Exhibit 99.01
THIRD AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
Dated as of January 1, 2001
among
FFCA FRANCHISE LOAN OWNER TRUST 1998-1
(Issuer)
FFCA LOAN WAREHOUSE CORPORATION
(Depositor)
FFCA ACQUISITION CORPORATION
(Loan Originator)
FRANCHISE FINANCE CORPORATION OF AMERICA
(Servicer)
and
LASALLE BANK NATIONAL ASSOCIATION f/k/a
LASALLE NATIONAL BANK
(Indenture Trustee)
FFCA FRANCHISE LOAN OWNER TRUST 1998-1
FRANCHISE LOAN BACKED NOTES ISSUABLE IN SERIES
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................2
Section 1.02 Other Definitional Provisions..................................34
ARTICLE II
CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES
Section 2.01 Conveyance of the Trust Estate; Additional Note
Principal Balances...........................................34
Section 2.02 Ownership and Possession of Loan Files.........................36
Section 2.03 Books and Records; Intention of the Parties....................36
Section 2.04 Delivery of Loan Documents.....................................37
Section 2.05 Acceptance by the Indenture Trustee of the Loans;
Certain Substitutions and Repurchases; Certification
by the Custodian.............................................40
Section 2.06 Conditions Precedent to Transfer Dates and Collateral
Value Excess Dates...........................................42
Section 2.07 Termination of Revolving Period................................44
Section 2.08 Re-Underwriting of Loans.......................................44
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Depositor................44
Section 3.02 Representations and Warranties of the Loan Originator..........46
Section 3.03 Representations, Warranties and Covenants of the Servicer......49
Section 3.04 Representations and Warranties Regarding Loans.................51
Section 3.05 Purchase and Substitution......................................60
Section 3.06 Securitizations................................................62
Section 3.07 Loan Originator Put; Servicer Call.............................63
Section 3.08 Modification of Underwriting Guidelines........................63
Section 3.09 Environmental Policy and Business Interruption Insurance.......63
Section 3.10 Whole Loan Sales...............................................64
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ARTICLE IV
ADMINISTRATION AND SERVICING OF THE LOANS
Section 4.01 Duties of the Servicer.........................................65
Section 4.02 Vacancies and Inspections......................................67
Section 4.03 Fidelity Bond; Errors and Omissions Insurance..................68
Section 4.04 Filing of Continuation Statements..............................68
Section 4.05 Establishment and Administration of Escrow Account.............69
Section 4.06 Subservicing...................................................69
Section 4.07 Successor Servicers............................................71
Section 4.08 Maintenance of Insurance.......................................71
Section 4.09 Periodic Advances..............................................72
Section 4.10 Foreclosure; Repossession and Alternatives.....................73
Section 4.11 Title, Management and Disposition of Foreclosure Property......74
Section 4.12 Compliance With Request for Information........................76
Section 4.13 Lockbox Trigger Event; Lockbox Account.........................76
Section 4.14 Valuation of Loans, Hedge Value and Retained Securities
Value; Market Value Agent....................................77
ARTICLE V
ESTABLISHMENT OF TRUST ACCOUNTS
Section 5.01 Collection Account and Distribution Account....................77
Section 5.02 Payments to Securityholders....................................81
Section 5.03 Trust Accounts; Trust Account Property.........................82
Section 5.04 Advance Account................................................85
Section 5.05 Transfer Obligation; Transfer Obligation Account...............85
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
Section 6.01 Statements.....................................................86
Section 6.02 Specification of Certain Tax Matters...........................90
ARTICLE VII
GENERAL SERVICING PROCEDURE
Section 7.01 Due-On-Sale; Due-on-Encumbrance................................90
Section 7.02 Release of Loan Files..........................................91
Section 7.03 Servicing Compensation.........................................92
Section 7.04 Statement as to Compliance and Financial Statements............93
Section 7.05 Independent Public Accountants' Servicing Report...............93
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Section 7.06 Right to Examine Servicer Records..............................94
Section 7.07 Reports to the Indenture Trustee; Collection Account
Statements...................................................94
Section 7.08 Access to Information..........................................94
ARTICLE VIII
HEDGING
Section 8.01 Hedging Instruments............................................95
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims............................96
Section 9.02 Merger or Consolidation of the Servicer........................98
Section 9.03 Limitation on Liability of the Servicer and Others.............99
Section 9.04 Servicer Not to Resign; Assignment.............................99
Section 9.05 Relationship of Servicer to Issuer and the Indenture Trustee...99
Section 9.06 Servicer May Own Securities...................................100
ARTICLE X
DEFAULT
Section 10.01 Events of Default.............................................100
Section 10.02 Appointment of Successor......................................102
Section 10.03 Waiver of Defaults............................................103
Section 10.04 Accounting Upon Termination of Servicer.......................103
ARTICLE XI
TERMINATION
Section 11.01 Termination...................................................104
Section 11.02 Optional Termination..........................................104
Section 11.03 Notice of Termination.........................................104
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Acts of Noteholders...........................................105
Section 12.02 Amendment.....................................................105
Section 12.03 Recordation of Agreement......................................106
Section 12.04 Duration of Agreement.........................................106
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Section 12.05 Governing Law.................................................106
Section 12.06 Notices.......................................................106
Section 12.07 Severability of Provisions....................................107
Section 12.08 No Partnership................................................107
Section 12.09 Counterparts..................................................107
Section 12.10 Successors and Assigns........................................107
Section 12.11 Headings......................................................107
Section 12.12 Actions of Securityholders....................................108
Section 12.13 Non-Petition Agreement........................................108
Section 12.14 Holders of the Trust Certificates.............................108
Section 12.15 FFCA to Guarantee Certain Loan Originator Obligations.........109
Section 12.16 Reports in Electronic Form....................................109
Section 12.17 Limitation of Owner Trustee Liability.........................109
EXHIBIT A - Form of Notice of Additional Note Principal Balance
EXHIBIT B - Form of Servicer's Remittance Report to Trustee
EXHIBIT C - Form of S&SA Assignment
EXHIBIT D - Referenced Documents
EXHIBIT E - Form of Bailee Agreement
EXHIBIT F - Form of Escrow Instructions
EXHIBIT G - Form of Loan Originator Put Notice
EXHIBIT H - Form of Servicer Call Notice
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THIS THIRD AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (the
"SALE AND SERVICING Agreement") is entered into effective as of January 1, 2001
by and among FFCA Franchise Loan Owner Trust 1998-1, a Delaware business trust
(the "ISSUER" or the "TRUST"), FFCA Loan Warehouse Corporation, a Delaware
corporation, as depositor (the "DEPOSITOR"), FFCA Acquisition Corporation, a
Delaware corporation, as loan originator (the "LOAN ORIGINATOR"), Franchise
Finance Corporation of America, a Maryland corporation ("FFCA"), as servicer
(the "SERVICER"), and LaSalle Bank National Association f/k/a LaSalle National
Bank, a national banking association, as indenture trustee on behalf of the
Noteholders (in such capacity, the "INDENTURE TRUSTEE"), which amends and
restates the Second Amended and Restated Sale and Servicing Agreement, dated as
of January 1, 2000 (the "SECOND AMENDED AND RESTATED SALE AND SERVICING
AGREEMENT"), by and among the parties hereto, as amended by Amendment No. 1 to
the Second Amended and Restated Sale and Servicing Agreement, dated as of July
28, 2000 ("AMENDMENT NO. 1 TO THE AMENDED AND RESTATED SALE AND SERVICING
AGREEMENT"), Amendment No. 2 to the Second Amended and Restated Sale and
Servicing Agreement, dated as of October 18, 2000 ("AMENDMENT NO. 2 TO THE
SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT") and Amendment No. 3
to the Second Amended and Restated Sale and Servicing Agreement, dated as of
November 13, 2000 ("AMENDMENT NO. 3 TO THE SECOND AMENDED AND RESTATED SALE AND
SERVICING Agreement"), each by and among the parties hereto, which amends and
restates the Sale and Servicing Agreement, dated as of August 14, 1998 (the
"ORIGINAL SALE AND SERVICING AGREEMENT"), by and among the parties hereto, as
amended by the Amendment No. 1 to the Sale and Servicing Agreement, dated as of
October 30, 1998 ("AMENDMENT NO. 1 TO THE ORIGINAL SALE AND SERVICING
AGREEMENT"), by and among the parties hereto.
WHEREAS, the parties hereto desire to amend and restate the Second
Amended and Restated Sale and Servicing Agreement, as amended by Amendment No. 1
to the Second Amended and Restated Sale and Servicing Agreement, Amendment No. 2
to the Second Amended and Restated Sale and Servicing Agreement and Amendment
No. 3 to the Second Amended and Restated Sale and Servicing Agreement, which
amends and restates the Original Sale and Servicing Agreement, as amended by the
Amendment No. 1 to the Original Sale and Servicing Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Issuer, the Depositor, the Loan Originator, the Servicer and the
Indenture Trustee hereby agree for the benefit of each of them and the holders
of the Notes and the Trust Certificates issued hereunder to amend and restate
the Second Amended and Restated Sale and Servicing Agreement, as amended by
Amendment No. 1 to the Amended and Restated Sale and Servicing Agreement and
Amendment No. 2 to the Second Amended and Restated Sale and Servicing Agreement,
which amends and restates the Original Sale and Servicing Agreement, as amended
by the Amendment No. 1 to the Original Sale and Servicing Agreement, in its
entirety to read as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations of interest described
herein shall be made on the basis of a 360-day year and the actual number of
days elapsed in each Accrual Period.
ACCRUAL PERIOD: With respect to the Notes, the period commencing on
and including the preceding Payment Date (or, in the case of the first Payment
Date, the period commencing on and including the first Transfer Date) and ending
on the day preceding the related Payment Date.
ACT OR SECURITIES ACT: The Securities Act of 1933, as amended.
ADDITIONAL NOTE PRINCIPAL BALANCE:
With respect to each Transfer Date, the lesser of (i) the product of
(x) an amount equal to the average of the Advance Factors with respect to the
Loans conveyed on such date, weighted by Transfer Cut-off Date Principal
Balances multiplied by (y) the sum of the Transfer Cut-off Date Principal
Balances of the Loans conveyed as of such Transfer Date, and (ii) the product of
(x) the average Maximum Advance Factors of the Loans conveyed on such date
weighted by Transfer Cut-off Date Principal Balances multiplied by (y) the sum
of the Market Value of all Loans conveyed on such date, in either case
subtracting from the product any Overcollateralization Shortfall as of such
date.
With respect to each Collateral Value Excess Date, an amount equal to
the Additional Note Principal Balance that the Issuer sells to the Initial
Noteholder pursuant to the Note Purchase Agreement on such Collateral Value
Excess Date.
ADJUSTABLE RATE LOAN: Any Loan, the Loan Interest Rate with respect to
which is subject to adjustment; provided that under the terms of such Loan, such
adjustments may not modify the Loan Interest Rate to a rate that is more than
six percent above or two percent below the Loan Interest Rate at the origination
of such Loan.
ADMINISTRATION AGREEMENT: The Administration Agreement, dated as of
August 14, 1998, among the Issuer and FFCA, as Administrator and as Servicer.
ADVANCE ACCOUNT: The account established and maintained pursuant to
Section 5.04.
ADVANCE FACTOR: With respect to each Loan (a) as of the related
Transfer Date, the lesser of (x) 85% or, to the extent that the Note Principal
Balance as of such day (after giving effect to the sale of such Loan to the
Trust) is greater than $300,000,000, 80% for each Loan (as selected by the
Initial Noteholder), the inclusion of which as an asset of the Trust results in
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the Note Principal Balance as of such day exceeding $300,000,000 (or such other
lesser percentage as agreed in writing by the Issuer and Initial Noteholder as
the Advance Factor with respect to such Loan) and (y) the Maximum Advance Factor
with respect to such Loan and (b) thereafter, the lesser of (x) the Maximum
Advance Factor with respect to such Loan and (y) to the extent that the Note
Principal Balance as of such day is greater than $300,000,000, 80% for each Loan
(as selected by the Initial Noteholder), the inclusion of which as an asset of
the Trust results in the Note Principal Balance as of such day exceeding
$300,000,000. Notwithstanding the foregoing, with respect to any date of
determination, if the Corporate FCCR Percentage is greater than or equal to 25%
as of such date, the Advance Factor for any Loan having a Corporate Fixed Charge
Coverage Ratio less than or equal to 1.15 will be determined by the Initial
Noteholder in its sole discretion, provided that such Advance Factor shall not
be less than 50%.
AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, the term "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 corresponding meanings.
AGREEMENT: This Sale and Servicing Agreement and all amendments hereof
and supplements hereto.
ALTA: The American Land Title Association and its successors in
interest.
APPROVED BRAND CD FACILITY MORTGAGE LOANS: CD Facility Mortgage Loans
for which the Brand has been approved in writing by the Majority Noteholders in
their sole discretion.
ASSIGNMENT: An LPA Assignment or S&SA Assignment.
ASSIGNMENT OF LOAN DOCUMENTS: With respect to each Loan, a blanket
assignment of the related Loan File (other than those Loan Documents in the Loan
File specifically assigned by another Loan Document) with the assignee in blank,
assigning all of the Loan Originator's right, title and interest in the related
Loan File, including but not limited to, the Promissory Note, the Mortgage and
Security Agreement.
ASSIGNMENT OF MORTGAGE: With respect to any Mortgage Loan, an
assignment in blank of the related Mortgage, notice of transfer or equivalent
instrument in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect the assignment and
pledge of such Mortgage.
AUTOMOTIVE SERVICE FACILITY MORTGAGE LOANS: Mortgage Loans secured by
establishments engaged in the service, repair, maintenance and sale of products
for motor vehicles after their initial sale to the public.
BAILEE: With respect to any Table-Funded Loan, the entity approved by
the Initial Noteholder, in its sole discretion and pursuant to Section 25 of the
Custodial Agreement, (i) to act pursuant to the Bailee Agreement, (ii) to
receive the documents comprising the Indenture Trustee's Loan File and (iii) to
issue the Bailee Trust Receipt.
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BAILEE AGREEMENT: A Bailee Agreement, among the Loan Originator, the
Initial Noteholder and a Bailee, substantially in the form of Exhibit E attached
hereto as the same may be amended, supplemented or otherwise modified from time
to time.
BAILEE TRUST RECEIPT: A trust receipt, in the form of Attachment B to
Exhibit E hereto, issued by the Bailee pursuant to the Bailee Agreement.
BASIC DOCUMENTS: This Agreement, the Administration Agreement, the
Custodial Agreement, the Indenture, the Loan Purchase Agreement, the Note
Purchase Agreement, the Trust Agreement, the Collection Account Letter
Agreement, each Hedging Instrument and, as and when required to be executed and
delivered, the Assignments and the Lockbox Agreement.
BORROWER: The obligor or obligors on a Promissory Note; including any
person who has assumed or guaranteed the obligations of the obligor or obligors
under such Promissory Note. With respect to each Borrower that is a special
purpose entity, "Borrower" shall be deemed to include the lessee (including all
Affiliates of such lessee and any guarantor of the lessee's obligations under
the lease) of the related Loan Collateral.
BRAND: With respect to each Loan, the franchise concept, if any, used
by the Borrower in operating the related Loan Collateral.
BUSINESS DAY: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in New York City or in the city in which the
corporate trust office of the Indenture Trustee is located or the city in which
the Servicer's servicing operations are located are authorized or obligated by
law or executive order to be closed.
C&G STORE MORTGAGE LOANS: Mortgage Loans secured by convenience and
gasoline stores.
CAPITALIZED LEASE: Any lease of property by FFCA or any of its
Subsidiaries as lessee that is reflected on FFCA's consolidated balance sheet as
a capitalized lease in accordance with GAAP.
CD FACILITY MORTGAGE LOANS: Mortgage Loans secured by casual dining or
family dining establishments.
CERTIFICATEHOLDER: A holder of a Trust Certificate.
CERTIFICATE REGISTER: The register established pursuant to Section 3.4
of the Trust Agreement.
CLEAN-UP CALL DATE: The first Payment Date occurring on or after the
end of the final Revolving Period on which the Note Principal Balance declines
to 10% or less of the aggregate Note Principal Balance as of the end of such
final Revolving Period.
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CLOSING DATE: August 14, 1998, or with respect to a Series of Notes
subsequent to the Series issued on the date hereof, as set forth in the related
Indenture Supplement.
CODE: The Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated by the United States Treasury thereunder.
COLLATERAL VALUE: With respect to each Loan and each Business Day, an
amount equal to (i) the product of the lesser of (x) the Principal Balance of
such Loan after giving effect to all payments received in respect of principal
thereon prior to such Business Day and (y) the Market Value of such Loan,
multiplied by the Advance Factor applicable to such Loan LESS (ii) the aggregate
unreimbursed Servicing Advances and Periodic Advances attributable to such Loan;
provided, however, that the Collateral Value shall be zero with respect to each
Loan (v) where the Unit-Level Fixed Charge Coverage Ratio is less than 1.20 or,
with respect to the Sonic franchise finance program, 1.15, unless otherwise
specified in writing by the Majority Noteholders in their sole discretion, (w)
that is 30 or more days Delinquent, (x) that the Loan Originator is required to
repurchase pursuant to Section 2.05 or Section 3.05 hereof, (y) that is a
Table-Funded Loan and for which the Custodian has failed to receive the related
Loan Documents by the third Business Day following the applicable Transfer Date
or (z) that is a Table-Funded Loan for which the Custodian has failed to receive
a copy of the related Promissory Note and such other documents as are prescribed
in SECTION 2.04(b) on or prior to the related Transfer Date. The Collateral
Value of a Loan shall be determined taking into consideration any Hedge Value
(or any net negative value) of each Hedging Instrument (as determined by the
Market Value Agent in accordance with Section 4.14(c)) attributable to such Loan
as of such Business Day. With the written consent of the Majority Noteholders in
their sole discretion, as of such Business Day, the Collateral Value shall be
increased (but in no event to an amount greater than par) or decreased, as the
case may be, by all or any portion of the Hedge Value or net negative value of
any Hedging Instrument attributable to such Loan, as of such Business Day, as
the Majority Noteholders may, in their sole discretion, designate in writing. If
as of such Business Day, no Rapid Amortization Trigger or Event of Default shall
be in effect, the aggregate Collateral Value of the Loans shall be reduced or
increased, as the case may be, by the aggregate net Hedge Value as of such
Business Day.
COLLATERAL VALUE EXCESS: With respect to any Business Day, an amount
equal to the positive difference, if any, between (a) (i) the aggregate
Collateral Value of all Loans in the Loan Pool on such Business Day, or (ii) in
the event that a Performance Trigger shall have occurred and not been Deemed
Cured, the aggregate Collateral Value of all Loans in the Loan Pool on such
Business Day multiplied by 0.98 and (b) the Note Principal Balance on such
Business Day.
COLLATERAL VALUE EXCESS DATE: Any Business Day on which a Collateral
Value Excess exists and on which the Initial Noteholder purchases Additional
Note Principal Balance in respect thereof pursuant to SECTION 2.01 hereof.
COLLECTION ACCOUNT: The account designated as such, established and
maintained by the Servicer in accordance with SECTION 5.01(a)(1) hereof.
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COLLECTION ACCOUNT LETTER AGREEMENT: the Letter Agreement dated August
14, 1998, between FFCA and the Issuer and acknowledged and agreed to by Norwest
Bank Arizona, N.A., Norwest Investment Services, Inc. and the Indenture Trustee.
CONDEMNATION PROCEEDS: With respect to a Mortgage Loan, all awards or
settlements in respect of the related Mortgaged Property, whether permanent or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation.
CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE: For any period, the
Consolidated Net Income of FFCA and its Subsidiaries plus amounts which have
been deducted, and minus amounts which have been added, for (a) interest on Debt
of FFCA and its Subsidiaries, (b) provision for taxes of FFCA and its
Subsidiaries based on income, (c) amortization of debt discount, (d) provisions
for gains and losses on properties, (e) depreciation, (f) the effect of any
non-cash charge resulting from a change in accounting principles in determining
Consolidated Net Income for such period and (g) amortization of deferred
charges.
CONSOLIDATED NET INCOME: For any period, the amount of consolidated
net income (or loss) of FFCA and its Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP.
CORPORATE FIXED CHARGE COVERAGE RATIO: The consolidated operations of
all entities related to the Borrower, calculated as (x) earnings before
depreciation, amortization, interest, rent and taxes, inclusive of overhead,
divided by (y) rent, interest and the current maturity of long-term debt, as
computed by the Loan Originator based on the information most recently provided
by the Borrower prior to the Transfer Date prior to any discretionary "add-back"
adjustments. In computing the Corporate Fixed Charge Coverage Ratio, the Loan
Originator, with the consent of the Initial Noteholder, in its sole discretion,
may take into consideration any guarantee of the obligations of the related
Borrower.
CORPORATE FCCR PERCENTAGE: As of any date of determination, (x) the
Principal Balance of all Loans which have a Corporate Fixed Charge Coverage
Ratio less than or equal to 1.15, divided by (y) the Principal Balance of all
Loans as of the same date of determination.
CUSTODIAL AGREEMENT: The Amended and Restated Custodial Agreement,
dated as of March 18, 1999, among the Issuer, the Loan Originator, the Servicer,
the Indenture Trustee and the Custodian, providing for the retention of the
Indenture Trustee's Loan Files by the Custodian on behalf of the Indenture
Trustee and all amendments and supplements thereto.
CUSTODIAN: Any custodian appointed by the Indenture Trustee pursuant
to the Custodial Agreement, which custodian shall not be affiliated with the
Servicer, the Loan Originator, any Subservicer or the Depositor. LaSalle
National Bank shall be the initial Custodian pursuant to the terms of the
Custodial Agreement.
CUSTODIAN FEE: If applicable, the annual fee payable to the Custodian,
calculated and payable monthly on each Payment Date pursuant to SECTION
5.01(c)(3)(i) hereof equal to the fee, if any, set forth in the Custodial
Agreement.
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DAILY INTEREST ACCRUAL AMOUNT: With respect to each day, interest
accrued at the Note Interest Rate with respect to such day on the Note Principal
Balance as of the preceding Business Day after giving effect to all changes to
the Note Principal Balance on or prior to such preceding day.
DCR: Duff & Xxxxxx Credit Rating Co., and any successors or assigns,
including Fitch, Inc.
