Exhibit 4.2
UNAFFILIATED SELLER'S AGREEMENT
dated as of November 1, 1998
by and among
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as Depositor,
ABFS 1998-4, INC.,
as Unaffiliated Seller
and
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
NEW JERSEY MORTGAGE AND INVESTMENT CORP.,
as Originators
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
Section 1.01. Definitions...........................................................................1
ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS...............................................3
Section 2.01. Agreement to Purchase the Initial Mortgage Loans......................................3
Section 2.02. Agreement to Purchase the Subsequent Mortgage Loans...................................3
Section 2.03. Purchase Price........................................................................4
Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage Files............................4
Section 2.05. Delivery of Mortgage Loan Documents...................................................5
Section 2.06. Acceptance of Mortgage Loans..........................................................6
Section 2.07. Transfer of Mortgage Loans; Assignment of Agreement...................................7
Section 2.08. Examination of Mortgage Files.........................................................7
Section 2.09. Books and Records.....................................................................8
Section 2.10. Cost of Delivery and Recordation of Documents.........................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES...............................................................8
Section 3.01. Representations and Warranties as to the Originators..................................8
Section 3.02. Representations and Warranties as to the Unaffiliated Seller.........................10
Section 3.03. Representations and Warranties Relating to the Mortgage Loans........................13
Section 3.04. Representations and Warranties of the Depositor......................................23
Section 3.05. Repurchase Obligation for Defective Documentation and for Breach of a Representation
or Warranty..........................................................................23
ARTICLE IV THE UNAFFILIATED SELLER......................................................................26
Section 4.01. Covenants of the Originators and the Unaffiliated Seller.............................26
Section 4.02. Merger or Consolidation..............................................................27
Section 4.03. Costs................................................................................27
Section 4.04. Indemnification......................................................................28
ARTICLE V CONDITIONS OF CLOSING.........................................................................30
Section 5.01. Conditions of Depositor's Obligations................................................30
Section 5.02. Conditions of Unaffiliated Seller's Obligations......................................32
Section 5.03. Termination of Depositor's Obligations...............................................33
ARTICLE VI MISCELLANEOUS ............................................................................ 33
Section 6.01. Notices..............................................................................33
Section 6.02. Severability of Provisions...........................................................34
Section 6.03. Agreement of Unaffiliated Seller.....................................................34
Section 6.04. Survival.............................................................................34
Section 6.05. Effect of Headings and Table of Contents.............................................34
Section 6.06. Successors and Assigns...............................................................34
Section 6.07. Confirmation of Intent; Grant of Security Interest...................................34
Section 6.08. Miscellaneous........................................................................35
Section 6.09. Amendments...........................................................................35
Section 6.10. Third-Party Beneficiaries............................................................36
Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.........................36
Section 6.12. Execution in Counterparts............................................................37
SCHEDULES AND EXHIBITS
Schedule I - Mortgage Loan Schedule
Exhibit A - Form of Subsequent Transfer Agreement
This UNAFFILIATED SELLER'S AGREEMENT, dated as of November 1,
1998 (this "Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION, a Delaware corporation, (the "Depositor"), ABFS 1998-4, INC., a
Delaware corporation (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT,
INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND
MORTGAGE, a Pennsylvania corporation ("Upland") and NEW JERSEY MORTGAGE AND
INVESTMENT CORP., a New Jersey corporation ("NJMIC", and together with ABC and
Upland, the "Originators").
W I T N E S S E T H:
WHEREAS, Schedule I attached hereto and made a part hereof
lists certain fixed rate business and consumer purpose first and second lien
mortgage loans (the "Mortgage Loans") owned by the Originators that the
Originators desire to sell to the Unaffiliated Seller, the Unaffiliated Seller
desires to sell to the Depositor and that the Depositor desires to purchase;
WHEREAS, it is the intention of the Originators, the
Unaffiliated Seller and the Depositor that simultaneously with the Originators'
conveyance of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated
Seller's conveyance of the Mortgage Loans to the Depositor on the Closing Date,
(a) the Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust
1998-4, a Delaware business trust (the "Trust") pursuant to a Sale and Servicing
Agreement to be dated as of November 1, 1998 (the "Sale and Servicing
Agreement"), to be entered into by and among the Depositor, as depositor, the
Trust, as issuer, ABC, as servicer (in such capacity, the "Servicer"), Chase
Bank of Texas, N.A., a national banking association, as collateral agent (the
"Collateral Agent"), and The Bank of New York, a New York banking corporation,
as indenture trustee (the "Indenture Trustee"), and (b) the Trust shall issue
its Mortgage Backed Notes (the "Notes"), pursuant to an Indenture, to be dated
as of November 1, 1998 (the "Indenture"), by and between the Trust and the
Indenture Trustee, which Notes will be secured by a pledge of the assets of the
Trust.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article I:
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Prospectus" means the Prospectus dated September 4, 1998
relating to the offering by the Depositor from time to time of its Mortgage
Backed Notes (Issuable in Series) in the form in which it was or will be filed
with the Commission pursuant to Rule 424(b) under the Securities Act with
respect to the offer and sale of the Notes.
"Prospectus Supplement" means the Prospectus Supplement dated
December 4, 1998, relating to the offering of the Notes in the form in which it
was or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Notes.
"Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. 333-61939) relating to the
offering by the Depositor from time to time of its Mortgage Backed Notes
(Issuable in Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of
the following conditions:
(a) a stop order suspending the effectiveness of the
Registration Statement shall have been issued or a proceeding for that purpose
shall have been initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery of this
Agreement, a downgrading, or public notification of a possible change, without
indication of direction, shall have occurred in the rating afforded any of the
debt securities or claims paying ability of any person providing any form of
credit enhancement for any of the Notes, by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; or
(c) subsequent to the execution and delivery of this
Agreement, there shall have occurred an adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory situation or business
prospects of the Note Insurer or the Unaffiliated Seller reasonably determined
by the Depositor to be material; or
(d) subsequent to the date of this Agreement there shall have
occurred any of the following: (i) a suspension or material limitation in
trading in securities substantially similar to the Notes; (ii) a general
moratorium on commercial banking activities in the State of New York declared by
either Federal or New York State authorities; or (iii) the engagement by the
United States in hostilities, or the escalation of such hostilities, or any
calamity or crisis, if the effect of any such event specified in this clause
(iii) in the reasonable judgment of the Depositor makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes on
the terms and in the manner contemplated in the Prospectus Supplement.
(b) Capitalized terms used herein that are not otherwise
defined shall have the respective meanings ascribed thereto in Appendix I to the
Indenture.
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ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01 Agreement to Purchase the Initial Mortgage Loans.
(a) Subject to the terms and conditions of this Agreement, the Originators agree
to sell, and the Unaffiliated Seller agrees to purchase on the Closing Date and
immediately subsequent thereto, the Unaffiliated Seller agrees to sell, and the
Depositor agrees to purchase, the Mortgage Loans having the Cut-Off Date
Aggregate Principal Balance or, in accordance with Section 2.08 hereof, such
other balance as is evidenced by the actual Cut-Off Date Aggregate Principal
Balance of the Mortgage Loans accepted by the Depositor on the Closing Date and
listed in the Mortgage Loan Schedule.
(b) Subject to Section 2.08 hereof, the Depositor and the
Unaffiliated Seller have agreed upon which of the Unaffiliated Seller's Mortgage
Loans are to be purchased by the Depositor on the Closing Date pursuant to this
Agreement, and the Unaffiliated Seller has prepared a schedule describing the
Mortgage Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage
Loans to be purchased under this Agreement, which Mortgage Loan Schedule is
attached hereto as Schedule I. The Mortgage Loan Schedule shall conform to the
requirements of the Depositor and to the definition of "Mortgage Loan Schedule"
in Appendix I to the Indenture.
(c) The closing for the purchase and sale of the Mortgage
Loans shall take place at the offices of Xxxxx Xxxxxxxxxx LLP, New York, New
York, at 10:00 a.m., New York time, on the Closing Date, or such other place and
time as the parties shall agree.
Section 2.02 Agreement to Purchase the Subsequent Mortgage
Loans. Subject to the satisfaction of the conditions set forth in Section
2.14(b) of the Indenture, (i) in consideration of the Unaffiliated Seller's
delivery on the related Subsequent Transfer Dates to or upon the order of the
Originators of all or a portion of the balance of funds on deposit in the
Pre-Funding Account, the Originators shall on any Subsequent Transfer Date sell,
transfer, assign, set over and convey to the Unaffiliated Seller, without
recourse, but subject to the terms and provisions of this Agreement, all of the
right, title and interest of the Originators in and to the Subsequent Mortgage
Loans, including all principal of, and all interest due on, such Subsequent
Mortgage Loans, and all other assets included or to be included in the Trust
Estate and (ii) in consideration of the Depositor's delivery on the related
Subsequent Transfer Dates to or upon the order of the Unaffiliated Seller of all
or a portion of the balance of funds on deposit in the Pre-Funding Account, the
Unaffiliated Seller shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey to the Depositor, without recourse, but subject to
the terms and provisions of this Agreement, all of the right, title and interest
of the Unaffiliated Seller in and to the Subsequent Mortgage Loans, including
all principal of, and all interest due on, such Subsequent Mortgage Loans, and
all other assets included or to be included in the Trust Estate.
The amount released from the Pre-Funding Account with respect
to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%)
of the Aggregate Principal Balance of such Subsequent Mortgage Loans so
transferred, as of the related Subsequent Cut-Off Date.
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The obligation of the Depositor to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the requirements set forth in Section 2.14(b) of the Indenture.
Section 2.03 Purchase Price. (a) On the Closing Date, as
consideration for the Originators' sale of the Initial Mortgage Loans to the
Unaffiliated Seller, the Unaffiliated Seller will deliver to the Originators an
amount in cash equal to the sum of (A) 99.65%, and 99.65% of the Original Note
Principal Balance as of the Closing Date of the Class A-1 Notes and Class A-2
Notes, respectively, plus (B) accrued interest on the Original Note Principal
Balance of the Class A-1 Notes at the rate of 6.505% per annum, from (and
including) November 1, 1998 to (but not including) December 7, 1998, minus (C)
the Original Pre-Funded Amount and the Original Capitalized Interest Amount,
payable by wire transfer of same day funds.
On the Closing Date, as full consideration for the
Unaffiliated Seller's sale of the Initial Mortgage Loans to the Depositor, the
Depositor will deliver to, or at the direction of, the Unaffiliated Seller (i)
an amount in cash equal to the sum of (A) 99.65 and 99.65% of the Original Note
Principal Balance as of the Closing Date of the Class A-1 Notes and Class A-2
Notes, respectively, plus (B) accrued interest on the Original Note Principal
Balance of the Class A-1 Notes at the rate of 6.505% per annum, from (and
including) November 1, 1998 to (but not including) December 7, 1998, minus (C)
the Original Pre-Funded Amount and the Original Capitalized Interest Amount,
payable by wire transfer of same day funds, and (ii) the Trust Certificates to
be issued pursuant to the Trust Agreement.
(b) On each Subsequent Transfer Date, as full consideration
for the Originators' sale of the Subsequent Mortgage Loans to the Unaffiliated
Seller and the Unaffiliated Seller's sale of the Subsequent Mortgage Loans to
the Depositor, the Depositor will deliver to the Unaffiliated Seller and the
Unaffiliated Seller will deliver to the Originators an amount in cash equal to
the sum of 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans as of the related Subsequent Cut-Off Date.
Section 2.04 Conveyance of Mortgage Loans; Possession of
Mortgage Files. (a) On the Closing Date and on each Subsequent Transfer Date,
the Originators shall sell, transfer, assign, set over and convey to the
Unaffiliated Seller, without recourse, but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the related Cut-Off Date, the insurance policies relating to each such Mortgage
Loan and all right, title and interest in and to the proceeds of such insurance
policies from and after the Closing Date and the Unaffiliated Seller shall sell,
transfer, assign, set over and convey to the Depositor, without recourse but
subject to the terms of this Agreement, all right, title and interest in and to
the applicable Mortgage Loans, including all principal outstanding as of, and
all interest due after, the related Cut-Off Date, the Insurance Policies
relating to each such Mortgage Loan, all right, title and interest in and to the
proceeds of such Insurance Policies and all of its rights under this Agreement
with respect to the Mortgage Loans from and after the Closing Date or the
Subsequent Transfer Date, as applicable. Upon payment of the purchase price for
such Mortgage Loans as provided in Section 2.03 of this Agreement, the
Originators and the Unaffiliated Seller shall have hereby, and shall be deemed
to have, sold, transferred, assigned, set over and conveyed to the Depositor
such Mortgage Loans, the Insurance Policies relating to each such Mortgage Loan,
all right, title and interest in and to the proceeds of such Insurance Policies
and all of its rights under this Agreement with respect to the Mortgage Loans
from and after the Closing Date or the Subsequent Transfer Date, as applicable.
4
(b) Upon the sale of such Mortgage Loans, the ownership of
each related Mortgage Note, each related Mortgage and the contents of the
related Mortgage File shall immediately vest in the Depositor and the ownership
of all related records and documents with respect to each Mortgage Loan prepared
by or which come into the possession of the Originators or the Unaffiliated
Seller shall immediately vest in the Depositor. The contents of any Indenture
Trustee's Mortgage File in the possession of the Originators or the Unaffiliated
Seller at any time after such sale, and any principal collected and interest due
on the Mortgage Loans after the related Cut-Off Date and received by the
Originators or the Unaffiliated Seller, shall be held in trust by the
Originators or the Unaffiliated Seller for the benefit of the Depositor as the
owner thereof, and shall be promptly delivered by the Originators or the
Unaffiliated Seller to or upon the order of the Depositor.
(c) Pursuant to the Sale and Servicing Agreement, the
Depositor shall, on the Closing Date, assign all of its right, title and
interest in and to the Initial Mortgage Loans to the Trust. Pursuant to the
Indenture, the Trust shall, on the Closing Date, pledge all of its right, title
and interest in and to the Initial Mortgage Loans to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer.
Section 2.05 Delivery of Mortgage Loan Documents. (a) On or
prior to the Closing Date or Subsequent Transfer Date, as applicable, the
related Originator shall deliver to the Unaffiliated Seller, and the
Unaffiliated Seller shall deliver to the Collateral Agent, on behalf of the
Indenture Trustee (as pledgee of the Trust pursuant to the Indenture, the Trust
being the assignee of the Depositor pursuant to the Sale and Servicing
Agreement), each of the documents for each applicable Mortgage Loan in
accordance with the provisions of Section 2.05 of the Sale and Servicing
Agreement.
(b) As promptly as practicable, but in any event within thirty
(30) days from the Closing Date or the Subsequent Transfer Date, as applicable,
the Unaffiliated Seller shall promptly submit, or cause to be submitted by the
related Originator, for recording in the appropriate public office for real
property records, each assignment referred to in Section 2.05(a)(iv) of the Sale
and Servicing Agreement. The Collateral Agent, on behalf of the Indenture
Trustee, shall be required to retain a copy of each assignment submitted for
recording. In the event that any such assignment is lost or returned unrecorded
because of a defect therein, the Unaffiliated Seller or such Originator shall
promptly prepare a substitute assignment or cure such defect, as the case may
be, and thereafter the Unaffiliated Seller or such Originator shall submit each
such assignment for recording.
