INDENTURE
dated as of December 1, 1999
by and between
ABFS MORTGAGE LOAN TRUST 1999-4,
as Issuer
and
THE BANK OF NEW YORK,
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..........................................................................8
Section 2.10. Cancellation..................................................................................8
Section 2.11. Authentication and Delivery of Notes..........................................................8
Section 2.12. Book-Entry Note..............................................................................10
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..............................................................17
Section 3.07. Performance of Obligations...................................................................17
Section 3.08. Investment Company Act.......................................................................17
Section 3.09. Negative Covenants.The Trust shall not:......................................................17
Section 3.10. Annual Statement as to Compliance............................................................18
Section 3.11. Restricted Payments..........................................................................19
Section 3.12. Treatment of Notes as Debt for Tax Purposes..................................................19
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...................................................................21
ARTICLE V DEFAULTS AND REMEDIES..................................................................................21
Section 5.01. Event of Default.............................................................................21
Section 5.02. Acceleration of Maturity; Rescission and Annulment...........................................22
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee....................23
Section 5.04. Remedies.....................................................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim...................................................24
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes.............................24
Section 5.07. Application of Money Collected...............................................................25
Section 5.08. Limitation on Suits..........................................................................26
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest........................27
Section 5.10. Restoration of Rights and Remedies...........................................................27
Section 5.11. Rights and Remedies Cumulative...............................................................27
Section 5.12. Delay or Omission Not Waiver.................................................................27
Section 5.13. Control by Noteholders.......................................................................27
Section 5.14. Waiver of Past Defaults......................................................................28
Section 5.15. Undertaking for Costs........................................................................28
Section 5.16. Waiver of Stay or Extension Laws.............................................................29
Section 5.17. Sale of Trust Estate.........................................................................29
Section 5.18. Action on Notes..............................................................................30
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust..............................31
Section 5.20. Application of the Trust Indenture Act.......................................................31
Section 5.21. Note Insurer Default.........................................................................31
ARTICLE VI THE INDENTURE TRUSTEE.................................................................................31
Section 6.01. Duties of Indenture Trustee..................................................................31
Section 6.02. Notice of Default............................................................................33
Section 6.03. Rights of Indenture Trustee..................................................................33
Section 6.04. Not Responsible for Recitals or Issuance of Notes............................................34
Section 6.05. May Hold Notes...............................................................................34
Section 6.06. Money Held in Trust..........................................................................35
Section 6.07. Eligibility, Disqualification................................................................35
Section 6.08. Indenture Trustee's Capital and Surplus......................................................35
Section 6.09. Resignation and Removal; Appointment of Successor............................................35
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.....................................37
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.............37
Section 6.12. Preferential Collection of Claims Against Trust..............................................37
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees........................................38
Section 6.14. Authenticating Agents........................................................................39
Section 6.15. Review of Mortgage Files.....................................................................40
Section 6.16. Indenture Trustee Fees and Expenses..........................................................41
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................................41
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders...............41
Section 7.02. Preservation of Information; Communications to Noteholders...................................42
Section 7.03. Reports by Indenture Trustee.................................................................42
Section 7.04. Reports by Trust.............................................................................42
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ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES..........................................43
Section 8.01. Accounts; Investment; Collection of Moneys...................................................43
Section 8.02. Payments; Statements.........................................................................46
Section 8.03. Claims against the Note Insurance Policy.....................................................47
Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans.........................49
Section 8.05. Releases of Deleted Mortgage Loans...........................................................50
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information...................50
Section 8.07. Release of Trust Estate......................................................................51
Section 8.08. Amendment to Sale and Servicing Agreement....................................................51
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement......................51
Section 8.10. Servicer as Agent............................................................................52
Section 8.11. Termination of Servicer......................................................................52
Section 8.12. Opinion of Counsel...........................................................................52
Section 8.13. Appointment of Collateral Agents.............................................................52
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders.................................52
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer...............................53
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................53
Section 9.01. Supplemental Indentures Without Consent of Noteholders.......................................53
Section 9.02. Supplemental Indentures With Consent of Noteholders..........................................54
Section 9.03. Execution of Supplemental Indentures.........................................................55
Section 9.04. Effect of Supplemental Indentures............................................................56
Section 9.05. Conformity With Trust Indenture Act..........................................................56
Section 9.06. Reference in Notes to Supplemental Indentures................................................56
Section 9.07. Amendments to Governing Documents............................................................56
ARTICLE X REDEMPTION OF NOTES....................................................................................57
Section 10.01. Redemption..................................................................................57
Section 10.02. Form of Redemption Notice...................................................................58
Section 10.03. Notes Payable on Optional Redemption........................................................59
ARTICLE XI MISCELLANEOUS.........................................................................................59
Section 11.01. Compliance Certificates and Opinions........................................................59
Section 11.02. Form of Documents Delivered to Indenture Trustee............................................60
Section 11.03. Acts of Noteholders.........................................................................60
Section 11.04. Notices, etc................................................................................61
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.......................................62
Section 11.06. Rules by Indenture Trustee..................................................................63
Section 11.07. Conflict With Trust Indenture Act...........................................................63
Section 11.08. Effect of Headings and Table of Contents....................................................63
Section 11.09. Successors and Assigns......................................................................63
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Section 11.10. Separability................................................................................63
Section 11.11. Benefits of Indenture.......................................................................63
Section 11.12. Legal Holidays..............................................................................64
Section 11.13. Governing Law...............................................................................64
Section 11.14. Counterparts................................................................................64
Section 11.15. Recording of Indenture......................................................................64
Section 11.16. Trust Obligation............................................................................64
Section 11.17. No Petition.................................................................................65
Section 11.18. Inspection..................................................................................65
Section 11.19. Usury.......................................................................................65
Section 11.20. Note Insurer Default........................................................................66
Section 11.21. Third-Party Beneficiary.....................................................................66
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.
v
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
(e).................................................................... 11.0 1(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
vi
This INDENTURE, dated as of December 1, 1999 (as amended or supplemented from
time to time as permitted hereby, this "Indenture"), is between ABFS MORTGAGE
LOAN TRUST 1999-4, a Delaware statutory business trust (together with its
permitted successors and assigns, the "Trust"), and THE BANK OF NEW YORK, 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 1999-4 (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, Pool II and Pool III
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 clauses that are defined in Appendix I are used with the meanings
given in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions of this Indenture and agrees to perform the
duties herein required to the end that the interests of the Holders of the
Notes may be adequately and effectively protected. The Indenture Trustee agrees
that it will hold the Note Insurance Policy in trust and that it will hold any
proceeds of any claim upon the Note Insurance Policy, solely for the use and
benefit of the Noteholders in accordance with the terms hereof and the Note
Insurance 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.
2
Section 2.03. General Provisions With Respect to Principal and Interest
Payment . The Notes shall be designated generally as the "ABFS Mortgage Loan
Trust 1999-4, Mortgage Backed Notes, Series 1999-4".
The Notes shall be issued in the form specified in Section 2.01 hereof. The
Notes shall be issued in three Classes, the Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes. The aggregate Original Note Principal Balance of Notes
that may be authenticated and delivered under the Indenture is limited to
$100,000,000 of Class A-1 Notes, $90,000,000 of Class A-2 Notes and $30,000,000
of Class A-3 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 or any Class A-2 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-3 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 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.
4
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.
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.
5
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
finalinstallment 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.
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.
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(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) Indenture Trustee's Remittance Report, shall be
prepared by the Indenture Trustee based on the Indenture Trustee's 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 Servicer, 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 "Indenture Trustee's Remittance Report," aggregated for such
calendar year or the applicable portion thereof during which such person was a
Noteholder. Such obligation will be deemed to have been satisfied to the extent
that substantially comparable information is provided pursuant to any
requirements of the Code as are from time to time in force.
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 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
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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).
The acceptability to the Note Insurer of the Opinion of Counsel delivered to the
Authenticating Agent and the Note Insurer at the Closing Date shall be
conclusively evidenced by the delivery on the Closing Date of the Note Insurance
Policy.
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
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(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 Note Insurance Policy.
(j) A copy of a letter from Xxxxx'x that is has assigned a
rating of "Aaa" to the Notes and a copy of a letter from S&P 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 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
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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 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.
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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 any 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 any 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 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;
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(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 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
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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 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.
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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 Indenture Trustee's Remittance Report, in each case to the extent
permitted by applicable law;
(b) hold all sums held by it for the payment of amounts due with
respect to the 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 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
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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.
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;
15
(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 2000, 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 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
16
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);
(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
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(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, 2000, 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 any 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.
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.
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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
(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.
