INDENTURE
dated as of July 6, 2000
by and between
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2000-2,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Table of Contents
Page
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ARTICLE I DEFINITIONS...........................................................................................2
Section 1.01. General Definitions..........................................................................2
ARTICLE II THE NOTES............................................................................................2
Section 2.01. Forms Generally..............................................................................2
Section 2.02. Form of Certificate of Authentication........................................................2
Section 2.03. General Provisions With Respect to Principal and Interest Payment............................2
Section 2.04. Denominations................................................................................3
Section 2.05. Execution, Authentication, Delivery and Dating...............................................3
Section 2.06. Registration, Registration of Transfer and Exchange..........................................4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Secured Notes...........................................5
Section 2.08. Payments of Principal and Interest...........................................................6
Section 2.09. Persons Deemed Owner.........................................................................8
Section 2.10. Cancellation.................................................................................8
Section 2.11. Authentication and Delivery of Secured Notes.................................................8
Section 2.12. Limitations on Transfer of the Secured Notes.................................................9
Section 2.13. Holding of Secured Notes....................................................................11
Section 2.14. Reserved....................................................................................11
Section 2.15. Release of Collateral.......................................................................11
ARTICLE III COVENANTS..........................................................................................12
Section 3.01. Payment of Secured Notes....................................................................12
Section 3.02. Maintenance of Office or Agency.............................................................12
Section 3.03. Money for Secured Note Payments to Be Held In Trust.........................................12
Section 3.04. Existence of Trust..........................................................................14
Section 3.05. Protection of Trust Estate..................................................................15
Section 3.06. Opinions as to the Trust Estate.............................................................16
Section 3.07. Performance of Obligations..................................................................16
Section 3.08. Investment Company Act......................................................................16
Section 3.09. Negative Covenants..........................................................................16
Section 3.10. Annual Statement as to Compliance...........................................................18
Section 3.11. Restricted Payments.........................................................................18
Section 3.12. Treatment of Secured Notes as Debt for Tax Purposes.........................................18
Section 3.13. Notice of Events of Default.................................................................18
Section 3.14. Further Instruments and Acts................................................................18
Section 3.15. Purpose.....................................................................................19
ARTICLE IV SATISFACTION AND DISCHARGE..........................................................................19
Section 4.01. Satisfaction and Discharge of Indenture.....................................................19
Section 4.02. Application of Trust Money..................................................................19
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ARTICLE V DEFAULTS AND REMEDIES................................................................................20
Section 5.01. Event of Default............................................................................20
Section 5.02. Acceleration of Maturity; Rescission and Annulment..........................................21
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...................22
Section 5.04. Remedies....................................................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim..................................................24
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Secured Notes....................24
Section 5.07. Application of Money Collected..............................................................25
Section 5.08. Limitation on Suits.........................................................................26
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest.......................27
Section 5.10. Restoration of Rights and Remedies..........................................................27
Section 5.11. Rights and Remedies Cumulative..............................................................27
Section 5.12. Delay or Omission Not Waiver................................................................27
Section 5.13. Control by Noteholders......................................................................28
Section 5.14. Waiver of Past Defaults.....................................................................28
Section 5.15. Undertaking for Costs.......................................................................28
Section 5.16. Waiver of Stay or Extension Laws............................................................29
Section 5.17. Sale of Trust Estate........................................................................29
Section 5.18. Action on Secured Notes.....................................................................30
Section 5.19. Application of the Trust Indenture Act......................................................31
ARTICLE VI THE INDENTURE TRUSTEE...............................................................................31
Section 6.01. Duties of Indenture Trustee.................................................................31
Section 6.02. Notice of Default...........................................................................32
Section 6.03. Rights of Indenture Trustee.................................................................33
Section 6.04. Not Responsible for Recitals or Issuance of Secured Notes...................................34
Section 6.05. May Hold Secured Notes......................................................................34
Section 6.06. Money Held in Trust.........................................................................34
Section 6.07. Eligibility, Disqualification...............................................................34
Section 6.08. Indenture Trustee's Capital and Surplus.....................................................34
Section 6.09. Resignation and Removal; Appointment of Successor...........................................34
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee....................................36
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture
Trustee.....................................................................................36
Section 6.12. Preferential Collection of Claims Against Trust.............................................37
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.......................................37
Section 6.14. Authenticating Agents.......................................................................38
Section 6.15. Review of Custodial Loan Files..............................................................39
Section 6.16. Indenture Trustee Fees and Expenses.........................................................40
Section 6.17. Representations and Warranties of the Indenture Trustee.....................................40
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ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.....................................................................41
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of
Noteholders.................................................................................41
Section 7.02. Preservation of Information; Communications to Noteholders..................................41
Section 7.03. Reports by Indenture Trustee................................................................42
Section 7.04. Reports by Trust............................................................................42
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES........................................42
Section 8.01. Account.....................................................................................42
Section 8.02. Payments; Statements........................................................................42
Section 8.03. Interest Payments. [.......................................................................42
Section 8.04. Principal Payments; Payment on Maturity Date................................................43
Section 8.05. Releases of Deleted Mortgage Loans..........................................................43
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information..................44
Section 8.07. Release of Trust Estate.....................................................................44
Section 8.08. Amendment to Sale and Servicing Agreement...................................................44
Section 8.09. Delivery of the Custodial Loan Files Pursuant to Sale and Servicing
Agreement...................................................................................44
Section 8.10. Termination of Servicer.....................................................................44
Section 8.11. Opinion of Counsel..........................................................................45
Section 8.12. Appointment of Collateral Agents............................................................45
Section 8.13. Trust Estate and Accounts Held for Benefit of the Note Purchaser............................45
ARTICLE IX SUPPLEMENTAL INDENTURES.............................................................................45
Section 9.01. Supplemental Indentures Without Consent of Noteholders......................................45
Section 9.02. Supplemental Indentures With Consent of Noteholders.........................................46
Section 9.03. Execution of Supplemental Indentures........................................................47
Section 9.04. Effect of Supplemental Indentures...........................................................48
Section 9.05. Conformity With Trust Indenture Act.........................................................48
Section 9.06. Reference in Secured Notes to Supplemental Indentures.......................................48
Section 9.07. Amendments to Governing Documents...........................................................48
ARTICLE X REDEMPTION OF NOTES..................................................................................48
Section 10.01. Redemption..................................................................................48
Section 10.02. Form of Redemption Notice...................................................................49
Section 10.03. Secured Notes Payable on Redemption.........................................................50
ARTICLE XI MISCELLANEOUS.......................................................................................50
Section 11.01. Compliance Certificates and Opinions........................................................50
Section 11.02. Form of Documents Delivered to Indenture Trustee............................................50
Section 11.03. Acts of Noteholders.........................................................................51
Section 11.04. Notices, etc., to Indenture Trustee, the Note Purchaser and Trust...........................52
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Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.......................................53
Section 11.06. Rules by Indenture Trustee..................................................................53
Section 11.07. Conflict With Trust Indenture Act...........................................................53
Section 11.08. Effect of Headings and Table of Contents....................................................54
Section 11.09. Successors and Assigns......................................................................54
Section 11.10. Separability................................................................................54
Section 11.11. Benefits of Indenture.......................................................................54
Section 11.12. Legal Holidays..............................................................................54
Section 11.13. Governing Law...............................................................................54
Section 11.14. Counterparts................................................................................54
Section 11.15. Recording of Indenture......................................................................54
Section 11.16. Trust Obligation............................................................................54
Section 11.17. No Petition.................................................................................55
Section 11.18. Inspection..................................................................................55
Section 11.19. Usury.......................................................................................55
Section 11.20. Third Party Beneficiary.....................................................................56
APPENDICES, SCHEDULES AND EXHIBITS
Appendix I Defined Terms
Exhibit A Form of Secured Note
Exhibit B
Exhibit C Form of Rule 144A Transfer Certificate
Exhibit D Form of Purchaser's Letter for Institutional Accredited Investor
Exhibit E Form of Transferee Certification-- Investment Company Act of 1940
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This INDENTURE, dated as of July 6, 2000 (as amended or supplemented
from time to time as permitted hereby, this "Indenture"), is between ABFS
MORTGAGE LOAN WAREHOUSE TRUST 2000-2, a Delaware statutory business trust
(together with its permitted successors and assigns, the "Trust" or the
"Issuer"), and The Chase Manhattan Bank, a New York banking corporation, as
indenture trustee (together with its permitted successors in the trust
hereunder, the "Indenture Trustee").
Preliminary Statement
The Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Secured Notes, Series 2000-2 (the
"Secured Notes"), as provided in this Indenture. All covenants and agreements
made by the Trust herein are for the benefit and security of the Holders of the
Secured Notes. The Trust is entering into this Indenture, and the Indenture
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Trust in accordance with its terms have been done.
Granting Clause
The Trust hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Secured Notes, all of the Trust's right, title and
interest (whether now owned or existing or at any time hereafter acquired or
arising) in and to (a) the Mortgage Loans in the Mortgage Loan Schedule attached
as Schedule I to the Assignments (including property that secures a Mortgage
Loan that becomes an REO Property), including the related Mortgage Loan File
(and including any surety agreements, in case of the business purpose loans),
including all payments of principal received, collected or otherwise recovered
after the Cut-Off Date for each Mortgage Loan, all payments of interest due on
each Mortgage Loan after the Cut-Off Date therefor whenever received and all
other proceeds received in respect of such Mortgage Loans, including any
prepayment penalties and any Qualified Substitute Mortgage Loan, (b) the Sale
and Servicing Agreement, (c) Insurance Proceeds, (d) any Assignments, (e) the
servicing rights relating to such Mortgage Loans, and (f) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid assets, including, without limitation, all insurance proceeds and
condemnation awards. Such Grants are made, however, in trust, to secure the
Secured Notes equally and ratably without prejudice, priority or distinction
between any Secured Note and any other Secured Note by reason of difference in
time of issuance or otherwise to secure (x) the payment of all amounts due on
the Secured Notes in accordance with their terms, (y) the payment of all other
sums payable under this Indenture and (z) compliance with the provisions of this
Indenture, all as provided in this Indenture. All terms used in the foregoing
granting clauses that are defined in Appendix I are used with the meanings given
in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Secured Notes may be adequately and effectively protected. In addition,
the Indenture Trustee agrees that it will acknowledge the Grant on each Transfer
Date of the related Mortgage Loans pursuant to the terms of the related
Assignment, provided that the conditions precedent to the pledge of such
Mortgage Loans contained in the Sale and Servicing Agreement are satisfied on or
prior to such Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the respective
meanings set forth in Appendix I for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of Default,
an Amortization Event or a Default known to the Indenture Trustee or of which
the Indenture Trustee has notice or knowledge, such reference shall be construed
to refer only to an Event of Default, an Amortization Event or a Default of
which the Indenture Trustee is deemed to have notice or knowledge pursuant to
Section 6.01(d). All other terms used herein that are defined in the Trust
Indenture Act (as hereinafter defined), either directly or by reference therein,
have the meanings assigned to them therein.
ARTICLE II
THE NOTES
Section 2.01. Forms Generally. The Secured Notes shall be substantially
in the form set forth at Exhibit A attached hereto and shall be issued solely in
the form of fully registered Definitive Notes and not in book-entry form. Each
Secured Note shall bear a sequential number. (For example, the first Secured
Note would be labeled 1, the second 2, and so forth). Any portion of the text of
any Secured Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Secured Note.
The Secured Notes may be produced in any manner determined by
the Trust, as evidenced by its execution thereof.
Section 2.02. Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Secured Note attached hereto at Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Secured Notes shall be designated generally as the "ABFS Mortgage
Loan Warehouse Trust 2000-2, Secured Notes, Series 2000-2".
The Secured Notes shall be issued in the form specified in
Section 2.01 hereof. The aggregate Note Principal Balance of Secured Notes that
may be authenticated and delivered under the Indenture is limited to
$200,000,000 of Secured Notes. With the exception of the Note Principal Balance,
the calculation of the Advance Amount reflected thereon and the Maturity Date,
each Secured Note shall have substantially the same terms as each other Secured
Note, including the interest rate, the Payment Date and the Redemption Date.
2
Subject to the provisions of Sections 3.01, 5.07, 5.09 and
8.02 of this Indenture, the principal of the Secured Notes shall be payable in
installments ending no later than the related Final Stated Maturity Date, unless
the unpaid principal of such Secured Notes become due and payable at an earlier
date by declaration of acceleration or call for redemption or otherwise.
All payments made with respect to any Secured Note shall be
applied first to the interest then due and payable on such Secured Note and then
to the principal thereof. All computations of interest accrued on any Secured
Note shall be made on the basis of a year of 360 days and the actual number of
days elapsed in the related Accrual Period.
Notwithstanding any of the foregoing provisions with respect
to payments of principal of and interest on the Secured Notes, if the Secured
Notes have become or been declared due and payable following an Event of Default
or an Amortization Event and such acceleration of maturity and its consequences
have not been rescinded and annulled, then payments of principal of and interest
on the Secured Notes shall be made in accordance with Section 5.07 hereof.
The Servicer will deliver to each of the Note Holder and the
Indenture Trustee, at the time of issuance of each Secured Note and in
connection with (i) the execution of the related Assignment by the Depositor,
Issuer and Indenture Trustee to effect the delivery by the Depositor to the
Issuer (and the Grant by the Issuer to the Indenture Trustee) of Mortgage Loans
pursuant to Section 2.12(b) and (ii) the issuance by the Issuer of a Trust Order
to authenticate additional Secured Notes pursuant to Section 2.11 hereof, the
Mortgage Loan Schedule that relate to such Secured Note. Each Secured Note shall
be secured by all of the Collateral, equally and ratably with each other Secured
Note issued hereunder.
Section 2.04. Denominations. The Secured Notes shall be issuable only
as registered Definitive Notes in the denominations equal to the Authorized
Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The
Secured Notes shall be executed on behalf of the Trust by an Authorized Officer
of the Owner Trustee, acting at the direction of the Certificateholders. The
signature of such Authorized Officer of the Owner Trustee on the Secured Notes
may be manual or by facsimile.
Secured Notes bearing the manual or facsimile signature of an
individual who was at any time an Authorized Officer of the Owner Trustee shall
bind the Trust, notwithstanding that such individual has ceased to be an
Authorized Officer of the Owner Trustee prior to the authentication and delivery
of such Secured Notes or was not an Authorized Officer of the Owner Trustee at
the date of such Secured Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Trust may deliver Secured Notes executed on
behalf of the Trust to the Authenticating Agent for authentication, and the
Authenticating Agent shall authenticate and deliver such Secured Notes as
provided in this Indenture and not otherwise.
3
Each Secured Note authenticated on the Closing Date shall be
dated the Closing Date. All other Secured Notes that are authenticated after the
Closing Date for any other purpose hereunder shall be dated the date of their
authentication.
No Secured Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Secured Note a certificate of authentication substantially in the form
provided for in Section 2.02 hereof, executed by the Authenticating Agent by the
manual signature of one of its Authorized Officers or employees, and such
certificate of authentication upon any Secured Note shall be conclusive
evidence, and the only evidence, that such Secured Note has been duly
authenticated and delivered hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange. The
Trust shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Trust shall provide for
the registration of Secured Notes and the registration of transfers of Secured
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Secured Notes and transfers of Secured Notes as
herein provided. The Indenture Trustee shall remain the Note Registrar
throughout the term hereof. Upon any resignation of the Indenture Trustee, the
Servicer, on behalf of the Trust, shall promptly appoint a successor, with the
approval of the Note Purchaser, or, in the absence of such appointment, the
Servicer, on behalf of the Trust, shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Secured
Note at the office or agency of the Trust to be maintained as provided in
Section 3.02 hereof, the Owner Trustee on behalf of the Trust, acting at the
direction of the Certificateholders, shall execute, and the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Secured Notes of any authorized denominations and
of a like aggregate Note Principal Balance.
At the option of the Holder, Secured Notes may be exchanged
for other Secured Notes of any authorized denominations, and of a like aggregate
Note Principal Balance, upon surrender of the Secured Notes to be exchanged at
such office or agency. Whenever any Secured Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Authenticating Agent shall
authenticate and deliver, the Secured Notes that the Noteholder making the
exchange is entitled to receive.
All Secured Notes issued upon any registration of transfer or
exchange of Secured Notes shall be the valid obligations of the Trust,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Secured Notes surrendered upon such registration of transfer
or exchange.
Every Secured Note presented or surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in the form of the Assignment included at Exhibit A
attached hereto, duly executed by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Secured Notes, but the Note Registrar, on behalf of the
Trust, may require payment of a sum sufficient to cover any tax or other
governmental charge as may be imposed in connection with any registration of
transfer or exchange of Secured Notes, other than exchanges pursuant to Section
2.07 hereof not involving any transfer or any exchange made by the Note
Purchaser.
4
Solely for the purposes of giving any consent, waiver, request
or demand pursuant hereto, any Secured Note registered in the name of the
Servicer or any Subservicer, or any Affiliate of any of them, shall be deemed
not to be outstanding and the undivided Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite percentage
of Secured Notes necessary to effect any such consent, waiver, request or demand
has been obtained. For purposes of any consent, waiver, request or demand of
Noteholders pursuant hereto, upon the Indenture Trustee's request, the Servicer
shall provide to the Indenture Trustee a notice identifying any of its
Affiliates of the Affiliates of any Subservicer that is a Noteholder as of the
date(s) specified by the Indenture Trustee in such request.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Secured Notes. If
(1) any mutilated Secured Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Secured Note, and (2) there is delivered to the Note Registrar such
security or indemnity as may be required by the Note Registrar to save each of
the Trust, the Owner Trustee, the Note Purchaser and the Note Registrar
harmless, then, in the absence of notice to the Note Registrar that such Secured
Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of
the Trust, acting at the direction of the Certificateholders, shall execute and
upon its delivery of a Trust Request the Authenticating Agent shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Secured Note, a new Secured Note or Secured Notes of the same tenor
and aggregate initial principal amount bearing a number not contemporaneously
outstanding. If, after the delivery of such new Secured Note, a bona fide
purchaser of the original Secured Note in lieu of which such new Secured Note
was issued presents for payment such original Secured Note, the Note Registrar,
shall be entitled to recover such new Secured Note from the person to whom it
was delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expenses incurred by the Trust, the
Owner Trustee, the Note Purchaser or the Note Registrar in connection therewith.
If any such mutilated, destroyed, lost or stolen Secured Note shall have become
or shall be about to become due and payable, or shall have become subject to
redemption in full, instead of issuing a new Secured Note, the Trust may pay
such Secured Note without surrender thereof, except that any mutilated Secured
Note shall be surrendered.
Upon the issuance of any new Secured Note under this Section
2.07, the Note Registrar, may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Trust, the
Indenture Trustee or the Note Registrar) connected therewith.
Every new Secured Note issued pursuant to this Section 2.07 in
lieu of any destroyed, lost or stolen Secured Note shall constitute an original
contractual obligation of the Trust, whether or not the destroyed, lost or
stolen Secured Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Secured Notes duly issued hereunder.
5
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Secured
Notes.
Section 2.08. Payments of Principal and Interest. (a) Any installment
of interest or principal payable on any Secured Notes that is punctually paid or
duly provided for by the Trust on the applicable Payment Date shall be paid to
the Person in whose name such Secured Note (or one or more Predecessor Secured
Notes) is registered at the close of business on the Record Date for such
Secured Note and such Payment Date by either (i) check mailed to such Person's
address as it appears in the Note Register on such Record Date, or (ii) by wire
transfer of immediately available funds to the account of a Noteholder, if such
Noteholder (A) is the registered holder of Definitive Notes having an initial
principal amount of at least $1,000,000 and (B) has provided the Indenture
Trustee with wiring instructions in writing by five (5) Business Days prior to
the related Record Date or has provided the Indenture Trustee with such
instructions for any previous Payment Date, except for the final installment of
principal payable with respect to such Secured Note, which shall be payable as
provided in subsection (b) of this Section 2.08. No fee may be charged by the
Indenture Trustee to a Holder for any payment made by wire transfer. Any
installment of interest or principal not punctually paid or duly provided for
shall be payable as soon as funds are available to the Indenture Trustee for
payment thereof, or if Section 5.07 applies, pursuant to Section 5.07.
Notwithstanding the forgoing, as long as UBS Principal Finance LLC is the holder
of 100% of the aggregate outstanding principal balance of the Secured Notes, all
installments of principal and interest shall be paid by wire transfer in
immediately available funds to Chase NYC, ABA#: 000000000, A/C #: 066614651,
Account Name: UBS PFLLC, Attn: Xxxxx Xxxxxxxxxxx (203-719-1817), Ref: American
Business Financial Services.
(a) All reductions in the Note Principal Balance of a Secured
Note (or one or more Predecessor Secured Notes) effected by payments of
installments of principal made on any Payment Date shall be binding upon all
Holders of such Secured Note and of any Secured Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Secured Note. The final installment
of principal of each Secured Note shall be payable only upon presentation and
surrender thereof on or after the Payment Date therefor at the Corporate Trust
Office of the Indenture Trustee located within the United States of America
pursuant to Section 3.02. Notwithstanding the forgoing, as long as UBS Principal
Finance LLC is the holder of 100% of the aggregate outstanding principal balance
of the Secured Notes, all installments of principal and interest shall be paid
by wire transfer in immediately available funds to Chase NYC, ABA#: 000000000,
A/C #: 066614651, Account Name: UBS PFLLC, Attn: Xxxxx Xxxxxxxxxxx
(203-719-1817), Ref: American Business Financial Services.
Whenever the Indenture Trustee expects that the entire unpaid
Note Principal Balance of any Secured Note will become due and payable on the
next Payment Date, other than pursuant to a Redemption pursuant to Article X, it
shall, no later than two (2) Business Days prior to such Payment Date, telecopy
or hand deliver to each Person in whose name a Secured Note to be so retired is
registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
6
(i) the Indenture Trustee expects that funds sufficient
to pay such final installment will be available in the Collection
Account on such Payment Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Payment Date, but only upon presentation and
surrender of such Secured Note at the office or agency of the Note
Registrar maintained for such purpose pursuant to Section 3.02 (the
address of which shall be set forth in such notice) and (B) no interest
shall accrue on such Secured Note after such Payment Date.
Notwithstanding the forgoing, as long as UBS Principal Finance, LLC is
the holder of 100% of the aggregate outstanding principal balance of
the Secured Notes, all installments of principal and interest shall be
paid by wire transfer in immediately available funds to Chase NYC,
ABA#: 000000000, A/C #: 066614651, Account Name: UBS PFLLC, Attn: Xxxxx
Xxxxxxxxxxx), Ref: American Business Financial Services.
Notices in connection with redemptions of Secured Notes shall
be mailed to Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08,
each Secured Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Secured Note shall carry the
rights to unpaid principal and interest that were carried by such other Secured
Note. Any checks mailed pursuant to subsection (a) of this Section 2.08 and
returned undelivered shall be held in accordance with Section 3.03 hereof.