(c) The Unaffiliated Seller or the related Originator shall,
within five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust being the assignee of
the Depositor pursuant to the Sale and Servicing Agreement): (i) the original
recorded Mortgage and related power of attorney, if any, in those instances
where a copy thereof certified by the related Originator was delivered to the
Collateral Agent, on behalf of the Indenture Trustee; (ii) the original recorded
assignment of Mortgage from the related Originator to the Indenture Trustee,
which, together with any intervening assignments of Mortgage, evidences a
complete chain of assignment from the originator of the Mortgage Loan to the
Indenture Trustee in those instances where copies of such assignments certified
by the related Originator were delivered to the Collateral Agent, on behalf of
the Indenture Trustee and (iii) the title insurance policy or title opinion
required in Section 2.05(a)(vi) of the Sale and Servicing Agreement.
5
Notwithstanding anything to the contrary contained in this
Section 2.05, in those instances where the public recording office retains the
original Mortgage, power of attorney, if any, assignment or assignment of
Mortgage after it has been recorded or such original has been lost, the
Unaffiliated Seller or the related Originator shall be deemed to have satisfied
its obligations hereunder upon delivery to the Collateral Agent, on behalf of
the Indenture Trustee, of a copy of such Mortgage, power of attorney, if any,
assignment or assignment of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof.
From time to time the Unaffiliated Seller or the related
Originator may forward or cause to be forwarded to the Collateral Agent, on
behalf of the Indenture Trustee, additional original documents evidencing an
assumption or modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that
are not delivered to the Collateral Agent, on behalf of the Indenture Trustee,
as permitted by Section 2.05(a) hereof are and shall be held by the Servicer,
the Unaffiliated Seller or the related Originator in trust for the benefit of
the Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the
event that any such original document is required pursuant to the terms of this
Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document
shall be delivered promptly to the Collateral Agent, on behalf of the Indenture
Trustee. From and after the sale of the Mortgage Loans to the Depositor pursuant
hereto, to the extent that the Unaffiliated Seller or the related Originator
retains legal title of record to any Mortgage Loans prior to the vesting of
legal title in the Indenture Trustee, such title shall be retained in trust for
the Trust as the owner of the Mortgage Loans, as the Depositor's assignee, and
the Indenture Trustee, as the Trust's pledgee.
Section 2.06 Acceptance of Mortgage Loans. (a) To evidence the
transfer of the Mortgage Loans and related Mortgage Files to the Collateral
Agent, on behalf of the Indenture Trustee, the Collateral Agent shall deliver
the acknowledgement of receipt, the Initial Certification and the Final
Certification required to be delivered pursuant to Section 2.06(b) of the Sale
and Servicing Agreement.
(b) The Sale and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Indenture Trustee's
Mortgage Files, finds any document constituting a part of a Indenture Trustee's
Mortgage File which is not executed, has not been received, is unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, or does not conform to
the requirements of Section 2.05 of the Sale and Servicing Agreement or the
description thereof as set forth in the Mortgage Loan Schedule, the Collateral
Agent shall promptly so notify the Servicer, the Unaffiliated Seller, the
Indenture Trustee, the related Originator and the Note Insurer. The Unaffiliated
Seller agrees that in performing any such review, the Collateral Agent may
conclusively rely on the Unaffiliated Seller as to the purported genuineness of
any such document and any signature thereon. Each of the Originators and the
Unaffiliated Seller agrees to use reasonable efforts to remedy a material defect
in a document constituting part of an Indenture Trustee's Mortgage File of which
it is notified. If, however, within sixty (60) days after such notice neither
the Unaffiliated Seller nor any Originator has remedied the defect and the
defect materially and adversely affects the interest of the Noteholders in the
related Mortgage Loan or the interests of the Note Insurer, then the
Unaffiliated Seller and the Originators shall be obligated to either substitute
in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan or purchase
such Mortgage Loan in the manner and subject to the conditions set forth in
Section 3.05 hereof.
6
(c) The failure of the Collateral Agent, the Indenture Trustee
or the Note Insurer to give any notice contemplated herein within the time
periods specified above shall not affect or relieve the Unaffiliated Seller's or
the Originators obligation to repurchase for any Mortgage Loan pursuant to this
Section 2.06 or Section 3.05 of this Agreement.
Section 2.07 Transfer of Mortgage Loans; Assignment of
Agreement. The Originators and the Unaffiliated Seller each hereby acknowledges
and agrees that the Depositor or the Trust may assign its interest under this
Agreement to the Indenture Trustee as may be required to effect the purposes of
the Indenture and the Sale and Servicing Agreement, without further notice to,
or consent of, the Unaffiliated Seller or the Originators, and the Indenture
Trustee shall succeed to such of the rights and obligations of the Depositor and
the Trust hereunder as shall be so assigned. The Depositor shall, pursuant to
the Sale and Servicing Agreement, assign all of its right, title and interest in
and to the Mortgage Loans and its right to exercise the remedies created by
Sections 2.06 and 3.05 hereof for breaches of the representations, warranties,
agreements and covenants of the Unaffiliated Seller or the Originators contained
in Sections 2.05, 2.06, 3.02 and 3.03 hereof to the Trust, and the Trust shall,
pursuant to the Indenture, pledge such right, title and interest to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Each
of the Originators and the Unaffiliated Seller agrees that, upon such assignment
to the Trust and pledge to the Indenture Trustee, such representations,
warranties, agreements and covenants will run to and be for the benefit of the
Indenture Trustee and the Indenture Trustee may enforce, without joinder of the
Depositor or the Trust, the repurchase obligations of the Unaffiliated Seller
and the Originators set forth herein with respect to breaches of such
representations, warranties, agreements and covenants.
Section 2.08 Examination of Mortgage Files. Prior to the
Closing Date and each Subsequent Transfer Date, as applicable, the Unaffiliated
Seller shall make the Mortgage Files available to the Depositor or its designee
for examination at the Unaffiliated Seller's offices or at such other place as
the Unaffiliated Seller shall reasonably specify. Such examination may be made
by the Depositor or its designee at any time on or before the Closing Date or
Subsequent Transfer Date, as the case may be. If the Depositor or its designee
makes such examination prior to the Closing Date or Subsequent Transfer Date, as
the case may be, and identifies any Mortgage Loans that do not conform to the
requirements of the Depositor as described in this Agreement, such Mortgage
Loans shall be deleted from the Mortgage Loan Schedule and may be replaced,
prior to the Closing Date or Subsequent Transfer Date, as the case may be, by
substitute Mortgage Loans acceptable to the Depositor. The Depositor may, at its
option and without notice to the Unaffiliated Seller, purchase all or part of
the Mortgage Loans without conducting any partial or complete examination. The
fact that the Depositor, the Collateral Agent or the Indenture Trustee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Depositor or the Indenture
Trustee to demand repurchase or other relief as provided in this Agreement.
7
Section 2.09 Books and Records. The transfer of each Mortgage
Loan shall be reflected on each of the Originators' and the Unaffiliated
Seller's accounting and other records, balance sheet and other financial
statements as a sale of assets by the Originators to the Unaffiliated Seller, by
the Unaffiliated Seller to the Depositor and by the Depositor to the Trust;
provided, that the Unaffiliated Seller's tax returns shall not reflect the
transfer from the Unaffiliated Seller to the Depositor and from the Depositor to
the Trust as a sale of the Mortgage Loans. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the Trust, and the
pledge of each Mortgage Loan by the Trust to the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer.
Section 2.10 Cost of Delivery and Recordation of Documents.
The costs relating to the delivery and recordation of the documents in
connection with the Mortgage Loans as specified in this Article II and in
Article II of the Sale and Servicing Agreement shall be borne by the
Unaffiliated Seller or the Originators.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties as to the
Originators. Each of the Originators hereby represents and warrants to the
Unaffiliated Seller and the Depositor, as of the Closing Date, that:
(a) The Originator is a corporation duly organized, validly
existing and in good standing under the laws of (i) with respect to ABC
and Upland, the State of Pennsylvania, or (ii) with respect to NJMIC,
the State of New Jersey, and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the
laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Originator and to perform
its obligations as the Originator hereunder, and in any event the
Originator is in compliance with the laws of any such state to the
extent necessary to ensure the enforceability of the related Mortgage
Loan; the Originator has the full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Originator and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Originator; and all requisite corporate action has
been taken by the Originator to make this Agreement valid and binding
upon the Originator in accordance with its terms;
8
(b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Originator of, or compliance by the Originator
with, this Agreement or the sale of the Mortgage Loans pursuant to the
terms of this Agreement or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Originator or
the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, has or will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Originator's charter or by-laws or any legal
restriction or any agreement or instrument to which the Originator is
now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any
of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Originator or its
property is subject, or impair the ability of the Indenture Trustee (or
the Servicer as the agent of the Indenture Trustee) to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than the information under the caption
"Underwriting") nor any statement, report or other document prepared by
the Originator and furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby
contains any untrue statement or alleged untrue statement of any
material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Originator, threatened before a
court, administrative agency or government tribunal against the
Originator which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Originator, or in any
material impairment of the right or ability of the Originator to carry
on its business substantially as now conducted, or in any material
liability on the part of the Originator, or which would draw into
question the validity of this Agreement, the Mortgage Loans, or of any
action taken or to be taken in connection with the obligations of the
Originator contemplated herein, or which would impair materially the
ability of the Originator to perform under the terms of this Agreement
or that will prohibit its entering into this Agreement or the
consummation of any of the transactions contemplated hereby;
(f) The Originator is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the
Originator and its performance of and compliance with the terms hereof
will not constitute a violation or default with respect to, any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which violation or
default might have consequences that would materially and adversely
affect the condition (financial or other) or operations of the
Originator or its properties or might have consequences that would
materially and adversely affect its performance hereunder or under any
subservicing agreement;
9
(g) Upon the receipt of each Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee)
will have good title to each related Mortgage Loan and such other items
comprising the corpus of the Trust Estate free and clear of any lien
created by the Originator (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and
the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Originator pursuant to this Agreement are not subject
to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Originator, the Originator acquired title to the Mortgage Loan in good
faith, without notice of any adverse claim;
(j) The Originator does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Originator is solvent and the
sale of the Mortgage Loans by the Originator pursuant to the terms of
this Agreement will not cause the Originator to become insolvent. The
sale of the Mortgage Loans by the Originator pursuant to the terms of
this Agreement was not undertaken with the intent to hinder, delay or
defraud any of the Originator's creditors;
(k) The Mortgage Loans are not intentionally selected in a
manner so as to affect adversely the interests of the Depositor or of
any transferee of the Depositor (including the Trust and the Indenture
Trustee);
(l) The Originator has determined that it will treat the
disposition of the Mortgage Loans pursuant to this Agreement as a sale
for accounting and tax purposes;
(m) The Originator has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans to the Depositor other
than to the Depositor or an affiliate thereof; and
(n) The consideration received by the Originator upon the sale
of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Section 3.02 Representations and Warranties as to the
Unaffiliated Seller. The Unaffiliated Seller hereby represents and warrants to
the Depositor, as of the Closing Date, that:
(a) The Unaffiliated Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Unaffiliated Seller and to perform its
obligations as the Unaffiliated Seller hereunder, and in any event the
Unaffiliated Seller is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related
Mortgage Loan; the Unaffiliated Seller has the full power and
authority, corporate and otherwise, to execute and deliver this
Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the
Unaffiliated Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of
the Unaffiliated Seller; and all requisite corporate action has been
taken by the Unaffiliated Seller to make this Agreement valid and
binding upon the Unaffiliated Seller in accordance with its terms;
10
(b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Unaffiliated Seller of or compliance by the
Unaffiliated Seller with this Agreement or the sale of the Mortgage
Loans pursuant to the terms of this Agreement or the consummation of
the transactions contemplated by this Agreement, or if required, such
approval has been obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Unaffiliated
Seller nor the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, has or
will conflict with or result in a breach of any of the terms,
conditions or provisions of the Unaffiliated Seller's charter or
by-laws or any legal restriction or any agreement or instrument to
which the Unaffiliated Seller is now a party or by which it is bound or
to which its property is subject, or constitute a default or result in
an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Unaffiliated Seller or its property is subject, or impair the ability
of the Indenture Trustee (or the Servicer as the agent of the Indenture
Trustee) to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than the information under the caption
"Underwriting") nor any statement, report or other document prepared by
the Unaffiliated Seller and furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement or alleged untrue statement of any
material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending nor, to the knowledge of the Unaffiliated Seller, threatened
before a court, administrative agency or government tribunal against
the Unaffiliated Seller which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Unaffiliated Seller, or in any material impairment of the right or
ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or in any material liability on the
part of the Unaffiliated Seller, or which would draw into question the
validity of this Agreement, the Mortgage Loans, or of any action taken
or to be taken in connection with the obligations of the Unaffiliated
Seller contemplated herein, or which would impair materially the
ability of the Unaffiliated Seller to perform under the terms of this
Agreement or that will prohibit its entering into this Agreement or the
consummation of any of the transactions contemplated hereby;
11
(f) The Unaffiliated Seller is not in violation of or in
default with respect to, and the execution and delivery of this
Agreement by the Unaffiliated Seller and its performance of and
compliance with the terms hereof will not constitute a violation or
default with respect to, any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Unaffiliated Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder or under any subservicing agreement;
(g) Upon the receipt of each Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee)
will have good title to each related Mortgage Loan and such other items
comprising the corpus of the Trust Estate free and clear of any lien
created by the Unaffiliated Seller (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Unaffiliated
Seller, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Unaffiliated Seller pursuant to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Unaffiliated Seller, the Unaffiliated Seller acquired title to the
Mortgage Loan in good faith, without notice of any adverse claim;
(j) The Unaffiliated Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Unaffiliated Seller is
solvent and the sale of the Mortgage Loans by the Unaffiliated Seller
pursuant to the terms of this Agreement will not cause the Unaffiliated
Seller to become insolvent. The sale of the Mortgage Loans by the
Unaffiliated Seller pursuant to the terms of this Agreement was not
undertaken with the intent to hinder, delay or defraud any of the
Unaffiliated Seller's creditors;
12
(k) The Mortgage Loans are not intentionally selected in a
manner so as to
affect adversely the interests of the Depositor or of any transferee of
the Depositor (including the Trust and the Indenture Trustee);
(l) The Unaffiliated Seller has determined that it will treat
the disposition of the Mortgage Loans pursuant to this Agreement as a
sale for accounting purposes;
(m) The Unaffiliated Seller has not dealt with any broker or
agent or anyone else that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans to the
Depositor other than to the Depositor or an affiliate thereof; and
(n) The consideration received by the Unaffiliated Seller upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Section 3.03 Representations and Warranties Relating to the
Mortgage Loans. The Originators represent and warrant to the Unaffiliated Seller
and the Unaffiliated Seller represents to the Depositor that, as of the Closing
Date, as to each Initial Mortgage Loan, and as of the Subsequent Transfer Date,
as to each Subsequent Mortgage Loan, immediately prior to the sale and transfer
of such Mortgage Loan by the Unaffiliated Seller to the Depositor:
(a) The information set forth in each Mortgage Loan Schedule
is complete, true and correct;
(b) The information to be provided by the Unaffiliated Seller
or the Originators, directly or indirectly, to the Depositor in
connection with a Subsequent Mortgage Loan will be true and correct in
all material respects at the date or dates respecting which such
information is furnished;