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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-3 Notes, any Class A-3 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 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;
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(e) if the Trust shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization in a
proceeding under any bankruptcy laws (as now or hereafter in effect) or an
answer admitting the material allegation of a petition filed against the Trust
in any such proceeding, or the Trust shall, by voluntary petition, answer or
consent, seek relief under the provisions of any now existing or future
bankruptcy or other similar law providing for the reorganization or winding-up
of debtors, or providing for an agreement, composition, extension or adjustment
with its creditors;
(f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent (express or legally implied) of the Trust, a custodian, receiver,
trustee or liquidator (or other similar official) of the Trust or any
substantial part of its property, or sequestering any substantial part of its
respective property, and any such order, judgment or decree or appointment or
sequestration shall remain in force undismissed, unstayed or unvacated for a
period of 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 all 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 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 all 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:
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(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 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;
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(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 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
23
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;
(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;
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(f) sixth, to the payment of any Net Mortgage Loan Interest
Shortfalls of such Class, pro rata, based on the relative amounts of such
shortfalls, through the day preceding the date on which such payment is made;
(g) seventh, for payment in respect of the other Classes of
Notes, pro rata, based on the relative amounts of such shortfalls, 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 Classes;
(h) eighth, with respect to the Class A-3 Notes only, to the
payment of any Class A-3 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 all 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 all of the Classes; and
(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 all of the Classes, the Indenture Trustee
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shall take the action prescribed by the group representing a greater percentage
of the Note Principal Balances of the Outstanding Notes of all 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 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 all 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:
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(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 all 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 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 all 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
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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 all 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 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
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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 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.
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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 Note Insurance 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
(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;
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(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 (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
31
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.
(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.
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(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 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
33
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 all 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
(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
34
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 all 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 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 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.
35
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 all 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 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.
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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.
(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
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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, 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 Note Insurance Policy required by Section 2.06(a) of the Sale
and Servicing Agreement.
(b) The Indenture Trustee shall cause the Collateral Agent to
(i) on or prior to 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)
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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 March 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 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.
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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).
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 Indenture Trustee's Remittance Report 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
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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 Indenture Trustee's Remittance Report, the
Shortfall Amount for the related Class, until paid in full, first, from the
Payment Account relating to the other Classes of Notes, pro rata, based upon the
Outstanding Note Principal Balance of each Class of Notes related to such other
Pools, to the extent of the Net Monthly Excess Cashflow from the other Pools of
Mortgage Loans, second, from the Cross-collateralization Reserve Account
relating to this Class of Notes, and third, from the Cross-collateralization
Reserve Account relating to the other Classes of Notes, pro rata based upon the
Outstanding Note Principal Balance of each Class of Notes related to such other
Pools, (viii) on each Payment Date, in accordance with the Indenture Trustee's
Remittance Report, the Net Mortgage Loan Interest Shortfalls for the related
Class of Notes, to the extent of the Net Monthly Excess Cashflow from the other
Pools of Mortgage Loans, pro rata based upon the Outstanding Note Principal
Balance of each Class of Notes related to such other Pools, remaining after
payment of: first, the Shortfall Amount for the related Class, second, the Over-
collateralization Increase Amount for such other Pools and, third, the Reserve
Payment Amount for such other Pools and
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(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 January, February 2000 or March 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 any Pre-Funding
Account at the close of business on March 31, 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
(iv) on the January 2000, February 2000, March 2000 and
April 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.
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(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 January 2000, February 2000, March 2000 and
April 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 any 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 provided,
that the earnings from the amounts deposited in the Accounts from one Business
Day immediately preceding the Payment date to the Payment Date shall be for the
account of the Indenture Trustee (i.e, the Indenture Trustee shall receive float
on the Accounts for such period). 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 any Permitted Investment included therein (except to the
extent that the Indenture Trustee is the obligor and has defaulted thereon).
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(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 all 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 Indenture Trustee's Remittance Report
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:
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(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 (excluding any Insured Payments), to the Note Insurer, the
lesser of (x) the excess of (i) the amount then on deposit in such
Payment Account over (ii) the Insured Payment Amount for such Pool on
such Payment Date and (y) the sum of the amount of 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;
(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, to the Cross- collateralization Reserve Account relating to
the other Classes of Notes, pro rata, based on the relative
deficiencies in those accounts, the amounts necessary for the balance
of such accounts to equal the applicable Reserve Payment Amount for
such Classes;
(v) 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;
(vi) from amounts then on deposit in the related Payment
Account, to the Holders of the other Classes of Notes, the amount of
any Net Mortgage Loan Interest Shortfalls for such other Classes of
Notes, pro rata, based on the relative amounts of such shortfalls;
(vii) with respect to the Class A-3 Notes, from amounts
then on deposit in the Payment Account relating to the Class A-3
Notes, to the Holders of the Class A-3 Notes, the Class A-3 Available
Funds Cap Carry-Forward Amount; and
(viii) 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 Note Insurance 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 any Pool, the Indenture Trustee shall complete a Notice in the
form of Exhibit A to the Note Insurance Policy and submit such notice to the
Note Insurer no later than 12:00 noon New York City time on the 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 Note
Insurance 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 Payment 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 Note
Insurance Policy, to the extent needed to pay the Insured Payment 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 Payment 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 Indenture Trustee's Remittance Report. Funds held in the Note
Insurance Payment Account shall not be invested. Any funds remaining in the
Note Insurance Payment Account on the first Business Day following a Payment
Date shall be returned to the Note Insurer pursuant to the written instructions
of the Note Insurer by the end of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Note from
moneys received under the Note Insurance Policy. The Note Insurer shall have
the right to inspect such records at reasonable times during normal business
hours upon one (1) Business Day's prior notice to the Indenture Trustee.
(e) In the event that the Indenture Trustee has received a
certified copy of an order of the appropriate court that any Insured Payment
has been voided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Note Insurer, shall
comply with the provisions of the Note Insurance Policy to obtain payment by
the Note Insurer of such voided Insured Payment, and shall, at the time it
provides notice to the Note Insurer, notify, by mail to the 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 Note
Insurance Policy, a copy of which shall be made available through the Indenture
Trustee, the Note Insurer or the Note Insurer's fiscal agent, if any, and the
Indenture Trustee shall furnish to the Note Insurer or its fiscal agent, if
any, its records evidencing the payments which have been made by the Indenture
Trustee and subsequently recovered from the Noteholders, and dates on which
such payments were made.
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(f) The Indenture Trustee shall promptly notify the Note
Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Indenture Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any payment made with
respect to the 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 Note Insurance
Policy, surrender the Note Insurance Policy to the Note Insurer for
cancellation.
(h) Unless a Note Insurer Default exists and is continuing,
the Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests hereunder without limiting the rights or
affecting the interests of the 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 Note Insurance 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.
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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 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
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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.
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
Indenture Trustee's Remittance Reports and other reports delivered since the
Closing Date pursuant to Section 2.08(d) hereof, (c) any Officers' Certificates
delivered to the Indenture Trustee since the Closing Date as described in the
Indenture 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.
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Section 8.10. Servicer as Agent. In order to facilitate the servicing
of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of
the Mortgage Loans has been appointed by the Trust to retain, in accordance with
the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into
the related Payment Account on or prior to the related Servicer Payment Date.
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 all 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;
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(b) the right to require the Unaffiliated Seller to
repurchase or substitute for Deleted Mortgage Loans pursuant to Section 8.05;
(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;
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(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;
(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 all 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;
52
(c) modify any of the provisions of this Section 9.02 or
Sections 5.13 or 5.17(b) hereof, except to increase any percentage specified
therein or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(d) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(e) permit the creation of any lien other than the lien of
this Indenture with respect to any part of the Trust Estate or terminate the
lien of this Indenture on any property at any time subject hereto or deprive
the Holder of any 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 any 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
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executed copies of any supplemental indentures to be delivered to the Note
Insurer and the Rating Agencies.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of 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. Redemptions. (a) At the option of the Majority
Certificateholder of the largest 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, Class A-2 Notes or
Class A-3 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 it would
result in a draw on the Note Insurance 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 both the Class A-2 Notes and Class A-3 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 and Class A-3. 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 both the Class
A-1 Notes and Class A-3 are redeemed. In such case, the Pool II Mortgage Loans
will continue to be pledged to the Indenture Trustee, on behalf of the
Noteholders and the Note Insurer, to secure the
55
obligations of the Trust with respect to the Class A-1 Notes and Class A-3. In
the case of a redemption of the Class A-3 Notes only, the Mortgage Loans in Pool
III will not be released from the lien of the Indenture until such time as both
the Class A-1 Notes and Class A-2 Notes are redeemed. In such case, the Pool III
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 and Class A-2 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, an Indenture Trustee's Remittance Report.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust by
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.
56
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
opinion and shall include a
57
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 1999- 4, 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 Financial Security Assurance Inc.
addressed to it at 000 Xxxx Xxxxxx, 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 Note Insurance
Policy or with respect to which failure on the part of the Note Insurer to
respond shall be deemed to constitute consent or acceptance, then a copy of
such notice or other communication should also be sent to the attention of each
of the General Counsel and the Head--Financial Guaranty Group 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 and (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; 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 Note Insurance 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 1999-4
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 BANK OF NEW YORK,
as Indenture Trustee
By:
--------------------------------------------
Name:
Title:
[Signature Page to Indenture]
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[See Schedule 1 to Unaffiliated Seller's Agreement.]