(d) Each (i) Monthly Report delivered to the Indenture Trustee
pursuant to the Sale and Servicing Agreement, (ii) Remittance Report, and (iii)
report regarding the Mortgage Loans delivered to the Indenture Trustee by the
Servicer pursuant to Section 7.16(b) of the Sale and Servicing Agreement, shall
be delivered by the Indenture Trustee to the Note Purchaser, the Servicer, the
Owner Trustee, the Depositor and each Noteholder as the statements required
pursuant to Section 8.06 hereof. Neither the Indenture Trustee nor the
Collateral Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or disk
or any such Monthly Report or Remittance Report except to the extent necessary
to satisfy all obligations under this Section 2.08(d).
Within ninety (90) days after the end of each calendar year,
the Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a), (b)
and (c) in the definition of "Monthly Report," aggregated for such calendar year
or the applicable portion thereof during which such person was a Noteholder.
Such obligation will be deemed to have been satisfied to the extent that
substantially comparable information is provided pursuant to any requirements of
the Code as are from time to time in force.
From time to time (but no more than once per calendar month),
upon the written request of the Depositor and the Servicer or the Note
Purchaser, the Indenture Trustee shall report to the Depositor, the Servicer and
the Note Purchaser the amount then held in each Account (including investment
earnings accrued thereon) held by the Indenture Trustee and the identity of the
investments included therein. From time to time, at the request of the Note
Purchaser, the Indenture Trustee shall report to the Note Purchaser with respect
to the actual knowledge of a Responsible Officer, without independent
investigation, of any breach of any of the representations or warranties
relating to individual Mortgage Loans set forth in Section 4.01 of the Sale and
Servicing Agreement. The Indenture Trustee shall also provide the Note Purchaser
such other information within its control as may be reasonably requested by it.
7
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Secured Note, any agent on behalf of the Trust
including but not limited to the Indenture Trustee may treat the Person in whose
name any Secured Note is registered as the owner of such Secured Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Secured Note and (b) on any other date for all other
purposes whatsoever, and none of the Trust, the Indenture Trustee or any other
agent of the Trust shall be affected by notice to the contrary.
Section 2.10. Cancellation. All Secured Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Secured Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Secured Notes so
delivered shall be promptly canceled by the Note Registrar. No Secured Notes
shall be authenticated in lieu of or in exchange for any Secured Notes cancelled
as provided in this Section 2.10, except as expressly permitted by this
Indenture. All cancelled Secured Notes held by the Note Registrar shall be held
by the Note Registrar in accordance with its standard retention policy, unless
the Owner Trustee, on behalf of the Trust shall direct by a Trust Order that
they be destroyed or returned to it.
Section 2.11. Authentication and Delivery of Secured Notes. The Secured
Notes shall be executed by an Authorized Officer of the Owner Trustee, on behalf
of the Trust, and delivered to the Authenticating Agent for authentication, and
thereupon the same shall be authenticated and delivered by the Authenticating
Agent, upon a Trust Request and upon receipt by the Authenticating Agent of all
of the following:
(a) A Trust Order authorizing the execution, authentication
and delivery of the Secured Notes and specifying the Note Principal Balance and
the Percentage Interest of such Secured Notes to be authenticated and delivered.
(b) With respect to the initial issuance of the Secured Notes
on the Closing Date, a Trust Order authorizing the execution and delivery of
this Indenture and the Sale and Servicing Agreement.
(c) One or more Opinions of Counsel (which opinion shall not
be at the expense of the Indenture Trustee or the Trust) addressed to the
Authenticating Agent and the Note Purchaser or upon which the Authenticating
Agent and the Note Purchaser are expressly permitted to rely, complying with the
requirements of Section 11.01, reasonably satisfactory in form and substance to
the Authenticating Agent and the Note Purchaser.
8
In rendering the opinions set forth above, such counsel may
rely upon Officer's Certificates of the Trust, the Owner Trustee, the
Originators, the Depositor, the Servicer and the Indenture Trustee, without
independent confirmation or verification with respect to factual matters
relevant to such opinions. In rendering the opinions set forth above, such
counsel need express no opinion as to (A) the existence of, or the priority of
the security interest created by the Indenture against, any liens or other
interests that arise by operation of law and that do not require any filing or
similar action in order to take priority over a perfected security interest or
(B) the priority of the security interest created by this Indenture with respect
to any claim or lien in favor of the United States or any agency or
instrumentality thereof (including federal tax liens and liens arising under
Title IV of ERISA).
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture and the
issuance of the Secured Notes will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default under,
the Trust's Certificate of Trust or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Trust is a party or
by which it is bound, or any order of any court or administrative
agency entered in any proceeding to which the Trust is a party or by
which it may be bound or to which it may be subject, and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Secured Notes have been complied
with;
(ii) the Trust is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule I to the Assignments is correct;
(iv) the Trust has Granted to the Indenture Trustee all of its
right, title and interest in each Mortgage Loan; and
(v) as of the Closing Date (or any Transfer Date), no lien in
favor of the United States described in Section 6321 of the Code, or
lien in favor of the Pension Benefit Guaranty Corporation described in
Section 4068(a) of the ERISA, has been filed as described in
subsections 6323(f) and 6323(g) of the Code upon any property belonging
to the Trust.
(e) An executed counterpart of the Sale and Servicing
Agreement.
Section 2.12. Limitations on Transfer of the Secured Notes. (a) Any
transfer of a Secured Note shall be made in accordance with the Securities Act
and the Investment Company Act. Each prospective purchaser (other than the Note
Purchaser) and any subsequent transferee of a Secured Note other than the
Depositor or an affiliate of the Depositor (each, a "Prospective Owner") shall
represent and warrant in writing, to the Indenture Trustee and the Note
Registrar and any of their respective successors that:
9
(i) Such Person is duly authorized to purchase the Secured
Notes and its purchase of investments having the characteristics of the
Secured Notes is authorized under, and not directly or indirectly in
contravention of, any law, charter, trust instrument or other operative
document, investment guidelines or list of permissible or impermissible
investments that is applicable to the investor.
(ii) Such Person understands that each holder of a Secured
Note, by virtue of its acceptance thereof, assents to the terms,
provisions and conditions of the Indenture.
(b) Each Prospective Owner of a Secured Note (other than an
Note Purchaser) shall represent and warrant in writing, to the Indenture Trustee
and the Note Registrar and any of their respective successors that:
(i) Such Person is a Qualified Purchaser and either (A) a QIB
and is aware that the seller of such Secured Note may be relying on the
exemption from the registration requirements of the Securities Act
provided by Rule 144A and is acquiring such Secured Note for its own
account or for the account of one or more qualified institutional
buyers, for whom it is authorized to act, or (B) an institutional
investor that is an "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
(ii) It understands that such Secured Notes have not been
registered under the Securities Act, and the Trust has not been
registered under the Investment Company Act, and that, if in the future
it decides to offer, resell, pledge or otherwise transfer such Secured
Notes, such Secured Notes may be offered, resold, pledged or otherwise
transferred only (A) pursuant to a Registration Statement which has
been declared effective under the Securities Act, (B) to a Qualified
Purchaser, and (C) for so long as such Secured Notes are eligible for
resale pursuant to Rule 144A under the Securities Act, to a person whom
the seller reasonably believes is a QIB, which is purchasing such
Secured Notes for its own account or for the account of a qualified
institutional buyer, to whom notice is given that the transfer is being
made in reliance on Rule 144A, or (D) to an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act, which is acquiring such Secured
Notes for its own account or for the account of such an institutional
"accredited investor," for investment purposes and not with a view to,
or for offer or sale in connection with, any distribution in violation
of the Securities Act, in each case in compliance with the requirements
of the Indenture.
In the event that a transfer of a Secured Note is to be made
in reliance upon an exemption from the Securities Act, Investment Company Act or
state securities laws, in order to assure compliance with the Securities Act,
the Investment Company Act and such laws, the prospective transferor and
transferee shall certify to the Indenture Trustee in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C or
Exhibit D and Exhibit E.
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The Servicer on behalf of the Depositor shall provide to any
Holder of a Secured Note and any prospective transferee designated by any such
Holder, information regarding the Secured Notes and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) and Section 3(c)(7) of the Investment Company Act
for transfer of any such Secured Note without registration under the Securities
Act or the Investment Company Act pursuant to the registration exemption
provided thereunder. Each Holder of a Secured Note desiring to effect such a
transfer shall, and does hereby agree to, indemnify the Issuer, the Owner
Trustee, the Indenture Trustee and the Depositor against any liability that may
result if the transfer is not so exempt or is not made in accordance with
federal and state securities laws.
Each Secured Note shall contain a legend substantially similar
to the applicable legend provided in Exhibit A stating that transfer of such
Secured Notes is subject to certain restrictions and referring prospective
purchasers of the Secured Notes to this Section 2.12 with respect to such
restrictions.
Section 2.13. Holding of Secured Notes. With respect to each Secured
Note executed as provided in Section 2.05, the Indenture Trustee shall cause the
Authorized Representative who executed such Secured Note to deliver such Secured
Note to the Note Purchaser or such other Person as the Note Purchaser shall
designate in writing from time to time. The Note Purchaser hereby initially
directs that, until further notice, each Secured Note be delivered to its
custodian, as follows:
Chase Manhattan Bank
4 New York Plaza
Ground Floor Receive Window
Account UBS Principal Finance (G 70991)
Attention: Xxxxx Xxxxxxxxx
(Telephone: 000-000-0000)
Section 2.14. Reserved.
Section 2.15. Release of Collateral. The Issuer or the Servicer, on
behalf of the Issuer, shall be entitled to obtain a release from the lien of
this Indenture for any Collateral at any time, (i) after liquidation of the
Collateral in accordance with Section 7.06 of the Sale and Servicing Agreement
and the deposit of all Liquidation Proceeds and Insurance Proceeds in the
Collection Account or (ii) upon the payment in full of the Mortgage Loans or the
sale or other disposition of the Collateral. Any such release shall be subject
to the condition that the Issuer shall have delivered to the Indenture Trustee a
Trust Request (A) identifying the Collateral to be released, (B) requesting the
release thereof, (C) setting forth the amount deposited in the Collection
Account with respect thereto, and (D) certifying that the amount deposited in
the Collection Account equals the entire amount of Insurance Proceeds and
Liquidation Proceeds received with respect to such Collateral.
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ARTICLE III
COVENANTS
Section 3.01. Payment of Secured Notes. The Servicer, on behalf of the
Trust will pay or cause to be duly and punctually paid the principal of, and
interest on, the Secured Notes in accordance with the terms of the Secured Notes
and this Indenture. The Secured Notes shall be non-recourse obligations of the
Trust and shall be limited in right of payment to amounts available from the
Trust Estate as provided in this Indenture and the Trust shall not otherwise be
liable for payments on the Secured Notes. No person shall be personally liable
for any amounts payable under the Secured Notes. If any other provision of this
Indenture conflicts or is deemed to conflict with the provisions of this Section
3.01, the provisions of this Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
will always maintain its corporate trust office at a location in the United
States of America where Secured Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Trust in
respect of the Secured Notes and this Indenture may be served. Such location
shall be the Corporate Trust Office of the Indenture Trustee.
Section 3.03. Money for Secured Note Payments to Be Held In Trust. All
payments of amounts due and payable with respect to any Secured Notes that are
to be made from amounts withdrawn from the Collection Account pursuant to
Sections 5.07 or 8.02 hereof shall be made on behalf of the Trust by the
Indenture Trustee, and no amounts so withdrawn from the Collection Account for
payments on the Secured Notes shall be paid over to the Trust under any
circumstances except as provided in this Section 3.03 or in Sections 5.07 or
8.02 hereof.
If the Trust shall have a Note Registrar that is not also the
Indenture Trustee, such Note Registrar shall furnish, no later than the fifth
(5th) calendar day after each Record Date, a list, in such form as such
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Secured Notes and of the number of individual Secured Notes held by
each such Holder.
Whenever the Trust shall have a Paying Agent other than the
Indenture Trustee, the Servicer, on behalf of the Trust, will, on or before the
Business Day next preceding each Payment Date, direct the Indenture Trustee to
deposit with such Paying Agent an aggregate sum sufficient to pay the amounts
then becoming due (to the extent funds are then available for such purpose in
the Collection Account), such sum to be held in trust for the benefit of the
Persons entitled thereto. Any moneys deposited with a Paying Agent in excess of
an amount sufficient to pay the amounts then becoming due on the Secured Notes
with respect to which such deposit was made shall, upon Trust Order, be paid
over by such Paying Agent to the Indenture Trustee for application in accordance
with Article VIII hereof.
Subject to the prior written consent of the Note Purchaser,
any Paying Agent other than the Indenture Trustee may be appointed by Trust
Order and at the expense of the Trust. The Trust shall not appoint any Paying
Agent (other than the Indenture Trustee) that is not, at the time of such
appointment, a depository institution or trust company whose obligations would
be Permitted Investments pursuant to clause (b) of the definition of the term
"Permitted Investments". The Servicer, on behalf of the Trust, will cause each
Paying Agent other than the Indenture Trustee to execute and deliver to the
Indenture Trustee and the Owner Trustee, on behalf of the Trust, an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.03, that such Paying Agent will:
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(a) allocate all sums received for payment to the Holders of
Secured Notes on each Payment Date among such Holders in the proportion
specified in the Remittance Report, in each case to the extent permitted by
applicable law;
(b) hold all sums held by it for the payment of amounts due
with respect to the Secured Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(c) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee
all sums held by it in trust for the payment of the Secured Notes if at any time
the Paying Agent ceases to meet the standards set forth above required to be met
by a Paying Agent at the time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give
the Indenture Trustee notice of any Default by the Trust (or any other obligor
upon the Secured Notes) in the making of any payment required to be made with
respect to any Secured Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, at any
time during the continuance of any such Default, upon the written request of the
Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in
trust by such Paying Agent; and
(f) comply with all requirements of the Code, and all
regulations thereunder, with respect to withholding from any payments made by it
on any Secured Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith;
provided, however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on any of the Secured Notes, the
Servicer, on behalf of the Trust, has provided the calculations pertaining
thereto to the Indenture Trustee and the Paying Agent.
(g) On the Determination Date, the Paying Agent shall prepare
and provide to the Indenture Trustee, the Servicer, the Owner Trustee and the
Note Purchaser a Remittance Report containing the following information:
(i) the amount of the payment with respect to the Secured
Notes and the Trust Certificates;
(ii) the amount of such payments allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein;
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(iii) the amount of such payments allocable to interest and
the calculation thereof; and
(iv) the Note Principal Balance of each Secured Note as of
such Payment Date after giving effect to any payment of principal on
such Payment Date.
Such information shall, with respect to the Secured
Notes, be presented on the basis of each Secured Note's actual
denomination. In addition, by January 31 of each calendar year
following any year during which the Secured Notes are outstanding, the
Paying Agent shall furnish a report to each Holder of record, if so
requested, in writing at any time during each calendar year as to the
aggregate of amounts reported pursuant to (i), (ii), (iii) and (iv)
with respect to the Secured Notes for such calendar year.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Secured Note and
remaining unclaimed for two and one-half years after such amount has become due
and payable to the Holder of such Secured Note (or if earlier, three months
before the date on which such amount would escheat to a governmental entity
under applicable law) shall be discharged from such trust and paid to the Trust;
and the Holder of such Secured Note shall thereafter, as an unsecured general
creditor, look only to the Trust for payment thereof (but only to the extent of
the amounts so paid to the Trust), and all liability of the Indenture Trustee or
such Paying Agent with respect to such trust money shall thereupon cease. The
Indenture Trustee may adopt and employ, at the expense of the Trust, any
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Secured Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or any Paying Agent, at the last address of
record for each such Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c) of
this Section 3.04, the Trust will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware or under
the laws of any other state of the United States of America, and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Secured Notes and the other Basic
Documents.
(a) Subject to Section 3.09(g) hereof, and with the prior
written consent of the Note Purchaser, any entity into which the Trust may be
merged or with which it may be consolidated, or any entity resulting from any
merger or consolidation to which the Trust shall be a party, shall be the
successor issuer under this Indenture without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything in any agreement relating to such merger or consolidation, by which any
such Trust may seek to retain certain powers, rights and privileges therefore
obtaining for any period of time following such merger or consolidation to the
contrary notwithstanding (other than Section 3.09(g)).
14
(c) Upon any consolidation or merger of or other succession to
the Trust in accordance with this Section 3.04, the Person formed by or
surviving such consolidation or merger (if other than the Trust) may exercise
every right and power of, and shall have all of the obligations of, the Trust
under this Indenture with the same effect as if such Person had been named as
the issuer herein.
Section 3.05. Protection of Trust Estate. (a) On or before the initial
Transfer Date, the Trust shall cause to be filed UCC-1 Financing Statements
naming the Indenture Trustee as "secured party" and the Trust as "debtor" and
describing the Mortgage Loans being pledged by the Trust to the Indenture
Trustee with the office of the Secretary of State in which the Trust is located
and such other jurisdictions as shall be necessary to perfect a security
interest in the Trust Estate.
(a) The Trust will, from time to time, execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans or the Sale and
Servicing Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the Note Purchaser
in the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
(c) The Indenture Trustee shall not, and shall not permit the
Collateral Agent to, remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the Closing Date or cause or permit
ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such time unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
15
Section 3.06. Opinions as to the Trust Estate. On or before April 30th
in each calendar year, beginning in 2001, the Servicer, on behalf of the Trust,
shall furnish to the Indenture Trustee and the Note Purchaser an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture Trustee
and the Note Purchaser either stating that, in the opinion of such counsel, such
action has been taken as is necessary to maintain the lien and security interest
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain such
lien and security interest. Such Opinion of Counsel shall also describe all such
action, if any, that will, in the opinion of such counsel, be required to be
taken to maintain the lien and security interest of this Indenture with respect
to the Trust Estate until May 1st in the following calendar year.
Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and
the other Basic Documents.
(a) The Trust shall not take any action and will use its Best
Efforts not to permit any action to be taken by others that would release any
Person from any of such Person's covenants or obligations under any of the
Servicer's Loan Files or under any instrument included in the Trust Estate, or
that would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the documents
or instruments contained in the Servicer's Loan Files, except as expressly
permitted in this Indenture, the other Basic Documents or such document included
in the Servicer's Loan File or other instrument or unless such action will not
adversely affect the interests of the Noteholders and the Note Purchaser.
(c) If the Servicer or the Owner Trustee, on behalf of the
Trust, shall have knowledge of the occurrence of a default under the Sale and
Servicing Agreement, the Servicer or the Owner Trustee, as applicable, shall
promptly notify the Indenture Trustee and the Note Purchaser thereof, and, in
the case of the Servicer, shall specify in such notice the action, if any, the
Servicer is taking with respect to such default.
(d) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall
promptly notify the Note Purchaser. As soon as any successor Servicer is
appointed, the Indenture Trustee shall notify the Note Purchaser, specifying in
such notice the name and address of such successor Servicer.
Section 3.08. Investment Company Act. The Trust shall at all times
conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any successor
statute), and the rules and regulations thereunder.
Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate, except as expressly permitted by this Indenture and
the other Basic Documents;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Secured Notes by reason of the payment
of any taxes levied or assessed upon any portion of the Trust Estate;
16
(c) engage in any business or activity other than as permitted
by the Trust Agreement or other than in connection with, or relating to, the
issuance of the Secured Notes pursuant to this Indenture, or amend the Trust
Agreement, as in effect on the Closing Date, other than in accordance with
Section 11.01 of the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an
indebtedness other than the Secured Notes;
(e) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such indebtedness as
may be incurred by the Trust in connection with the issuance of the Secured
Notes pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or
liquidate in whole or in part (until the Secured Notes are paid in full);
(g) (i) permit the validity or effectiveness of this Indenture
or any Grant to be impaired, or permit the lien of this Indenture to be
impaired, amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (ii) permit any lien,
charge, security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or burden
the Trust Estate or any part thereof or any interest therein or the proceeds
thereof, or (iii) permit the lien of this Indenture not to constitute a valid
perfected first priority security interest in the Trust Estate;
(h) take any other action that should reasonably be expected
to, or fail to take any action if such failure should reasonably be expected to,
cause the Trust to be taxable as (x) an association pursuant to Section 7701 of
the Code or (y) a taxable mortgage pool pursuant to Section 7701(i) of the Code;
(i) merge with or into or consolidate with any other Person,
regardless of whether the Trust is the surviving entity in such merger or
consolidation, or transfer all or substantially all of its assets to any other
Person to accomplish a similar purpose or wind up, liquidate or dissolve or
agree to do any of the foregoing;
(j) change its name, chief executive office or location where
its books and records are kept with respect to the Mortgage Loans without filing
UCC-1 financing statements, amendments and continuation statements required to
be filed to create in favor of the Note Purchaser a perfected security interest
in the Pledged Mortgage Loans and delivering to the Indenture Trustee, the
Servicer and the Note Purchaser an Opinion of Counsel to such effect;
(k) without obtaining the prior written consent of the Note
Purchaser in each case, either (i) amend, supplement or otherwise modify (or
agree to amend, supplement or otherwise modify) the Trust's organizational
documents (unless such amendment, supplement or other modification cannot
reasonably be expected to have a material adverse effect on the interests of the
Noteholders or (ii) amend, supplement or otherwise modify (or agree to amend,
supplement or otherwise modify, or, to the extent its consent is required
therefor, consent to any amendment or supplement to or modification of ) any
Basic Document; or
17
(l) make any distributions to any security holder other than
as provided in the Basic Documents.
Section 3.10. Annual Statement as to Compliance. (a) On or before April
30, 2001, and each April 30 thereafter, the Servicer, on behalf of the Trust,
shall deliver to the Indenture Trustee, the Note Purchaser and the Depositor a
written statement, signed by an Authorized Officer of the Servicer, on behalf of
the Trust, stating that:
(a) a review of the fulfillment by the Trust during such year
of its obligations under this Indenture has been made under such Authorized
Officer's supervision; and
(c) to the best of such Authorized Officer's knowledge, based
on such review, the Trust has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a Default in the
fulfillment of any such covenant or condition, specifying each such Default
known to such Authorized Officer and the nature and status thereof.
Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust
or otherwise with respect to any ownership or equity interest or security in or
of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Trust may make, or cause to be made, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee and the holder of
Certificates as contemplated by, and to the extent funds are available for such
purpose under this Indenture and the other Basic Documents and the Trust will
not, directly or indirectly, make or cause to be made payments to or
distributions from any Collection Account except in accordance with this
Indenture.