(c) Each Mortgage is a valid first or second lien on a fee
simple (or its equivalent under applicable state law) estate in the
real property securing the amount owed by the Mortgagor under the
Mortgage Note subject only to (i) the lien of current real property
taxes and assessments which are not delinquent, (ii) with respect to
any Mortgage Loan identified on the Mortgage Loan Schedule as secured
by a second lien, the related first mortgage loan, (iii) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained
in connection with the origination of the related Mortgage Loan
obtained by the Unaffiliated Seller and (iv) other matters to which
like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by such
Mortgage;
(d) Immediately prior to the transfer and assignment by the
related Originator to the Unaffiliated Seller and by the Unaffiliated
Seller to the Depositor, the Unaffiliated Seller or such Originator, as
applicable, had good title to, and was the sole owner of each Mortgage
Loan, free of any interest of any other Person, and the Unaffiliated
Seller or such Originator has transferred all right, title and interest
in each Mortgage Loan to the Depositor or the Unaffiliated Seller, as
applicable;
13
(e) As of the applicable Cut-Off Date, no payment of principal
or interest on or in respect of any Mortgage Loan remains unpaid for
thirty (30) or more days past the date the same was due in accordance
with the related Mortgage Note without regard to applicable grace
periods;
(f) As of the Initial Cut-Off Date, no Mortgage Loan has a
Mortgage Interest Rate less than 7.75% per annum in Pool I and 8.49%
per annum in Pool II and the weighted average Mortgage Interest Rate of
the Mortgage Loans is 11.30% in Pool I and 11.42% in Pool II;
(g) At origination, no Mortgage Loan in Pool I or Pool II had
an original term to maturity of greater than 360 months;
(h) As of the Initial Cut-Off Date, the weighted average
remaining term to maturity of the Mortgage Loans is 262 months for the
Mortgage Loans in Pool I and 256 months for the Mortgage Loans in Pool
II;
(i) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no mechanics' lien or claim for work,
labor or material (and no rights are outstanding that under law could
give rise to such lien) affecting the premises subject to any Mortgage
which is or may be a lien prior to, or equal or coordinate with, the
lien of such Mortgage, except those which are insured against by the
title insurance policy referred to in (ff) below;
(j) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no delinquent tax or assessment lien
against any Mortgaged Property;
(k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
including, without limitation, the obligation of the Mortgagor to pay
the unpaid principal of and interest on the Mortgage Note, are each not
subject to any right of rescission (or any such rescission right has
expired in accordance with applicable law), set-off, counterclaim, or
defense, including the defense of usury, nor will the operation of any
of the terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim, or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim, or
defense has been asserted with respect thereto;
14
(l) To the best knowledge of the Unaffiliated Seller and each
of the Originators, the Mortgaged Property is free of material damage
and is in good repair, and there is no pending or threatened proceeding
for the total or partial condemnation of the Mortgaged Property;
(m) Neither the Originators nor the Unaffiliated Seller has
received a notice of default of any first mortgage loan secured by the
Mortgaged Property which has not been cured by a party other than the
Unaffiliated Seller;
(n) Each Mortgage Note and Mortgage are in substantially the
forms previously provided to the Depositor and the Indenture Trustee on
behalf of the Unaffiliated Seller;
(o) No Mortgage Loan had, at the date of origination, a CLTV
in excess of 100%, and the weighted average CLTV of all Mortgage Loans
as of the Initial Cut-Off Date is approximately 76.60% in Pool I and
78.11% in Pool II;
(p) The Mortgage Loan was not originated in a program in which
the amount of documentation in the underwriting process was limited in
comparison to the originator's normal documentation requirements;
(q) No more than the following percentages of the Mortgage
Loans by Cut-Off Date Aggregate Principal Balance are secured by
Mortgaged Properties located in the following states:
Pool I
-------------------------------------------------------------
Percentage of Cut-Off
Date Aggregate
State Principal Balance
---------------------------- --------------------------
California 0.13%
Connecticut 2.00
Delaware 1.34
Florida 7.81
Georgia 8.29
Illinois 2.84
Indiana 0.10
Kentucky 0.14
Maryland 1.52
Mississippi 0.85
New Jersey 28.79
New York 23.55
North Carolina 0.54
Ohio 1.21
Pennsylvania 17.57
South Carolina 0.30
Tennessee 0.22
Virginia 2.81
-------
100.00%
=======
15
Pool II
-------------------------------------------------------------
Percentage of Cut-Off
Date Aggregate
State Principal Balance
---------------------------- --------------------------
Connecticut 3.30%
Delaware 0.40
Florida 2.75
Georgia 15.82
Illinois 0.50
Maryland 0.79
New Jersey 33.54
New York 15.92
North Carolina 1.73
Ohio 2.14
Pennsylvania 21.42
Virginia 1.69
-------
100.00%
=======
(r) The Mortgage Loans were not selected by the Unaffiliated
Seller or the Originators for sale hereunder or inclusion in the Trust
Estate on any basis adverse to the Trust Estate relative to the
portfolio of similar mortgage loans of the Unaffiliated Seller or the
Originators;
(s) None of the Mortgage Loans constitutes a lien on leasehold
interests;
(t) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. To the best of the Unaffiliated Seller's and the
Originators' knowledge, there is no homestead or other exemption
available to the related Mortgagor which would materially interfere
with the right to sell the related Mortgaged Property at a trustee's
sale or the right to foreclose the related Mortgage. The Mortgage
contains customary and enforceable provisions for the acceleration of
the payment of the Principal Balance of such Mortgage Loan in the event
all or any part of the related Mortgaged Property is sold or otherwise
transferred without the prior written consent of the holder thereof;
(u) The proceeds of such Mortgage Loan have been fully
disbursed, including reserves set aside by the Unaffiliated Seller or
the Originators, there is no requirement for, and neither the
Unaffiliated Seller nor the Originators shall make any, future advances
thereunder. Any future advances made prior to the applicable Cut-Off
Date have been consolidated with the principal balance secured by the
Mortgage, and such principal balance, as consolidated, bears a single
interest rate and single repayment term reflected on the applicable
Mortgage Loan Schedule. The Principal Balance as of the applicable
Cut-Off Date does not exceed the original principal amount of such
Mortgage Loan. Except with respect to no more than $150,000 of escrow
funds, any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees, and expenses
incurred in making, or recording such Mortgage Loan have been paid;
16
(v) All Mortgage Loans were originated in compliance with the
Originators' Underwriting Guidelines;
(w) The terms of the Mortgage and the Mortgage Note have not
been impaired, waived, altered, or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Indenture Trustee and which has been delivered to
the Collateral Agent, on behalf of the Indenture Trustee. The substance
of any such alteration or modification is or as to Subsequent Mortgage
Loans will be reflected on the applicable Mortgage Loan Schedule and,
to the extent necessary, has been or will be approved by (i) the
insurer under the applicable mortgage title insurance policy, and (ii)
the insurer under any other insurance policy required hereunder for
such Mortgage Loan where such insurance policy requires approval and
the failure to procure approval would impair coverage under such
policy;
(x) No instrument of release, waiver, alteration, or
modification has been executed in connection with such Mortgage Loan,
and no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been approved by the
insurer under any insurance policy required hereunder for such Mortgage
Loan where such policy requires approval and the failure to procure
approval would impair coverage under such policy, and which is part of
the Mortgage File and has been delivered to the Collateral Agent, on
behalf of the Indenture Trustee, and the terms of which are reflected
in the applicable Mortgage Loan Schedule;
(y) Other than delinquencies described in clause (e) above,
there is no default, breach, violation, or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute such a default, breach, violation or
event of acceleration, and neither the Originators nor the Unaffiliated
Seller has waived any such default, breach, violation or event of
acceleration. All taxes, governmental assessments (including
assessments payable in future installments), insurance premiums, water,
sewer, and municipal charges, leaseholder payments, or ground rents
which previously became due and owing in respect of or affecting the
related Mortgaged Property have been paid. Neither the Originators nor
the Unaffiliated Seller has advanced funds, or induced, solicited, or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage or the Mortgage Note;
(z) All of the improvements which were included for the
purposes of determining the Appraised Value of the Mortgaged Property
were completed at the time that such Mortgage Loan was originated and
lie wholly within the boundaries and building restriction lines of
such Mortgaged Property. Except for de minimis encroachments, no
improvements on adjoining properties encroach upon the Mortgaged
Property. To the best of the Unaffiliated Seller's and the Originators'
knowledge, no improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation.
All inspections, licenses, and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
(including all such improvements which were included for the purpose of
determining such Appraised Value) and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriters certificates, have been made or
obtained from the appropriate authorities and the Mortgaged Property is
lawfully occupied under applicable law;
17
(aa) To the best of the Unaffiliated Seller's and the
Originators' knowledge, there do not exist any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, or the Mortgagor's credit standing that can be reasonably
expected to cause such Mortgage Loan to become delinquent or adversely
affect the value or marketability of such Mortgage Loan, other than any
such circumstances or conditions permitted under the Originator's
Underwriting Guidelines;
(bb) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) (i)
in compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located and (ii)
(A) organized under the laws of such state, (B) qualified to do
business in such state, (C) federal savings and loan associations or
national banks having principal offices in such state, (D) not doing
business in such state, or (E) not required to qualify to do business
in such state;
(cc) The Mortgage Note and the Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium,
or other similar laws affecting the enforcement of creditors' rights
generally and except that the equitable remedy of specific performance
and other equitable remedies are subject to the discretion of the
courts. All parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and convey the
estate therein purported to be conveyed, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties or
pursuant to a valid power-of-attorney that has been recorded with the
Mortgage;
(dd) The transfer of the Mortgage Note and the Mortgage as and
in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Depositor all right, title, and interest of
the Unaffiliated Seller and the Originators thereto as note holder and
mortgagee or (ii) to grant to the Depositor the security interest
referred to in Section 6.07 hereof. The Mortgage has been duly assigned
and the Mortgage Note has been duly endorsed. The Assignment of
Mortgage delivered to the Collateral Agent, on behalf of the Indenture
Trustee, pursuant to Section 2.04(a)(iv) of the Sale and Servicing
Agreement is in recordable form and is acceptable for recording under
the laws of the applicable jurisdiction. The endorsement of the
Mortgage Note, the delivery to the Collateral Agent, on behalf of the
Indenture Trustee, of the endorsed Mortgage Note, and such Assignment
of Mortgage, and the delivery of such Assignment of Mortgage for
recording to, and the due recording of such Assignment of Mortgage in,
the appropriate public recording office in the jurisdiction in which
the Mortgaged Property is located are sufficient to permit the
Indenture Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of
the Unaffiliated Seller and the Originators, and are sufficient to
prevent any other sale, transfer, assignment, pledge, or hypothecation
of the Mortgage Note and Mortgage by the Unaffiliated Seller or the
Originators from being enforceable;
18
(ee) Any and all requirements of any federal, state, or local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, or disclosure laws applicable to such Mortgage Loan have
been complied with, and the Servicer shall maintain in its possession,
available for the Indenture Trustee's inspection, and shall deliver to
the Indenture Trustee or its designee upon demand, evidence of
compliance with all such requirements. The consummation of the
transactions contemplated by this Agreement will not cause the
violation of any such laws;
(ff) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy or such other generally used and acceptable form of
policy, issued by and the valid and binding obligation of a title
insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Unaffiliated Seller, and
its successors and assigns, as to the first or second priority lien, as
applicable, of the Mortgage in the original principal amount of such
Mortgage Loan. The assignment to the Indenture Trustee of the
Unaffiliated Seller's interest in such mortgage title insurance policy
does not require the consent of or notification to the insurer. Such
mortgage title insurance policy is in full force and effect and will be
in full force and effect and inure to the benefit of the Indenture
Trustee upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such mortgage title insurance
policy and none of the Unaffiliated Seller, the Originators nor any
prior holder of the Mortgage has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy;
(gg) All improvements upon the Mortgaged Property are insured
against loss by fire, hazards of extended coverage, and such other
hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements
of Section 3.05 hereof. If the Mortgaged Property at origination was
located in an area identified on a flood hazard boundary map or flood
insurance rate map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available), such Mortgaged Property was covered by flood insurance at
origination. Each individual insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Indenture Trustee
upon the consummation of the transactions contemplated by this
Agreement, and contain a standard mortgage clause naming the originator
of such Mortgage Loan, and its successors and assigns, as mortgagee and
loss payee. All premiums thereon have been paid. The Mortgage obligates
the Mortgagor to maintain all such insurance at the Mortgagor's cost
and expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor, and none of the Unaffiliated Seller, the related
Originator or any prior holder of the Mortgage has acted or failed to
act so as to impair the coverage of any such insurance policy or the
validity, binding effect, and enforceability thereof;
19
(hh) If the Mortgage constitutes a deed of trust, a Indenture
Trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, as no fees or expenses are or will become payable by the
Indenture Trustee or the Noteholders to the Indenture Trustee under the
deed of trust, except in connection with a Indenture Trustee's sale
after default by the Mortgagor;
(ii) The Mortgaged Property consists of one or more parcels of
real property separately assessed for tax purposes. To the extent there
is erected thereon a detached or an attached one-family residence or a
detached two-to six-family dwelling, or an individual condominium unit
in a low-rise condominium, or an individual unit in a planned unit
development, or a commercial property, a mobile home, or a mixed use or
multiple purpose property, such residence, dwelling or unit is not (i)
a unit in a cooperative apartment, (ii) a property constituting part of
a syndication, (iii) a time share unit, (iv) a property held in trust,
(v) a manufactured dwelling, (vi) a log-constructed home, or (vii) a
recreational vehicle;
(jj) There exist no material deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made or which the
Unaffiliated Seller or the related Originator expects not to be cured,
and no escrow deposits or payments of other charges or payments due the
Unaffiliated Seller have been capitalized under the Mortgage or the
Mortgage Note;
(kk) Such Mortgage Loan was not originated at a below market
interest rate. Such Mortgage Loan does not have a shared appreciation
feature, or other contingent interest feature;
(ll) The origination and collection practices used by the
Unaffiliated Seller, the Originators or the Servicer with respect to
such Mortgage Loan have been in all respects legal, proper, prudent,
and customary in the mortgage origination and servicing business;
(mm) The Mortgagor has, to the extent required by applicable
law, executed a statement to the effect that the Mortgagor has received
all disclosure materials, if any, required by applicable law with
respect to the making of fixed-rate mortgage loans. The Servicer shall
maintain or cause to be maintained such statement in the Mortgage File;
(nn) All amounts received by the Unaffiliated Seller or the
Originators with respect to such Mortgage Loan after the applicable
Cut-Off Date and required to be deposited in the related Distribution
Account have been so deposited in the related Distribution Account and
are, as of the Closing Date, or will be as of the Subsequent Transfer
Date, as applicable, in the related Distribution Account;
(oo) The appraisal report with respect to the Mortgaged
Property contained in the Mortgage File was signed prior to the
approval of the application for such Mortgage Loan by a qualified
appraiser, duly appointed by the originator of such Mortgage Loan, who
had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof and whose compensation is not
affected by the approval or disapproval of such application;
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(pp) When measured by the Cut-Off Date Aggregate Principal
Balance, the Mortgagors with respect to at least 89.28% of the Mortgage
Loans in Pool I and 93.03% of the Mortgage Loans in Pool II,
represented at the time of origination that the Mortgagor would occupy
the Mortgaged Property as the Mortgagor's primary residence;
(qq) Each of the Originators and the Unaffiliated Seller has
no knowledge with respect to the Mortgaged Property of any governmental
or regulatory action or third party claim made, instituted or
threatened in writing relating to a violation of any applicable
federal, state or local environmental law, statute, ordinance,
regulation, order, decree or standard;
(rr) Each Mortgage Loan in Pool II is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(ss) With respect to second lien Mortgage Loans:
(i) the Unaffiliated Seller and the Originators have no
knowledge that the Mortgagor has received notice from the holder of the
prior mortgage that such prior mortgage is in default,
(ii) no consent from the holder of the prior mortgage is
needed for the creation of the second lien Mortgage or, if required,
has been obtained and is in the related Mortgage File,
(iii) if the prior mortgage has a negative amortization, the
CLTV was determined using the maximum loan amount of such prior
mortgage,
(iv) the related first mortgage loan encumbering the related
Mortgaged Property does not have a mandatory future advance provision,
and
(v) the Mortgage Loans conform in all material respects to the
description thereof in the Prospectus Supplement.