EXHIBIT A
FORM OF NOTE
ABFS MORTGAGE LOAN TRUST 1999-4
CLASS A-[1][2][3] 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][3]-
Class A-1 Original Note Principal Balance: Percentage Interest:
$__________ 100%
Date of Indenture: First Payment Date:
As of December 1, 1999 January 15, 2000
------------------------------------------
A-1
ABFS MORTGAGE LOAN TRUST 1999-4
MORTGAGE BACKED NOTES, SERIES 1999-4, CLASS A-[1][2][3]
ABFS Mortgage Loan Trust 1999-4, 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][3] Notes,
pursuant to the Indenture, dated as of December 1, 1999, between the Trust and
The Bank of New York, 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 April 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][3] 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 1999-4, Mortgage Backed Notes, Series 1999-4,
Class A-[1][2][3]," 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 1999-4, Mortgage Backed Notes, Series 1999-4, Class
A[1][2][3]." 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][3] Notes are and will be equally and ratably secured by the
Mortgage Loans in Pool [I][II][III], 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][III].
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 Financial Security Assurance
Inc. (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 all 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
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Rate" specified in the Insurance Agreement) and any other amounts owed under the
Note Insurance Policy.
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 Note Insurance 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 Note Insurance 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, all 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.
A-4
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 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][3] 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.
A-5
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 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.
A-6
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 1999-4
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][3] Notes designated above and referred to in
the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
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 _____________, 1999 (the
"Subsequent Transfer Date"), is entered into by and between ABFS MORTGAGE LOAN
TRUST 1999-4, as issuer (the "Trust"), and THE BANK OF NEW YORK, 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 December 1,
1999 (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, Pool II and
Pool III 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, $___
for Pool II and $_________ in Pool III.
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 Note
Insurance 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
B-2
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
1999-4, as Issuer
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Indenture Trustee
By:
-----------------------------------------
Name:
Title:
[Signature Page to Subsequent Pledge Agreement]
B-4
EXHIBIT C
FORM OF NOTE INSURER CONSENT TO
SUBSEQUENT MORTGAGE LOANS
__________, 1999
The Bank of New York,
as Indenture Trustee
000 Xxxxxxx Xxxxxx, 00-X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Fiduciary Services
Re: ABFS Mortgage Loan Trust 1999-4;
Mortgage Backed Notes, Series 1999-4
Ladies and Gentlemen:
Reference is made to the Indenture, dated as of December 1, 1999 (the
"Indenture"), by and between ABFS Mortgage Loan Trust 1999-4, 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.
FINANCIAL SECURITY ASSURANCE INC.
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, the Payment Accounts, the
Cross-collateralization Reserve Accounts, the Note Insurance Payment Account,
the Pre-Funding Accounts or the Capitalized Interest 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.
"Accrual Period": With respect to the Class A-1 Notes and the Class A-2
Notes and any Payment Date, the prior calendar month; with respect to the Class
A-3 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 Unaffiliated Seller to the
Depositor, the Trust, the Indenture Trustee, the Collateral Agent, the Rating
Agencies and the Note Insurer that the Unaffiliated Seller desires to make a
Subsequent Transfer.
"Adjusted Note Rate": With respect to any Payment Date for the Class
A-1 Notes, the percentage equal to (i) the Class A-1 Note Rate plus (ii) the
Premium Percentage for such Class; with respect to any Payment Date for the
Class A-2 Notes, the percentage equal to (i) the Class A-2 Note Rate plus (ii)
the Premium Percentage for such Class; and with respect to any Payment Date for
the Class A-3 Notes, the percentage equal to (i) the Class A-3 Note Rate plus
(ii) the Premium Percentage for such Class.
"Administrative Costs": With respect to each Class of Notes and any
Payment Date, the sum of the Indenture Trustee Fee, the Premium Amount and the
Servicing Fee for such Payment Date and such Class of Notes.
"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.
"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": Each Class of Notes is issuable only in the
minimum Percentage Interest corresponding to a minimum denomination of $1,000 or
integral multiples of $1,000 in excess thereof; provided, however, that one Note
of each Class is issuable in a denomination equal to any such multiple plus an
additional amount such that the aggregate denomination of all Notes of such
Class shall be equal to the Original Note Principal Balance of such Class.
"Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee or the Collateral Agent, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer,
any financial services officer or any other officer of the Owner Trustee or the
Collateral Agent customarily performing functions similar to those performed by
the above officers and (iii) any other Person, the chairman, chief operating
officer, president or any vice president of such Person.
"Available Funds": With respect to any Payment Date and any Payment
Account, the amount to be on deposit in such Payment Account on such Payment
Date (excluding the amount of any Insured Payment and prior to the application
of such amounts as described in Section 8.02 of the Indenture for such Payment
Date) as a result of (a) the Servicer's remittance of the Servicer Remittance
Amount for the Pool related to such Payment Account on the related
2
Servicer Payment Date, (b) any transfers to such Payment Account made from the
related Capitalized Interest Account and/or the related Pre-Funding Account and
relating to such Payment Date pursuant to Section 8.01 of the Indenture, and (c)
any transfers to such Payment Account in respect of the Shortfall Amount for
such Class and such Payment Date pursuant to Section 8.01 of the Indenture,
until such Shortfall Amount is paid in full, made first, to the extent of the
Net Monthly Excess Cashflow for the other Pools of Mortgage Loans, from the
Payment Account relating to such other Pools, pro rata, based upon the
Outstanding Note Principal Balance of each Class of Notes related to such other
Pools, second, from the Cross-collateralization Reserve Account relating to this
Pool, and third, from the Cross-collateralization Reserve Account relating to
the other Pools pro rata, based upon the Outstanding Note Principal Balance of
each Class of Notes related to such other Pools. For purposes of calculating the
Available Funds, any Loan Repurchase Price or Substitution Adjustment that is
paid shall be deemed deposited in the Payment Account in the Due Period
preceding such Servicer Payment Date.
"Available Funds Shortfall": With respect to any Payment Date and any
Class, an amount equal to the excess of the Insured Payment Amount for such
Payment Date and for such Class over the Available Funds for such Payment Date
and such Class available for distribution in respect of such Insured Payment
Amount.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Basic Documents": The Indenture, the Trust Agreement, the Sale and
Servicing Agreement, the Unaffiliated Seller's Agreement, the Insurance
Agreement and the Indemnification Agreement.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who
is the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (as either a Direct Participant or an Indirect Participant,
in accordance with the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Trust 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.
"Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant in
accordance with the rules of such Clearing Agency).
"Book-Entry Termination": The time at which the book-entry registration
of the Book-Entry Notes shall terminate, as specified in Section 2.13 of the
Indenture.
3
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a
day that is either a legal holiday or a day on which the Note Insurer or banking
institutions in the State of New York, the State of Delaware, 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.
"Capitalized Interest Account": Each of the Capitalized Interest
Accounts established in accordance with Section 8.01(c) of the Indenture and
maintained by the Indenture Trustee.
"Capitalized Interest Requirement": With respect to each Class of Notes
and the Payment Date occurring in January 2000, February 2000, March 2000 and
April 2000, (A) the product of (i) one-twelfth of the related Adjusted Note Rate
as calculated as of such Payment Date and (ii) the related Pre-Funded Amount as
of the first day of the related Due Period, minus (B) thirty (30) days'
interest, at the related Mortgage Interest Rate, on the Subsequent Mortgage
Loans for the related Pool transferred to the Trust during the related Due
Period which had a Due Date after the related Subsequent Cut-Off Date during the
related Due Period, minus (C) the amount of any Pre-Funding Earnings for the
related Pool earned from the last Payment Date (or the Closing Date with respect
to the January 2000 Payment Date). In no event will the Capitalized Interest
Requirement for any Pool be less than zero.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Civil Relief Act Interest Shortfall": With respect to any Payment
Date, for any Mortgage Loan as to which there has been a reduction in the amount
of interest collectible thereon for the most recently ended Due Period as a
result of the application of the Civil Relief Act, the amount, if any, by which
(a) interest collectible on such Mortgage Loan during the most recently ended
calendar month is less than (b) the sum of one month's interest on the Principal
Balance of such Mortgage Loan, calculated at a rate equal to the related
Mortgage Interest Rate.
"Class": Each class of Notes designated as the Class A-1 Notes, the
Class A-2 Notes and the Class A-3 Notes.
"Class A-1 Carry-Forward Amount": As of any Payment Date, the sum of
(a) the amount, if any, by which (i) the Class A-1 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-1 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-1
Note Rate.
4
"Class A-1 Current Interest": With respect to the Class A-1 Notes for
any Payment Date, the interest accrued during the related Accrual Period at the
Class A-1 Note Rate applicable to such Payment Date on the Class A-1 Note
Principal Balance as of such Payment Date (and prior to making any payments on
such Payment Date).
"Class A-1 Formula Payment Amount": With respect to the Class A-1 Notes
for any Payment Date, the sum of the Class A-1 Interest Payment Amount and the
Class A-1 Principal Payment Amount.
"Class A-1 Interest Payment Amount": With respect to the Class A-1
Notes for any Payment Date, an amount equal to (a) the related Class A-1 Current
Interest, less (b) the Class A-1 Mortgage Loan Interest Shortfall Amount, plus
(c) the Class A-1 Carry-Forward Amount, minus (d) any amounts paid by the Note
Insurer in respect of such Class A-1 Carry-Forward Amount, in each case, as of
such Payment Date.