DEBT: Any indebtedness of FFCA or any of its Subsidiaries, whether or
not contingent, in respect of (a) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (b) indebtedness secured by any mortgage,
pledge, lien, charge, encumbrance or any security interest existing on property
owned by FFCA or any of its Subsidiaries, (c) letters of credit or amounts
representing the balance deferred and unpaid of the purchase price of any
property except any such balance that constitutes an accrued expense or trade
payable or (d) Capitalized Leases, in the case of items of indebtedness under
(a) through (c) above to the extent that any such items (other than letters of
credit) would appear as liabilities on FFCA's consolidated balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise included,
any obligation by FFCA or any of its Subsidiaries to be liable for, or to pay,
as obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), indebtedness of another person (other than FFCA or
any of its Subsidiaries) (it being understood that Debt shall be deemed to be
incurred by FFCA or any of its Subsidiaries whenever FFCA or such Subsidiary
shall create, assume, guarantee or otherwise become liable in respect thereof).
DEEMED CURED: A Performance Trigger or Rapid Amortization Trigger
shall be Deemed Cured on the 25th consecutive Business Day on which the
condition that originally gave rise to such event has not continued.
DEFAULT: Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
DEFAULTED LOAN: With respect to any date of determination, any Loan,
including, without limitation, any Liquidated Loan with respect to which any of
the following has occurred as of the end of the preceding Due Period: (a)
foreclosure or similar proceedings have been commenced; (b) any portion of a
Monthly Payment becomes 59 days past due by the related Borrower; or (c) the
Servicer or any Subservicer has determined in good faith and in accordance with
the Servicing Standard that such Loan is in default or imminent default.
DEFECTIVE LOAN: As defined in SECTION 3.05(a) hereof.
DELETED LOAN: A Loan replaced or to be replaced by one or more than
one Qualified Substitute Loan.
DELINQUENT: A Loan is "Delinquent" if any Monthly Payment due thereon
is not made by the close of business on the day such Monthly Payment is required
to be paid. A Loan is "30 days Delinquent" if any Monthly Payment due thereon
has not been received by the close of business on the corresponding day of the
month immediately succeeding the month in which such Monthly Payment was
required to be paid or, if there is no such corresponding day (e.g., as when a
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30-day month follows a 31-day month in which a payment was required to be paid
on the 31st day of such month), then on the last day of such immediately
succeeding month. The determination of whether a Loan is "60 days Delinquent,"
"90 days Delinquent", etc. shall be done in like manner.
DELIVERY: When used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery (except with respect to Trust Account Property consisting of
certificated securities (as defined in Section 8-102(a)(4) of the UCC)),
physical delivery to the Indenture Trustee or its custodian endorsed to the
Indenture Trustee or its custodian or endorsed in blank;
(b) with respect to a certificated security (i) delivery of such
certificated security endorsed to, or registered in the name of, the Indenture
Trustee or endorsed in blank to a securities intermediary (as defined in Section
8-102(a)(14) of the UCC) and the making by such securities intermediary of
appropriate entries in its records identifying such certificated securities as
credited to the securities account (as defined in Section 8-501(a) of the UCC)
of the Indenture Trustee, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(5) of the UCC) and the making by such
clearing corporation of appropriate entries in its records crediting the
securities account of a securities intermediary by the amount of such
certificated security and the making by such securities intermediary of
appropriate entries in its records identifying such certificated securities as
credited to the securities account of the Indenture Trustee (all of the Trust
Account Property described in subsections (a) and (b), "PHYSICAL PROPERTY");
and, in any event, any such Physical Property in registered form shall
be registered 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 any such
Trust Account Property (as defined herein) to the Indenture Trustee or its
nominee or custodian, consistent with then applicable law or regulations or
the interpretation thereof;
(c) with respect to any security issued by the U.S. Treasury, FNMA or
FHLMC 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: the making by a Federal Reserve Bank of an
appropriate entry crediting such Trust Account property to an account of a
securities intermediary that is also a "participant" pursuant to applicable
federal regulations; the making by such securities intermediary of appropriate
entries in its records crediting such book-entry security held through the
Federal Reserve System pursuant to federal book-entry regulations and Articles 8
and 9 of the UCC to the securities account of the Indenture Trustee; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account Property to the
Indenture Trustee or its nominee or custodian, consistent with then applicable
law or regulations or the interpretation thereof; and
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(d) with respect to any item of Trust Account Property that is an
uncertificated security (as defined in Section 8-102(a)(18) of the UCC) and that
is not governed by clause (c) above, registration in the records of the Issuer
thereof in the name of the securities intermediary, and the making by such
securities intermediary of appropriate entries in its records crediting such
uncertificated certificates to the Indenture Trustee.
DENOMINATION: With respect to a Note, the portion of the Note
Principal Balance represented by such Note as specified on the face thereof.
DEPOSITOR: FFCA Loan Warehouse Corporation, a Delaware corporation,
and any successor thereto.
DETERMINATION DATE: With respect to any Payment Date, the tenth
calendar day of the month in which such Payment Date occurs or if such day is
not a Business Day, the immediately preceding Business Day.
DISPOSITION TRIGGER EVENT: Either (i) FFCA or any Subsidiary of FFCA
shall incur any Debt such that the ratio of Consolidated Income Available for
Debt Service to Quarterly Service Charge for the most recent fiscal quarter for
which consolidated financial statements of FFCA are available is less than 2.0
to 1.0 on a pro forma basis after giving effect to the incurrence of such Debt
and the application of the proceeds therefrom or (ii) the rating of the
long-term, senior, unsecured debt obligations of the Servicer is withdrawn by
Xxxxx'x or S&P or is downgraded below Ba2, by Xxxxx'x, or BB, by S&P.
DISTRIBUTION ACCOUNT: The account established and maintained pursuant
to SECTION 5.01(a)(2) hereof.
DUE DATE: The day of the month on which the Monthly Payment is due
from the Borrower with respect to a Loan.
DUE DILIGENCE PACKAGE: With respect to a Loan, collectively, (i) a
complete and accurate internal credit write-up with respect to the related
Borrower, (ii) a site inspection and valuation report with respect to the
Mortgaged Property consistent with the Underwriting Guidelines, (iii) (x) if
such Loan is a C&G Store Mortgage Loan, a copy of the schedule to the insured
properties declaration of the Environmental Policy or letter from an
Environmental Insurer evidencing that such Mortgage Loan is covered by the
Environmental Policy and (y) in the case of each other Mortgage Loan, (I) (x) a
copy of a Phase I environmental assessment conducted with respect to the related
Mortgaged Property, that concluded that no further investigation of the related
Mortgaged Property was necessary or (y) in those cases where the Phase I
environmental assessment concluded that further investigation of such Mortgaged
Property was necessary, copies of the Phase II environmental assessments
conducted with respect to the related Mortgaged Property, evidencing that no
remediation or other further action was required with respect to such Mortgaged
Property or (II) a copy of the schedule to the insured properties declaration of
the Environmental Policy or letter from an Environmental Insurer evidencing that
such Mortgage Loan is covered by the Environmental Policy, (iv) a complete
description of any modifications made to such Loan since the completion of
funding contemplated under the applicable Loan Documents, without limitation,
any information concerning any prior borrower with respect to any of the related
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Loan Collateral, (v) the Corporate Fixed Charge Coverage Ratio and the
Unit-Level Fixed Charge Coverage Ratio, (vi) information concerning all pending
or overtly threatened lawsuits and legal actions related to the Borrower and
actually known by the Loan Originator which are reasonably expected to result in
cumulative liabilities of $100,000 or more net of expected recoveries from
insurance or other third party sources, together with an estimate by the Loan
Originator as to the potential financial and operational magnitude of the
related lawsuit and (vii) such other information as may be reasonably requested
by the Majority Noteholders from time to time.
DUE PERIOD: With respect to any Determination Date or Payment Date,
the calendar month immediately preceding such Determination Date or Payment
Date, as the case may be.
ELIGIBLE ACCOUNT: At any time, an account which is: (i) maintained
with a depository institution or trust company (A) the long-term debt
obligations of which are at such time rated by each Rating Agency in one of
their three highest long-term rating categories or (B) the short-term debt
obligations of which are then rated by each Rating Agency in their highest
short-term rating category; (ii) fully insured by either the Bank Insurance Fund
or the Savings Association Insurance Fund of the FDIC; (iii) a trust account
(which shall be a "segregated trust account") maintained with the corporate
trust department of a federal or state chartered depository institution or trust
company with trust powers and acting in its fiduciary capacity for the benefit
of the Indenture Trustee and the Issuer, which depository institution or trust
company shall have capital and surplus of not less than $50,000,000; or (iv)
with the prior written consent of the Majority Noteholders, any other account.
(Each reference in this definition of "Eligible Account" to the Rating Agency
shall be construed as a reference to Xxxxx'x and DCR).
ELIGIBLE SERVICER: A Person that (a) (i) has demonstrated the ability
professionally and competently to service a portfolio of commercial mortgage
loans similar to the Loans and (ii) has a net worth calculated in accordance
with GAAP of at least $5,000,000 or (b) any other Person to which the Majority
Noteholders may consent in writing.
ENVIRONMENTAL INSURER: American International Specialty Lines
Insurance Company, a member company of American International Group, Inc., or
such other environmental insurer as the Majority Noteholders in their sole
discretion may consent to in writing.
ENVIRONMENTAL POLICY: Any one of the secured creditor impaired
property policies issued by an Environmental Insurer, together with any
endorsements thereto, insuring the Loan Originator and the Indenture Trustee, as
their interests appear, for losses with respect to certain Mortgage Loans caused
by the presence of hazardous substances on or the migration of hazardous
substances from the related Mortgage Properties, acceptable to the Majority
Noteholders in their reasonable discretion, provided that the Environmental
Policy issued by American International Specialty Lines Insurance Company shall
be deemed acceptable to the Majority Noteholders.
EQUIPMENT: All personalty, furniture, securities and any other
property or assets of any kind securing an Equipment Loan.
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EQUIPMENT LOAN: A Loan secured by a valid and enforceable security
interest in Equipment of the related Borrower, evidenced by a Security Agreement
and, if applicable, Loan Agreement with respect to such Equipment.
ESCROW ACCOUNT: The separate account or accounts, each of which shall
be an Eligible Account, created and maintained pursuant to SECTION 4.05 hereof.
ESCROW INSTRUCTIONS: Escrow Instructions to the Settlement Agent,
substantially in the form of EXHIBIT F attached hereto as the same may be
amended, supplemented or otherwise modified from time to time.
ESCROW PAYMENTS: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, fire, hazard, liability and other insurance premiums,
condominium charges, and any other payments required to be escrowed by the
related Borrower with the lender pursuant to the Mortgage or any other document.
EVENT OF DEFAULT: As described in SECTION 10.01 hereof.
EXTENSION DATE: Any day on which there occurs a Securitization of
Loans with an aggregate Principal Balance at least equal to 66.67% (or such
lesser amount as may be agreed to in writing by the Majority Noteholders) of the
Pool Principal Balance as of the closing date with respect to such
Securitization, and with respect to which Securitization (i) the sum of (x) the
cash Securitization Proceeds and (y) the Retained Securities Value of any
Retained Securities issued in connection therewith was at least equal to the
aggregate Principal Balance of the Loans included in such Securitization as of
the closing date with respect to such Securitization and (ii) immediately after
giving effect to the sale of Loans pursuant to such Securitization, no Borrower
has an Individual Borrower Concentration greater than $30,000,000.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FFCA: Franchise Finance Corporation of America, a Maryland
corporation.
FFCA ACQUISITION CORP.: FFCA Acquisition Corporation, a Delaware
corporation.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
FIDELITY BOND: As described in SECTION 4.03 hereof.
FNMA: The Federal National Mortgage Association and any successor
thereto.
FORECLOSED LOAN: As of any date of determination, (a) any Mortgage
Loan that has been discharged as a result of (i) the completion of foreclosure
or comparable proceedings; (ii) the Owner Trustee's acceptance of the deed or
other evidence of title to the related Mortgaged Property in lieu of foreclosure
or other comparable proceeding; or (iii) the acquisition by the Owner Trustee of
title to the related Mortgaged Property by operation of law and (b) any
Equipment Loan that has been discharged as a result of a repossession or
comparable conversion of the ownership of the related Equipment.
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FORECLOSURE PROPERTY: Any real property securing a Foreclosed Loan
that has been acquired by the Servicer through foreclosure, deed in lieu of
foreclosure or similar proceedings in respect of the related Loan if such
Foreclosed Loan is a Mortgage Loan or personalty securing a Foreclosed Loan
acquired by the Servicer pursuant to a foreclosure or other appropriate
procedure in accordance with applicable law if such Foreclosed Loan is an
Equipment Loan.
GAAP: Generally accepted accounting principles as in effect in the
United States.
GROUND LEASE: A lease for which the related Borrower has a leasehold
interest as a lessee of either the land, or the land and the improvements,
located at the related Mortgaged Property.
HAZARDOUS MATERIAL: Each of (a) those substances included within the
definitions of any one or more of the terms "contaminants," "pollutants,"
"hazardous substances," "hazardous materials" and "toxic substances" in CERCLA,
RCRA, and the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
xx.xx. 1801 et seq., and in the regulations promulgated pursuant thereto; (b)
those substances listed in the United States Department of Transportation Table
(49 CFR ss. 172. 101 and amendments thereto) or by the Environmental Protection
Agency (or any successor agency) (40 CFR ss. 302 and amendments thereto) as
hazardous substances; (c) such other substances, materials and wastes that are
or become regulated under applicable local, state or federal laws or
regulations, or that are classified as hazardous or toxic under federal, state
or local laws or regulations; and (d) any materials, wastes or substances that
are (i) petroleum, (ii) polychlorinated biphenyl, (iii) within the definition of
"hazardous substance" set forth in Section 311 of the Clean Water Act, (33
U.S.C. ss. 1321) or designated as "toxic pollutants" subject to Chapter 26 of
the Clean Water Act pursuant to SECTION 307 to the Clean Water Act (33 U.S.C.
ss. 1317), (iv) flammable substances or explosives, or (v) radioactive
materials.
HEDGE FUNDING REQUIREMENT: With respect to any day, all amounts
required to be paid or delivered by the Issuer under any Hedging Instrument,
whether in respect of payments thereunder or in order to meet margin, collateral
or other requirements thereof.
HEDGE VALUE: With respect to any Business Day and a specific Hedging
Instrument, the amount, if any, that is equal to the amount that would be paid
to the Issuer (expressed as a positive number) or paid by the Issuer (expressed
as a negative number) in consideration of an agreement between the Issuer and an
unaffiliated third party, that would have the effect of preserving for the
Issuer the net economic equivalent, as of such Business Day, of all payment and
delivery requirements payable to and by the Issuer under such Hedging Instrument
until the termination thereof, as determined by the Market Value Agent in
accordance with SECTION 4.14 hereof.
HEDGING COUNTERPARTY: A Person (i) (A) the long-term and commercial
paper or short-term deposit ratings of which are acceptable to the Majority
Noteholders and (B) which shall agree in writing that, in the event that any of
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its long-term or commercial paper or short-term deposit ratings cease to be at
or above the levels deemed acceptable by the Majority Noteholders, it shall
secure its obligations in accordance with the reasonable request of the Majority
Noteholders, (ii) that has entered into a Hedging Instrument and (iii) that is
acceptable to the Majority Noteholders; provided, that as of the date hereof,
NationsBank, N.A., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and the
Bank of Montreal shall be deemed to be acceptable to the Majority Noteholders.
HEDGING INSTRUMENT: Any interest rate cap agreement, interest rate
floor agreement, interest rate swap agreement or other interest rate hedging
agreement entered into by the Issuer with a Hedging Counterparty, and which
requires the Hedging Counterparty to deposit all amounts payable thereby
directly to the Collection Account. Each Hedging Instrument shall meet the
requirements set forth in ARTICLE VIII hereof with respect thereto.
IDENTIFICATION CERTIFICATE: A certificate originated by the Loan
Originator, substantially in the form of Attachment A to the Bailee Agreement,
attached hereto as Exhibit E.
INDENTURE: The Indenture dated as of August 14, 1998, together with
the Indenture Supplement, between the Issuer and the Indenture Trustee.
INDENTURE SUPPLEMENT: With respect to a Series of Notes, the Indenture
Supplement pursuant to which such Series of Notes was issued.
INDENTURE TRUSTEE: LaSalle National Bank, a national banking
association, as Indenture Trustee under the Indenture and this Agreement acting
on behalf of the Noteholders, or any successor indenture trustee under the
Indenture or this Agreement.
INDENTURE TRUSTEE FEE: As to any Payment Date, $750.
INDENTURE TRUSTEE'S LOAN FILE: As defined in SECTION 2.04(a) hereof.
INDEPENDENT: When used with respect to any specified Person, such
Person (i) is in fact independent of the Loan Originator, the Servicer, the
Depositor or any of their respective Affiliates, (ii) does not have any direct
financial interest in, or any material indirect financial interest in, any of
the Loan Originator, the Servicer, the Depositor or any of their respective
Affiliates and (iii) is not connected with any of the Loan Originator, the
Servicer, the Depositor or any of their respective Affiliates, as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Loan Originator, the Servicer, the Depositor or any of their
respective Affiliates merely because such Person is the beneficial owner of 1%
or less of any class of securities issued by the Loan Originator, the Servicer,
the Depositor or any of their respective Affiliates, as the case may be.
INDEPENDENT ACCOUNTANTS: A firm of nationally recognized certified
public accountants which is Independent.
INDIVIDUAL BORROWER CONCENTRATION: With respect to each Borrower and
as of any date of determination, the aggregate Principal Balance of Loans in the
Loan Pool with respect to which such Borrower (including all Affiliates thereof)
is an obligor or guarantor under the related Promissory Note.
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INITIAL CERTIFICATION: The meaning set forth in the Custodial
Agreement.
INITIAL NOTEHOLDER: MSSFI.
INSURANCE POLICIES: With respect to any Loan Collateral, any related
insurance policy.
INSURANCE PROCEEDS: With respect to any Loan Collateral, all amounts
collected in respect of Insurance Policies and not required either pursuant to
applicable law or the related Loan Documents to be applied to the restoration of
the related Loan Collateral or paid to the related Borrower.
INSURED CLOSING LETTER: A letter addressed to the Initial Noteholder
and the Indenture Trustee from the title insurance underwriter for which the
Settlement Agent is serving as an agent for each Table-Funded Loan, which letter
shall be in form and substance reasonably acceptable to the Initial Noteholder.
INTEREST CARRY-FORWARD AMOUNT: With respect to any Payment Date, the
excess, if any, of (A) the Interest Payment Amount for such Payment Date plus
the Interest Carry-Forward Amount for the prior Payment Date over (B) the amount
in respect of interest that is actually paid from the Distribution Account on
such Payment Date in respect of the interest for such Payment Date.
INTEREST PAYMENT AMOUNT: With respect to any Payment Date, the sum of
the Daily Interest Accrual Amounts for all days in the related Accrual Period.
LASALLE NATIONAL BANK: LaSalle Bank National Association f/k/a LaSalle
National Bank, a national banking association.
LIBOR: With respect to each day, the rate for United States dollar
deposits for one month that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London time, on the related LIBOR Determination Date. If such rate does
not appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be reasonably selected by the
Initial Noteholder), LIBOR for the applicable day will be the Reference Bank
Rate. If no such quotations can be obtained by the Initial Noteholder and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the first
preceding day on which LIBOR has been determined in accordance with this
definition.
LIBOR BUSINESS DAY: Any day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
LIBOR DETERMINATION DATE: With respect to each day that is a LIBOR
Business Day, such LIBOR Business Day, and with respect to any day that is not a
LIBOR Business Day, the LIBOR Business Day preceding such day, as determined by
the Initial Noteholder.
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LIBOR MARGIN: As defined in the Pricing Letter Agreement.
LIQUIDATED LOAN: With respect to any date of determination, any
Foreclosure Property or any Loan in respect of which a Monthly Payment is in
excess of 30 days past due and as to which the Servicer has determined, in
accordance with the Servicing Standard, that all amounts which it reasonably and
in good faith expects to collect have been recovered from or on account of such
Loan or the related Foreclosure Property; provided, however, that in any event
such Loan or the related Foreclosure Property shall be deemed uncollectible and
therefore be a Liquidated Loan upon the earliest to occur of: (a) the
liquidation of the related Foreclosure Property, (b) the determination by the
Servicer, in accordance with the Servicing Standard, that no further amounts are
collectible from the Loan and any related Loan Collateral, or (c) the date on
which any portion of a Monthly Payment on any Loan is in excess of 59 days past
due (without regard to any applicable grace periods).
LIQUIDATED LOAN LOSSES: With respect to any date of determination, the
difference between (i) the aggregate Principal Balances as of such date of all
Loans that became Liquidated Loans and (ii) all Liquidation Proceeds allocable
to principal received prior to such date.
LIQUIDATION PROCEEDS: With respect to a Liquidated Loan, any cash
amounts received in connection with the liquidation of such Liquidated Loan,
whether through trustee's sale, foreclosure sale or other disposition, any cash
amounts received in connection with the management of the Loan Collateral from
Defaulted Loans and any other amounts required to be deposited in the Collection
Account pursuant to SECTION 5.01(b)(1) hereof, in each case other than Insurance
Proceeds, Released Loan Collateral Proceeds and any proceeds of Retained
Interests, provided, however, that no Liquidation Proceeds shall be allocated to
Retained Interest until all other amounts owing under the Promissory Note shall
have been paid.
LOAN: Any Equipment Loan or Mortgage Loan.
LOAN AGREEMENT: With respect to each Loan, the related loan agreement
between the Borrower and the Loan Originator.
LOAN COLLATERAL: With respect to an Equipment Loan, all of the
Equipment securing such Equipment Loan, with respect to a Mortgage Loan, all of
the Mortgaged Property securing such Mortgage Loan and with respect to a Senior
Loan, all of the Equipment and/or Mortgaged Property securing such Senior Loan.
LOAN DOCUMENTS: With respect to a Loan, the documents comprising the
Indenture Trustee's Loan File for such Loan.
LOAN FILE: With respect to each Loan, the Indenture Trustee's Loan
File and the Servicer's Loan File.
LOAN INTEREST RATE: With respect to each Loan, the annual rate of
interest borne by the related Promissory Note, as shown on the Loan Schedule, as
the same may be modified by the Servicer in accordance with SECTION 4.01(a)
hereof and, in the case of an Adjustable Rate Loan, as the same may be
periodically adjusted in accordance with the terms of such Loan.