Section 3.12. Treatment of Secured Notes as Debt for Tax Purposes. For
purposes of federal, state and local income, franchise and any other income
taxes, the Trust will treat the Secured Notes as indebtedness, and hereby
instructs the Indenture Trustee, Paying Agent and the Servicer, on behalf of the
Trust to treat the Secured Notes as indebtedness for all applicable tax
reporting purposes.
Section 3.13. Notice of Events of Default. The Servicer, on behalf of
the Trust, shall give the Indenture Trustee, the Note Purchaser and the
Depositor prompt written notice of each Event of Default hereunder and each
Default on the part of the Servicer or the Originators of their obligations.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Purchaser, the Owner Trustee, on behalf of the
Trust, and at the direction of the Certificateholders, will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
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Section 3.15. Purpose. The funds derived from issuing and selling the
Secured Notes will be used solely to purchase Mortgage Loans and other
Collateral from the Depositor.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) the entire unpaid Note Principal Balance of the Secured
Notes not theretofore delivered to the Indenture Trustee for cancellation has
been paid and discharged;
(b) the Servicer, on behalf of the Trust, has paid or caused
to be paid all other sums payable hereunder by the Servicer; and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Purchaser an Officers' Certificate and an Opinion
of Counsel satisfactory in form and substance to the Indenture Trustee and the
Note Purchaser each stating that all conditions precedent herein providing for
the satisfaction and discharge of this Indenture have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Trust (or of the Servicer in the
case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Trust or upon Trust Order all cash, securities and
other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (a) and (b) above.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Indenture Trustee and any Paying Agent to the
Trust and the Holders of Secured Notes under Section 3.03 hereof, the
obligations of the Indenture Trustee to the Holders of Secured Notes under
Section 4.02 hereof and the provisions of Section 2.07 hereof with respect to
lost, stolen, destroyed or mutilated Secured Notes, registration of transfers of
Secured Notes and rights to receive payments of principal of and interest on the
Secured Notes shall survive.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Secured Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
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ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to Secured Notes issued hereunder, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of the
Secured Notes, on any Payment Date, any Interest Payment Amount due and payable
on the Secured Notes on such Payment Date;
(b) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of the
Secured Notes, (x) on any Payment Date, an amount equal to the Principal Payment
Amount due on the Secured Notes on such Payment Date, to the extent that
sufficient funds are on deposit in the Collection Account or (y) on the Final
Stated Maturity Date for any Secured Notes, the aggregate outstanding Note
Principal Balance of such Secured Notes;
(c) if the Trust shall breach or default in the due observance
of any one or more of the covenants set forth in clauses (a) through (l) of
Section 3.09 hereof;
(d) if the Trust shall consent to the appointment of a
custodian, receiver, trustee or liquidator (or other similar official) of
itself, or of a substantial part of its property, or shall admit in writing its
inability to pay its debts generally as they come due, or a court of competent
jurisdiction shall determine that the Trust is generally not paying its debts as
they come due, or the Trust shall make a general assignment for the benefit of
creditors;
(e) if the Trust shall file a voluntary petition in bankruptcy
or a voluntary petition or an answer seeking reorganization in a proceeding
under any bankruptcy laws (as now or hereafter in effect) or an answer admitting
the material allegation of a petition filed against the Trust in any such
proceeding, or the Trust shall, by voluntary petition, answer or consent, seek
relief under the provisions of any now existing or future bankruptcy or other
similar law providing for the reorganization or winding-up of debtors, or
providing for an agreement, composition, extension or adjustment with its
creditors;
(f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent (express or legally implied) of the Trust, a custodian, receiver,
trustee or liquidator (or other similar official) of the Trust or any
substantial part of its property, or sequestering any substantial part of its
respective property, and any such order, judgment or decree or appointment or
sequestration shall remain in force undismissed, unstayed or unvacated for a
period of thirty (30) days after the date of entry thereof;
(g) if a petition against the Trust in a proceeding under
applicable bankruptcy laws or other insolvency laws, as now or hereafter in
effect, shall be filed and shall not be stayed, withdrawn or dismissed within
thirty (30) days thereafter, or if, under the provisions of any law providing
for reorganization or winding-up of debtors which may apply to the Trust, any
court of competent jurisdiction shall assume jurisdiction, custody or control of
the Trust or any substantial part of its property, and such jurisdiction,
custody or control shall remain in force unrelinquished, unstayed or
unterminated for a period of thirty (30) days;
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(h) if there shall have occurred a Servicer Event of Default
under the Sale and Servicing Agreement which has not been cured or waived;
(i) a Shortfall exists under Section 2.19 of the Sale and
Servicing Agreement and such Shortfall has not been cured within the applicable
cure period, or if, prior to expiration of such period, the Depositor has
notified the Note Purchaser in writing that the Depositor does not intend to
effect the Minimum Margin Contribution;
(j) the Trust shall have become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or shall have
come under the "control" of an "investment company" under the Investment Company
Act of 1940, as amended;
(k) the failure on the part of any of the Originators or the
Depositor to observe or perform in any material respect any material covenants
or agreements of any of the Originators or Depositor under the Sale and
Servicing Agreement which failure continues for a period of fifteen (15) days
after written notice or actual knowledge thereof;
(l) any representation or warranty made by any of the
Originators or the Depositor pursuant to the Sale and Servicing Agreement shall
prove to have been incorrect when made in any material respect when made or
delivered and which continues to be incorrect in any material respect for a
period of fifteen (15) days after written notice or actual knowledge thereof;
(m) any representation or warranty made or deemed to be made
by the Trust in any Basic Document or in any written certificates or statement
made or entered into in connection therewith shall prove to have been incorrect
when made in any material respect and continues to be incorrect in any material
respect for a period of fifteen (15) days after the Trust shall have written
notice thereof; or
(n) the Trust fails to comply with any of its other agreements
or covenants in, or provisions of, the Secured Notes or this Indenture and the
failure to so comply materially and adversely affects the interests of the
Holders of the Secured Notes and continues to materially and adversely affect
the interests of the Holders of the Secured Notes for a period of thirty (30)
days after the earlier of the date on which (i) the Trust obtains knowledge
thereof or (ii) the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Trust by the Indenture Trustee
or the Trust and the Indenture Trustee by the Majority Noteholders.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default or an Amortization Event occurs and is continuing, then and in
every such case, but with the consent of the Note Purchaser, the Indenture
Trustee may, and on request of the Note Purchaser, or, with the prior written
consent of the Note Purchaser, the Holders of Secured Notes representing not
less than 50% of the Note Principal Balance of the Outstanding Notes of the
Secured Notes, shall, declare all the Secured Notes to be immediately due and
payable by a notice in writing to the Trust (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration such Secured Notes, in an
amount equal to the entire unpaid Note Principal Balance of such Secured Notes,
together with accrued and unpaid interest thereon to the date of such
acceleration, shall become immediately due and payable, all subject to the prior
written consent of the Note Purchaser.
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At any time after such a declaration of acceleration of
maturity of the Secured Notes has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter provided in this Article V, the Note Purchaser, or the Holders of
Secured Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes, with the prior written consent of the Note Purchaser, by
written notice to the Trust and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(i) all payments of principal of, and interest on, all
Outstanding Notes and all other amounts that would then be due
hereunder or upon such Secured Notes if the Event of Default or
Amortization Event giving rise to such acceleration had not occurred;
and
(ii) all sums paid by the Indenture Trustee hereunder and the
reasonable compensation, expenses and disbursements of the Indenture
Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of Secured Notes that have become due solely by such acceleration,
have been cured or waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or
impair any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default or an Amortization Event occurs and
is continuing, the Indenture Trustee may, with the prior written consent of the
Note Purchaser, proceed to protect and enforce its rights and the rights of the
Noteholders by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholders, or any Noteholder against
the Trust shall be limited to the preservation, enforcement and foreclosure of
the liens, assignments, rights and security interests under the Indenture and no
attachment, execution or other unit or process shall be sought, issued or levied
upon any assets, properties or funds of the Trust, other than the Trust Estate
relative to the Secured Notes in respect of which such Event of Default or an
Amortization Event has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Secured Notes may be sought or obtained by the Indenture
Trustee or any Noteholder against the Trust. The Indenture Trustee shall be
entitled to recover the costs and expenses expended by it pursuant to this
Article V including reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel.
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Section 5.04. Remedies. (a) If an Event of Default or Amortization
Event shall have occurred and be continuing and the Secured Notes been declared
due and payable and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee, at the direction of the Note
Purchaser (subject to Section 5.17 hereof, to the extent applicable) may, for
the benefit of the Noteholders, do one or more of the following:
(i) institute Proceedings for the collection of all amounts
then payable on the Secured Notes, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03 hereof;
(ii) in accordance with Section 5.17 hereof, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law;
(iii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iv) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or
the Holders of the Secured Notes and the Note Purchaser hereunder; and
(v) refrain from selling the Trust Estate and apply all funds
on deposit in each of the Accounts pursuant to Section 5.07 hereof.
(b) Upon the occurrence of an Amortization Event or an Event
of Default under Section 5.01 that has not been cured by the Depositor or the
Issuer within the applicable cure period provided in the Sale and Servicing
Agreement, the Indenture Trustee, at the direction of the Note Purchaser may
take any one of the following courses of action: (i) subject to providing seven
Business Days' prior notice thereof to the Depositor, the Noteholders and the
Note Purchaser, sell the Pledged Mortgage Loans in the manner set forth in
Section 12.16 of the Sale and Servicing Agreement; (ii) apply all collections on
the Pledged Mortgage Loans to pay outstanding principal on the Secured Notes
(but solely after payment of any outstanding Servicing Fees, Indenture Trustee
Fees, and interest payments on the Secured Notes due on such Payment Date); (iv)
apply the collections on the Pledged Mortgage Loans in the priorities set forth
in Section 5.07; provided that the payment of any outstanding Indenture Trustee
Fees and Servicing Fees shall not be made subordinate to payment of principal or
interest on the Secured Notes; (v) require the Depositor to transfer additional
Mortgage Loans to the Trust in accordance with the procedures set forth in the
Sale and Servicing Agreement and this Indenture; (vi) increase the per annum
interest rate on the Secured Notes to LIBOR plus 5.00% or any lesser rate the
Note Purchaser determines in its sole discretion to be appropriate; (vii)
arrange for the transfer of servicing of the Mortgage Loans to an newly
appointed successor servicer; or (viii) waive any such Amortization Event or an
Event of Default indefinitely or for a specific period of time as it deems
appropriate.
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(c) Upon the occurrence of an Event of Default under Section
5.01 that has not been cured by the Depositor or the Issuer within the
applicable cure period provided in the Sale and Servicing Agreement, the Note
Purchaser may take action in the manner set forth in Section 12.17 of the Sale
and Servicing Agreement.
Section 5.05. Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative
to the Trust or any other obligor upon any of the Secured Notes or the property
of the Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Secured Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Trust for the payment of any
overdue principal or interest) shall, with the prior written consent of the Note
Purchaser, be entitled and empowered, by intervention in such Proceeding or
otherwise to:
(a) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Secured Notes and file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for the reasonable
compensation, expenses and disbursements of the Indenture Trustee, its agents
and counsel), the Noteholders and the Note Purchaser allowed in such Proceeding,
and
(b) collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, liquidator, or sequestrator (or other similar official) in
any such Proceeding is hereby authorized by each Noteholder and the Note
Purchaser to make such payments to the Indenture Trustee and, in the event that
the Indenture Trustee shall consent to the making of such payments directly to
the Noteholders and the Note Purchaser, to pay to the Indenture Trustee any
amount due to it for the reasonable compensation, expenses and disbursements of
the Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Purchaser any plan of reorganization, arrangement,
adjustment or composition affecting any of the Secured Notes or the rights of
any Holder thereof, or the Note Purchaser, or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder or the Note Purchaser in any
such Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of Secured Notes. All rights of action and claims under this Indenture or any of
the Secured Notes may be prosecuted and enforced by the Indenture Trustee
without the possession of any of the Secured Notes or the production thereof in
any Proceeding relating thereto, and any such Proceeding instituted by the
Indenture Trustee, at the direction of the Note Purchaser, shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall
be for the ratable benefit of the Holders of the Secured Notes in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (a) of Section 5.07 hereof.
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Section 5.07. Application of Money Collected.
(a) If the Secured Notes have been declared due and payable
following an Event of Default or an Amortization Event and such declaration and
its consequences have not been rescinded and annulled, any money collected by
the Indenture Trustee with respect to the Secured Notes pursuant to this Article
V or otherwise and any other monies that may then be held or thereafter received
by the Indenture Trustee as security for such Secured Notes (including any
amounts then on deposit in either Account) shall be applied in the following
order, at the date or dates fixed by the Indenture Trustee and, in case of the
payment of the entire amount due on account of principal of, and interest on,
the Secured Notes, upon presentation and surrender thereof:
(i) first, to the Indenture Trustee, any unpaid Indenture
Trustee Fees then due and any other amounts payable and due to the
Indenture Trustee under this Indenture, including any costs or expenses
incurred by it in connection with the enforcement of the remedies
provided for in this Article V and to the Collateral Agent, any unpaid
Collateral Agent Fees; provided, however, that any amounts payable to
the Indenture Trustee and the Collateral Agent pursuant to this clause
(a) shall be limited in the aggregate to $15,000 per annum;
(ii) second, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount then due and unpaid through the day preceding
the date on which such payment is made;
(iii) third, from amounts collected from non-Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount remaining after the distribution in clause (ii)
is made;
(iv) fourth, to the Note Purchaser such other amounts (except
for principal) including, without limitation, the Minimum Usage Fee,
then due and owing to the Note Purchaser under the Basic Documents as
the Note Purchaser may have given written notice of to the Indenture
Trustee and the Servicer not later than noon Eastern time on such date;
(v) fifth, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of the
related unpaid Note Principal Balance;
(vi) sixth, from amounts collected from the non-Related
Mortgage Loans, to the Holders of each Secured Note, to the payment of
the related unpaid Note Principal Balance;
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(vii) seventh, to the extent not paid pursuant to clause (i)
above, to the Indenture Trustee, any unpaid Indenture Trustee Fees then
due and any other amounts payable and due to the Indenture Trustee
under this Indenture, including any costs or expenses incurred by it in
connection with the enforcement of the remedies provided for in this
Article V;
(viii) eighth, to the Servicer, any amounts required to pay
the Servicer for any unpaid Servicing Fees then due and to reimburse
the Servicer for Servicing Advances, Periodic Advances and Compensating
Interest previously made by, and not previously reimbursed to or
retained by, the Servicer and, upon the final liquidation of the
related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances, Periodic Advances and Compensating Interest
previously made by, and not previously reimbursed to or retained by,
the Servicer; and
(ix) ninth, the remainder to the Holder of Trust Certificates.
(b) Amounts which are to be paid out of collections generally
pursuant to clauses (i), (iii), (vi), (vii), (viii) and (ix) above shall be
allocated among the groups of Related Mortgage Loans pro rata in relation to the
unpaid principal balances of the related Secured Notes immediately prior to such
distribution.
Section 5.08. Limitation on Suits. No Holder of a Secured Note shall
have any right to institute any Proceedings, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default or Amortization Event;
(b) the Holders of Secured Notes representing not less than
25% of the Note Principal Balance of the Outstanding Notes shall have made
written request to the Indenture Trustee to institute Proceedings in respect of
such Event of Default or Amortization Event in its own name as Indenture Trustee
hereunder;
(c) such Holder or Holders have offered to the Indenture
Trustee indemnity in full against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Indenture Trustee, for five (5) days after its receipt
of such notice, request and offer of indemnity, has failed to institute any such
Proceeding;
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such five (5) day period by the
Holders of Secured Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes; and
(f) the consent of the Note Purchaser shall have been
obtained; it being understood and intended that no one or more Holders of
Secured Notes shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Secured Notes or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the Holders of Secured Notes.
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In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Secured Notes, each representing less than 50% of the Note Principal Balances of
the Outstanding Notes, the Indenture Trustee shall take the action prescribed by
the group representing a greater percentage of the Note Principal Balances of
the Outstanding Notes.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections
3.01 and 5.03 hereof) limiting the right to recover amounts due on a Secured
Note to recovery from amounts in the portion of the Trust Estate relating to
such Secured Note, the Holder of any Secured Note shall have the right, to the
extent permitted by applicable law, which right is absolute and unconditional,
to receive payment of each installment of interest on such Secured Note on the
respective Payment Date for such installments of interest, to receive payment of
each installment of principal of such Secured Note when due (or, in the case of
any Secured Note called for redemption, on the date fixed for such redemption)
and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Purchaser or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Purchaser or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Purchaser and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee, the Note Purchaser and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Purchaser or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Purchaser or of any Holder of any Secured Note to
exercise any right or remedy accruing upon any Event of Default or Amortization
Event shall impair any such right or remedy or constitute a waiver of any such
Event of Default or Amortization Event or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee, the Note
Purchaser or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee, the Note Purchaser or by
the Noteholders with the prior consent of the Note Purchaser, as the case may
be.
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Section 5.13. Control by Noteholders. The Holders of Secured Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Notes on the applicable Record Date shall, with the consent of the Note
Purchaser, have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale
of the Trust Estate shall be by the Holders of Secured Notes representing the
percentage of the Note Principal Balance of the Outstanding Notes specified in
Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is applicable; and
(c) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee or as directed by the Note Purchaser that is not
inconsistent with such direction; provided, however, that, subject to Section
6.01 hereof, the Indenture Trustee need not take any action that it determines
might involve it in liability or be unjustly prejudicial to the Noteholders not
consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Secured Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Notes on the applicable Record Date may on behalf of the Holders of all the
Secured Notes, and with the consent of the Note Purchaser, waive any past
Default hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest
on any Secured Note; or
(b) in respect of a covenant or provision hereof that under
Section 9.02 hereof cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default or Amortization Event arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Secured Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by the Note Purchaser or any
Noteholder, or group of Noteholders, holding in the aggregate Secured Notes
representing more than 10% of the Note Principal Balance of the Outstanding
Notes, or to any suit instituted by the Note Purchaser or any Noteholder for the
enforcement of the payment of any Interest Payment Amount or Principal Payment
Amount on any Secured Note on or after the related Payment Date or for the
enforcement of the payment of principal of any Secured Note on or after the
Final Stated Maturity Date (or, in the case of any Secured Note called for
redemption, on or after the applicable Redemption Date).
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Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension of law wherever enacted, now or at any time hereafter in
force, that may affect the covenants in, or the performance of, this Indenture;
and the Trust (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 5.04 hereof or
Section 12.16 of the Sale and Servicing Agreement shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been sold or
all amounts payable on the Secured Notes and under this Indenture with respect
thereto shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale.
(a) To the extent permitted by law, the Indenture Trustee
shall not in any private Sale sell or otherwise dispose of the Trust Estate, or
any portion thereof, unless:
(i) the Holders of Secured Notes representing not less than
50% of the Note Principal Balance of the Secured Notes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Holders of the Secured
Notes, in full payment thereof in accordance with Section 5.07 hereof,
on the Payment Date next succeeding the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of
the Trust Estate at a private Sale shall not be deemed a Sale or disposition
thereof for purposes of this Section 5.17(b). No Sale hereunder shall be
effective without the consent of the Note Purchaser.
(c) Unless the Holders of all Outstanding Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (ii) of subsection (b) of this Section 5.17 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee, acting in its capacity as
Indenture Trustee (i) on behalf of the Noteholders and the Note Purchaser, shall
prevent such Sale and bid an amount (which shall include the Indenture Trustee's
right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more
than the highest other bid in order to preserve the Trust Estate on behalf of
the Noteholders and the Note Purchaser.
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(d) In connection with a Sale of all or any portion of the
Trust Estate:
(i) any Holder or Holders of Secured Notes may bid for and
purchase the property offered for Sale, and upon compliance with the
terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any Outstanding Notes or claims for
interest thereon in lieu of cash up to the amount that shall, upon
distribution of the net proceeds of such Sale, be payable thereon, and
such Secured Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders
thereof after being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale thereof,
and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A)
the amount that would be payable to the Holders of the Secured Notes as
a result of such Sale in accordance with Section 5.07 hereof on the
Payment Date next succeeding the date of such Sale and (B) the expenses
of the Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Secured Notes
in order to complete any such Sale or in order for the net Sale price
to be credited against such Secured Notes, and any property so acquired
by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Trust to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale;
(v) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys; and
(vi) no Sale may be affected without the prior written consent
of the Note Purchaser.
Section 5.18. Action on Secured Notes. The Indenture Trustee's right to
seek and recover judgment under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee, the Note Purchaser or the Holders of Secured Notes shall
be impaired by the recovery of any judgment by the Indenture Trustee against the
Trust or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
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Section 5.19. Application of the Trust Indenture Act. Pursuant to
Section 316(a) of the TIA, all provisions automatically provided for in Section
316(a) are hereby expressly excluded.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
or an Amortization Event has occurred and is continuing, the Indenture Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(a) Except during the continuance of an Event of Default or an
Amortization Event:
(i) the Indenture Trustee need perform only those duties that
are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection
(b) of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Sections 5.13 or 5.17
hereof or exercising any trust or power or remedy conferred upon the
Indenture Trustee under this Indenture.
(d) Except with respect to duties of the Indenture Trustee
prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all
purposes under this Indenture, the Indenture Trustee shall not be deemed to have
notice or knowledge of any Event of Default or Amortization Event described in
Sections 5.01(e), (f), (g), (h), (i), (j),(m) or (n) hereof or any Default
described in Sections 5.01(c) or 5.01(d) hereof or of any event described in
Section 3.05 hereof unless a Responsible Officer assigned to and working in the
Indenture Trustee's corporate trust department and having direct responsibility
for this Indenture has actual knowledge thereof or unless written notice of any
event that is in fact such an Event of Default, Amortization Event or Default is
received by the Indenture Trustee at the Corporate Trust Office, and such notice
references the Secured Notes generally, the Trust, the Trust Estate or this
Indenture.
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(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it under this Indenture or the other
Basic Documents.
(f) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Trust in and to the Trust Estate following an Event of Default
or Amortization Event and a consequent declaration of acceleration of the
maturity of the Secured Notes, whether such extinguishment occurs through a Sale
of the Trust Estate to another Person, the acquisition of the Trust Estate by
the Indenture Trustee or otherwise, the rights, powers and duties of the
Indenture Trustee with respect to the Trust Estate (or the proceeds thereof),
the Noteholders and the Note Purchaser and the rights of Noteholders and the
Note Purchaser shall continue to be governed by the terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any
successor Collateral Agent appointed pursuant to Section 11.08 of the Sale and
Servicing Agreement shall at all times retain possession of the Custodial Loan
Files in the State of Texas except for those Custodial Loan Files or portions
thereof released to the Servicer or the Note Purchaser pursuant to this
Indenture or the Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and
without limiting the generality of this Section 6.01, the Indenture Trustee
shall have no duty (A) to see to any recording, filing, or depositing of this
Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording, filing or depositing or to any rerecording,
refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate from funds available in the Collection
Account or (D) to confirm or verify the contents of any reports or certificates
of the Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
Section 6.02. Notice of Default. Immediately after the occurrence of
any Default known to the Indenture Trustee, the Indenture Trustee shall transmit
by mail to the Note Purchaser and the Depositor notice of each such Default and,
within ninety (90) days after the occurrence of any Default known to the
Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders
of Secured Notes notice of each such Default, unless such Default shall have
been cured or waived; provided, however, that in no event shall the Indenture
Trustee provide notice, or fail to provide notice of a Default known to the
Indenture Trustee in a manner contrary to the requirements of the Trust
Indenture Act.
