fulfillment by the Trust during such year of its
obligations under this Indenture has been made under such Authorized Officer's
supervision; and
(c) to the best of such Authorized Officer's knowledge, based on such
review, the Trust has complied with all conditions and covenants under this
Indenture throughout such year, or, if there has been a Default in the
fulfillment of any such covenant or condition, specifying each such Default
known to such Authorized Officer and the nature and status thereof.
Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust
or otherwise with respect to any ownership or equity interest or security in or
of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Trust may make, or cause to be made, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under this Indenture and the other Basic Documents and the Trust
will not, directly or indirectly, make or cause to be made payments to or
distributions from either Payment Account except in accordance with this
Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes. For purposes
of federal, state and local income, franchise and any other income taxes, the
Trust will treat the Notes as indebtedness, and hereby instructs the Indenture
Trustee, Payee Agent and the Servicer, on behalf of the Trust to treat the Notes
as indebtedness for all applicable tax reporting purposes.
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Section 3.13. Notice of Events of Default. The Servicer, on behalf of
the Trust, shall give the Indenture Trustee, the Note Insurer, the Rating
Agencies and the Depositor prompt written notice of each Event of Default
hereunder, each default on the part of the Servicer of its obligations under the
Sale and Servicing Agreement and each default on the part of the Unaffiliated
Seller of its obligations under the Unaffiliated Seller's Agreement.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the
Trust, will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) either
(i) all Notes theretofore authenticated and delivered (other than (x)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.07 hereof, and (y) Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Trust, as provided in Section 3.03 hereof) have been delivered to the Note
Registrar for cancellation; or
(ii) all Notes not theretofore delivered to the Note Registrar for
cancellation, (A) have become due and payable, or (B) will become due and
payable at the Final Stated Maturity Date within one (1) year, or (C) are to
be called for redemption pursuant to Section 10.01 hereof within one (1)
year under irrevocable arrangements satisfactory to the Indenture Trustee
for the giving of notice of redemption by the Indenture Trustee in the name,
and at the expense, of the Certificateholder or Servicer, as applicable,
and the Certificateholder, in the case of clause ii(C), or Servicer, in the case
of clauses (ii)(A), (ii)(B) or (ii)(C) above, has irrevocably deposited or
caused to be deposited with the Indenture Trustee, in trust for such purpose, an
amount sufficient to pay and discharge the entire unpaid Note Principal Balance
of such Notes not theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the Final Stated Maturity Date or to
the applicable Redemption Date, as the case may be, and in the case of Notes
that were not paid at the Final Stated Maturity Date of their entire unpaid Note
Principal Balance, for all overdue principal and all interest payable on such
Notes to the next succeeding Payment Date therefor;
(b) the Servicer, on behalf of the Trust, has paid or caused to be paid
all other sums payable hereunder by the Trust (including, without limitation,
amounts due the Note Insurer); and
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(c) the Servicer, on behalf of the Trust, has delivered to the Indenture
Trustee and the Note Insurer an Officers' Certificate and an Opinion of Counsel
satisfactory in form and substance to the Indenture Trustee and the Note Insurer
each stating that all conditions precedent herein providing for the satisfaction
and discharge of this Indenture have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Trust (or of the Servicer in the
case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Trust or upon Trust Order all cash, securities and
other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (a) and (b) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and any Paying Agent to the Trust and the
Holders of Notes under Section 3.03 hereof, the obligations of the Indenture
Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of
Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes,
registration of transfers of Notes and rights to receive payments of principal
of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to Notes issued hereunder, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) if the Trust shall fail to distribute or cause to be distributed to
the Indenture Trustee, for the benefit of the holders of the Notes, on any
Payment Date, any Interest Payment Amount or shall fail to pay any Net Mortgage
Loan Interest Shortfalls on the Final Stated Maturity Date for the applicable
Class of Notes or shall fail to pay on the Final Stated Maturity Date of the
Class A-2 Notes any Class A-2 Available Funds Cap Carry-Forward Amount due on
the Notes;
(b) if the Trust shall fail to distribute or cause to be distributed to
the Indenture Trustee, for the benefit of the holders of the Notes, (x) on any
Payment Date, an
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amount equal to the Principal Payment Amount due on the Notes on such Payment
Date, to the extent that sufficient funds are on deposit in the Collection
Account or (y) on the Final Stated Maturity Date for any Class of Notes, the
aggregate outstanding Note Principal Balance of such Class of Notes;
(c) if the Trust shall breach or default in the due observance of any
one or more of the covenants set forth in clauses (a) through (h) of Section
3.09 hereof;
(d) if the Trust shall consent to the appointment of a custodian,
receiver, trustee or liquidator (or other similar official) of itself, or of a
substantial part of its property, or shall admit in writing its inability to pay
its debts generally as they come due, or a court of competent jurisdiction shall
determine that the Trust is generally not paying its debts as they come due, or
the Trust shall make a general assignment for the benefit of creditors;
(e) if the Trust shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization in a proceeding under any
bankruptcy laws (as now or hereafter in effect) or an answer admitting the
material allegation of a petition filed against the Trust in any such
proceeding, or the Trust shall, by voluntary petition, answer or consent, seek
relief under the provisions of any now existing or future bankruptcy or other
similar law providing for the reorganization or winding-up of debtors, or
providing for an agreement, composition, extension or adjustment with its
creditors;
(f) if an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent (express
or legally implied) of the Trust, a custodian, receiver, trustee or liquidator
(or other similar official) of the Trust or any substantial part of its
property, or sequestering any substantial part of its respective property, and
any such order, judgment or decree or appointment or sequestration shall remain
in force undismissed, unstayed or unvacated for a period of ninety (90) days
after the date of entry thereof; or
(g) if a petition against the Trust in a proceeding under applicable
bankruptcy laws or other insolvency laws, as now or hereafter in effect, shall
be filed and shall not be stayed, withdrawn or dismissed within ninety (90) days
thereafter, or if, under the provisions of any law providing for reorganization
or winding-up of debtors which may apply to the Trust, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Trust or any
substantial part of its property, and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period of
ninety (90) days.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case, but with
the consent of the Note Insurer in the absence of a Note Insurer Default, the
Indenture Trustee may, and on request of the Note Insurer, in the absence of a
Note Insurer Default, or, with the prior written consent of the Note Insurer,
the Holders of Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Notes of both of the Classes, shall, declare all the
Notes to be immediately due and payable by a notice in writing to the Trust (and
to the Indenture Trustee if given by Noteholders), and upon any such declaration
such Notes, in an amount equal to the entire unpaid Note Principal Balance of
such Notes, together with accrued and unpaid interest thereon to the
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date of such acceleration, shall become immediately due and payable, all subject
to the prior written consent of the Note Insurer in the absence of a Note
Insurer Default.
At any time after such a declaration of acceleration of maturity of the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter provided in this
Article V, the Note Insurer, in the absence of a Note Insurer Default, or the
Holders of Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both of the Classes, with the prior written consent of the
Note Insurer, by written notice to the Trust and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of, and interest on, all Outstanding Notes
and all other amounts that would then be due hereunder or upon such Notes if
the Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal of
Notes that have become due solely by such acceleration, have been cured or
waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default occurs and is continuing, the
Indenture Trustee may, with the prior written consent of the Note Insurer,
proceed to protect and enforce its rights and the rights of the Noteholders and
the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, or any
Noteholder against the Trust shall be limited to the preservation, enforcement
and foreclosure of the liens, assignments, rights and security interests under
the Indenture and no attachment, execution or other unit or process shall be
sought, issued or levied upon any assets, properties or funds of the Trust,
other than the Trust Estate relative to the Notes in respect of which such Event
of Default has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Notes may be sought or obtained by the Indenture Trustee or
any Noteholder against the Trust. The Indenture Trustee shall be entitled to
recover the costs and expenses expended by it pursuant to
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this Article V including reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing and the Notes been declared due and payable and such declaration
and its consequences have not been rescinded and annulled, the Indenture
Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof,
to the extent applicable) may, for the benefit of the Noteholders and the Note
Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts then payable
on the Notes, or under this Indenture, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Trust moneys adjudged due,
subject in all cases to the provisions of Sections 3.01 and 5.03 hereof;
(b) in accordance with Section 5.17 hereof, sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or private
Sales called and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate; (d) exercise any
remedies of a secured party under the Uniform Commercial Code and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee or the Holders of the Notes and the Note Insurer hereunder;
and
(e) refrain from selling the Trust Estate and apply all funds on deposit
in each of the Accounts pursuant to Section 5.07 hereof.
Section 5.05. Indenture Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative
to the Trust or any other obligor upon any of the Notes or the property of the
Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Trust for the payment of any
overdue principal or interest) shall, with the prior written consent of the Note
Insurer, be entitled and empowered, by intervention in such Proceeding or
otherwise to:
(a) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel), the Noteholders and the Note Insurer allowed in such Proceeding, and
(b) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, liquidator, or sequestrator (or other similar official) in
any such Proceeding is hereby authorized by each
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Noteholder and the Note Insurer to make such payments to the Indenture Trustee
and, in the event that the Indenture Trustee shall consent to the making of such
payments directly to the Noteholders and the Note Insurer, to pay to the
Indenture Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of
Notes. All rights of action and claims under this Indenture or any of the Notes
may be prosecuted and enforced by the Indenture Trustee without the possession
of any of the Notes or the production thereof in any Proceeding relating
thereto, and any such Proceeding instituted by the Indenture Trustee, at the
direction of the Note Insurer, shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the Holders of the Notes and the Note Insurer in respect of which such judgment
has been recovered after payment of amounts required to be paid pursuant to
clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. If the Notes have been
declared due and payable following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, any money collected by
the Indenture Trustee with respect to each Class of Notes pursuant to this
Article V or otherwise and any other monies that may then be held or thereafter
received by the Indenture Trustee as security for such Class of Notes shall be
applied in the following order, at the date or dates fixed by the Indenture
Trustee and, in case of the payment of the entire amount due on account of
principal of, and interest on, such Class of Notes, upon presentation and
surrender thereof:
(a) first, to the Indenture Trustee, any unpaid Indenture Trustee Fees
with respect to such Class then due and any other amounts payable and due to the
Indenture Trustee with respect to such Class under this Indenture, including any
costs or expenses incurred by it in connection with the enforcement of the
remedies provided for in this Article V;
(b) second, to the Servicer, any amounts required to pay the Servicer
for any unpaid Servicing Fees with respect to the related Pool then due and to
reimburse the Servicer for Periodic Advances with respect to the related Pool
previously made by, and not previously reimbursed to or retained by, the
Servicer and, upon the final liquidation of the related Mortgage Loan or the
final liquidation of the Trust Estate, Servicing Advances with respect to the
related Pool previously made by, and not previously reimbursed to or retained
by, the Servicer;
(c) third, to the payment of Interest Payment Amounts then due and
unpaid upon the Outstanding Notes of such Class through the day preceding the
date on which such payment is made;
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(d) fourth, to the payment of the Note Principal Balance of each of the
Outstanding Notes of such Class, up to the amount of their respective unpaid
Note Principal Balance, ratably, without preference or priority of any kind;
(e) fifth, to the Note Insurer, as subrogee to the rights of the
Noteholders, (x) the aggregate amount necessary to reimburse the Note Insurer
for any unreimbursed Reimbursement Amounts for such Class paid by the Note
Insurer on prior Payment Dates, together with interest thereon at the "Late
Payment Rate" specified in the Insurance Agreement from the date such
Reimbursement Amounts were due to the Note Insurer to such Payment Date, (y) the
amount of any unpaid Premium Amount for such Class then due, together with
interest thereon at the "Late Payment Rate" specified in the Insurance Agreement
from the date such amounts were due to such Payment Date and (z) any other
amounts due and owing to the Note Insurer for such Class under the Insurance
Agreement;
(f) sixth, to the payment of any Net Mortgage Loan Interest Shortfalls
of such Class, through the day preceding the date on which such payment is made;
(g) seventh, for payment in respect of the other Class of Notes, in the
priority set forth in this Section 5.07, to the extent of any shortfall in the
payment of the amounts described in clauses (a) through (f) with respect to such
other Class;
(h) eighth, with respect to the Class A-2 Notes only, to the payment of
any Class A-2 Available Funds Cap Carry-Forward Amount; and
(i) ninth, the remainder to the Holder of Trust Certificate relating to
such Class.
Section 5.08. Limitation on Suits. No Holder of a Note shall have any
right to institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee and the Note Insurer of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the Note
Principal Balance of the Outstanding Notes of both of the Classes shall have
made written request to the Indenture Trustee to institute Proceedings in
respect of such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
indemnity in full against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Indenture Trustee, for sixty (60) days after its receipt of such
notice, request and offer of indemnity, has failed to institute any such
Proceeding;
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such sixty (60) day period by the Holders of
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both of the Classes; and
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(f) the consent of the Note Insurer shall have been obtained; it being
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the Holders of
Notes.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than 50% of the Note Principal Balances of the
Outstanding Notes of both of the Classes, the Indenture Trustee shall take the
action prescribed by the group representing a greater percentage of the Note
Principal Balances of the Outstanding Notes of both of the Classes.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections
3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to
recovery from amounts in the portion of the Trust Estate relating to such Note,
the Holder of any Note shall have the right, to the extent permitted by
applicable law, which right is absolute and unconditional, to receive payment of
each installment of interest on such Note on the respective Payment Date for
such installments of interest, to receive payment of each installment of
principal of such Note when due (or, in the case of any Note called for
redemption, on the date fixed for such redemption) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Insurer and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee, the Note Insurer and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee, the Note Insurer or to the Noteholders may be
26
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Note Insurer or by the Noteholders with the prior consent
of the Note Insurer, as the case may be.
Section 5.13. Control by Noteholders. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both of
the Classes on the applicable Record Date shall, with the consent of the Note
Insurer, have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale of the
Trust Estate shall be by the Holders of Notes representing the percentage of the
Note Principal Balance of the Outstanding Notes specified in Section 5.17(b)(i)
hereof, unless Section 5.17(b)(ii) hereof is applicable; and
(c) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; provided,
however, that, subject to Section 6.01 hereof, the Indenture Trustee need not
take any action that it determines might involve it in liability or be unjustly
prejudicial to the Noteholders not consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both of
the Classes on the applicable Record Date may on behalf of the Holders of all
the Notes, and with the consent of the Note Insurer, waive any past Default
hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest on any
Note; or
(b) in respect of a covenant or provision hereof that under Section 9.02
hereof cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted
27
by any Noteholder, or group of Noteholders, holding in the aggregate Notes
representing more than 10% of the Note Principal Balance of the Outstanding
Notes of both of the Classes, or to any suit instituted by any Noteholder for
the enforcement of the payment of any Interest Payment Amount or Principal
Payment Amount on any Note on or after the related Payment Date or for the
enforcement of the payment of principal of any Note on or after the Final Stated
Maturity Date (or, in the case of any Note called for redemption, on or after
the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension of law wherever enacted, now or at any time hereafter in
force, that may affect the covenants in, or the performance of, this Indenture;
and the Trust (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale
(a "Sale") of any portion of the Trust Estate pursuant to Section 5.04 hereof
shall not be exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire Trust
Estate shall have been sold or all amounts payable on the Notes and under this
Indenture with respect thereto shall have been paid. The Indenture Trustee may
from time to time postpone any public Sale by public announcement made at the
time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee shall not in
any private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
(i) the Holders of Notes representing not less than 50% of the Note
Principal Balance of the Notes of both of the Classes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the entire amount
that would be payable to the Holders of the Notes, in full payment thereof
in accordance with Section 5.07 hereof, on the Payment Date next succeeding
the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or disposition thereof for purposes
of this Section 5.17(b). In the absence of a Note Insurer Default, no Sale
hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise consented
or directed the Indenture Trustee, at any public Sale of all or any portion of
the Trust Estate at which a minimum bid equal to or greater than the amount
described in paragraph (ii) of subsection (b) of this Section 5.17 has not been
established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee, acting in its capacity as
Indenture Trustee (i) on behalf of the Noteholders and the Note Insurer, shall
prevent
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such Sale and bid an amount (which shall include the Indenture Trustee's right,
in its capacity as Indenture Trustee, to credit bid) at least $1.00 more than
the highest other bid in order to preserve the Trust Estate on behalf of the
Noteholders and the Note Insurer.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Holder or Holders of Notes may bid for and purchase the property
offered for Sale, and upon compliance with the terms of sale may hold,
retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Outstanding Notes or claims for interest thereon in lieu of cash up to the
amount that shall, upon distribution of the net proceeds of such Sale, be
payable thereon, and such Notes, in case the amounts so payable thereon
shall be less than the amount due thereon, shall be returned to the Holders
thereof after being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered
for Sale in connection with any public Sale thereof, and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting the
gross Sale price against the sum of (A) the amount that would be payable to
the Holders of the Notes as a result of such Sale in accordance with Section
5.07 hereof on the Payment Date next succeeding the date of such Sale and
(B) the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes in
order to complete any such Sale or in order for the net Sale price to be
credited against such Notes, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the provisions
of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Trust to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take
all action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek and
recover judgment under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee, the Note Insurer or the Holders of Notes shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Trust or by
the levy of any execution under such judgment upon any portion of the Trust
Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the
Trust. The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security
29
only for the Notes. Holders of the Notes shall have no recourse against the
trust estate granted as security for any other series of Notes issued by the
Trust, and no judgment against the Trust for any amount due with respect to the
Notes may be enforced against either the trust estate securing any other series
or any other assets of the Trust, nor may any prejudgment lien or other
attachment be sought against any such other trust estate or any other assets of
the Trust. The Noteholders shall have no recourse against the Owner Trustee, the
Indenture Trustee, the Note Registrar, the Authenticating Agent, the Collateral
Agent, the Depositor, the Unaffiliated Seller, the Servicer or any of their
respective Affiliates, or to the assets of any of the foregoing entities.