(tt) Each of the Originators and the Unaffiliated Seller
further represents and warrants to the Indenture Trustee, the Note
Insurer and the Noteholders that as of the Subsequent Cut-Off Date all
representations and warranties set forth in clauses (a) through (ss)
above will be correct in all material respects as to each Subsequent
Mortgage Loan, and the representations so made in this subsection (tt)
as to the following matters will be deemed to be correct if: (i) each
Subsequent Mortgage Loan may not be thirty (30) or more days
contractually delinquent as of the related Subsequent Cut-Off Date;
(ii) the original term to maturity of such Subsequent Mortgage Loan may
not exceed 360 month; (iii) such Subsequent Mortgage Loan must have a
Mortgage Interest Rate of at least 7.75%; (iv) the purchase of the
Subsequent Mortgage Loans is consented to by the Note Insurer and the
Rating Agencies, notwithstanding the fact that the Subsequent Mortgage
Loans meet the parameters stated in this subsection (tt); (v) the
Principal Balance of any such Subsequent Mortgage Loan may not exceed
$227,150.00; (vi) no more than 9.50% of such Subsequent Mortgage Loans
may be second liens (vii) no such Subsequent Mortgage Loan shall have a
CLTV of more than, (a) for consumer purpose loans, 84.99%, and (b) for
business purpose loans, 75%; (viii) no more than 45% of such Subsequent
Mortgage Loans may be Balloon Loans; (ix) no more than 5% of such
Subsequent Mortgage Loans may be secured by mixed-use properties,
commercial properties, or four or more unit multifamily properties; and
(x) following the purchase of such Subsequent Mortgage Loans, the
Mortgage Loans (including the Subsequent Mortgage Loans) held by the
Trust (a) will have a weighted average Mortgage Interest Rate, (I) for
consumer purpose loans, of at least 7.75% and (II) for business purpose
loans, of at least 12%; and (b) will have a weighted average CLTV of
not more than (I) for consumer purpose loans, 80%, and (II) for
business purpose loans, 62%.
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(uu) To the best of the Unaffiliated Seller's and the
Originators' knowledge, no error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan
has taken place on the part of any person, including without limitation
the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;
(vv) Each Mortgaged Property is in compliance with all
environmental laws, ordinances, rules, regulations and orders of
federal, state or governmental authorities relating thereto. No
hazardous material has been or is incorporated in, stored on or under,
released from, treated on, transported to or from, or disposed of on or
from, any Mortgaged Property such that, under applicable law (A) any
such hazardous material would be required to be eliminated before the
Mortgaged Property could be altered, renovated, demolished or
transferred, or (B) the owner of the Mortgaged Property, or the holder
of a security interest therein, could be subjected to liability for the
removal of such hazardous material or the elimination of the hazard
created thereby. Neither the Unaffiliated Seller nor any Mortgagor has
received notification from any federal, state or other governmental
authority relating to any hazardous materials on or affecting the
Mortgaged Property or to any potential or known liability under any
environmental law arising from the ownership or operation of the
Mortgaged Property. For the purposes of this subsection, the term
"hazardous materials" shall include, without limitation, gasoline,
petroleum products, explosives, radioactive materials, polychlorinated
biphenyls or related or similar materials, asbestos or any material
containing asbestos, lead, lead-based paint and any other substance or
material as may be defined as a hazardous or toxic substance by any
federal, state or local environmental law, ordinance, rule, regulation
or order, including, without limitation, CERCLA, the Clean Air Act, the
Clean Water Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act and any regulations promulgated pursuant
thereto; and
(ww) With respect to any business purpose loan, the related
Mortgage Note contains an acceleration clause, accelerating the
maturity date under the Mortgage Note to the date the individual
guarantying such loan becomes subject to any bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally.
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Section 3.04 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Unaffiliated
Seller, as of the date of execution of this Agreement and the Closing Date,
that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and perform, and to
enter into and consummate all the transactions contemplated by this
Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, and, assuming the due
authorization, execution and delivery hereof by the Unaffiliated Seller
and the Originators, constitutes the legal, valid and binding agreement
of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or
court is required for the execution, delivery and performance of or
compliance by the Depositor with this Agreement or the consummation by
the Depositor of any of the transactions contemplated hereby, except
such as have been made on or prior to the Closing Date;
(e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with Rule 424(b)
under the Securities Act; and
(f) None of the execution and delivery of this Agreement, the
purchase of the Mortgage Loans from the Unaffiliated Seller, the
consummation of the other transactions contemplated hereby, or the
fulfillment of or compliance with the terms and conditions of this
Agreement, (i) conflicts or will conflict with the charter or bylaws of
the Depositor or conflicts or will conflict with or results or will
result in a breach of, or constitutes or will constitute a default or
results or will result in an acceleration under, any term, condition or
provision of any indenture, deed of trust, contract or other agreement
or other instrument to which the Depositor is a party or by which it is
bound and which is material to the Depositor, or (ii) results or will
result in a violation of any law, rule, regulation, order, judgment or
decree of any court or governmental authority having jurisdiction over
the Depositor.
Section 3.05 Repurchase Obligation for Defective Documentation
and for Breach of a Representation or Warranty. (a) Each of the representations
and warranties contained in Sections 3.01, 3.02 and 3.03 shall survive the
purchase by the Depositor of the Mortgage Loans, the subsequent transfer thereof
by the Depositor to the Trust and the subsequent pledge thereof by the Trust to
the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer,
and shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Sale and Servicing Agreement or the
Indenture.
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(b) With respect to any representation or warranty contained
in Sections 3.01 or 3.03 hereof that is made to the best of the
Originators' knowledge or contained in Sections 3.02 or 3.03 hereof
that is made to the best of the Unaffiliated Seller's knowledge, if it
is discovered by the Servicer, any Subservicer, the Indenture Trustee,
the Collateral Agent, the Depositor, the Note Insurer or any Noteholder
that the substance of such representation and warranty was inaccurate
as of the Closing Date or the Subsequent Transfer Date, as applicable,
and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, then notwithstanding the Originators' or the
Unaffiliated Seller's lack of knowledge with respect to the inaccuracy
at the time the representation or warranty was made, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
Upon discovery by the Originators, the Unaffiliated Seller, the
Servicer, any Subservicer, the Indenture Trustee, the Collateral Agent,
the Note Insurer, the Depositor or any Noteholder of a breach of any of
such representations and warranties which materially and adversely
affects the value of Mortgage Loans or the interest of the Noteholders,
or which materially and adversely affects the interests of the Note
Insurer or the Noteholders in the related Mortgage Loan in the case of
a representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' or the Unaffiliated Seller's best knowledge), the party
discovering such breach shall give, pursuant to this Section 3.05(b)
and pursuant to Section 4.02 of the Sale and Servicing Agreement,
prompt written notice to the others. Subject to the next to last
paragraph of this Section 3.05(b), within sixty (60) days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Unaffiliated Seller and the Originators
shall (a) promptly cure such breach in all material respects, or (b)
purchase such Mortgage Loan at a purchase price equal to the Loan
Repurchase Price, or (c) remove such Mortgage Loan from the Trust
Estate (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans; provided,
that, with respect to Mortgage Loans in Pool II, such substitution is
effected not later than the date which is two (2) years after the
Startup Day or at such later date, if the Indenture Trustee and the
Note Insurer receive an Opinion of Counsel to the effect set forth in
Section 3.05(c). Any such substitution shall be accompanied by payment
by the Unaffiliated Seller of the Substitution Adjustment, if any, to
be deposited in the related Distribution Account pursuant to the Sale
and Servicing Agreement.
The Originators shall cooperate with the Unaffiliated Seller
to cure any breach and shall reimburse the Unaffiliated Seller for the
costs and expenses related to any cure, substitution (including any
Substitution Adjustment) or repurchase incurred by the Unaffiliated
Seller pursuant to this Section 3.05.
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(c) As to any Deleted Mortgage Loan for which the Unaffiliated
Seller or an Originator substitutes a Qualified Substitute Mortgage
Loan or Loans, the Unaffiliated Seller or such Originator shall effect
such substitution by delivering to the Indenture Trustee and the
Collateral Agent, a certification in the form attached to the Sale and
Servicing Agreement as Exhibit H, executed by a Servicing Officer and
the documents described in Section 2.05(a) of the Sale and Servicing
Agreement for such Qualified Substitute Mortgage Loan or Loans.
Pursuant to the Sale and Servicing Agreement, upon receipt by the
Indenture Trustee and the Collateral Agent of a certification of a
Servicing Officer of such substitution or purchase and, in the case of
a substitution, upon receipt by the Collateral Agent, on behalf of the
Indenture Trustee of the related Mortgage File, and the deposit of
certain amounts in the related Distribution Account pursuant to Section
2.07(b) of the Sale and Servicing Agreement (which certification shall
be in the form of Exhibit H to the Sale and Servicing Agreement), the
Collateral Agent, on behalf of the Indenture Trustee, shall be required
to release to the Servicer for release to the Unaffiliated Seller the
related Indenture Trustee's Mortgage File and shall be required to
execute, without recourse, and deliver such instruments of transfer
furnished by the Unaffiliated Seller as may be necessary to transfer
such Mortgage Loan to the Unaffiliated Seller or such Originator.
(d) Pursuant to the Sale and Servicing Agreement, the Servicer
shall deposit in the related Distribution Account all payments received
in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with
respect to Qualified Substitute Mortgage Loans on or before the date of
substitution will be retained by the Unaffiliated Seller. The Trust
will own all payments received on the Deleted Mortgage Loan on or
before the date of substitution, and the Unaffiliated Seller shall
thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Pursuant to the Sale and
Servicing Agreement, the Servicer shall be required to give written
notice to the Indenture Trustee, the Collateral Agent and the Note
Insurer that such substitution has taken place and shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of the Sale and Servicing Agreement and the
substitution of the Qualified Substitute Mortgage Loan. The parties
hereto agree to amend the Mortgage Loan Schedule accordingly. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of the Indenture, the Sale and Servicing Agreement
and this Agreement in all respects, and the Unaffiliated Seller shall
be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Sections 3.02 and 3.03
herein. On the date of such substitution, the Unaffiliated Seller will
remit to the Servicer and, pursuant to the Sale and Servicing
Agreement, the Servicer will deposit into the related Distribution
Account, an amount equal to the Substitution Adjustment, if any.
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(e) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan in Pool II which is not in default or
as to which no default is imminent, no purchase, or substitution
pursuant to Section 2.06(b) or this Section 3.05 shall be made unless
the Unaffiliated Seller provides to the Indenture Trustee, the
Collateral Agent and the Note Insurer an Opinion of Counsel to the
effect that such purchase or substitution would not (i) result in the
imposition of taxes on "prohibited transactions" of the REMIC Trust, as
defined in Section 860F of the Code or a tax on contributions to the
REMIC Trust under the REMIC Provisions, or (ii) cause the REMIC Trust
to fail to qualify as a REMIC at any time that any Class A-2 Notes are
outstanding. Any Mortgage Loan as to which purchase or substitution was
delayed pursuant to this Section 3.05(e) shall be purchased or
substituted (subject to compliance with Section 2.06 and this Section
3.05) upon the earlier of (x) the occurrence of a default or reasonably
foreseeable default with respect to such Mortgage Loan and (y) receipt
by the Indenture Trustee, the Collateral Agent and the Note Insurer of
an Opinion of Counsel to the effect that such purchase or substitution
will not result in the events described in clauses (i) and (ii) of the
preceding sentence.
(f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originator set forth in Section 2.06 and
this Section 3.05 to cure, purchase or substitute for a defective
Mortgage Loan as provided in Section 2.06 and this Section 3.05
constitute the sole remedies of the Depositor, the Indenture Trustee,
the Note Insurer and the Noteholders respecting a breach of the
foregoing representations and warranties.
(g) Pursuant to the Sale and Servicing Agreement, upon
discovery by the Unaffiliated Seller, the Servicer, the Indenture
Trustee, the Collateral Agent, the Note Insurer or any Noteholder that
any Mortgage Loan in Pool II does not constitute a Qualified Mortgage,
the party discovering such fact shall promptly (and in any event within
five (5) days of the discovery) give written notice thereof to the
other parties. In connection therewith, the Unaffiliated Seller or the
related Originator shall repurchase or substitute a Qualified
Substitute Mortgage Loan for the affected Mortgage Loan within ninety
(90) days of the earlier of such discovery by any of the foregoing
parties, or the Indenture Trustee's or the Unaffiliated Seller's
receipt of notice, in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Sections 3.02 or
3.03. Pursuant to the Sale and Servicing Agreement, the Collateral
Agent, on behalf of the Indenture Trustee, shall reconvey to the
Unaffiliated Seller or the related Originator the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Sections 3.02 or 3.03.
(h) Each of the Originators and the Unaffiliated Seller shall
be jointly and severally responsible for any repurchase, cure or
substitution obligation of any of the Originators or the Unaffiliated
Seller under this Agreement, the Indenture and the Sale and Servicing
Agreement.