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LOAN MARGIN: With respect to each Other Mortgage Loan, the applicable
margin over LIBOR for the Note Principal Balance relating to each such Other
Mortgage Loan. The Loan Margin for each Other Mortgage Loan is 0.70% unless
otherwise agreed in writing between the Servicer and the Majority Noteholders or
otherwise specified by the Initial Noteholder pursuant to SECTION 2.08 hereof.
LOAN ORIGINATOR: FFCA Acquisition Corporation, in its capacity as the
Loan Originator hereunder.
LOAN ORIGINATOR PUT: The mandatory repurchase by the Loan Originator,
at the option of the Majority Noteholders, of a Loan pursuant to SECTION 3.07(a)
hereof.
LOAN POOL: As of any date of determination, the pool of all Loans
conveyed to the Issuer pursuant to this Agreement on all Transfer Dates up to
and including such date of determination, which Loans have not been released
from the Lien of the Indenture pursuant to the terms thereof, together with the
rights and obligations of a holder thereof, and the payments thereon and
proceeds therefrom received after the applicable Transfer Cutoff Date, as
identified from time to time on the Loan Schedule.
LOAN PURCHASE AGREEMENT: The Loan Purchase Agreement between the Loan
Originator and the Depositor, dated as of August 14, 1998, and all amendments
and supplements thereto.
LOAN SCHEDULE: The schedule of Loans conveyed to the Issuer and
delivered to the Initial Noteholder in the form of a computer-readable
transmission specifying the following information with respect to each Loan
conveyed on such date: (i) the Loan Originator's internal loan identifying
number; (ii) the Borrower's name as it appears on the related Promissory Note;
(iii) the name of the Borrower group (to be input consistently for purposes of
computing the Individual Borrower Concentration); (iv) in the case of a Mortgage
Loan, xxx xxxxxx xxxxxxx, xxxx, xxxxx and zip code of the Mortgaged Property;
(v) the original Principal Balance; (vi) the Transfer Cutoff Date Principal
Balance; (vii) the Loan Interest Rate at origination; (viii) the date of
origination; (ix) the industry segment (e.g., CD Facility, C&G Store, QSR
Store); (x) the type of Loan (e.g., Mortgage, Equipment); (xi) the Monthly
Payment as of such Transfer Cutoff Date; (xii) the scheduled maturity date under
the Promissory Note; (xiii) the Corporate Fixed Charge Coverage Ratio; (xiv)
with respect to the Unit-Level Fixed Charge Coverage Ratio, a flag indicating
whether such figure is a calculation of the Unit-Level Fixed Charge Coverage
Ratio with respect to the single unit or in the aggregate; (xv) the Brand; (xvi)
a Prepayment Code; (xvii) a Product Code with respect to such Loan; (xviii) if
such Loan is an Adjustable Rate Loan, the interest rate spread over LIBOR; (xix)
in the case of a Mortgage Loan, the loan to replacement cost ratio for the
related Mortgaged Property (if obtained); (xx) the Maximum Advance Factor, to
the extent changed by written agreement between the Servicer and the Majority
Noteholders in their sole discretion; (xxi) a code indicating whether the Loan
is a Table-Funded Loan; and (xxii) such other information as may be reasonably
requested by the Majority Noteholders.
LOAN SCHEDULE AND EXCEPTIONS REPORT: The meaning set forth in the
Custodial Agreement.
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LOCKBOX ACCOUNT: A demand deposit account or an Eligible Account held
by the Lockbox Bank acceptable to the Majority Noteholders.
LOCKBOX AGREEMENT: An agreement acceptable to the Indenture Trustee
and the Majority Noteholders among the Lockbox Bank, the Servicer, the
Depositor, the Issuer and the Indenture Trustee.
LOCKBOX BANK: A depository institution named by the Servicer and
agreed to by the Majority Noteholders.
LOCKBOX TRIGGER EVENT: The Majority Noteholders, in their sole
discretion may declare the occurrence of a Lockbox Trigger Event at any time
after the Closing Date if the long-term unsecured debt obligations of FFCA (i)
fail to be rated at least BBB- by DCR and Baa3 by Xxxxx'x or are not rated by
either of DCR or Xxxxx'x and (ii) such condition continues for 30 days after the
occurrence thereof.
LONDON BUSINESS DAY: A day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
LPA ASSIGNMENT: An Assignment of Loans from the Loan Originator to the
Depositor under the Loan Purchase Agreement.
MAJORITY NOTEHOLDERS: The holder or holders of in excess of 50% of the
Note Principal Balance. In the event of the release of the Lien of the Indenture
in accordance with the terms thereof, the Majority Noteholders shall mean the
Majority Certificateholders.
MAJORITY CERTIFICATEHOLDERS: The meaning set forth in the Trust
Agreement.
MARKET VALUE: With respect to each Loan and each Business Day, the
Market Value of such Loan as of such Business Day as determined by the Market
Value Agent in accordance with SECTION 4.14 hereof.
MARKET VALUE AGENT: Xxxxxx Xxxxxxx & Co. Incorporated and its
successors and assigns.
MATURITY DATE: With respect to the Notes of a given Series, as set
forth in the related Indenture Supplement or such later date as may be agreed in
writing by the Majority Noteholders.
MAXIMUM ADVANCE FACTOR: As defined in the Pricing Letter Agreement.
MAXIMUM NOTE PRINCIPAL BALANCE: For any Series of Notes, as set forth
in the related Indenture Supplement.
MONTHLY PAYMENT: The scheduled monthly payment of principal and/or
interest required to be made by an Borrower on the related Loan, as set forth in
the related Promissory Note.
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MOODY'S: Xxxxx'x Investors Service, Inc., or any successor thereto.
MORTGAGE: With respect to any Mortgage Loan, the mortgage, deed of
trust or other instrument securing the related Promissory Note, which creates a
first lien on the fee in real property and/or a first lien on the leasehold
estate in real property securing the Promissory Note and the assignment of rents
and leases related thereto.
MORTGAGE LOAN: Any C&G Store Mortgage Loan, CD Facility Mortgage Loan,
QSR Store Mortgage Loan, Automotive Service Facility Mortgage Loan or Other
Mortgage Loan pledged to the Indenture Trustee pursuant to the Indenture, and
which Mortgage Loan includes, without limitation, (i) a Mortgage Note and
related Mortgage and (ii) all right, title and interest of the Loan Originator
in and to the Mortgaged Property covered by such Mortgage. The term Mortgage
Loan shall be deemed to include the related Mortgage Note, related Mortgage and
related Foreclosure Property, if any. The term Mortgage Loan shall exclude any
Retained Interest.
MORTGAGED PROPERTY: With respect to a Mortgage Loan, the related
mortgagor's fee and/or leasehold interest in the real property (and/or all
improvements, buildings, fixtures, building equipment and personal property
thereon (to the extent applicable) and all additions, alterations and
replacements made at any time with respect to the foregoing) and all other
collateral securing repayment of the debt evidenced by the related Promissory
Note.
MSSFI: Xxxxxx Xxxxxxx Securitization Funding Inc.
NEGATIVE AMORTIZATION: With respect to each Adjustable Rate Loan, any
amounts in respect of interest accrued thereon for any Payment Period in excess
of the amount of the Monthly Payment thereon for the related Due Date, which
amounts are capitalized and added to the Principal Balance of such Adjustable
Rate Loan.
NEGATIVE AMORTIZATION CAP: With respect to any Adjustable Rate Loan,
the fixed percentage specified in the related Promissory Note as the percentage
of the original principal balance of such Loan for purposes of determining
whether any Negative Amortization Payment is payable as a part of the Monthly
Payment on such Loan for any Due Date.
NEGATIVE AMORTIZATION PAYMENT: With respect to any Adjustable Rate
Loan and any Due Date immediately succeeding a Due Date on which the addition of
Negative Amortization to the Principal Balance of such Loan caused such
Principal Balance to be more than the product of the Negative Amortization Cap
for such Loan and the original principal balance of such Loan, a prepayment of
principal that is payable (without penalty) by the related Borrower on such
immediately succeeding Due Date in an amount equal to the difference between the
Principal Balance of such Loan and the original principal balance of such Loan.
NET LIQUIDATION PROCEEDS: With respect to any Payment Date,
Liquidation Proceeds received during the period commencing on the preceding
Payment Date and ending on the Business Day immediately prior to such Payment
Date, net of any reimbursements to the Servicer made from such amounts for any
unreimbursed Servicing Compensation, Servicing Advances and Periodic Advances
(including Nonrecoverable Servicing Advances and Nonrecoverable Periodic
Advances) made and any other fees and expenses paid in connection with the
foreclosure, conservation and liquidation of the related Liquidated Loans or
Foreclosure Properties pursuant to SECTION 4.11 hereof.
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NET LOAN INTEREST RATE: With respect to each Loan, the related Loan
Interest Rate, less the rate at which the Servicing Fee is calculated.
NET LOAN LOSSES: With respect to any Defaulted Loan that is subject to
a modification pursuant to SECTION 4.01(e) hereof, an amount equal to the
portion of the Principal Balance, if any, released in connection with such
modification.
NONRECOVERABLE PERIODIC ADVANCE: Any portion of a Periodic Advance
previously made or proposed to be made in respect of a Loan which has not been
previously reimbursed to the Servicer and which, in the good faith judgment of
the Servicer, will not, or in the case of a proposed Periodic Advance would not,
be ultimately recoverable from Liquidation Proceeds or other recoveries in
respect of the related Loan. The determination by the Servicer that (i) it has
made a Nonrecoverable Periodic Advance or (ii) that any proposed advance, if
made, would constitute a Nonrecoverable Periodic Advance, shall be evidenced by
a certificate of a Servicing Officer promptly delivered to the Initial
Noteholder detailing the reasons for such determination.
NONRECOVERABLE SERVICING ADVANCE: With respect to any Foreclosure
Property, (a) any Servicing Advance previously made and not reimbursed from late
collections, Liquidation Proceeds, Insurance Proceeds or the Released Property
Proceeds or (b) a Servicing Advance proposed to be made in respect of a Loan or
Foreclosure Property either of which, in the good faith business judgment of the
Servicer, as evidenced by an Officer's Certificate delivered to the Initial
Noteholder, would not be ultimately recoverable.
NOTE: The meaning assigned thereto in the Indenture.
NOTE INTEREST RATE: Interest will accrue on the Notes on each day at a
per annum interest rate equal to LIBOR for the related LIBOR Determination Date
plus the LIBOR Margin for such day.
NOTE PRINCIPAL BALANCE: With respect to the Notes, as of any date of
determination (a) the sum of the Additional Note Principal Balances of all Notes
purchased on or prior to such date pursuant to the Note Purchase Agreement less
(b) all amounts previously distributed in respect of principal of the Notes
prior to such day.
NOTE PURCHASE AGREEMENT: The Note Purchase Agreement among MSSFI, the
Issuer, the Depositor and the Loan Originator, dated as of August 14, 1998 and
all amendments and supplements thereto.
NOTE REDEMPTION AMOUNT: As of any date of determination, an amount
without duplication equal to the sum of (i) then outstanding Note Principal
Balance plus all accrued and unpaid interest thereon (ii) any Trust Fees and
Expenses due and unpaid on such date, (iii) any Servicing Advance Reimbursement
Amount and (iv) any Nonrecoverable Periodic Advances.
NOTEHOLDER: The meaning assigned thereto in the Indenture.
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OFFICER'S CERTIFICATE: A certificate delivered to the Indenture
Trustee or the Issuer signed by the President or a Vice President or an
Assistant Vice President of the Depositor, the Servicer or the Loan Originator,
in each case, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel who may be employed
by the Loan Originator, the Servicer, the Depositor or any of their respective
Affiliates.
OPTIMAL PRINCIPAL PAYMENT AMOUNT: On each Payment Date, an amount
equal to the sum of (a) the positive difference, if any, between (i) aggregate
Collateral Value of all Loans in the Loan Pool for the prior Payment Date and
(ii) the aggregate Collateral Value of all Loans in the Loan Pool for such
Payment Date, (b) the Overcollateralization Shortfall for such Payment Date, and
(c) on each Payment Date on which a Securitization shall occur, an amount equal
to the cash Securitization Proceeds, provided, however, that on (A) the Maturity
Date, or (B) the Payment Date on which the Trust is to be terminated pursuant to
SECTION 11.02 hereof, the Optimal Principal Payment Amount shall be equal to the
Note Principal Balance. Notwithstanding anything to the contrary herein, in no
event shall the Optimal Principal Payment Amount with respect to any Payment
Date exceed the Note Principal Balance as of such date.
OTHER CD FACILITY MORTGAGE LOANS: CD Facility Mortgage Loans other
than Approved Brand CD Facility Mortgage Loans.
OTHER MARGIN BALANCES: With respect to each date and each Other
Mortgage Loan, (i) the product of (a) the Principal Balance of such Other
Mortgage Loan as of such date, (b) the Maximum Advance Factor for such Other
Mortgage Loan as of such date and (c) the Note Principal Balance as of such
date, divided by (ii) the sum for all Loans of the product of (a) the Principal
Balance of each such Loan as of such date and (b) the Maximum Advance Factor for
each such Loan as of such date.
OTHER MORTGAGE LOANS: Senior Loans and Mortgage Loans other than QSR
Store Mortgage Loans, C&G Store Mortgage Loans, CD Facility Mortgage Loans,
Equipment Loans or Automotive Service Facility Mortgage Loans and as to which
the Majority Noteholders, in their sole discretion, have consented in writing
delivered pursuant to the terms hereof and which may include, without
limitation, truck stops, automotive parts and/or service facilities and car
washes.
OUTSTANDING: As defined in the Indenture.
OVERCOLLATERALIZATION SHORTFALL: With respect to any Business Day, an
amount equal to the positive difference, if any, between (a) the Note Principal
Balance on such Business Day and (b) (i) the aggregate Collateral Value of all
Loans in the Loan Pool on such Business Day, or (ii) in the event that a
Performance Trigger shall have occurred and not been Deemed Cured, the aggregate
Collateral Value of all Loans in the Loan Pool on such Business Day multiplied
by 0.98.
OWNER TRUSTEE: Wilmington Trust Company, as owner trustee under the
Trust Agreement, and any successor owner trustee under the Trust Agreement.
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OWNER TRUSTEE FEE: The annual fee of $2,500 pursuant to the agreement
mentioned in Section 8.1 of the Trust Agreement, payable in equal monthly
installments to the Servicer which shall in turn pay, in one lump sum, such
$2,500 to the Owner Trustee on the Payment Date occurring in August each year
during the term of this Agreement, commencing in August 1999.
PAYMENT DATE: The second Business Day following each Determination
Date. From time to time, the Majority Noteholders and the Issuer may agree, upon
written notice to the Indenture Trustee, to additional Payment Dates in
accordance with SECTION 5.01(c)(3).
PAYMENT PERIOD: With respect to each Adjustable Rate Loan, the period
commencing on the first day of each calendar year and ending on the last day of
such calendar year.
PAYMENT RESET DATE: With respect to each Adjustable Rate Loan, the
first day of the calendar year or, if such day is not a Business Day, the next
succeeding Business Day.
PAYMENT STATEMENT: As defined in SECTION 6.01(b) hereof.
PERCENTAGE INTEREST: As defined in the Trust Agreement.
PERFORMANCE TRIGGER: With respect to any Business Day, a Performance
Trigger shall mean the existence of one or more of the following conditions as
of such Business Day:
(i) (x) the aggregate Principal Balance of all Loans that are 30
days or more Delinquent as of such Business Day divided by (y)
the Pool Principal Balance as of such Business Day is greater
than 1.0%; and
(ii) the aggregate Liquidated Loan Losses from the later of (A) the
Closing Date or (B) the most recent Securitization, through
such Business Day are greater than $25,000.
A Performance Trigger shall continue to exist until Deemed Cured.
PERIODIC ADVANCE: The aggregate of the advances made by the Servicer
on any Payment Date pursuant to SECTION 4.09, the amount of any such advances
being equal to the total of all Monthly Payments (net of the related Servicing
Fee) on the Loans, that (x) were Delinquent as of the close of business on the
Business Day preceding the related Payment Date and (y) have not been determined
by the Servicer to be Nonrecoverable Periodic Advances.
PERMITTED INVESTMENTS: Each of the following:
(1) obligations of, or guaranteed as to principal and interest by, the
United States or any agency or instrumentality thereof if backed by the
full faith and credit of the United States;
(2) direct U.S. government obligations or obligations of a federal
agency that are backed by the full faith and credit of the U.S. government
or by FNMA or FHLMC, which are subject to a repurchase agreement that
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satisfies the following criteria: (A) it must be between the Indenture
Trustee and either (x) primary dealers on the Federal Reserve reporting
dealer list which are rated in one of the three highest categories for
long-term unsecured debt obligations by each Rating Agency or (y) banks or
bank holding companies rated in one of the three highest categories for
long-term unsecured debt obligations by each Rating Agency; and (B) it must
be in writing and include the following terms: (a) a term no greater than
60 days for any repurchase transaction; (b) except as may be otherwise
provided in the Collection Account Letter Agreement with respect to the
investment of funds on deposit in the Collection Account, the collateral
must be delivered to the Indenture Trustee or a third party custodian
acting as agent for the Indenture Trustee by appropriate book entries and
confirmation statements, and must have been delivered before or
simultaneously with payment (i.e., perfection by possession of certificated
securities); and (c) the securities sold thereunder must be valued weekly,
marked-to-market at current market price plus accrued interest and the
value of the collateral must be equal to at least 104% of the amount of
cash transferred by or on behalf of the Indenture Trustee under the
repurchase agreement and, if the value of the securities held as collateral
declines to an amount below 104% of the cash transferred by or on behalf of
the Indenture Trustee plus accrued interest (i.e., a margin call), then
additional cash and/or acceptable securities must be transferred to the
Indenture Trustee (except as may be otherwise provided in the Collection
Account Letter Agreement with respect to the investment of funds on deposit
in the Collection Account) to satisfy such margin call; provided, however,
that if the securities used as collateral are obligations of FNMA or FHLMC,
then the value of the securities held as collateral must equal at least
105% of the cash transferred by or on behalf of the Indenture Trustee under
such repurchase agreement;
(3) certificates of deposit, time deposits and bankers acceptances of
any United States depository institution or trust company incorporated
under the laws of the United States or any state thereof, including the
Indenture Trustee; provided, however, that the debt obligations of such
depository institution or trust company at the date of the acquisition
thereof have been rated by each Rating Agency in one of its three highest
long-term rating categories;
(4) deposits, including deposits with the Indenture Trustee, that are
fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC;
(5) commercial paper of any corporation incorporated under the laws of
the United States or any state thereof, including corporate Affiliates of
the Indenture Trustee, which at the time the investment is made is rated by
each Rating Agency in its highest short-term rating category and which has
an original maturity of not more than 365 days;
(6) debt obligations rated by each Rating Agency at the time the
investment is made in one of its three highest long-term rating categories
(or those investments specified in paragraph (3) above with depository
institutions which have debt obligations rated by each Rating Agency in one
of its three highest long-term rating categories);
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(7) money market funds that are rated by each Rating Agency at the
time the investment is made in one of its three highest long-term rating
categories; provided, that money market funds that allow for withdrawals on
demand shall be deemed to satisfy any maturity requirements for Permitted
Investments set forth in this Agreement; or
(8) any other investments that the Majority Noteholders may consent to
in writing prior to the time at which such investment is made;
PROVIDED, HOWEVER, that no instrument described in foregoing subparagraphs (1)
through (7) shall evidence either the right to receive (a) only interest with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide 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 in
the foregoing subparagraphs 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 its stated maturity.
Each reference in this definition of "Permitted Investments" to the
Rating Agency shall be construed, in the case of each subparagraph above
referring to each Rating Agency, as a reference to each of DCR and Moody's.
PERSON: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
PHYSICAL PROPERTY: As defined in clause (b) of the definition of
"Delivery" above.
POOL PRINCIPAL BALANCE: With respect to any date of determination, the
aggregate Principal Balances of the Loans as of the end of the preceding day;
provided, however, that the Pool Principal Balance on any Distribution Date on
which the Termination Price is to be paid to Noteholders will be deemed to have
been equal to zero as of such date.
POSTSECURITIZATION UNFUNDED TRANSFER OBLIGATION: With respect to any
Series of Notes and any date of determination after an Extension Date, an amount
equal to (x) the sum of (A) the Transfer Obligation Carry-Forward Amount, plus
(B) 10% of the aggregate Collateral Value of all Loans sold hereunder since such
Extension Date plus (C) any amounts withdrawn from the Transfer Obligation
Account for return to the Loan Originator pursuant to SECTION 5.05(j) hereof
since such Extension Date less (y) the sum of the aggregate amount of payments
actually made by the Loan Originator in respect of the Transfer Obligation
pursuant to Section 2.3(b) of the Loan Purchase Agreement since such Extension
Date and the aggregate amount of the Purchase Prices paid by Servicer in respect
of any Loan Originator Puts since such Extension Date. With respect to any
Series of Notes subsequent to the first Series of Notes, the Postsecuritization
Unfunded Transfer Obligation may be modified as set forth in the Indenture
Supplement.
PREPAID LOAN: As defined in SECTION 4.15 hereof.
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PREPAYMENT CODE: With respect to each Loan, a code agreed to in
writing by the Loan Originator and the Initial Noteholder, which code shall
identify certain prepayment terms with respect to such Loan as may be agreed in
writing from time to time between the Loan Originator and the Initial
Noteholder.
PRICING LETTER AGREEMENT: That certain letter agreement dated as of
January 1, 2001 between Xxxxxx Xxxxxxx Securitization Funding Inc. and the Loan
Originator.
PRINCIPAL BALANCE: With respect to any Loan or related Foreclosure
Property, (i) at the Transfer Cutoff Date, the outstanding unpaid principal
balance of the Mortgage Loan as of the Transfer Cutoff Date and (ii) with
respect to any other date of determination, the outstanding unpaid principal
balance of the Loan as of the prior Business Day (after giving effect to all
payments received thereon and the allocation of any Net Loan Losses with respect
thereto for a Defaulted Loan on such Business Day); provided, however, that any
Liquidated Loan shall be deemed to have a Principal Balance of zero.
PRINCIPAL CARRY-FORWARD AMOUNT: With respect to any Payment Date, the
excess, if any, of (A) the Optimal Principal Payment Amount for such Payment
Date over (B) the amount in respect of principal that is actually distributed
from the Distribution Account on such Payment Date.