Section 5.20. Application of the Trust Indenture Act. Pursuant to
Section 316(a) of the TIA, all provisions automatically provided for in Section
316(a) are hereby expressly excluded.
Section 5.21. Note Insurer Default. Notwithstanding anything elsewhere
in this Indenture or in the Notes to the contrary, if a Note Insurer Default
exists, the provisions of this Article V and all other provisions of this
Indenture which (a) permit the Note Insurer to exercise rights of the
Noteholders, (b) restrict the ability of the Noteholders or the Indenture
Trustee to act without the consent or approval of the Note Insurer, (c) provide
that a particular act or thing must be acceptable to the Note Insurer, (d)
permit the Note Insurer to direct (or otherwise to require) the actions of the
Indenture Trustee or the Noteholders, (e) provide that any action or omission
taken with the consent, approval or authorization of the Note Insurer shall be
authorized hereunder or shall not subject the party taking or omitting to take
such action to any liability hereunder or (f) which have a similar effect, shall
be of no further force and effect and the Indenture Trustee shall administer the
Trust Estate and perform its obligations hereunder solely for the benefit of the
Holders of the Notes. Nothing in the foregoing sentence, nor any action taken
pursuant thereto or in compliance therewith, shall be deemed to have released
the Note Insurer from any obligation or liability it may have to any party or to
the Noteholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Policy) or under applicable law.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
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(ii) in the absence of bad faith on its part, the Indenture Trustee may
request and conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the requirements of
this Indenture. The Indenture Trustee shall, however, examine such
certificates and opinions to determine whether they conform on their face to
the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b) of this
Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 5.13 or 5.17 hereof or
exercising any trust or power or remedy conferred upon the Indenture Trustee
under this Indenture.
(d) Except with respect to duties of the Indenture Trustee prescribed by
the TIA, as to which this Section 6.01(d) shall not apply, for all purposes
under this Indenture, the Indenture Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Sections 5.01(e) or 5.01(f)
hereof or any Default described in Sections 5.01(c) or 5.01(d) hereof or of any
event described in Section 3.05 hereof unless a Responsible Officer assigned to
and working in the Indenture Trustee's corporate trust department and having
direct responsibility for this Indenture has actual knowledge thereof or unless
written notice of any event that is in fact such an Event of Default or Default
is received by the Indenture Trustee at the Corporate Trust Office, and such
notice references the Notes generally, the Trust, the Trust Estate or this
Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it under this Indenture or the other Basic Documents.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Trust in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of the Notes, whether
such extinguishment occurs through a Sale of the Trust Estate to another Person,
the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the
rights, powers and duties of the Indenture Trustee with respect to the Trust
Estate
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(or the proceeds thereof), the Noteholders and the Note Insurer and the rights
of Noteholders and the Note Insurer shall continue to be governed by the terms
of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 9.08 of the Sale and Servicing
Agreement shall at all times retain possession of the Indenture Trustee's
Mortgage Files in the State of Delaware or the State of New York (or, with
respect to the Chase Bank of Texas, N.A., as initial Collateral Agent, in the
State of Texas), except for those Indenture Trustee's Mortgage Files or portions
thereof released to the Servicer or the Note Insurer pursuant to this Indenture,
the Unaffiliated Seller's Agreement or the Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.01, the Indenture Trustee shall have
no duty (A) to see to any recording, filing, or depositing of this Indenture or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording, filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate from funds available in the Payment
Accounts or (D) to confirm or verify the contents of any reports or certificates
of the Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
Section 6.02. Notice of Default. Immediately after the occurrence of any
Default known to the Indenture Trustee, the Indenture Trustee shall transmit by
mail to the Note Insurer and the Depositor notice of each such Default and,
within ninety (90) days after the occurrence of any Default known to the
Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders
of Notes notice of each such Default, unless such Default shall have been cured
or waived; provided, however, that in no event shall the Indenture Trustee
provide notice, or fail to provide notice of a Default known to the Indenture
Trustee in a manner contrary to the requirements of the Trust Indenture Act.
Concurrently with the mailing of any such notice to the Holders of the Notes,
the Indenture Trustee shall transmit by mail a copy of such notice to the Rating
Agencies.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
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(c) With the consent of the Note Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers.
(e) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Noteholders or the Note Insurer, pursuant to the
provisions of this Indenture, unless such Noteholders or the Note Insurer shall
have offered to the Indenture Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or thereby.
(f) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Noteholders
or the Note Insurer; provided, however, that if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Indenture Trustee, not reasonably assured to the Indenture Trustee by the
security afforded to it by the terms of this Indenture, the Indenture Trustee
may require reasonable indemnity against such cost, expense or liability as a
condition to taking any such action.
(g) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for anything other than its negligence or
willful misconduct in the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except, with respect to the
Indenture Trustee, the certificates of authentication on the Notes, shall be
taken as the statements of the Trust, and the Owner Trustee, the Indenture
Trustee and the Authenticating Agent assume no responsibility for their
correctness. The Owner Trustee and the Indenture Trustee make no representations
with respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Notes. Neither the Indenture Trustee nor the Owner Trustee
shall be accountable for the use or application by the Trust of the Notes or the
proceeds thereof or any money paid to the Trust or upon a Trust Order pursuant
to the provisions hereof.
Section 6.05. May Hold Notes. The Indenture Trustee, any Agent, or any
other agent of the Trust, in its individual or any other capacity, may become
the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13 hereof, may
otherwise deal with the Trust or any Affiliate of the Trust with the same rights
it would have if it were not Indenture Trustee, Agent or such other agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by this
33
Indenture or by law. The Indenture Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed with
the Trust and except to the extent of income or other gain on investments that
are obligations of the Indenture Trustee, in its commercial capacity, and income
or other gain actually received by the Indenture Trustee on investments, which
are obligations of others.
Section 6.07. Eligibility, Disqualification. Irrespective of whether
this Indenture is qualified under the TIA, this Indenture shall always have an
indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and
surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject
to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b)
be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by
Xxxxx'x; provided, however, that the Indenture Trustee's separate capital and
surplus shall at all times be at least the amount required by TIA Section
310(a)(2). If the Indenture Trustee publishes annual reports of condition of the
type described in TIA Section 310(a)(1), its combined capital and surplus for
purposes of this Section 6.08 shall be as set forth in the latest such report.
If at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
Section 6.09. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article VI shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10 hereof.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Trust, the Note Insurer and each Rating Agency. If an
instrument of acceptance by a successor Indenture Trustee shall not have been
delivered to the Indenture Trustee within thirty (30) days after the giving of
such notice of resignation, the resigning Indenture Trustee may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(c) The Indenture Trustee may be removed at any time by the Note Insurer
or, with the consent of the Note Insurer, by Act of the Holders representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both of
the Classes, by written notice delivered to the Indenture Trustee and to the
Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest prohibited
by Section 6.07 hereof and shall fail to resign or eliminate such
conflicting interest in accordance with Section 6.07 hereof after written
request therefor by the Trust or by any Noteholder; or
34
(ii) the Indenture Trustee shall cease to be eligible under Section 6.08
hereof or shall become incapable of acting or shall be adjudged bankrupt or
insolvent, or a receiver of the Indenture Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the
Indenture Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a
Trust Order, with the consent of the Note Insurer, may remove the Indenture
Trustee, and the Owner Trustee, on behalf of the Trust, by a Trust Order, shall
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint a successor
Indenture Trustee acceptable to the Note Insurer and to vest in such successor
Indenture Trustee any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Indenture; provided, however,
if the Owner Trustee, on behalf of the Trust, and the Note Insurer do not join
in such appointment within fifteen (15) days after the receipt by it of a
request to do so, or in case an Event of Default has occurred and is continuing,
the Indenture Trustee may petition a court of competent jurisdiction to make
such appointment, or (y) subject to Section 5.15 hereof, and, in the case of a
conflicting interest as described in clause (i) above, unless the Indenture
Trustee's duty to resign has been stayed as provided in TIA Section 310(b), the
Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at
least six (6) months may, on behalf of himself and all others similarly
situated, with the consent of the Note Insurer, petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a Trust
Order, shall promptly appoint a successor Indenture Trustee acceptable to the
Note Insurer. If within one (1) year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture Trustee
shall be appointed by the Note Insurer or, with the consent of the Note Insurer,
by Act of the Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes of both of the Classes delivered to the Trust
and the retiring Indenture Trustee, the successor Indenture Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Indenture Trustee and supersede the predecessor Indenture Trustee appointed by
the Trust. If no successor Indenture Trustee shall have been so appointed by the
Trust, the Note Insurer or Noteholders and shall have accepted appointment in
the manner hereinafter provided, any Noteholder who has been a bona fide Holder
of a Note for at least six (6) months may, on behalf of himself and all others
similarly situated, with the consent of the Note Insurer, petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Servicer, on behalf of the Trust, shall give notice of each
resignation and each removal of the Indenture Trustee and each appointment of a
successor Indenture Trustee to the Holders of Notes, the Rating Agencies and the
Note Insurer. Each notice shall include the name of the successor Indenture
Trustee and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge
and deliver
35
to the Trust, the Note Insurer and the retiring Indenture Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective and such successor Indenture
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Indenture Trustee.
Notwithstanding the foregoing, upon a Trust Request of the Owner Trustee, on
behalf of the Trust, or the successor Indenture Trustee, such retiring Indenture
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder. Upon a written request of any such
successor Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall,
with the written consent of the Note Insurer, execute and deliver any and all
instruments for more fully and certainly vesting in and confirming to such
successor Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article VI.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into which
the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Notes have
been authenticated, but not delivered, by the Indenture Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Indenture Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Indenture Trustee had
authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, for the purpose of meeting the legal requirements of the TIA
or of any jurisdiction in which any of the Trust Estate may at the time be
located, the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the Note Insurer or of the Holders of
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both of the Classes with respect to which a co-trustee or
separate trustee is being appointed, with the written consent of the Note
Insurer, the Owner Trustee, on behalf of the Trust, shall for such purpose join
with the Indenture Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more
36
Persons approved by the Indenture Trustee either to act as co-trustee, jointly
with the Indenture Trustee, of all or any part of the Trust Estate, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or Persons
in the capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section 6.13. If the Owner
Trustee, on behalf of the Trust, does not join in such appointment within
fifteen (15) days after the receipt by it of a request to do so, or in case an
Event of Default has occurred and is continuing, the Indenture Trustee alone
shall have power to make such appointment. All fees and expenses of any
co-trustee or separate trustee shall be payable by the Trust.
Should any written instrument from the Trust be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on written request, be executed, acknowledged and
delivered by the Owner Trustee, on behalf of the Trust, with the written consent
of the Note Insurer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) The Notes shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be exercised,
solely by the Indenture Trustee.
(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Indenture Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee or by the Indenture Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Indenture
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in writing,
executed by it, with the concurrence of the Owner Trustee, on behalf of the
Trust, evidenced by a Trust Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section 6.13, and, in case
an Event of Default has occurred and is continuing, the Indenture Trustee shall
have power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Trust, but upon the written
request of the Indenture Trustee, the Owner Trustee, on behalf of the Trust,
shall join with the Indenture Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in this Section
6.13.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Indenture Trustee, or any other
such trustee hereunder.
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(e) Any Act of Noteholders delivered to the Indenture Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 6.14. Authenticating Agents. The Owner Trustee, acting at the
direction of the Majority Certificateholders, shall appoint an Authenticating
Agent with power to act on the Trust's behalf, subject to the direction of the
Majority Certificateholders, in the authentication and delivery of the Notes
designated for such authentication and, containing provisions therein for such
authentication (unless the Owner Trustee, acting at the direction of the
Majority Certificateholders, has made other arrangements, satisfactory to the
Indenture Trustee and such Authenticating Agent, for notation on the Notes of
the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Notes) in connection with transfers and
exchanges under Section 2.06 hereof, as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by Section 2.06
hereof to authenticate and deliver Notes. For all purposes of this Indenture
(other than in connection with the authentication and delivery of Notes pursuant
to Sections 2.05 and 2.11 hereof in connection with their initial issuance), the
authentication and delivery of Notes by the Authenticating Agent pursuant to
this Section 6.14 shall be deemed to be the authentication and delivery of Notes
"by the Indenture Trustee." Such Authenticating Agent shall at all times be a
Person that both meets the requirements of Section 6.07 hereof for the Indenture
Trustee hereunder and has an office for presentation of Notes in the United
States of America. The Indenture Trustee shall initially be the Authenticating
Agent and shall be the Note Registrar as provided in Section 2.06 hereof. The
office from which the Indenture Trustee shall perform its duties as Note
Registrar and Authenticating Agent shall be its Corporate Trust Office. Any
Authenticating Agent appointed pursuant to the terms of this Section 6.14 or
pursuant to the terms of any supplemental indenture shall deliver to the
Indenture Trustee as a condition precedent to the effectiveness of such
appointment an instrument accepting the trusts, duties and responsibilities of
Authenticating Agent and of Note Registrar or co-Note Registrar and indemnifying
the Indenture Trustee for and holding the Indenture Trustee harmless against,
any loss, liability or expense (including reasonable attorneys' fees) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance, administration of the trust or exercise of authority by
such Authenticating Agent, Note Registrar or co-Note Registrar.
Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate trust business of
any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14, without the execution or filing of any further act on the part of
the parties hereto or the Authenticating Agent or such successor corporation or
banking association.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trust. The Owner Trustee, acting at the direction of the
Majority Certificateholders, may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Indenture Trustee. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee,
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acting at the direction of the Majority Certificateholders, shall promptly
appoint a successor Authenticating Agent, shall give written notice of such
appointment to the Indenture Trustee, and shall mail notice of such appointment
to all Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e) hereof, to pay
to any Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such
payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04
and 6.05 hereof shall be applicable to any Authenticating Agent.
Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee shall,
on or prior to the Closing Date, execute and deliver the acknowledgement of
receipt of the Policy required by Section 2.06(a) of the Sale and Servicing
Agreement.
(b) The Indenture Trustee shall cause the Collateral Agent to (i) on or
prior to the Closing Date, execute and deliver the acknowledgement of receipt of
the Mortgage Loans required by Section 2.06(b)(i) of the Sale and Servicing
Agreement, (ii) on or prior to thirty (30) days following the Closing Date,
execute and deliver the Initial Certificate required by Section 2.06(b)(ii) of
the Sale and Servicing Agreement, and (iii) on or prior to ninety (90) days
following the Closing Date, execute and deliver the Final Certification required
by Section 2.06(b)(iii) of the Sale and Servicing Agreement.
(c) In giving each of the acknowledgements, the Initial Certification
and the Final Certification referred to in clauses (a) and (b) of this Section
6.15, neither the Indenture Trustee nor the Collateral Agent shall be under any
duty or obligation (i) to inspect, review or examine any such documents,
instruments, securities or other papers to determine that they or the signatures
thereto are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File
should include a flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) In the event that the Mortgage Loans are required to be recorded in
accordance with the provisions of Article II of the Sale and Servicing
Agreement, no later than the fifth Business Day of each third month, commencing
in June 2000, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer and the Note Insurer a recordation report dated as of the first
day of such month, identifying those Mortgage Loans for which it has not yet
received (i) an original recorded Mortgage or a copy thereof certified to be
true and correct by the public recording office in possession of such Mortgage
or (ii) an original recorded Assignment of Mortgage to the Indenture Trustee and
any required intervening Assignments of Mortgage or a copy thereof certified to
be a true and correct copy by the public recording office in possession of such
Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses. The Indenture Trustee
shall be entitled to receive the Indenture Trustee Fee on each Payment Date as
provided herein. The Indenture Trustee also shall be entitled to (i) payment of
or reimbursement for expenses, disbursements and advances incurred or made by
the Indenture Trustee in accordance with any
39
of the provisions of this Indenture (including, but not limited to, the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ), and (ii) indemnification against
losses, liability and expenses, including reasonable attorney's fees, incurred,
arising out of or in connection with this Indenture, the Notes and the Sale and
Servicing Agreement. The Indenture Trustee and any director, officer, employee
or agent of the Indenture Trustee shall be indemnified by, first, the Trust and,
second, the Servicer and held harmless against any loss, liability or reasonable
expense incurred in connection with this Indenture or the Notes, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance by the Indenture Trustee of its duties
hereunder. The obligations of the Servicer and the Trust under this Section 6.16
shall survive termination of the Trust and payment of the Notes, and shall
extend to any co-Indenture Trustee or separate-Indenture Trustee appointed
pursuant to this Article VI.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and
Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to
be furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Payment Date occurring closest
to six (6) months after the Closing Date and each Payment Date occurring at six
(6) month intervals thereafter, all information in the possession or control of
the Note Registrar, in such form as the Indenture Trustee may reasonably
require, as to names and addresses of the Holders of Notes, and (ii) at such
other times, as the Indenture Trustee may request in writing, within thirty (30)
days after receipt by the Note Registrar of any such request, a list of similar
form and content as of a date not more than ten (10) days prior to the time such
list is furnished; provided, however, that so long as the Indenture Trustee is
the Note Registrar, no such list shall be required to be furnished.
(b) In addition to furnishing to the Indenture Trustee the Noteholder
lists, if any, required under clause (a) of this Section 7.01, the Note
Registrar shall also furnish all Noteholder lists, if any, required under
Section 3.03 hereof at the times required by such Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list, if any, furnished to the Indenture Trustee as
provided in Section 7.01 hereof and the names and addresses of the Holders of
Notes received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 hereof upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Trust, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
40
Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60)
days after December 31 of each year (the "reporting date"), commencing December
31, 2000, (i) the Indenture Trustee shall, if required by TIA Section 313(a),
mail to all Holders a brief report dated as of such reporting date that complies
with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set
forth in the Noteholder Statement pursuant to Section 2.08(d) hereof, also mail
to Holders of Notes and the Note Insurer with respect to which it has made
advances, any reports with respect to such advances that are required by TIA
Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of
Notes and the Note Insurer any reports required by TIA Section 313(b)(1). For
purposes of the information required to be included in any such reports pursuant
to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the
principal amount of indenture securities outstanding on the date as of which
such information is provided shall be the Note Principal Balance of the then
Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at the
time of such transmission to Holders of Notes and the Note Insurer be filed by
the Indenture Trustee with the Commission and with each securities exchange upon
which the Notes are listed. The Servicer, on behalf of the Trust, will notify
the Indenture Trustee when the Notes are listed on any securities exchange.