(i) Any cause of action against the Unaffiliated Seller or an
Originator relating to or arising out of the breach of any
representations and warranties or covenants made in Sections 2.06, 3.02
or 3.03 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by any party and notice thereof to the Unaffiliated Seller or
such Originator, (ii) failure by the Unaffiliated Seller or such
Originator to cure such breach or purchase or substitute such Mortgage
Loan as specified above, and (iii) demand upon the Unaffiliated Seller
or such Originator by the Indenture Trustee for all amounts payable in
respect of such Mortgage Loan.
ARTICLE IV
THE UNAFFILIATED SELLER
Section 4.01 Covenants of the Originators and the Unaffiliated Seller. Each of
the Originators and the Unaffiliated Seller covenants to the Depositor as
follows:
(a) The Originators and the Unaffiliated Seller shall
cooperate with the Depositor and the firm of independent certified
public accountants retained with respect to the issuance of the Notes
in making available all information and taking all steps reasonably
necessary to permit the accountants' letters required hereunder to be
delivered within the times set for delivery herein.
26
(b) The Unaffiliated Seller agrees to satisfy or cause to be
satisfied on or prior to the Closing Date, all of the conditions to the
Depositor's obligations set forth in Section 5.01 hereof that are
within the Unaffiliated Seller's (or its agents') control.
(c) The Originators and the Unaffiliated Seller hereby agree
to do all acts, transactions, and things and to execute and deliver all
agreements, documents, instruments, and papers by and on behalf of the
Originators or the Unaffiliated Seller as the Depositor or its counsel
may reasonably request in order to consummate the transfer of the
Mortgage Loans to the Depositor and the subsequent transfer thereof to
the Indenture Trustee, and the rating, issuance and sale of the Notes.
Section 4.02 Merger or Consolidation. Each of the Originators
and the Unaffiliated Seller will keep in full effect its existence, rights and
franchises as a corporation and will obtain and preserve its qualification to do
business as a foreign corporation, in each jurisdiction necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement. Any Person into which any of the
Originators or the Unaffiliated Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Originators or the Unaffiliated Seller shall be a party, or any Person
succeeding to the business of the Originators or the Unaffiliated Seller, shall
be approved by the Note Insurer which approval shall not be unreasonably
withheld. If the approval of the Note Insurer is not required, the successor
shall be an established mortgage loan servicing institution that is a Permitted
Transferee and in all events shall be the successor of the Originators or the
Unaffiliated Seller without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Originators and the Unaffiliated Seller shall send notice
of any such merger or consolidation to the Indenture Trustee and the Note
Insurer.
Section 4.03 Costs. In connection with the transactions
contemplated under this Agreement, the Trust Agreement, the Indenture and the
Sale and Servicing Agreement, the Unaffiliated Seller shall promptly pay (or
shall promptly reimburse the Depositor to the extent that the Depositor shall
have paid or otherwise incurred): (a) the fees and disbursements of the
Depositor's, the Unaffiliated Seller's and the Originators' counsel; (b) the
fees of S&P and Xxxxx'x; (c) any of the fees of the Indenture Trustee and the
fees and disbursements of the Indenture Trustee's counsel; (d) any of the fees
of the Owner Trustee and the fees and disbursements of the Owner Trustee's
counsel; (e) expenses incurred in connection with printing the Prospectus, the
Prospectus Supplement, any amendment or supplement thereto, any preliminary
prospectus and the Notes; (f) fees and expenses relating to the filing of
documents with the Commission (including without limitation periodic reports
under the Exchange Act); (g) the shelf registration amortization fee of 0.04% of
the Note Principal Balance of the Notes on the Closing Date, paid in connection
with the issuance of Notes; (h) the fees and disbursements for Deloitte & Touche
LLP, accountants for the Originators; and (i) all of the initial expenses (not
to exceed $75,000) of the Note Insurer including, without limitation, legal fees
and expenses, accountant fees and expenses and expenses in connection with due
diligence conducted on the Mortgage Files but not including the initial premium
paid to the Note Insurer. For the avoidance of doubt, the parties hereto
acknowledge that it is the intention of the parties that the Depositor shall not
pay any of the Indenture Trustee's or Owner Trustee's fees and expenses in
connection with the transactions contemplated by this Agreement, the Trust
Agreement, the Indenture and the Sale and Servicing Agreement. All other costs
and expenses in connection with the transactions contemplated hereunder shall be
borne by the party incurring such expenses.
27
Section 4.04 Indemnification. (a) The Originators and the
Unaffiliated Seller, jointly and severally, agree
(i) to indemnify and hold harmless the Depositor, each of its
directors, each of its officers who have signed the Registration
Statement, and each of its directors and each person or entity who
controls the Depositor or any such person, within the meaning of
Section 15 of the Securities Act, against any and all losses, claims,
damages or liabilities, joint and several, to which the Depositor or
any such person or entity may become subject, under the Securities Act
or otherwise, and will reimburse the Depositor and each such
controlling person for any legal or other expenses incurred by the
Depositor or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement
or the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originators or the
Unaffiliated Seller, in light of the circumstances under which they
were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Prospectus Supplement
referred to in Section 3.01(d). This indemnity agreement will be in
addition to any liability which the Originators and the Unaffiliated
Seller may otherwise have; and
(ii) to indemnify and to hold the Depositor harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses
that the Depositor may sustain in any way related to the failure of any
of the Originators or the Unaffiliated Seller to perform its duties in
compliance with the terms of this Agreement. The Originators or the
Unaffiliated Seller shall immediately notify the Depositor if a claim
is made by a third party with respect to this Agreement, and the
Originators or the Unaffiliated Seller shall assume the defense of any
such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Depositor in
respect of such claim. Pursuant to the Indenture, the Indenture Trustee
shall reimburse the Unaffiliated Seller in accordance with the
Indenture for all amounts advanced by the Unaffiliated Seller pursuant
to the preceding sentence except when the claim relates directly to the
failure of the Unaffiliated Seller to perform its duties in compliance
with the terms of this Agreement.
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(b) The Depositor agrees to indemnify and hold harmless each
of the Originators and the Unaffiliated Seller, each of their
respective directors and each person or entity who controls the
Originators or the Unaffiliated Seller or any such person, within the
meaning of Section 15 of the Securities Act, against any and all
losses, claims, damages or liabilities, joint and several, to which the
Originators or the Unaffiliated Seller or any such person or entity may
become subject, under the Securities Act or otherwise, and will
reimburse the Originators and the Unaffiliated Seller and any such
director or controlling person for any legal or other expenses incurred
by such party or any such director or controlling person in connection
with investigating or defending any such loss, claim, damage, liability
or action, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, the Prospectus Supplement,
any amendment or supplement to the Prospectus or the Prospectus
Supplement or the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission is other
than a statement or omission relating to the information set forth in
subsection (a)(i) of this Section 4.04; provided, however, that in no
event shall the Depositor be liable to the Unaffiliated Seller under
this paragraph (b) in an amount in excess of the Depositor's resale
profit or the underwriting fee on the sale of the Notes. This indemnity
agreement will be in addition to any liability which the Depositor may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 4.04 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 4.04, notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. In case any such action
is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section 4.04 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. The indemnifying party shall not be liable for the
expenses of more than one separate counsel.
29
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding parts of this Section 4.04 is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or subsection (b) of this Section 4.04 in respect
of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) subject to the limits set forth in subsection (a) and
subsection (b) of this Section 4.04; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties
are entitled, there shall be considered the relative benefits received
by the Originators and the Unaffiliated Seller on the one hand, and the
Depositor on the other, the Originators', the Unaffiliated Seller's and
the Depositor's relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any
other equitable considerations appropriate in the circumstances. The
Originators, the Unaffiliated Seller and the Depositor agree that it
would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation. For purposes of this
Section 4.04, each director of the Depositor, each officer of the
Depositor who signed the Registration Statement, and each person, if
any who controls the Depositor within the meaning of Section 15 of the
Securities Act, shall have the same rights to contribution as the
Depositor, and each director of the Originators or the Unaffiliated
Seller, and each person, if any who controls the Originators or the
Unaffiliated Seller within the meaning of Section 15 of the Securities
Act, shall have the same rights to contribution as the Originators and
the Unaffiliated Seller.
30
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01 Conditions of Depositor's Obligations. The
obligations of the Depositor to purchase the Mortgage Loans will be subject to
the satisfaction on the Closing Date of the following conditions. Upon payment
of the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the Unaffiliated Seller
required to be performed by it on or prior to the Closing Date pursuant
to the terms of this Agreement shall have been duly performed and
complied with and all of the representations and warranties of the
Unaffiliated Seller under this Agreement shall be true and correct as
of the Closing Date and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement, and the Depositor shall have received a certificate to the
effect of the foregoing signed by an authorized officer of the
Unaffiliated Seller.
(b) The Depositor shall have received a letter dated the date
of this Agreement, in form and substance acceptable to the Depositor
and its counsel, prepared by Deloitte & Touche LLP, independent
certified public accountants, regarding the numerical information
contained in the Prospectus Supplement under the captions "Prepayment
and Yield Considerations" and "The Mortgage Loan Pools."
(c) The Mortgage Loans will be acceptable to the Depositor, in
its sole reasonable discretion.
(d) The Depositor shall have received the following additional
closing documents, in form and substance reasonably satisfactory to the
Depositor and its counsel:
(i) the Mortgage Loan Schedule;
(ii) this Agreement, the Sale and Servicing Agreement, the
Indenture, the Trust Agreement, and the Underwriting Agreement dated as
of October 16, 1998 between the Depositor and Prudential Securities
Incorporated and all documents required thereunder, duly executed and
delivered by each of the parties thereto other than the Depositor;
(iii) officer's certificates of an officer of each of the
Originators and the Unaffiliated Seller, dated as of the Closing Date,
and attached thereto resolutions of the board of directors and a copy
of the charter and by-laws;
31
(iv) copy of each of the Originators and the Unaffiliated
Seller's charter and all amendments, revisions, and supplements
thereof, certified by a secretary of each entity;
(v) an opinion of the counsel for the Originators and the
Unaffiliated Seller as to various corporate matters in a form
acceptable to the Depositor, its counsel, the Note Insurer, S&P and
Xxxxx'x (it being agreed that the opinion shall expressly provide that
the Indenture Trustee shall be entitled to rely on the opinion);
(vi) opinions of counsel for the Unaffiliated Seller, in forms
acceptable to the Depositor, its counsel, the Note Insurer, S&P and
Xxxxx'x as to such matters as shall be required for the assignment of a
rating to the Notes of "AAA" by S&P, and "Aaa" by Xxxxx'x (it being
agreed that such opinions shall expressly provide that the Indenture
Trustee shall be entitled to rely on such opinions);
(vii) a letter from Xxxxx'x that it has assigned a rating of
"Aaa" to the Notes;
(viii) a letter from S&P that it has assigned a rating of
"AAA" to the Notes;
(ix) an opinion of counsel for the Indenture Trustee in form
and substance acceptable to the Depositor, its counsel, the Note
Insurer, Xxxxx'x and S&P (it being agreed that the opinion shall
expressly provide that the Unaffiliated Seller shall be entitled to
rely on the opinion);
(x) an opinion of counsel for the Owner Trustee in form and
substance acceptable to the Depositor, its counsel, the Note Insurer,
Xxxxx'x and S&P (it being agreed that the opinion shall expressly
provide that the Unaffiliated Seller shall be entitled to rely on the
opinion);
(xi) an opinion or opinions of counsel for the Servicer, in
form and substance acceptable to the Depositor, its counsel, the Note
Insurer, Xxxxx'x and S&P (it being agreed that the opinion shall
expressly provide that the Unaffiliated Seller shall be entitled to
rely on the opinion); and
(xii) an opinion or opinions of counsel for the Note Insurer,
in each case in form and substance acceptable to the Depositor, its
counsel, Xxxxx'x and S&P (it being agreed that the opinion shall
expressly provide that the Unaffiliated Seller shall be entitled to
rely on the opinion).
(e) The Note Insurance Policy shall have been duly executed,
delivered and issued with respect to the Notes.
32
(f) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be satisfactory in form and substance to the Depositor and its counsel.
(g) The Unaffiliated Seller shall have furnished the Depositor
with such other certificates of its officers or others and such other
documents or opinions as the Depositor or its counsel may reasonably
request.
Section 5.02 Conditions of Unaffiliated Seller's Obligations.
The obligations of the Unaffiliated Seller under this Agreement shall be subject
to the satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor required to be
performed by it at or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed and complied with and
all of the representations and warranties of the Depositor contained in
this Agreement shall be true and correct as of the Closing Date and the
Unaffiliated Seller shall have received a certificate to that effect
signed by an authorized officer of the Depositor.
(b) The Unaffiliated Seller shall have received the following
additional documents:
(i) this Agreement and the Sale and Servicing Agreement, and
all documents required thereunder, in each case executed by the
Depositor as applicable; and
(ii) a copy of a letter from Xxxxx'x to the Depositor to the
effect that it has assigned a rating of "Aaa" to the Notes and a copy
of a letter from S&P to the Depositor to the effect that it has
assigned a rating of "AAA" to the Notes.
(iii) an opinion of counsel for the Indenture Trustee in form
and substance acceptable to the Unaffiliated Seller and its counsel;
(iv) an opinion of counsel for the Owner Trustee in form and
substance acceptable to the Unaffiliated Seller and its counsel;
(v) an opinion of counsel for the Note Insurer in form and
substance acceptable to the Unaffiliated Seller and its counsel;
33
(vi) an opinion of the counsel for the Depositor as to
securities and tax matters; and
(vii) an opinion of the counsel for the Depositor as to true
sale matters.
(c) The Depositor shall have furnished the Unaffiliated Seller
with such other certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in this
Agreement as the Unaffiliated Seller may reasonably request.
Section 5.03 Termination of Depositor's Obligations. The
Depositor may terminate its obligations hereunder by notice to the Unaffiliated
Seller at any time before delivery of and payment of the purchase price for the
Mortgage Loans if: (a) any of the conditions set forth in Section 5.01 are not
satisfied when and as provided therein; (b) there shall have been the entry of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Unaffiliated Seller, or
for the winding up or liquidation of the affairs of the Unaffiliated Seller; (c)
there shall have been the consent by the Unaffiliated Seller to the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Unaffiliated Seller or of or relating to substantially all of
the property of the Unaffiliated Seller; (d) any purchase and assumption
agreement with respect to the Unaffiliated Seller or the assets and properties
of the Unaffiliated Seller shall have been entered into; or (e) a Termination
Event shall have occurred. The termination of the Depositor's obligations
hereunder shall not terminate the Depositor's rights hereunder or its right to
exercise any remedy available to it at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Depositor, addressed to the Depositor at Prudential Securities Secured
Financing Corporation, Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Managing Director - Asset Backed Finance Group, or to such other
address as the Depositor may designate in writing to the Unaffiliated Seller and
the Originators and if to the Unaffiliated Seller or an Originator, addressed to
the Unaffiliated Seller or such Originator at Xxxxxxxxxx Xxxxxx Xxxxxx, 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xx. Xxxxxxx Xxxxxxxx, Xx., or to such other address as the Unaffiliated Seller
or such Originator may designate in writing to the Depositor.