PRINCIPAL PREPAYMENT: With respect to any Loan and any day, any
principal amount received on a Loan in excess of the principal of the Monthly
Payment due on such day.
PRODUCT CODE: With respect to each Loan, a code agreed to in writing
by the Loan Originator and the Initial Noteholder, which code shall identify
whether such Loan is an Adjustable Rate Loan or a fixed rate Loan, whether such
Loan has a Retained Interest and such other attributes of such Loan as may be
agreed in writing from time to time between the Loan Originator and the Initial
Noteholder.
PROMISSORY NOTE: With respect to a Loan, the original executed
promissory note or other evidence of the indebtedness of the related Borrower or
Borrowers.
PURCHASE PRICE: With respect to a Loan, the Principal Balance thereof
as of the date of purchase or repurchase, plus all accrued and unpaid interest
on such Loan to and including the date of purchase or repurchase computed at the
applicable Loan Interest Rate, plus the amount of any unreimbursed Servicing
Advances and any unreimbursed Periodic Advances made by the Servicer with
respect to such Loan (after deducting therefrom any amounts received in respect
of such purchased or repurchased Loan and being held in the Collection Account
for future distribution to the extent such amounts represent recoveries of
principal not yet applied to reduce the related Principal Balance or interest
(net of the Servicing Fee) for the period from and after the date of
repurchase). To the extent the Servicer does not reimburse itself for amounts,
if any, in respect of the Servicing Advance Reimbursement Amount or
Nonrecoverable Periodic Advances pursuant to SECTION 5.01(c)(1) hereof, with
respect to such Loan, the Purchase Price shall be reduced by such amounts.
QSR STORE MORTGAGE LOANS: Mortgage Loans secured by quick service
restaurants.
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QUALIFIED INSURER: An insurance company duly qualified as such under
the laws of the states in which any applicable Loan Collateral is located, duly
authorized and licensed or otherwise qualified in such states to transact the
applicable insurance business and to write the insurance provided, approved as
an insurer in accordance with the Servicing Standard, and whose claims-paying
ability is rated "A" or better (or the equivalent in any successor rating
system) by Best's Key Rating Guide or rated "A" or better by Standard & Poor's
Ratings Services or the equivalent by any Rating Agency as to claims-paying
ability with respect to hazard and flood insurance.
QUALIFIED SUBSTITUTE LOAN: A Loan or Loans substituted for a Deleted
Loan pursuant to SECTION 3.05 hereof, which (i) has or have been approved in
writing by the Majority Noteholders and (ii) complies or comply as of the date
of substitution with each representation and warranty set forth in SECTION 3.04
hereof and is or are not more than 29 days Delinquent as of the date of
substitution for such Deleted Loan or Loans.
QUARTERLY SERVICE CHARGE: The interest expense of FFCA and its
Subsidiaries for the quarter most recently ended, including, without limitation,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, net costs pursuant to hedging
obligations, the interest component of all payments associated with Capitalized
Leases, amortization of debt issuance costs, amortization of original issue
discount, non-cash interest payments and the interest component of any deferred
payment obligations.
RAPID AMORTIZATION TRIGGER: With respect to any Business Day, a Rapid
Amortization Trigger shall mean the existence of one or more of the following
conditions as of such Business Day:
(i) the aggregate Principal Balance of all Loans that are 30 to 59
days Delinquent as of such Business Day divided by the Pool
Principal Balance as of such Business Day is greater than 2.0%;
(ii) the aggregate Principal Balance of all Loans that are 60 to 89
days Delinquent as of such Business Day divided by the Pool
Principal Balance as of such Business Day is greater than 1.0%;
(iii) the aggregate Principal Balance of all Loans that are 90 days
or more Delinquent as of such Business Day divided by the Pool
Principal Balance as of such Business Day is greater than
0.50%;
(iv) the aggregate Liquidated Loan Losses since the Reset Date are
greater than $100,000; and
(v) (x) the aggregate Liquidated Loan Losses for the three calendar
month period preceding such Business Day divided by (y) the
average Transfer Cutoff Date Principal Balance of all Loans
conveyed to the Issuer hereunder during such three calendar
month period is greater than 0.10%.
A Rapid Amortization Trigger shall continue to exist until it is
Deemed Cured.
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RATING AGENCIES: DCR and Moody's or such other nationally recognized
credit rating agencies as may from time to time be designated in writing by the
Majority Noteholders in their sole discretion.
RECORD DATE: With respect to each Payment Date, the close of business
on the prior Business Day.
REFERENCE BANK RATE: With respect to any day, the arithmetic mean
(rounded upwards, if necessary, to the nearest one sixteenth of a percent) of
the offered rates for United States dollar deposits for one month that are
offered by the Reference Banks as of 11:00 a.m., New York City time, on the
related LIBOR Determination Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the Note Principal
Balance, provided that at least two such Reference Banks provide such rate. If
fewer than two offered rates appear, the Reference Bank Rate will be arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Initial Noteholder, as of 11:00 a.m., New York City time, on such day for
loans in U.S. Dollars to leading European Banks for a period of one month in
amounts approximately equal to the outstanding Note Principal Balance. If no
such quotation can be obtained, the Reference Bank Rate will be the Reference
Bank Rate applicable to the preceding day.
REFERENCE BANKS: Three money center banks selected by the Initial
Noteholder.
RELEASED LOAN COLLATERAL PROCEEDS: With respect to any Loan, proceeds
received by the Servicer in connection with (i) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (ii) any
release of part of the Loan Collateral from the lien of the related Mortgage or
Security Agreement, as the case may be, whether by partial condemnation, sale or
otherwise; which proceeds in either case are not released to the Borrower in
accordance with applicable law, the Servicing Standard or this Agreement.
RESET DATE: The later of the latest Closing Date and the latest
Extension Date.
RESPONSIBLE OFFICER: When used with respect to (i) the initial
Indenture Trustee or the initial Custodian, any officer in its Asset Backed
Securities Trust Services Group with particular responsibility for the
transactions contemplated by this Agreement and (ii) any successor Indenture
Trustee or Custodian, any officer within the corporate trust office of such
successor Indenture Trustee or Custodian, including any Vice President,
Assistant Vice President, Secretary, Assistant Secretary or any other officer of
such successor Indenture Trustee or Custodian customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Issuer, any officer in the
corporate trust administration department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and this Agreement
on behalf of the Issuer. When used with respect to the Depositor, the Loan
Originator or the Servicer, the President or any Executive Vice President,
Senior Vice President or the Treasurer.
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RETAINED INTEREST: With respect to any Loan, any interest payable
under the related Promissory Note other than default interest and interest at
the related Loan Interest Rate (and excluding any prepayment charges and yield
maintenance premiums). Without limiting the generality of the foregoing,
Retained Interest shall include interest designated or defined as "Shared
Appreciation," "Contingent Interest," "Participating Interest," "Additional
Interest," "Fixed Bumps" or "Payment Escalations" under the terms of any Loan.
Notwithstanding the foregoing, in no event shall any interest payable under any
Loan to any affiliate of U.S. Realty Advisors, LLC be deemed to be Retained
Interest.
RETAINED SECURITIES: With respect to a Securitization, any
subordinated securities issued or expected to be issued, or excess collateral
value retained or expected to be retained, in connection therewith to the extent
the Loan Originator or an Affiliate thereof decides in its sole discretion to
retain, instead of sell, such securities.
RETAINED SECURITIES VALUE: With respect to any Business Day and a
Retained Security, the market value thereof as determined by the Market Value
Agent in accordance with SECTION 4.14(d) hereof.
RE-UNDERWRITTEN LOANS: Any Loan that has been included in the Trust
Estate (i) for a period in excess of one year from the Transfer Date thereof or
(ii) after completion of two Securitizations since the applicable Transfer Date
for such Loan.
REVOLVING PERIOD: The period commencing on the Closing Date and ending
on the earlier of (i) the date on which the Revolving Period is terminated
pursuant to SECTION 2.07 and (ii) with respect to a Note of a given Series, the
date set forth in the related Indenture Supplement.
S&SA ASSIGNMENT: An Assignment, in the form of Exhibit C hereto, of
Loans and other property from the Depositor to the Issuer pursuant to this
Agreement.
SECURITIES: The Notes or Trust Certificates.
SECURITIZATION: A sale or transfer of loans, including Loans, to an
Affiliate of the Depositor in order to effect one or a series of
structured-finance securitization transactions involving the issuance of
securities treated for federal income tax purposes as indebtedness of FFCA or
one or more of its wholly-owned subsidiaries.
SECURITIZATION PARTICIPANT: With respect to a Securitization, any
"depositor" with respect to such Securitization, the Majority Noteholders, the
Issuer, the Servicer, the trustee and the custodian thereunder, any nationally
recognized credit rating agency, the related underwriters, the related placement
agent, the related credit enhancer, 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 Securitization.
SECURITIZATION PROCEEDS: With respect to a Securitization, (x) the
proceeds of the Securitization remitted to the Issuer in respect of the Loans
transferred on the date of and with respect to such Securitization, including
without limitation, any cash and Retained Securities created in such
Securitization less all costs, fees and expenses incurred in connection with
such Securitization, including, without limitation, all amounts deposited into
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any reserve funds upon the closing thereof plus or minus (y) the net positive or
net negative value of all Hedging Instruments terminated in connection with such
Securitization minus (z) all other amounts agreed upon in writing by the Initial
Noteholder, the Issuer and the Servicer.
SECURITY AGREEMENT: (a) With respect to any Equipment Loan, the pledge
agreement, security agreement or similar instrument that secures the related
Promissory Note and creates a lien on the related Equipment and (b) with respect
to any Mortgage Loan, any security agreement, contract, instrument or other
document related to security for repayment thereof (other than the related
Mortgage and Promissory Note), executed by the Borrower and/or others in
connection with such Mortgage Loan, and in either case including without
limitation, any guaranty, title insurance policy, hazard insurance policy,
chattel mortgage, letter of credit or certificate of deposit, other pledged
accounts, pledge of stock or other equity interest in the related Borrower, and
any other documents and records relating to any of the foregoing.
SECURITYHOLDER: Any Noteholder or Certificateholder.
SENIOR LOAN: A Loan secured by Loan Collateral with respect to which a
Unit-Level Fixed Charge Coverage Ratio is not provided on the related Loan
Schedule, provided, however, that (i) a Senior Loan which is secured only by
Equipment shall be deemed an Equipment Loan for purposes of this Agreement, (ii)
a Senior Loan which is secured by Mortgaged Property shall be deemed a Mortgage
Loan for purposes of this Agreement, and (iii) a Senior Loan which is secured
only by both Equipment and Mortgaged Property shall be deemed a Mortgage Loan
for purposes of this Agreement.
SERIES: With respect to a Note, the related series of which such Note
is a part, as specified in the Indenture Supplement.
SERVICER: FFCA, in its capacity as the servicer hereunder, or any
successor appointed as herein provided.
SERVICER CALL: The optional repurchase by the Servicer of a Loan
pursuant to SECTION 3.07(b) hereof.
SERVICER'S FISCAL YEAR: January 1st through December 31st of each
year.
SERVICER'S LOAN FILE: With respect to each Loan, the file held by the
Servicer, consisting of originals of all documents relating to such Loan that
are not delivered to the Custodian, copies of all of the Loan Documents included
in the related Indenture Trustee's Loan File and (i) a closing instruction
letter (if any) with respect to the Loan, (ii) a copy of the Borrower's opinion
of counsel (if any), (iii) a copy of the franchise agreement with all amendments
thereto (if any), (iv) a copy of the site inspection and valuation report and
(v) if such Loan is a Mortgage Loan, a survey (if any) of the related Mortgaged
Property and a Title Matters Indemnity Agreement (if any).
SERVICER'S REMITTANCE REPORT: A report prepared and computed by the
Servicer in substantially the form of Exhibit B attached hereto.
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SERVICER TERMINATION EVENT: The termination of the Servicer pursuant
to SECTION 10.01(b) hereof.
SERVICING ADVANCE REIMBURSEMENT AMOUNT: With respect to any date of
determination, the amount of any Servicing Advances that have not been
reimbursed as of such date, including Nonrecoverable Servicing Advances.
SERVICING ADVANCES: Subject to SECTION 4.01(b) hereof, all reasonable,
customary and necessary "out of pocket" costs and expenses advanced or paid by
the Servicer with respect to the Loans in accordance with the performance by the
Servicer of its servicing obligations hereunder, including, but not limited to,
the costs and expenses for (i) the preservation, restoration and protection of
Loan Collateral, including without limitation, advances in respect of real
estate taxes and assessments, (ii) any collection, enforcement or judicial
proceedings, including, without limitation, foreclosures, collections, reports
and liquidations pursuant to SECTION 4.10 hereof and (iii) the conservation,
management and sale or other disposition of a Foreclosure Property pursuant to
SECTION 4.11 hereof.
SERVICING COMPENSATION: The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to SECTION 7.01 and SECTION 7.03 hereof.
SERVICING FEE: As to each Loan (including any Loan that has been
foreclosed and has become a Foreclosure Property, but excluding any Liquidated
Loan), the fee payable monthly to the Servicer on each Payment Date, which (i)
in the case of fixed rate Loans shall be the product of 0.25% (25 basis points)
and the Principal Balance of such Loan as of the beginning of the immediately
preceding Due Period, divided by 12 and (ii) in the case of Adjustable Rate
Loans shall be the product of 0.375% (37.5 basis points) and the Principal
Balance of such Loan as of the beginning of the immediately preceding Due
Period, divided by 12. The Servicing Fee includes any servicing fees owed or
payable to any Subservicer, which fees shall be paid from the Servicing Fee.
SERVICING OFFICER: Any officer of the Servicer or Subservicer involved
in, or responsible for, the administration and servicing of the Loans whose name
and specimen signature appears on a list of servicing officers annexed to an
Officer's Certificate furnished by the Servicer or the Subservicer,
respectively, on the Closing Date to the Issuer and the Indenture Trustee, on
behalf of the Noteholders, as such list may from time to time be amended.
SERVICING STANDARD: With respect to the servicing of the Loans, the
servicing and administration of the Loans with the same care, skill, prudence
and diligence with which prudent institutional commercial lenders and loan
servicers service comparable loans which are owned, for federal income tax
purposes, by entities which qualify as real estate investment trusts under
Section 856 of the Code (and at least with the same care, skill, prudence and
diligence with which the Servicer generally services loans owned by it), with a
view to the timely collection of all scheduled payments of principal and
interest under the Loans or, if a Loan comes into and continues in default and
no satisfactory arrangements can be made for the collection of the delinquent
payments, the maximization of the recovery on such Loan to the Noteholders on a
present value basis (the relevant discounting of anticipated collections to be
performed at the related Loan Interest Rate), but without regard to:
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(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the
related Borrower;
(ii) the ownership of any Notes or the Trust Certificates by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Servicing Advances or
Periodic Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services or reimbursement of its costs
hereunder or with respect to any particular transaction.
SETTLEMENT AGENT: With respect to any Table-Funded Loan, the entity
approved by the Initial Noteholder, in its sole discretion and pursuant to
Section 25 of the Custodial Agreement (which may be a title company, escrow
company or attorney in accordance with local law and practice in the
jurisdiction where the related Table-Funded Loan is being originated), (i) to
act pursuant to the Escrow Instructions, (ii) to which the proceeds of such
Table-Funded Loan are to be wired by the Initial Noteholder and (iii) to
disburse such proceeds pursuant to a written authorization from the Initial
Noteholder.
SUBSEQUENTLY DISPOSED LOAN: As defined in SECTION 4.15 hereof.
SUBSERVICER: Any Person with which the Servicer has entered into a
Subservicing Agreement and which is an Eligible Servicer and satisfies any
requirements set forth in SECTION 4.06(a) hereof in respect of the
qualifications of a Subservicer.
SUBSERVICING ACCOUNT: An account established by a Subservicer pursuant
to a Subservicing Agreement, which account must be an Eligible Account.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of any or all Loans
as provided in SECTION 4.06(a) hereof, copies of which shall be made available,
along with any modifications thereto, to the Issuer and the Indenture Trustee.
SUBSIDIARY: With respect to FFCA, (a) any corporation, association,
joint venture or other business entity of which more than 50% of the total
voting power of shares of stock or other ownership interests entitled to vote in
the election of the directors, managers, trustees or other persons having the
power to direct or cause the direction of the management and policies thereof is
at the time owned or controlled, directly or indirectly, by FFCA or one or more
of the other Subsidiaries of FFCA, and (b) any partnership or limited liability
company in which FFCA or one or more of the other Subsidiaries of FFCA, directly
or indirectly, possesses more than a 50% interest in the total capital or total
income of such partnership or limited liability company.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to SECTION 2.05 or SECTION 3.05 hereof, the amount, if any, by which
(a) the sum of the aggregate principal balance (after application of principal
payments received on or before the date of substitution) of any Qualified
Substitute Loans as of the date of substitution, plus any accrued and unpaid
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interest thereon to the date of substitution, is less than (b) the sum of the
aggregate of the Principal Balances, together with accrued and unpaid interest
thereon to the date of substitution, of the related Deleted Loans.
TABLE-FUNDED LOAN: A Loan which is pledged to the Indenture Trustee
simultaneously with the origination thereof by the Loan Originator, which
origination is funded in part or in whole with proceeds advanced directly to a
Settlement Agent. A Loan shall cease to be a Table-Funded Loan upon the later to
occur of (i) the delivery of the Loan Schedule and Exceptions Report by the
Custodian to the Initial Noteholder for such Table-Funded Loan on the Business
Day of receipt of the related Indenture Trustee's Loan File by the Custodian and
(ii) the disbursement of funds by the Settlement Agent to the Borrower.
TEN YEAR TREASURY YIELD: As of any date of determination, the yield on
United States treasury securities with maturities of ten years, as most recently
reported in the Wall Street Journal, or in the event that the Wall Street
Journal ceases publication, in such source as shall be designated in writing by
the Indenture Trustee.
TERMINATION PRICE: As of any date of determination, an amount without
duplication equal to the greater of (A) the Note Redemption Amount and (B) the
sum of (i) the Principal Balance of each Loan included in the Trust as of the
Payment Date of the termination of the Trust; (ii) all unpaid interest accrued
on the Principal Balance of each such Loan at the related Net Loan Interest Rate
to such Payment Date; and (iii) the aggregate fair market value of each
Foreclosure Property included in the Trust on such Payment Date, as determined
by an Independent appraiser acceptable to the Majority Noteholders as of a date
not more than 30 days prior to such Payment Date.
TITLE MATTERS INDEMNITY AGREEMENT: With respect to each Mortgage Loan,
an agreement (if any) between the Borrower and the Loan Originator, indemnifying
the Loan Originator for any losses arising from title matters, including without
limitation, zoning, use, covenants, conditions and restrictions and
encroachments.
TITLE POLICY: With respect to any Mortgaged Property, an ALTA
(extended coverage) loan title insurance policy or such other form as is
customarily acceptable to prudent lending institutions in the jurisdiction in
which the Mortgaged Property is located (or other satisfactory title insurance
as confirmed in writing by the Majority Noteholders) consistent with the
Underwriting Guidelines.
TRANSFER CUTOFF DATE: With respect to each Loan, the first day of the
month in which the Transfer Date with respect to such Loan occurs.
TRANSFER CUTOFF DATE PRINCIPAL BALANCE: As to each Loan for which its
Transfer Date occurs (i) from and including the first of a calendar month to and
including the Business Day preceding the Payment Date in such calendar month,
its Principal Balance as of the opening of business on the Transfer Cutoff Date
(after giving effect to any payments received on the Loan before the Transfer
Cutoff Date) and (ii) from and including the Payment Date to and including the
last day of a calendar month, its Principal Balance as of the close of business
on the Transfer Cutoff Date (after giving effect to any payments due on the Loan
on or before the Transfer Cutoff Date).
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TRANSFER DATE: With respect to each Loan, the day such Loan is sold to
the Depositor pursuant to the Loan Purchase Agreement and to the Issuer pursuant
to SECTION 2.01 hereof.
TRANSFER OBLIGATION: The obligation of the Loan Originator under
Section 2.3(b) of the Loan Purchase Agreement to make certain payments in
connection with Securitizations and other related matters.
TRANSFER OBLIGATION ACCOUNT: The account designated as such,
established and maintained pursuant to SECTION 5.05 hereof.
TRANSFER OBLIGATION CARRY-FORWARD AMOUNT: With respect to any
Extension Date, the lesser of (x) the Unfunded Transfer Obligation as of such
date (immediately after giving effect to any Securitization occurring on such
date) and (y) 10% of the aggregate Collateral Value of all Loans remaining in
the Loan Pool as of such date.
TRANSFER OBLIGATION TARGET AMOUNT: With respect to any date of
determination, the cumulative total of all withdrawals pursuant to SECTION
5.05(e), 5.05(f), 5.05(g) and 5.05(h) hereof from the Transfer Obligation
Account since the Closing Date, after deducting from such total all amounts
returned to the Loan Originator pursuant to SECTION 5.05(j) hereof.
TRUST: The Issuer.
TRUST ACCOUNT PROPERTY: The Trust Accounts, all amounts and
investments held from time to time in the Trust Accounts and all proceeds of the
foregoing.
TRUST ACCOUNTS: The Distribution Account, the Collection Account, the
Transfer Obligation Account, the Lockbox Account, if any, and each Escrow
Account, if any.
TRUST AGREEMENT: The Trust Agreement dated as of March 13, 1998, as
amended, among the Depositor, the Loan Originator and the Owner Trustee.
TRUST CERTIFICATE: The meaning assigned thereto in the Trust
Agreement.