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Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(a) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Note Purchaser, which consent
shall not be unreasonably withheld, the Indenture Trustee may act through agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith that it believes to be authorized or
within its rights or powers.
(e) The Indenture Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Indenture or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Noteholders or the Note Purchaser,
pursuant to the provisions of this Indenture, unless such Noteholders or the
Note Purchaser shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(f) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Noteholders or the Note Purchaser; provided, however, that if the payment
within a reasonable time to the Indenture Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action.
(g) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed as a duty,
and the Indenture Trustee shall not be answerable for anything other than its
negligence or willful misconduct in the performance of such act.
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Section 6.04. Not Responsible for Recitals or Issuance of Secured
Notes. The recitals contained herein and in the Secured Notes, except, with
respect to the Indenture Trustee, the certificates of authentication on the
Secured Notes, shall be taken as the statements of the Trust, and the Owner
Trustee, the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Owner Trustee and the Indenture
Trustee make no representations with respect to the Trust Estate or as to the
validity or sufficiency of this Indenture or of the Secured Notes. Neither the
Indenture Trustee nor the Owner Trustee shall be accountable for the use or
application by the Trust of the Secured Notes or the proceeds thereof or any
money paid to the Trust or upon a Trust Order pursuant to the provisions hereof.
Section 6.05. May Hold Secured Notes. The Indenture Trustee, any Agent,
or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Secured Notes and, subject to Sections 6.07 and
6.13 hereof, may otherwise deal with the Trust or any Affiliate of the Trust
with the same rights it would have if it were not Indenture Trustee, Agent or
such other agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder shall be segregated from other funds as provided in this
Indenture, the Sale and Servicing Agreement and otherwise as required by law.
The Indenture Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Trust and except to
the extent of income or other gain on investments that are obligations of the
Indenture Trustee, in its commercial capacity, and income or other gain actually
received by the Indenture Trustee on investments, which are obligations of
others.
Section 6.07. Eligibility, Disqualification. Irrespective of whether
this Indenture is qualified under the TIA, this Indenture shall always have an
indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and
surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject
to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b)
be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by
Xxxxx'x; provided, however, that the Indenture Trustee's separate capital and
surplus shall at all times be at least the amount required by TIA Section
310(a)(2). If the Indenture Trustee publishes annual reports of condition of the
type described in TIA Section 310(a)(1), its combined capital and surplus for
purposes of this Section 6.08 shall be as set forth in the latest such report.
If at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
Section 6.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article VI shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10 hereof.
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(a) The Indenture Trustee may resign at any time by giving
written notice thereof to the Trust and the Note Purchaser. If an instrument of
acceptance by a successor Indenture Trustee shall not have been delivered to the
Indenture Trustee within thirty (30) days after the giving of such notice of
resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the
Note Purchaser or, with the consent of the Note Purchaser, by Act of the Holders
representing more than 50% of the Note Principal Balance of the Outstanding
Notes, by written notice delivered to the Indenture Trustee and to the Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 hereof and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.07 hereof after
written request therefor by the Trust or by any Noteholder; or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.08 hereof or shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of
the Trust, by a Trust Order, with the consent of the Note Purchaser, may remove
the Indenture Trustee, and the Owner Trustee, on behalf of the Trust, by a Trust
Order, shall join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint a
successor Indenture Trustee acceptable to the Note Purchaser and to vest in such
successor Indenture Trustee any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Indenture; provided,
however, if the Owner Trustee, on behalf of the Trust, and the Note Purchaser do
not join in such appointment within fifteen (15) days after the receipt by it of
a request to do so, or in case an Event of Default or Amortization Event has
occurred and is continuing, the Indenture Trustee may petition a court of
competent jurisdiction to make such appointment, or (y) subject to Section 5.15
hereof, and, in the case of a conflicting interest as described in clause (i)
above, unless the Indenture Trustee's duty to resign has been stayed as provided
in TIA Section 310(b), any Noteholder who has been a bona fide Holder of a
Secured Note for at least six (6) months or the Note Purchaser may, on behalf of
himself and all others similarly situated, with the consent of the Note
Purchaser, petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of the
Indenture Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a
Trust Order, shall promptly appoint a successor Indenture Trustee acceptable to
the Note Purchaser. If within one (1) year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture Trustee
shall be appointed by the Note Purchaser or, with the consent of the Note
Purchaser, by Act of the Holders of Secured Notes representing more than 50% of
the Note Principal Balance of the Outstanding Notes delivered to the Trust and
the retiring Indenture Trustee, the successor Indenture Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Indenture Trustee and supersede the predecessor Indenture Trustee appointed by
the Trust. If no successor Indenture Trustee shall have been so appointed by the
Trust, the Note Purchaser or Noteholders and shall have accepted appointment in
the manner hereinafter provided, any Noteholder who has been a bona fide Holder
of a Secured Note for at least six (6) months may, on behalf of himself and all
others similarly situated, with the consent of the Note Purchaser, petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
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(f) The Servicer, on behalf of the Trust, shall give notice of
each resignation and each removal of the Indenture Trustee and each appointment
of a successor Indenture Trustee to the Holders of Secured Notes and the Note
Purchaser. Each notice shall include the name of the successor Indenture Trustee
and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge
and deliver to the Trust, the Note Purchaser and the retiring Indenture Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee. Notwithstanding the foregoing, upon a Trust Request of the
Owner Trustee, on behalf of the Trust, or the successor Indenture Trustee, such
retiring Indenture Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Indenture Trustee all the
rights, powers and trusts of the retiring Indenture Trustee, and shall duly
assign, transfer and deliver to such successor Indenture Trustee all property
and money held by such retiring Indenture Trustee hereunder. Upon a written
request of any such successor Indenture Trustee, the Owner Trustee, on behalf of
the Trust, shall, with the written consent of the Note Purchaser, execute and
deliver any and all instruments for more fully and certainly vesting in and
confirming to such successor Indenture Trustee all such rights, powers and
trusts.
No successor Indenture Trustee shall accept its appointment
unless at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article VI.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into which
the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Secured Notes
have been authenticated, but not delivered, by the Indenture Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Secured Notes so authenticated with the same effect as if such successor
Indenture Trustee had authenticated such Secured Notes.
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Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, for the purpose of meeting the legal requirements of the TIA
or of any jurisdiction in which any of the Trust Estate may at the time be
located, the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the Note Purchaser or of the Holders
of Secured Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes with respect to which a co-trustee or separate trustee is
being appointed, with the written consent of the Note Purchaser, the Owner
Trustee, on behalf of the Trust, shall for such purpose join with the Indenture
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of the Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 6.13. If the Owner Trustee, on
behalf of the Trust, does not join in such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an Event of Default or
Amortization Event has occurred and is continuing, the Indenture Trustee alone
shall have power to make such appointment. All fees and expenses of any
co-trustee or separate trustee shall be payable by the Indenture Trustee.
Should any written instrument from the Trust be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on written request, be executed, acknowledged
and delivered by the Owner Trustee, on behalf of the Trust, with the written
consent of the Note Purchaser.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:
(a) The Secured Notes shall be authenticated and delivered and
all rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be exercised,
solely by the Indenture Trustee.
(b) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that under
any law of any jurisdiction in which any particular act is to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
37
(c) The Indenture Trustee at any time, by an instrument in
writing, executed by it, with the concurrence of the Owner Trustee, on behalf of
the Trust, evidenced by a Trust Order, may accept the resignation of or remove
any co-trustee or separate trustee appointed under this Section 6.13, and, in
case an Event of Default or Amortization Event has occurred and is continuing,
the Indenture Trustee shall have power to accept the resignation of, or remove,
any such co-trustee or separate trustee without the concurrence of the Trust,
but upon the written request of the Indenture Trustee, the Owner Trustee, on
behalf of the Trust, shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section 6.13.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture Trustee, or
any other such trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 6.14. Authenticating Agents. The Owner Trustee, acting at the
direction of the Majority Certificateholders, shall appoint an Authenticating
Agent with power to act on the Trust's behalf, subject to the direction of the
Majority Certificateholders, in the authentication and delivery of the Secured
Notes designated for such authentication and, containing provisions therein for
such authentication (unless the Owner Trustee, acting at the direction of the
Majority Certificateholders, has made other arrangements, satisfactory to the
Indenture Trustee and such Authenticating Agent, for notation on the Secured
Notes of the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Secured Notes) in connection with transfers
and exchanges under Section 2.06 hereof, as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by Section 2.06
hereof to authenticate and deliver Secured Notes. For all purposes of this
Indenture (other than in connection with the authentication and delivery of
Secured Notes pursuant to Sections 2.05 and 2.11 hereof in connection with their
initial issuance), the authentication and delivery of Secured Notes by the
Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the
authentication and delivery of Secured Notes "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 hereof for the Indenture Trustee hereunder and has
an office for presentation of Secured Notes in the United States of America. The
Indenture Trustee shall initially be the Authenticating Agent and shall be the
Note Registrar as provided in Section 2.06 hereof. The office from which the
Indenture Trustee shall perform its duties as Note Registrar and Authenticating
Agent shall be its Corporate Trust Office. Any Authenticating Agent appointed
pursuant to the terms of this Section 6.14 or pursuant to the terms of any
supplemental indenture shall deliver to the Indenture Trustee as a condition
precedent to the effectiveness of such appointment an instrument accepting the
trusts, duties and responsibilities of Authenticating Agent and of Note
Registrar or co-Note Registrar and indemnifying the Indenture Trustee for and
holding the Indenture Trustee harmless against, any loss, liability or expense
(including reasonable attorneys' fees) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance, administration
of the trust or exercise of authority by such Authenticating Agent, Note
Registrar or co-Note Registrar.
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Any corporation or banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any corporation or banking association succeeding to the corporate
trust business of any Authenticating Agent, shall be the successor of the
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14, without the execution or filing of any further
act on the part of the parties hereto or the Authenticating Agent or such
successor corporation or banking association.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trust. The Owner Trustee, acting at the
direction of the Majority Certificateholders, may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Indenture Trustee. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
promptly appoint a successor Authenticating Agent, shall give written notice of
such appointment to the Indenture Trustee, and shall mail notice of such
appointment to all Holders of Secured Notes.
The Indenture Trustee agrees, subject to Section 6.01(e)
hereof, to pay to any Authenticating Agent from time to time reasonable
compensation for its services and the Indenture Trustee shall be entitled to be
reimbursed for such payments pursuant to Section 6.16 hereof. The provisions of
Sections 2.09, 6.04 and 6.05 hereof shall be applicable to any Authenticating
Agent.
Section 6.15. Review of Custodial Loan Files.
(a) The Indenture Trustee shall cause the Collateral Agent to
execute and deliver each Trust Receipt and the Exceptions Report required by
Section 2.07(a) of the Sale and Servicing Agreement.
(b) In giving each of the Trust Receipts and Exceptions
Reports referred to in clause (a) of this Section 6.15, neither the Indenture
Trustee nor the Collateral Agent shall be under any duty or obligation (i) to
inspect, review or examine any such documents, instruments, securities or other
papers to determine that they or the signatures thereto are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face or (ii) to determine whether any Custodial Loan File should include a
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
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(c) In the event that the Mortgage Loans are required to be
recorded in accordance with the provisions of Article II of the Sale and
Servicing Agreement, no later than the fifth Business Day of each month,
commencing in July 2000, the Indenture Trustee shall cause the Collateral Agent
to deliver to the Servicer and the Note Purchaser an exception report dated as
of the first day of such month, identifying those Mortgage Loans for which it
has not yet received (i) an original recorded Mortgage or a copy thereof
certified to be true and correct by the public recording office in possession of
such Mortgage or (ii) an original recorded Assignment of Mortgage to the
Indenture Trustee and any required intervening Assignments of Mortgage or a copy
thereof certified to be a true and correct copy by the public recording office
in possession of such Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses
The Indenture Trustee shall be entitled to receive the
Indenture Trustee Fee on each Payment Date pursuant to Section 8.06 of the Sale
and Servicing Agreement. The Indenture Trustee also shall be entitled to (i)
payment of or reimbursement for expenses and disbursements incurred or made by
the Indenture Trustee in accordance with any of the provisions of this Indenture
(including, but not limited to, the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
and (ii) indemnification against losses, liability and expenses, including
reasonable attorney's fees, incurred, arising out of or in connection with this
Indenture, the Secured Notes and the Sale and Servicing Agreement. The Indenture
Trustee and any director, officer, employee or agent of the Indenture Trustee
shall be indemnified by, first, the Trust and, second, the Servicer and held
harmless against any loss, liability or reasonable expense incurred in
connection with this Indenture or the Secured Notes, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance by the Indenture Trustee of its duties hereunder.
The obligations of the Servicer and the Trust under this Section 6.16 shall
survive termination of the Trust and payment of the Secured Notes, and shall
extend to any co-Indenture Trustee or separate-Indenture Trustee appointed
pursuant to this Article VI.
Section 6.17. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants for the benefit of the Noteholders
that:
(a) Organization and Good Standing. The Indenture Trustee is
a banking corporation duly organized, validly existing and in good standing
under the laws of the state of New York.
(b) Authorization. The Indenture Trustee has the power,
authority and legal right to execute, deliver and perform this Indenture, and
the execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(c) Binding Obligations. This Indenture, assuming due
authorization, execution and delivery by all other parties thereto, constitutes
the legal, valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally and the rights of
trust companies in particular and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether in a proceeding at law or in equity.
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(d) Tax Returns. In the event the Trust shall be required to
file tax returns, the Servicer shall prepare or shall cause to be prepared any
tax returns required to be filed by the Trust and shall remit such returns to
the Owner Trustee for signature at least five days before such returns are due
to be filed. The Indenture Trustee, upon request, will furnish the Servicer with
all such information known to the Indenture Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust. In
no event shall the Indenture Trustee or the Owner Trustee in their respective
individual capacities be liable for any liabilities, costs or expenses of the
Trust, the Noteholders or the Servicer arising under any tax law or regulation,
including, without limitation, federal, state or local income or excise taxes or
any other tax imposed on or measured by income (or any interest or penalty with
respect thereto or arising from any failure to comply therewith).
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and
Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be
furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Payment Date occurring closest
to six (6) months after the Closing Date and each Payment Date occurring at six
(6) month intervals thereafter, all information in the possession or control of
the Note Registrar, in such form as the Indenture Trustee may reasonably
require, as to names and addresses of the Holders of Secured Notes, and (ii) at
such other times, as the Indenture Trustee may request in writing, within thirty
(30) days after receipt by the Note Registrar of any such request, a list of
similar form and content as of a date not more than ten (10) days prior to the
time such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.
(a) In addition to furnishing to the Indenture Trustee the
Noteholder lists, if any, required under clause (a) of this Section 7.01, the
Note Registrar shall also furnish all Noteholder lists, if any, required under
Section 3.03 hereof at the times required by such Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Secured
Notes contained in the most recent list, if any, furnished to the Indenture
Trustee as provided in Section 7.01 hereof and the names and addresses of the
Holders of Secured Notes received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.01 hereof upon receipt of a new list so furnished.
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(a) Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this Indenture
or under the Secured Notes.
(c) The Trust, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60) days
after December 31 of each year, commencing December 31, 2000, (i) the Indenture
Trustee shall, if required by TIA Section 313(a), mail to all Holders a brief
report dated as of such date that complies with TIA Section 313(a); (ii) the
Indenture Trustee shall, to the extent not set forth in the Monthly Report
pursuant to Section 2.08(d) hereof; and the Indenture Trustee shall also mail to
Holders of Secured Notes and the Note Purchaser any reports required by TIA
Section 313(b)(1). For purposes of the information required to be included in
any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable),
or 313(b)(2), the principal amount of indenture securities outstanding on the
date as of which such information is provided shall be the Note Principal
Balance of the then Outstanding Notes covered by the report.
(a) A copy of each report required under this Section 7.03
shall, at the time of such transmission to Holders of Secured Notes and the Note
Purchaser be filed by the Indenture Trustee with the Commission and with each
securities exchange upon which the Secured Notes are listed. The Servicer, on
behalf of the Trust, will notify the Indenture Trustee when the Secured Notes
are listed on any securities exchange.
Section 7.04. Reports by Trust. The Servicer, on behalf of the Trust,
(a) shall deliver to the Indenture Trustee within fifteen (15) days after the
Trust is required to file the same with the Commission copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Trust is required to file with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b)
shall also comply with the other provisions of TIA Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Account The Collection Account established pursuant to
Section 8.03 of the Sale and Servicing Agreement.
Section 8.02. Payments; Statements. On each Payment Date, the Indenture
Trustee shall effect the distributions described in Section 8.06 of the Sale and
Servicing Agreement.
Section 8.03. Interest Payments. (a) The Principal Amount of each
Secured Note shall bear interest, for each day, at the Note Rate, in each case
computed on the basis of a 360-day year for the actual number of days elapsed.
(a) All interest accrued on each Secured Note for each
Interest Period (the "Interest Payment Amount") shall be payable pursuant to
Section 8.06(c) of the Sale and Servicing Agreement.
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(c) If, by the terms of this Indenture or any Secured Note,
the Trust at any time is required or obligated to pay interest at a rate in
excess of the maximum rate permitted by applicable law, the rate of interest
payable with respect to the affected Secured Notes shall be immediately reduced
to that maximum rate and the portion of all prior applicable interest payments
in excess of the maximum rate permitted by applicable law shall be applied in
reduction of the Principal Amounts of the affected Secured Notes.
Section 8.04. Principal Payments; Payment on Maturity Date.
(a) The Trust will make payments of principal pursuant to
Sections 2.19, 4.02 and 8.06(d) of the Sale and Servicing Agreement and Article
X hereof.
(b) From time to time, the Note Purchaser may, in the
exercise of its rights under Article XII of the Sale and Servicing Agreement
(and in compliance therewith), direct that the Trust sell one or more Mortgage
Loans to one or more identified Persons and on specified terms and conditions,
and apply the proceeds of such sale (i) to the extent required to avoid the
occurrence of a Shortfall upon giving effect to such sale, to the prepayment of
the principal of the Secured Notes, and (ii) to the payment of accrued and
unpaid interest on that portion of the Secured Notes so prepaid, to the date of
prepayment. The Trust shall comply with all such directions, and, upon the
closing of such sale, shall apply the proceeds thereof in accordance with the
preceding sentence.
(c) The Trust shall repay the Note Principal Balance of each
Secured Note in full on the Final Stated Maturity Date, together with all
accrued and unpaid interest thereon to the Final Stated Maturity Date and all
other accrued and unpaid obligations under the Basic Documents. In addition, if
an optional redemption is exercised pursuant to Section 10.01 hereof, the Trust
shall repay the respective Note Principal Balance of all issued and outstanding
Secured Notes in full on the related optional redemption date, together with all
accrued and unpaid interest thereon to such date and all other accrued and
unpaid obligations under the Basic Documents.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Originators or the Depositor set forth in
Section 4.01 of the Sale and Servicing Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Originators or the Depositor, as applicable,
to either cure, repurchase or substitute for such Mortgage Loan as provided in
Section 4.02 of the Sale and Servicing Agreement. Upon any purchase of or
substitution for a Deleted Mortgage Loan by the Originators or the Depositor in
accordance with Section 4.02 of the Sale and Servicing Agreement, the Indenture
Trustee shall cause the Collateral Agent to deliver the Custodial Loan File
relating to such Deleted Mortgage Loan to the Originators or the Depositor, as
applicable, and the Trust, the Collateral Agent and the Indenture Trustee shall
execute such instruments of transfer as are necessary to convey title to such
Deleted Mortgage Loan to the Originators or the Depositor, as applicable, from
the lien of this Indenture. Nothing in this Section 8.05 should be construed to
obligate the Indenture Trustee to actively monitor the correctness or accuracy
of the representations and warranties of the Originators or the Depositor.
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Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports required by Section 2.08(d) to Noteholders of record as of
the related Record Date.
The Indenture Trustee shall make available at its Corporate
Trust Office, during normal business hours, for review by any Noteholder or any
person identified to the Indenture Trustee as a prospective Noteholder, after
reasonable notice, originals or copies of the following items: (a) the Indenture
and any amendments thereto, (b) all Monthly Reports, Remittance Reports and
other reports delivered since the Closing Date pursuant to Section 2.08(d)
hereof, (c) any Officers' Certificates delivered to the Indenture Trustee since
the Closing Date as described in the Indenture, to the extent they have been
received by the Indenture Trustee and (d) any Accountants' reports delivered to
the Indenture Trustee since the Closing Date as required under the Sale and
Servicing Agreement. Copies of any and all of the foregoing items will be
available from the Indenture Trustee upon request; however, the Indenture
Trustee will be permitted to require payment of a sum sufficient to cover the
reasonable costs and expenses of providing such copies and shall not be required
to provide such copies without reasonable assurances that such sum will be paid.
Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate to
the Trust (other than any cash held for the payment of the Secured Notes
pursuant to Section 3.03 or 4.02 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder (other than the Note Purchaser),
enter into or consent to any amendment or supplement to the Sale and Servicing
Agreement for the purpose of increasing the obligations or duties of any party
other than the Indenture Trustee or the Holders of the Secured Notes. The
Indenture Trustee may, in its discretion, decline to enter into or consent to
any such supplement or amendment: (i) unless the Indenture Trustee receives an
Opinion of Counsel that the position of the Holders would not be materially
adversely affected or (ii) if its own rights, duties or immunities would be
adversely affected.
Section 8.09. Delivery of the Custodial Loan Files Pursuant to Sale and
Servicing Agreement. As is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer the Custodial Loan Files for such Mortgage Loan upon receipt by
the Indenture Trustee and the Collateral Agent on or prior to the date such
release is to be made of:
(a) such Officer's Certificates, if any, as are required by
the Sale and Servicing Agreement; and
(b) a Request for Release, executed by the Servicer,
providing that the Servicer will hold or retain the Custodial Loan Files in
trust for the benefit of the Indenture Trustee, the Note Purchaser and the
Holders of Secured Notes.
Section 8.10. Termination of Servicer.