34
Section 6.02 Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
Section 6.03 Agreement of Unaffiliated Seller. The
Unaffiliated Seller agrees to execute and deliver such instruments and take such
actions as the Depositor may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
Section 6.04 Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any Note or other instrument delivered pursuant hereto shall be deemed to
be relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 6.06 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly permitted by
the terms hereof, this Agreement may not be assigned, pledged or hypothecated by
any party hereto to a third party without the written consent of the other party
to this Agreement and the Note Insurer; provided, however, that the Depositor
may assign its rights hereunder without the consent of the Unaffiliated Seller.
Section 6.07 Confirmation of Intent; Grant of Security
Interest. It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Originators to the Unaffiliated Seller as contemplated
by this Unaffiliated Seller's Agreement be, and be treated for all purposes as,
a sale of the Mortgage Loans and that the conveyance of the Mortgage Loans by
the Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated
Seller's Agreement be, and be treated for accounting purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that any such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators or the Unaffiliated Seller, as the
case may be. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to continue to be property of the
Originators or the Unaffiliated Seller then (a) this Unaffiliated Seller's
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of the
Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor of a security interest in all of such parties' right, title and
interest in and to the Mortgage Loans and all amounts payable on the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property; (c) the possession by the Depositor (or its assignee) of
Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the Uniform Commercial Code; and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor (or its assignee) for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Depositor pursuant to any provision hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Originators, the Unaffiliated Seller and the Depositor shall, to the
extent consistent with this Unaffiliated Seller's Agreement, take such actions
as may be necessary to ensure that, if this Unaffiliated Seller's Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement.
35
Section 6.08 Miscellaneous. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 6.09 Amendments. (a) This Agreement may be amended
from time to time by the Originators, the Unaffiliated Seller and the Depositor
by written agreement, upon the prior written consent of the Note Insurer,
without notice to or consent of the Noteholders to cure any ambiguity, to
correct or supplement any provisions herein, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, at the expense of the party requesting the change,
delivered to the Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder; and provided, further, that no such amendment shall
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Note without the
consent of the Holder of such Note, or change the rights or obligations of any
other party hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor with the consent of the
Note Insurer, the Majority Noteholders and the Holders of the majority of the
Percentage Interest in the Trust Certificates for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall be made unless the Indenture
Trustee receives an Opinion of Counsel, at the expense of the party requesting
the change, that such change will not adversely affect the status of the REMIC
Trust as a REMIC or cause a tax to be imposed on the REMIC, and provided
further, that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Note without the consent of the Holder of such Note or
reduce the percentage for each Class the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of each
Class of Notes affected thereby.
(c) It shall not be necessary for the consent of Holders under
this Section 6.09 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
Section 6.10 Third-Party Beneficiaries. The parties agree that
each of the Note Insurer and the Indenture Trustee is an intended third-party
beneficiary of this Agreement to the extent necessary to enforce the rights and
to obtain the benefit of the remedies of the Depositor under this Agreement
which are assigned to the Trust and then to the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer, pursuant to the Sale and
Servicing Agreement and the Indenture, respectively, and to the extent necessary
to obtain the benefit of the enforcement of the obligations and covenants of the
Unaffiliated Seller under Section 4.01 and 4.04(a)(ii) of this Agreement. The
parties further agree that Prudential Securities Incorporated and each of its
directors and each person or entity who controls Prudential Securities
Incorporated or any such person, within the meaning of Section 15 of the
Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller with
respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement.
36
Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER
EACH HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.
(c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER
EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 6.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
37
IN WITNESS WHEREOF, the parties to this Unaffiliated Seller's
Agreement have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: ____________________________________________
Name:
Title:
ABFS 1998-4, INC.
By: ____________________________________________
Name:
Title:
AMERICAN BUSINESS CREDIT, INC.
By: _____________________________________________
Name:
Title:
HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE
By: ____________________________________________
Name:
Title:
NEW JERSEY MORTGAGE AND INVESTMENT CORP.
By: _____________________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOAN SCHEDULE
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0000010116 XXXXX X. XXXXXXX 75000.00 75000.00
0000010164 XXXXX XXXXXX 175000.00 175000.00
0000010173 RICH JANITORIAL, INC 56000.00 56000.00
0000010180 AKIRA, INC. 50000.00 50000.00
0000010182 M.P.L. & CO. CONTRACTORS, INC. 60000.00 60000.00
0000000000 XXXXX XXXXX RESTAURANT, INC. 30000.00 30000.00
0000010190 XXXXX XXXXXX 76000.00 76000.00
0000010191 COUNTY CARBURETOR, INC 30000.00 30000.00
0000010193 EAST WEST INTERIORS INC. 50000.00 50000.00
0000010194 BJK COUNSULTING, INC. 70000.00 70000.00
0000000000 XXXXX XXXX PAK 150000.00 150000.00
0000010197 A-ONE HERBS & VITAMINS, INC. 26000.00 26000.00
0000010198 B & G DELIVERY SERVICE, CO. 57500.00 57500.00
0000010199 XXXX MAJOR XXXXXXXX 30000.00 30000.00
0000010200 XXXX X. XXXXXXX III 34000.00 34000.00
0000010202 BR-JR, INC. 100000.00 100000.00
0000000000 XXXXXX X. XXXXXX 50000.00 50000.00
0000010204 XXX XXXX AUTO RECOVERY, INC 20000.00 20000.00
0000010205 XXXXX XXXXXXX 50000.00 50000.00
0000010206 MARLAIS ENTERPRISES LIMITED 43000.00 43000.00
0000010208 XXXX X. XXXXXXX 23500.00 23500.00
0000010209 XXXX XXXXXXXX 11000.00 11000.00
0000010210 XXXX X. XXXXXXX ENTERPRISES, I 48000.00 48000.00
0000000000 KID'S PLACE, INC. 50000.00 50000.00
0000010212 CARACHILO'S CAFE, INC 65000.00 65000.00
0000010214 XXXXXXX XXXXX XX. 40000.00 40000.00
0000010215 KLEENET, INC 78000.00 78000.00
0000010216 XXXXXX & XXXXX, PC 85000.00 85000.00
0000010219 XXXX X. XXXXXXXX 67000.00 67000.00
0000010220 XXXXXX PLANITA 31000.00 31000.00
0000010221 BOISE X. XXXXXXXXXXX 66000.00 66000.00
0000010222 EXACTE MEDICAL MANAGEMENT, INC 20000.00 20000.00
0000010223 XXXXXXX X. XXXXXXXXXX 25000.00 25000.00
0000010224 IK XXX XXXX 155000.00 155000.00
0000010225 XXXX XXXXXX 58000.00 58000.00
0000010226 XXXXXXX X. XXXXXXXXX 23500.00 23500.00
0000000000 XXXXX XXXXXXXXX 50000.00 50000.00
0000010230 XXX X. INC 135000.00 135000.00
0000010231 XXXX X. XXXXXX 25000.00 25000.00
0000010235 P. E. C., INC 50000.00 50000.00
0000010236 XXXXXXX XXXXXXXX 50000.00 50000.00
0000000000 K. C.'S PLUMBING & HEATING, I 33000.00 33000.00
0000010238 ADVANCED RESPIRATORY THERAPEUT 45000.00 45000.00
0000010239 HARDWOODS, LLC 46000.00 46000.00
0000010242 PRECISION EXCAVATING & PAVING 120000.00 120000.00
0000010243 DMR INVESTMENTS, INC. 50000.00 50000.00
0000000000 XXXXXX X. XXXXXXXXX XX. 40000.00 40000.00
0000010246 XXXXXX X. XXXXXX 23000.00 23000.00
0000010247 AKRON-CANTON CONCRETE CO., INC 95000.00 95000.00
0008882069 XXXXXX X. XXXXX 150000.00 150000.00
0008882070 XXXX X. XXXXXXXXXXXX 28500.00 28500.00
0008882072 XXXXXXXX XXXXXX 30000.00 30000.00
0000000000 XXXXXX XXXXXXX, INC. 55000.00 55000.00
0008882075 LA'XXXXXXX XXXXX 72000.00 72000.00
0008882076 XXXXXXX X. XXXXXX 60000.00 60000.00
0008882080 DYNAMIC PROPERTIES, INC. 49000.00 49000.00
0008882083 XXXXXXXXX XXXXXXX 20000.00 20000.00
0000004858 XXXXXXXXX X. XXXXXXXX 162400.00 162400.00
Page 1
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0000010107 VENTER, INC. 25000.00 25000.00
0000010253 XXXXX X. XXXXXX 45000.00 45000.00
0000010228 XXXX XXXX YOUNG 90000.00 90000.00
0000010251 XXXXXX X. XXXXXX, D.M.D., P.C. 200000.00 200000.00
0000010254 XXXXX X. XXXXXX XX. 32000.00 32000.00
0000010255 XXXXX X. XXXXXXX 35000.00 35000.00
0000010256 XXXXXX X. XXX 100000.00 100000.00
0000010257 XXXX XXXXX XXXXXX 58000.00 58000.00
0008882084 XXXXXXXX XXXX 18000.00 18000.00
0000010258 XXXXXXXXXX'X LAKESIDE CORPORAT 35000.00 35000.00
0000010259 JILI, LTD. 100000.00 100000.00
0000010264 XXXX XXXXXXXX 67000.00 67000.00
0000010265 XXXXX X. XXXXXXXX 15000.00 15000.00
0000010266 XXXXX X. XXXXXXX 30000.00 30000.00
0000000000 XXXXXX XXXXXX 47000.00 47000.00
0000010261 XXXXX X. XXXXXX 147000.00 147000.00
0000010227 CHAN SHIN HONG 100000.00 100000.00
0000010123 X. XXXXXX AND COMPANY INC. 55000.00 55000.00
0000010218 XXXXXX X. XXXXXX 95000.00 95000.00
0000010207 LIGHTS ON 9,INC. 24000.00 24000.00
0000010134 MATTI'S CAFE CORP. 420000.00 420000.00
0000000000 XXXXX X. XXXXXXX 38000.00 38000.00
0008882079 XXXXXX PROPERTIES 325000.00 325000.00
0000010250 XXXXXX'X CHOICE, INC. 85000.00 85000.00
0008882086 TENDER MERCIES CHILD CARE & LE 250000.00 250000.00
0001044403 XXXXX X. XXXX 10000.00 10000.00
0001044809 XXXXXXXX XXXXXXX 10000.00 10000.00
0001044483 XXXXXX X. XXXXX 12000.00 12000.00
0009013168 XXXXXXX XXXXXXXXX XX. 12000.00 12000.00
0009013147 XXXXX X. XXXXX 12000.00 12000.00
0009013066 XXXXX X. XXXXXXX XX. 12850.00 12850.00
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Page 2
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
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Page 3
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
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0001044059 XXXXXXX X. XXXXXX 36000.00 36000.00
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0000000000 XXXXXXX XXXXXXX 40000.00 40000.00
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Page 4
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001043189 XXXXXX X. XXXXX 49500.00 49500.00
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0001039290 XXXXXXX X. XXXXXXXX 52460.00 52460.00
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0009013284 XXXXXXXX X. XXXXXXX 54000.00 54000.00
0000000000 XXXXX XXXXXX 54400.00 54400.00
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0001043521 XXXXXX XXXXXX 58400.00 58400.00
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0001043214 XXXXXX XXXXX 59925.00 59925.00
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0001045313 XXXX X. XXXXX 64000.00 64000.00
0000000000 XXXXX X. XXXXXXXX 64200.00 64200.00
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Page 5
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001044208 XXXXXX XXXXXX 65500.00 65500.00
0001044435 XXXXXXX XXXXXXXXX 66000.00 66000.00
0001041867 XXXXX X. XXXXXXXX 66300.00 66300.00
0001042829 XXXXXXXX X. XXXXXX 66500.00 66500.00
0000000000 XXXXX X. XXXXXXX 66700.00 66700.00
0001043086 XXXXXXX XXXXXX 67000.00 67000.00
0001039689 XXXXX XXXXXXX 67500.00 67500.00
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0001043085 XXXXXXXX X. XXXXXXX 68000.00 68000.00
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0001044604 XXXXXX X. XXXXX 69700.00 69700.00
0001040508 XXXXX X. XXXXX 70000.00 70000.00
0001044264 XXXX X.XXXXXX NKA XXXX X.XXXXX 70000.00 70000.00
0001044690 XXXXXXX X. XXXXXXXXX 70000.00 70000.00
0000000000 XXXXXX X. XXXXXXX 70125.00 70125.00
0001042876 XXXXXX XXX 70400.00 70400.00
0001044455 XXX XXXXXXXXXXX 71000.00 71000.00
0001042546 XXXXXXXX X. XXXXXXXX 71500.00 71500.00
0001041992 XXXXX X. XXXXXXXX 72000.00 72000.00
0001044025 XXXXXXXX XXXXXX 72000.00 72000.00
0000000000 XXXXX XXXXXX 72250.00 72250.00
0001044652 XXXXX XXXXXXX XXXXXXX 72500.00 72500.00
0001041786 XXXXXXXXX X. XXXXXXX 73000.00 73000.00
0001044842 XXXX XXXXXXX 74000.00 74000.00
0001044303 XXXXXX X. XXXXXXXXX 74000.00 74000.00
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0001042068 XXXXXX XXXXXXX 75000.00 75000.00
0001043449 XXXXXX XXXXXX 75600.00 75600.00
0000000000 XXXXXX XXXXX 76000.00 76000.00