Section 7.04. Reports by Trust. The Servicer, on behalf of the Trust,
(a) shall deliver to the Indenture Trustee within fifteen (15) days after the
Trust is required to file the same with the Commission copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Trust is required to file with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b)
shall also comply with the other provisions of TIA Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust
hereby directs the Indenture Trustee to establish, on or before the Closing
Date, for each Class of Notes, at its Corporate Trust Office, one or more
Eligible Accounts that shall collectively be the "Payment Account" for such
Class. The Indenture Trustee shall promptly deposit in the related Payment
Account (i) the Servicer Remittance Amount for the related Pool received by it
from the Servicer on the Servicer Payment Date pursuant to the Sale and
Servicing Agreement, (ii) any other funds from any deposits for such Pool to be
made by the Servicer pursuant to the Sale and Servicing Agreement, (iii) any
amount for such Pool required to be deposited in such Payment Account pursuant
to this Section 8.01, (iv) all amounts for such Pool received pursuant to
Section 8.03 hereof, (v) any amount for such Pool required to be deposited
pursuant to Section 8.05 hereof, (vi) the Termination Price received by it from
either the Majority Certificateholder or the Servicer on the Clean-up Call Date
or Note Clean-up Call Date pursuant to Section 10.01, (vii) on each Payment
Date, in accordance with the Noteholder Statement, the Shortfall Amount for the
related Class, until paid in full, first, from the Payment Account relating to
the other Class of Notes to the extent of the Net Monthly Excess Cashflow from
the other Pool of Mortgage Loans, second, from the Cross-collateralization
Reserve Account relating to this Class of Notes,
41
and third, from the Cross-collateralization Reserve Account relating to the
other Class of Notes, (viii) on each Payment Date, in accordance with the
Noteholder Statement, the Net Mortgage Loan Interest Shortfalls for the related
Class of Notes, to the extent of the Net Monthly Excess Cashflow from the other
Pool of Mortgage Loans, remaining after payment of: first, the Shortfall Amount
for the related Class, second, the Over-collateralization Increase Amount for
such other Pool and, third, the Reserve Payment Amount for such other Pool and
(ix) all other amounts for such Pool received for deposit in such Payment
Account, including the payment of any Loan Repurchase Price for a Mortgage Loan
in such Pool received by the Indenture Trustee. All amounts that are deposited
from time to time in a Payment Account are subject to withdrawal by the
Indenture Trustee for the purposes set forth in Sections 8.02 hereof. All funds
withdrawn from a Payment Account pursuant to Section 8.02 hereof for the purpose
of making payments to the Holders of Notes shall be applied in accordance with
Sections 3.03 and 8.02 hereof.
(b) The Trust hereby directs the Indenture Trustee to establish for each
Class of Notes, at its Corporate Trust Office, an Eligible Account which shall
be the "Pre-Funding Account" for such Class of Notes. On the Closing Date, the
Indenture Trustee shall deposit the Original Pre-Funded Amount for each Class of
Notes in the related Pre-Funding Account from the proceeds of the sale of the
related Class of Notes. The Indenture Trustee shall withdraw and distribute or
cause to be distributed funds on deposit therein only at the times specified
below, based on written instructions provided by the Servicer or other party as
indicated:
(i) on any Subsequent Transfer Date, the Unaffiliated Seller shall
instruct in writing the Indenture Trustee to withdraw from the related
Pre-Funding Account an amount equal to 100% of the aggregate Principal
Balances as of the related Subsequent Cut-Off Date of the Subsequent
Mortgage Loans sold to the Trust in respect of the related Pool and pledged
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, on such Subsequent Transfer Date and pay such amount to or upon the
order of the Unaffiliated Seller upon satisfaction of the conditions set
forth in Section 2.14 hereof with respect to such transfer; the Indenture
Trustee may conclusively rely on such written instructions from the
Unaffiliated Seller;
(ii) if the Pre-Funding Amount for a Class of Notes (exclusive of
Pre-Funding Earnings for such Class) has been reduced to $100,000 or less by
the April 2000, May 2000 or June 2000 Payment Date, then, on such Payment
Date, after giving effect to any reductions in the related Pre-Funding
Account on such date, the Indenture Trustee shall withdraw, from the related
Pre-Funding Account on such date and deposit in the Payment Account relating
to such Class, the amount on deposit in such Pre-Funding Account, other than
any Pre-Funding Earnings, for payment to the related Noteholders as a
prepayment of principal on such Payment Date;
(iii) if any amounts remain on deposit in either Pre-Funding Account at
the close of business on June 30, 2000, the Indenture Trustee shall
withdraw, from such Pre-Funding Account on the following Payment Date and
deposit in the Payment Account relating to the related Class, the amount on
deposit in such Pre-Funding Account, other than any Pre-Funding Earnings,
for payment to the related Noteholders as a prepayment of principal on such
Payment Date; and
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(iv) on the April 2000, May 2000, June 2000 and July 2000 Payment Dates,
the Indenture Trustee shall transfer from each Pre-Funding Account to the
related Payment Account, the Pre-Funding Earnings, if any, applicable to
such Payment Date.
(c) The Trust hereby directs the Indenture Trustee to establish for each
Class of Notes, at its Corporate Trust Office, an Eligible Account which shall
be the "Capitalized Interest Account" for such Class of Notes. On the Closing
Date, the Indenture Trustee shall deposit the Original Capitalized Interest
Amount for each Class of Notes in the related Capitalized Interest Account from
the proceeds of the sale of the related Class of Notes. The Indenture Trustee
shall withdraw and distribute or cause to be distributed funds on deposit
therein only at the times specified below, based on written instructions
provided by the Servicer or other party as indicated:
(i) on the April 2000, May 2000, June 2000 and July 2000 Payment Dates,
the Indenture Trustee shall transfer from each Capitalized Interest Account
to the related Payment Account, the applicable Capitalized Interest
Requirement, if any, for such Class and such Payment Date; and
(ii) on the Payment Date immediately following, or on which, the amount
on deposit in the related Pre-Funding Account is reduced to zero, any
amounts remaining in the related Capitalized Interest Account, after taking
into account the transfers in respect of the Payment Date described in
clause (i) above, shall be paid to the Unaffiliated Seller.
(d) The Trust hereby directs the Indenture Trustee to establish, on or
before the Closing Date, for each Class of Notes, at its Corporate Trust Office,
an Eligible Account that shall be the "Cross-collateralization Reserve Account"
for such Class. The Indenture Trustee shall deposit and withdraw funds in each
Cross-collateralization Reserve Account in accordance with the provisions of
Sections 8.01(a) and 8.02(a) hereof.
(e) So long as no Default or Event of Default shall have occurred and be
continuing, amounts held in the Accounts, other than the Collection Account and
the Note Insurance Payment Account, shall at the written direction of the
Servicer be invested in Permitted Investments, which Permitted Investments shall
mature no later than the Business Day preceding the immediately following
Payment Date.
All income or other gains, if any, from investment of moneys deposited
in the Payment and Collection Accounts shall be for the benefit of the Servicer
and on each Payment Date, any such amounts may be released from the Accounts and
paid to the Servicer as part of its compensation for acting as Servicer. Any
loss resulting from such investment of moneys deposited in an Account shall be
reimbursed immediately as incurred to the related Account by the Servicer.
Subject to Section 6.01 hereof and the preceding sentence, neither the Indenture
Trustee nor the Servicer shall in any way be held liable by reason of any
insufficiency in the Accounts.
The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any Account held by the Indenture Trustee resulting from
any investment loss on
43
any Permitted Investment included therein (except to the extent that the
Indenture Trustee is the obligor and has defaulted thereon).
(f) Except as otherwise expressly provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply it as
provided in this Indenture.
If the Indenture Trustee shall not have received the Servicer Remittance
Amount by close of business on any related Servicer Payment Date, the Indenture
Trustee shall, unless the Servicer shall have made provisions satisfactory to
the Indenture Trustee for delivery to the Indenture Trustee of an amount equal
to such Servicer Remittance Amount, deliver a notice, with a copy to the Note
Insurer, to the Servicer of its failure to remit such Servicer Remittance Amount
and that such failure, if not remedied by the close of business on the Business
Day after the date upon which such notice is delivered to the Servicer, shall
constitute a Servicer Event of Default under the Sale and Servicing Agreement.
If the Indenture Trustee shall subsequently receive any such Servicer Remittance
Amount by the close of business on such Business Day, such Servicer Event of
Default shall not be deemed to have occurred. Notwithstanding any other
provision hereof, the Indenture Trustee shall deliver to the Servicer, or its
designee or assignee, any Servicer Remittance Amount received with respect to a
Mortgage Loan after the related Servicer Payment Date to the extent that the
Servicer previously made payment or provision for payment with respect to such
Servicer Remittance Amount in accordance with this Section 8.01, and any such
Servicer Remittance Amount shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the Sale
and Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Servicer shall fail to remit the Servicer Remittance
Amount on any Servicer Payment Date, the Indenture Trustee shall deliver a
second notice to the Servicer, the Trust and the Note Insurer by the close of
business on the third Business Day prior to the related Payment Date indicating
that a Servicer Event of Default occurred and is continuing under the Sale and
Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as
are required of the Indenture Trustee under Article VII of the Sale and
Servicing Agreement. In addition, if a default occurs in any other performance
required under the Sale and Servicing Agreement, the Indenture Trustee may, and
upon the request of the Note Insurer or, with the consent of the Note Insurer,
the Holders of Notes representing more than 50% of the Note Principal Balance of
the Outstanding Notes of both of the Classes shall, take such action as may be
appropriate to enforce such payment or performance including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and to proceed thereafter as provided in Article V hereof.
Section 8.02. Payments; Statements. On each Payment Date, unless the
Notes have been declared due and payable pursuant to Section 5.02 hereof and
moneys collected by the Indenture Trustee are being applied in accordance with
Section 5.07 hereof, Available Funds on deposit in each Payment Account on any
Payment Date or Redemption Date shall be withdrawn from such Payment Account, in
the amounts required (based on the Noteholder Statement
44
prepared by the Indenture Trustee on or before such Payment Date), for
application on such Payment Date in respect of payments for the related Class of
Notes as follows:
(i) to the Indenture Trustee, an amount equal to the Indenture Trustee
Fees then due to it with respect to the related Class of Notes;
(ii) from amounts then on deposit in the related Payment Account, to the
Note Insurer, the Premium Amount for such payment date;
(iii) from amounts then on deposit in the related Payment Account, to
the Holders of the related Class of Notes, the Payment Amount for such
Class;
(iv) from amounts then on deposit in the related Payment Account
(excluding any Insured Payments), to the Note Insurer, all Reimbursement
Amounts relating to such Class of Notes which have not been previously paid
as of such Payment Date and any other amounts relating to such Class then
due to the Note Insurer pursuant to the Insurance Agreement;
(v) from amounts then on deposit in the related Payment Account, to the
Cross-collateralization Reserve Account relating to the other Class of
Notes, the Reserve Payment Amount for such Class;
(vi) from amounts then on deposit in the related Payment Account, to the
Holders of the related Class of Notes, the amount of any Net Mortgage Loan
Interest Shortfalls for such Class;
(vii) from amounts then on deposit in the related Payment Account, to
the Holders of the other Class of Notes, the amount of any Net Mortgage Loan
Interest Shortfall for such other Class of Notes;
(viii) with respect to the Class A-2 Notes, from amounts then on deposit
in the Payment Account relating to the Class A-2 Notes, to the Holders of
the Class A-2 Notes, the Class A-2 Available Funds Cap Carry-Forward Amount;
and
(ix) following the making by the Indenture Trustee of all allocations,
transfers and disbursements described above, from amounts then on deposit in
the related Payment Account, the Indenture Trustee shall distribute to the
Holders of the related Trust Certificates, the amount remaining on such
Payment Date, if any.
Section 8.03. Claims against the Policy. (a) Within two (2) Business
Days of receipt of each Servicer Remittance Report, the Indenture Trustee shall
determine with respect to the immediately following Payment Date, the amount to
be on deposit in each Payment Account on such Payment Date as a result of the
(i) Servicer's remittance of the Servicer Remittance Amount on the related
Servicer Payment Date, and (ii) any transfers to each Payment Account made from
the related Capitalized Interest Account and/or the related Pre-Funding Account
relating to such Payment Date pursuant to Section 8.01 hereof, excluding the
amount of any Insured Payment and prior to the application of the amounts
described in clauses (i) through (viii) of Section 8.02 hereof for the related
Payment Date.
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(b) If on any Payment Date there is an Available Funds Shortfall for
either Pool, the Indenture Trustee shall complete a Notice in the form of
Exhibit A to the Policy and submit such notice to the Note Insurer no later than
12:00 noon New York City time on the second Business Day preceding such Payment
Date as a claim for an Insured Payment in an amount equal to such Available
Funds Shortfall for such Pool.
(c) The Indenture Trustee shall establish a separate Eligible Account
for the benefit of Holders of the Notes and the Note Insurer referred to herein
as the "Note Insurance Payment Account" over which the Indenture Trustee shall
have exclusive control and sole right of withdrawal. The Indenture Trustee shall
deposit upon receipt any amount paid under the Policy in the Note Insurance
Payment Account and distribute such amount only for purposes of payment to the
Noteholders of the related Pool of the Insured Amount for such Pool for which a
claim was made and such amount may not be applied to satisfy any costs, expenses
or liabilities of the Servicer, the Indenture Trustee or the Trust. Amounts paid
under the Policy, to the extent needed to pay the Insured Amount shall be
transferred to the related Payment Account on the related Payment Date and
disbursed by the Indenture Trustee to the Noteholders in accordance with Section
8.02. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay the Insured
Amount with other funds available to make such payment. However, the amount of
any payment of principal or of interest on the Notes to be paid from funds
transferred from the Note Insurance Payment Account shall be noted as provided
in subsection (d) of this Section 8.03 in the Note Register and in the
Noteholder Statement. Funds held in the Note Insurance Payment Account shall not
be invested. Any funds remaining in the Note Insurance Payment Account on the
first Business Day following a Payment Date shall be returned to the Note
Insurer pursuant to the written instructions of the Note Insurer by the end of
such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Note from moneys
received under the Policy. The Note Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon one (1) Business
Day's prior notice to the Indenture Trustee.
(e) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Insured Payment has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so notify the Note Insurer, shall comply with
the provisions of the Policy to obtain payment by the Note Insurer of such
voided Insured Payment, and shall, at the time it provides notice to the Note
Insurer, notify, by mail to the Noteholders of the affected Notes that, in the
event any Noteholder's Insured Payment is so recovered, such Noteholder will be
entitled to payment pursuant to the Policy, a copy of which shall be made
available through the Indenture Trustee, the Note Insurer or the Note Insurer's
fiscal agent, if any, and the Indenture Trustee shall furnish to the Note
Insurer or its fiscal agent, if any, its records evidencing the payments which
have been made by the Indenture Trustee and subsequently recovered from the
Noteholders, and dates on which such payments were made.
(f) The Indenture Trustee shall promptly notify the Note Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Indenture Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable
46
bankruptcy, insolvency, receivership or similar law (a "Preference Claim") of
any payment made with respect to the Notes. Each Noteholder, by its purchase of
Notes, the Servicer and the Indenture Trustee agree that, the Note Insurer (so
long as no Note Insurer Default exists) may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedeas or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Note Insurer shall be subrogated
to, and each Noteholder, the Servicer and the Indenture Trustee hereby delegate
and assign to the Note Insurer, to the fullest extent permitted by law, the
rights of the Servicer, the Indenture Trustee and each Noteholder in the conduct
of any such Preference Claim, including, without limitation, all rights of any
party to any adversary proceeding or action with respect to any court order
issued in connection with any such Preference Claim.
(g) The Indenture Trustee shall, upon retirement of the Notes, furnish
to the Note Insurer a notice of such retirement, and, upon retirement of the
Notes and the expiration of the term of the Policy, surrender the Policy to the
Note Insurer for cancellation.
(h) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests hereunder without limiting the rights or
affecting the interests of the Noteholders as otherwise set forth herein.
(i) Each Noteholder, by its purchase of Notes, and the Indenture Trustee
hereby agree that, unless a Note Insurer Default exists and is continuing, the
Note Insurer shall have the right to direct all matters relating to the Notes in
any proceeding in a bankruptcy of the Trust, including without limitation any
proceeding relating to a Preference Amount and the posting of any surety or Note
pending any such appeal.
(j) Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Notes which is made with moneys
received pursuant to the terms of the Policy shall not be considered payment of
the Notes from the Trust. The Trust and the Indenture Trustee acknowledge, and
each Holder by its acceptance of a Note agrees, that without the need for any
further action on the part of the Note Insurer, the Trust, the Indenture Trustee
or the Note Registrar (x) to the extent the Note Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Holders of such Notes, the Note Insurer will be fully subrogated to, and
each Noteholder, the Trust and the Indenture Trustee hereby delegate and assign
to the Note Insurer, to the fullest extent permitted by law, the rights of such
Holders to receive such principal and interest from the Trust, including,
without limitation, any amounts due to the Noteholders in respect of securities
law violations arising from the offer and sale of the Notes, and (y) the Note
Insurer shall be paid such amounts from the sources and in the manner provided
herein for the payment of such amounts.