TRUST ESTATE: The assets subject to this Agreement, the Trust
Agreement and the Indenture and assigned to the Trust, which assets consist of:
(i) such Loans as from time to time are subject to this Agreement as listed in
the Loan Schedule, as the same may be amended or supplemented on each Transfer
Date, by the removal of Deleted Loans and by the addition of Qualified
Substitute Loans, together with the Servicer's Loan Files and the Indenture
Trustee's Loan Files relating thereto and all proceeds thereof, (ii) the
Mortgages, Security Agreements and security interests in Loan Collateral, (iii)
all payments in respect of interest due with respect to each Loan on or after
the related Transfer Cutoff Date and all payments in respect of principal
received after such Transfer Cutoff Date net of any Retained Interest (iv) such
assets as from time to time are identified as Foreclosure Property, (v) such
assets and funds as are from time to time deposited in the Distribution Account,
Collection Account, the Transfer Obligation Account, the Lockbox Account, if
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any, and each Escrow Account, if any, including, without limitation, amounts on
deposit in such accounts that are invested in Permitted Investments, (vi)
lenders' rights under all Insurance Policies and to any Insurance Proceeds,
(vii) lenders' rights to any Condemnation Proceeds, (viii) Net Liquidation
Proceeds and Released Loan Collateral Proceeds, (ix) all right, title and
interest of the Issuer (but none of the obligations) in and to the obligations
of Hedging Counterparties under Hedging Instruments, (x) all right, title and
interest of the Depositor in and to the obligations of the Loan Originator under
the Loan Purchase Agreement pursuant to which the Depositor acquired the Loans
from the Loan Originator, and all proceeds of any of the foregoing and (xi) all
of the Loan Originator's right, title and interest in, to and under (but none of
its obligations) any Environmental Policy to the extent relating to Mortgage
Loans.
TRUST FEES AND EXPENSES: As of each Payment Date, an amount equal to
the Servicing Compensation, the Indenture Trustee Fee, the Owner Trustee Fee and
the Custodian Fee, if any.
UCC: The Uniform Commercial Code as in effect in the State of New
York.
UCC-1 FINANCING STATEMENT: A financing statement meeting the
requirements of the Uniform Commercial Code of the relevant jurisdiction.
UCC ASSIGNMENT: A form "UCC-2" or "UCC-3" statement meeting the
requirements of the Uniform Commercial Code of the relevant jurisdiction to
reflect an assignment of a secured party's interest in collateral.
UNDERWRITING GUIDELINES: The underwriting guidelines (including the
loan origination guidelines) provided to the Initial Noteholder on or prior to
the Closing Date by the Loan Originator or an Affiliate thereof.
UNFUNDED TRANSFER OBLIGATION: With respect to any Series of Notes and
any date of determination on or prior to an Extension Date, an amount equal to
(x) the sum of (A) 10% of the aggregate Collateral Value of all Loans sold
hereunder since the related Closing Date, plus (B) any amounts withdrawn from
the Transfer Obligation Account for return to the Loan Originator pursuant to
SECTION 5.05(j) hereof since the related Closing Date less (y) the sum of the
aggregate amount of payments actually made by the Loan Originator in respect of
the Transfer Obligation pursuant to Section 2.3(b) of the Loan Purchase
Agreement since the related Closing Date and the aggregate amount of the
Purchase Prices paid by Servicer in respect of any Loan Originator Puts since
the related Closing Date. With respect to any Series of Notes subsequent to the
first Series of Notes, the Unfunded Transfer Obligation may be modified as set
forth in the Indenture Supplement.
UNIT-LEVEL FIXED CHARGE COVERAGE RATIO: With respect to a Loan, as of
any date of determination and for any period, the applicable "Fixed Charge
Coverage Ratio" determined in accordance with, and defined in, the Underwriting
Guidelines and any applicable Loan Documents, as computed by the Loan Originator
based on the information most recently provided by the Borrower prior to any
discretionary "add-back" adjustments.
WHOLE LOAN SALE: A sale of Loans as whole loans.
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WILMINGTON TRUST COMPANY: Wilmington Trust Company, a Delaware banking
corporation.
WIRE INSTRUCTIONS: Instructions, originated by the Loan Originator,
substantially in the form of Attachment A to the Escrow Instructions, attached
hereto as Exhibit F.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture and the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Agreement
or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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ARTICLE II
CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES
SECTION 2.01 CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES.
(a) (i) On the terms and conditions of this Agreement, on each
Transfer Date, the Depositor agrees to offer for sale and to sell Loans and
deliver related Loan Documents to or at the direction of the Issuer. To the
extent the Issuer has or is able to obtain sufficient funds for the purchase
thereof, the Issuer agrees to purchase such Loans offered for sale by the
Depositor.
(ii) In consideration of the payment of the Additional Note
Principal Balance pursuant to SECTION 2.06 hereof, the Depositor, as of the
Closing Date and concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to the
Trust Estate.
(iii) During the Revolving Period, on each Transfer Date, subject
to the conditions precedent set forth in SECTION 2.06(a) and in accordance with
the procedures set forth in SECTION 2.01(c), the Depositor, pursuant to an S&SA
Assignment, will assign to the Issuer without recourse all the right, title and
interest of the Depositor in and to the Loans and all proceeds thereof listed on
the Loan Schedule attached to such S&SA Assignment, including all interest and
principal (i) for each Loan having a Transfer Date from and including the first
day of a calendar month to and including the Business Day preceding a Payment
Date, received on or after the opening of business of the Transfer Cutoff Date
and (ii) for each Loan having a Transfer Date from and including a Payment Date
to and including the last day of a calendar month, due on the Loan after the
Transfer Cutoff Date, in each case whether received by the Loan Originator, the
Depositor or the Servicer, together with all right, title and interest in and to
the proceeds of any related Insurance Policies and all of the Depositor's right,
title and interest in and to (but none of its obligations under) the Loan
Purchase Agreement and all proceeds of the foregoing.
(iv) The foregoing sales, transfers, assignments, set overs and
conveyances do not, and are not intended to, result in a creation or an
assumption by the Issuer of any obligation of the Depositor, the Loan Originator
or any other Person in connection with the Trust Estate or under any agreement
or instrument relating thereto except as specifically set forth herein.
(b) As of the Closing Date and as of each Transfer Date, the Issuer
acknowledges (or will acknowledge pursuant to the S&SA Assignment) the
conveyance to it of the Trust Estate, including all right, title and interest of
the Depositor in and to the Trust Estate, receipt of which is hereby
acknowledged by the Issuer. Concurrently with such delivery, as of the Closing
Date and as of each Transfer Date, the Issuer pledges (or will pledge pursuant
to the S&SA Assignment) the Trust Estate to the Indenture Trustee. In addition,
concurrently with such delivery and in exchange therefor, the Owner Trustee,
pursuant to the instructions of the Depositor, has executed (not in its
individual capacity, but solely as Owner Trustee on behalf of the Issuer) and
caused the Trust Certificates to be authenticated and delivered to the
Depositor.
(c) (i) Pursuant to and subject to the Note Purchase Agreement, the
Issuer may, at its sole option, from time to time request that the Initial
Noteholder advance on any Transfer Date and on any Collateral Value Excess Date,
Additional Note Principal Balances and the Initial Noteholder shall remit on
such Transfer Date or Collateral Value Excess Date, as the case may be, to the
Advance Account an amount equal to the Additional Note Principal Balance.
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(ii) Notwithstanding anything to the contrary herein, in no event
shall the Initial Noteholder be required to advance Additional Note Principal
Balances on a Transfer Date if the conditions precedent to a transfer of the
Loans under SECTION 2.06(a) and the conditions precedent to the purchase of
Additional Note Principal Balances set forth in Section 3.01 of the Note
Purchase Agreement have not been fulfilled.
(iii) Notwithstanding anything to the contrary herein, in no
event shall the Initial Noteholder be required to advance Additional Note
Principal Balance on a Collateral Value Excess Date if the conditions precedent
thereto set forth in SECTION 2.06(b) and the conditions precedent to the
purchase of Additional Note Principal Balances set forth in Section 3.01 of the
Note Purchase Agreement have not been fulfilled.
(iv) The Servicer shall appropriately note such Additional Note
Principal Balance (and the increased Note Principal Balance) in the next
succeeding Payment Statement; provided, however, that failure to make any such
notation in such Payment Statement or any error in such notation shall not
adversely affect any Noteholder's rights with respect to its Note Principal
Balance and its right to receive interest and principal payments in respect of
the Note Principal Balance held by such Noteholder. The Initial Noteholder shall
record on the schedule attached to such Noteholder's Note, the date and amount
of any Additional Note Principal Balance advanced by it; provided, that failure
to make such recordation on such schedule or any error in such schedule shall
not adversely affect any Noteholder's rights with respect to its Note Principal
Balance and its right to receive interest payments in respect of the Note
Principal Balance held by such Noteholder.
(v) Absent manifest error, the Note Principal Balance of each
Note as set forth in the Initial Noteholder's records shall be binding upon the
Noteholders and the Issuer, notwithstanding any notation made by the Servicer in
its Payment Statement pursuant to the preceding paragraph.
SECTION 2.02 OWNERSHIP AND POSSESSION OF LOAN FILES.
With respect to each Loan, as of the related Transfer Date the
ownership of the related Promissory Note, the related Mortgage or Security
Agreement and the contents of the related Servicer's Loan File and Indenture
Trustee's Loan File shall be vested in the Issuer and pledged to the Indenture
Trustee for the benefit of the Securityholders, although possession of the
Servicer's Loan File (other than items required to be maintained in the
Indenture Trustee's Loan Files) on behalf of and for the benefit of the
Securityholders shall remain with the Servicer, and the Custodian shall take
possession of the Indenture Trustee's Loan Files as contemplated in SECTION 2.05
hereof.
SECTION 2.03 BOOKS AND RECORDS; INTENTION OF THE PARTIES.
(a) As of each Transfer Date, the sale of each of the Loans conveyed
on such Transfer Date shall be reflected on the balance sheets and other
financial statements of the Depositor or the Loan Originator, as the case may
be, as a sale of assets by the Depositor or the Loan Originator, as the case may
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be, under GAAP. Each of the Servicer and the Custodian shall be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Loan which shall be clearly marked to reflect the ownership of each Loan, as of
the related Transfer Date, by the Owner Trustee and pledged, as of such Transfer
Date, to the Indenture Trustee for the benefit of the Securityholders.
(b) It is the intention of the parties hereto that, other than for
federal, state and local income or franchise tax purposes, the transfers and
assignments of the Trust Estate on the Closing Date, on each Transfer Date and
as otherwise contemplated by the Basic Documents and the Assignments shall
constitute a sale of the Trust Estate including, without limitation, the Loans
and all other property comprising the Trust Estate specified in SECTION 2.01(a)
hereof, from the Depositor to the Issuer and such property shall not be property
of the Depositor. The parties hereto shall treat the Notes as indebtedness for
federal, state and local income and franchise tax purposes.
(c) If any of the assignments and transfers of the Loans and the other
property of the Trust Estate specified in SECTION 2.01(a) hereof to the Owner
Trustee pursuant to this Agreement or the conveyance of the Loans or any of such
other property of the Trust Estate to the Owner Trustee, other than for federal,
state and local income or franchise tax purposes, is held or deemed not to be a
sale or is held or deemed to be a pledge of security for a loan, the Depositor
intends that the rights and obligations of the parties shall be established
pursuant to the terms of this Agreement and that, in such event, with respect to
such property, (i) consisting of Loans and related property, the Depositor shall
be deemed to have granted, as of the related Transfer Date, to the Owner Trustee
a first priority security interest in the entire right, title and interest of
the Depositor in and to such Loans and proceeds and all other property conveyed
to the Owner Trustee as of such Transfer Date, (ii) consisting of any other
property specified in SECTION 2.01(a), the Depositor shall be deemed to have
granted, as of the Closing Date, to the Owner Trustee a first priority security
interest in the entire right, title and interest of the Depositor in and to such
property and the proceeds thereof. In such event, with respect to such property,
this Agreement shall constitute a security agreement under applicable law.
(d) Within ten (10) days of the date first above written, the
Depositor shall, at Depositor's sole expense, cause to be filed UCC-1 financing
statements naming the Owner Trustee as "secured party" and describing the Trust
Estate being sold by the Depositor to the Issuer with the office of the
Secretary of State of the state in which the Depositor is located.
SECTION 2.04 DELIVERY OF LOAN DOCUMENTS.
(a) With respect to each Loan that is not a Table-Funded Loan, the
Loan Originator and/or the Depositor, as the case may be, shall, on or before
the related Transfer Date, deliver or cause to be delivered to the Custodian, as
the designated agent of the Indenture Trustee, each of the following documents
(collectively, the "INDENTURE TRUSTEE'S LOAN FILE"):
(i) With respect to each Mortgage Loan:
(1) The original Promissory Note, endorsed by the Loan Originator in
blank in the following form: "Pay to the order of ______________________,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from origination of the Mortgage Loan to the
Loan Originator;
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(2) The original Mortgage with evidence of recording thereon (or, if
the original Mortgage has not been returned from the applicable public
recording office or is not otherwise available, a copy of the original
Mortgage submitted for recording) and, if the Mortgage was executed
pursuant to a power of attorney, the original power of attorney with
evidence of recording thereon (or, if the original power of attorney has
not been returned from the applicable public recording office or is not
otherwise available, a copy of the original power of attorney submitted for
recording);
(3) The original executed Assignment of Mortgage, in recordable form.
The Assignment of Mortgage may be a blanket assignment, to the extent such
assignment is effective under applicable law, for Mortgages covering
Mortgaged Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, an Assignment of Mortgage need not be included
in the individual Indenture Trustee's Loan File;
(4) All original intervening assignments of mortgage, with evidence of
recording thereon, showing a complete chain of assignment from origination
of the Mortgage Loan to the Loan Originator (or, if any such assignment of
mortgage has not been returned from the applicable public recording office
or is not otherwise available, a copy of such assignment of mortgage
submitted for recording);
(5) The original of the guaranty (if any) executed in connection with
the Promissory Note or related lease;
(6) The originals of all assumption, modification, consolidation or
extension agreements relating to the Mortgage with evidence of recording
thereon, (or, if the originals have not been returned from the applicable
public recording office or are not otherwise available, a copy of such
originals submitted for recording);
(7) The original attorney's opinion of title and abstract of title or
the original mortgagee title insurance policy, or if the original mortgagee
title insurance policy has not been issued, the irrevocable commitment to
issue the same;
(8) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage Loan;
(9) The original assignment of leases and rents, if separate from the
related Mortgage, with evidence of recording thereon, or a copy of the
original that has been or will, on or prior to the related Transfer Date be
submitted for recordation in the appropriate governmental recording office
of the jurisdiction where the Mortgaged Property is located;
(10) The original assignment of assignment of leases and rents, if the
assignment of leases and rents is separate from the related Mortgage, from
the Loan Originator in blank, in form and substance acceptable for
recording;
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(11) A copy of the UCC-1 Financing Statements and all necessary UCC
continuation statements with evidence of filing and/or recording thereon or
copies thereof that have been sent for filing and/or recording on or
promptly after closing, and UCC Assignments executed by the Loan Originator
in blank, which UCC Assignments shall be in form and substance acceptable
for filing and/or recording;
(12) An environmental indemnity agreement (if any);
(13) An Assignment of Loan Documents; and
(14) the original Loan Agreement.
(ii) With respect to each Equipment Loan:
(1) The original Promissory Note, endorsed by the Loan Originator in
blank in the following form: "Pay to the order of ______________________,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from origination of the Loan to the Loan
Originator;
(2) The original Security Agreement and, if the Security Agreement was
executed pursuant to a power of attorney, the original power of attorney;
(3) The original Loan Agreement, to the extent not encompassed in the
Loan Agreement with respect to the related Mortgage Loan;
(4) The original of the guaranty (if any) executed in connection with
the Promissory Note or related lease;
(5) The originals of all assumption, modification, consolidation or
extension agreements relating to the Security Agreement, or true and
correct copies thereof;
(6) A true and correct copy of the UCC-1 Financing Statements and all
necessary UCC continuation statements with evidence of filing and/or
recording thereon or true copies thereof that have been sent for filing
and/or recording on or promptly after closing, and UCC Assignments executed
by the Loan Originator in blank, which UCC Assignments shall be in form and
substance acceptable for filing and/or recording; and
(7) An Assignment of Loan Documents.
(b) With respect to each Table-Funded Loan:
(i) By no later than 2:00 p.m., New York City time, on the Transfer
Date, the Loan Originator shall cause the Bailee to deliver, by facsimile,
copies of:
(1) a fully executed Bailee Agreement (to the extent that the Bailee
Agreement has not been previously delivered to the Custodian and Initial
Noteholder) and Bailee Trust Receipt issued thereunder (as required in the
Bailee Agreement) to the Custodian and Initial Noteholder; and
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(2) the fully executed Promissory Note to the Custodian (to the extent
that the original Promissory Note has not been previously delivered to the
Custodian).
(ii) Within three Business Days following the Transfer Date, the Loan
Originator shall have delivered or caused to be delivered to the Custodian,
by overnight courier, the Indenture Trustee's Loan File documents not
previously delivered pursuant hereto.
(iii) By no later than 2:00 p.m., New York City time, on the Transfer
Date, the Loan Originator shall cause the Settlement Agent to deliver, by
facsimile, copies of fully executed Escrow Instructions and any Insured
Closing Letter, if any, to the Custodian and Initial Noteholder;
(c) With respect to each Loan, the Loan Originator and the Depositor
shall, on the related Transfer Date, deliver or caused to be delivered to the
Servicer for the benefit of the Indenture Trustee, as secured party on behalf of
the Noteholders, the related Servicer's Loan File.
(d) The Indenture Trustee shall cause the Custodian to take and
maintain continuous physical possession of the Indenture Trustee's Loan Files in
the State of Illinois and, in connection therewith, shall act solely as agent
for the Securityholders in accordance with the terms hereof and not as agent for
the Loan Originator, the Servicer or any other party.
(e) Upon the delivery by the Loan Originator to the Custodian of any
copies of Loan Documents, the Loan Originator shall be deemed to certify and
hereby certifies that each such copy is a true, correct and complete copy of the
related original.
SECTION 2.05 ACCEPTANCE BY THE INDENTURE TRUSTEE OF THE LOANS; CERTAIN
SUBSTITUTIONS AND REPURCHASES; CERTIFICATION BY THE CUSTODIAN.
(a) The Indenture Trustee declares that it will cause the Custodian to
hold the Indenture Trustee's Loan Files and any additions, amendments,
replacements or supplements to the documents contained therein, as well as any
other assets included in the Trust Estate and delivered to the Custodian, in
trust, upon and subject to the conditions set forth herein. The Indenture
Trustee further agrees to cause the Custodian to execute and deliver such
certifications as are required under the Custodial Agreement and to otherwise
direct the Custodian to perform all of its obligations with respect to the
Indenture Trustee's Loan Files in strict accordance with the terms of the
Custodial Agreement.
(b) (i) With respect to any Loans which are set forth as exceptions in
the Initial Certification or the Loan Schedule and Exceptions Report, the Loan
Originator shall cure such exception by delivering such missing documents to the
Custodian or otherwise curing the defect no later than (A) 5 Business Days after
the receipt of the Initial Certification or the first Loan Schedule and
Exceptions Report with respect to such Mortgage Loan (or in the case of a
Table-Funded Loan, 5 Business Days after the related Transfer Date with respect
thereto) or (B) in the case of Loan Documents which have been delivered to
recording or filing offices and have not been returned to the Loan Originator to
permit their delivery to the Custodian at the time required, 90 days after the
related Transfer Date.
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(ii) In the event that, with respect to any Loan, the Loan
Originator does not comply with the document delivery requirements of this
SECTION 2.05, the Loan Originator shall purchase such Loan at the Purchase Price
with respect to such Loan by depositing such Purchase Price in the Collection
Account. The Loan Originator shall provide the Servicer, the Indenture Trustee,
the Issuer and the Initial Noteholder with a certification of a Responsible
Officer prior to such repurchase indicating that the Loan Originator intends to
repurchase such Loan. In lieu of such a repurchase, the Depositor and Loan
Originator may comply with the substitution provisions of SECTION 3.05 hereof.
(iii) It is understood and agreed that the obligation of the Loan
Originator to repurchase any such Loan pursuant to this SECTION 2.04(b) shall
constitute the sole remedy against it with respect to such failure to comply
with the foregoing delivery requirements.
(c) In performing its reviews of the Indenture Trustee's Loan Files
pursuant to the Custodial Agreement, the Custodian shall have no responsibility
to determine the genuineness of any document contained therein and any signature
thereon. The Custodian shall not have any responsibility for determining whether
any document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form, whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction or
whether a blanket assignment is permitted in any applicable jurisdiction.
(d) The Servicer's Loan File shall be held in the custody of the
Servicer (i) for the benefit of, and as agent for, the Noteholders and (ii) for
the benefit of the Indenture Trustee, as secured party on behalf of the
Noteholders, for so long as the Indenture continues in full force and effect;
after the Indenture is terminated in accordance with the terms thereof, the
Servicer's Loan File shall be held in the custody of the Servicer for the
benefit of, and as agent for, the Certificateholders. It is intended that, by
the Servicer's agreement pursuant to this SECTION 2.05(d), the Indenture Trustee
shall be deemed to have possession of the Servicer's Loan Files for purposes of
Section 9-305 of the UCC of the state in which such documents or instruments are
located. The Servicer shall promptly report to the Indenture Trustee any failure
by it to hold the Servicer's Loan File as herein provided and shall promptly
take appropriate action to remedy any such failure. In acting as custodian of
such documents and instruments, the Servicer agrees not to assert any legal or
beneficial ownership interest in the Loans or such documents or instruments. The
Servicer agrees to indemnify the Securityholders and the Indenture Trustee, its
officers, directors, employees, agents and "control persons" as such term is
used under the Act and under the Securities Exchange Act of 1934, as amended for
any and all liabilities, obligations, losses, damages, payments, costs or
expenses of any kind whatsoever which may be imposed on, incurred by or asserted
against the Securityholders or the Indenture Trustee as the result of any act or
omission by the Servicer relating to the maintenance and custody of such
documents or instruments which have been delivered to the Servicer; provided,
however, that the Servicer will not be liable for any portion of any such amount
resulting from the negligence or willful misconduct of any Securityholders or
the Indenture Trustee; and provided, further, that the Servicer will not be
liable for any portion of any such amount resulting from the Servicer's
compliance with any instructions or directions consistent with this Agreement
issued to the Servicer by the Indenture Trustee. The Indenture Trustee shall
have no duty to monitor or otherwise oversee the Servicer's performance as
custodian hereunder.
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SECTION 2.06 CONDITIONS PRECEDENT TO TRANSFER DATES AND COLLATERAL
VALUE EXCESS DATES.