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Page 6
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
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0001043358 XXXXXXX X. XXXXXXXX 90000.00 90000.00
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0001044246 XXXXXXXX X. XXXXXX 91800.00 91800.00
0000000000 XXXXX XXXXX 92700.00 92700.00
0001044444 XXXXXX X. XXXXXX 92800.00 92800.00
0001044248 XXXXX XXXXXX 94000.00 94000.00
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0001046161 XXXXXX X. XXXX 96000.00 96000.00
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0001045766 XXXXXXX X. XXXXX 99000.00 99000.00
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0000000000 XXXX XXXXXX XXXXXXX 100000.00 100000.00
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0001042047 XXXXXX XXXXXXXXXX XXXXXXX 100000.00 100000.00
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0001043605 XXXXXXX X. XXXXXXX 101600.00 101600.00
0000000000 XXXXXXX XXXXXXXX 102500.00 102500.00
0001034260 XXXX XXXXXXX 103000.00 103000.00
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0001046492 XXXXXX XXXXXX 105600.00 105600.00
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Page 7
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001043499 XXXXXX X. XXXXXX 123300.00 123300.00
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0001044957 XXXX X. XXXXXXXX 123750.00 123750.00
0001042647 XXXXX X. XXXXXXX 124000.00 124000.00
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0000000000 XXXXXX XXXXXXXX 125000.00 125000.00
0001045114 XXXXXXXX XXXXXXX 125000.00 125000.00
0001043307 XXXXX XXXXX 126200.00 126200.00
0001043504 XXXXXX XXXXXXXXX XXXXXXX XX. 126500.00 126500.00
0001041027 XXXXXX X. XXXXXXXXX 127000.00 127000.00
0001044591 XXXXXX X. XXXXX 127260.00 127260.00
0001041550 XXXXXXXXXXX X. XXXXX 127420.00 127420.00
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0001043295 XXXXXXXXX XXXXXX 140250.00 140250.00
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0001043216 XXXXX XXXXXXXX 142000.00 142000.00
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0001039295 XXXXX XXXXXXXXXX 143250.00 143250.00
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Page 8
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
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0001043368 XXXXX XXXXXX 27000.00 27000.00
0001043398 XXXXX X. XXXXXXXXXX 70800.00 70800.00
0001043608 XXXXX XXXXX 76500.00 76500.00
0001043636 XXXXXX XXXXXXXX 73600.00 73600.00
0001043759 XXXXXXX X. XXXXXXX 125100.00 125100.00
0001043761 XXXXXXX X. XXXXXXX 57275.00 57275.00
0001044244 XXXXXXX X. X'XXXXX 83000.00 83000.00
0001044515 XXX XXXXX XX. 46750.00 46750.00
0001044556 XXXXXX XXXXXX 119000.00 119000.00
0001044618 XXXXX XXXXXXXXXX 118000.00 118000.00
0001044707 XXXXX XXX XXXXX 110000.00 110000.00
0001044716 XXXXX X. XXXXXXXXX 23500.00 23500.00
0001044717 XXXX X. XXXXXX 109800.00 109800.00
0001044820 XXXXX XXXXXX 30000.00 30000.00
0001044898 XXXXXX XXXXXX 28000.00 28000.00
0001044955 XXXX X. XXXXXXXX 149400.00 149400.00
0001045086 XXX X. XXX 53500.00 53500.00
0001045179 XXXXXXX X. XXXXXX 20500.00 20500.00
0001045197 XXXX XXXXXX 28900.00 28900.00
0001045205 XXXXX X. XXXX XX. 25750.00 25750.00
0001045221 XXXXXXXX XXXXXXXX 11300.00 11300.00
0000000000 XXX XXXXX 96300.00 96300.00
0000000000 XXXXXXX X. XXXXXXX 51000.00 51000.00
0001045557 XXXXXX X. XXXXXXX 21688.00 21688.00
0001045568 XXXXXXX X. XXXXXXX 45000.00 45000.00
0001045585 XXXXX X. XXXX 147500.00 147500.00
0001045590 XXXXXX X. XXXXXXX 88500.00 88500.00
0001045671 XXXX XXXXXX 15000.00 15000.00
0001045680 XXXX XXXXXXX 70200.00 70200.00
0001045682 XXXXXX X. XXXXXX XX. 64000.00 64000.00
0001045690 XXXXXX XXXXXXXX 52200.00 52200.00
0001045707 XXXXXX XXXXX XX. 35500.00 35500.00
0001045731 XXXXXX XXXXXXXX 55000.00 55000.00
0001045764 XXXXXXX X. XXXXXXX 47700.00 47700.00
0001045937 XXX XXXXXX 125000.00 125000.00
0001045990 XXXX X. XXXX 87700.00 87700.00
0001045998 XXXXXX XXXXXX 61500.00 61500.00
0001046077 XXXXXXXX XXXXX 89100.00 89100.00
0001046079 XXXXXXXX X. XXXXXXX 26000.00 26000.00
0001046097 XXXX XXXXXXXXX 13555.00 13555.00
0001046098 XXXXXXX XXX 70000.00 70000.00
0001046181 XXXX XXXXXXX 26000.00 26000.00
0001046185 XXXXXXX X. XXXXXXXX 80820.00 80820.00
0001046192 XXXXXX X. XXXXXXX 80750.00 80750.00
0001046218 XXXXXX XXXXXXX 31500.00 31500.00
0001046223 XXXXX X. MASSIMO 210000.00 210000.00
0001046457 XXXXX X. XXXXX 21375.00 21375.00
0001046477 XXXXXXX X. XXXXXX 157500.00 157500.00
Page 9
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001046486 XXXXX XXXXXXX 130500.00 130500.00
0001046522 XXX XXXXXX 144500.00 144500.00
0001047190 XXXX XXXXXXXXX 130500.00 130500.00
0001047215 PASTOR XXXXXX 130500.00 130500.00
0000000000 XXXXX XXXXXXX 20000.00 20000.00
0009012939 XXXXXX XXXXXXXX 55000.00 55000.00
0009013100 XXXXXXXX XXXXXX 175000.00 175000.00
0009013119 XXXXXX X. XXXXXXXXX 51250.00 51250.00
0009013156 XXXXXX X. XXXXXX 22000.00 22000.00
0009013277 XXXXX X. XXXXX 55250.00 55250.00
0009013298 XXXXXXXXX X. XXXXXXX 18000.00 18000.00
0009013302 XXXXXX X. XXXXX 45000.00 45000.00
0000000000 XXXX X. XXXXXXXX XX. 15000.00 15000.00
0000000000 XXXXX XXXXXXX MESSADO 39100.00 39100.00
0001039380 XXXXXXXX 20800.00 20800.00
0001040562 XXXXXXX 59400.00 59400.00
0001042880 SKETTINI 90000.00 90000.00
0001043162 XXXXXXXX 74400.00 74400.00
0001043463 XXXXXXXX 80000.00 80000.00
0000000000 XXXXX 26000.00 26000.00
0001043821 XXXXXXXX 110000.00 110000.00
0001043886 XXXXX 148000.00 148000.00
0001043916 XXXXX 140400.00 140400.00
0001044156 XXXXXX 51000.00 51000.00
0001044423 XXXXX 30000.00 30000.00
0001044703 BUGEL 135000.00 135000.00
0001044793 XXXXXXX 32900.00 32900.00
0001044931 XXXXXX 67500.00 67500.00
0001044992 ANTILA 15000.00 15000.00
0000000000 XXXXXXX 58500.00 58500.00
0001045068 XXXXXXX 54400.00 54400.00
0001045217 XXXXX 41850.00 41850.00
0001045242 CHILDRESS 135000.00 135000.00
0001045360 HASLAM 46000.00 46000.00
0001045388 XXXXXX 24000.00 24000.00
0001045427 XXXXX 86400.00 86400.00
0001045601 XXXXXX 40000.00 40000.00
0001045625 BEAN 35250.00 35250.00
0001045655 XXXXX 92800.00 92800.00
0001045691 XXXXXX 20000.00 20000.00
0001045701 XXXXX 41250.00 41250.00
0001045801 XXXX 24000.00 24000.00
0001045837 XXXXX 100000.00 100000.00
0001045838 YELLEMATY 40000.00 40000.00
0001045860 XXXXXXX 36200.00 36200.00
0001045967 XXXX 12700.00 12700.00
0001045969 XXXXXX 54000.00 54000.00
0000000000 PINCHIAROLI 75000.00 75000.00
0001046003 XXXXX 48800.00 48800.00
0001046007 XXXXXX 41000.00 41000.00
0001046010 XXXXXX 15000.00 15000.00
0000000000 XXXXX 204000.00 204000.00
0001046027 STRAIT 202500.00 202500.00
0001046029 XXXXXX 85000.00 85000.00
0000000000 XXXXX 223200.00 223200.00
0001046178 XXXXX 40500.00 40500.00
0000000000 XXXXX 78400.00 78400.00
0001046184 XXXXXXX 25000.00 25000.00
Page 10
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001046204 XXXXX 211500.00 211500.00
0001046265 XXXXXXXX 22400.00 22400.00
0001046282 BIRKS 20000.00 20000.00
0001046283 XXXXX 67500.00 67500.00
0001046301 XXXXX 147900.00 147900.00
0001046309 XXXXXXXX 202500.00 202500.00
0001046353 XXXXXX 69000.00 69000.00
0001046390 LINDSAY 20000.00 20000.00
0001046414 XXXXXX 19500.00 19500.00
0001046437 XXXXXXX 56000.00 56000.00
0001046494 XXXXXXX 130500.00 130500.00
0001046524 PATELLA 103600.00 103600.00
0001046597 XXXXX 196000.00 196000.00
0000000000 XXXXXXXX 65700.00 65700.00
0001046787 XXXXXXX 40000.00 40000.00
0001046865 XXXXXX 42000.00 42000.00
0001046970 XXXXX 20500.00 20500.00
0001047051 XXXXXX 100000.00 100000.00
0001047230 XXXXXX 100000.00 100000.00
0009012842 XXXXXXXXX 30500.00 30500.00
0009013185 DOVE 30000.00 30000.00
0009013205 XXXXXXXXXX 53000.00 53000.00
0009013210 KIYLER 40000.00 40000.00
0009013244 XXXX 20000.00 20000.00
0009013296 XXXX 50000.00 50000.00
0009013300 XXXXXX 25400.00 25400.00
0009013325 XXXXX 14600.00 14600.00
0009013329 XXXXXX 77000.00 77000.00
0009013330 XXXX 16500.00 16500.00
0009013333 XXXX 61000.00 61000.00
0009013346 XXXXXXXX 46600.00 46600.00
0000000000 XXXXX 29000.00 29000.00
0009013370 XXXXXX 22500.00 22500.00
0009013379 XXXXXXXX 35000.00 35000.00
0009013399 XXXXXXX 10000.00 10000.00
0009013410 XXXXXXXXX 42600.00 42600.00
0009013440 XXXXXXX 16000.00 16000.00
0001043144 XXXXXX XXXXXXX 128700.00 128700.00
0001041305 XXXX X. XXXXXXXXX 75000.00 75000.00
0001041188 XXXXX XXXXXX XXXXX 246000.00 246000.00
0001041598 XXXXXX X. XXXXXXXX 240000.00 240000.00
0001043783 XXXXXXX XXXXXXX 80000.00 80000.00
0001040634 XXXXX X. XXXXX 220000.00 220000.00
0001036742 SCOTT J. ROBERTSON 70000.00 70000.00
0001029278 AMIR HUGH ROBINSON 367500.00 367286.28
0001033109 LAWRENCE J. ROSENTHAL 254400.00 254400.00
0001043794 BEVERLEY ROGERS 35000.00 35000.00
0001035964 SUBIR RAY 160000.00 160000.00
0001042805 CHARLES NORRIS 25000.00 25000.00
0001036711 MICHAEL WHITE 115000.00 115000.00
0001039818 MICHAEL F. CROWLEY 34250.00 34250.00
0001042244 ROBERT P. MILEWSKI 340000.00 340000.00
0001046028 JANELLE V. CRANMER 236000.00 236000.00
0001039018 YVETTE A. VOGEL 260000.00 259570.43
0001043124 CAROLE S. NICHOLSON 243750.00 243750.00
0001040497 JERRY PIERRE 270000.00 270000.00
0001043938 LINDA M. VITO 256000.00 256000.00
0001044010 EMIL DISPENZA 232000.00 232000.00
Page 11
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
0001034603 HOWARD EDWARD CROSS JR. 140000.00 140000.00
0001039392 HERBUCHNER WHITE IV 267750.00 267750.00
0001038502 RASHAD CLARK 259200.00 259200.00
0001041366 W MICHAEL FURSE 382500.00 380940.38
0001041548 JACK C. JEFFCOAT 351900.00 350246.72
0001035465 BRIAN P. MANGIN 30000.00 29999.39
0001039465 SHARON G. YORK 50100.00 50100.00
0001037737 SHELDON R. NEWCOMER 98000.00 97788.62
0001040220 B PAUL SOSTER 295000.00 295000.00
0001042314 KENNETH L. HILL 260000.00 260000.00
0001035827 THOMAS A. PLOUFFE 47800.00 47652.34
0001039585 PEARL V. HOLDER AKA PEARL V. S 229500.00 229500.00
0001040644 JONATHON SETZER 314910.00 314910.00
0001040825 THAD E. GILLIAM 63200.00 63096.00
0001040937 EDITH WILSON 263700.00 262944.04
0001046034 JANELLE V. CRANMER 29500.00 29500.00
0001045554 RICHARD G. WELGER 50000.00 50000.00
0001045820 MALI PETITE 365000.00 365000.00
0001046054 MICHAEL MOSENSON 355000.00 355000.00
0001046225 DIEGO F. RIOS 40000.00 40000.00
0001046272 PAMELA YOUNG ERFF 65000.00 65000.00
0009013018 JAMES M. ZINKAND 268000.00 268000.00
0009013282 SHAWN S. SIMON 80000.00 80000.00
0001046471 VITEO 250000.00 250000.00
0001046496 BLANDO 54000.00 54000.00
0001046845 NASO 25000.00 25000.00
3019800752 KATHLEEN EASTERLING 62900.00 62900.00
3019804607 DENNIS ROGER ADAMS 33750.00 33750.00
3019804651 JAY E. BLOSFIELD 41250.00 41250.00
3019804681 WILLIAM D. STICKLEY 16225.00 16225.00
3019806440 KAREN WRIGHT 27500.00 27500.00
3019806487 CRAIG GRAHAM 100000.00 100000.00
3019806717 JONATHAN D. RUDMAN 60000.00 60000.00
3019806738 LENA WHITEHEAD 76500.00 76500.00
3019806836 CLARENCE C. CHASE, JR. 145000.00 145000.00
3019806865 ROBERT W. MELLEY 73100.00 73100.00
3019837847 SYLVESTER A. DUDLEY 101915.00 101915.00
3019838486 ERNESTO ROMERO 96000.00 96000.00
3019839817 BABETTA LOVERDI 30000.00 30000.00
3019840089 LEO D. MICKEY 136000.00 136000.00
3019840374 LEWIS F. BIANCONE 33750.00 33750.00
3019841011 GEORGE R. BOYDEN 54000.00 54000.00
3019841187 PEARLIE PAISLEY 165750.00 165750.00
3019841215 DAVID G. GILMAN, JR. 174600.00 174600.00
3019841305 OLGA FUENTES SANCHEZ 21000.00 21000.00
3019841380 TERRY W. MULLER 105000.00 105000.00
3019841383 COREY SCOTT 22750.00 22750.00
3019841394 ROSALYN ESSEX-COPE 133450.00 133450.00
3019841414 ALICE TOMLIN 25000.00 25000.00
3019892232 ABRAHAM TOWNES 111700.00 111700.00
3019892256 CLIFFORD J. JACKSON, SR. 46750.00 46750.00
3019892359 THERESA C. OLIVER 20000.00 20000.00
3039838677 BARBARA WEIGEL 49000.00 49000.00
3100000382 MICHELE C ORITZ-ROMAN 49396.00 49396.00
3100000385 MERLIN J. LAYTON JR. 21000.00 21000.00
3100003081 YVONNE A. HAZZARD 53000.00 53000.00
3100003331 HARVEY COLLINS 29900.00 29900.00
3000000080 ESTHER A TONEY 160000.00 160000.00
Page 12
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
3019800706 CARLOS J. VELAZQUEZ 40000.00 40000.00
3019800759 JOAN McGRATH 38500.00 38500.00
3019804494 DENNIS R. SPRADLEY 40000.00 40000.00
3019804530 ORVAL N. CLEGG, JR. 30400.00 30400.00
3019804561 MAGGIE WILLIS 60000.00 60000.00
3019804567 DONALD R. JACKSON 32000.00 32000.00
3019804586 MARY SPEARMAN 42400.00 42400.00
3019804631 BRUCE STAWICKI 56000.00 56000.00
3019804719 PAMELA SUE STOFLETH 52000.00 52000.00
3019806037 SHIRLEY DELAIR 42750.00 42750.00
3019806077 LORETTA STALLWORTH 18750.00 18750.00
3019806279 MODESTINI H. ROMANO 113050.00 113050.00
3019806295 FRANK B. BEY 23400.00 23400.00
3019806300 FRANK B. BEY 25200.00 25200.00
3019806301 PATRICIA M COLEMAN 28000.00 28000.00
3019806313 RALPH E. UHRICK 100800.00 100800.00
3019806377 KEVIN GAMELLI 60000.00 60000.00
3019806455 JEANNE M. VOEGTLE 41600.00 41600.00
3019806510 STEPHEN R. WEIKEL, SR. 18850.00 18850.00
3019806571 MATHY STANISLAUS 122400.00 122400.00
3019806584 GREGORY A. VENTRESCA 125000.00 125000.00
3019806618 HOWARD ROSENSTONE 67000.00 67000.00
3019806636 STEPHEN R. WEIKEL 37100.00 37100.00
3019806650 DEMETRIOS MARGETIS 211200.00 211200.00
3019806660 HAROLD B. GOLDEN 212000.00 212000.00
3019806692 ELIZABETH COFFIELD 44625.00 44625.00
3019806698 LARRY A. COLBERT 36800.00 36800.00