Upon the occurrence and during the continuance of a Servicer
Event of Default specified in Section 9.01 of the Sale and Servicing Agreement,
44
the Indenture Trustee may, with the consent of the Note Purchaser or, with the
prior written consent of the Note Purchaser, the Holder of Secured Notes
representing not less than 50% of the Note Principal Balance of the Outstanding
Notes, and shall, upon the direction of the Note Purchaser (or as otherwise
provided in the Sale and Servicing Agreement), terminate the Servicer as
provided in Section 9.01 of the Sale and Servicing Agreement. If the Indenture
Trustee terminates the Servicer, the Indenture Trustee shall, pursuant to
Section 9.02 of the Sale and Servicing Agreement, assume the duties of the
Servicer or appoint a successor Servicer acceptable to the Trust and the Note
Purchaser and meeting the requirements set forth in the Sale and Servicing
Agreement.
Section 8.11. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to be
taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with
releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
Section 8.12. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Note Purchaser, appoint one or more Collateral Agents to hold all
or a portion of the Custodial Loan Files, as Agent for the Indenture Trustee.
Such Collateral Agent shall meet the requirements of Article XI of the Sale and
Servicing Agreement. Matters concerning the Collateral Agents shall be governed
by said Article XI. The Chase Manhattan Bank is hereby appointed as the initial
Collateral Agent hereunder.
Section 8.13. Trust Estate and Accounts Held for Benefit of the Note
Purchaser. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Custodial Loan Files for the benefit of the
Noteholders.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Purchaser and without the consent of the Holders of
any Secured Notes, the Trust and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes;
provided, however, that any such supplement shall not, as evidenced by an
Officer's Certificate acceptable to the Note Purchaser, adversely affect in any
respect the interests of any Noteholder:
(a) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey and
45
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(b) to add to the conditions, limitations and restrictions on
the authorized amount, terms and purposes of the issuance, authentication and
delivery of any Secured Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Trust
to the extent permitted herein, and the assumption by any such successor of the
covenants of the Trust herein and in the Secured Notes contained;
(d) to add to the covenants of the Trust, for the benefit of
the Holders of all Secured Notes, or to surrender any right or power herein
conferred upon the Trust; or
(e) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or questions
arising under this Indenture, which shall not be inconsistent with the
provisions of this Indenture, provided that such action shall not adversely
affect in any material respect the interests of the Holders of the Secured Notes
or the Holders of the Trust Certificates.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Purchaser and with the consent of Holders of Secured
Notes representing not less than a majority of the Note Principal Balance of all
Outstanding Notes by Act of said Holders delivered to the Trust and the
Indenture Trustee, the Trust and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Secured Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change any Payment Date or the Final Stated Maturity Date
of the Secured Notes or, with respect to the Secured Notes, reduce the Note
Principal Balance thereof or the Note Rate thereon, change the earliest date on
which any Secured Note may be redeemed at the option of the Servicer, change any
place of payment where, or the coin or currency in which, any Secured Note or
any interest thereon is payable, or impair the right to institute suit for the
enforcement of the payment of any installment of interest due on any Secured
Note on or after the Final Stated Maturity Date thereof or for the enforcement
of the payment of the entire remaining unpaid principal amount of any Secured
Note on or after the Final Stated Maturity Date (or, in the case of redemption,
on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of
the Outstanding Notes, the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with provisions of this Indenture or Defaults
hereunder and their consequences provided for in this Indenture;
(c) modify any of the provisions of this Section 9.02 or
Sections 5.13 or 5.17(b) hereof, except to increase any percentage specified
46
therein or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(d) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(e) permit the creation of any lien other than the lien of
this Indenture with respect to any part of the Trust Estate or terminate the
lien of this Indenture on any property at any time subject hereto or deprive the
Holder of any Secured Note of the security afforded by the lien of this
Indenture;
(f) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the Interest Payment Amount or Principal
Payment Amount for any Payment Date (including the calculation of any of the
individual components of such amounts) or to affect rights of the Holders of the
Secured Notes to the benefits of any provisions for the mandatory redemption of
Secured Notes contained herein; or
(g) incur any indebtedness, other than the Secured Notes,
that would cause the Trust or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether
or not any Secured Notes would be affected by any supplemental indenture and any
such determination shall be conclusive upon the Holders of all Secured Notes,
whether theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Trust and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.02, the
Indenture Trustee shall mail to the Holders of the Secured Notes to which such
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights or immunities under this Indenture or otherwise.
The Servicer, on behalf of the Trust, shall cause executed copies of any
supplemental indentures to be delivered to the Note Purchaser.
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Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Secured Notes to
which such supplemental indenture relates that have theretofore been or
thereafter are authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the TIA as then in effect so long as this Indenture shall then be qualified
under the TIA.
Section 9.06. Reference in Secured Notes to Supplemental Indentures.
Secured Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
so determine, new Secured Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Owner Trustee, acting at the direction of the Majority
Certificateholders, to any such supplemental indenture may be prepared by the
Servicer and executed by the Owner Trustee, acting at the direction of the
Majority Certificateholders, on behalf of the Trust, and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
Section 9.07. Amendments to Governing Documents. The Indenture Trustee
shall, upon a Trust Request, consent to any proposed amendment to the Trust's
governing documents, or an amendment to or waiver of any provision of any other
document relating to the Trust's governing documents, such consent to be given
without the necessity of obtaining the consent of the Holders of any Secured
Notes upon receipt by the Indenture Trustee of an Officer's Certificate, to
which such proposed amendment or waiver shall be attached, stating that such
attached copy is a true copy of the proposed amendment or waiver and that all
conditions precedent to such consent specified in this Section 9.07 have been
satisfied.
Notwithstanding the foregoing, the Indenture Trustee may
decline to consent to a proposed waiver or amendment that adversely affects its
own rights, duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require
that any Person obtain the consent of the Indenture Trustee to any amendment or
waiver or any provision of any document where the making of such amendment or
the giving of such waiver without obtaining the consent of the Indenture Trustee
is not prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
(a) If the Note Purchaser so elects in its sole discretion
(such election to be made by the Note Purchaser in writing and delivered to the
48
Trust and the Indenture Trustee at least two (2) Business Days prior to the date
specified in the writing as the Redemption Date), the Trust shall repay the
respective Note Principal Balance of all issued and outstanding Secured Notes in
full on the Optional Redemption Date, together with all accrued and unpaid
interest thereon to the Optional Redemption Date and all other accrued and
unpaid obligations under the Basic Documents. Pursuant to the preceding
sentence, the Note Purchaser hereby elects, and the Trust hereby acknowledges
receipt of such notice of election, to require the Trust to repay the respective
Note Principal Balances of all issued and outstanding Secured Notes in full on
the Optional Redemption Date (which shall be the Redemption Date), together with
all accrued and unpaid interest thereon to, but not including, the Redemption
Date and all other accrued and unpaid obligations under the Basic Documents;
provided, however, that the Note Purchaser and the Trust may mutually agree to
revoke such election on any date that is 90 or more days prior to the Optional
Redemption Date.
(b) Any redemption shall be accomplished by a Disposition by
the Trust pursuant to Article XII of the Sale and Servicing Agreement, or if the
Indenture Trustee shall not have received notice of a Disposition within 2
Business Days prior to the Redemption Date, then the Indenture Trustee shall
sell the Trust Estate at one or more private Sales called and conducted in any
manner permitted by law. The amounts on deposit therein shall be distributed by
the Indenture Trustee on such Redemption Date in accordance with the priority
set forth in Section 5.07 hereof. No termination or redemption is permitted
without the prior written consent of the Note Purchaser.
(c) Any expenses associated with the compliance of the
provisions hereof in connection with a redemption of the Secured Notes shall be
paid by the Trust.
(d) Upon receipt of the notice from the Note Purchaser of
its election to cause the Trust to redeem the Secured Notes pursuant to Section
10.01(a) hereof, the Servicer shall prepare, and the Indenture Trustee shall
deliver to the Trust and the Note Purchaser, no later than the related
Redemption Date, a Monthly Report.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust by
facsimile at least one Business Day prior to the Redemption Date to each Holder
of Secured Notes to be redeemed, such Holders being determined as of the Record
Date for such Payment Date, and to the Note Purchaser.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the price at which the Secured Notes will be redeemed;
and
(c) the fact of payment in full on such Secured Notes, the
place where such Secured Notes are to be surrendered for final payment (which
shall be the office or agency of the Trust to be maintained as provided in
Section 3.02 hereof), and that no interest shall accrue on such Secured Note for
any period after the date fixed for redemption.
49
Failure to give notice of redemption, or any defect therein,
to any Holder of any Secured Note selected for redemption shall not impair or
affect the validity of the redemption of any other Secured Note.
Section 10.03. Secured Notes Payable on Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Secured
Notes to be redeemed shall, on the applicable Redemption Date, become due and
payable and (unless the Trust shall default in such payment) no interest shall
accrue on such Secured Notes for any period after such Redemption Date;
provided, however, that if such payment is not made on the Redemption Date, the
Note Principal Balance shall, until paid, bear interest from the Redemption Date
at the applicable Note Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any action
under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(a) Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture,
including one furnished pursuant to specific requirements of this Indenture
relating to a particular application or request (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include and shall be deemed to
include (regardless of whether specifically stated therein) the following:
(i) a statement that each individual signing such
certificate, opinion or letter has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of the Trust may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
50
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any Opinion of Counsel may be based on the written opinion of other
counsel, in which event such Opinion of Counsel shall be accompanied by a copy
of such other counsel's opinion and shall include a statement to the effect that
such counsel believes that such counsel and the Indenture Trustee may reasonably
rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Wherever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Trust shall deliver any document as a condition of the granting of such
application, or as evidence of the Trust's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Trust to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Section 6.01(b)(ii) hereof.
Whenever in this Indenture it is provided that the absence
of the occurrence and continuation of a Default, Event of Default or
Amortization Event is a condition precedent to the taking of any action by the
Indenture Trustee at the request or direction of the Trust, then,
notwithstanding that the satisfaction of such condition is a condition precedent
to the Trust's right to make such request or direction, the Indenture Trustee
shall be protected in acting in accordance with such request or direction if it
does not have knowledge of the occurrence and continuation of such Default,
Event of Default or Amortization Event as provided in Section 6.01(d) hereof.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Trust. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
51
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section 11.03.
(a) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Secured Notes shall be proved by the
Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Secured Notes shall bind
the Holder of every Secured Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Indenture Trustee or the Trust in reliance
thereon, whether or not notation of such action is made upon such Secured Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Purchaser
and Trust. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Trust
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with and received by the Indenture Trustee at its
Corporate Trust Office; or
(b) the Trust by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder (except as provided in Section
5.01(c) and (d)) hereof if in writing and mailed, first-class postage prepaid,
to the Trust addressed to it at ABFS Mortgage Loan Warehouse Trust 2000-2, in
care of First Union Trust Company, National Association, One Xxxxxx Square, 000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to the
Indenture Trustee by the Trust.
(c) the Note Purchaser by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage prepaid, to UBS Principal Finance, addressed to it
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: American Business
Warehouse Line (in each case in which notice or other communication to the Note
Purchaser refers to an Event of Default or an Amortization Event, then a copy of
such notice or other communication should also be sent to the attention of each
of the General Counsel and shall be marked to indicate "URGENT MATERIAL
ENCLOSED"), or at any other address previously furnished in writing to the
Indenture Trustee by the Note Purchaser; or
52
(d) the Depositor by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage paid, to ABFS Greenmont, Inc., 0000 Xxxxxxxxxx
Xxxx, 000 Xxxxxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; Attention: Xxxxxxx
Xxxxx, Executive Vice President, or at any other address previously furnished in
writing to the Indenture Trustee by the Depositor; or
(e) the Originators or the Servicer by the Indenture Trustee
or by any Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage paid, to such party, in care of
American Business Financial Services, Inc., XxxxXxxxxx Xxxxxx Xxxxxx, 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000, Attention:
General Counsel or at any other address previously furnished in writing to the
Indenture Trustee by the Originators or the Servicer.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
Section 11.07. Conflict With Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
53
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether
so expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Secured Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Secured Notes, expressed or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any
Payment Date, Redemption Date or any other date on which principal of or
interest on any Secured Note is proposed to be paid shall not be a Business Day,
then (notwithstanding any other provision of the Secured Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date, Redemption Date or other date for the payment of
principal of or interest on any Secured Note and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or
3.06 hereof.
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust, the Owner Trustee or
the Indenture Trustee on the Secured Notes or under this Indenture or any
54
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Trust or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Trust
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder and Beneficial Owner, by accepting a Secured
Note, hereby covenant and agree that, prior to the date which is one year and
one day after the payment in full of the Secured Notes, they will not at any
time institute against the Trust, or join in any institution against the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Secured Notes, this Indenture or any of the Basic Documents. In addition, the
Indenture Trustee will on behalf of the Holders of the Secured Notes, (a) file a
written objection to any motion or other proceeding seeking the substantive
consolidation of any Originator with the Trust, (b) file an appropriate
memorandum of points and authorities or other brief in support of such
objection, or (c) endeavor to establish at the hearing on such objection that
the substantive consolidation of such entity would be materially prejudicial to
the Noteholders.
This Section 11.17 will survive for one year and one day
following the termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the Note
Purchaser, during the Trust's normal business hours, to examine all of books of
account, records, reports and other papers of the Trust, to make copies and
extracts therefrom, to cause such books to be audited by Independent Accountants
selected by the Indenture Trustee or the Note Purchaser, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Trust hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any expense incident to the exercise by the Indenture Trustee of any
right under this Section 11.18 shall be borne by the Trust.
Section 11.19. Usury. The amount of interest payable or paid on any
Secured Note under the terms of this Indenture shall be limited to an amount
that shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the United States or the State of New York (whichever shall
permit the higher rate), that could lawfully be contracted for, charged or
55
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Secured Note exceeds the Highest Lawful Rate, the Trust stipulates that such
excess amount will be deemed to have been paid as a result of an error on the
part of both the Indenture Trustee, acting on behalf of the Holder of such
Secured Note, and the Trust, and the Holder receiving such excess payment shall
promptly, upon discovery of such error or upon notice thereof from the Trust or
the Indenture Trustee, refund the amount of such excess or, at the option of the
Indenture Trustee, apply the excess to the payment of principal of such Secured
Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid
to the Indenture Trustee for the benefit of Holders of Secured Notes for the
use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such Secured Notes.
Section 11.20. Third Party Beneficiary.
The parties agree that the Note Purchaser is intended and
shall have all rights of a third-party beneficiary of this Indenture, and may
exercise its rights hereunder directly.
[Remainder of Page Intentionally Left Blank]
56
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN WAREHOUSE
TRUST 2000-2
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner
Trustee
By: _______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: _______________________________
Name:
Title:
[Signature Page to Indenture]
EXHIBIT A
FORM OF SECURED NOTE
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2000-2, SERIES 2000-2
SECURED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND THE ISSUER HAS
NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS
AMENDED ("THE INVESTMENT COMPANY ACT"). THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM, AND IN ACCORDANCE WITH SECTION 3(c)(7) OF THE INVESTMENT
COMPANY ACT. IN ADDITION, THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
RESTRICTIONS AND CONDITIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE UNDER
WHICH THIS NOTE IS ISSUED (A COPY OF WHICH INDENTURE IS AVAILABLE FROM THE OWNER
TRUSTEE OR INDENTURE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE OWNER
TRUSTEE AND THE INDENTURE TRUSTEE OF AN INVESTMENT LETTER IN WHICH THE
TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN
RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE PERSONALLY LIABLE FOR
PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
-------------------------------------------
--------------------------------------------------------------------------------
Secured Note
A
--------------------------------------------------------------------------------
Percentage Interest
$____________ 100%
--------------------------------------------------------------------------------
Date of Indenture: First Payment Date:
As of July 30, 2000 ______, 2000
--------------------------------------------------------------------------------
------------------------------------------
A-1
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2000-2
MORTGAGE BACKED NOTES, SERIES 2000-2
ABFS Mortgage Loan Warehouse Trust 2000-2, a statutory business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Trust"), for value received, hereby promises to pay to the registered
owner, the principal sum of $_____________ (the "Advance Amount"), together with
interest on the unpaid balance thereof from time to time outstanding at the
applicable interest rate and on the dates set forth in the Indenture, dated as
of July 6, 2000 (the "Indenture"), between the Trust and The Chase Manhattan
Bank, a New York banking corporation, as Indenture Trustee (the "Indenture
Trustee").
The entire unpaid Note Principal Balance of this Secured Note shall be
due and payable on the earlier of (i) the Payment Date occurring in ______ (this
Secured Note's "Final Stated Maturity Date"), (ii) the Redemption Date, if any,
applicable to the Secured Notes pursuant to Article X of the Indenture or (iii)
the date on which an Event of Default or Amortization Event shall have occurred
and be continuing, if the Secured Notes have been declared to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. Capitalized
terms used but not defined herein are defined in Appendix I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the
25th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 25th day and any date on which Mortgage Loans are
sold by the Trust (each such date a "Payment Date"), commencing on the first
Payment Date specified on the cover page hereof, to the Person in whose name
this Secured Note is registered at the close of business on the applicable
Record Date, in an amount equal to the product of (a) the Percentage Interest
evidenced by this Secured Note and (b) the sum of the amounts to be paid on the
Secured Notes with respect to such Payment Date, all as more specifically set
forth in the Indenture.
On each Payment Date, Noteholders will be entitled to receive interest
payments in an aggregate amount equal to the Interest Payment Amount for such
Payment Date, together with principal payments in an aggregate amount equal to
the Principal Payment Amount for such Payment Date. The "Note Principal Balance"
of a Secured Note as of any date of determination is equal to the Advance Amount
(disregarding clause (ii) of the definition thereof) of such Secured Note minus
(ii) all payments of principal on such Secured Note pursuant to the terms of the
Indenture.
The principal of and interest on this Secured Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Trust with respect to this Secured Note shall be applied first to interest due
and payable on this Secured Note as provided above and then to the unpaid
principal of this Secured Note.
This Secured Note is one of a duly authorized issue of Secured Notes of
the Trust, designated as the "ABFS Mortgage Loan Warehouse Trust 2000-2, Secured
Notes, Series 2000-2," issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Trust, the Indenture Trustee
and the Holders of the Secured Notes. To the extent that any provision of this
Secured Note contradicts or is inconsistent with the provisions of the
Indenture, the provisions of the Indenture shall control and supersede such
contradictory or inconsistent provision herein. The Secured Notes are subject to
all terms of the Indenture.
A-2
This Secured Note is secured by the related Mortgage Loans, the other
collateral related thereto pledged as security therefor as provided in the
Indenture.
As described above, the entire unpaid Note Principal Balance of this
Secured Note shall be due and payable on the earlier of the Final Stated
Maturity Date and any Redemption Date, pursuant to Article X of the Indenture.
Notwithstanding the foregoing, the entire unpaid Note Principal Balance of the
Secured Notes shall be due and payable on the date on which an Event of Default
or an Amortization Event shall have occurred and be continuing if the Indenture
Trustee, at the direction or upon the prior written consent of the Note
Purchaser, or the Holders of the Secured Notes representing not less than 50% of
the Note Principal Balance of the Outstanding Notes (with the prior written
consent of the Note Purchaser), shall have declared the Secured Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Secured Notes shall be made pro rata to
the Noteholders entitled thereto.
The Trust shall not be liable upon the indebtedness evidenced by the
Secured Notes except to the extent of amounts available from the Trust Estate
which constitutes security for the payment of the Secured Notes. The assets
included in the Trust Estate will be sole source of payments on the Secured
Notes, and each Holder hereof, by its acceptance of this Secured Note, agrees
that (i) such Secured Note will be limited in right of payment to amounts
available from the Trust Estate as provided in the Indenture and (ii) such
Holder shall have no recourse to the Trust, the Owner Trustee, the Indenture
Trustee, the Depositor, the Seller, the Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Trust pledged to secure the Secured Notes pursuant to the Indenture.
Payments of interest on this Secured Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Secured Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Secured Note (or one or more
Predecessor Secured Notes) on the Note Register as of the close of business on
each Record Date. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Secured Note be submitted for
notation of payment. Notwithstanding the foregoing, upon written request at
least five days prior to the related Record Date with appropriate instructions
by the Holder of this Secured Note (holding an aggregate initial Note Principal
Balance of at least $1,000,000), any payment of principal or interest, other
than the final installment of principal or interest, shall be made by wire
transfer to an account in the United States of America designated by such Holder
reasonably satisfactory to the Indenture Trustee. Notwithstanding the forgoing,
so long as UBS Principal Finance LLC is the Holder of all of the Secured Notes,
payments of interest and principal shall be made to Chase NYC, ABA#: 000000000,
A/C #: [066614651], Account Name: UBS PFLLC, Attn: Xxxxx Xxxxxxxxxxx
(203-719-1817), Ref: American Business Financial Services. Any reduction in the
A-3
principal amount of this Secured Note (or any one or more Predecessor Secured
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Secured Note and of any Secured Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Secured Note on a Payment Date, then the Indenture Trustee, in the name of
and on behalf of the Trust, will notify the Person who was the Holder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Secured Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes.
As provided in the Indenture, this Secured Note may be redeemed at the
option of the Note Purchaser upon the conditions set forth in Section 10.01 of
the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Secured Note may be registered on the Note
Register upon surrender of this Secured Note for registration of transfer at the
office or agency designated by the Trust pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Secured Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Secured Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
In the case of a transfer of a Secured Note, the Note Registrar shall
not register the transfer of this Secured Note unless the Note Registrar has
received a representation letter from the transferee to the effect that either
(i) the transferee is not, and is not acquiring the Secured Note on behalf of or
with the assets of, an employee benefit plan or other retirement plan or
arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of this Secured Note by the transferee qualifies for
exemptive relief under a class exemption from the prohibited transaction
provisions of Sections 4.06 and 4.07 of ERISA issued by the Department of Labor.
Each Noteholder, by acceptance of a Secured Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
Secured Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Trust, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
A-4
Each Noteholder agrees, by acceptance of this Secured Note, to treat
this Secured Note as indebtedness for all federal, state and other tax purposes.
The Trust has entered into the Indenture and this Secured Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Secured Notes will qualify as
indebtedness of the Trust secured by the Trust Estate. Each Noteholder, by
acceptance of a Secured Note, agrees to treat the Secured Notes for federal,
state and local income, single business and franchise tax purposes as
indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this
Secured Note, the Trust, the Indenture Trustee and any agent of the Trust or the
Indenture Trustee may treat the Person in whose name this Secured Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Secured Note be overdue, and none of the Trust, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Secured Notes under the Indenture at
any time by the Trust with the consent of the Note Purchaser and the Holders of
Secured Notes representing a majority of the Note Principal Balance of all
Outstanding Notes. The Indenture also contains provisions permitting the (i)
Note Purchaser or (ii) the Holders of Secured Notes representing specified
percentages of the Note Principal Balance of Outstanding Notes, on behalf of the
Holders of all the Secured Notes, to waive compliance by the Trust with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Note Purchaser or by the
Holder of this Secured Note (or any one or more Predecessor Secured Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Secured Note and of any Secured Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Secured Note. The Indenture also permits the
amendment thereof, in certain limited circumstances, or the waiver of certain
terms and conditions set forth in the Indenture, without the consent of Holders
of the Secured Notes issued thereunder.