(a) On each Transfer Date, the Depositor shall convey to the Issuer,
the Loans and the other property and rights related thereto described in the
related S&SA Assignment, the Issuer, only upon the satisfaction of each of the
conditions set forth below on or prior to such Transfer Date, shall deposit or
cause to be deposited cash in the amount of the Additional Note Principal
Balance in the Advance Account in respect thereof, and the Servicer shall,
promptly after such deposit, withdraw the amount deposited in respect of
applicable Additional Note Principal Balance from the Advance Account, and
distribute such amount to or at the direction of the Depositor. In the case of
Table-Funded Loans, the Initial Noteholder (acting pursuant to the instructions
of the Issuer and Depositor, which are hereby given) shall disburse the related
amount in respect of Additional Note Principal Balances to the Settlement Agent
for distribution in accordance with the related Escrow Instructions, as
applicable.
(i) the Depositor shall have delivered to the Issuer and the
Initial Noteholder duly executed Assignments, which shall
have attached thereto a Loan Schedule setting forth the
appropriate information with respect to all Loans conveyed
on such Transfer Date and shall have delivered to the
Initial Noteholder a computer readable transmission of
such Loan Schedule;
(ii) the Depositor shall have deposited in the Collection
Account all collections received with respect to each of
the Loans after but not including the applicable Transfer
Cutoff Date;
(iii) as of such date, neither the Loan Originator, the Issuer
nor the Depositor shall (A) be insolvent, (B) be made
insolvent by its respective sale of Loans or (C) have
reason to believe that its insolvency is imminent;
(iv) the Revolving Period shall not have terminated;
(v) the Initial Noteholder shall have received the Due
Diligence Packages for such Loans as are to be transferred
on such Transfer Date at least five Business Days prior to
the related Transfer Date, shall have such completed its
due diligence investigation of such Loans and shall have
approved, in its sole discretion, each such Loan;
(vi) the Issuer shall have either (x) delivered the Indenture
Trustee's Loan File to the Custodian in accordance with
the Custodial Agreement and the Initial Noteholder shall
have received a copy of the Loan Schedule and Exceptions
Report reflecting such delivery and for any Loans having
Exceptions (as defined in the Custodial Agreement)
thereon, the Initial Noteholder shall have approved in its
sole discretion each such Loan or (y) in the case of a
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Table-Funded Loan, delivered the documentation specified
in SECTION 2.04(b)(i) to the Custodian and shall have
received consent from the Initial Noteholder (in its sole
discretion) to the sale of the Table-Funded Loan;
(vii) each of the representations and warranties made by the
Depositor pursuant to SECTION 3.04 with respect to the
Loans shall be true and correct as of the related Transfer
Date with the same effect as if then made, and the
Depositor shall have performed all obligations to be
performed by it under the Basic Documents on or prior to
such Transfer Date;
(viii) the Depositor shall, at its own expense, on or prior to
the Transfer Date, indicate in its computer files that the
Loans identified in the LPA Assignment and S&SA Assignment
have been sold to the Issuer pursuant to this Agreement
and the S&SA Assignment;
(ix) the Depositor shall have taken any action required to
maintain the ownership interest of the Issuer in the Trust
Estate and the first perfected security interest therein
of the Indenture Trustee;
(x) no selection procedures believed by the Depositor to be
adverse to the interests of the Noteholders shall have
been utilized in selecting the Loans to be conveyed on
such Transfer Date;
(xi) the Depositor shall have provided the Issuer, the
Indenture Trustee and the Initial Noteholder no later than
two Business Days prior to such date a Notice of
Additional Note Principal Balance in the form of Exhibit A
hereto;
(xii) after giving effect to the Additional Note Principal
Balance associated therewith, the Note Principal Balance
will not exceed the Maximum Note Principal Balance;
(xiii) all conditions precedent to the Depositor's purchase of
Loans pursuant to the Loan Purchase Agreement shall have
been fulfilled as of such Transfer Date;
(xiv) all conditions precedent to the Noteholders' purchase of
Additional Note Principal Balance pursuant to the Note
Purchase Agreement shall have been fulfilled as of such
date; and
(xv) if any Loan sold on the Transfer Date is a Table-Funded
Loan, the Loan Originator shall have provided the Initial
Noteholder, Depositor, Issuer, Settlement Agent and
Custodian with a copy of any related Bailee Agreement,
Bailee Trust Receipt and Escrow Instructions on or prior
to such Transfer Date.
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(b) On each Collateral Value Excess Date, the Issuer shall deposit or
cause to be deposited into the Advance Account cash in the amount equal to the
Additional Note Principal Balance with respect to such Collateral Value Excess
Date, only upon the satisfaction of conditions set forth in subclauses (iii),
(iv), (ix), (xi), (xii) and (xiv) of Section 2.06(a) on such Collateral Value
Excess Date. The Servicer shall withdraw the amount deposited in respect of
Additional Note Principal Balance from the Advance Account in respect of such
deposit and distribute such amount to or at the direction of the Depositor.
SECTION 2.07 TERMINATION OF REVOLVING PERIOD.
Upon the occurrence of (i) an Event of Default or Default under this
Agreement or the Indenture or (ii) a Rapid Amortization Trigger, the Initial
Noteholder (if still a Noteholder) may, in its sole discretion, terminate the
Revolving Period.
SECTION 2.08 RE-UNDERWRITING OF LOANS
On the 10th Business Day prior to a Loan being deemed a
Re-Underwritten Loan, the Loan Originator and the Issuer shall provide the
Initial Noteholder with (i) the most recent financial information provided to it
by the Borrower, (ii) the Corporate Fixed Charge Coverage Ratio and the
Unit-Level Fixed Charge Coverage Ratio and (iii) any description of material
changes from the Due Diligence Package previously delivered with respect to the
applicable Transfer Date as if such day was a Transfer Date and the Initial
Noteholder shall within 10 Business Days following the receipt thereof specify
the applicable LIBOR Margin and Maximum Advance Factor for such Re-Underwritten
Loan to the Issuer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to the Loan Originator,
the Servicer, the Indenture Trustee, the Owner Trustee and the Noteholders that
as of the Closing Date, as of each Transfer Date and as of each Collateral Value
Excess Date:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has, and had at
all relevant times, full power to own its property, to carry on its business as
currently conducted, to enter into and perform its obligations under each Basic
Document to which it is a party;
(b) The execution and delivery of each Basic Document to which it is a
party by the Depositor and its performance of and compliance with all of the
terms thereof will not violate the Depositor's certificate of incorporation or
by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument to which
the Depositor is a party or which may be applicable to the Depositor or any of
its assets;
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(c) The Depositor has the full power and authority to enter into and
consummate the transactions contemplated by each Basic Document to which it is a
party, has duly authorized the execution, delivery and performance of each Basic
Document to which it is a party and has duly executed and delivered each Basic
Document to which it is a party. Each Basic Document to which it is a party,
assuming due authorization, execution and delivery by the other party or parties
thereto, constitutes a valid, legal and binding obligation of the Depositor,
enforceable against it in accordance with the terms thereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) The Depositor is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Depositor and its
performance and compliance with the terms of each Basic Document to which it is
a party will not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially and
adversely affect the condition (financial or otherwise) or operations of the
Depositor or its properties or materially and adversely affect the performance
of its duties hereunder;
(e) There are no actions or proceedings against, or investigations of,
the Depositor currently pending with regard to which the Depositor has received
service of process and no action or proceeding against, or investigation of, the
Depositor is, to the knowledge of the Depositor, threatened or otherwise pending
before any court, administrative agency or other tribunal that (A) if determined
adversely to the Depositor, would prohibit its entering into any of the Basic
Documents to which it is a party or render the Notes invalid, (B) seek to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by any of the Basic Documents to which it is a party or (C) if
determined adversely to the Depositor, would prohibit or materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, any of the Basic Documents to which it is a
party or the Notes;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, any of the
Basic Documents to which it is a party or the Notes, or for the consummation of
the transactions contemplated by any of the Basic Documents to which it is a
party, except for such consents, approvals, authorizations and orders, if any,
that have been obtained prior to the Closing Date;
(g) The Depositor is solvent, is able to pay its debts as they become
due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of
any of the Basic Documents to which it is a party or the assumption of any of
its obligations thereunder; no petition of bankruptcy (or similar insolvency
proceeding) has been filed by or against the Depositor;
(h) As of the Transfer Date related thereto, the Depositor did not
sell the Mortgage Loans sold thereon to the Trust with any intent to hinder,
delay or defraud any of its creditors; nor will the Depositor be rendered
insolvent as a result of such sale;
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(i) As of the Transfer Date related thereto, the Depositor had good
title to, and was the sole owner of, each Loan sold thereon free and clear of
any lien other than any such lien released simultaneously with the sale
contemplated herein, and, immediately upon each transfer and assignment herein
contemplated, the Depositor will have delivered to the Trust good title to, and
the Trust will be the sole owner of, each Mortgage Loan transferred thereon free
and clear of any lien;
(j) As of the Transfer Date related thereto, the Depositor acquired
title to each of the Loans sold thereon in good faith, without notice of any
adverse claim;
(k) The Basic Documents and other information identified in Exhibit D
hereto (collectively, the "REFERENCED DOCUMENTS"), when taken as a whole, do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Depositor to
the Initial Noteholder or any Affiliate thereof in connection with the
Referenced Documents and the transactions contemplated thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified. Except as disclosed in writing to the Initial Noteholder,
there is no fact known to a Responsible Officer of the Depositor, after due
inquiry, that could reasonably be expected to have a material adverse effect on
(a) the property, business, operations, financial condition or prospects of the
Depositor, (b) the ability of the Depositor to perform its obligations under any
Basic Document to which it is a party, (c) the validity or enforceability of any
of the Basic Documents, (d) the rights and remedies of the Noteholders and the
Indenture Trustee under any of the Basic Documents, (e) the timely payment of
the principal of or interest on the Notes or other amounts payable in connection
therewith or (f) the Loans;
(l) The Depositor is not required to be registered as an "investment
company" under the Investment Company Act of 1940, as amended; and
(m) As of the Transfer Date related thereto, the transfer, assignment
and conveyance of the Loans by the Depositor thereon pursuant to this Agreement
is not subject to the bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.
(n) The Depositor's principal place of business and chief executive
offices are located at The Perimeter Center, 00000 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000.
SECTION 3.02 REPRESENTATIONS AND WARRANTIES OF THE LOAN ORIGINATOR.
The Loan Originator hereby represents and warrants to the Servicer,
the Indenture Trustee, the Owner Trustee, the Noteholders and the Depositor that
as of the Closing Date, as of each Transfer Date and as of each Collateral Value
Excess Date:
(a) The Loan Originator is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (i) is
duly qualified, in good standing and licensed to carry on its business in each
state where any Loan Collateral is located and (ii) is in compliance with the
laws of any such state, in both cases, to the extent necessary to ensure the
enforceability of the Loans in accordance with the terms thereof and had at all
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relevant times, full corporate power to originate the Loans, to own its
property, to carry on its business as currently conducted and to enter into and
perform its obligations under each Basic Document to which it is a party;
(b) The execution and delivery by the Loan Originator of each Basic
Document to which it is a party and its performance of and compliance with the
terms thereof will not violate the Loan Originator's articles of incorporation
or by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach or
acceleration of, any contract, agreement or other instrument to which the Loan
Originator is a party or which may be applicable to the Loan Originator or any
of its assets;
(c) The Loan Originator has the full power and authority to enter into
and consummate all transactions contemplated by the Basic Documents to be
consummated by it, has duly authorized the execution, delivery and performance
of each Basic Document to which it is a party and has duly executed and
delivered each Basic Document to which it is a party. Each Basic Document to
which it is a party, assuming due authorization, execution and delivery by each
of the other parties thereto, constitutes a valid, legal and binding obligation
of the Loan Originator, enforceable against it in accordance with the terms
hereof, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);
(d) The Loan Originator is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Loan Originator
and its performance and compliance with the terms of each Basic Document to
which it is a party will not constitute a violation with respect to, any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the condition (financial or otherwise) or
operations of the Loan Originator or its properties or materially and adversely
affect the performance of its duties under any Basic Document to which it is a
party;
(e) There are no actions or proceedings against, or investigations of,
the Loan Originator currently pending with regard to which the Loan Originator
has received service of process and no action or proceeding against, or
investigation of, the Loan Originator is, to the knowledge of the Loan
Originator, threatened or otherwise pending before any court, administrative
agency or other tribunal that (A) if determined adversely to the Loan
Originator, would prohibit its entering into any Basic Document to which it is a
party or render the Notes invalid, (B) seek to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by any Basic
Document to which it is a party or (C) if determined adversely to the Loan
Originator, would prohibit or materially and adversely affect the sale of the
Loans to the Depositor, the performance by the Loan Originator of its
obligations under, or the validity or enforceability of, any Basic Document to
which it is a party or the Notes;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for: (1) the execution, delivery and
performance by the Loan Originator of, or compliance by the Loan Originator
with, any Basic Document to which it is a party, (2) the issuance of the Notes,
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(3) the sale of the Loans under the Loan Purchase Agreement or (4) the
consummation of the transactions required of it by any Basic Document to which
it is a party, except such as shall have been obtained before such date;
(g) Immediately prior to the Transfer Date related thereto, the Loan
Originator had good title to the Loans sold on such Transfer Date without notice
of any adverse claim;
(h) The information, reports and schedules furnished in writing by or
on behalf of the Loan Originator to the Initial Noteholder or any Affiliate
thereof with regard to the Loans, the Due Diligence Packages, the Basic
Documents and other information identified in Exhibit D hereto (collectively,
the "REFERENCED DOCUMENTS"), when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by or on behalf of the Loan Originator to the Initial Noteholder or any
Affiliate thereof in connection with the Referenced Documents and the
transactions contemplated thereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on reasonable estimates,
on the date as of which such information is stated or certified. Except as
disclosed in writing to the Initial Noteholder, there is no fact known to a
Responsible Officer of the Loan Originator, after due inquiry, that could
reasonably be expected to have a material adverse effect on (a) the property,
business, operations, financial condition or prospects of the Loan Originator,
(b) the ability of the Loan Originator to perform its obligations under any
Basic Document to which it is a party, (c) the validity or enforceability of any
of the Basic Documents, (d) the rights and remedies of the Noteholders and the
Indenture Trustee under any of the Basic Documents, (e) the timely payment of
the principal of or interest on the Notes or other amounts payable in connection
therewith or (f) the Loans;
(i) The Loan Originator is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its
obligations under each Basic Document to which it is a party; it will not be
rendered insolvent by the execution and delivery of this Agreement or by the
performance of its obligations under each Basic Document to which it is a party;
no petition of bankruptcy (or similar insolvency proceeding) has been filed by
or against the Loan Originator prior to the date hereof;
(j) As of the Transfer Date related thereto, the Loan Originator has
transferred the Loans transferred on or prior to such Transfer Date without any
intent to hinder, delay or defraud any of its creditors; and
(k) As of the Transfer Date related thereto, the Loan Originator has
received fair consideration and reasonably equivalent value in exchange for the
Loans sold on such Transfer Date to the Depositor.
It is understood and agreed that the representations and warranties
set forth in this SECTION 3.02 shall survive delivery of the respective
Indenture Trustee's Loan Files to the Custodian (as the agent of the Indenture
Trustee) and shall inure to the benefit of the Securityholders, the Depositor,
the Servicer, the Indenture Trustee, the Owner Trustee and the Trust. Upon
discovery by any of the Loan Originator, the Depositor, the Servicer, the
Indenture Trustee or the Owner Trustee of a breach of any of the foregoing
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representations and warranties that materially and adversely affects the value
of any Loan or the interests of the Securityholders therein, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties. The
obligations of the Loan Originator set forth in SECTIONS 2.05 and 3.05 hereof to
cure any breach or to substitute for or repurchase an affected Loan shall
constitute the sole remedies available hereunder to the Securityholders, the
Depositor, the Servicer, the Indenture Trustee or the Owner Trustee respecting a
breach of the representations and warranties contained in this SECTION 3.02. The
fact that the Initial Noteholder has conducted or has failed to conduct any
partial or complete due diligence investigation of the Loan Files shall not
affect the Noteholders' rights to demand repurchase or substitution as provided
under this Agreement.
SECTION 3.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER.
The Servicer hereby represents and warrants to and covenants with the
Owner Trustee, the Indenture Trustee, the Noteholders, the Depositor and the
Loan Originator that as of the Closing Date, as of each Transfer Date and as of
each Collateral Value Excess Date:
(a) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland and (i) is duly
qualified, in good standing and licensed to carry on its business in each state
where any Loan Collateral is located, and (ii) is in compliance with the laws of
any such state, in both cases, to the extent necessary to ensure the
enforceability of the Loans in accordance with the terms thereof and to perform
its duties under each Basic Document to which it is a party and had at all
relevant times, full corporate power to own its property, to carry on its
business as currently conducted, to service the Loans and to enter into and
perform its obligations under each Basic Document to which it is a party;
(b) The execution and delivery by the Servicer of each Basic Document
to which it is a party and its performance of and compliance with the terms
thereof will not violate the Servicer's articles of incorporation or by-laws or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach or acceleration of,
any material contract, agreement or other instrument to which the Servicer is a
party or which may be applicable to the Servicer or any of its assets;
(c) The Servicer has the full power and authority to enter into and
consummate all transactions contemplated by each Basic Document to which it is a
party, has duly authorized the execution, delivery and performance of each Basic
Document to which it is a party and has duly executed and delivered each Basic
Document to which it is a party. Each Basic Document to which it is a party,
assuming due authorization, execution and delivery by each of the other parties
thereto, constitutes a valid, legal and binding obligation of the Servicer,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) The Servicer is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Servicer and its
performance and compliance with the terms of each Basic Document to which it is
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a party will not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially and
adversely affect the condition (financial or otherwise) or operations of the
Servicer or materially and adversely affect the performance of its duties under
any Basic Document to which it is a party;
(e) There are no actions or proceedings against, or investigations of,
the Servicer currently pending with regard to which the Servicer has received
service of process and no action or proceeding against, or investigation of, the
Servicer is, to the knowledge of the Servicer, threatened or otherwise pending
before any court, administrative agency or other tribunal that (A) if determined
adversely to the Servicer, would prohibit its entering into any Basic Document
to which it is a party, (B) seek to prevent the consummation of any of the
transactions contemplated by any Basic Document to which it is a party or (C) if
determined adversely to the Servicer, would prohibit or materially and adversely
affect the performance by the Servicer of its obligations under, or the validity
or enforceability of, any Basic Document to which it is a party or the Notes;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, any Basic
Document to which it is a party or the Notes, or for the consummation of the
transactions contemplated by any Basic Document to which it is a party, except
for such consents, approvals, authorizations and orders, if any, that have been
obtained prior to such date;
(g) The Basic Documents and other information identified in Exhibit D
hereto (collectively, the "REFERENCED DOCUMENTS"), when taken as a whole, do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Servicer to
the Initial Noteholder or any Affiliate thereof in connection with the
Referenced Documents and the transactions contemplated thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified. Except as disclosed in writing to the Initial Noteholder,
there is no fact known to a Responsible Officer of the Servicer, after due
inquiry, that could reasonably be expected to have a material adverse effect on
(a) the property, business, operations, financial condition or prospects of the
Servicer, (b) the ability of the Servicer to perform its obligations under any
Basic Document to which it is a party, (c) the validity or enforceability of any
of the Basic Documents, (d) the rights and remedies of the Noteholders and the
Indenture Trustee under any of the Basic Documents, (e) the timely payment of
the principal of or interest on the Notes or other amounts payable in connection
therewith or (f) the Loans;
(h) The Servicer is solvent and will not be rendered insolvent as a
result of the performance of its obligations pursuant to under the Basic
Documents to which it is a party; and
(i) The Servicer acknowledges and agrees that the Servicing Fee
represents reasonable compensation for the performance of its services hereunder
and that the entire Servicing Fee shall be treated by the Servicer, for
accounting purposes, as compensation for the servicing and administration of the
Loans pursuant to this Agreement.
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It is understood and agreed that the representations, warranties and
covenants set forth in this SECTION 3.03 shall survive delivery of the
respective Indenture Trustee's Loan Files to the Indenture Trustee and shall
inure to the benefit of the Depositor, the Noteholders and the Indenture
Trustee. Upon discovery by any of the Loan Originator, the Depositor, the
Servicer, the Indenture Trustee or the Owner Trustee of a breach of any of the
foregoing representations, warranties and covenants that materially and
adversely affects the value of any Loans or the interests of the Noteholders
therein, the party discovering such breach shall give prompt written notice (but
in no event later than two Business Days following such discovery) to the other
parties. The fact that the Initial Noteholder has conducted or has failed to
conduct any partial or complete due diligence investigation shall not affect the
Noteholders' rights to exercise their remedies as provided under this Agreement.
SECTION 3.04 REPRESENTATIONS AND WARRANTIES REGARDING LOANS.
The Loan Originator hereby represents and warrants to the Depositor,
the Issuer, the Indenture Trustee and the Noteholders, with respect to each Loan
as of the related Transfer Date (except as otherwise expressly agreed in writing
by the Majority Noteholders):
(a) Immediately prior to sale to the Depositor, the Loan Originator is
the sole owner and holder of the Loan.
(b) Immediately prior to sale to the Depositor, the Loan Originator
has full right and authority to sell, assign, transfer and pledge the Loan.
(c) The Loan Originator is transferring the Loan free and clear of any
and all liens, pledges, equities, charges, claims or security interests of any
nature encumbering the Loan, except those removed immediately prior to sale to
the Depositor and except any security interest created pursuant to the terms of
this Agreement.
(d) With respect to each Mortgage Loan, the related Servicer's Loan
File includes a survey, certified to the Loan Originator and the title insurance
company, which is prepared in accordance with minimum standards for surveys as
determined by ALTA or equivalent at the time of origination of such Mortgage
Loan and contains the signature and seal of a licensed engineer or surveyor
affixed thereto.
(e) With respect to each Mortgage Loan, the related Assignment of
Mortgage and assignment of assignment of leases and rents (if any), except for
the name of the assignee, which is left blank, constitutes the legal, valid and
binding assignment of the Mortgage and the related assignment of leases and
rents from the Loan Originator. The endorsement of each Promissory Note, except
for the name of the assignee, which is left blank, constitutes the legal, valid
and binding assignment of the Promissory Note, and together with the Assignment
of Mortgage and Assignment of Loan Documents, legally and validly conveys all
right, title and interest in the subject Loan to the Indenture Trustee.
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(f) With respect to each Equipment Loan, the endorsement of the
related Promissory Note, except for the name of the assignee, which is left
blank, constitutes the legal, valid and binding assignment of the Promissory
Note, and together with the Assignment of Loan Documents, legally and validly
conveys all right, title and interest in the subject Equipment Loan to the
Indenture Trustee.