"Class A-1 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool I and any Payment Date, the sum of (x) the excess, if
any, of the aggregate Prepayment Interest Shortfalls for the related Due Period
over the aggregate amount of Compensating Interest paid by the Servicer in
respect thereto and (y) the aggregate amount of Civil Relief Act Interest
Shortfalls in respect of which the Servicer did not make a Servicer Advance.
"Class A-1 Note": Any Note designated as a "Class A-1 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A-1 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-1 Notes less any amounts
actually paid with respect to principal thereon on all prior Payment Dates.
"Class A-1 Note Rate": With respect to any Payment Date, the per annum
rate equal to 7.675%; provided, that, on any Payment Date after the Clean-Up
Call Date, the Class A-1 Note Rate will be 8.175%.
"Class A-1 Payment Amount": With respect to the Class A-1 Notes for any
Payment Date, the amount to be paid to the Holders of the Class A-1 Notes on
such Payment Date, applied first to interest and then to principal, which amount
shall be the sum of (i) any moneys released from the Pre-Funding Account as a
prepayment of principal on the Class A-1 Notes pursuant to Section 8.01(b) of
the Indenture, and (ii) the lesser of (x) the Class A-1 Formula Payment Amount
for such Payment Date and (y) the amount (including any applicable portion of
any Insured Payment) available for payment on account of the Class A-1 Notes for
such Payment Date.
"Class A-1 Principal Payment Amount": With respect to the Class A-1
Notes for any Payment Date, the lesser of (x) the Principal Payment Amount for
Pool I for such Payment Date, and (y) the Class A-1 Note Principal Balance as of
such Payment Date.
5
"Class A-2 Carry-Forward Amount": As of any Payment Date, the sum of
(a) the amount, if any, by which (i) the Class A-2 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-2 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-2
Note Rate.
"Class A-2 Current Interest": With respect to the Class A-2 Notes for
any Payment Date, the interest accrued during the related Accrual Period at the
Class A-2 Note Rate applicable to such Payment Date on the Class A-2 Note
Principal Balance as of such Payment Date (and prior to making any payments on
such Payment Date).
"Class A-2 Formula Payment Amount": With respect to the Class A-2 Notes
for any Payment Date, the sum of the Class A-2 Interest Payment Amount and the
Class A-2 Principal Payment Amount.
"Class A-2 Interest Payment Amount": With respect to the Class A-2
Notes for any Payment Date, an amount equal to (a) the related Class A-2 Current
Interest, less (b) the Class A-2 Mortgage Loan Interest Shortfall Amount, plus
(c) the Class A-2 Carry-Forward Amount, minus (d) any amounts paid by the Note
Insurer in respect of such Class A-2 Carry-Forward Amount, in each case, as of
such Payment Date.
"Class A-2 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool II and any Payment Date, the sum of (x) the excess,
if any, of the aggregate Prepayment Interest Shortfalls for the related Due
Period over the aggregate amount of Compensating Interest paid by the Servicer
in respect thereto and (y) the aggregate amount of Civil Relief Act Interest
Shortfalls in respect of which the Servicer did not make a Servicer Advance.
"Class A-2 Note": Any Note designated as a "Class A-2 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-2 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A-2 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-2 Notes less any amounts
actually paid with respect to principal thereon on all prior Payment Dates.
"Class A-2 Note Rate": With respect to any Payment Date, the per annum
rate equal to 7.200%; provided, that, on any Payment Date after the Clean-Up
Call Date, the Class A-2 Note Rate will be 7.700%.
"Class A-2 Payment Amount": With respect to the Class A-2 Notes for any
Payment Date, the amount to be paid to the Holders of the Class A-2 Notes on
such Payment Date, applied first to interest and then to principal, which amount
shall be the sum of (i) any moneys released from the Pre-Funding Account as a
prepayment of principal on the Class A-2 Notes pursuant to Section 8.01(b) of
the Indenture, and (ii) the lesser of (x) the Class A-2 Formula Payment Amount
for such Payment Date and (y) the amount (including any applicable
6
portion of any Insured Payment) available for payment on account of the Class
A-2 Notes for such Payment Date.
"Class A-2 Principal Payment Amount": With respect to the Class A-2
Notes for any Payment Date, the lesser of (x) the Principal Payment Amount for
Pool II for such Payment Date, and (y) the Class A-2 Note Principal Balance as
of such Payment Date.
"Class X-0 Xxxxxxxxx Xxxxx Xxx Xxxxx-Xxxxxxx Xxxxxx": With respect to
the Class A-3 Notes and any Payment Date, the sum of (a) the excess of (x) the
Class A-3 Current Interest calculated at the Class A-3 Formula Note Rate over
(y) the Class A-3 Current Interest calculated at the Class A-3 Available Funds
Cap Rate, in each case as of such Payment Date and (b) the amount of any Class
A-3 Available Funds Cap Carry-Forward remaining unpaid from any previous Payment
Date, with 30 days' interest thereon on the Class-3 Formula Note Rate.
"Class A-3 Available Funds Cap Rate": A per annum rate equal to the Net
Weighted Average Mortgage Interest Rate with respect to the Mortgage Loans in
Pool III, less the rate at which the Indenture Trustee Fee is then calculated,
less 0.75%.
"Class A-3 Carry-Forward Amount": As of any Payment Date, the sum of
(a) the amount, if any, by which (i) the Class A-3 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-3 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-3
Formula Note Rate.
"Class A-3 Current Interest": With respect to the Class A-3 Notes for
any Payment Date, the interest accrued during the related Accrual Period at the
Class A-3 Note Rate applicable to such Payment Date on the Class A-3 Note
Principal Balance as of such Payment Date (and prior to making any distributions
on such Payment Date).
"Class A-3 Formula Note Rate": A per annum rate equal to the lesser of
(i) LIBOR plus 0.45%; provided, that, on any Payment Date after the Clean-Up
Call Date, such rate will be equal to LIBOR plus 0.90% per annum and (ii) 13%.
"Class A-3 Formula Payment Amount": With respect to the Class A-3 Notes
for any Payment Date, the sum of the Class A-3 Interest Payment Amount and the
Class A-3 Principal Payment Amount.
"Class A-3 Interest Payment Amount": With respect to the Class A-3
Notes for any Payment Date, an amount equal to (a) the related Class A-3 Current
Interest, less (b) the Class A-3 Mortgage Loan Interest Shortfall Amount plus
(c) the Class A-3 Carry-Forward Amount, minus (d) any amounts paid by the Note
Insurer in respect of such Class A-3 Carry-Forward Amount, in each case, as of
such Payment Date.
"Class A-3 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool III and any Payment Date, the sum of (x) the excess,
if any, of the aggregate Prepayment Interest Shortfalls for the related Due
Period over the aggregate amount of Compensating Interest paid by the Servicer
in respect thereto and (y) the aggregate amount of
7
Civil Relief Act Interest Shortfalls in respect of which the Servicer did not
make a Servicer Advance.
"Class A-3 Note": Any Note designated as a "Class A-3 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-3 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A-3 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-3 Notes less any amounts
actually paid with respect to principal thereon on all prior Payment Dates.
"Class A-3 Note Rate": With respect to any Payment Date, the per annum
rate equal to the lesser of (i) the Class A-3 Formula Note Rate and (ii) the
Class A-3 Available Funds Cap Rate for such Payment Date.
"Class A-3 Payment Amount": With respect to the Class A-3 Notes for any
Payment Date, the amount to be paid to the Holders of the Class A-3 Notes on
such Payment Date, applied first to interest and then to principal, which amount
shall be the lesser of (x) the Class A-3 Formula Payment Amount for such Payment
Date and (y) the amount (including any applicable portion of any Insured
Payment) available for payment on account of the Class A-3 Notes for such
Payment Date.
"Class A-3 Principal Payment Amount": With respect to the Class A-3
Notes for any Payment Date, the lesser of (x) the Principal Payment Amount for
Pool III for such Payment Date and (y) the Class A-3 Note Principal Balance as
of such Payment Date.
"Clean-Up Call Date": The first Payment Date after the sum of the Class
A-1 Note Principal Balance, the Class A-2 Note Principal Balance and the Class
A-3 Note Principal Balance is less than or equal to 10% of the sum of the
Original Note Principal Balance of the Class A-1 Notes, the Original Note
Principal Balance of the Class A-2 Notes and the Original Note Principal Balance
of the Class A-3 Notes.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Notes, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"Closing Date": December 22, 1999.
"Code": The Internal Revenue Code of 1986, as amended.
8
"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 9.08 of the Sale and Servicing Agreement.
"Collection Account": The Eligible Account established and maintained
by the Servicer pursuant to Section 5.02(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
Unaffiliated Seller to underwrite such Mortgage Loan.
"Commission": The United States Securities and Exchange Commission.