Section 8.04. General Provisions Regarding the Payment Accounts and
Mortgage Loans. (a) Each Payment Account shall relate solely to the Notes of
the related Class and to the Mortgage Loans in the related Pool, Permitted
Investments and other property securing the related Notes. Funds and other
property in each Payment Account shall not be
47
commingled with the other Payment Account or any other moneys or property of the
Trust or any Affiliate thereof. Notwithstanding the foregoing, the Indenture
Trustee may hold any funds or other property received or held by it as part of a
Payment Account in collective accounts maintained by it in the normal course of
its business and containing funds or property held by it for other Persons
(which may include the Trust or an Affiliate); provided, that such accounts are
under the sole control of the Indenture Trustee and the Indenture Trustee
maintains adequate records indicating the ownership of all such funds or
property and the portions thereof held for credit to the related Payment
Account.
(b) If any amounts are needed for payment from a Payment Account and
sufficient uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in such Payment Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Indenture
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Payment Accounts. The Indenture Trustee shall
relinquish possession of such items, or direct its agent to do so, only for
purposes of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the
Payment Accounts, against delivery of the amount receivable in connection with
any sale.
(d) The Indenture Trustee shall not invest any part of the Trust Estate
in Permitted Investments that constitute uncertificated securities (as defined
in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant
jurisdiction) or in any other book-entry securities unless it has received an
Opinion of Counsel reasonably satisfactory in form and substance to the
Indenture Trustee setting forth, with respect to each type of security for which
authority to invest is being sought, the procedures that must be followed to
maintain the lien and security interest created by this Indenture with respect
to the Trust Estate.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Unaffiliated Seller set forth in Section
3.03 of the Unaffiliated Seller's Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Unaffiliated Seller to either cure,
repurchase or substitute for such Mortgage Loan as provided in Section 3.05 of
the Unaffiliated Seller's Agreement. Upon any purchase of or substitution for a
Deleted Mortgage Loan by the Unaffiliated Seller in accordance with Section 3.05
of the Unaffiliated Seller's Agreement, the Indenture Trustee shall cause the
Collateral Agent to deliver the Indenture Trustee's Mortgage File relating to
such Deleted Mortgage Loan to the Unaffiliated Seller, and the Trust, the
Collateral Agent and the Indenture Trustee shall execute such instruments of
transfer as are necessary to convey title to such Deleted Mortgage Loan to the
Unaffiliated Seller from the lien of this Indenture. Nothing in this Section
8.05 should be construed to obligate the Indenture Trustee to actively monitor
the correctness or accuracy of the representations and warranties of the
Unaffiliated Seller.
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Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports required by Section 2.08(d) to Noteholders of record as of
the related Record Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Noteholder Statements and other reports delivered since the Closing Date
pursuant to Section 2.08(d) hereof, (c) any Officers' Certificates delivered to
the Indenture Trustee since the Closing Date as described in the Indenture and
(d) any Accountants' reports delivered to the Indenture Trustee since the
Closing Date as required under the Sale and Servicing Agreement. Copies of any
and all of the foregoing items will be available from the Indenture Trustee upon
request; however, the Indenture Trustee will be permitted to require payment of
a sum sufficient to cover the reasonable costs and expenses of providing such
copies and shall not be required to provide such copies without reasonable
assurances that such sum will be paid.
Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate to
the Trust (other than any cash held for the payment of the Notes pursuant to
Section 3.03 or 4.02 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder, enter into or consent to any
amendment or supplement to the Sale and Servicing Agreement for the purpose of
increasing the obligations or duties of any party other than the Indenture
Trustee or the Holders of the Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation of satisfaction of the Rating Agency Condition or (ii) if
its own rights, duties or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and
Servicing Agreement. As is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer the Mortgage Files for such Mortgage Loan upon receipt by the
Indenture Trustee and the Collateral Agent on or prior to the date such release
is to be made of:
(a) such Officer's Certificates, if any, as are required by the Sale and
Servicing Agreement; and
(b) a Request for Release, executed by the Servicer, providing that the
Servicer will hold or retain the Indenture Trustee's Mortgage Files in trust for
the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes.
Section 8.10. Servicer as Agent. In order to facilitate the servicing of
the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of the
Mortgage Loans
49
has been appointed by the Trust to retain, in accordance with the provisions of
the Sale and Servicing Agreement and this Indenture, all Servicer Remittance
Amounts on such Mortgage Loans prior to their deposit into the related Payment
Account on or prior to the related Servicer Payment Date.
Section 8.11. Termination of Servicer. In the event of the occurrence of
a Servicer Event of Default specified in Section 7.01 of the Sale and Servicing
Agreement, the Indenture Trustee may, with the consent of the Note Insurer or,
with the prior written consent of the Note Insurer, the Holder of Notes
representing not less than 50% of the Note Principal Balance of the Outstanding
Notes of both of the Classes, and shall, upon the direction of the Note Insurer
(or as otherwise provided in the Sale and Servicing Agreement), terminate the
Servicer as provided in Section 7.01 of the Sale and Servicing Agreement. If the
Indenture Trustee terminates the Servicer, the Indenture Trustee shall, pursuant
to Section 7.02 of the Sale and Servicing Agreement, assume the duties of the
Servicer or appoint a successor Servicer acceptable to the Trust, the Note
Insurer and the Rating Agencies and meeting the requirements set forth in the
Sale and Servicing Agreement.
Section 8.12. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to be
taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with
releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
Section 8.13. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Note Insurer, appoint one or more Collateral Agents to hold all
or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture
Trustee. Such Collateral Agent shall meet the requirements of Article IX of the
Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be
governed by said Article IX. Chase Bank of Texas, N.A. is hereby appointed as
the initial Collateral Agent hereunder.
Section 8.14. Rights of the Note Insurer to Exercise Rights of
Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Noteholders under this Indenture, without any further consent of
the Noteholders, including, without limitation:
(a) the right to require the Servicer to effect foreclosures upon
Mortgage Loans upon failure of the Servicer to do so;
(b) the right to require the Unaffiliated Seller to repurchase or
substitute for Deleted Mortgage Loans pursuant to Section 8.05;
50
(c) the right to direct the actions of the Indenture Trustee during the
continuance of an Event of Default; and
(d) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default exists,
the rights specifically set forth above may be exercised by the Noteholders only
with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 hereof and notwithstanding
any provision in this Indenture to the contrary, so long as a Note Insurer
Default has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Note Insurer.
All notices, statements, reports, certificates or opinions required by
this Indenture to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note
Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of
the Noteholders and the Note Insurer, and all references in this Indenture and
in the Notes to the benefit of Holders of the Notes shall be deemed to include
the Note Insurer (provided there does not exist a Note Insurer Default).
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the Holders of
any Notes, the Trust and the Indenture Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this Indenture
additional property;
(b) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Notes, as herein set forth, additional conditions, limitations
and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Trust to the
extent permitted herein, and the assumption by any such successor of the
covenants of the Trust herein and in the Notes contained;
51
(d) to add to the covenants of the Trust, for the benefit of the Holders
of all Notes and the Note Insurer, or to surrender any right or power herein
conferred upon the Trust;
(e) to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
amend any other provisions with respect to matters or questions arising under
this Indenture, which shall not be inconsistent with the provisions of this
Indenture, provided that such action shall not adversely affect in any material
respect the interests of the Holders of the Notes or the Holders of the Trust
Certificates; provided, that the amendment shall not be deemed to adversely
affect in any material respect the interests of the Holders of the Notes and the
Note Insurer if the Person requesting the amendment obtains written confirmation
of the satisfaction of the Rating Agency Condition; or
(f) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute hereafter enacted, and to add
to this Indenture such other provisions as may be expressly required by the TIA.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Insurer and with the consent of Holders of Notes
representing not less than a majority of the Note Principal Balance of all
Outstanding Notes of both of the Classes by Act of said Holders delivered to the
Trust and the Indenture Trustee, the Trust and the Indenture Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change any Payment Date or the Final Stated Maturity Date of the
Notes or, with respect to the Notes, reduce the Note Principal Balance thereof
or the Note Rate thereon, change the earliest date on which any Note may be
redeemed at the option of the Servicer, change any place of payment where, or
the coin or currency in which, any Note or any interest thereon is payable, or
impair the right to institute suit for the enforcement of the payment of any
installment of interest due on any Note on or after the Final Stated Maturity
Date thereof or for the enforcement of the payment of the entire remaining
unpaid principal amount of any Note on or after the Final Stated Maturity Date
(or, in the case of redemption, on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with provisions of this Indenture or Defaults hereunder
and their consequences provided for in this Indenture;
(c) modify any of the provisions of this Section 9.02 or Sections 5.13
or 5.17(b) hereof, except to increase any percentage specified therein or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
52
(d) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(e) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate or terminate the lien of
this Indenture on any property at any time subject hereto or deprive the Holder
of any Note of the security afforded by the lien of this Indenture;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the Interest Payment Amount or Principal Payment
Amount for any Payment Date and either Class (including the calculation of any
of the individual components of such amounts) or to affect rights of the Holders
of the Notes to the benefits of any provisions for the mandatory redemption of
Notes contained herein; or
(g) incur any indebtedness, other than the Notes, that would cause the
Trust or the Trust Estate to be treated as a "taxable mortgage pool" within the
meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Trust and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties or immunities under this Indenture or
otherwise. The Servicer, on behalf of the Trust, shall cause executed copies of
any supplemental indentures to be delivered to the Note Insurer and the Rating
Agencies.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance
53
therewith, and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Notes to which such supplemental indenture
relates that have theretofore been or thereafter are authenticated and delivered
hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the TIA as then in effect so long as this Indenture shall then be qualified
under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Owner Trustee, acting at the
direction of the Majority Certificateholders, shall so determine, new Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Owner
Trustee, acting at the direction of the Majority Certificateholders, to any such
supplemental indenture may be prepared by the Servicer and executed by the Owner
Trustee, acting at the direction of the Majority Certificateholders, on behalf
of the Trust, and authenticated and delivered by the Indenture Trustee in
exchange for Outstanding Notes.
Section 9.07. Amendments to Governing Documents. The Indenture Trustee
shall, upon a Trust Request, consent to any proposed amendment to the Trust's
governing documents, or an amendment to or waiver of any provision of any other
document relating to the Trust's governing documents, such consent to be given
without the necessity of obtaining the consent of the Holders of any Notes upon
receipt by the Indenture Trustee of:
(a) an Officer's Certificate, to which such proposed amendment or waiver
shall be attached, stating that such attached copy is a true copy of the
proposed amendment or waiver and that all conditions precedent to such consent
specified in this Section 9.07 have been satisfied; and
(b) written confirmation of the satisfaction of the Rating Agency
Condition with respect to such proposed amendment.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
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ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) At the option of the Majority
Certificateholder of the larger pool of Mortgage Loans (by Aggregate Principal
Balance) remaining or, if such Holders fail to exercise such option, at the
option of the Servicer, and, in each case at such parties' sole cost and
expense, (x) this Indenture may be terminated and all the Notes may be redeemed
in whole, but not in part, on any Redemption Date on and after the Clean-Up Call
Date at the Termination Price or (y) the Class A-1 Notes or Class A-2 Notes may
be individually redeemed, on any Redemption Date on and after the related Note
Clean-up Call Date at the applicable Termination Price.
(b) Any such purchase or redemption shall be accomplished by deposit by
the exercising party, into the related Payment Account or Accounts of the
Termination Price on the Servicer Payment Date preceding the Redemption Date.
The amounts on deposit therein shall be distributed by the Indenture Trustee on
such Redemption Date in accordance with the priority set forth in Section 8.02
hereof. No termination or redemption is permitted without the prior written
consent of the Note Insurer if only one Class of Notes is terminated or redeemed
while the other Class of Notes is still outstanding or if any termination or
redemption would result in a draw on the Policy.
(c) Notice by the Majority Certificateholder referred to in paragraph
(a) of this Section 10.01 of the election to redeem the Notes pursuant to
subsection (a) of this Section 10.01 shall be furnished to the Indenture Trustee
not later than thirty (30) days prior to the Payment Date selected for such
redemption. Upon receiving such notice, the Indenture Trustee shall notify each
Holder of such Notes and Note Insurer of such election pursuant to Section 10.02
hereof. Any expenses associated with the compliance of the provisions hereof in
connection with a redemption of the Notes shall be paid by the Majority
Certificateholder exercising such redemption or the Servicer, as the case may
be.
If the Indenture Trustee does not receive notice from the Majority
Certificateholder referred to in paragraph (a) of this Section 10.01 that they
intend to exercise their option to redeem the Notes at least thirty (30) days
prior to the first Payment Date on which they are entitled to do so, the
Indenture Trustee shall promptly notify the Servicer that it may effect a
redemption of the Notes by responding to the Indenture Trustee's notice no later
than fifteen (15) days prior to the next succeeding Payment Date.
(d) Upon the redemption of all of the Notes, the Mortgage Loans in the
Trust Estate shall be released and delivered to the Majority Certificateholder
effecting such redemption or the Servicer, as the case may be. In the case of a
redemption of the Class A-1 Notes only, the Mortgage Loans in Pool I will not be
released from the lien of the Indenture until such time as the Class A-2 Notes
are redeemed. In such case, the Pool I Mortgage Loans will continue to be
pledged to the Indenture Trustee, on behalf of the Noteholders and the Note
Insurer, to secure the obligations of the Trust with respect to the Class A-2
Notes. In the case of a redemption of the Class A-2 Notes only, the Mortgage
Loans in Pool II will not be released from the lien of the Indenture until such
time as the Class A-1 Notes are redeemed. In such case, the Pool II
55
Mortgage Loans will continue to be pledged to the Indenture Trustee, on behalf
of the Noteholders and the Note Insurer, to secure the obligations of the Trust
with respect to the Class A-1 Notes.
(e) Upon receipt of the notice from the relevant Majority
Certificateholder or the Servicer of their respective election to redeem the
Notes pursuant to Section 10.01(a) hereof (which shall state, in the case of an
election by the Servicer, that the Servicer has determined that the conditions
to redemption at the option of the Servicer have been satisfied and setting
forth the amount, if any, to be withdrawn from each Payment Account and paid to
the Servicer as reimbursement for Nonrecoverable Advances in respect of the
related Mortgage Loans and such other information as may be required to
accomplish such redemption), the Indenture Trustee shall prepare and deliver to
the Trust, the Servicer and the Note Insurer, no later than the related
Redemption Date, a Noteholder Statement.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust by
first class mail, postage prepaid, mailed not less than ten days prior to the
Redemption Date to each Holder of Notes to be redeemed, such Holders being
determined as of the Record Date for such Payment Date, and to the Note Insurer.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the price at which the Notes of such Class will be redeemed; and
(c) the fact of payment in full on such Notes, the place where such
Notes are to be surrendered for final payment (which shall be the office or
agency of the Trust to be maintained as provided in Section 3.02 hereof), and
that no interest shall accrue on such Note for any period after the date fixed
for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Notes to
be redeemed shall, on the applicable Redemption Date, become due and payable and
(unless the Trust shall default in such payment) no interest shall accrue on
such Notes for any period after such Redemption Date; provided, however, that if
such payment is not made on the Redemption Date, the Note Principal Balance
shall, until paid, bear interest from the Redemption Date at the applicable Note
Rate.
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ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any action
under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(b) Every certificate, opinion or letter with respect to compliance with
a condition or covenant provided for in this Indenture, including one furnished
pursuant to specific requirements of this Indenture relating to a particular
application or request (other than certificates provided pursuant to TIA Section
314(a)(4)) shall include and shall be deemed to include (regardless of whether
specifically stated therein) the following:
(i) a statement that each individual signing such certificate, opinion
or letter has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of the Trust may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's
57
opinion and shall include a statement to the effect that such counsel believes
that such counsel and the Indenture Trustee may reasonably rely upon the opinion
of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Trust
shall deliver any document as a condition of the granting of such application,
or as evidence of the Trust's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Trust to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(ii) hereof.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Trust, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Trust's right to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d)
hereof.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Trust. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
58
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and
Trust. Any request, demand, authorization, direction, notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Trust shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with and received by the Indenture Trustee at its Corporate Trust
Office; or
(b) the Trust by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder (except as provided in Section 5.01(c)
and (d)) hereof if in writing and mailed, first-class postage prepaid, to the
Trust addressed to it at ABFS Mortgage Loan Trust 2000-1, in care of First Union
Trust Company, National Association, One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx, 00000, Attention: Corporate Trust Administration, or
at any other address previously furnished in writing to the Indenture Trustee by
the Trust.
(c) the Note Insurer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to Ambac Assurance Corporation addressed to it at Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Surveillance Department (in
each case in which notice or other communication to the Note Insurer refers to
an Event of Default, a claim on the Policy or with respect to which failure on
the part of the Note Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of each of the and shall be marked to indicate "URGENT
MATERIAL ENCLOSED"), or at any other address previously furnished in writing to
the Indenture Trustee by the Note Insurer; or
(d) the Depositor by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage paid, to Prudential Securities Secured Financing Corporation c/o
Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; Attention: Managing Director - Asset-Backed Finance Group, or at any
other address previously furnished in writing to the Indenture Trustee by the
Depositor; or
(e) the Unaffiliated Seller or the Servicer by the Indenture Trustee or
by any Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed, first-class, postage paid, to such party, in care of American
Business Financial Services, Inc., XxxxXxxxxx Xxxxxx Xxxxxx, 000 Xxxxxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxx Cynwyd, Pennsylvania, 19004,
59
Attention: General Counsel or at any other address previously furnished in
writing to the Indenture Trustee by the Unaffiliated Seller or the Servicer; or
(f) the Underwriter by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Managing Director - Asset-Backed Finance, or at
any other address previously furnished in writing to the Indenture Trustee by
the Underwriter.