The term "Trust" as used in this Secured Note includes any successor to
the Trust under the Indenture.
The Secured Notes will be delivered in fully registered, definitive
form in denominations as provided in the Indenture and subject to certain
limitations therein set forth. The Secured Notes are exchangeable for a like
aggregate initial Note Principal Balance of Secured Notes of different
authorized denominations, as requested by the Holder surrendering the same.
A-5
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Secured
Note or of the Indenture shall alter or impair the obligation of the Trust,
which is absolute and unconditional, to pay the principal of and interest on
this Secured Note at the times, place and rate, and in the coin or currency
herein prescribed.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this
Secured Note shall not be entitled to any benefit under the Indenture referred
to herein, or be valid or obligatory for any purpose.
A-6
IN WITNESS WHEREOF, the Trust has caused this Instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Dated:
ABFS MORTGAGE LOAN WAREHOUSE
TRUST 2000-2
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By:
-----------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Secured Notes designated above and referred to in
the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By:
----------------------------------------
Authorized Signatory
A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
----------------------------------------------------------
(name and address of assignee)
the within Secured Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
------------------------------------------, attorney, to transfer said
Secured Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
----------------------------------------------
Signature Guaranteed:
*/
-----------------------------------------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Secured
Note in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
A-8
EXHIBIT B
FORM OF NOTE PURCHASER CONSENT TO
MORTGAGE LOANS
__________, 2000
The Chase Manhattan Bank,
as Indenture Trustee
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Fiduciary Services
Re: ABFS Mortgage Loan Warehouse Trust 2000-2;
Secured Notes, Series 2000-2
----------------------------
Ladies and Gentlemen:
Reference is made to the Indenture, dated as of July 6, 2000
(the "Indenture"), by and between ABFS Mortgage Loan Warehouse Trust 2000-2, as
issuer (the "Trust"), and you, as indenture trustee (the "Indenture Trustee").
Pursuant to Section 2.12 of the Indenture, the undersigned hereby approves and
consents to the acquisition of the Mortgage Loans listed on Schedule I attached
to the related Assignment aggregating $____________ in Aggregate Principal
Balance by the Trust and the subsequent pledge of such Mortgage Loans by the
Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note
Purchaser.
UBS PRINCIPAL FINANCE, LLC
By:
-----------------------
Name:
Title:
B-1
EXHIBIT C
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: ABFS Mortgage Loan Warehouse Trust 2000-2 Mortgage
Backed Notes, Series 2000-2(the "Secured Notes")
------------------------------------------------
Reference is hereby made to the Indenture dated as of July 6, 2000 (the
"Indenture") between ABFS Mortgage Loan Warehouse Trust 2000-2, as Issuer, and
The Chase Manhattan Bank, as Indenture Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture. This
letter relates to $__________ initial Note Principal Balance of Secured Notes
which are held in the form of Definitive Notes registered in the name of
_________________ (the "Transferor"). The Transferor has requested a transfer of
such Definitive Notes for Definitive Notes registered in the name of [insert
name of transferee]. In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Indenture and the Secured Notes, (ii) the Investment Company Act of 1940, as
amended and (iii) Rule 144A under the Securities Act to a purchaser that the
Transferor reasonably believes is a Qualified Purchaser and a "qualified
institutional buyer" within the meaning of Rule 144A, purchasing for its own
account or for the account of a "qualified institutional buyer," and is aware
that the sale to it is being made in reliance upon Rule 144A, in a transaction
meeting the requirements of Rule 144A and in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction. This certificate and the statements contained herein are made for
your benefit and the benefit of the Indenture Trustee.
--------------------------------------------------
[Name of Transferor]
By:
---------------------------------------------
Name:
Title:
Dated: ___________, ____
C-1
EXHIBIT D
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
---------------
Date
Dear Sirs:
In connection with our proposed purchase of $______________
aggregate principal balance of ABFS Mortgage Loan Warehouse Trust 2000-2 Secured
Notes, Series 2000-2 (the "Secured Notes"), we confirm that:
(1) We understand that the Secured Notes have not been, and will not be,
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Secured Notes within three years of the later of the
date of original issuance of the Secured Notes or the last day on which
such Secured Notes are owned by the Depositor or any affiliate of the
Depositor we will do so only (A) to the Depositor, (B) to "qualified
purchasers" (within the meaning of Section (3)(c)(7) of the Investment
Company Act of 1940, as amended, which are also "qualified
institutional buyers" (within the meaning of Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (D) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which prior to such transfer,
delivers to the Indenture Trustee under the Indenture dated as of July
6, 2000 between ABFS Mortgage Loan Warehouse Trust 2000-2, as Issuer,
and The Chase Manhattan Bank, as Indenture Trustee, a signed letter in
the form of this letter; and we further agree, in the capacities stated
above, to provide to any person purchasing any of the Secured Notes
from us a notice advising such purchaser that resales of the Secured
Notes are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Secured Notes to an Institutional Accredited Investor, we will be
required to furnish to the Indenture Trustee a certification from such
transferee in the form hereof to confirm that the proposed sale is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. We
further understand that the Secured Notes purchased by us will bear a
legend to the foregoing effect.
(3) We are acquiring the Secured Notes for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience
in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Secured Notes, and we and any
account for which we are acting are each able to bear the economic risk
of such investment.
D-1
(4) We are an Institutional Accredited Investor, and we are acquiring the
Secured Notes purchased by us for our own account or for one or more
accounts (each of which is an Institutional Accredited Investor) as to
each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Indenture.
D-2
You and the Indenture Trustee are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
-------------------------------------
[Purchaser]
By:
----------------------------------
Name:
Title
D-3
EXHIBIT E
FORM OF TRANSFEREE CERTIFICATION--
INVESTMENT COMPANY ACT OF 1940
-----------------
[date]
Dear Sirs:
In connection with our proposed purchase of $______________ aggregate
principal balance of ABFS Mortgage Loan Warehouse Trust 2000-2 Secured Notes,
Series 2000-2 (the "Secured Notes"), the undersigned (the "Transferee") confirms
that:
1. The Transferee is a Qualified Purchaser as defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
2. The Transferee is not a dealer that owns and invests on a
discretionary basis less than US$25,000,000 in securities of issuers that are
not affiliated persons of said dealer.
3. The Transferee was not formed for the purpose of investing in the
Secured Notes or other securities of the Issuer.
4. If the Transferee is an investment company excepted from the
Investment Company Act pursuant to Section 3(c)(1) or Section 3(c)(7) thereof
(or a foreign investment company under Section 7(d) thereof relying on Section
3(c)(1) or Section 3(c)(7) thereof with respect to its U.S. holders) and was
formed on or before April 30, 1996, it has received the consent of those of its
beneficial owners who acquired their interests on or before April 30, 1996 with
respect to its treatment as a qualified purchaser in the manner required by
Section 2(a)(51)(C) of the Investment Company Act and the rules thereunder.
5. The Transferee is not a (a) partnership, (b) common trust fund, (c)
special trust, pension fund or retirement plan or (d) other entity in which the
partners, beneficiaries, beneficial owners or participants, as the case may be,
may designate the particular investments to be made or the allocation thereof.
6. The value of the Secured Notes and other securities of the Trust
purchased shall constitute less than 40% of the value of the Transferee's total
assets.
7. The Transferee will hold at least the minimum denomination of the
Secured Notes.
8. The Transferee is purchasing the Secured Notes for its own account
or for the accounts of one or more persons each of whom meets all of the
requirements of items 1 through 8 herein.
E-1
9. The Transferee agrees that it will not reoffer, resell, pledge, or
otherwise transfer any Secured Note or interest therein except to a transferee
who (a) duly completes a purchase application or transfer certificate in the
form hereof, (b) submits the purchase application or transfer certificate to the
Indenture Trustee, and (c) receives approval from the Depositor for the
transfer. The Transferee also agrees that it will not reoffer, resell, pledge or
otherwise transfer any Secured Note or interest therein through an intermediary
or in any manner other than pursuant to direct contact with the transferee
thereof.
10. The Transferee understands that the Secured Notes have not been and
will not be registered under the Securities Act, that the Trust has not been
registered under the Investment Company Act and that the Secured Notes are being
sold to it in a transaction that is exempt from the registration requirements of
the Securities Act and in accordance with the requirements of Section 3(c)(7) of
the Investment Company Act.
11. In making this purchase the Transferee is not acting with the
intention of evading, either alone or in conjunction with any other person, the
requirements of the Investment Company Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust.
[insert name of Transferee],
on behalf of itself and each
Beneficial Owner
By:
-----------------------------------
Name:
Title:
E-2
APPENDIX I
DEFINED TERMS
"Accepted Servicing Practices": The Servicer's normal
servicing practices, which in general will conform to the mortgage servicing
practices of prudent mortgage lending institutions which service, for their own
account, mortgage loans of the same type as the Mortgage Loans in the
jurisdiction in which the related Mortgaged Properties are located.
"Account": Either of the Collection Account and the General
Operating Account.
"Accountant": A Person engaged in the practice of accounting
who (except when the Indenture provides that an Accountant must be Independent)
may be employed by or affiliated with the Trust or an Affiliate of the Trust.
"Accredited Investor": The meaning assigned to such term in
Section 2.12(b)(i) of the Indenture.
"Accrual Period": With respect to the Secured Notes and any
Payment Date, the period from and including the prior Payment Date (or, in the
case of the first Payment Date with respect to a Secured Note, from and
including the related Transfer Date) to and including the day immediately
preceding such Payment Date.
"Act": With respect to any Noteholder, as defined in Section
11.03 of the Indenture.
"Advance Amount": The amount to be advanced on a Transfer
Date; provided, that such amount shall not cause a Collateral Deficiency Event
to occur on such Transfer Date.
"Affiliate": With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent": Any Note Registrar, Collateral Agent, or
Authenticating Agent.
"Aggregate Principal Balance": With respect to any Mortgage
Loans and any date of determination, the aggregate of the Principal Balance of
such Mortgage Loans as of such date of determination.
"Amortization Event": Shall mean the occurrence of any of the
following:
(i) a Servicer Event of Default;
(ii) the Sponsor shall fail to maintain a consolidated net
worth of at least $________;
1
(iii) a breach of any of the representations, warranties or
covenants set forth in Article III of the Sale and
Servicing Agreement;
(iv) the occurrence of an Event of Default or a Default,
if the Note Purchaser so elects, provided that if any
Default is cured before it becomes an Event of
Default, the Funding Period shall be reinstated,
unless the last day of the Commitment Term has
occurred or an event described in clause (v) has
occurred and has not been Deemed Cured;
(v) the occurrence of a Performance Trigger Event, if the
Note Purchaser so elects, provided that, if such
Performance Trigger Event is Deemed Cured, the
Funding Period shall be reinstated, unless the last
day of the Commitment Term has expired or an event
described in clause (iv) has occurred and an Event of
Default or Default still exists; and
(vi) the Sponsor shall fail to, directly or indirectly,
own 100% of the outstanding common stock of each of
the Originators.
"Appraised Value": As to any Mortgaged Property, the appraised
value of the Mortgaged Property based upon the appraisal made by or on behalf of
the related Originator at the time referred to in the related Basic Documents
or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the
sales price of the Mortgaged Property, if such sales price is less than such
appraised value.
"Assignment": Each Assignment of Mortgage Loans and other
related property, executed by the related Originators or the Depositor, as the
case may be, in substantially the form attached to the Sale and Servicing
Agreement as Exhibit J.
"Assignment of Mortgage": With respect to each Mortgage Loan,
an assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the
Indenture Trustee, for the benefit of the Noteholders.
"Authenticating Agent": The Person, if any, appointed as
Authenticating Agent by the Owner Trustee, acting at the direction of the
Majority Certificateholders, pursuant to Section 6.14 of the Indenture, until
any successor Authenticating Agent for the Notes is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Indenture Trustee. Any Authenticating Agent other than the
Indenture Trustee shall sign an instrument under which it agrees to be bound by
all of the terms of this Indenture applicable to the Authenticating Agent.
"Authorized Denominations": A minimum Percentage Interest
corresponding to a minimum denomination of $5,000,000 or integral multiples of
$1,000 in excess thereof; provided, however, that one Secured Note is issuable
in a denomination equal to any such multiple plus an additional amount such that
the aggregate denomination of all Notes shall be equal to the Original Note
Principal Balance.
2
"Authorized Officer": With respect to (i) the Indenture
Trustee, any Responsible Officer, (ii) the Owner Trustee or the Collateral
Agent, the president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, any
trust officer or any other officer of the Owner Trustee or the Collateral Agent
customarily performing functions similar to those performed by the above
officers and (iii) any other Person, the chairman, chief operating officer,
president or any vice president of such Person.
"Available Funds": With respect to any Payment Date and the
Collection Account, the amount to be on deposit in such Account on such Payment
Date as a result of the Servicer's remittance of collections and proceeds on the
Mortgage Loans and the Servicer's deposit of Periodic Advances, Monthly Advances
and Compensating Interest. For purposes of calculating the Available Funds, any
Repurchase Price or Substitution Adjustment that is paid shall be deemed
deposited in the Collection Account in the Due Period preceding such
Determination Date.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Basic Documents": The Indenture, the Trust Agreement, the
Sale and Servicing Agreement, the Purchase Agreement and the Administration
Agreement.
"Best Efforts": Efforts determined to be in good faith and
reasonably diligent by the Person performing such efforts, specifically the
Trust or the Servicer or any other agent of the Trust, as the case may be, in
its reasonable discretion. Such efforts do not require the Trust or the Servicer
or any other agent of the Trust, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Trust or the Servicer or any other agent of the Trust, as the case
may be, to advance or expand fees or sums of money in addition to those
specifically set forth in this Indenture and the Sale and Servicing Agreement.
"Borrowing Base": The product of: (A) 97.00% and (B) the
lesser of (i) the aggregate outstanding Principal Balance of the Pledged
Mortgage Loans and (ii) the aggregate Market Value of the Pledged Mortgage
Loans, in each case as of the date of determination and minus the amount of any
Target Amount Shortfall.
"Business Day": Any day other than (i) a Saturday or Sunday or
(ii) a day that is either a legal holiday or a day on which banking institutions
in the State of Texas, the State of New York, the State of Delaware, the State
of Pennsylvania or the state in which the Indenture Trustee's office from which
payments will be made to Certificateholders, are authorized or obligated by law,
regulation or executive order to be closed.
"Business Purpose Property": Any mixed-use property,
commercial property, or four or more unit multifamily property.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
3
"Certificateholder": Has the meaning ascribed thereto in
Section 1.01 of the Trust Agreement.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.
"Closing Date": July 6, 2000.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The Pledged Mortgage Loans, Accounts and other
collateral described in the Granting Clause securing payment of the Notes.
"Collateral Agent": The Chase Manhattan Bank, a New York
banking corporation, in its capacity as Collateral Agent under the Sale and
Servicing Agreement, any successor-in-interest, or any successor Collateral
Agent appointed as provided in Section 11.08 of the Sale and Servicing
Agreement.
"Collateral Agent Fee": $600.00 per month [note to draft: the
Collateral Agent Fee is not currently in the waterfall; are there to be both a
Collateral Agent Fee and an Indenture Trustee Fee?]
"Collateral Deficiency Event": A situation which shall be
deemed to be existing as of any day on which (a) the aggregate Note Principal
Balance of the Secured Notes as of such day exceeds, (b) the Borrowing Base as
of such day.
"Collection Account": The Eligible Account established and
maintained pursuant to Section 8.03 of the Sale and Servicing Agreement.
"Combined Loan-to-Value Ratio" or "CLTV": As to any Mortgage
Loan at any time, the fraction, expressed as a percentage, the numerator of
which is the sum of (i) the Principal Balance thereof at such time and (ii) if
such Mortgage Loan is subject to a second mortgage, the unpaid principal balance
of any related first mortgage loan or loans, if any, as of such time, and the
denominator of which is the Appraised Value of any related Mortgaged Property or
Properties as of the date of the appraisal used by or on behalf of the
Originators to underwrite such Mortgage Loan.
"Commitment Term": shall mean that period of time commencing
on the date hereof and continuing until the earlier of (i) June __, 2001, which
is exactly 364 days from the date hereof, and (ii) the date upon which the
Obligations are declared to be, or become, due and payable in full in accordance
with Article X or Section 5.02 of the Indenture.
"Compensating Interest": As defined in Section 7.13 of the
Sale and Servicing Agreement.
"Corporate Trust Office": With respect to (x) the Indenture
Trustee, the principal office of the indenture Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of the Basic Documents is located at
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: ABFS
Mortgage Loan Warehouse Trust 2000-2; (y) the Owner Trustee, the principal
office of the Owner Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the date of the
execution of the Basic Documents is located at One Xxxxxx Square, 000 Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration; and (z) the Collateral Agent, the principal office of the
Collateral Agent at which at any particular time its corporate trust business
shall be principally administered, which office at the date of the execution of
the Basic Documents is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Capital Markets Fiduciary Services, ABFS Mortgage Loan
Warehouse Trust 2000-2.
4
"Custodial Loan File": For each Mortgage Loan, the mortgage
loan documents set forth in Section 2.06(a) of the Sale and Servicing Agreement
that are delivered to the Collateral Agent pursuant to Section 2.06(a) of the
Sale and Servicing Agreement or which at any time come into the possession of
the Collateral Agent.
"Custodial Delivery Failure": As defined in Section 11.10(b)
of the Sale and Servicing Agreement.
"Custodial Register" As defined in Section 2.08(d) of the Sale
and Servicing Agreement.
"Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage loan in full, nor is intended to cure a
Delinquency nor is it intended as a future payment.
"Cut-Off-Date": With respect to each Mortgage Loan, the date
designated as such in the related Assignment.
"Daily Report": As defined in Section 8.02 of the Sale and
Servicing Agreement.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"Deemed Cured": With respect to any Performance Trigger Event,
that the delinquency and/or loss ratios which resulted in such Performance
Trigger Event have declined to below the specified levels for three consecutive
Determination Dates.
"Default": Any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Defective Mortgage Loan": A Mortgage Loan which is subject to
purchase or replacement (i) as having one or more exceptions in the Exceptions
Report as contemplated by Section 2.07(b) of the Sale and Servicing Agreement or
(ii) for breaches of representations and warranties as contemplated by Section
4.02(b) of the Sale and Servicing Agreement.
5
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding Principal Balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Notes": Notes other then Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquent": A Mortgage Loan is "delinquent" if any payment
due thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"Delivery" when used with respect to any Eligible Investments
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations, in each case
that constitute "instruments" within the meaning of Section 9-105(l)(i)
of the UCC and are susceptible of physical delivery, transfer thereof
by physical delivery to the Indenture Trustee endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
endorsed in blank by an effective endorsement, and, with respect to a
certificated security (as defined in Section 8-102(4) of the UCC) (i)
the acquisition of possession by the Indenture Trustee of the "security
certificate" (as defined in 8-102(16) of the UCC), or (ii) another
person, other than a "securities intermediary" (as defined in 8-102(14)
of the UCC), either acquires possession of the security certificate on
behalf of the Indenture Trustee or, having previously acquired
possession of the certificate, acknowledges that it holds for the
Indenture Trustee, or (iii) a securities intermediary acting on behalf
of the Indenture Trustee acquires possession of the security
certificate, only if the certificate is in "registered form" (as
defined in 8-102(13) of the UCC) and has been specially indorsed to the
Indenture Trustee by an effective "indorsement" (as defined in
8-102(l1) of the UCC) (all of the foregoing "Physical Property") and,
in any event, any such Physical Property in registered form shall be in
the name of the Indenture Trustee or its nominee or custodian, and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of or a
security interest in any such Eligible Investment to the Indenture
Trustee, consistent with changes in applicable law or regulations or
the interpretation thereof;
6
(b) with respect to any security that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8
and 9 of the UCC, book-entry registration of such Eligible Investment
to an appropriate Participant's Securities Account (as defined in such
applicable federal regulations) maintained with a Federal Reserve Bank
by a financial institution which is a "Participant" pursuant to
applicable federal regulations and issuance by such Participant of a
deposit advice or other written confirmation of such book-entry
registration to the Indenture Trustee; and the making by such financial
institution of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
federal book-entry regulations as belonging to the Indenture Trustee
and as having been credited to a securities account in the name of the
Indenture Trustee and indicating that such financial institution holds
such Eligible Investment solely as agent for the Indenture Trustee; and
such additional or alternative procedures as may be or hereafter become
requisite or appropriate to effect complete transfer of ownership of or
a security interest in any such Eligible Investment to the Indenture
Trustee, consistent with changes in applicable law or regulations or
the interpretation thereof; and
(c) with respect to any Eligible Investment that is an
uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, (i) registration by the issuer of the
Indenture Trustee as the registered owner, upon original issue or
registration or transfer, or (ii) another person, other than a
securities intermediary, either becomes the registered owner of the
uncertificated security on behalf of the Indenture Trustee or, having
previously become the registered owner, acknowledges that it holds for
the Indenture Trustee; and such additional or alternative procedures as
may be or hereafter become requisite or appropriate to effect complete
transfer of ownership of or a security interest in any such Eligible
Investment to the Indenture Trustee, consistent with changes in
applicable law or regulations or the interpretation thereof.
"Depositor": ABFS Greenmont, Inc.
"Determination Date": With respect to any Payment Date, the
10th day of the month in which such Payment Date occurs, or if such 10th day is
not a Business Day, the Business Day preceding such 10th day.
"Disbursement Order": The disbursement order in the form
attached as Exhibit E to the Sale and Servicing Agreement.
"Disposition": A Securitization, Whole Loan Sale transaction,
or other disposition of Mortgage Loans.
"Disposition Agent": UBS Principal Finance LLC and its
successors and assigns acting at the direction of the Majority Noteholders.
"Disposition Participant": As applicable, with respect to a
Disposition, any "depositor" with respect to such Disposition, the Disposition
Agent, the Majority Noteholders, the Trust, the Servicer, the related trustee
and the related custodian, any nationally recognized credit rating agency, the
related underwriters, the related placement agent, the related credit enhancer,
the related whole-loan purchaser, the related purchaser of securities and/or any
other party necessary or, in the good faith belief of any of the foregoing,
desirable to effect a Disposition.