"Compensating Interest": As defined in Section 6.05 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 Xxxxxxx
Xxxxxx, 00-X, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Corporate Trust Department,
ABFS Mortgage Loan Trust 1999-4; (y) the Owner Trustee, the principal office of
the Owner Trustee at which at any particular time its corporate trust business
shall be principally administered, which office at the date of the execution of
the Basic Documents is located at One 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 0000 Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Custody
Manager.
"Cross-collateralization Reserve Accounts": 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(d) of the Indenture and
entitled "The Bank of New York, as Indenture Trustee for ABFS Mortgage Loan
Trust 1999-4 Mortgage Backed Notes, Series 1999-4, Class A-[1][2][3],
Cross-collateralization Reserve Account," as the case may be, on behalf of the
related Noteholders and the Note Insurer.
"Cumulative Loan Loss": With respect to any period, the sum of all
Liquidated Loan Losses which occurred during such period.
"Cumulative Loss Percentage": As of any date of determination thereof,
the aggregate of all Liquidated Loan Losses since the Closing Date as a
percentage of the sum of (i) the aggregate Principal Balance of the Initial
Mortgage Loans as of the Initial Cut-Off Date and (ii) the aggregate Principal
Balance of any Subsequent Mortgage Loans transferred to the Trust as of the
related Subsequent Cut-Off Date.
9
"Cumulative Loss Test": The Cumulative Loss Test for each period
indicated below is satisfied if the Cumulative Loss Percentage for such period
does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
------------------------------ -------------------------------
31st - 36th Payment Date 1.50%
37th - 48th Payment Date 1.75%
49th Payment Date and thereafter 2.00%
"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 $133,325,978.32. The Cut-Off Date Aggregate
Principal Balance for Pool I, Pool II and Pool III is $60,563,693.57,
$54,436,095.33 and $18,326,189.42, respectively.
"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).
"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.
"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
10
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": Prudential Securities Secured Financing Corporation, a
Delaware corporation.
"Direct Participant": Any broker-dealer, bank or other financial
institution for which the Clearing Agency holds Notes from time to time as a
securities depositary.
"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 Xxxxx'x
and in the highest short term rating category by S&P and Xxxxx'x, and which is
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution (including
the Indenture Trustee) duly organized, validly existing and in good standing
under the applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing under the
federal banking laws, (iv) a principal subsidiary of a bank holding company, or
(v) approved in writing by the Note Insurer and the Rating Agencies or (B) a
trust account or accounts maintained with the trust department of a federal or
state chartered depository institution or trust company (which may include the
Indenture Trustee; provided, that the Indenture Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Excess Over-collateralized Amount": With respect to a Pool of Mortgage
Loans and any Payment Date, the excess, if any, of (x) the Over-collateralized
Amount for such Pool that would apply on such Payment Date after taking into
account the payment of the Class A-1 Payment Amount, the Class A-2 Payment
Amount or the Class A-3 Payment Amount, as
11
applicable, on such Payment Date (except for any payments of
Overcollateralization Reduction Amounts for such Pool on such Payment Date) over
(y) the related Specified Over-collateralized Amount for such Pool for such
Payment Date; provided, however, that the Excess Over-collateralized Amount for
the period beginning with the Payment Date as to which clause (b)(i)(y)(A) of
"Specified Over-collateralized Amount" applies (the "Trigger Date") and ending
on the Payment Date occurring in the month five months immediately following the
Trigger Date (e.g., if January is the Trigger Date, then June shall be the end
of such period) shall be limited to the amount obtained using the following
formula.
n
--- x E.S.A.
6
Where "n" is equal to the number of Payment Dates that have occurred
since the Trigger Date and "E.S.A." is equal to the amount of Excess
Over-collateralized Amount that would otherwise be obtained for such Payment
Date without regard to the provisions of this proviso.
"Exchange Act": Means the Securities Exchange Act of 1934, as amended.
"Event of Default": As defined in Section 5.01 of the Indenture.
"Xxxxxx Mae": The Federal National Mortgage Association, and any
successor thereto.
"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": With respect to both the Class A-1 Notes,
the Class A-2 Notes and the Class A-3 Notes, the April 2031 Payment Date.
"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 5.06 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.
12
"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, the Unaffiliated Seller's 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.
"Highest Lawful Rate": As defined in Section 11.19 of the Indenture.
"I&I Payments": Payments due and owing under the Insurance Agreement
other than pursuant to Section 3.02(b) of such Insurance Agreement.
"Indemnification Agreement": As defined in the Insurance Agreement.
"Indenture": The Indenture, dated as of December 1, 1999, between the
Trust and the Indenture Trustee, relating to the issuance of the Notes.
"Indenture Trustee": The Bank of New York, 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.
"Indenture Trustee Fee": As to any Payment Date, the fee payable to the
Indenture Trustee in respect of its services as Indenture Trustee pursuant to
Section 6.16 of the Indenture that accrues at a monthly rate equal to
one-twelfth of 0.00875% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.
"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 each Class of
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 and separately
identifying any Over-collateralization Increase Amounts for each Pool;
13
(c) the amount of such payments allocable to interest and the
calculation thereof;
(d) the Note Principal Balance of each Class of Notes as of
such Payment Date, together with the Note Principal Balance of each
Class of Notes (based on a Note in an original Note Principal Balance
of $1,000) then outstanding, in each case after giving effect to any
payment of principal on such Payment Date;
(e) the amount of any Insured Payment included in the amounts
paid to the Noteholders on such Payment Date;
(f) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in such payment;
(g) 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;
(h) the Pre-Funding Amount for each Class on such Payment
Date; and
(i) LIBOR for such Payment Date.
Items (a), (b) and (c) above shall, with respect to each Class of
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 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.
"Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Note.
"Individual Note": A Note of an Original Note Principal Balance of
$1,000; a Note of an Original Note Principal Balance in excess of $1,000 shall
be deemed to be a number of Individual Notes equal to the quotient obtained by
dividing such Original Note Principal Balance amount by $1,000.
14
"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(a)(ii) of the Sale and Servicing Agreement.
"Initial Cut-Off Date": The close of business on November 30, 1999 (or
with respect to any Initial Mortgage Loan originated or otherwise acquired by an
Originator after November 30, 1999, 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 Over-collateralized Amount": With respect to any Pool, an
amount equal to 1.00% of the Maximum Collateral Amount for such Pool.
"Insurance Agreement": The Insurance and Indemnity Agreement dated as
of December 1, 1999 among the Note Insurer, the Depositor, the Trust, the
Servicer, the Unaffiliated Seller, and the Originators as such agreement may be
amended or supplemented in accordance with the provisions thereof.
"Insurance Policies": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Trust or the Indenture Trustee has any
interest therein.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with Accepted Servicing Practices. "Insurance
Proceeds" do not include "Insured Payments."
"Insured Payment Amount": With respect to any Payment Date and for any
Pool, is the sum of (i) the Interest Payment Amount for such Pool, (ii) the
amount of the Over-collateralization Deficit applicable to such Pool, if any,
with respect to such Payment Date, and (iii) with respect to the Payment Date
which is a Final Stated Maturity Date, the outstanding Note Principal Balance
for the related Class of Notes.
"Insured Payment": With respect to any Payment Date and any Class of
Notes, the Available Funds Shortfall for such Class.
"Interest Determination Date": With respect to any Accrual Period for
the Class A-3 Notes, the second London Business Day preceding the first day of
such Accrual Period; provided, however, that with respect to the January 2000
Payment Date, the Interest Determination Date shall be the second London
Business Day preceding the Closing Date.
"Interest Payment Amount": The Class A-1 Interest Payment Amount, the
Class A-2 Interest Payment Amount or the Class A-3 Interest Payment Amount, as
applicable.
"Late Payment Rate": Has the meaning ascribed thereto in the Insurance
Agreement.
15
"Letter Agreement": The Letter of Representations to the Clearing
Agency from the Indenture Trustee and the Trust dated December 1, 1999.
"LIBOR": With respect to any Accrual Period for the Class A-3 Notes,
the rate determined by the Indenture Trustee on the related Interest
Determination Date 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 Interest Determination Date. On each
Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Indenture Trustee as follows:
(a) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period for the Class A-3 Notes shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%).
(b) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period Class A-3 Notes shall be the higher of (i) LIBOR as
determined on the previous Interest Determination Date and (ii) the
Reserve Interest Rate.
"Liquidated Loan Loss": With respect to any Payment Date, the aggregate
of the amount of losses with respect to each Mortgage Loan which became a
Liquidated Mortgage Loan prior to the Due Date preceding such Payment Date,
equal to the excess of (i) the unpaid Principal Balance of each such Liquidated
Mortgage Loan, plus accrued interest thereon in accordance with the amortization
schedule at the time applicable thereto at the applicable Mortgage Interest Rate
from the Due Date as to which interest was last paid with respect thereto
through the next succeeding Due Date following the date such Loan became a
Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines that all Liquidation Proceeds which it
expects to recover have been recovered.