Notices required to be given to the Rating Agencies by the Trust or the
Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to (i) in the case of Moody's, at the following
address: Xxxxx'x Investors Service, Inc., Residential Mortgage Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) in the case of S&P,
at the following address: Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Asset-Backed Surveillance Department and
(iii) in the case of DCR, at the following address: Duff and Xxxxxx Credit
Rating Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Residential
Mortgage-Backed Securities Group; or as to each of the foregoing, at such other
address as shall be designed by written notice to the other parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
60
Section 11.07. Conflict With Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
Section 11.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether so
expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any Payment
Date, Redemption Date or any other date on which principal of or interest on any
Note is proposed to be paid shall not be a Business Day, then (notwithstanding
any other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of any such Payment Date,
Redemption Date or other date for the payment of principal of or interest on any
Note and no interest shall accrue for the period from and after any such nominal
date, provided such payment is made in full on such next succeeding Business
Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or
3.06 hereof.
61
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Trust or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Trust
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder and Beneficial Owner, by accepting a Note, hereby
covenant and agree that they will not at any time institute against the
Unaffiliated Seller or the Trust, or join in any institution against the
Unaffiliated Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents. In addition, the Indenture Trustee will on behalf of the Holders of
the Notes, (a) file a written objection to any motion or other proceeding
seeking the substantive consolidation of any Originator with the Unaffiliated
Seller or the Trust, (b) file an appropriate memorandum of points and
authorities or other brief in support of such objection, or (c) endeavor to
establish at the hearing on such objection that the substantive consolidation of
such entity would be materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following the
termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the Note
Insurer, during the Trust's normal business hours, to examine all of books of
account, records, reports and other papers of the Trust, to make copies and
extracts therefrom, to cause such books to be audited by Independent Accountants
selected by the Indenture Trustee or the Note Insurer, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Trust hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any expense incident to the exercise by the Indenture Trustee of any
right under this Section 11.18 shall be borne by the Trust.
Section 11.19. Usury. The amount of interest payable or paid on any Note
under the terms of this Indenture shall be limited to an amount that shall not
exceed the maximum nonusurious rate of interest allowed by the applicable laws
of the United States or the State of
62
New York (whichever shall permit the higher rate), that could lawfully be
contracted for, charged or received (the "Highest Lawful Rate"). In the event
any payment of interest on any Note exceeds the Highest Lawful Rate, the Trust
stipulates that such excess amount will be deemed to have been paid as a result
of an error on the part of both the Indenture Trustee, acting on behalf of the
Holder of such Note, and the Trust, and the Holder receiving such excess payment
shall promptly, upon discovery of such error or upon notice thereof from the
Trust or the Indenture Trustee, refund the amount of such excess or, at the
option of the Indenture Trustee, apply the excess to the payment of principal of
such Note, if any, remaining unpaid. In addition, all sums paid or agreed to be
paid to the Indenture Trustee for the benefit of Holders of Notes for the use,
forbearance or detention of money shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such Notes.
Section 11.20. Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default
exists. At such time as the Notes are no longer Outstanding under this
Indenture, and no amounts owed to the Note Insurer under the Basic Documents
remain unpaid, the Note Insurer's rights under this Indenture shall terminate.
Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as
a third- party beneficiary of this Indenture which shall be binding upon and
inure to the benefit of the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to
its obligations under the Policy, the Noteholders shall succeed to the Note
Insurer's rights hereunder. Without limiting the generality of the foregoing,
all covenants and agreements in this Indenture that expressly confer rights upon
the Note Insurer shall be for the benefit of and run directly to the Note
Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Indenture.
[Remainder of Page Intentionally Left Blank]
63
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST 2000-1
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner
Trustee under the Trust Agreement
By:
------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
------------------------------------------
Name:
Title:
[Signature Page to Indenture]
64
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[See Schedule 1 to Unaffiliated Seller's Agreement.]
EXHIBIT A
FORM OF NOTE
ABFS MORTGAGE LOAN TRUST 2000-1
CLASS A-[1][2] NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE INSURANCE POLICY
AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
-------------------------------------------
Note No.: CUSIP No.:
A-[1][2] -
Class A-[1][2] Original Note Principal Percentage Interest:
Balance: 100%
$__________ First Payment Date:
Date of Indenture: April 17, 2000
As of March 1, 2000
------------------------------------------
A-1
ABFS MORTGAGE LOAN TRUST 2000-1
MORTGAGE BACKED NOTES, SERIES 2000-1, CLASS A-[1][2]
ABFS Mortgage Loan Trust 2000-1, a statutory business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $__________ (_________________________
Thousand Dollars) payable on each Payment Date in an amount equal to the result
obtained by multiplying (x) the Percentage Interest of this Note set forth on
the cover page hereof, by (y) the aggregate amount, if any, payable from the
related Payment Account in respect of principal on the Class A-[1][2] Notes,
pursuant to the Indenture, dated as of March 1, 2000, between the Trust and The
Chase Manhattan Bank, a New York banking corporation, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid Note Principal
Balance of this Note shall be due and payable on the earlier of (i) the Payment
Date occurring in July 2031 (this Note's "Final Stated Maturity Date"), (ii) the
Redemption Date, if any, applicable to this Notes pursuant to Article X of the
Indenture or (iii) the date on which an Event of Default shall have occurred and
be continuing, if the Notes have been declared to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. Capitalized terms used
but not defined herein are defined in Appendix I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the 15th day of
each month or, if such day is not a Business Day, on the Business Day
immediately following such 15th day (each a "Payment Date"), commencing on the
first Payment Date specified on the cover page hereof, to the Person in whose
name this Note is registered at the close of business on the applicable Record
Date, in an amount equal to the product of (a) the Percentage Interest evidenced
by this Note and (b) the sum of the amounts to be paid on the Class A-[1][2]
Notes with respect to such Payment Date, all as more specifically set forth in
the Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon written
request at least five (5) days prior to the related Record Date with appropriate
instructions by the Holder of this Note (holding an aggregate initial Note
Principal Balance of at least $1,000,000), any payment of principal or interest,
other than the final installment of principal or interest, shall be made by wire
transfer to an account in the United States of America designated by such Holder
reasonably satisfactory to the Indenture Trustee.
On each Payment Date, Noteholders will be entitled to receive interest payments
in an aggregate amount equal to the Current Interest for such Class for such
Payment Date, together with principal payments in an aggregate amount equal to
the Principal Payment Amount for such Class for such Payment Date, plus, until
the Over-collateralization Amount for the related Pool and such Payment Date is
equal to the Specified Over-collateralization Amount for such Pool and such
Payment Date, the Net Monthly Excess Cashflow, if any, for such Pool and such
Payment Date. The "Note Principal Balance" of a Note as of any date of
determination is equal to the initial Note Principal Balance thereof as of the
Closing Date, reduced by the aggregate of all amounts previously paid with
respect to such Note on account of principal.
A-2
The principal of and interest on this Note are payable in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts. All payments made by the Trust with respect
to this Note shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Trust, designated as
the "ABFS Mortgage Loan Trust 2000-1, Mortgage Backed Notes, Series 2000-1,
Class A-[1][2]," issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Trust, the Indenture Trustee
and the Holders of the Notes. Also issued under the Indenture are the "ABFS
Mortgage Loan Trust 2000-1, Mortgage Backed Notes, Series 2000-1, Class
A[1][2]." To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
The Class A-[1][2] Notes are and will be equally and ratably secured by the
Mortgage Loans in Pool [I][II], the other collateral related thereto pledged as
security therefor as provided in the Indenture, and, to the extent provided in
the Indenture, by the Mortgage Loans in Pool [I][II].
As described above, the entire unpaid Note Principal Balance of this Note shall
be due and payable on the earlier of the Final Stated Maturity Date and any
Redemption Date applicable to such Class, pursuant to Article X of the
Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal
Balance of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing if the Indenture Trustee, at the
direction or upon the prior written consent of Ambac Assurance Corporation (the
"Note Insurer") in the absence of a Note Insurer Default, or the Holders of the
Notes representing not less than 50% of the Note Principal Balance of the
Outstanding Notes (with the prior written consent of the Note Insurer in the
absence of a Note Insurer Default) of both of the Classes, shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Notes shall be made pro
rata to the Noteholders entitled thereto.
The Note Insurer, in consideration of the payment of the premium and subject to
the terms of the Note Guaranty Insurance Policy (the "Note Insurance Policy")
thereby has unconditionally and irrevocably guaranteed the payment of the
Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note
Insurer shall be deemed to be the holder of the Notes for certain purposes
specified in the Indenture and will be entitled to exercise all rights of the
Noteholders thereunder, including the rights of Noteholders relating to the
occurrence of, and the remedies with respect to, an Event of Default, without
the consent of such Noteholders, and (ii) the Indenture Trustee may take actions
which would otherwise be at its option or within its discretion, including
actions relating to the occurrence of, and the remedies with respect to, an
Event of Default, only at the direction of the Note Insurer. In addition, on
each Payment Date, after the Noteholders have been paid all amounts to which
they are entitled, the Note Insurer will be entitled to be reimbursed for any
unreimbursed Insured Payments, unreimbursed Premium Amounts (each with interest
thereon at the "Late Payment Rate" specified in the Insurance Agreement) and any
other amounts owed under the Policy.
A-3
The Trust shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the Policy will be sole source of payments on
the Notes, and each Holder hereof, by its acceptance of this Note, agrees that
(i) such Note will be limited in right of payment to amounts available from the
Trust Estate and the Policy as provided in the Indenture and (ii) such Holder
shall have no recourse to the Trust, the Owner Trustee, the Indenture Trustee,
the Depositor, the Seller, the Servicer or any of their respective affiliates,
or to the assets of any of the foregoing entities, except the assets of the
Trust pledged to secure the Notes pursuant to the Indenture.
Payments of interest on this Note due and payable on each Payment Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as the
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Notwithstanding the foregoing, in the case of Definitive Notes, upon
written request at least five days prior to the related Record Date with
appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Principal Balance of at least $1,000,000), any payment of principal
or interest, other than the final installment of principal or interest, shall be
made by wire transfer to an account in the United States of America designated
by such Holder reasonably satisfactory to the Indenture Trustee. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Trust, will notify the Person who was the Holder hereof as of the Record Date
preceding such Payment Date by notice mailed or transmitted by facsimile prior
to such Payment Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes.
As provided in the Indenture, both of the Classes of Notes may be redeemed in
whole, but not in part, at the option of the Majority Certificateholder of the
Trust Certificates in respect of which the largest pool of Mortgage Loans (by
Aggregate Principal Balance) is remaining or, if such Majority Certificateholder
elects not to exercise such option, by the Servicer, on any Payment Date on and
after the date on which the aggregate unpaid Note Principal Balance of the Notes
is less than or equal to 10% of the aggregate Original Note Principal Balance of
the Notes.
As provided in the Indenture, any Class of Notes may be redeemed in whole, but
not in part at the option of the Majority Certificateholder of the Trust
Certificates in respect of which the largest pool of Mortgage Loans (by
Aggregate Principal Balance) is remaining or, if such
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Majority Certificateholder elects not to exercise such option, by the Servicer,
on any Payment Date on and after the date on which the aggregate unpaid Note
Principal Balances of the related class of Notes is less than or equal to 10% of
the aggregate Original Note Principal Balance of the related class of Notes.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Trust pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
In the case of a transfer of a Class A-[1][2] Note, the Note Registrar shall not
register the transfer of this Note unless the Note Registrar has received a
representation letter from the transferee to the effect that either (i) the
transferee is not, and is not acquiring the Note on behalf of or with the assets
of, an employee benefit plan or other retirement plan or arrangement that is
subject to Title I of the Employee Retirement Income Security Act or 1974, as
amended, or Section 4975 of the Code or (ii) the acquisition and holding of this
Note by the transferee qualifies for exemptive relief under a Department of
Labor Prohibited Transaction Class Exemption. Each Beneficial Owner, by
acceptance of a beneficial interest herein, shall be deemed to make one of the
foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of
a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Trust or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of
a Beneficial Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the
A-5
Indenture that such Noteholder or Beneficial Owner will not at any time
institute against American Business Financial Services, Inc. or the Trust, or
join in any institution against American Business Financial Services, Inc. or
the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture, the Trust Agreement, the Unaffiliated Seller's Agreement, the Sale
and Servicing Agreement, the Insurance Agreement and the Indemnification
Agreement (the "Basic Documents").
The Trust has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Trust
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this Note, the
Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of
the Trust, the Indenture Trustee or any such agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Notes under the Indenture at any time
by the Trust with the consent of the Note Insurer and the Holders of Notes
representing a majority of the Note Principal Balance of all Outstanding Notes.
The Indenture also contains provisions permitting the (i) Note Insurer or (ii)
if a Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Principal Balance of Outstanding Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Trust with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Note Insurer or by the
Holder of this Note (or any one or more Predecessor Notes) shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the Trust under
the Indenture.
Initially, each Class of Notes will be represented by one Note registered in the
name of Cede & Co. as nominees of the Clearing Agency. The Notes will be
delivered in denominations as provided in the Indenture and subject to certain
limitations therein set forth. The Notes are exchangeable for a like aggregate
initial Note Principal Balance of Notes of different authorized denominations,
as requested by the Holder surrendering the same.
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THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Trust, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to herein, or
be valid or obligatory for any purpose.
A-7
IN WITNESS WHEREOF, the Trust has caused this Instrument to be signed, manually
or in facsimile, by its Authorized Officer, as of the date set forth below.
Dated:
ABFS MORTGAGE LOAN TRUST 2000-1
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[1][2] Notes designated above and referred to in the
within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By:
-------------------------------------
Authorized Signatory
A-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________________, attorney, to transfer
said Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
----------------------------------------------
Signature Guaranteed:
*/
-----------------------------------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-9
EXHIBIT B
FORM OF SUBSEQUENT PLEDGE AGREEMENT
This SUBSEQUENT PLEDGE AGREEMENT, dated as of _____________, 2000 (the
"Subsequent Transfer Date"), is entered into by and between ABFS MORTGAGE LOAN
TRUST 2000-1, as issuer (the "Trust"), and THE CHASE MANHATTAN BANK, as
indenture trustee (the "Indenture Trustee").
W I T N E S S E T H:
Reference is hereby made to that certain Indenture, dated as of March 1,
2000 (the "Indenture"), by and between the Trust and the Indenture Trustee.
Pursuant to the Indenture, the Trust agreed to pledge, and the Indenture Trustee
agreed to accept, from time to time, a security interest in Subsequent Mortgage
Loans (as defined below). The Indenture provides that each such pledge of
Subsequent Mortgage Loans be evidenced by the execution and delivery of a
Subsequent Pledge Agreement such as this Subsequent Pledge Agreement.
The assets pledged to the Indenture Trustee pursuant to this Subsequent
Pledge Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool
II listed in the Mortgage Loan Schedule attached hereto (including property that
secures a Subsequent Mortgage Loan that becomes an REO Property), including the
related Mortgage Files delivered or to be delivered to the Collateral Agent, on
behalf of the Indenture Trustee, including all payments of principal received,
collected or otherwise recovered after the Subsequent Cut-Off Date for each
Subsequent Mortgage Loan, all payments of interest accruing on each Subsequent
Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and
all other proceeds received in respect of such Subsequent Mortgage Loans, (b)
the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I and $___ for Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Subsequent Pledge
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.
Section 2. Pledge. In consideration of the receipt of $__________ (such
amount being approximately 100% of the Aggregate Principal Balance of the
Subsequent Mortgage Loans) from the Indenture Trustee, the Trust hereby pledges
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, without recourse, all of the Trust's right, title and
B-1
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.
In connection with such pledge, the Originators and the Unaffiliated
Seller shall satisfy the document delivery requirements set forth in Section
2.05 of the Sale and Servicing Agreement with respect to each Subsequent
Mortgage Loan.
In connection with such pledge, the Servicer shall make a Special
Advance of $________ as set forth in Section 5.18(b) of the Sale and Servicing
Agreement.
Section 3. Representations and Warranties Concerning the Subsequent
Mortgage Loans. With respect to each Subsequent Mortgage Loan, the Trust hereby
assigns each of the representations and warranties made by the Originators and
the Unaffiliated Seller in Section 3 of the Subsequent Transfer Agreement, for
the benefit of the Indenture Trustee, the Note Insurer and the Noteholders, on
which the Indenture Trustee relies in accepting the pledge of the Subsequent
Mortgage Loans and the Note Insurer relies in connection with the Policy. Such
representations and warranties speak as of the Subsequent Transfer Date unless
otherwise indicated, and shall survive each pledge, assignment, transfer and
conveyance of the respective Subsequent Mortgage Loans to the Indenture Trustee,
for the benefit of the Noteholders and the Note Insurer.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any
Noteholder of a breach of any of the representations and warranties made by the
Originators and the Unaffiliated Seller pursuant to Section 3.03 of the
Unaffiliated Seller's Agreement or Section 3 of any Subsequent Transfer
Agreement, the party discovering such breach shall give prompt written notice to
such other Person; provided, that the Indenture Trustee shall have no duty to
inquire or to investigate the breach of any such representations and warranties.
The Originators and the Unaffiliated Seller will be obligated to repurchase a
Subsequent Mortgage Loan which breaches a representation or warranty in
accordance with the provisions of Section 4.02 of the Sale and Servicing
Agreement or to indemnify as described in Section 3.05(g) of the Unaffiliated
Seller's Agreement. Such repurchase and indemnification obligation of the
Originators and the Unaffiliated Seller shall constitute the sole remedy against
the Originators and the Unaffiliated Seller, and the Trust for such breach
available to the Servicer, the Trust, the Owner Trustee, the Indenture Trustee,
the Depositor, the Note Insurer and the Noteholders.
Section 5. Amendment. This Subsequent Pledge Agreement may be amended
from time to time by the Trust and the Indenture Trustee only with the prior
written consent of the Note Insurer (or, in the event of a Note Insurer Default,
the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT PLEDGE
AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT PLEDGE
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AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
Section 7. Counterparts. This Subsequent Pledge Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Pledge Agreement will inure to the benefit of and be binding upon the parties
hereto, the Note Insurer, the Noteholders, and their respective successors and
permitted assigns.