(g) With respect to each Mortgage Loan, the lien of the related
Mortgage is insured by an ALTA lender's title insurance policy (or a policy on
an equivalent form), issued (or to be issued pursuant to a binding irrevocable
commitment therefor) by a Qualified Insurer, insuring (subject to the exceptions
referred to in subsection (ac) below) the Loan Originator, its successors and
assigns, that the related Mortgage is a valid first lien on the Mortgaged
Property. Such title insurance policy is in full force and effect and will inure
to the benefit of the owner of such Mortgage Loan. Such title insurance policy
insures the Mortgaged Property for not less than the original principal amount
of the Mortgage Loan after all advances of principal. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
or uses to the extent that such exceptions would, in the aggregate, materially
and adversely affect the value of the related Mortgaged Property or the intended
use thereof and, where available, has been marked to delete the standard survey
exception or to replace the standard survey exception with a specific survey
reading. No Person claiming through the Loan Originator has done, by act or
omission, anything, or has knowledge of any fact, which would materially impair
the coverage of any such title insurance policy. The title policy has been
marked to delete the intervening lien exception. All premiums for such policy,
including any premiums for endorsements and special endorsements, have been
paid. With respect to each Adjustable Rate Loan, the related title policy
contains an ALTA 6.02 endorsement, or its equivalent, to the extent available.
(h) With respect to the Indenture Trustee's Loan File for such Loan,
all copies contained therein are true, correct and complete copies of the
related originals.
(i) The Unit-Level Fixed Charge Coverage Ratio for such Loan is not
less than 1.20 or, with respect to the Sonic franchise finance program, 1.15.
(j) (i) With respect to each Mortgage Loan that is secured by the
related Borrower's fee simple ownership interest in the related Mortgaged
Property, such Borrower is the owner and holder of the landlord's interest under
any lease for use and occupancy of all or any portion of the related Mortgaged
Property. Each Mortgage provides for the appointment of a receiver for rents in
the event of default or allows the mortgagee to enter into possession to collect
the rents. Neither the Loan Originator nor the Borrower has made any assignments
of the landlord's interest in any such lease or any portion of the rents,
additional rents, charges, issues or profits due and payable or to become due
and payable under any such lease, which assignments are presently outstanding
and have priority over the related Mortgage or any related assignment of leases,
rents and profits given in connection with the origination of the related
Mortgage, other than as may be disclosed in the related lender's title insurance
policy referred to in subsection (g) above. An assignment of leases and/or rents
and any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid and enforceable first lien and first priority security interest on the
property described therein except as enforceability may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, (B) general principles of equity
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(regardless of whether such enforcement is considered in a proceeding in equity
or at law) and (C) applicable state laws, which state laws will not materially
interfere with the practical realization of the principal benefits or security
provided thereby.
(ii) With respect to each Equipment Loan, all Equipment subject
to the related Security Agreement is either subject to a UCC-1 Financing
Statement filed and/or recorded (or sent for filing and/or recording on or prior
to the Transfer Cutoff Date) in all places necessary to perfect a valid first
priority lien thereon or, to the extent the related Equipment is securities or
other instruments, the Loan Originator or its agent has a valid first priority
lien thereon perfected by possession.
(k) In reliance on the Borrower's counsel's opinion contained in the
Servicer's Loan File, if any, and the Title Policy contained in the Indenture
Trustee's Loan File, with respect to each Mortgage that is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has either been
properly designated and currently so serves or may be substituted in accordance
with applicable law. Except in connection with a trustee's sale or as otherwise
required by applicable law, after default by the Borrower, no fees or expenses
are payable to such trustee.
(l) The Servicer's Loan File contains a site inspection and valuation
report of the related Mortgaged Property which site inspection and valuation
report conforms to the requirements contained in the Underwriting Guidelines and
such site inspection and valuation report was conducted by a Person whose
compensation was and is not affected by the approval or disapproval of such
Loan.
(m) The information set forth in the Loan Schedule for such Loan is
true, correct and complete in all material respects.
(n) The Loan has been originated in accordance with applicable law and
the Underwriting Guidelines.
(o) The Borrower and/or its lessees and/or operator are in possession
of all material licenses, permits, and authorizations required for use and/or
possession of the Loan Collateral.
(p) The Loan has been serviced in accordance with applicable law and
the terms of the related Loan Documents.
(q) Since the completion of funding contemplated under the applicable
Loan Documents of the Loan, the terms of the related Promissory Note, Mortgage,
if applicable, and Security Agreements, if applicable, have not been impaired,
waived, modified, altered, satisfied, canceled or subordinated by the Loan
Originator in any respect, except, in each of the foregoing instances, by
written instruments that are a part of the related Indenture Trustee's Loan
File, recorded in the applicable public recording office if necessary to
maintain the priority of the lien of the related Mortgage, if applicable, and
Security Agreements, if applicable, delivered to the Indenture Trustee or its
designee.
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(r) No fraud, error, omission, misrepresentation or negligence with
respect to the origination of a Loan has taken place on the part of any Person,
including, without limitation, the Borrower, any appraiser or any other party
involved in the origination of the Loan. The Loan Originator has reviewed all of
the documents constituting the Indenture Trustee's Loan File, the Servicer's
Loan File and internal credit write-up and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein.
(s) The Loan is not a participation interest in a loan, but is a whole
loan, and the Loan Originator does not own and is not entitled to own any equity
interest in the Borrower. Except as disclosed in the Due Diligence Package
related thereto, such Loan does not provide for any Retained Interest.
(t) The Loan does not contain a shared appreciation feature or any
terms providing for a contingent interest.
(u) No taxes, ground rents, water charges, sewer rents, insurance
premiums, governmental assessments (including the current portion of assessments
payable in future installments) or other charges affecting the related Loan
Collateral that, prior to the related Transfer Cutoff Date became due and owing
in respect of such Loan Collateral, are delinquent.
(v) Any escrow deposits and payments relating to the Loan are under
the control of the Loan Originator or Servicer and any amounts required to be
deposited by the Borrower have been deposited.
(w) There is no material default, breach, violation or event of
acceleration on the part of the related Borrower existing under the related
Mortgage or Security Agreement or the related Promissory Note, and no event
which, with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration occurred during
the preceding twelve months. The Loan Originator has not waived any material
default, breach, violation or event of acceleration of any of the foregoing,
and, pursuant to the terms of the related Mortgage or Security Agreement or the
related Promissory Note, no person or party other than the holder of such
Promissory Note may declare any event of default or accelerate the related
indebtedness under either of such Mortgage or Promissory Note.
(x) There is no pending total or partial condemnation of the related
Mortgaged Property, and the Loan Collateral is free and clear of any damage or
waste that would materially and adversely affect its value or marketability as
security for the Loan and the related Loan Collateral is in good repair and has
not been materially damaged by fire, wind or other cause, which damage has not
been fully repaired or for which insurance proceeds have not been received or
are not expected to be received.
(y) With respect to each Mortgage Loan, none of the improvements that
are or are intended to be, security for the Mortgage Loan lie outside of the
boundaries and building restriction lines of the Mortgaged Property except for
certain immaterial encroachments therefrom, and no improvements on adjoining
properties materially encroach upon the Mortgaged Property, except for those
material encroachments insured over by title insurance or the subject of a Title
Matters Indemnity Agreement contained in the Servicer's Loan File with respect
to such Mortgage Loan.
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(z) The Loan Collateral is covered by acceptable insurance meeting the
minimum requirements set forth in the Mortgage or Security Agreement. The Loan
Collateral is insured by a fire and extended perils insurance policy that
provides coverage in an amount not less than the lesser of the Principal Balance
of the related Promissory Note and full replacement value of the Loan
Collateral.
(aa) With respect to each Mortgage Loan, the related Loan Documents
require that the related Mortgaged Property be insured by a fire and extended
perils insurance policy, issued by a Qualified Insurer that has a claims-paying
ability rated at least "A:VI" by A.M. Best's Key Rating Guide, providing
coverage against loss or damage sustained by reason of fire, lightning,
windstorm, hail, explosion, riot, riot attending a strike, civil commotion,
aircraft, vehicles and smoke, and, to the extent required under such Loan
Documents, against earthquake and other risks insured against by Persons
operating like properties in the locality of such Mortgaged Property, in an
amount that is not less than 100% of the full insurable replacement cost of such
Mortgaged Property (exclusive of land, footings and foundations). If such
Mortgaged Property is located in a Special Flood Hazard Area (as defined by the
Federal Emergency Management Agency) and flood insurance is available, such Loan
Documents require that a flood insurance policy be in effect. The related Loan
Documents also require the related Mortgaged Property to be covered by
comprehensive general liability insurance in amounts generally required by
institutional lenders for similar properties. The related Loan Documents require
that each such Insurance Policy (i) contain a standard mortgagee clause naming
the Loan Originator, its successors and assigns as mortgagee and (ii) provide
for prior notice to the mortgagee, as additional insured, of termination or
cancellation (and no such notice has been received). In addition, each such
Insurance Policy will be required to be subject to deductibles not greater than
those customarily carried for similar Mortgaged Property, considering the
creditworthiness of the Borrower. The Loan Documents for such Mortgage Loan
obligate the related Borrower to maintain all such insurance, and if such
Borrower fails to do so, authorize the mortgagee to obtain and maintain such
insurance at such Borrower's cost and expense and to seek reimbursement therefor
from such Borrower;
(ab) The Loan is not thirty (30) or more days delinquent in payment of
principal or interest and has not been delinquent by thirty (30) or more days
more than once during the preceding twelve (12) months.
(ac) With respect to each Mortgage Loan, the related Mortgage is a
valid and enforceable first lien on the fee or leasehold estate of the Borrower
in the related Mortgaged Property (as applicable), which Mortgaged Property is
free and clear of all encumbrances and liens having priority over the first lien
of the Mortgage, except (i) for liens for real estate taxes and special
assessments either not yet delinquent or not yet due and payable, (ii) for
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, which
exceptions do not, in the aggregate, materially and adversely affect the value
of the related Mortgaged Property or the intended use thereof, (iii) to the
extent such Loan Collateral consists of patents, trademarks or copyrights, or
property as to which perfection of a security interest is effected through
possession, notation on a document of title or recording or filing under any law
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other than the UCC, such security interest is perfected as a first priority
security interest under the UCC and (iv) for other matters to which like
properties are commonly subject which do not, individually or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by such Mortgage.
(ad) With respect to each Mortgage Loan, no claims have been made by
the Loan Originator under the related Title Policy. No prior holder of the
related Mortgage has done, by act or omission, anything which would materially
impair the coverage of any such Title Policy and such Title Policy is in full
force and effect, is freely assignable and will inure to the benefit of the
Indenture Trustee or its designee as mortgagee of record. All applicable
premiums for the Title Policy, endorsements and all special endorsements, if
any, have been paid.
(ae) The Loan Originator has, and all parties to the related
Promissory Note, Mortgage or Security Agreement, and any related agreements or
guaranties had, the power, authority and legal capacity to enter into, execute
and deliver the same and such Promissory Note, Mortgage or Security Agreement,
related agreements and guaranties, if any, have been duly and properly executed
and delivered by the Loan Originator and all other parties.
(af) In connection with each Loan, the related Promissory Note,
Mortgage or Security Agreement and other agreements executed in connection
therewith:
(i) have been completed in compliance with, or are exempt from,
applicable state, federal and local laws and rules and regulations relating to
the origination of and performance under the Loan, including, without
limitation, usury, land sales, the offer and sale of securities and equal credit
opportunity or disclosure, the Federal Truth-in-Lending Act, the Real Estate
Settlement Procedure Act and other consumer protection laws and neither
origination of such Loan nor consummation of the transactions contemplated
hereby involved or will involve the violation of any such laws; and
(ii) are genuine and are the legal, valid and binding obligation
of the Borrower or Borrowers thereof (subject to any non-recourse provisions
therein), and enforceable in accordance with their respective terms, without
defense, offset, counterclaim or right of rescission, except as enforcement may
be limited by (A) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally, (B) general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law) and (C) applicable state laws, which state laws will not
materially interfere with the practical realization of the principal benefits or
security provided thereby.
(ag) The related Promissory Note, Mortgage or Security Agreement, as
applicable, and other agreements executed in connection therewith contain
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Loan Collateral of the benefits
of the security provided thereby.
(ah) The Loan Documents have not been modified to (i) provide for any
holdbacks, other than any holdbacks previously approved by the parties hereto,
(ii) require future advances thereunder, or (iii) require disbursements of any
escrow funds for completion of any on-site or off-site improvements, other than
any requirements for disbursement of escrow funds held pursuant to the
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applicable Loan Documents. All applicable costs, fees and expenses incurred in
making, closing or recording such Loan will have been paid on or before the
related Transfer Cutoff Date.
(ai) With respect to each Mortgage Loan, the Loan Originator has a
first lien priority perfected security interest in all Condemnation Proceeds and
casualty proceeds relating to such Mortgaged Property.
(aj) The Loan Collateral is not in construction or substantial
rehabilitation.
(ak) The Loan is not cross-collateralized with any obligation other
than a Loan. For each Senior Loan, the related Borrower's obligations thereunder
are cross-defaulted with such Borrower's obligations under the Mortgage Loans
and the Equipment Loans (if any) associated with such Senior Loan.
(al) The conveyance of the Loan on such Transfer Date shall be deemed
a certification by a Responsible Officer of the Loan Originator that no default
by a Borrower is threatened or imminent with respect to such Loan.
(am) With respect to each Mortgage Loan, there is access to the
Mortgaged Property and such access is insured by title insurance (to the extent
available), and each Mortgaged Property, in every case, is serviced by public or
private water and sewer systems. The Loan Originator inspected, or caused to be
inspected, the related Mortgaged Property in connection with the origination of
such Mortgage Loan and the Loan Originator has inspected, or caused to be
inspected, such Mortgaged Property in accordance with the Underwriting
Guidelines.
(an) [Reserved.]
(ao) The Loan Originator has not, directly or indirectly, advanced
funds under the related Promissory Note to a party other than the related
Borrower or its designee. The Loan Originator has not received any advance of
funds by a party other than the related Borrower, for the payment of any amount
required by the related Promissory Note or the related Mortgage or Security
Agreement, as the case may be.
(ap) The related Borrower is not a debtor in any state or federal
bankruptcy or insolvency proceeding.
(aq) The Mortgage or Security Agreement, as the case may be, prohibits
any further pledge or lien on the Loan Collateral, whether equal or subordinate
to the lien of the Mortgage or Security Agreement, as the case may be, without
the prior written consent of the holder.
(ar) All Loan Collateral is located within one of the 50 United States
or the District of Columbia.
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(as) Each Loan that is a Mortgage Loan is secured by the related
Borrower's (x) fee simple estate ("FEE INTEREST") or (y) leasehold estate in a
Ground Lease. With respect to each Ground Lease:
(i) Such Ground Lease, or a memorandum thereof, has been
recorded, and either any provisions of such Ground Lease that prohibit the
related leasehold estate to be mortgaged have been waived or the lessor has
consented to the leasehold mortgage;
(ii) Except as disclosed in the Due Diligence Package related to
such Loan, such Ground Lease or the related estoppel certificate provides that
the Borrower's interest in such Ground Lease is assignable to successors and
assigns of the mortgagee with the consent of, the lessor thereunder which
consent shall not be unreasonably withheld;
(iii) The lessor has delivered an estoppel certificate stating
that at the date of delivery of such estoppel certificate, such Ground Lease is
in full force and effect and no default has occurred under such Ground Lease nor
is there any existing condition which, but for the passage of time or the giving
of notice, or both, would result in a default thereunder;
(iv) The mortgagee under such Ground Lease is permitted a
reasonable opportunity to cure any default under such Ground Lease which is
curable after the receipt of notice of such default before the lessor thereunder
may terminate such Ground Lease;
(v) Such Ground Lease or applicable estoppel certificate does not
restrict the use of the related Mortgaged Property by the related Borrower, its
successors or assigns in a manner that would materially and adversely affect the
security provided by the related Mortgage. The Ground Lease or applicable
estoppel certificate contains a covenant or agreement that the lessor thereunder
is not permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of any lessee in the relevant portion of
the Mortgaged Property for any reason; and
(vi) Such Ground Lease has an original term that, together with
any term or terms for which such Ground Lease may be renewed or extended by the
related Borrower, extends to not earlier than the fifth anniversary of the
stated maturity date of the related Mortgage Loan.
(at) (i) Each Mortgage Loan that is a C&G Store Mortgage Loan is
insured under the Environmental Policy; and
(ii) With respect to each Mortgage Loan that is not a C&G Store
Mortgage Loan, either (A) (x) a Phase I environmental assessment was conducted
with respect to the related Mortgaged Property, that concluded that no further
investigation of the related Mortgaged Property was necessary or (y) if such
Phase I environmental assessment concluded that further investigation of such
Mortgaged Property was necessary, a Phase II environmental assessment was
conducted with respect to the related Mortgaged Property, and such Phase II
environmental assessment evidenced that no remediation or further action was
required with respect to the related Mortgaged Property or (B) such Mortgage
Loan is insured under the Environmental Policy.
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(au) With respect to each Mortgage Loan, the related Mortgage provides
that the Borrower will defend and hold the Loan Originator and its successors
and/or assigns harmless from and against claims of any kind whatsoever
(including attorney's fees and costs) paid, incurred, or suffered by, or
asserted against, any such other party resulting from a breach of any
representation, warranty or covenant given by the Borrower under the related
Mortgage.
(av) As of the related Transfer Date, after giving effect to the
transfer of such Loan, the aggregate Principal Balance of all Other CD Facility
Mortgage Loans in the Loan Pool will not exceed the greater of (i) 28.08% of the
Pool Principal Balance and (ii) $93,696,420.03.
(aw) With respect to each Equipment Loan, the related Security
Agreement creates a valid, existing and enforceable first priority security
interest in the related Equipment and such security interest is perfected as a
first priority security interest under the UCC.
(ax) The information contained in the Due Diligence Package covering
the characteristics of such Loan and the related Borrower and Loan Collateral is
true and correct in all material respects.
(ay) (i) With respect to each Loan that is not identified as an
Adjustable Rate Loan on the Loan Schedule, the Loan Interest Rate with respect
thereto is fixed throughout the term to maturity of such Loan (without regard to
any Retained Interest). The amount of interest accrued on each such Loan will be
calculated either based on a 360-day year consisting of twelve 30-day months or
on a 360-day year and the actual numbers of days elapsed.
(ii) With respect to each Loan that is an Adjustable Rate Loan,
the Loan Interest Rate is subject to adjustment on the first day of each
calendar month to equal the sum of LIBOR (as defined in the related Loan
Documents) for such date and a fixed percentage, subject to a maximum rate and
minimum rate in accordance with the terms thereof. The initial amount of the
Monthly Payment related to each Adjustable Rate Loan will fully amortize the
original Principal Balance of such Loan over its original term to maturity at
the initial Loan Interest Rate thereon. The Monthly Payments on each such Loan
will be equal to such amount until the first Payment Reset Date for such Loan,
at which time, and on each succeeding Payment Reset Date thereafter, the amount
of the Monthly Payments to be paid by the related Borrower will be adjusted for
the next succeeding Payment Period to an amount that will fully amortize the
Principal Balance of such Loan on such Payment Reset Date at the Loan Interest
Rate for such Loan as determined on each December 15th prior to the next Payment
Period over its remaining term to maturity. The amount of interest accrued on
each of the Adjustable Rate Loans will be calculated based on a 360-day year and
the actual number of days elapsed. Any Negative Amortization will be added to
the Principal Balance of such Loan on such Due Date. If the Principal Balance of
any Adjustable Rate Loan exceeds the product of the related Negative
Amortization Cap and the original Principal Balance thereof after adding any
Negative Amortization thereto, the related Borrower will be required to prepay
such Loan on the immediately succeeding Due Date in an amount equal to the
difference between such Principal Balance and such original principal balance.
All adjustments to the Loan Interest Rate on any Adjustable Rate Loan have been
made in compliance with the terms of applicable law and the related Promissory
Note.
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(az) As of the related Transfer Date, after giving effect to the
transfer of such Loan, the aggregate Principal Balance of all Automotive Service
Facility Mortgage Loans in the Loan Pool will not exceed the greater of (i) 20%
of the Pool Principal Balance and (ii) $50,000,000.
(ba) As of the related Transfer Date, after giving effect to the
transfer of such Loan, the aggregate Principal Balance of all Mortgage Loans in
the Loan Pool for which the related store, dining establishment or other
business operated on the Mortgaged Property has been in continuous operation for
less than twelve months will not exceed such amounts as may periodically be
specified by the Majority Noteholder to the Servicer in writing.
SECTION 3.05 PURCHASE AND SUBSTITUTION.
It is understood and agreed that the representations and warranties
set forth in SECTION 3.04 hereof shall survive the conveyance of the Loans to
the Issuer, the pledge of the Loans to the Indenture Trustee and the delivery of
the Notes to the Noteholders. Upon discovery by the Depositor, the Servicer, the
Loan Originator, the Custodian, the Issuer, the Indenture Trustee or any
Securityholder of a breach of any of such representations and warranties or the
representations and warranties set forth in SECTION 3.02 which materially and
adversely affects the value of the Loans or the interests of the Securityholders
in the related Loan (notwithstanding that such representation and warranty was
made to the Loan Originator's best knowledge), the party discovering such breach
shall give prompt written notice to the others. The Loan Originator shall within
5 Business Days of any breach of a representation or warranty, including any
breach of the representation set forth in SECTION 3.04(aw) hereof as a result of
an attribute of the aggregate Loan Pool which would not otherwise cause a breach
of any other representation or warranty, promptly cure such breach in all
material respects. If within 5 Business Days after the earlier of the Loan
Originator's discovery of such breach or the Loan Originator's receiving notice
thereof such breach has not been remedied by the Loan Originator and such breach
materially and adversely affects the interests of the Securityholders or in the
related Loan (the "DEFECTIVE LOAN"), the Loan Originator shall promptly upon
receipt of written instructions from the Majority Noteholders either (i) remove
such Defective Loan from the Trust (in which case it shall become a Deleted
Loan) and substitute one or more Qualified Substitute Loans in the manner and
subject to the conditions set forth in this SECTION 3.05 or (ii) purchase such
Defective Loan at a purchase price equal to the Purchase Price with respect to
such Defective Loan by depositing such Purchase Price in the Collection Account.