"Liquidation Expenses": Expenses incurred by the Servicer in connection
with the liquidation of any defaulted Mortgage Loan or property acquired in
respect thereof (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to
Sections 5.04 and 5.06 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
16
of the power of eminent domain or condemnation, (ii) the liquidation of a
defaulted Mortgage Loan through a 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, net of the Servicing Fee if the Unaffiliated Seller or any of its
Affiliates is the Servicer, 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 Loans and being held in the Collection
Account for future payment to the extent such amounts have not yet been applied
to principal or interest on such Mortgage Loan.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan as of
its date of origination, the ratio on such date borne by the outstanding
Principal Balance of the Mortgage Loan to the Appraised Value of the related
Mortgaged Property.
"London Business Day": A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
"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.
"Maximum Collateral Amount": The sum of the Original Pool Principal
Balance and the Original Pre-Funded Amount for each Class of 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 5.08 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 by the Note Insurer.
17
"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.
"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 Interest Shortfall": With respect to any Payment Date,
as to any Mortgage Loan, the sum of (a) the excess, if any, of the Prepayment
Interest Shortfall for such Mortgage Loan for the related Due Period over the
Compensating Interest for such Mortgage Loan paid by the Servicer in respect
thereto and (b) any Civil Relief Act Interest Shortfall in respect of which the
Servicer did not make a Servicer Advance.
"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; (ix) the scheduled monthly payment of principal and
interest and (x) a Pool designation.
"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 Unaffiliated
Seller 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.
"Mortgage Portfolio Performance Test": The Mortgage Portfolio
Performance Test is satisfied for any date of determination thereof if either
(a) (i) the Rolling Six Month Delinquency Rate is less than or equal to 11.00%,
(ii) the Over-collateralization Loss Test is satisfied and (iii) if the Twelve
Month Loss Amount is not greater than or equal to 1.25% of the Principal Balance
of the Mortgage Loans in each Pool as of the first day of the twelfth preceding
calendar month or (b) the Note Insurer, by notice to the Trust, the Servicer,
the Indenture Trustee
18
and the Collateral Agent, expressly waives in writing compliance with the
foregoing tests for such Payment Date.
"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 and any
Pool, the excess of (x) the Available Funds for such Pool then on deposit in the
related Payment Account over (y) the sum of (i) the Interest Payment Amount for
such Pool and such Payment Date, (ii) the Principal Payment Amount for such Pool
and such Payment Date, calculated for this purpose without regard to any
Over-collateralization Increase Amount (or portion thereof included therein) for
such Pool and such Payment Date, (iii) the amounts due to the Note Insurer for
such Pool on such Payment Date pursuant to Section 8.02(ii) of the Indenture,
and (iv) the Indenture Trustee Fees allocable to such Pool for such Payment
Date.
"Net Mortgage Loan Interest Shortfall Amount": The Class A-1 Mortgage
Loan Interest Shortfall, the Class A-2 Mortgage Loan Interest Shortfall Amount
or the Class A-3 Mortgage Loan Interest Shortfall Amount, as applicable.
"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, and less the Premium
Percentage.
"Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 5.03 of the Sale and Servicing Agreement, or (b) a Periodic
Advance proposed to be made in respect of a Mortgage Loan or REO Property either
of which, in the good faith business judgment of the Servicer, as evidenced by
an Officer's Certificate delivered to the Note Insurer and the Indenture Trustee
no later than the Business Day following such determination, would not
ultimately be recoverable pursuant to Section 5.03 of the Sale and Servicing
Agreement.
19
"Note": Any Class A-1 Note, the Class A-2 Note or Class A-3 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 the Unaffiliated
Seller, 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 and the
Unaffiliated Seller shall provide to the Indenture Trustee a notice identifying
any of their respective Affiliates or the Affiliates of any Subservicer that is
a Noteholder as of the date(s) specified by the Indenture Trustee in such
request. Any Notes on which payments are made under the Note Insurance Policy
shall be deemed to be Outstanding and held by the Note Insurer to the extent of
such payment.
"Note Clean-Up Call Date": With respect to the Class A-1 Notes, the
first Payment Date on which the Class A-1 Note Principal Balance is less than or
equal to 10% of the Original Note Principal Balance of the Class A-1 Notes; with
respect to the Class A-2 Notes, the first Payment Date on which the Class A-2
Note Principal Balance is less than or equal to 10% of the Original Note
Principal Balance of the Class A-2 Notes; or with respect to the Class A-3
Notes, the first Payment Date on which the Class A-3 Note Principal Balance is
less than or equal to 10% of the Original Note Principal Balance of the Class
A-3 Notes.
"Note Insurance Payment Account": The Note Insurance Payment Account
established in accordance with Section 8.03(c) of the Indenture and maintained
by the Indenture Trustee.
"Note Insurance Policy": The Financial Guaranty Insurance Policy No.
50895-N, all endorsements thereto dated the Closing Date, issued by the Note
Insurer for the benefit of the Noteholders.
"Note Insurer": Financial Security Assurance Inc., a monoline stock
insurance company organized and created under the laws of the State of New York,
and any successors thereto.
"Note Insurer Default": The existence and continuance of any of the
following:
(a) the Note Insurer shall have failed to make a required
payment when due under the Note Insurance Policy;
(b) the Note Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state
20
law relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or any other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, indenture trustee, agent, or receiver for the
Note Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, indenture trustee,
agent, or receiver of the Note Insurer or of all or any material
portion of its property.
"Note Principal Balance": As to any particular Note and date of
determination, the product of the Percentage Interest evidenced thereby and the
aggregate principal balance of all Notes of the same Class as of such date of
determination. The Trust Certificates do not have a "Note Principal Balance".
"Note Rate": The Class A-1 Note Rate, the Class A-2 Note Rate or the
Class A-3 Note Rate, as applicable.
"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-1 Notes, the Class A-2 Notes and the Class A-3
Notes.
"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 of the Unaffiliated Seller,
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 Unaffiliated Seller, the Servicer, the Depositor,
the Indenture Trustee, the Owner Trustee, a Noteholder or a Noteholder's
prospective transferee or the Note Insurer (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 Capitalized Interest Amount": With respect to the Class A-1
Notes, $544,509.76, with respect to the Class A-2 Notes, $447,706.02, and with
respect to the Class A-3 Notes, $117,073.62.
"Original Note Principal Balance": As of the Closing Date and as to the
Class A-1 Notes, $100,000,000, as to the Class A-2 Notes, $90,000,000 and as to
the Class A-3 Notes, $30,000,000. 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
21
$133,325,978.32. The Original Pool Principal Balance for Pool I, Pool II and
Pool III is $60,563,693.57, $54,436,095.33 and $18,326, 189.42, respectively.
"Original Pre-Funded Amount": With respect to the Class A-1 Notes,
$40,446,407.44, with respect to the Class A-2 Notes, $36,472,995.58, and with
respect to the Class A-3 Notes, $11,976,840.88.
"Originators": American Business Credit, Inc., HomeAmerican Credit,
Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp.
"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 the Notes or any Affiliate of
the Trust, the Unaffiliated Seller, 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 Unaffiliated Seller, the Servicer or the Depositor or such other
obligor; provided, further, however, that Notes that have been paid with the
proceeds of the Note Insurance Policy shall be deemed to be Outstanding for the
purposes of this Indenture, such payment to be evidenced by written notice from
the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed
to be the Holder thereof to the extent of any payments thereon made by the Note
Insurer which have not been reimbursed.
22
"Over-collateralization Deficit": As of any Payment Date, the amount,
if any, by which (a) the aggregate Note Principal Balance of the Notes, after
taking into account the payment of the Principal Payment Amount for each Pool
(except for any amount in respect of the Over-collateralization Deficit) on such
date exceeds (b) the sum of (i) the Aggregate Principal Balances of the Mortgage
Loans determined as of the end of the immediately preceding Due Period, (ii) the
amount, if any, on deposit in the Pre-Funding Accounts as of the close of
business on the last day of the immediately preceding Due Period, and (iii) the
amount on deposit in the Cross-collateralization Reserve Accounts on such
Payment Date, after application of all amounts due on such Payment Date.
"Over-collateralization Deficiency Amount": With respect to any Payment
Date and any Pool, the difference, if greater than zero, between (a) the
Specified Over-collateralized Amount for such Pool applicable to such Payment
Date and (b) the Over-collateralized Amount for such Pool applicable to such
Payment Date prior to taking into account the payment of any related
Over-collateralization Increase Amount for such Pool on such Payment Date.
"Over-collateralization Increase Amount": With respect to any Payment
Date and any Pool, the lesser of:
(a) the Over-collateralization Deficiency Amount for such Pool
as of such Payment Date (after taking into account the payment of the
Principal Payment Amount for such Pool on such Payment Date (except for
any Over-collateralization Increase Amount for such Pool)); and
(b) 100% of the amount of Net Monthly Excess Cashflow on such
Payment Date.
"Over-collateralization Loss Test": The Over-collateralization Loss
Test for any period set out below is satisfied if the Cumulative Loss Percentage
for such period does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
---------------------------------- ----------------------------
1st - 12th Payment Date 0.75%
13th - 24th Payment Date 1.25%
25th - 36th Payment Date 1.75%
37th - 48th Payment Date 2.00%
49th - Payment Date and thereafter 2.50%
"Over-collateralization Reduction Amount": With respect to any Pool and
Payment Date, an amount equal to the lesser of (a) the Excess
Over-collateralized Amount for such pool and such Payment Date and (b) the
Principal Payment Amount for such Pool and such Payment Date (without regard to
clause (b)(xi) of the definition of "Principal Payment Amount").