Section 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Pledge Agreement and are
incorporated into this Subsequent Pledge Agreement for all purposes.
[Remainder of Page Intentionally Left Blank]
B-3
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused this
Subsequent Pledge Agreement to be duly executed by their respective officers as
of the day and year first above written.
ABFS MORTGAGE LOAN TRUST
2000-1, as Issuer
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
-------------------------------------
Name:
Title:
[Signature Page to Subsequent Pledge Agreement]
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EXHIBIT C
FORM OF NOTE INSURER CONSENT TO
SUBSEQUENT MORTGAGE LOANS
__________, 2000
The Chase Manhattan Bank,
as Indenture Trustee
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Fiduciary Services
Re: ABFS Mortgage Loan Trust 2000-1;
Mortgage Backed Notes, Series 2000-1
------------------------------------
Ladies and Gentlemen:
Reference is made to the Indenture, dated as of March 1, 2000 (the
"Indenture"), by and between ABFS Mortgage Loan Trust 2000-1, as issuer (the
"Trust"), and you, as indenture trustee (the "Indenture Trustee"). Pursuant to
Section 2.14(b)(viii) of the Indenture, the undersigned hereby approves and
consents to the acquisition of the Subsequent Mortgage Loans listed on Schedule
I attached hereto aggregating $____________ in Aggregate Principal Balance by
the Trust and the subsequent pledge of such Subsequent Mortgage Loans by the
Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer.
AMBAC ASSURANCE CORPORATION
By:
-------------------------------------
Name:
Title:
C-1
APPENDIX I
DEFINED TERMS
"Accepted Servicing Practices": The Servicer's normal
servicing practices, which in general will conform to the mortgage servicing
practices of prudent mortgage lending institutions which service, for their own
account, mortgage loans of the same type as the Mortgage Loans in the
jurisdictions in which the related Mortgaged Properties are located.
"Account": Any of the Collection Account and the Payment
Accounts.
"Accountant": A Person engaged in the practice of accounting
who (except when the Indenture provides that an Accountant must be Independent)
may be employed by or affiliated with the Trust or an Affiliate of the Trust.
"Accredited Investor": The meaning assigned to such term in
Section 2.12(b)(i) of the Indenture.
"Accrual Period": With respect to the Class A Notes and any
Payment Date, the period from and including the prior Payment Date (or, in the
case of the first Payment Date, from and including the Closing Date) to and
including the day immediately preceding such Payment Date.
"Act": With respect to any Noteholder, as defined in Section
11.03 of the Indenture.
"Addition Notice": A written notice from the Depositor, the
Trust, the Indenture Trustee, the Collateral Agent and the Initial Purchaser
that the Originators desire to make a Subsequent Transfer.
"Advance Amount": The lesser of (i) 96.00% of the aggregate
outstanding Principal Balance of the Mortgage Loans and (ii) 92.00% of the
aggregate Market Value of the Mortgage Loans, in each case as of the date of
determination.
"Affiliate": With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent": Any Note Registrar, Collateral Agent, or
Authenticating Agent.
"Aggregate Principal Balance": With respect to any Mortgage
Loans and any date of determination, the aggregate of the Principal Balances of
such Mortgage Loans as of such date of determination.
"Amortization Event": The occurrence of any of the following:
(i) A Collateral Deficiency Event which is not cured within
five (5) Business Days;
(ii) Failure of the Redemption Date to have occurred on or
before September 30, 2000;
(iii) A Servicer Event of Default set forth in Section
9.01(a)(viii) or (a)(ix) of the Sale and Servicing
Agreement;
(iv) A breach of any of the representations, warranties or
covenants set forth in Article III or Section 4.01 of
the Sale and Servicing Agreement or Section 3.17 of the
Indenture; and
(v) Failure to make any payment on the Class A Notes when
due.
"Appraised Value": As to any Mortgaged Property, the appraised
value of the Mortgaged Property based upon the appraisal made by or on behalf of
the related Originator at the time referred to in the related Basic Documents
or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the
sales price of the Mortgaged Property, if such sales price is less than such
appraised value.
"Assignment of Mortgage": With respect to each Mortgage Loan,
an assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.
"Authenticating Agent": The Person, if any, appointed as
Authenticating Agent by the Owner Trustee, acting at the direction of the
Majority Certificateholders, pursuant to Section 6.14 of the Indenture, until
any successor Authenticating Agent for the Notes is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Indenture Trustee. Any Authenticating Agent other than the
Indenture Trustee shall sign an instrument under which it agrees to be bound by
all of the terms of this Indenture applicable to the Authenticating Agent.
"Authorized Denominations": A minimum Percentage Interest
corresponding to a minimum denomination of $1,000 or integral multiples of
$1,000 in excess thereof; provided, however, that one Class A Note is issuable
in a denomination equal to any such multiple plus an additional amount such that
the aggregate denomination of all Notes shall be equal to the Original Note
Principal Balance.
"Authorized Officer": With respect to (i) the Indenture
Trustee, any Responsible Officer, (ii) the Owner Trustee or the Collateral
Agent, the president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, any
trust officer, any financial services officer or any other officer of the Owner
Trustee or the Collateral Agent customarily performing functions similar to
those performed by the above officers and (iii) any other Person, the chairman,
chief operating officer, president or any vice president of such Person.
2
"Available Funds": With respect to any Payment Date and any
Payment Account, the amount to be on deposit in such Payment Account on such
Payment Date as a result of (a) the Servicer's remittance of the Servicer
Remittance Amount related to such Payment Account on the related Servicer
Payment Date, and (b) any transfers to such Payment Account in respect of the
Shortfall Amount and such Payment Date pursuant to Section 8.01 of the
Indenture, until such Shortfall Amount is paid in full, made to the extent of
the Net Monthly Excess Cashflow from the Payment Account. For purposes of
calculating the Available Funds, any Loan Repurchase Price or Substitution
Adjustment that is paid shall be deemed deposited in the Payment Account in the
Due Period preceding such Servicer Payment Date.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Basic Documents": The Indenture, the Trust Agreement and the
Sale and Servicing Agreement.
"Best Efforts": Efforts determined to be in good faith and
reasonably diligent by the Person performing such efforts, specifically the
Trust or the Servicer or any other agent of the Trust, as the case may be, in
its reasonable discretion. Such efforts do not require the Trust or the Servicer
or any other agent of the Trust, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Trust or the Servicer or any other agent of the Trust, as the case
may be, to advance or expend fees or sums of money in addition to those
specifically set forth in this Indenture and the Sale and Servicing Agreement.
"Business Day": Any day other than (i) a Saturday or Sunday or
(ii) a day that is either a legal holiday or a day on which banking institutions
in the State of New York, the State of Delaware, the State of New Jersey, the
State of North Carolina, or the state in which the Indenture Trustee's office
from which payments will be made to Certificateholders, are authorized or
obligated by law, regulation or executive order to be closed.
"Business Purpose Property": Any mixed-use property,
commercial property, or four or more unit multifamily property.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Change of Control": Any of the following:
(a) any transaction or event as a result of which Guarantor
ceases to own, beneficially and of record, 100% of the Stock of Issuer;
(b) the sale, transfer, or other disposition of all or
substantially all of the Issuer's assets (excluding any such action
taken in connection with any securitization transactions);
(c) the consummation of a merger or consolidation of the
Guarantor with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's Stock outstanding immediately after
3
such merger, consolidation or such other reorganization is owned by
persons who were not stockholders of the Guarantor immediately prior to
such merger, consolidation or other reorganization; or
(d) the sale, transfer, or other disposition of all or
substantially all of the Guarantor's assets.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.
"Class": The class of Notes designated as the Class A Notes.
"Class A Carry-Forward Amount": As of any Payment Date, the
sum of (a) the amount, if any, by which (i) the Class A Interest Payment Amount
as of the immediately preceding Payment Date exceeded (ii) the amount of
interest actually paid to the Holders of the Class A Notes on such immediately
preceding Payment Date and (b) thirty (30) days' interest on the amount
described in clause (a), calculated at an interest rate equal to the Class A
Note Rate.
"Class A Current Interest": With respect to the Class A Notes
for any Payment Date, the interest accrued during the related Accrual Period at
the Class A Note Rate applicable to such Payment Date on the Class A Note
Principal Balance as of such Payment Date (and prior to making any payments on
such Payment Date).
"Class A Interest Payment Amount": With respect to the Class A
Notes for any Payment Date, an amount equal to (a) the related Class A Current
Interest, plus (b) the Class A Carry-Forward Amount.
"Class A Note": Any Note designated as a "Class A Note" on the
face thereof, in the form of Exhibit A to the Indenture. The Class A Notes shall
be issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A Note Principal Balance": As of any date of
determination, the Original Note Principal Balance of the Class A Notes less any
amounts actually paid with respect to principal thereon on all prior Payment
Dates.
"Class A Note Rate": With respect to each business day, the
per annum rate equal to the LIBOR rate for such day plus 1.00%, plus any
increase in the Initial Purchaser's funding costs, which costs shall be provided
to the Indenture Trustee; provided, that on any day on or after the occurrence
of an Event of Default, the rate shall be LIBOR plus 5.00%.
"Class A Payment Amount": With respect to the Class A Notes
for any Payment Date, the amount to be paid to the Holders of the Class A Notes
on such Payment Date, applied first to interest and then to principal, which
amount shall be the sum of the Class A Interest Payment Amount and the Class A
Principal Payment Amount.
"Class A Principal Payment Amount": For any Payment Date, the
amount necessary to reduce the Class A Note Principal Balance to an amount equal
to the Advance Amount as of such Payment Date; provided, however, that for
purposes of calculating the Class
4
A Principal Payment Amount on any Payment Date, the Principal Balance of Pledged
Mortgage Loans that are more than 60 days past due shall equal zero.
[["Clean-Up Call Date": The first Payment Date after the Class
A Note Principal Balance is less than or equal to 10% of the Original Note
Principal Balance of the Class A Notes.]]
"Closing Date": March __, 2000 and each date thereafter on
which Subsequent Mortgage Loans are purchased by the Trust.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The Pledged Mortgage Loans, Accounts and other
collateral described in the Granting Clause securing payment of the Notes.
"Collateral Agent": Chase Bank of Texas, N.A., a national
banking association, or its successor-in-interest, or any successor Collateral
Agent appointed as provided in Section 11.08 of the Sale and Servicing
Agreement.
"Collateral Deficiency Event": A situation which shall be
deemed to be existing as of any day on which (a) the outstanding principal
amount of the Class A Notes as of such day exceeds, (b) the sum of (A) all funds
held by the Indenture Trustee in the Reserve Account and (B) the lesser of (i)
the outstanding principal balance of all Pledged Mortgage Loans then pledged to
the Indenture Trustee under the Indenture (disregarding the outstanding
principal balance of any such Pledged Mortgage Loans to be pledged to the
Indenture Trustee on such date) and (ii) the product of (x) the Market Value of
all Pledged Mortgage Loans (disregarding the Market Value of any such Pledged
Mortgage Loans proposed to be pledged to the Indenture Trustee on such day) and
(y) Advance Rate.
"Collection Account": The Eligible Account established and
maintained by the Servicer pursuant to Section 7.02(b) of the Sale and Servicing
Agreement.
"Combined Loan-to-Value Ratio" or "CLTV": As to any Mortgage
Loan at any time, the fraction, expressed as a percentage, the numerator of
which is the sum of (i) the Principal Balance thereof at such time and (ii) if
such Mortgage Loan is subject to a second mortgage, the unpaid principal balance
of any related first mortgage loan or loans, if any, as of such time, and the
denominator of which is the Appraised Value of any related Mortgaged Property or
Properties as of the date of the appraisal used by or on behalf of the
Originators to underwrite such Mortgage Loan.
"Compensating Interest": As defined in Section 8.05 of the
Sale and Servicing Agreement.
"Corporate Trust Office": With respect to (x) the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of the Basic Documents is located at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: ABFS Mortgage Loan
Warehouse Trust 2000-1; (y) the Owner Trustee, the principal office of the Owner
Trustee at
5
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of the Basic Documents
is located at One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration; and (z) the
Collateral Agent, the principal office of the Collateral Agent at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of the Basic Documents is located at
000 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, Attention: Custody Manager.
"Cumulative Loan Loss": With respect to any period, the sum of
all Liquidated Loan Losses which occurred during such period.
"Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
Delinquency.
"Cut-Off Date": With respect to the Initial Mortgage Loans,
the Initial Cut-Off Date, and with respect to the Subsequent Mortgage Loans, the
Subsequent Cut-Off Date.
"Cut-Off Date Aggregate Principal Balance": Means the
aggregate unpaid principal balance of the Initial Mortgage Loans as of the
Initial Cut-Off Date (or, with respect to Initial Mortgage Loans which were
originated after the Initial Cut-Off Date, as of the date of origination). The
Cut-Off Date Aggregate Principal Balance for the Trust is $[[ ]].
"Cut-Off Date Principal Balance": Means as to each Initial
Mortgage Loan, its unpaid principal balance as of the Initial Cut-Off Date (or,
with respect to Initial Mortgage Loans which were originated after the Initial
Cut-Off Date, as of the date of origination).
"DCR": The meaning assigned to such term in Section 5.01(n) of
the Indenture.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"Default": Any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding Principal Balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Notes": Notes other than Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
6
"Delinquency Ratio": With respect to any Payment Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are sixty (60) or more
days Delinquent, in foreclosure or converted to REO Property as of the last day
of such Due Period and (b) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans as of the last day of such Due Period.
"Delinquent": A Mortgage Loan is "delinquent" if any payment
due thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"Depositor": [[Warehouse Co.]].
"Due Date": With respect to each Mortgage Loan and any Payment
Date, the day of the calendar month preceding the calendar month in which such
Payment Date occurs on which the Monthly Payment for such Mortgage Loan was due.
"Due Period": With respect to each Payment Date, the calendar
month preceding the related Payment Date.
"Eligible Account": Either (A) an account or accounts
maintained with an institution (which may include the Indenture Trustee;
provided, that the Indenture Trustee otherwise meets these requirements) whose
deposits are insured by the FDIC, the unsecured and uncollateralized debt
obligations of which institution shall be rated "AA" or better by S&P and "Aa2"
or better by Moody's and in the highest short term rating category by S&P and
Moody's, and which is (i) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (ii) an
institution (including the Indenture Trustee) duly organized, validly existing
and in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws or (iv) a principal subsidiary of a bank
holding company or (B) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution or trust
company (which may include the Indenture Trustee; provided, that the Indenture
Trustee otherwise meets these requirements), having capital and surplus of not
less than $50,000,000, acting in its fiduciary capacity.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Event of Default": As defined in Section 5.01 of the
Indenture.
"Xxxxxx Xxx": The Federal National Mortgage Association, and
any successor thereto.
7
"FDIC": The Federal Deposit Insurance Corporation, and any
successor thereto.
"Final Certification": A certification as to the completeness
of each Indenture Trustee's Mortgage File prepared by the Collateral Agent, on
behalf of the Indenture Trustee, and provided by the Collateral Agent within
ninety (90) of the Closing Date pursuant to Section 2.06(a)(iii) of the Sale and
Servicing Agreement.
"Final Stated Maturity Date": The April 2030 Payment Date.
"Fitch": The meaning assigned to such term in Section 5.01(n)
of the Indenture.
"Foreclosure Profits": As to any Payment Date, the excess, if
any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the related Due Period over (ii) the
sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus
accrued and unpaid interest at the applicable Mortgage Interest Rate on the
unpaid Principal Balance thereof from the Due Date on which interest was last
paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had
been an REO Mortgage Loan, from the Due Date on which interest was last deemed
to have been paid pursuant to Section 7.06 of the Sale and Servicing Agreement)
to the next succeeding Due Date following the date such Loan became a Liquidated
Mortgage Loan.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, and
any successor thereto.
"GAAP": Generally accepted accounting principles, consistently
applied.
"Grant": To assign, transfer, mortgage, pledge, create and
grant a security interest in, deposit, set-over and confirm. A Grant of a
Mortgage Loan and the related Mortgage Files, a Permitted Investment, the Sale
and Servicing Agreement, or any other instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including without limitation the immediate and continuing right to
claim for, collect, receive and give receipts for principal and interest
payments thereunder, Insurance Proceeds, Loan Purchase Prices and all other
moneys payable thereunder and all proceeds thereof, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything that the Granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Guarantor": American Business Financial Services, Inc.
"Highest Lawful Rate": As defined in Section 11.19 of the
Indenture.
"Indenture": The Indenture, dated as of March 1, 2000, between
the Trust and the Indenture Trustee, relating to the issuance of the Notes.
"Indenture Trustee": The Chase Manhattan Bank, a New York
banking corporation, or its successor-in-interest, or any successor Indenture
Trustee appointed as provided for in Section 6.09 of the Indenture.
8
"Indenture Trustee Fee": As to any Payment Date, the fee
payable to the Indenture Trustee in respect of its services as Indenture Trustee
pursuant to Section 6.16 of the Indenture that accrues at a monthly rate equal
to one-twelfth of 0.015% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.
"Indenture Trustee's Mortgage File": The documents delivered
to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section
2.05 of the Sale and Servicing Agreement.
"Indenture Trustee's Remittance Report": The statement
prepared pursuant to Section 2.08(d) of the Indenture, containing the following
information with respect to each Class:
(a) the amount of the payment with respect to the Class A
Notes and the Trust Certificates;
(b) the amount of such payments allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein;
(c) the amount of such payments allocable to interest and the
calculation thereof;
(d) the Note Principal Balance of Class A Notes as of such
Payment Date after giving effect to any payment of principal on such
Payment Date;
(e) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in such payment;
(f) the amounts, if any, of any Liquidated Loan Losses for
consumer purpose loans and for business purpose loans for the related
Due Period and cumulative Liquidated Loan Losses since the Closing Date
for consumer purpose loans and for business purpose loans;
(g) [[LIBOR]] for such Payment Date [[DO WE WANT AVERAGE OF
DAILY LIBOR DETERMINATIONS]];.