7
"Disposition Proceeds": With respect to a Disposition, (x) the
proceeds of the Disposition remitted to the Trust in respect of the Mortgage
Loans transferred on the date of and with respect to such Disposition, including
without limitation, any cash and Excess Interest Securities created in any
related Securitization less all costs, fees and expenses incurred in connection
with such Disposition, including, without limitation, all amounts deposited into
any reserve accounts upon the closing thereof, minus (y) all other amounts
agreed upon in writing by the Note Purchaser, the Trust and the Servicer.
"Due Date": With respect to each Mortgage Loan and any Payment
Date, the day of the calendar month preceding the calendar month in which such
Payment Date occurs on which the Monthly Payment for such Mortgage Loan was due.
"Due Period": With respect to each Payment Date, the calendar
month preceding the related Payment Date.
"Eligible Account": Either (A) an account or accounts
maintained with an institution (which may include the Indenture Trustee;
provided, that the Indenture Trustee otherwise meets these requirements) whose
deposits are insured by the FDIC, the unsecured and uncollateralized debt
obligations of which institution shall be rated "AA" or better by S&P and "Aa2"
or better by Moody's and in the highest short term rating category by S&P and
Moody's, and which is (i) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (ii) an
institution (including the Indenture Trustee) duly organized, validly existing
and in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws or (iv) a principal subsidiary of a bank
holding company or (B) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution or trust
company (which may include the Indenture Trustee; provided, that the Indenture
Trustee otherwise meets these requirements), having capital and surplus of not
less the $50,000,000, acting in its fiduciary capacity.
"Eligible Mortgage Loans": All Mortgage Loans: (i) as to which
no representation and warranty made pursuant to Section 4.01 of the Sale and
Servicing Agreement has been breached and (ii) that are not more than 59 days
past due.
"Eligible Servicer": Either (x) American Business Credit,
Inc., for so long as it is considered an approved servicer by at least two
nationally recognized rating agencies (S&P, Moody's and/or FitchIBCA) or (y) any
other Person to which the Majority Noteholders may consent in writing.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
8
"Exception": With respect to any Custodial Loan File, any of
the following: (i) any variance from the requirements of Section 2.06(a) with
respect to such Custodial Loan File; provided that an Exception shall be
reported to the extent that the aggregate principal balances (as reflected on
the Mortgage Loan Schedule) of all Mortgage Loans listed on the Mortgage Loan
Schedule for which no original Mortgage Note has been delivered exceeds 0.5% of
the aggregate original principal balance (as reflected on the Mortgage Loan
Schedule) for all Mortgage Loans; provided that a Lost Note Affidavit (with a
copy of the original Mortgage Note attached) has been delivered to the
Collateral Agent with respect to each such Mortgage Loan; and (ii) a Mortgage
Loan for which a Responsible Officer of the Collateral Agent receives written
notice or has actual knowledge of a lien or security interest in respect of the
related Mortgage Loan in favor of a Person other than the Indenture Trustee.
"Exceptions Report": A list generated by the Collateral Agent
in accordance with Section 2.07(a) of the Sale and Servicing Agreement, of
Mortgage Loans with respect to which the Collateral Agent holds the Custodial
Loan File for the benefit of the Indenture Trustee as of the close of business
on the prior Business Day, which list includes codes indicating all Exceptions
with respect to each Custodial Loan File listed thereon. Each Exceptions Report
shall set forth all Exceptions with respect to the Mortgage Loans covered by the
then-current Trust Receipt, and shall be attached to such Trust Receipt.
"Excess Interest Securities": With respect to a
Securitization, any subordinated securities backed by excess spread expected to
be, or which could be, issued, in connection therewith.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Event of Default": As defined in Section 5.01 of the
Indenture.
"Xxxxxx Mae": The Federal National Mortgage Association, and
any successor thereto.
"FDIC": The Federal Deposit Insurance Corporation, and any
successor thereto.
"Final Stated Maturity Date": The June 2030 Payment Date.
"Fitch": The meaning assigned to such term in Section 5.01(n)
of the Indenture.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, and
any successor thereto.
"Funding Period": Shall mean the period commencing on the
Closing Date and ending on the earliest to occur of (i) the last day of the
Commitment Term, (ii) an Amortization Event or (iii) the early termination
thereof by the Note Purchaser pursuant to Section 2.15 of the Sale and Servicing
Agreement.
"GAAP": Generally accepted accounting principles, consistently
applied.
"General Operating Account": The account, designated as such,
established and maintained pursuant to Section 8.03 of the Sale and Servicing
Agreement.
9
"Grant": To assign, transfer, mortgage, pledge, create and
grant a security interest in, deposit, set-over and confirm. A Grant of a
Mortgage Loan and the related Mortgage Files, a Permitted Investment, the Sale
and Servicing Agreement, or any other instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including without limitation the immediate and continuing right to
claim for, collect, receive and give receipts for principal and interest
payments thereunder, Insurance Proceeds, Loan Purchase prices and all other
moneys payable thereunder and all proceeds thereof, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything that the Granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Highest Lawful Rate": As defined in Section 11.19 of the
Indenture.
"Indenture": The Indenture, dated as of July 6, 2000, between
the Trust and the Indenture Trustee, relating to the issuance of the Notes.
"Indenture Trustee": The Chase Manhattan Bank, a New York
banking corporation, in its capacity as Indenture Trustee under the Indenture,
its successor-in-interest, or any successor Indenture Trustee appointed as
provided for in Section 6.09 of the Indenture.
"Indenture Trustee Fee": As to any Payment Date, the fee
payable to the Indenture Trustee in respect of its services as Indenture Trustee
pursuant to Section 6.16 of the Indenture that accrues at a monthly rate equal
to one-twelfth of 0.00875% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date, [subject to an aggregate monthly minimum of
$600.00].
"Independent": When used with respect to any specified Person,
means such a Person who (i) is in fact independent of the Trust and any other
obligor upon the Notes, (ii) does not have any direct financial interest or any
material indirect financial interest in the Trust or in any such other obligor
or in an Affiliate of the Trust or such other obligor, and (ii) is not connected
with the Trust or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by a Trust Order and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan to the extent such proceeds are
not applied to the restoration of the related Mortgaged Property or released to
the related Mortgagor in accordance with Accepted Servicing Practices.
"Insurance Proceeds" do not include "Insured Payments."
"Interest Amount Available": The aggregate amount on deposit
in the Collection Account as of the close of business on a Determination Date
(A) that are designated by the Servicer as "interest collections" on deposit in
the Collection Account on such Payment Date which relate to the prior Due
Period, (B) that constitute the interest portion of Disposition Proceeds, (C)
that are prepayment fees deposited into the Collection Account, (D) that
constitute investment earnings on amounts in deposit in the Collection Account
and (E) deposited by the Servicer as Servicing Advances, Periodic Advances or
Compensating Interest. The Interest Amount Available with respect to an
individual Secured Note is the portion of the amount described above which
related to the Related Mortgage Loans.
10
"Interest Payment Amount": As to each Secured Note with
respect to a Payment Date, the amount distributed to the related Noteholder
respecting interest, as contemplated by Section 8.06(c) of the Sale and
Servicing Agreement and calculated in accordance with Section 8.03 of the
Indenture.
"Investment Company Act": The Investment Company Act of 1940,
as amended.
"Lenders": The meaning assigned to such term in Section
5.01(j) of the Indenture.
"LIBOR": For each day, the rate of interest per annum for
dollar deposits with a duration of one month that is displayed (i) on the
Telerate Page 3750 at about 11:00 a.m. (London time) on the second LIBOR
Business Day prior to such day, or (ii) if that page ceases to display the
necessary information, then on whatever page replaces it on that service for the
purpose of displaying that information (the "Telerate Rate"). If the Telerate
Rate cannot be determined, then the one-month LIBOR rate" for any day means the
arithmetic mean of the rates of interest offered by two prime banks in the
London interbank market (selected by the Indenture Trustee) of dollar deposits
with a duration of one month at about 11:00 a.m. (London time) the second LIBOR
Business Day prior to such day. Each determination of the one-month LIBOR rate
by the Indenture Trustee pursuant to the provisions of this Agreement shall be
conclusive and binding absent manifest error.
[ADD LIBOR RATES FOR INITIAL INTEREST PERIOD AND PRIOR TO A
REDEMPTION BY INITIAL PURCHASER.]
"LIBOR Business Day": A Business Day on which trading in U.S.
dollars is conducted between banks in the London interbank market.
"Licensee": The meaning assigned to such term in Section
3.17(a)(ii) of the Indenture.
"Liquidated Loan Loss": With respect to any Payment Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan prior to the Due Date preceding such Payment
Date, equal to the excess of (i) the unpaid Principal Balance of each such
Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Mortgage
Interest Rate from the Due Date as to which interest was last paid with respect
thereto through the next succeeding Due Date following the date such Loan became
a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed
and with respect to which the Servicer determines that all Liquidation Proceeds
which it expects to recover have been recovered.
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"Liquidation Expenses": Expenses incurred by the Servicer in
connection with the liquidation of any defaulted Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions
and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant
to Sections 7.04 and 7.06 of the Sale and Servicing Agreement respecting the
related Mortgage Loan and any unreimbursed expenditures for real property taxes
or for property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds) received by the Servicer in connection with (i) the taking of all or a
part of Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan through an
Indenture Trustee's sale, foreclosure sale, REO Disposition or otherwise or
(iii) the liquidation of any other security for such Mortgage Loan, including,
without limitation, pledged equipment, inventory and working capital and
assignments of rights and interests made by the related Mortgagor; provided that
in no event shall net Liquidation Proceeds be less than zero.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage
Loan as of its date of origination, the ratio on such date borne by the
outstanding Principal Balance of the Mortgage Loan to the Appraised Value of the
related Mortgaged Property.
"Lost Note Affidavit": The lost note affidavit substantially
in the form attached to the Sale and Servicing Agreement as Exhibit
"Majority Certificateholders": The Holder or Holders of Trust
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
"Majority Noteholders": The Holder or Holders of Notes
evidencing Percentages Interests in excess of 51% in the aggregate.
"Margin": A rate per annum equal to 1.375%.
"Margin Option": As defined in Section 2.19 of the Sale and
Servicing Agreement.
"Market Value": The meaning assigned to such term in Section
8.10(a) of the Sale and Servicing Agreement; provided, however, that to the
extent that on any day a Pledged Mortgage Loan is not an Eligible Mortgage Loan,
the fair market value of such Mortgage Loan will be deemed zero.
"Material Adverse Effect": The meaning assigned to such term
in Section 3.17(b)(viii) of the Indenture.
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"Maximum Note Balance": $200,000,000.
"Minimum Margin Contribution": As defined in Section 2.19 of
the Sale and Servicing Agreement.
"Minimum Usage Fee": The meaning assigned to such term in
Section 2.04 of the Sale and Servicing Agreement.
"Monthly Payment": As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon as specified for such Due Date in the related amortization schedule at
the time applicable thereto (after adjustment, if any, for any Curtailments and
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than Deficient
Valuations, or similar proceeding or any moratorium or similar waiver or grace
period).
"Monthly Report": The monthly report prepared by the Servicer
and delivered to the parties specified in Section 7.16(a) of the Sale and
Servicing Agreement and containing the following information:
(a) the total of any Substitution Adjustments and any
Repurchase Price amounts included in such payment;
(b) any Restoration Amount then outstanding;
(c) the aggregate Principal Balance of all Mortgage Loans that
have ceased to be Eligible Mortgage Loans since the initial Cut-Off
Date (such Principal Balance measured as of the day immediately
preceding the date on which each such Mortgage Loan ceased to be an
Eligible Mortgage Loan), provided that each such Mortgage Loan was
Delinquent more than 30 days at the time such Mortgage Loan ceased to
be an Eligible Mortgage Loan, but excluding any Mortgage Loans that
have been released from the lien of the Indenture due to the
Disposition of such Mortgage Loans;
(d) the number and Principal Balance of Mortgage Loans which
are 30-59 days Delinquent and which are 60-89 days Delinquent;
(e) LIBOR for each day during the related Collection Period
together with a calculation of the daily amount of interest due based
on such rate; and
(f) the total amount of principal and interest scheduled to be
received on the Mortgage Loans during the related Collection Period
"Moody's": Xxxxx'x Investors Service, Inc., a corporation
organized and existing under Delaware law, or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized rating agency designated in any Securitization Agreement.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on the Mortgaged Property.
13
"Mortgage File": As described in Exhibit A to the Sale and
Servicing Agreement.
"Mortgage Insurance Policies": With respect to any Mortgaged
Property or Mortgage Loan, the insurance policies required pursuant to Section
4.01 of the Sale and Servicing Agreement.
"Mortgage Interest Rate": As to any Mortgage Loan, the per
annum fixed rate at which interest accrues on the unpaid Principal Balance
thereof.
"Mortgage Loan Documents": Each Mortgage, each Mortgage Note
and each other agreement, instrument or other document executed by one or more
Mortgagors or other obligors (including the surety agreement in the case of a
business purpose loan) that constitutes a portion of the related security with
respect to any Mortgage Loan.
"Mortgage Loan Schedule": The schedule of Mortgage Loans as of
the related Cut-Off Date attached as Schedule I to the related Assignment, which
will be deemed to be modified automatically to reflect any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage Loan, including
the addition of a Mortgage Loan, pursuant to the terms hereof. The Mortgage Loan
Schedule shall be transmitted either electronically or in hard copy, and shall
set forth the following information with respect to each Mortgage Loan so
pledged:
(i) the Originator's Mortgage Loan identifying number;
(ii) the Mortgagor's name and social security number;
(iii) the street address of the Mortgaged Property,
including the state and zip code;
(iv) a code indicating whether the Mortgaged Property
was represented by the Mortgagor as being
owner-occupied on the date of origination;
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the months to maturity at origination, based on the
original amortization schedule;
(vii) the loan-to-value ratio at origination;
(viii) the rate of interest in effect on the Transfer
Date;
(ix) the day of the month on which the first monthly
payment was due, and, if different, the day of the
month on which monthly payments are due as of the
Transfer Date;
(x) the stated maturity date;
(xi) the amount of the monthly payment due at
origination;
14
(xii) the amount of the monthly payment due on the first
due date after the Transfer Date;
(xiii) the interest paid-through date;
(xiv) the last monthly payment date on which any portion
of the monthly payment was applied to the reduction
of principal;
(xv) the original principal amount;
(xvi) the Principal Balance as of the close of business
on the Transfer Date;
(xvii) if the Mortgage Loan is an adjustable-rate loan,
the initial adjustment date thereunder, including
the look-back period;
(xviii) if the Mortgage Loan is an adjustable-rate loan,
the gross margin over the applicable interest rate
index;
(xix) a code indicating the purpose of the Mortgage Loan,
as indicated by the Mortgagor (i.e., purchase
financing, rate/term refinancing or cash-out
refinancing);
(xx) if the Mortgage Loan is an adjustable-rate loan,
the maximum interest rate;
(xxi) if the Mortgage Loan is an adjustable-rate loan,
the minimum interest rate;
(xxii) the interest rate at origination;
(xxiii) if the Mortgage Loan is an adjustable-rate loan,
the periodic rate cap and the maximum adjustment in
the interest rate that may be made on the first
adjustment date immediately following the Transfer
Date;
(xxiv) a code indicating the documentation program (i.e.,
full documentation, limited documentation or stated
income);
(xxv) if the Mortgage Loan is an adjustable-rate loan,
the applicable interest rate index to which the
gross margin is added, including the source of such
index;
(xxvi) if the Mortgage Loan is an adjustable-rate loan,
the first adjustment date thereunder to occur after
the Advance Date;
(xxvii) the risk grade;
(xxviii) any risk upgrade;
(xxix) the appraised value of the Mortgaged Property at
origination;
15
(xxx) if different from the appraised value, the dollar
value of the review appraisal of the Mortgaged
Property at origination;
(xxxi) the sale price of the Mortgaged Property, if
applicable;
(xxxii) the product type code (e.g., 3/27, 2/28, balloon,
etc.);
(xxxiii) a code indicating whether the Mortgage Loan is a
first-lien loan or a second-lien loan;
(xxxiv) if the Mortgage Loan is a second-lien loan, the
outstanding principal balance of the first lien on
the date of origination of such Mortgage Loan;
(xxxv) if the Mortgage Loan is a second-lien loan, the
combined loan-to-value ratio of such Mortgage Loan
and the first lien to which it is subject, as of
the origination date of such Mortgage Loan;
(xxxvi) the prepayment penalty code;
(xxxvii) the prepayment penalty term;
(xxxviii) the late charge;
(xxxix) the rounding code (next highest or nearest 0.125%);
and
(xl) the Mortgagor's FICO score, if any;
(xli) if there is mortgage insurance with respect to the
Mortgage Loan, a code so indicating;
(xlii) the date the Mortgage Loan was originated;
(xliii) if the Mortgage Loan is negatively amortizing, a
code so indicating;
(xliv) if the Mortgage Loan is a Section 32 Loan, a code
so indicating;
(xlv) the Mortgagor's debt to income ratio;
(xlvi) the number of units included in the Mortgaged
Property;
(xlvii) the remaining term of the Mortgage Loan, stated in
months;
(xlviii) the age of the Mortgage Loan, in months;
(xlix) the first monthly payment date under the Mortgage
Loan;
(l) if the Mortgage Loan is an adjustable-rate loan,
the frequency at which the interest rate is
adjusted;
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(li) if the Mortgage Loan is an adjustable-rate loan,
the frequency at which the monthly payment amount
is adjusted;
(lii) if the Mortgage Loan is an adjustable-rate loan,
the next reset date to occur after the Advance
Date;
(liii) if the Mortgage Loan is an adjustable-rate loan,
the maximum change that may be made in the interest
rate on any adjustment date; and
(liv) if the Mortgage Loan is a business purpose loan, a
code so indicating.
"Mortgage Loans": The mortgage loans, including the rights to
receive collections of principal and interest, to service such mortgage loans
and to receive prepayment penalties thereunder, and including the related
Mortgage Loan Documents, together with any Qualified Substitute Mortgage Loans
substituted therefor in accordance with the Basic Documents, as from time to
time are held as a part of the Trust. When used in respect of any Payment Date,
the term Mortgage Loans shall mean all Mortgage Loans (including those in
respect of which the Indenture Trustee has acquired the related Mortgaged
Property) which have not been repaid in full prior to the related Due Period,
did not become Liquidated Mortgage Loans prior to such related Due Period or
were not purchased or replaced by the Originators, the Depositor or the Sponsor
prior to such related Due Period.
"Mortgage Note": The original executed note or other evidence
of any indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgaged Property": The underlying property or properties
securing a Mortgage Loan, consisting of a fee simple interest in one or more
parcels of land.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": As to any Liquidated Mortgage
Loan, Liquidation Proceeds net of Liquidation Expenses and net of any
unreimbursed Periodic Advances and Servicing Advances made by the Servicer. For
all purposes of the Basic Documents, Net Liquidation Proceeds shall be allocated
first to accrued and unpaid interest on the related Mortgage Loan and then to
the unpaid Principal Balance thereof.
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
"Net Worth": with respect to any Person, the aggregate
"assets" of such Person less (i) the aggregate "liabilities" of such Person and
(ii) all intangible assets (including capitalized servicing rights and 50% of
all interest only strips) of such Person, with the term "asset" having the
meaning ascribed to such term by GAAP, and the term "liability" being those
obligations or liabilities of such Person which, in accordance with GAAP, would
be included in the liability side of such Person's balance sheet and which will
include, but not be limited to, any subordinate indebtedness with a maturity
prior to August 1, 2000. [For as long as no Event of Default is occurring? ] Any
subordinate indebtedness with a maturity of August 1, 2000, or later shall not
be included in the liability side of such Person's balance sheet for the
purposes of this calculation.
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"Nonrecoverable Advances": With respect to any Mortgage Loan,
(a) any Periodic Advance previously made and not reimbursed from late
collections pursuant to Section 7.02 of the Sale and Servicing Agreement, or (b)
a Periodic Advance proposed to be made in respect of a Mortgage Loan or REO
Property either of which, in the good faith business judgment of the Servicer,
as evidenced by an Officer's Certificate delivered to the Indenture Trustee no
later than the Business Day following such determination, would not ultimately
be recoverable pursuant to Section 7.02 of the Sale and Servicing Agreement.
"Noteholder" or "Holder": Initially, the Note Purchaser. Upon
a transfer of Secured Notes by the Note Purchaser, each Person in whose name a
Note is registered in the Note Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to the Indenture, any
Secured Note registered in the name of the Servicer or any Subservicer, or any
Affiliate of any of them, shall be deemed not to be outstanding and the
undivided Percentage Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Notes necessary to effect any
such consent, waiver, request or demand has been obtained.
"Note Principal Balance": As to any particular Secured Note
and date of determination, an amount equal to the sum of (i) the Advance Amount
(disregarding clause (ii) of the definition thereof) of such Note, minus (ii)
all payments of principal on such Note pursuant to the terms of the Indenture.
"Note Purchaser": UBS Principal Finance LLC.
"Note Rate": With respect to each Business Day, the per annum
rate equal to the LIBOR rate for such day plus the Margin; provided, that on any
day on or after the occurrence and during the continuance of an Event of
Default, the rate shall be LIBOR plus 5.00% (or any lesser rate that the Note
Purchaser may require).
"Note Register": As defined in Section 2.06 of the Indenture.
"Note Registrar": As defined in Section 2.06 of the Indenture.
"Notice of Borrowing": A notice with respect to each advance,
in the form set forth as Exhibit L to the Sale and Servicing Agreement,
delivered by the Trust to the Note Purchaser, the Indenture Trustee and the
Collateral Agent.
"Obligations": Shall mean all amounts due and owing by the
Trust to the Note Purchaser in connection with any Basic Document, including:
(i) the unpaid principal and, interest (including interest accruing thereon
after the Maturity Date and after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceedings, relating
to the Trust, whether or not a claim for post-filing or post-petition interest
is allowed in the proceeding) on any Secured Note, when and as due, whether at
maturity, by acceleration or otherwise; and (ii) all other obligations and
liabilities of every nature of the Trust from time to time owing to the Note
Purchaser, in each case whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred (including any monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in the proceeding).
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"Officer's Certificate": A certificate signed by the chairman
of the board, the president or a vice president and the treasurer, the secretary
or one of the assistant treasurers or assistant secretaries, the Servicer, or
the Depositor, or, with respect to the Trust, a certificate signed by a
Responsible Officer of the Owner Trustee, at the direction of the related
Majority Certificateholders as required by any Basic Document.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Servicer, the Depositor, the Indenture
Trustee, the Owner Trustee, a Noteholder or a Noteholder's prospective
transferee (including except as otherwise provided herein, in-house counsel)
reasonably acceptable to each addressee of such opinion and experienced in
matters relating to the subject of such opinion.