"Over-collateralized Amount": As of any Payment Date and any Pool, the
difference, if any, between (a) the sum of (i) the aggregate Principal Balances
of the Mortgage Loans in such Pool as of the close of business on the last day
of the related Due Period and
23
(ii) the amount on deposit in the related Pre-Funding Account as of the close of
business on the last day of the immediately preceding Due Period and (b) the
aggregate Note Principal Balance of the related Class as of such Payment Date
(after taking into account the payment of the Principal Payment Amount for such
Pool on such Payment Date, except for any portion thereof related to an Insured
Payment); provided, however, that such amount shall not be less than zero.
"Overfunded Interest Amount": With respect to each Pool and each
Subsequent Transfer Date occurring in December 1999, the excess of (i) the
amount on deposit in the related Capitalized Interest Account, over (ii)
four-months' interest calculated at the related Adjusted Note Rate on the amount
on deposit in the related Pre-Funding Account (net of any Pre-Funding Earnings
for such Pre-Funding Account) immediately following such Subsequent Transfer
Date (disregarding any amount applied from such Pre-Funding Account to a
Subsequent Mortgage Loan that does not have a Due Date in December 1999).
With respect to each Pool and each Subsequent Transfer Date occurring
in January 2000, the excess of (i) the amount on deposit in the related
Capitalized Interest Account, over (ii) three-months' interest calculated at the
related Adjusted Note Rate on the amount on deposit in the related Pre-Funding
Account (net of any Pre-Funding Earnings for such Pre-Funding Account)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the such Pre-Funding Account to a Subsequent Mortgage Loan that
does not have a Due Date in January 2000).
With respect to each Pool and each Subsequent Transfer Date occurring
in February 2000, the excess of (i) the amount on deposit in the related
Capitalized Interest Account, over (ii) two-month's interest calculated at the
related Adjusted Note Rate on the amount on deposit in the related Pre-Funding
Account (net of any Pre-Funding Earnings for such Pre-Funding Account)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the such Pre-Funding Account to a Subsequent Mortgage Loan that
does not have a Due Date in February 2000).
With respect to each Pool and each Subsequent Transfer Date occurring
in March 2000, the excess of (i) the amount on deposit in the related
Capitalized Interest Account, over (ii) one-month's interest calculated at the
related Adjusted Note Rate on the amount on deposit in the related Pre-Funding
Account (net of any Pre-Funding Earnings for such Pre-Funding Account)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from such Pre-Funding Account to a Subsequent Mortgage Loan that does
not have a Due Date in March 2000).
"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
Unaffiliated Seller has 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.
24
"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.
"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 Bank of New York,
as Indenture Trustee for ABFS Mortgage Loan Trust 1999-4 Mortgage Backed Notes,
Series 1999-4, Class A-[1][2][3], Payment Account," as the case may be, on
behalf of the related Noteholders and the Note Insurer.
"Payment Amount": The Class A-1 Payment Amount, the Class A-2 Payment
Amount or the Class A-3 Payment Amount, as applicable.
"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
January 18, 2000.
"Percentage Interest": With respect to a Note of any Class, 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 of such Class. 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 5.18 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;
25
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;
(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 Moody's 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.
"Pool": Pool I, Pool II or Pool III, as the case may be.
26
"Pool I": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-1 Notes, as reflected on the Mortgage Loan Schedule.
"Pool I Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool I, substantially in the form of Exhibit A to the
Trust Agreement.
"Pool II": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-2 Notes, as reflected on the Mortgage Loan Schedule.
"Pool II Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool II, substantially in the form of Exhibit A to the
Trust Agreement.
"Pool III": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-3 Notes, as reflected on the Mortgage Loan Schedule.
"Pool III Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool III, substantially in the form of Exhibit A to the
Trust Agreement.
"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.
"Pre-Funding Account": Each of the Pre-Funding Accounts established in
accordance with Section 8.01(b) of the Indenture and maintained by the Indenture
Trustee.
"Pre-Funding Amount": With respect to each Pool and any date of
determination, the amount on deposit in the related Pre-Funding Account.
"Pre-Funding Earnings": With respect to each Pool and any date of
determination, the actual investment earnings realized on amounts deposited in
the related Pre-Funding Account.
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"Pre-Funding Period": With respect to each Pre-Funding Account, the
period commencing on the Closing Date and ending on the earliest to occur of (i)
the date on which the amount on deposit in such Pre-Funding Account (exclusive
of any investment earnings) is less than $100,000, (ii) the date on which any
Event of Default or Servicer Event Default occurs and (iii) the close of
business on March 31, 2000.
"Premium Amount": The product of the Premium Percentage and the
aggregate outstanding Note Principal Balance for the related Class on the
related Payment Date, but prior to any payments on such Payment Date.
"Premium Percentage": The rate at which the "Premium" is determined, as
described in the letter dated December __, 1999 between the Servicer and the
Note Insurer.
"Premium Supplement Event": Means any Event of Default, Servicer Event
of Default or an "Event of Default" as defined in the Insurance Agreement.
"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 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 which
becomes a Liquidated Mortgage Loan on or prior to such date of determination
shall be zero.
"Principal Payment Amount": For any Payment Date and any Pool of
Mortgage Loans will be the lesser of:
(a) the excess of (i) the sum, as of such Payment Date, of (A)
the Available Funds for such Pool and (B) any Insured Payment with
respect to the related Class of Notes plus, if the Note Insurer shall
so elect in its sole discretion, an amount of principal (including
Liquidated Loan Losses) that would have been payable pursuant to
clauses (b)(i) through (ix) below if sufficient funds were made
available to the Indenture Trustee, in accordance with the terms of the
Note Insurance Policy, over (ii) the sum of (w) the Interest Payment
Amount for such Pool, (x) the Indenture Trustee Fee allocable to such
Pool and (y) the amount due the Note Insurer on such Payment Date
pursuant to Section 8.02(ii) of the Indenture in respect to the related
Class of Notes; and
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(b) the sum, without duplication, of:
(i) all principal in respect of the Mortgage Loans in
such Pool actually collected during the related Due Period;
(ii) the principal balance of each Mortgage Loan that
either was repurchased by the Unaffiliated Seller or purchased
by the Servicer on the related Servicer Payment Date from such
Pool, to the extent such principal balance is actually
received by the Indenture Trustee;
(iii) any Substitution Adjustments delivered by the
Unaffiliated Seller on the related Servicer Payment Date in
connection with a substitution of a Mortgage Loan in such
Pool, 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 in such Pool
during the related Due Period (to the extent such Net
Liquidation Proceeds relate to principal);
(v) with respect to the January 2000, February 2000,
March 2000 or April 2000 Payment Dates, moneys released from
the related Pre-Funding Account, if any;
(vi) 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);
(vii) the amount of any Over-collateralization
Deficit with respect to such Pool for such Payment Date;
(viii) 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) allocable to such Pool;
(ix) the amount of any Over-collateralization
Increase Amount with respect to such Pool for such Payment
Date, to the extent of any Remaining Excess Cashflow for such
Pool available for such purpose;
(x) if the Note Insurer shall so elect in its sole
discretion, an amount of principal (including Liquidated Loan
Losses) that would have been payable pursuant to clauses (i)
through (ix) above if sufficient funds were made available to
the Indenture Trustee in accordance with the terms of the Note
Insurance Policy;
minus
-----
29
(xi) the amount of any Over-collateralization
Reduction Amount for such Pool for such Payment Date.
In no event will the Principal Payment Amount for a Pool with respect
to any Payment Date be (x) less than zero or (y) greater than the then aggregate
outstanding Note Principal Balance of the related Class of Notes.
"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.
"Prospectus Supplement": The Prospectus Supplement dated December 1,
1999 relating to the Notes filed with the Commission in connection with the
Registration Statement heretofore filed or to be filed with the Commission
pursuant to Rule 424(b)(2) or 424(b)(5).
"Qualified Appraiser": An appraiser, duly appointed by the Unaffiliated
Seller, who had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
"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
and 3.02 of the Unaffiliated Seller's Agreement.
"Rating Agency": S&P or Xxxxx'x.
"Rating Agency Condition": Means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
ten (10) days (or such
30
shorter period as is acceptable to each Rating Agency) prior notice thereof and
that each of the Rating Agencies shall have notified the Indenture Trustee, the
Servicer, the Depositor, the Note Insurer and the Trust in writing that such
action will not result in a reduction, qualification or withdrawal of the then
current "implied" rating of the Notes that it maintains without taking into
account the Note Insurance Policy.
"Record Date": With respect to the Class A-1 Notes and the Class A-2
Notes, the last Business Day of the month immediately preceding a month in which
a Payment Date occurs; with respect to the Class A-3 Notes, 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 or the Note
Clean-Up Date, as applicable.
"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 Unaffiliated Seller or any affiliate
thereof, (iii) whose quotations appear on the Telerate Page 3750 on the relevant
Interest Determination Date and (iv) which have been designated as such by the
Indenture Trustee.