Items (a), (b) and (c) above shall, with respect to the Class
A Notes, be presented on the basis of a Note having a $1,000 denomination. In
addition, by January 31 of each calendar year following any year during which
the Notes are outstanding, the Indenture Trustee shall furnish a report to each
Holder of record if so requested in writing at any time during each calendar
year as to the aggregate of amounts reported pursuant to (a), (b) and (c) with
respect to the Notes for such calendar year.
"Independent": When used with respect to any specified Person,
means such a Person who (i) is in fact independent of the Trust and any other
obligor upon the Notes, (ii) does not have any direct financial interest or any
material indirect financial interest in the Trust or in any such other obligor
or in an Affiliate of the Trust or such other obligor, and (iii) is not
9
connected with the Trust or any such other obligor as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions. Whenever it is herein provided that any Independent Person's opinion
or certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by a Trust Order and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.
"Individual Note": A Note of an Original Note Principal
Balance of $1,000; a Note of an Original Note Principal Balance in excess of
$1,000 shall be deemed to be a number of Individual Notes equal to the quotient
obtained by dividing such Original Note Principal Balance amount by $1,000.
"Initial Certification": A certification as to the
completeness of each Mortgage File prepared by the Collateral Agent, on behalf
of the Indenture Trustee, and provided by the Collateral Agent within thirty
(30) of the Closing Date pursuant to Section 2.06(b)(ii) of the Sale and
Servicing Agreement.
"Initial Cut-Off Date": The close of business on [[February
29, 2000]] (or with respect to any Initial Mortgage Loan originated or otherwise
acquired by an Originator after [[February 29, 2000]], the date of origination
or acquisition of such Initial Mortgage Loan).
"Initial Mortgage Loans": The Mortgage Loans delivered by the
Trust on the Closing Date.
"Initial Purchaser: [[Prudential Securities, Inc./Prudential
Securities Credit Corp.]]
"Insurance Proceeds": Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan to the extent such proceeds are
not applied to the restoration of the related Mortgaged Property or released to
the related Mortgagor in accordance with Accepted Servicing Practices.
"Insurance Proceeds" do not include "Insured Payments."
"Interest Payment Amount": The Class A Interest Payment
Amount.
"Lenders": The meaning assigned to such term in Section
5.01(j) of the Indenture.
"LIBOR": With respect to any business day, the rate determined
by the Indenture Trustee on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits, as such rates appear on Telerate Page
3750, as of 11:00 a.m. (London time) on such day. On each business day, LIBOR
will be established by the Indenture Trustee as follows:
(a) If on such business day two or more Reference Banks
provide such offered quotations, LIBOR shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%).
10
(b) If on such business day fewer than two Reference Banks
provide such offered quotations, LIBOR shall be the higher of (i) LIBOR
as determined on the previous business day and (ii) the Reserve
Interest Rate.
"Licensee": The meaning assigned to such term in Section
3.17(a)(ii) of the Indenture.
"Liquidated Loan Loss": With respect to any Payment Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan prior to the Due Date preceding such Payment
Date, equal to the excess of (i) the unpaid Principal Balance of each such
Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Mortgage
Interest Rate from the Due Date as to which interest was last paid with respect
thereto through the next succeeding Due Date following the date such Loan became
a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed
and with respect to which the Servicer determines that all Liquidation Proceeds
which it expects to recover have been recovered.
"Liquidation Expenses": Expenses incurred by the Servicer in
connection with the liquidation of any defaulted Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions
and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant
to Sections 7.04 and 7.06 of the Sale and Servicing Agreement respecting the
related Mortgage Loan and any unreimbursed expenditures for real property taxes
or for property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds) received by the Servicer in connection with (i) the taking of all or a
part of Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan through an
Indenture Trustee's sale, foreclosure sale, REO Disposition or otherwise or
(iii) the liquidation of any other security for such Mortgage Loan, including,
without limitation, pledged equipment, inventory and working capital and
assignments of rights and interests made by the related Mortgagor.
"Loan Repurchase Price": With respect to any Mortgage Loan,
the Principal Balance of such Mortgage Loan as of the date of purchase, plus all
accrued and unpaid interest on such Principal Balance computed, as of the next
succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest
Rate, plus the amount of any unreimbursed Servicing Advances made by the
Servicer with respect to such Mortgage Loan, which purchase price shall be
deposited in the Collection Account on the next succeeding Servicer Payment
Date, after deducting therefrom any amounts received in respect of such
repurchased Mortgage Loan or
11
Loans and being held in the Collection Account for future payment to the extent
such amounts have not yet been applied to principal or interest on such Mortgage
Loan.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage
Loan as of its date of origination, the ratio on such date borne by the
outstanding Principal Balance of the Mortgage Loan to the Appraised Value of the
related Mortgaged Property.
"Majority Certificateholders": The Holder or Holders of Trust
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
"Majority Noteholders": The Holder or Holders of Notes
evidencing Percentage Interests in excess of 51% in the aggregate.
"Market Value": As of any date and with respect to any Pledged
Mortgage Loan, the whole-loan servicing-retained fair market value of such
Pledged Mortgage Loan as of such date as determined by the Initial Purchaser (or
an affiliate thereof) in its sole and reasonable discretion. [[To the extent
that on any day (x) the aggregate outstanding principal balance of Pledged
Mortgage Loans which as of the last payment due date were past due for a period
of 31-59 days and continue to be past due exceeds (y) ____ percent (__%) of the
aggregate outstanding principal balance of all Pledged Mortgage Loans, the fair
market value of such excess portion will be deemed to be zero.]] To the extent
that on any day a Pledged Mortgage Loan is greater than 59 days past due, the
fair market value of such will be deemed zero.
"Material Adverse Effect": The meaning assigned to such term
in Section 3.17(b)(viii) of the Indenture.
"Maximum Collateral Amount": The sum of the Original Pool
Principal Balance and [[ ]] for the Class A Notes.
"Monthly Payment": As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon as specified for such Due Date in the related amortization schedule at
the time applicable thereto (after adjustment for any Curtailments and Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than Deficient
Valuations, or similar proceeding or any moratorium or similar waiver or grace
period).
"Monthly Servicing Fee": As defined in Section 7.08 of the
Sale and Servicing Agreement.
"Moody's": Xxxxx'x Investors Service, Inc., a corporation
organized and existing under Delaware law, or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized rating agency designated in any Securitization Agreement.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on the Mortgaged Property.
"Mortgage File": As described in Exhibit A to the Sale and
Servicing Agreement.
12
"Mortgage Interest Rate": As to any Mortgage Loan, the per
annum fixed rate at which interest accrues on the unpaid Principal Balance
thereof.
"Mortgage Loan Schedule": The schedule of Initial Mortgage
Loans as of the Initial Cut-Off Date attached as Schedule I to the Indenture,
which will be deemed to be modified automatically to reflect any replacement,
sale, substitution, liquidation, transfer or addition of any Mortgage Loan,
including the addition of a Subsequent Mortgage Loan, pursuant to the terms
hereof. The initial Mortgage Loan Schedule sets forth as to each Initial
Mortgage Loan, and any subsequent Mortgage Loan Schedule provided in connection
with the Subsequent Mortgage Loans will set forth as to each Subsequent Mortgage
Loan: (i) its identifying number and the name of the related Mortgagor; (ii) the
billing address for the related Mortgaged Property including the state and zip
code; (iii) its date of origination; (iv) the original number of months to
stated maturity; (v) the original stated maturity; (vi) the original Principal
Balance; (vii) its Principal Balance as of the applicable Cut-Off Date; (viii)
the Mortgage Interest Rate; and (ix) the scheduled monthly payment of principal
and interest.
"Mortgage Loans": The Initial Mortgage Loans and the
Subsequent Mortgage Loans, together with any Qualified Substitute Mortgage Loans
substituted therefor in accordance with the Basic Documents, as from time to
time are held as a part of the Trust, the Initial Mortgage Loans originally so
held being identified in the initial Mortgage Loan Schedule. When used in
respect of any Payment Date, the term Mortgage Loans shall mean all Mortgage
Loans (including those in respect of which the Indenture Trustee has acquired
the related Mortgaged Property) which have not been repaid in full prior to the
related Due Period, did not become Liquidated Mortgage Loans prior to such
related Due Period or were not repurchased or replaced by the Originators (or
the Depositor) prior to such related Due Period.
"Mortgage Note": The original, executed note or other evidence
of any indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgaged Property": The underlying property or properties
securing a Mortgage Loan, consisting of a fee simple interest in one or more
parcels of land.
"Mortgagor": The obligor on a Mortgage Note.
"Net Foreclosure Profits": As to any Payment Date, the excess,
if any, of (i) the aggregate Foreclosure Profits with respect to such Payment
Date over (ii) Liquidated Loan Losses with respect to such Payment Date.
"Net Liquidation Proceeds": As to any Liquidated Mortgage
Loan, Liquidation Proceeds net of Liquidation Expenses and net of any
unreimbursed Periodic Advances and Servicing Advances made by the Servicer. For
all purposes of the Basic Documents, Net Liquidation Proceeds shall be allocated
first to accrued and unpaid interest on the related Mortgage Loan and then to
the unpaid Principal Balance thereof.
"Net Monthly Excess Cashflow": With respect to any Payment
Date, the excess of (x) the Available Funds then on deposit in the Payment
Account over (y) the sum of (i) the Interest Payment Amount for such Payment
Date, (ii) the Principal Payment Amount for such Payment Date, and (iii) the
Indenture Trustee Fees for such Payment Date.
13
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
"Net Weighted Average Mortgage Interest Rate": With respect to
any Due Period, the weighted average Mortgage Interest Rates (weighted by
Principal Balances) of the Mortgage Loans, calculated at the opening of business
on the first day of such Due Period, less the Servicing Fee Rate.
"Net Worth": The meaning assigned to such term in section
3.17(b)(i) of the Indenture.
"Nonrecoverable Advances": With respect to any Mortgage Loan,
(a) any Periodic Advance previously made and not reimbursed from late
collections pursuant to Section 7.03 of the Sale and Servicing Agreement, or (b)
a Periodic Advance proposed to be made in respect of a Mortgage Loan or REO
Property either of which, in the good faith business judgment of the Servicer,
as evidenced by an Officer's Certificate delivered to the Indenture Trustee no
later than the Business Day following such determination, would not ultimately
be recoverable pursuant to Section 7.03 of the Sale and Servicing Agreement.
"Note": Any Class A Note executed by the Owner Trustee on
behalf of the Trust and authenticated by the Indenture Trustee.
"Noteholder" or "Holder": Each Person in whose name a Note is
registered in the Note Register, except that, solely for the purposes of giving
any consent, waiver, request or demand pursuant to the Indenture, any Note
registered in the name of the Servicer or any Subservicer, or any Affiliate of
any of them, shall be deemed not to be outstanding and the undivided Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Notes necessary to effect any such consent,
waiver, request or demand has been obtained. For purposes of any consent,
waiver, request or demand of Noteholders pursuant to the Indenture, upon the
Indenture Trustee's request, the Servicer shall provide to the Indenture Trustee
a notice identifying any of its Affiliates or the Affiliates of any Subservicer
that is a Noteholder as of the date(s) specified by the Indenture Trustee in
such request.
"Note Principal Balance": As to any particular Note and date
of determination, the product of the Percentage Interest evidenced thereby and
the aggregate principal balance of all Notes of the same Class as of such date
of determination. The Trust Certificates do not have a "Note Principal Balance".
"Note Rate": The Class A Note Rate.
"Note Register": As defined in Section 2.06 of the Indenture.
"Note Registrar": As defined in Section 2.06 of the Indenture.
"Notes": The Class A Notes.
14
"Officer's Certificate": A certificate signed by the chairman
of the board, the president or a vice president and the treasurer, the secretary
or one of the assistant treasurers or assistant secretaries, the Servicer, or
the Depositor, or, with respect to the Trust, a certificate signed by a
Responsible Officer of the Owner Trustee, at the direction of the related
Majority Certificateholders as required by any Basic Document.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Servicer, the Depositor, the Indenture
Trustee, the Owner Trustee, a Noteholder or a Noteholder's prospective
transferee (including except as otherwise provided herein, in-house counsel)
reasonably acceptable to each addressee of such opinion and experienced in
matters relating to the subject of such opinion.
"Original Note Principal Balance": As of the Closing Date and
as to the Class A Notes, $[[ ]]. The Trust Certificates do not
have an "Original Note Principal Balance."
"Original Pool Principal Balance": The aggregate Principal
Balance of the Mortgage Loans, as of the Initial Cut-Off Date, which amount for
the Trust is equal to $[[ ]].
"Originators": American Business Credit, Inc., HomeAmerican
Credit, Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp.
"Other Debt Agreement": The meaning assigned to such term in
section 3.17(a)(iv) of the Indenture.
"Outstanding": As of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Definitive Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Holders of such Notes; provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been made;
(c) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser (as defined by the Uniform
Commercial Code of the applicable jurisdiction); and
(d) Notes alleged to have been destroyed, lost or stolen that
have been paid as provided for in Section 2.07 of the Indenture;
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Principal Balance of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Notes owned by the Trust, any other obligor upon
15
the Notes or any Affiliate of the Trust, the Servicer or the Depositor or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Trust, any other obligor upon the Notes or any Affiliate of
the Trust, the Servicer or the Depositor or such other obligor.
"Over-collateralization Deficit": As of any Payment Date, the
amount, if any, by which (a) the aggregate Note Principal Balance of the Class A
Notes, after taking into account the payment of the Principal Payment Amount
(except for any amount in respect of the Over-collateralization Deficit) on such
date exceeds (b) the Aggregate Principal Balances of the Mortgage Loans
determined as of the end of the immediately preceding Due Period.
"Owner-Occupied Mortgaged Property": A Residential Dwelling as
to which (a) the related Mortgagor represented an intent to occupy as such
Mortgagor's primary residence at the origination of the Mortgage Loan, and (b)
the Originators have no actual knowledge that such Residential Dwelling is not
so occupied.
"Ownership Interest": As to any Note, any ownership or
security interest in such Note, including any interest in such Note as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Owner Trustee": First Union Trust Company, National
Association, a national banking association, not in its individual capacity, but
solely as owner trustee under the Trust Agreement, and any successor owner
trustee thereunder.
"Owner Trustee Fee": As defined in Section 8.01 of the Trust
Agreement.
"Pass-Through Transfer": The sale or transfer of some or all
of the Mortgage Loans to a trust to be formed as part of a publicly issued
and/or privately placed, rated or unrated, mortgage pass-through or other
mortgage-backed securities transaction, retaining the Servicer as "servicer"
(with or without a master servicer) thereunder.
"Paying Agent": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Trust pursuant to Section
3.03 of the Indenture to pay the principal of, or interest on, any Notes on
behalf of the Trust, which agent, if not the Indenture Trustee, shall have
signed an instrument agreeing to be bound by the terms of the Indenture
applicable to such Paying Agent.
"Payment Account": With respect to each Class of Notes, the
segregated trust account, which shall be an Eligible Account, established and
maintained pursuant to Section 8.01(a) of the Indenture and entitled "The Chase
Manhattan Bank, as Indenture Trustee for ABFS Mortgage Loan Warehouse Trust
2000-1 Mortgage Backed Notes, Series 2000-1, Class A Payment Account," on behalf
of the related Noteholders.
"Payment Amount": The Class A Payment Amount.
16
"Payment Date": The 15th day of any month or if such 15th day
is not a Business Day, the first Business Day immediately following, commencing
on April 15, 2000.
"Percentage Interest": With respect to a Class A Note, the
portion evidenced by such Note, expressed as a percentage rounded to four
decimal places, equal to a fraction the numerator of which is the denomination
represented by original principal balance of such Note and the denominator of
which is the Original Note Principal Balance. With respect to a Trust
Certificate, the portion evidenced thereby as stated on the face of such Trust
Certificate.
"Periodic Advance": The aggregate of the advances required to
be made by the Servicer on any Servicer Payment Date pursuant to Section 7.18 of
the Sale and Servicing Agreement, the amount of any such advances being equal to
the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Servicer Payment Date, the product of (i) the Principal
Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage
Interest Rate for such Mortgage Loan net of the Servicing Fee, and
(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net proceeds from the REO Property transferred to
the Payment Account for such Payment Date;
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
"Permitted Investments": As used herein, Permitted Investments
shall include the following:
(a) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(b) repurchase agreements on obligations specified in clause
(a) maturing not more than three months from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated in one of the two
highest rating categories by the Rating Agencies;
(c) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States or any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
17
(d) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated in the highest short-term rating category by the Rating
Agencies;
(e) the VISTA U.S. Government Money Market Fund, the VISTA
Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as
any such fund is rated in the highest rating category by Xxxxx'x or
S&P;
provided, that no instrument described hereunder shall evidence either the right
to receive (x) only interest with respect to the obligations underlying such
instrument or (y) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": A pension or benefit plan or individual retirement
arrangement that is subject to ERISA or Section 4975 of the Code.
"Pledged Mortgage Loans": The Mortgage Loans pledged to the
Indenture Trustee pursuant to the Indenture.
"Predecessor Notes": With respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.07 of the Indenture in lieu of
a lost, destroyed or stolen Note shall be deemed to evidence the same debt as
the lost, destroyed or stolen Note.
"Preference Amount": Any amounts paid in respect of the Notes
which are recovered from any Holder of a Note as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code or other similar law in
accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Holder.
"Preference Claim": As defined in Section 8.03(f) of the
Indenture.