"Optional Redemption Date": With respect to any Secured Note
and at any time, the day on which the Commitment Term is scheduled to end or, if
such date is not a Business Day, then the immediately preceding Business Day.
"Originators": American Business Credit, Inc., HomeAmerican
Credit, Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp.
"Other Debt Agreement": The meaning assigned to such term in
Section 3.17(a)(iv) of the Indenture.
"Outstanding": As of the date of determination, all Secured
Notes theretofore authenticated and delivered under the Indenture except:
(a) Definitive Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(b) Secured Notes or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for the Holders
of such Secured Notes; provided, however, that if such Secured
Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made;
(c) Secured Notes in exchange for or in lieu of which other
Secured Notes have been authenticated and delivered pursuant
to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Secured Notes are held by a
bona fide purchaser (as defined by the Uniform Commercial Code
of the applicable jurisdiction); and
(d) Secured Notes alleged to have been destroyed, lost or stolen
that have been paid as provided for in Section 2.07 of the
Indenture;
19
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Principal Balance of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder.
Secured Notes owned by the Trust, any other obligor upon the Secured Notes or
any Affiliate of the Trust, the Servicer or the Depositor or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Secured Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Secured Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes the pledgee's right to act
with respect to such Notes and that the pledgee is not the Trust, any other
obligor upon the Secured Notes or any Affiliate of the Trust, the Servicer or
the Depositor or such other obligor.
"Owner-Occupied Mortgage Property": A Residential Dwelling as
to which (a) the related Mortgagor represented an intent to occupy as such
Mortgagors primary residence at the origination of the Mortgage Loan, and (b)
the Originators have no actual knowledge that such Residential Dwelling is not
so occupied.
"Owner Trustee": First Union Trust Company, National
Association, a national banking association, not in its individual capacity, but
solely as owner trustee under the Trust Agreement, and any successor owner
trustee thereunder.
"Owner Trustee Fee": As defined in Section 8.01 of the Trust
Agreement.
"Pass-Through Transfer": The sale or transfer of some or all
of the Mortgage Loans to a trust to be formed as part of a publicly issued
and/or privately placed, rated or unrated, mortgage pass-through or other
mortgage-backed securities transaction, retaining the Servicer as "servicer"
(with or without a master servicer) thereunder.
"Paying Agent": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Trust pursuant to Section
3.03 of the Indenture to pay the principal of, or interest on, any Notes on
behalf of the Trust, which agent, if not the Indenture Trustee, shall have
signed an instrument agreeing to be bound by the terms of the Indenture
applicable to such Paying Agent.
"Payment Date": The 25th day of any month (or if such 25th day
is not a Business Day, the first Business Day immediately following) commencing
on _____, 2000, or the day on which a Mortgage Loan is sold by the Trust.
"Percentage Interest": With respect to a Secured Note,
expressed as a percentage rounded to four decimal places, equal to a fraction
the numerator of which is the current Note Principal Balance of such Secured
Note and the denominator of which is the current aggregate Note Principal
Balance of all outstanding Secured Notes. With respect to a Trust Certificate,
the portion evidenced thereby as stated on the face of such Trust Certificate.
"Performance Trigger Event": As of any Determination Date, the
existence of one or more of the following conditions as of such Determination
Date:
20
(i) the aggregate Principal Balance of all Mortgage
Loans that are 30 to 59 days Delinquent as of such
Determination Date divided by the aggregate Principal Balance
as of such Determination Date is greater than 2%; provided,
however, that a Performance Trigger Event shall not occur if
such percentage is reduced to less than 2% within three
Business Days of such Determination Date as a result of the
exercise of a Servicer Call; and
(ii) the aggregate Principal Balance of all Mortgage
Loans that are 60 days or more Delinquent as of such
Determination Date divided by the aggregate Principal Balance
as of such Determination Date is greater than 3%; provided,
however, that a Performance Trigger Event shall not occur if
such percentage is reduced to less than 3% within three
Business Days of such Determination Date as a result of the
exercise of a Servicer Call; and
a Performance Trigger Event shall continue to exist until it is Deemed Cured.
"Periodic Advance": The aggregate of the advances required to
be made by the Servicer on any Determination Date pursuant to Section 7.18 of
the Sale and Servicing Agreement, the amount of any such advances being equal to
the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Determination Date, the product of (i) the Principal
Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage
Interest Rate for such Mortgage Loan net of the Servicing Fee, and
(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net proceeds from the REO Property transferred to
the Collection Account for such Payment Date;
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
"Permitted Investments": As used herein, Permitted Investments
shall include the following:
(a) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(b) repurchase agreements on obligations specified in clause
(a) maturing not more than three months from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated in one of the two
highest rating categories by the Rating Agencies;
(c) certificates of deposit, time deposits and bankers
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States of any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
21
(d) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated in the highest short-term rating category by the Rating
Agencies;
(e) the VISTA U.S. Government Money Market Fund, the VISTA
Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as
any such fund is rated in the highest rating category by Xxxxx'x or
S&P;
provided, that no instrument described hereunder shall evidence either the right
to receive (x) only interest with respect to the obligations underlying such
instrument or (y) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": A pension or benefit plan or individual retirement
arrangement that is subject to ERISA or Section 4975 of the Code.
"Pledged Mortgage Loans": The Mortgage Loans pledged to the
Indenture Trustee pursuant to the Indenture.
"Portfolio Composition Criteria": As of any date of
determination with respect to any subcategory of Mortgage Loans, the maximum
percentage (as measured by the Principal Balance as of such date) of the
aggregate Principal Balance of all Mortgage Loans of the category set forth
opposite such subcategory in the table set forth below that, as of such
determination, have been pledged to the Indenture Trustee on behalf of the Note
Purchaser under the Indenture and not released pursuant to the provisions
thereof, that may be represented by such product category, as set forth below:
22
---------------------------------------------------------------------------------------------------------------------
Product Maximum Percentage, Category
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans with an LTV in excess of 80% 25% of the aggregate Principal Balance of all
Mortgage Loans
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans with a credit grade of C or below 15% of the aggregate Principal Balance of all
Mortgage Loans
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans secured by Mortgaged Property other than 10% of the aggregate Principal Balance of all
Mortgaged Property that is represented by the Mortgagor to Mortgage Loans
be the Mortgagor's principal residence
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans which are underwritten under the Business 15% of aggregate Principal Balance of all Mortgage
Purpose Loan Program Loans
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans which are principally secured by Business 2% of aggregate Principal Balance of all Mortgage
Purpose Properties Loans
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans secured by a second lien 22% of the aggregate Principal Balance of all
Mortgage Loans
------------------------------------------------------------ ------------------------------------------------------
"Stated income" Mortgage Loans 35% of the aggregate Principal Balance of all
Mortgage Loans
------------------------------------------------------------ ------------------------------------------------------
Mortgage Loans with respect to which no original of the 0.5% of the aggregate Principal Balance of all
promissory note is delivered, but which are covered by a Mortgage Loans (measured at origination)
Lost Note Affidavit with a copy of the Original Note
attached as provided in the Sale and Servicing Agreement
------------------------------------------------------------ ------------------------------------------------------
Section 32 Loans 2% of the aggregate Principal Balance of all
Mortgage Loans
---------------------------------------------------------------------------------------------------------------------
"Predecessor Notes": With respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.07 of the Indenture in lieu of
a lost, destroyed or stolen Note shall be deemed to evidence the same debt as
the lost, destroyed or stolen Note.
"Preference Amount": Any amounts paid in respect of the Notes
which are recovered from any Holder of a Note as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code or other similar law in
accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Holder.
"Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date, other
than an early future payment.
"Prepayment Interest Shortfall": With respect to any Payment
Date, for each Mortgage Loan that was the subject during the related Due Period
of a Prepayment, an amount equal to the excess, if any, of (a) 30 days' interest
on the Principal Balance of such Mortgage Loan at a per annum rate equal to (i)
the Mortgage Interest Rate (or at such lower rate as may be in effect for such
Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient
Valuation and/or any Debt Service Reduction) minus (ii) the Servicing Fee Rate
over (b) the amount of interest actually remitted by the Mortgagor in connection
with such Prepayment less the Servicing Fee for such Mortgage Loan in such
month.
23
"Principal Amount Available": The aggregate amount on deposit
in the Collection Account as of the close of business on a Determination Date
that has been designated by the Servicer as "principal collections" with respect
to the prior Due Period as of the related Determination Date, or that constitute
the principal portion of Disposition Proceeds. The Principal Amount Available
with respect to an individual Secured Note is the portion of the amount
described above which relates to the Related Mortgage Loans.
"Principal Balance": As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to prepayments received prior to
the end of the related Due Period and Deficient Valuations incurred prior to
such date of determination. The Principal Balance of a Mortgage Loan that is not
an Eligible Mortgage Loan or that becomes a Liquidated Mortgage Loan on or prior
to such date of determination shall be zero.
"Principal Payment Amount": As to each Secured Note with
respect to a Payment Date, the amount actually distributed to the related
Noteholder respecting principal, as contemplated by Section 8.06(d) of the Sale
and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other
judicial or administrative proceeding.
"Prospective Owner": The meaning assigned to such term in
section 2.12(a) of the Indenture.
"Purchase Agreement": The Purchase Agreement, dated June __,
2000, between the Note Purchaser and the Depositor.
"Purchase Price": With respect to any Mortgage Loan, the
Advance Amount with respect thereto.
"Put/Call Mortgage Loan": Any (i) Mortgage Loan that has
become 60 or more days Delinquent, (ii) Defaulted Mortgage Loan, (iii) Mortgage
Loan that has been in default for a period of 30 days or more (other than a
Mortgage Loan referred to in the preceding clause (i)), (iv) Mortgage Loan that
does not meet criteria established by independent rating agencies or surety
agency conditions for Dispositions which criteria have been established at the
related Transfer Date and may be modified only to match changed criteria of
independent rating agencies or surety agents, or (v) Mortgage Loan that is
inconsistent with the intended tax status of a Securitization.
"Qualified Appraiser": An appraiser, duly appointed by the
Originators, who had no interest, direct or indirect, in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and such appraiser
and the appraisal made by such appraiser both satisfy the requirements of Title
XI of the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
"Qualified Institutional Buyer": As defined in Rule 144 under
the Securities Act.
24
"Qualified Purchaser": A "qualified purchaser" as defined in
Section 2(a)(51) of the Investment Company Act.
"Qualified Substitute Mortgage Loan": A mortgage loan or
mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section
2.07(b) or 4.02(b) of the Sale and Servicing Agreement, which (a) has or have an
interest rate at least equal to those applicable to the Deleted Mortgage Loan,
(b) relates or relate to a detached one-family residence or to the same type of
Residential Dwelling or Business Purpose Property, or any combination thereof,
as the Deleted Mortgage Loan and in each case has or have the same or a better
lien priority as the Deleted Mortgage Loan and has or have the same occupancy
status as the Deleted Mortgage Loan or is or are Owner-Occupied Mortgaged
Property(ies), (c) matures or mature no later than (and not more than one year
earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio
or Loan-to-Value Ratios at the time of such substitution no higher than the
Loan-to-Value; of the Deleted Mortgage Loan, (e) has or have a Combined
Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such
substitution no higher than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan, (f) has or have a Principal Balance or Principal Balances (after
application of all payments received on or prior to the date of substitution)
not substantially less and not more than the Principal Balance of the Deleted
Mortgage Loan as of such date, and (g) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01 of
the Sale and Servicing Agreement.
"Record Date": The Business Day immediately preceding the
related Payment Date.
"Redemption Date": The Payment Date, if any, on which the
Indenture is terminated and all of the Notes are redeemed pursuant to Article X
of the Indenture, which date may occur on or after _____, 2000, but on or before
the Final Stated Maturity Date.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"Related Mortgage Loans": With respect to a particular Secured
Note, the Mortgage Loans listed on the Trust Receipt issued concurrently with
such Secured Note.
"Remittance Report": The report required to be made by the
Paying Agent pursuant to Section 3.03(a) and (g) of the Indenture.
"REO Disposition": The final sale by the Servicer of a
Mortgaged Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
"REO Mortgage Loan": Any Mortgage Loan which is not a
Liquidated Mortgage Loan and as to which the indebtedness evidenced by the
related Mortgage Note is discharged and the related Mortgaged Property is held
as part of the Trust.
"REO Proceeds": Proceeds received in respect of any REO
Mortgage Loan (including, without limitation, proceeds from the rental of the
related Mortgaged Property).
25
"REO Property": A Mortgaged Property acquired by the Servicer
in the name of the Indenture Trustee on behalf of the Noteholders through
foreclosure or deed-in-lieu of foreclosure.
"Repurchase Price": With respect to any Mortgage Loan, the
Principal Balance of such Mortgage Loan as of the date of purchase, plus all
accrued and unpaid interest on such Principal Balance computed, as of the next
succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest
Rate, plus the amount of any unreimbursed Servicing Advances made by the
Servicer with respect to such Mortgage Loan, which purchase price shall be
deposited in the Collection Account on the next succeeding Determination Date,
after deducting therefrom any amounts received in respect of such repurchased
Mortgage Loan or Loans and being held in the Collection Account for future
payment to the extent such amounts have not yet been applied to principal or
interest on such Mortgage Loan.
"Request for Release": A request for release in substantially
the form attached as Exhibit C of the Sale and Servicing Agreement.
"Residential Dwelling": A one- to four-family dwelling, a unit
in a planned unit development, a unit in a condominium development or a
townhouse.
"Responsible Officer": When used with respect to the Indenture
Trustee, the Collateral Agent or the Owner Trustee, any officer assigned to the
Corporate Trust Division (or any successor thereto), including any Vice
President, Second Vice President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Indenture Trustee or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject. When used
with respect to the Servicer, any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee, the Collateral Agent and the Note Purchaser by the
Servicer, as such list may from time to time be amended.
"Restoration Amount": As of any date of determination, the
amount, if any, by which (a) the outstanding principal amount of the Secured
Notes (including accrued interest thereon) as of such day exceeds, (b) the
Advance Amount as of such day.
"Review Procedures": The procedures regarding the Collateral
Agent's review of the Custodial Loan Files attached to the Sale and Servicing
Agreement as Exhibit K.
"Sale": The meaning specified in Section 5.17 of the
Indenture.
"Sales Price": For any Transfer Date, the sum of the Market
Values with respect to each Mortgage Loan conveyed on such Transfer Date as of
such Transfer Date.
"Sale and Servicing Agreement": The Sale and Servicing
Agreement, dated as of July 6, 2000, among the Trust, the Servicer, the
Originators, the Subservicers, the Sponsor, the Depositor, the Collateral Agent
and the Indenture Trustee, providing for, among other things, the sale of the
Mortgage Loans from the Depositor to the Trust and the servicing of the Mortgage
Loans.
26
"Section 32 Loans": Mortgage Loans which are subject to
regulation under the Home Ownership and Equity Protection Act
"Secured Note": Any Note designated as a "Secured Note" on the
face thereof, in the form of Exhibit A to the Indenture.
"Securities Act": The Securities Act of 1933, as amended.
"Securitization": The retirement of the Notes issued by the
Trust through the offering of new securities secured or otherwise backed by the
Mortgage Loans through a owner trust, REMIC, FASIT, collateralized mortgage
obligation or other securitization vehicle.
"Securitization Agreement": The agreement or agreements
entered into by the Servicer and certain third parties on the Securitization
Date(s) with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Pass-Through Transfer as set forth in Section 13.01 of the
Sale and Servicing Agreement, including, but not limited to, a pooling and
servicing agreement, trust agreement or indenture and/or a subservicing/master
servicing agreement and related custodial/trust agreement and related documents
with respect to a Pass-Through Transfer. Such agreement or agreements shall
prescribe the rights and obligations of the Servicer in servicing the related
Mortgage Loans and shall provide for servicing compensation to the Servicer
(calculated on a weighted average basis for all the related Mortgage Loans as of
the Securitization Date) at least equal to the Servicing Fee due the Servicer in
accordance with this Agreement. The form of relevant Securitization Agreement to
be entered into by the master servicer or trustee and the Servicer with respect
to Pass-Through Transfers shall be reasonably satisfactory in form and substance
to the Note Purchaser and the Servicer (giving due regard to any rating or
master servicing requirements) and the representations and warranties and
servicing provisions contained therein shall be substantially similar to those
contained in this Agreement, unless otherwise mutually agreed by the parties.
"Securityholder": Any Noteholder or Certificateholder.
"Servicer": American Business Credit, Inc., a Pennsylvania
corporation, or any successor appointed as herein provided.
"Servicer Event of Default": As defined in Section 9.01 of the
Sale and Servicing Agreement.
"Servicer Extension Notice": As defined in Section 9.01(c) of
the Sale and Servicing Agreement.
"Servicer Remittance Amount": With respect to any
Determination Date, an amount equal to the sum of (i) all collections of
principal and interest on the Mortgage Loans (including Prepayments, Net REO
Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during
the related Due Period, (ii) all Periodic Advances made by the Servicer with
respect to interest payments due to be received on the Mortgage Loans on the
related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to the Sale and Servicing Agreement.
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"Servicer's Loan File": With respect to each Mortgage Loan,
the file held by the Servicer, consisting of all documents (or electronic images
thereof) relating to such Mortgage Loan, including, without limitation, copies
of all of the Mortgage Loan Documents included in the related Custodial Loan
File.
"Servicing Advances": All reasonable and customary
"out-of-pocket" costs and expenses incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the REO Property, including reasonable fees paid to any
independent contractor in connection therewith, (d) compliance with the
obligations under Section 7.06 of the Sale and Servicing Agreement, all of which
reasonable and customary out-of-pocket costs and expenses are reimbursable to
the Servicer to the extent provided in Section 8.06(e)(i) of the Sale and
Servicing Agreement.
"Servicing Compensation": The Servicing Fee and other amounts
to which the Servicer is entitled pursuant to Section 7.08 of the Sale and
Servicing Agreement.
"Servicing Fee": As to each Mortgage Loan, the annual fee
payable to the Servicer, which is calculated as an amount equal to the product
of (a) Servicing Fee Rate, and (b) the Principal Balance thereof. Such fee shall
be calculated and payable monthly only from the amounts received in respect of
interest on such Mortgage Loan and shall be computed on the basis of the same
Principal Balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Servicing Fee includes any servicing
fees owed or payable to any Subservicer.
"Servicing Fee Rate": 0.50% per annum
"Shortfall": The meaning assigned to such term in Section 2.19
of the Sale and Servicing Agreement.
"Stock": All shares, options, warrants, interests,
participation or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, convertible debentures and all agreements, instruments
and documents convertible, in whole or in part, into any one or more or all of
the foregoing.
"Subservicers": HomeAmerican Credit, Inc., d/b/a Upland
Mortgage, a Pennsylvania corporation, or its successor in interest and New
Jersey Mortgage and Investment Corp., a New Jersey corporation, or its successor
in interest.
"Substitution Adjustment": As to any date on which a
substitution occurs pursuant to Sections 2.19 or 4.02 of the Sale and Servicing
Agreement, the amount (if any) by which the aggregate principal balances (after
application of principal payments received on or before the date of
substitution) of any Qualified Substitute Mortgage Loans as of the date of
substitution, are less than the aggregate of the Principal Balances of the
related Deleted Mortgage Loans together with 30-days' interest thereon at the
Mortgage Interest Rate.
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"Target Amount Shortfall": shall mean, on any date during the
period commencing on the date that is three months prior to the last day of the
Usage Measurement Period and ending on the last day thereof, the difference
between (i) the Minimum Usage Fee that would be payable with respect to such
Usage Measurement Period were the applicable Usage Amount to be zero, and (ii)
the product of (a) the Usage Amount, determined for the period commencing on the
first day of such Usage Measurement Period and ending on the date as of which
the Target Amount Shortfall is being determined, times (b) the Margin, times (c)
a fraction, the numerator of which is the number of days in the period
commencing on the first day of such Usage Measurement Period and ending on the
date as of which the Target Amount Shortfall is being determined and the
denominator of which is 360.
"Targeted Usage Amount": The meaning assigned to such term in
Section 2.04 of the Sale and Servicing Agreement.
"Telerate Page 3750": The display designated as Telerate Page
3750 on the Telerate Service (or such other page as may replace the Telerate
page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": The sum of (i) 100% of the Aggregate
Principal Balance of each outstanding Mortgage Loan and (ii) the greater of (A)
the aggregate amount of accrued and unpaid interest on the Mortgage Loans
through the related Due Period and (B) thirty (30) days' interest thereon,
computed at a rate equal to the related Mortgage Interest Rate, in each case net
of the Servicing Fee.
"Transfer Date": With respect to each Mortgage Loan, the day
such Mortgage Loan is sold and conveyed to the Depositor by the Originator and
to the Trust by the Depositor, which results in the issuance of a Secured Note
in an original principal amount equal to the related Advance Amount, subject to
any limitations in frequency and minimum amounts as may be imposed by the
Indenture. With respect to any Qualified Substitute Loan, the Transfer Date
shall be the day such Mortgage Loan is conveyed to the Trust pursuant to Section
2.05 or 2.06.
"Trust": ABFS Mortgage Loan Warehouse Trust 2000-2, a Delaware
statutory business trust.
"Trust Agreement": The Amended and Restated Trust Agreement,
dated as of July 6, 2000, between the Depositor and the Owner Trustee, relating
to the governance of the Trust.
"Trust Certificate": The certificate evidencing the entire
beneficial ownership interest in the Trust.
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"Trust Certificateholder" or "Holder": A Person in whose name
a Trust Certificate is registered.
"Trust Estate": All money, instruments and other property
subject or intended to be subject to the lien of the Indenture, for the benefit
of the Noteholders, as of any particular time, including, without limitation,
all property and interest, including all proceeds thereof, Granted to the
Indenture Trustee, for the benefit of the Noteholders, pursuant to the Granting
Clauses of the Indenture.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of
1939, as it may be amended from time to time.
"Trust Order" and "Trust Request": A written order or request
of the Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, at the direction of the related Majority Certificateholders and
delivered to the Indenture Trustee or the Authenticating Agent, as applicable.
"Trust Receipt": A document substantially in the form of
Exhibit A to the Sale and Servicing Agreement.
"Underwriting Guidelines": Has the meaning set forth in
Section 8.09 of the Sale and Servicing Agreement.
"Uniform Commercial Code": The Uniform Commercial Code as in
affect in the State of New York.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States or a trust if a court within the United States can exercise
primary jurisdiction over its administration and at least one United States
fiduciary has the authority to control all substantial decisions of the trust.
"Usage Measurement Amount": The meaning assigned to such term
in Section 2.04 of the Sale and Servicing Agreement.
"Usage Measurement Period": The meaning assigned to such term
in Section 2.04 of the Sale and Servicing Agreement.
"Whole Loan Sale": A Disposition of Mortgage Loans pursuant to
a whole-loan sale.
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