"Reimbursement Amount": With respect to any Payment Date and any Pool
of Mortgage Loans, equals the sum of (a)(i) all Insured Payments previously
received by the Indenture Trustee and all Preference Amounts previously paid by
the Note Insurer and in each case not previously repaid to the Note Insurer
pursuant to Section 8.02(ii) of the Indenture, plus (ii) interest accrued on
each such Insured Payment and Preference Amounts not previously repaid
calculated at the Late Payment Rate from the date the Indenture Trustee received
the related Insured Payment or Preference Amounts paid by the Note Insurer, and
(b)(i) any amounts then due and owing to the Note Insurer under the Insurance
Agreement (including the Premium Amount due on such Payment Date), as certified
to the Indenture Trustee by the Note Insurer plus (ii) interest on such amounts
at the rate specified in the Insurance Agreement. The Note Insurer shall notify
the Indenture Trustee and the Servicer of the amount of any Reimbursement
Amount. For purposes of allocating the Reimbursement Amount among the respective
Classes of Notes, any Reimbursement Amount that is not clearly attributable to
one or more particular Class(es) of Notes shall be allocated between each Class
of Notes, pro rata, in accordance with the aggregate Note Principal Balances of
each such Class of Notes.
"Remaining Excess Cashflow": For a Payment Date and a Pool of Mortgage
Loans, the Net Monthly Excess Cashflow with respect to such Pool remaining, if
any, after payment of the Shortfall Amount with respect to the other Pool of
Mortgage Loans.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
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"REO Disposition": The final sale by the Servicer of a REO 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.
"Request for Release": A request for release in substantially the form
attached as Exhibit F of the Sale and Servicing Agreement.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Indenture Trustee determines to be either (i)
the arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of 1/16%) of the one-month U.S. dollar lending rates which three New York City
banks selected by the Indenture Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
which three New York City banks selected by the Indenture Trustee are quoting on
such Interest Determination Date to leading European banks.
"Reserve Payment Amount": With respect to any Payment Date and any
Class of Notes, the amount necessary for the funds on deposit in the related
Cross-collateralization Reserve Account to equal the Specified Reserve Amount.
"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 or Assistant Vice
President, Senior Trust Officer, Trust Officer, Assistant Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Indenture
Trustee 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
Unaffiliated Seller or the Servicer, the president or any vice president,
assistant vice president, or any secretary or assistant secretary.
"Rolling Six Month Delinquency Rate": For any Payment Date, the
fraction, expressed as a percentage, equal to the average of the Delinquency
Ratio for each of the six (1, 2, 3, 4 or 5 in the case of the first six (6)
Payment Dates, as the case may be) immediately preceding Due Periods.
32
"Sale": The meaning specified in Section 5.17 of the Indenture.
"Sale and Servicing Agreement": The Sale and Servicing Agreement, dated
as of December 1, 1999, among the Trust, the Servicer, the Depositor, the
Collateral Agent and the Indenture Trustee, providing for, among other things,
the sale of the Mortgage Loans from the Depositor to the Trust and the servicing
of the Mortgage Loans.
"Securities Act": Means the Securities Act of 1933, as amended.
"Servicer": American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.
"Servicer Event of Default": As defined in Section 7.01 of the Sale and
Servicing Agreement.
"Servicer Extension Notice": Has the meaning set forth in Section 8.04
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;
33
(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 5.16(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 5.06 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 5.03 and 5.06 of the Sale and Servicing
Agreement.
"Servicing Compensation": The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 5.08 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, the Collateral Agent and the Note Insurer 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 Pool and such Payment Date, (ii)
Liquidated Loan Losses for such Pool, (iii) the Indenture Trustee Fee allocable
to such Pool and such Payment Date, (iv) the sum of the amount of 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, and (v)
the amount specified in clause (b)(vii) 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 effect any Insured
34
Payment or Shortfall Amount and prior to the application of the amounts
described in Section 8.02 of the Indenture.
"Special Advance": As defined in Section 5.18(b) of the Sale and
Servicing Agreement.
"Specified Over-collateralized Amount": Means with respect to any
Payment Date and any Pool:
(a) With respect to a Payment Date occurring on or prior to
the Stepdown Date and after the Stepdown Date, if the Unaffiliated
Seller has given five days written notice of its election not to "step
down" as described in clause (b) below to the Indenture Trustee and the
Note Insurer, the amount which is equal to 5.50% of the Maximum
Collateral Amount for such Pool;
(b) With respect to a Payment Date after the Stepdown Date
unless the Unaffiliated Seller has given five (5) days written notice
of its election not to "step down" as described in this clause to the
Indenture Trustee and the Note Insurer, (i) if the Stepdown Requirement
is satisfied, the lesser of (x) the amount equal to 5.50% of the
Maximum Collateral Amount for such Pool and (y) the greater of (A) the
amount equal to 11.00% of the then outstanding aggregate Principal
Balance of the Mortgage Loans in the related Pool of Mortgage Loans or
(B) 0.50% of the Maximum Collateral Amount for such Pool or (ii) if the
Stepdown Requirement is not satisfied, the amount which is equal to
5.50% of the Maximum Collateral Amount for such Pool;
provided, however, that if on any Payment Date, the Mortgage Portfolio
Performance Test is not satisfied, then the Specified Over-collateralized Amount
will be unlimited during the period that such Mortgage Portfolio Performance
Test is not satisfied.
"Specified Reserve Amount": Means, with respect to any Pool and any
Payment Date, the excess, if any, of (x) the Specified Over-collateralized
Amount for such Pool and such Payment Date, over (y) the Over-collateralized
Amount for such Pool and such Payment Date.
"Standard & Poor's" or "S&P": Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
statistical rating organization designated by the Note Insurer.
"Startup Day": The day designated as such pursuant to Section 2.07(a)
of the Trust Agreement.
"Step Down Date": The Payment Date occurring in June 2002.
"Step Down Requirement": The Stepdown Requirement is satisfied for any
date of determination thereof if as of such date of determination either (i) (x)
the Rolling Six Month Delinquency Rate is less than 9.75%, (y) the Cumulative
Loss Test is satisfied and (z) the Twelve Month Loss Amount is not greater than
or equal to 0.75% of the Aggregate Principal Balance of the Mortgage Loans as of
the first day of the twelfth preceding calendar month or (ii)
35
the Note Insurer, by notice to each of the parties hereto in accordance with
Section 10.06 of the Sale and Servicing Agreement, expressly waives in writing
compliance with the foregoing tests for such Payment Date.
"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 with funds on deposit in any
Pre-Funding Account pursuant to Section 2.14 of the Indenture.
"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
and the Note Insurer, 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, the Unaffiliated Seller and the Depositor, in the form of
Exhibit A to the Unaffiliated Seller's 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 with funds in any Pre-Funding Account, such date
occurring before the end of the related Pre-Funding Period.
"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 5.13 of the Sale and Servicing Agreement, a copy of
which shall be delivered, along with any modifications thereto, to the Indenture
Trustee and the Note Insurer.
"Substitution Adjustment": As to any date on which a substitution
occurs pursuant to Sections 2.06(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
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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.
"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": Either (a) with respect to a Clean-Up Call Date,
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, and (iii) any
unpaid amount due the Note Insurer or (b) with respect to the Note Clean-Up Call
Date, the sum of (i) 100% of the Note Principal Balance of the related Class of
Notes and (ii) the greater of (A) the aggregate amount of accrued and unpaid
interest on the related Class of Notes through the related Due Period and (B)
thirty (30) days' interest thereon, computed at a rate equal to the related Note
Rate, in each case net of the Servicing Fee, and (iii) any unpaid amount due the
Note Insurer, as applicable.
"Trust": ABFS Mortgage Loan Trust 1999-4, a Delaware statutory business
trust.
"Trust Agreement": The Trust Agreement, dated as of December 1, 1999,
among the Unaffiliated Seller, the Depositor and the Owner Trustee, relating to
the establishment of the Trust.
"Trust Certificate": Any one of the Pool I Trust Certificates, the Pool
II Trust Certificates or the Pool III Trust Certificates.
"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 and the Note Insurer, as of any particular time, including, without
limitation, all property and interests, including all proceeds thereof, Granted
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, pursuant to the Granting Clauses of the Indenture. The Trust Estate
shall consist of three separate sub-trusts comprised of Pool I, Pool II and Pool
III.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it
may be amended from time to time.
"Trust Order" and "Trust Request": A written order or request of the
Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, at the direction of the related Majority Certificateholders and
delivered to the Indenture Trustee or the Authenticating Agent, as applicable.
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"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.
"Unaffiliated Seller": ABFS 1999-4, Inc., a Delaware corporation.
"Unaffiliated Seller's Agreement": The Unaffiliated Seller's Agreement,
dated as of December 1, 1999, among the Unaffiliated Seller, the Originators and
the Depositor relating to the sale of the Mortgage Loans from the Originators to
the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor.
"Underwriter": Prudential Securities Incorporated.
"Underwriting Guidelines": The underwriting guidelines of the
Originators as approved by the Note Insurer and the Depositor.
"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.
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