"Prepayment Assumption": A constant prepayment rate of 25%
HEP, used solely for determining the accrual of original issue discount and
market discount on the Notes for federal income tax purposes.
"Prepayment Interest Shortfall": With respect to any Payment
Date, for each Mortgage Loan that was the subject during the related Due Period
of a Principal Prepayment, an amount equal to the excess, if any, of (a) 30
days' interest on the Principal Balance of such
18
Mortgage Loan at a per annum rate equal to (i) the Mortgage Interest Rate (or at
such lower rate as may be in effect for such Mortgage Loan pursuant to
application of the Civil Relief Act, any Deficient Valuation and/or any Debt
Service Reduction) minus (ii) the Servicing Fee Rate over (b) the amount of
interest actually remitted by the Mortgagor in connection with such Principal
Prepayment less the Servicing Fee for such Mortgage Loan in such month.
"Principal Balance": As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to prepayments received prior to
the end of the related Due Period and Deficient Valuations incurred prior to
such date of determination. The Principal Balance of a Mortgage Loan that is
greater than 59 days past due or that becomes a Liquidated Mortgage Loan on or
prior to such date of determination shall be zero.
"Principal Payment Amount": For any Payment Date the sum,
without duplication, of:
(i) all principal in respect of the Mortgage Loans
actually collected during the related Due Period;
(ii) the principal balance of each Mortgage Loan that
either was repurchased by the Originators or the Depositor or
purchased by the Servicer on the related Servicer Payment
Date, to the extent such principal balance is actually
received by the Indenture Trustee;
(iii) any Substitution Adjustments delivered by the
Originators or the Depositor on the related Servicer Payment
Date in connection with a substitution of a Mortgage Loan to
the extent such Substitution Adjustments are actually received
by the Indenture Trustee;
(iv) the Net Liquidation Proceeds actually collected by
the Servicer with respect to Mortgage Loans during the related
Due Period (to the extent such Net Liquidation Proceeds relate
to principal);
(v) the proceeds received by the Indenture Trustee upon
the exercise by the Trust Certificateholders or the Servicer
of the optional redemption of the Notes pursuant to Section
10.01 of the Indenture (to the extent such proceeds relate to
principal);
(vi) the amount of any Over-collateralization Deficit
for such Payment Date;
(vii) the proceeds received by the Indenture Trustee on
any termination of the Trust pursuant to Section 10.01 of the
Indenture (to the extent such proceeds relate to principal);
In no event will the Principal Payment Amount with respect to
any Payment Date be (x) less than zero or (y) greater than the then aggregate
outstanding Note Principal Balance of the Notes.
19
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date.
"Proceeding": Any suit in equity, action at law or other
judicial or administrative proceeding.
"Prospective Owner": The meaning assigned to such term in
section 2.12(a) of the Indenture.
"PSI": The meaning assigned to such term in section
10.01(a)(ii) of the Indenture.
"Purchase Price": [[ ]].
"Qualified Appraiser": An appraiser, duly appointed by the
Originators, who had no interest, direct or indirect, in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and such appraiser
and the appraisal made by such appraiser both satisfy the requirements of Title
XI of the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
"Qualified Substitute Mortgage Loan": A mortgage loan or
mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section
2.06(b) or 4.02(b) of the Sale and Servicing Agreement, which (a) has or have an
interest rate at least equal to those applicable to the Deleted Mortgage Loan,
(b) relates or relate to a detached one-family residence or to the same type of
Residential Dwelling or Business Purpose Property, or any combination thereof,
as the Deleted Mortgage Loan and in each case has or have the same or a better
lien priority as the Deleted Mortgage Loan and has or have the same occupancy
status as the Deleted Mortgage Loan or is or are Owner-Occupied Mortgaged
Property(ies), (c) matures or mature no later than (and not more than one year
earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio
or Loan-to-Value Ratios at the time of such substitution no higher than the
Loan-to-Value of the Deleted Mortgage Loan, (e) has or have a Combined
Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such
substitution no higher than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan, (f) has or have a Principal Balance or Principal Balances (after
application of all payments received on or prior to the date of substitution)
not substantially less and not more than the Principal Balance of the Deleted
Mortgage Loan as of such date, and (g) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01 of
the Sale and Servicing Agreement.
"Record Date": The Business Day immediately preceding the
related Payment Date.
"Redemption Date": The Payment Date, if any, on which the
Indenture is terminated and all of the Notes are redeemed pursuant to Article X
of the Indenture, which date may occur on or after the Clean-Up Call Date;
provided, however, that in no event shall a Redemption Date occur between [[ ]]
and [[ ]].
20
"Reference Banks": Citibank, Xxxxxxx'x Bank PLC, The Bank of
Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Unaffiliated Seller which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Originators or any affiliate thereof, (iii)
whose quotations appear on the Telerate Page 3750 on the relevant Interest
Determination Date and (iv) which have been designated as such by the Indenture
Trustee.
"Remaining Excess Cashflow": For a Payment Date, the Net
Monthly Excess Cashflow remaining, if any, after payment of the Shortfall
Amount.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REO Disposition": The final sale by the Servicer of a
Mortgaged Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
"REO Mortgage Loan": Any Mortgage Loan which is not a
Liquidated Mortgage Loan and as to which the indebtedness evidenced by the
related Mortgage Note is discharged and the related Mortgaged Property is held
as part of the Trust.
"REO Proceeds": Proceeds received in respect of any REO
Mortgage Loan (including, without limitation, proceeds from the rental of the
related Mortgaged Property).
"REO Property": A Mortgaged Property acquired by the Servicer
in the name of the Indenture Trustee on behalf of the Noteholders through
foreclosure or deed-in-lieu of foreclosure.
"Reporting Date". The meaning assigned to such term in section
7.03(a).
"Request for Release": A request for release in substantially
the form attached as Exhibit F of the Sale and Servicing Agreement.
"Residential Dwelling": A one- to four-family dwelling, a unit
in a planned unit development, a unit in a condominium development or a
townhouse.
"Responsible Officer": When used with respect to the Indenture
Trustee or the Owner Trustee, any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Second Vice
President, Senior Trust Officer, Trust Officer, Assistant Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Indenture
Trustee or the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers and to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject. When used with respect to the
Servicer, the president or any vice president, assistant vice president, or any
secretary or assistant secretary.
21
"Restoration Amount": As of any date of determination, the
amount, if any, by which (i) the outstanding principal amount of the Class A
Notes as of such date (including accrued interest thereon) exceeds (ii) the sum
of (A) all funds held by the Indenture Trustee in the Reserve Account and (B)
the lesser of (1) the product of (x) the Market Value of all Pledged Mortgage
Loans then pledged to the Indenture Trustee hereunder (disregarding the Market
Value of any such Pledged Mortgage Loans proposed to be pledged to the Indenture
Trustee on such date) and (y) the Advance Rate, and (2) the outstanding
principal balance of all such Pledged Mortgage Loans (disregarding the
outstanding principal balance of any such Pledged Mortgage Loans to be pledged
to the Indenture Trustee on such date).
"Sale": The meaning specified in Section 5.17 of the
Indenture.
"Sale and Servicing Agreement": The Sale and Servicing
Agreement, dated as of March 1, 2000, among the Trust, the Servicer, the
Originators, the Depositor, the Collateral Agent, the Guarantor and the
Indenture Trustee, providing for, among other things, the sale of the Mortgage
Loans from the Depositor to the Trust and the servicing of the Mortgage Loans.
"Securities Act": The Securities Act of 1933, as amended.
"Securitization": The retirement of the Notes issued by the
Trust through the offering of new securities secured or otherwise backed by the
Mortgage Loans through a owner trust, REMIC, FASIT, collateralized mortgage
obligation or other securitization vehicle.
"Securitization Agreement": The agreement or agreements
entered into by the Servicer and certain third parties on the Securitization
Date(s) with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Pass-Through Transfer as set forth in Section 14.01 of the
Sale and Servicing Agreement, including, but not limited to, a pooling and
servicing agreement, trust agreement or indenture and/or a subservicing/master
servicing agreement and related custodial/trust agreement and related documents
with respect to a Pass-Through Transfer. Such agreement or agreements shall
prescribe the rights and obligations of the Servicer in servicing the related
Mortgage Loans and shall provide for servicing compensation to the Servicer
(calculated on a weighted average basis for all the related Mortgage Loans as of
the Securitization Date) at least equal to the Servicing Fee due the Servicer in
accordance with this Agreement. The form of relevant Securitization Agreement to
be entered into by the master servicer or trustee and the Servicer with respect
to Pass-Through Transfers shall be reasonably satisfactory in form and substance
to the Initial Purchaser and the Servicer (giving due regard to any rating or
master servicing requirements) and the representations and warranties and
servicing provisions contained therein shall be substantially similar to those
contained in this Agreement, unless otherwise mutually agreed by the parties.
"Securitization Date": The date or dates on which any or all
of the Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and securitized as part of a Pass-Through Transfer pursuant to Section
14.01 of the Sale and Servicing Agreement. On such date or dates, the Mortgage
Loans transferred shall cease to be covered by this Agreement and the Servicer's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
22
"Senior Debt": The meaning assigned to such term in Section
5.01(j) of the Indenture.
"Senior Lender": The meaning assigned to such term in /section
5.01(j) of the Indenture.
"Senior Loan Agreement": The meaning assigned to such term in
Section 5.01(j) of the Indenture.
"Servicer": American Business Credit, Inc., a Pennsylvania
corporation, or any successor appointed as herein provided.
"Servicer Event of Default": As defined in Section 9.01 of the
Sale and Servicing Agreement.
"Servicer Extension Notice": As defined in Section 10.04 of
the Sale and Servicing Agreement.
"Servicer Payment Date": With respect to any Payment Date, the
10th day of the month in which such Payment Date occurs, or if such 10th day is
not a Business Day, the Business Day preceding such 10th day.
"Servicer Remittance Amount": With respect to any Servicer
Payment Date, an amount equal to the sum of (i) all collections of principal and
interest on the Mortgage Loans (including Principal Prepayments, Net REO
Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during
the related Due Period, (ii) all Periodic Advances made by the Servicer with
respect to interest payments due to be received on the Mortgage Loans on the
related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to the Sale and Servicing Agreement
but excluding the following:
(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously
made an unreimbursed Periodic Advance;
(b) amounts received on a particular Mortgage Loan with
respect to which the Servicer has previously made an unreimbursed
Servicing Advance, to the extent of such unreimbursed Servicing
Advance;
(c) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(d) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee;
(e) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
23
(f) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
(g) certain other amounts which are reimbursable to the
Servicer, as provided in this Sale and Servicing Agreement; and
(h) Net Foreclosure Profits.
"Servicer Remittance Report": The monthly report prepared by
the Servicer and delivered to the parties specified in Section 7.16(a) of the
Sale and Servicing Agreement.
"Servicing Advances": All reasonable and customary
"out-of-pocket" costs and expenses incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the REO Property, including reasonable fees paid to any
independent contractor in connection therewith, (d) compliance with the
obligations under Section 7.06 of the Sale and Servicing Agreement, all of which
reasonable and customary out-of-pocket costs and expenses are reimbursable to
the Servicer to the extent provided in Sections 7.03 and 7.06 of the Sale and
Servicing Agreement.
"Servicing Compensation": The Servicing Fee and other amounts
to which the Servicer is entitled pursuant to Section 7.08 of the Sale and
Servicing Agreement.
"Servicing Fee": As to each Mortgage Loan, the annual fee
payable to the Servicer, which is calculated as an amount equal to the product
of (a) Servicing Fee Rate, and (b) the Principal Balance thereof. Such fee shall
be calculated and payable monthly only from the amounts received in respect of
interest on such Mortgage Loan and shall be computed on the basis of the same
Principal Balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Servicing Fee includes any servicing
fees owed or payable to any Subservicer.
"Servicing Fee Rate": 0.50% per annum
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee and the Collateral Agent by the Servicer, as such list may
from time to time be amended.
"Shortfall Amount": With respect to any Payment Date and any
Class of Notes, an amount, not less than zero, equal to the excess, if any, of
(A) the sum of (i) the Interest Payment Amount for such Payment Date, (ii)
Liquidated Loan Losses, (iii) the Indenture Trustee Fee for such Payment Date,
(iv) the sum of the amount of all Reimbursement Amounts relating to the Class A
Notes which have not been previously paid as of such Payment Date, and (v) the
amount specified in clause (vi) of the definition of the Principal Payment
Amount for such Class over (B) the Available Funds for such Class and such
Payment Date, without taking into account any Shortfall Amount and prior to the
application of the amounts described in Section 8.02 of the Indenture.
24
"Special Advance": As defined in Section 7.18(b) of the Sale
and Servicing Agreement.
"Startup Day": The day designated as such pursuant to Section
2.07(a) of the Trust Agreement.
"Stock": All shares, options, warrants, interests,
participation or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, convertible debentures and all agreements, instruments
and documents convertible, in whole or in part, into any one or more or all of
the foregoing.
"Subsequent Cut-Off Date": With respect to any Subsequent
Mortgage Loans, the close of business on the last day of the calendar month
preceding the month in which the Subsequent Transfer Date for such Subsequent
Mortgage Loans occurred or, with respect to any Subsequent Mortgage Loans that
were originated or acquired after such date, the Subsequent Cut-Off Date shall
be the date of origination or acquisition of such Subsequent Mortgage Loans.
"Subsequent Contribution Agreement": Any Subsequent
Contribution Agreement, between the Depositor and the Trust, in the form of
Exhibit G to the Sale and Servicing Agreement, relating to the contribution to
the Trust of Subsequent Mortgage Loans.
"Subsequent Mortgage Loans": The Mortgage Loans hereafter
purchased by the Trust and pledged to the Indenture Trustee.
"Subsequent Pledge Agreement": Any Subsequent Pledge
Agreement, between the Trust and the Indenture Trustee, in the form of Exhibit B
to the Indenture, relating to the pledge to the Indenture Trustee, on behalf of
the Noteholders, of Subsequent Mortgage Loans.
"Subsequent Transfer": The purchase by the Trust and pledge to
the Indenture Trustee of the Subsequent Mortgage Loans.
"Subsequent Transfer Agreement": Any Subsequent Transfer
Agreement, among the Originators and the Depositor, in the form of Exhibit A to
the Sale and Servicing Agreement, relating to the transfer to the Depositor of
any Subsequent Mortgage Loans.
"Subsequent Transfer Date": The date on which Subsequent
Mortgage Loans are purchased by the Trust.
"Subservicers": HomeAmerican Credit, Inc., d/b/a Upland
Mortgage, a Pennsylvania corporation, or its successor in interest and New
Jersey Mortgage and Investment Corp., a New Jersey corporation, or its successor
in interest.
"Subservicing Agreement": The agreement between the Servicer
and the Subservicers relating to subservicing and/or administration of certain
Mortgage Loans as provided in Section 7.13 of the Sale and Servicing Agreement,
a copy of which shall be delivered, along with any modifications thereto, to the
Indenture Trustee and the Initial Purchaser.
25
"Substitution Adjustment": As to any date on which a
substitution occurs pursuant to Sections 2.06(b) or 4.02(b) of the Sale and
Servicing Agreement, the amount (if any) by which the aggregate principal
balances (after application of principal payments received on or before the date
of substitution) of any Qualified Substitute Mortgage Loans as of the date of
substitution, are less than the aggregate of the Principal Balances of the
related Deleted Mortgage Loans together with 30-days' interest thereon at the
Mortgage Interest Rate.
"Supplemental Mortgage Loan Schedule": The meaning assigned to
such term in Section 3.18(a) of the Indenture.
"Tangible Net Worth": The meaning assigned to such term in
Section 3.17(b)(i) of the Indenture.
"Telerate Page 3750": The display designated as Telerate Page
3750 on the Telerate Service (or such other page as may replace the Telerate
page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": The sum of (i) 100% of the Aggregate
Principal Balance of each outstanding Mortgage Loan and (ii) the greater of (A)
the aggregate amount of accrued and unpaid interest on the Mortgage Loans
through the related Due Period and (B) thirty (30) days' interest thereon,
computed at a rate equal to the related Mortgage Interest Rate, in each case net
of the Servicing Fee.
"Transaction Documents": The meaning assigned to such term in
Section 3.17(a.)(ii) of the Indenture.
"Trust": ABFS Mortgage Loan Warehouse Trust 2000-1, a Delaware
statutory business trust.
"Trust Agreement": The Trust Agreement, dated as of March 1,
2000, between the Depositor and the Owner Trustee, relating to the establishment
of the Trust.
"Trust Certificate": The certificate evidencing the entire
beneficial ownership interest in the Trust.
"Trust Certificateholder" or "Holder": A Person in whose name
a Trust Certificate is registered.
"Trust Estate": All money, instruments and other property
subject or intended to be subject to the lien of the Indenture, for the benefit
of the Noteholders, as of any particular time, including, without limitation,
all property and interests, including all proceeds thereof, Granted to the
Indenture Trustee, for the benefit of the Noteholders, pursuant to the Granting
Clauses of the Indenture.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of
1939, as it may be amended from time to time.
26
"Trust Order" and "Trust Request": A written order or request
of the Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, at the direction of the related Majority Certificateholders and
delivered to the Indenture Trustee or the Authenticating Agent, as applicable.
"Twelve Month Loss Amount": With respect to any Payment Date,
an amount equal to the aggregate of all Liquidated Loan Losses on the Mortgage
Loans which became Liquidated Mortgage Loans during the twelve (12) preceding
Due Periods.
"Underwriting Guidelines": The underwriting guidelines of the
Originators as approved by the Initial Purchaser and the Depositor.
"Uniform Commercial Code": The Uniform Commercial Code as in
affect in the State of New York.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States or a trust if a court within the United States can exercise
primary jurisdiction over its administration and at least one United States
fiduciary has the authority to control all substantial decisions of the trust.
27