3019806714 EDWARD C. HAWK 176125.00 176125.00
3019806719 MICHAEL G. TOWNSEND 57600.00 57600.00
3019835960 CHEN HWA HSIAO 135000.00 135000.00
3019837193 WILLIAM J. SEVERINO 96250.00 96250.00
3019837449 OSCAR PANIAGUA 157250.00 157250.00
3019837488 MARK A FRANCIS 30600.00 30600.00
3019837845 EARL BROOKS 64720.00 64720.00
3019838044 WILLIAM GEHRINGER JR 115650.00 115650.00
3019838462 SCOTT P. KUHL 75000.00 75000.00
3019839186 PAMELA MARTIN 36000.00 36000.00
3019839449 JOANNIE A ROSE 110500.00 110500.00
3019839511 EDWARD L. HECKSTALL 131750.00 131750.00
3019839531 JOSEPH N. GRASSO 40000.00 40000.00
3019839597 SHEILA VOELKER 107200.00 107200.00
3019839692 ZETTY PETERSON 119000.00 119000.00
3019839696 KENNETH PIERCE COOPER 98000.00 98000.00
3019839750 GUILAINE MOMPOINT 100800.00 100800.00
3019839981 JOSE A. PEREZ 101700.00 101700.00
3019840053 SALVATORE POLERA 80000.00 80000.00
3019840131 ANNA MAZUROWSKI 74000.00 74000.00
3019840167 PRINCETTA CHAPPELL 36000.00 36000.00
3019840177 H. ROBERT MOORE 42600.00 42600.00
3019840413 ROBERT A. GOODALE 115000.00 115000.00
3019840551 JOHN RENNARD 59500.00 59500.00
3019840557 LUIS G. BALAGUER 127500.00 127500.00
3019840609 PATRICK ARCHER 106250.00 106250.00
3019840612 MICHAEL D'ELIA 138550.00 138550.00
3019840714 GERMAINE D'AMICO 144500.00 144500.00
3019840718 WILLIAM L. BOYNES 51000.00 51000.00
3019840808 DIAN JOHNSON COOPER 67500.00 67500.00
3019840886 ESPERANZA HUAPAYA 88000.00 88000.00
Page 13
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
3019840956 JOHN R. IANTOSCA, JR. 216000.00 216000.00
3019840972 MICHAEL YANNARELLA 180000.00 180000.00
3019840983 JOHN D. O'CALLAGHAN 195000.00 195000.00
3019840984 WILLIAM A. WHITE 28000.00 28000.00
3019840985 JAMES M. PHILLIPS 120000.00 120000.00
3019841008 ALAN J. MASON 105000.00 105000.00
3019841016 VICENTA TLATENCHI 136000.00 136000.00
3019841019 DONTRELL HARRIS 80500.00 80500.00
3019841071 PABLO GIRONA 126400.00 126400.00
3019841072 DAVID D'AMORE 156000.00 156000.00
3019841088 DELWIN REYES 77000.00 77000.00
3019841093 SHAKIR AWWAL 44000.00 44000.00
3019841095 JOSEPH P. REITANO 107950.00 107950.00
3019841105 ANITA DAVISON 80000.00 80000.00
3019841122 MILDRED TORTORELLO 150000.00 150000.00
3019841130 ELIZABETH BETZ 21750.00 21750.00
3019841157 ROXANNE BENDER 102000.00 102000.00
3019841158 JOYCE DURHAM 65000.00 65000.00
3019841237 FRANK CALVIN CAUL, JR. 24000.00 24000.00
3019841246 RICHARD ISAAC 81000.00 81000.00
3019841323 BRITTINA BUTLER 97500.00 97500.00
3019841327 CYNTHIA MCCALLISTER 54400.00 54400.00
3019841336 KENNETH GAIGE 109600.00 109600.00
3019841337 LAYOTA KINSEL 21000.00 21000.00
3019841339 BILLY DAVENPORT 125600.00 125600.00
3019841345 LEVAN W. EASLEY, JR. 124800.00 124800.00
3019841406 MARIELA FONTALVO 172000.00 172000.00
3019841433 PATRICK WELLINGTON 170000.00 170000.00
3019892058 GIOVANNI MEJIA 72800.00 72800.00
3019892085 ERVIN JETER 48150.00 48150.00
3019892157 WILMA C. HOWARD 34560.00 34560.00
3019892200 WILLIE A. BROWN 55250.00 55250.00
3019892218 MICHAEL HUGH BEAZLEY 78750.00 78750.00
3019892224 MICHAEL G. MARCHANT 38500.00 38500.00
3019892229 LOVELENE E. JOHNSON 37000.00 37000.00
3019892236 LISA R FLANAGAN 101600.00 101600.00
3019892251 CHARLES M. GIBSON 35000.00 35000.00
3039834472 TERRANCE JONES 14664.00 14664.00
3039835087 HELENA POC 69500.00 69500.00
3039840495 LARRY S. GROSSMAN 75000.00 75000.00
3039840592 MARY LAMB 26500.00 26500.00
3039840932 JOHN BURKHARDT 71000.00 71000.00
3039841311 VITO IANUZELLI 55000.00 55000.00
3100000672 THOMAS STEWART 28000.00 28000.00
3100001303 PATRICIA A TYSON 225000.00 225000.00
3100002514 JACQUELINE STOVER 91800.00 91800.00
3100003326 JOSEPH F. IMBIMBO JR. 37219.00 37219.00
3100003327 FRANK C. LIU 70200.00 70200.00
3100003328 ROBERT A. MINNICH JR. 74800.00 74800.00
3100003329 JOHN MCCORMACK JR. 175000.00 175000.00
3119839150 JAMES W. ADELMANN 85000.00 85000.00
3119839431 JOY A. FLETCHER 102200.00 102200.00
3119840009 LOUIS JOHN DELLO 126000.00 126000.00
3119840675 ADELAIDE L. MORENO 41250.00 41250.00
3119840740 VINCENT A. GALEONE 174000.00 174000.00
3139839122 MAL S. KIM 36778.00 36778.00
3139840793 EDWARD A. SCOTT 10500.00 10500.00
3039839646 MICHAEL R. ROUTH 64512.00 64512.00
Page 14
LOAN ID CUST NAME ORIGINAL BALANCE CURRENT BALANCE
------- --------- ---------------- ---------------
3100003229 BENNY L. MCCANTS 239000.00 239000.00
3119839916 DAVID CAVICCHIA 342000.00 342000.00
3019830992 PATRICIA MELE 318000.00 318000.00
3019837808 ALECIA MARZULLO 329963.00 329963.00
3019838311 ANTHONY S MORELL 238500.00 238500.00
3019838480 MARIO MANCHENO 250000.00 250000.00
3019840494 ROBERT GUEITS, JR. 238500.00 238500.00
3019840991 THOMAS HENRY 310250.00 310250.00
3019841161 NEIL DERN 280000.00 280000.00
3039836875 PATRICIA LARRIER 14000.00 14000.00
3039839255 ANTHONY MASSIMO 150000.00 150000.00
3139841106 THOMAS H. CODY 51769.00 51769.00
Page 15
EXHIBIT A
FORM OF SUBSEQUENT
TRANSFER AGREEMENT
This SUBSEQUENT TRANSFER AGREEMENT, dated as of December 28, 1998 (the
"Subsequent Transfer Date"), is entered into by and among ABFS 1998-4, INC., as
unaffiliated seller (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC.,
as an originator ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an
originator ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP., as an
originator ("NJMIC") (ABC, Upland and NJMIC are collectively referred to herein
as the "Originators"), and PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as depositor (the "Depositor").
W I T N E S S E T H:
Reference is hereby made to (x) that certain Unaffiliated Seller's
Agreement, dated as of November 1, 1998 (the "Unaffiliated Seller's Agreement"),
by and among the Unaffiliated Seller, the Originators and the Depositor, and (y)
that certain Indenture, dated as of November 1, 1998 (the "Indenture"), by and
between the ABFS Mortgage Loan Trust 1998-4 (the "Trust") and The Bank of New
York, as indenture trustee (the "Indenture Trustee"). Pursuant to the
Unaffiliated Seller's Agreement, the Originators have agreed to sell, assign and
transfer, and the Unaffiliated Seller has agreed to accept, from time to time,
Subsequent Mortgage Loans (as defined below), and the Unaffiliated Seller has
agreed to sell, assign and transfer, and the Depositor has agreed to accept,
from time to time, such Subsequent Mortgage Loans. The Unaffiliated Seller's
Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced
by the execution and delivery of a Subsequent Transfer Agreement such as this
Subsequent Transfer Agreement.
The assets sold to the Unaffiliated Seller, and then sold to the
Depositor pursuant to this Subsequent Transfer Agreement consist of (a) the
Subsequent Mortgage Loans in Pool I 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 $__________.
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 Transfer
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. Sale, Assignment and Transfer. In consideration of the
receipt of $__________ (such amount being approximately 100% of the Aggregate
Principal Balance of the Subsequent Mortgage Loans) from the Unaffiliated
Seller, each of the Originators hereby sells, assigns and transfers to the
Unaffiliated Seller, without recourse, all of the their respective right, title
and interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.
In consideration of receipt of $__________ (such amount being
approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans) from the Depositor, the Unaffiliated Seller hereby sells, assigns and
transfers to the Depositor, without recourse, all of its right, title and
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.
In connection with each such sale, assignment and transfer, 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.
Section 3. Representations and Warranties of the Originators and the
Unaffiliated Seller. With respect to each Subsequent Mortgage Loan, each of the
Originators and the Unaffiliated Seller hereby remake each of the
representations, warranties and covenants made by the Originators and the
Unaffiliated Seller in Section 3.03 of the Unaffiliated Seller's Agreement, on
which the Depositor relies in accepting the Subsequent Mortgage Loans. Such
representations and warranties speak as of the Subsequent Transfer Date unless
otherwise indicated, and shall survive each sale, assignment, transfer and
conveyance of the Subsequent Mortgage Loans to the Depositor.
Each of the Originators and the Unaffiliated Seller hereby acknowledge
that the Depositor is transferring the Subsequent Mortgage Loans to the Trust,
and that the Trust is pledging the Subsequent Mortgage Loans to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, on the date
hereof. Each of the Originators and the Unaffiliated Seller hereby acknowledge
and agree that the Depositor may assign to the Trust, and the Trust may assign
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, its interest in the representations and warranties set forth in this
Section 3. Each of the Originators and the Unaffiliated Seller agrees that, upon
such assignment to the Trust and pledge to the Indenture Trustee, such
representations, warranties, agreements and covenants will run to and be for the
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benefit of the Indenture Trustee and the Indenture Trustee may enforce, without
joinder of the Depositor or the Trust, the repurchase obligations of the
Unaffiliated Seller and the Originators set forth herein with respect to
breaches of such representations, warranties, agreements and covenants.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Trust, the
Indenture Trustee, the Servicer, 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 this Section 3, 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. Such repurchase 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 Indenture Trustee, the Note Insurer and the
Noteholders.
Section 5. Amendment. This Subsequent Transfer Agreement may be amended
from time to time by the Originators, the Unaffiliated Seller and the Depositor
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
TRANSFER 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 TRANSFER
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
Section 7. Counterparts. This Subsequent Transfer 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
Transfer 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.
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Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Transfer Agreement and are
incorporated into this Subsequent Transfer Agreement for all purposes.
Section 11. Intent of the Parties; Security Agreement. The Originators,
the Unaffiliated Seller and the Depositor intend that the conveyance of all
right, title and interest in and to the Subsequent Mortgage Loans and related
assets described above by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor pursuant to this Subsequent Transfer
Agreement shall be, and be construed as, a sale of the Subsequent Mortgage Loans
from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller
to the Depositor. It is, further, not intended that such conveyances be deemed
to be pledges of the Subsequent Mortgage Loans by the Originators to the
Unaffiliated Seller and by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators of the Unaffiliated Seller, as the
case may be. However, in the event that the Subsequent Mortgage Loans are held
to be property of the Originators or the Unaffiliated Seller, or if for any
reason this Subsequent Transfer Agreement is held or deemed to create a security
interest in the Subsequent Mortgage Loans, then it is intended that: (a) this
Subsequent Transfer Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the Uniform Commercial Code of any
other applicable jurisdiction; (b) the conveyance provided for in this
Subsequent Transfer Agreement shall be deemed to be a grant by the Originators
to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor of a
security interest in all of the Originators' and the Unaffiliated Seller's
respective right, title and interest, whether now owned or hereafter acquired,
in and to the Subsequent Mortgage Loans and related assets described above. The
Originators and the Unaffiliated Seller, as applicable, shall, to the extent
consistent with this Subsequent Transfer Agreement, take such reasonable actions
as may be necessary to ensure that, if this Subsequent Transfer Agreement were
deemed to create a security interest in the Subsequent Mortgage Loans and the
other property described above, such interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Subsequent Transfer Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Originators, the Unaffiliated Seller and the Depositor
have caused this Subsequent Transfer Agreement to be duly executed by their
respective officers as of the day and year first above written.
AMERICAN BUSINESS CREDIT, INC.
By: ____________________________
Name:
Title:
HOMEAMERICAN CREDIT, INC. D/B/A
UPLAND MORTGAGE
By: ____________________________
Name:
Title:
NEW JERSEY MORTGAGE AND
INVESTMENT, INC.
By: ____________________________
Name:
Title:
ABFS 1998-4, INC.
By: ____________________________
Name:
Title:
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: ____________________________
Name:
Title:
A-1