The Loan Originator shall provide the Servicer, the Indenture Trustee, the
Initial Noteholder and the Issuer with a certification of a Responsible Officer
on the Determination Date next succeeding the end of such 5 Business Days period
indicating whether the Loan Originator is purchasing the Defective Loan or
substituting in lieu of such Defective Loan a Qualified Substitute Loan.
Any substitution of Loans pursuant to this SECTION 3.05(a) shall be
accompanied by payment by the Loan Originator of the Substitution Adjustment, if
any, to be deposited in the Collection Account pursuant to SECTION 5.01(b)(1)
hereof.
It is understood and agreed that the obligation of the Loan Originator
to repurchase or substitute any such Loan pursuant to this SECTION 3.05 shall
constitute the sole remedy against it with respect to such breach of the
foregoing representations or warranties or the existence of the foregoing
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conditions. With respect to representations and warranties made by the Loan
Originator pursuant to SECTION 3.04 hereof that are made to the Loan
Originator's best knowledge, if it is discovered by any of the Depositor, the
Loan Originator, the Indenture Trustee or the Owner Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Loan, notwithstanding the Loan
Originator's lack of knowledge, such inaccuracy shall be deemed a breach of the
applicable representation and warranty.
(b) As to any Deleted Loan for which the Loan Originator substitutes a
Qualified Substitute Loan or Loans, the Loan Originator shall effect such
substitution by delivering to the Issuer (i) a certification executed by a
Responsible Officer of the Loan Originator to the effect that the Substitution
Adjustment has been credited to the Collection Account and (ii) the documents
constituting the Indenture Trustee's Loan File for such Qualified Substitute
Loan or Loans.
The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Loan or Loans after the
date of such substitution. Monthly Payments received with respect to Qualified
Substitute Loans on or before the date of substitution will be retained by the
Loan Originator. The Issuer will be entitled to all payments received on the
Deleted Loan on or before the date of substitution and the Loan Originator shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Loan. The Loan Originator shall give written notice to the Issuer,
the Servicer (if the Loan Originator is not then acting as such), the Indenture
Trustee and Owner Trustee that such substitution has taken place and the
Servicer shall amend the Loan Schedule to reflect (i) the removal of such
Deleted Loan from the terms of this Agreement and (ii) the substitution of the
Qualified Substitute Loan. The Loan Originator shall promptly deliver to the
Issuer, the Servicer (if the Loan Originator is not then acting as such), the
Indenture Trustee and Owner Trustee, a copy of the amended Loan Schedule. Upon
such substitution, such Qualified Substitute Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Loan Originator shall be
deemed to have made with respect to such Qualified Substitute Loan or Loans, as
of the date of substitution, the covenants, representations and warranties set
forth in SECTION 3.04 hereof. On the date of such substitution, the Loan
Originator will deposit into the Collection Account an amount equal to the
related Substitution Adjustment, if any. In addition, on the date of such
substitution, the Servicer shall cause the Indenture Trustee to release the
Deleted Loan from the lien of the Indenture and the Servicer will cause such
Qualified Substitute Loan to be pledged to the Indenture Trustee under the
Indenture as part of the Trust Estate.
(c) With respect to all Defective Loans or other Loans repurchased by
the Loan Originator pursuant to this Agreement, upon the deposit of the Purchase
Price therefor into the Collection Account, the Indenture Trustee shall assign
to the Loan Originator, without recourse, representation or warranty, all the
Indenture Trustee's right, title and interest in and to such Defective Loans or
Loans, which right, title and interest were conveyed to the Indenture Trustee
pursuant to SECTION 2.01 hereof. The Indenture Trustee shall, at the expense of
the Loan Originator, take any actions as shall be reasonably requested by the
Loan Originator to effect the repurchase of any such Loans.
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(d) It is understood and agreed that the obligations of the Loan
Originator set forth in this SECTION 3.05 to cure, purchase or substitute for a
Defective Loan (and to indemnify the Trust for certain losses as described
herein in connection with a Defective Loan) constitute the sole remedies
hereunder of the Depositor, the Issuer, the Indenture Trustee, Owner Trustee and
the Securityholders respecting a breach of the representations and warranties
contained in SECTION 3.02 and SECTION 3.04 hereof. Any cause of action against
the Loan Originator relating to or arising out of a defect in a Indenture
Trustee's Loan File as contemplated by SECTION 2.05 hereof or against the Loan
Originator relating to or arising out of a breach of any representations and
warranties made in SECTION 3.04 hereof shall accrue as to any Loan upon (i)
discovery of such defect or breach by any party and notice thereof to the Loan
Originator or notice thereof by the Loan Originator to the Indenture Trustee,
(ii) failure by the Loan Originator to cure such defect or breach or purchase or
substitute such Loan as specified above, and (iii) demand upon the Loan
Originator, as applicable, by the Issuer or the Majority Noteholders for all
amounts payable in respect of such Loan.
(e) Neither the Issuer nor the Indenture Trustee shall have any duty
to conduct any affirmative investigation other than as specifically set forth in
this Agreement as to the occurrence of any condition requiring the repurchase or
substitution of any Loan pursuant to this Section or the eligibility of any Loan
for purposes of this Agreement.
SECTION 3.06 SECURITIZATIONS.
(a) In accordance with the terms of Section 2.3(a) of the Loan
Purchase Agreement, the Loan Originator shall effect Securitizations at the
direction of the Majority Noteholders. In connection therewith, the Issuer
agrees to assist the Loan Originator in such Securitizations and accordingly it
shall, at the request and direction of the Majority Noteholders:
(i) transfer, deliver and sell all or a portion of the Loans,
as of the "cutoff dates" of the related Securitizations,
to such Securitization Participants as may be necessary to
effect the Securitizations; PROVIDED, that any such sale
shall be for "fair market value," as determined by the
Majority Noteholders in their reasonable discretion;
(ii) deposit the cash Securitization Proceeds into the
Collection Account pursuant to SECTION 5.01(b)(1) and
retain any Retained Securities created in Securitizations
in accordance with the terms of the Trust Agreement;
(iii) to the extent that a Securitization creates any Retained
Securities, to accept such Retained Securities as a part
of the Securitization Proceeds, PROVIDED, that any such
acceptance of such Retained Securities shall be subject to
the Issuer's reasonable approval; and
(iv) take such further actions as may be reasonably necessary
to effect such Securitizations.
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(b) The Servicer hereby covenants that it will take such actions as
may be reasonably necessary to effect Securitizations as the Majority
Noteholders may request and direct.
(c) The right of the Majority Noteholders to require the Issuer and
the Loan Originator to effect Securitizations is subject to (i) the conditions
set forth in Section 2.3(a) of the Loan Purchase Agreement and (ii) the Issuer's
right of approval with respect to the Securitization; provided, however, that no
such Issuer right of approval shall be required if a Disposition Trigger Event
has occurred.
(d) The Loan Originator shall, in connection with a Securitization,
cause FFCA to obtain an Opinion of Counsel to the effect that the securities
issued shall be treated as the issuance of debt instruments by FFCA or an
Affiliate thereof.
SECTION 3.07 LOAN ORIGINATOR PUT; SERVICER CALL.
(a) LOAN ORIGINATOR PUT. The Loan Originator shall promptly
repurchase, upon the written demand of the Majority Noteholders, in the form of
Exhibit G attached hereto, any (i) Loan that has become 30 or more days
Delinquent, (ii) Defaulted Loan, (iii) Loan that has been in default for a
period of 30 days or more, (iv) Loan that has been determined to be ineligible
for a Securitization by mutual agreement of the Majority Noteholders and the
Servicer and (v) Mortgage Loan with respect to which the Loan Originator did not
enforce a due-on-sale or due-on-encumbrance clause pursuant to SECTION 7.01
hereof (each such Loan, a "Put/Call Loan").
(b) SERVICER CALL. The Servicer may repurchase any Put/Call Loan (as
defined in SECTION 3.07(a) hereof). Such Servicer Calls shall be solely at the
option of the Servicer. Prior to exercising a Servicer Call, the Servicer shall
deliver written notice to the Majority Noteholders and the Indenture Trustee in
the form of Exhibit H attached hereto, which notice shall identify each Loan to
be repurchased and the Purchase Price therefor.
(c) In connection with each Loan Originator Put, the Loan Originator
shall remit to the Servicer for deposit into the Collection Account, the
Purchase Price for the Loans to be repurchased. In connection with each Servicer
Call, the Servicer shall deposit into the Collection Account the Purchase Price
for the Loans to be repurchased. The aggregate Purchase Price of all Loans
transferred pursuant to Section 3.07(a) shall in no event exceed the Unfunded
Transfer Obligation or the Postsecuritization Unfunded Transfer Obligation, as
applicable, at the time of such Loan Originator Put.
SECTION 3.08 MODIFICATION OF UNDERWRITING GUIDELINES.
The Loan Originator shall give the Initial Noteholder prompt written
notification of any material modification or change to the Underwriting
Guidelines.
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SECTION 3.09 ENVIRONMENTAL POLICY AND BUSINESS INTERRUPTION INSURANCE.
(a) The Loan Originator shall perform all actions required under the
Environmental Policy to validly assign such policy to the Indenture Trustee with
respect to each Mortgage Loan insured thereunder.
(b) The Loan Originator shall remit to the Collection Account all
amounts received by it under the Environmental Policy with respect to each Loan
insured thereunder; provided that to the extent the Servicer decides in
accordance with the Servicing Standard to apply such proceeds to remediate the
related Mortgaged Property, the Servicer shall retain such amounts for such use.
(c) The Loan Originator hereby covenants that in the event that the
Majority Noteholders determine that it is generally required by national
statistical rating organizations, in connection with securitization transactions
with respect to the Loans (regardless of whether such a Securitization is
expected to occur with respect to the Loans), it shall promptly obtain or cause
to be obtained for each Mortgaged Property, business interruption or rent
insurance, in an amount at least equal to six (6) months of operations of such
Mortgaged Property, or if the Loan Originator shall not obtain or cause such
insurance to be obtained for any Mortgage Loan, the parties hereto agree that
the Majority Noteholders may proportionately reduce the Maximum Advance Factor
for such Mortgage Loan in an amount equal to the aggregate reduction in
anticipated Securitization Proceeds attributable to such failure to obtain such
insurance.
SECTION 3.10 WHOLE LOAN SALES.
(a) Each of the Servicer, the Originator and the Issuer covenants to
take such action to effect Whole Loan Sales as it would with respect to
Securitizations, as applicable.
(b) The Majority Noteholders may only effect Whole Loan Sales:
(i) if FFCA ceases to qualify as a REIT, as defined in Section
856 of the Code; and
(ii) subject to the same conditions that apply to
Securitizations, including, without limitation, the
Issuer's right of approval set forth in SECTION
3.06(c)(ii) unless a Disposition Trigger Event has
occurred.
(c) In connection with Whole Loan Sales, MSSFI shall, in good faith,
use commercially reasonable efforts to obtain two bona fide market bids for the
Loans subject to any Whole Loan Sale from two bidders with the legal and
financial capacity to make such bids that are not Affiliates of MSSFI or FFCA.
FFCA may participate as a concurrent bidder for the Loans subject to such Whole
Loan Sale, provided that MSSFI obtains at least two such bids from bidders
unaffiliated with FFCA and that FFCA does not pay a price higher than the fair
market value of such Loans (as reasonably determined by the Market Value Agent).
In addition, MSSFI may, in its sole discretion, obtain such additional bids from
bidders with the legal and financial capacity to make such bids which may
include Affiliates of MSSFI. MSSFI shall take the highest bid among all bids
made pursuant to this SECTION 3.10(c).
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ARTICLE IV
ADMINISTRATION AND SERVICING OF THE LOANS
SECTION 4.01 DUTIES OF THE SERVICER.
(a) SERVICING STANDARD. The Servicer, as an independent contractor,
shall remain an Eligible Servicer and shall service and administer the Loans in
the best interests of and for the benefit of the Noteholders, in accordance with
applicable state and Federal Laws, the terms of this Agreement and the Servicing
Standard. To the extent consistent with such terms and in accordance with such
terms, the Servicer shall have full power and authority, acting alone, to
service and administer the Loans with a view toward the maximization of timely
recovery of principal and interest thereon. Notwithstanding anything to the
contrary contained herein, the Servicer, in servicing and administering the
Loans, shall employ or cause to be employed procedures (including collection,
foreclosure, liquidation and Foreclosure Property management and liquidation
procedures) and exercise the same care that it customarily employs and exercises
in servicing and administering loans of the same type as the Loans for its own
account, all in accordance with the Servicing Standard of prudent lending
institutions and servicers of commercial loans of the same type as the Loans and
giving due consideration to the Noteholders' reliance on the Servicer. In the
event of a conflict between this Agreement and the Servicing Standard, this
Agreement shall control. The Servicer has and shall maintain the facilities,
procedures and experienced personnel necessary to comply with the servicing
standard set forth in this subsection (a) and the duties of the Servicer set
forth in this Agreement relating to the servicing and administration of the
Loans. In performing its obligations hereunder the Servicer shall at all times
act in good faith in a commercially reasonable manner in accordance with
applicable law and the Promissory Notes and Mortgages or Security Agreements, as
the case may be.
(b) The Servicer shall notify the Initial Noteholder in writing in
advance of any action taken by the Servicer to (i) release, or agree to the
substitution or exchange of any collateral for, any portion of any Loan
Collateral or related collateral, (ii) release from liability any Person liable
for any obligation under a Mortgage or Security Agreement, as the case may be,
(iii) consent (to the extent the Servicer is entitled under the Mortgage or
other agreement to withhold such consent) to the transfer (direct or indirect)
or encumbrance of any Loan Collateral, (iv) with respect to any lease, consent
(to the extent the Servicer is entitled under the Mortgage or other agreement to
withhold such consent) to the execution, assignment, termination or modification
of such lease if, in the case of the termination of such lease or the execution
of new lease, such would result in a reduction of the monthly rent most recently
payable in respect of the related portion of the Mortgaged Property, or, in the
case of an assignment or modification of such lease, such assignment would
reduce the term thereof or the rental payable thereunder, (v) grant
non-disturbance to any tenant under any lease, (vi) apply Insurance Proceeds or
proceeds of a partial condemnation in excess of $50,000 received with respect to
a Loan to the restoration or repair of the related Loan Collateral unless
otherwise required pursuant to the related Loan Documents or applicable law,
(vii) waive any prepayment premium or otherwise waive, amend or modify any term
of any Loan, (viii) accelerate the maturity of any Loan, (ix) take possession of
or acquire title to any Loan Collateral, or (x) sell any Loan Collateral or
Foreclosure Property.
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(c) SERVICING ADVANCES. In accordance with the preceding general
servicing standard, the Servicer, or any Subservicer on behalf of the Servicer,
shall make all Servicing Advances in connection with the servicing of each Loan
hereunder. Notwithstanding any provision to the contrary herein, neither the
Servicer nor any Subservicer on behalf of the Servicer shall have any obligation
to satisfy or keep current the indebtedness secured by any on the related Loan
Collateral. No costs incurred by the Servicer or any Subservicer in respect of
Servicing Advances shall, for the purposes of distributions to Securityholders,
be added to the amount owing under the related Loan. Notwithstanding any
obligation by the Servicer to make a Servicing Advance hereunder with respect to
a Loan, before making any Servicing Advance, the Servicer shall assess the
reasonable likelihood of (i) recovering such Servicing Advance and any prior
Servicing Advances for such Loan and (ii) recovering any amounts attributable to
outstanding interest and principal owing on such Loan for the benefit of the
Securityholders in excess of the costs, expenses and other deductions to obtain
such recovery, including without limitation any Servicing Advances therefor and,
if applicable, the outstanding indebtedness of all. The Servicer shall only make
a Servicing Advance with respect to a Loan to the extent that the Servicer
determines in its reasonable, good faith judgment that such Servicing Advance
would likely be recovered as aforesaid; provided, however, that the Servicer
will be entitled to be reimbursed for any Nonrecoverable Servicing Advances in
accordance with the terms of this Agreement.
(d) WAIVERS, MODIFICATIONS AND EXTENSIONS; SUBORDINATION. The Servicer
shall make reasonably diligent efforts to collect all payments called for under
the terms and provisions of the Loans and shall, to the extent such procedures
shall be consistent with this Agreement, follow the Servicing Standard. The
Servicer may in its discretion waive or permit to be waived any penalty interest
or any other fee or charge which the Servicer would be entitled to retain
hereunder as servicing compensation and extend the Due Date on a Promissory Note
for a period (with respect to each payment as to which the Due Date is extended)
not greater than 90 days after the initially scheduled due date for such
payment. Notwithstanding anything in this Agreement to the contrary, the
Servicer shall not permit any additional extension or modification with respect
to any Loan other than that permitted by the immediately preceding sentence
unless the Loan is a Defaulted Loan. The Servicer may in its discretion enter in
subordination agreements with respect to any Loan, provided that the Servicer
determines, consistent with this Agreement and the Servicing Standard that the
entering into of such subordination agreement is in the best interests of the
Trust; provided further, that the Servicer shall not enter into such a
subordination agreement with respect to any Mortgage Loan if, after giving
effect to such agreement, such Mortgage Loan would fail to constitute a real
estate asset, as described in Section 856 of the Code. The Servicer shall
provide written notice to the Initial Noteholder prior to entering into any
agreement to modify the terms of any Loan after the Transfer Date with respect
thereto, including, without limitation, any cross-default or
cross-collateralization provisions with respect thereto.
(e) INSTRUMENTS OF SATISFACTION OR RELEASE. Without limiting the
generality of subsection (d) of this Section 4.01, the Servicer, in its own name
or in the name of a Subservicer, is hereby authorized and empowered, when the
Servicer believes it appropriate in its best judgment, to execute and deliver,
on behalf of the Securityholders and the Trust or any of them, and upon notice
to the Indenture Trustee, any and all instruments of satisfaction or
cancellation or of partial or full release or discharge, and all other
comparable instruments with respect to the Loans and the Loan Collateral and to
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institute foreclosure proceedings or obtain a deed in lieu of foreclosure so as
to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Trust and Securityholders. The
Servicer shall service and administer the Loans in accordance with applicable
state and federal law and shall provide to the Borrowers any reports required to
be provided to them thereby. The Indenture Trustee shall execute, at the written
direction of the Servicer, any limited or special powers of attorney and other
documents reasonably acceptable to the Indenture Trustee to enable the Servicer
or any Subservicer to carry out their servicing and administrative duties
hereunder, including, without limitation, limited or special powers of attorney
with respect to any Foreclosure Property as well as pursuant to Section 4.10(c)
hereof, and the Indenture Trustee shall not be accountable for the actions of
the Servicer or any Subservicers under such powers of attorney and shall be
indemnified by such parties with respect to such actions.
(f) TERMINATION OF SERVICING. (i) In the event of a Securitization or
other removal of a Loan from the Trust Estate, the Servicer shall be terminated
with respect to such Loan.
(ii) The Servicer agrees that in the event that any Notes are
Outstanding on the Maturity Date, the Servicer will resign and the Majority
Noteholders shall appoint a successor in accordance with provisions of SECTION
10.02. The Majority Noteholders may, by written notice to the Servicer and the
Indenture Trustee, elect to have the Servicer continue its duties hereunder.
SECTION 4.02 VACANCIES AND INSPECTIONS.
(a) The Servicer shall promptly notify the Issuer, the Indenture
Trustee and the Initial Noteholder of any actual knowledge on the part of the
Servicer of any material vacancy in any Mortgaged Property, of any abandonment
of any Loan Collateral, of any material adverse change in the condition or value
of any Loan Collateral, of any waste committed thereon, of any failure on the
part of a Borrower to keep the related Loan Collateral in good condition and
repair, of any permanent or substantial injury to the Loan Collateral through
unreasonable use, abuse or neglect or of any other matter which would materially
and adversely affect the value of or the Noteholders' interest in any Loan
Collateral. The Servicer shall also promptly notify the Issuer, the Indenture
Trustee and the Majority Noteholders upon learning thereof of any state or
federal insolvency or bankruptcy proceedings in which any Borrower is seeking
relief or is a defendant debtor provided, however, that Servicer shall not be
deemed to be in default under this Agreement for failure to give such notice if
Servicer has no knowledge of any such proceeding and could not reasonably be
expected to have such knowledge in the ordinary course of Servicer's business.
(b) The Servicer shall inspect or cause to be inspected the Loan
Collateral with respect to each Loan at such times and in such manner as are
consistent with the Servicing Standard; provided that if any Monthly Payment
becomes more than 45 days Delinquent, or if the Unit-Level Fixed Charge Coverage
Ratio with respect to any Loan Collateral is less than 105%, the related Loan
Collateral shall be inspected as soon as practicable thereafter.
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(c) The Servicer shall make a written report of each inspection
required pursuant to paragraph (b) above, on a form reasonably acceptable to the
Initial Noteholder and shall submit a copy of each such report to the Initial
Noteholder.
SECTION 4.03 FIDELITY BOND; ERRORS AND OMISSIONS INSURANCE.
The Servicer shall maintain with a responsible company, and at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy or
policies, which policy or policies shall be in such form and amount as would
permit it to be a qualified Federal National Mortgage Association
seller-servicer of multi-family mortgage loans, with broad coverage on all
officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Loans
("Servicer Employees"). Any such fidelity bond and errors and omissions
insurance shall protect and insure the Servicer against losses, including losses
resulting from forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts (including acts relating to the origination and servicing of
loans of the same type as the Loans) of such Servicer Employees. Such fidelity
bond shall also protect and insure the Servicer against losses in connection
with the release or satisfaction of a Loan without having obtained payment in
full of the indebtedness secured thereby. In the event of any loss of principal
or interest on a Loan for which reimbursement is received from the Servicer's
fidelity bond or errors and omissions insurance, the process from any such
insurance will be deposited in the Collection Account. No provision of this
SECTION 4.03 requiring such fidelity bond and errors and omission insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. Upon the request of the Issuer or the Indenture
Trustee, the Servicer shall cause to be delivered to the requesting party a
certified true copy of such fidelity bond and insurance policy.
SECTION 4.04 FILING OF CONTINUATION STATEMENTS.
On or before the fifth anniversary of the filing of any financing
statements by the Loan Originator and the Depositor, respectively, with respect
to the assets conveyed to the Trust, the Loan Originator and the Depositor shall
prepare, have executed by the necessary parties and file in the proper
jurisdictions all financing and continuation statements necessary to maintain
the liens, security interests and priorities of such liens and security
interests that have been granted by the Loan Originator and the Depositor,
respectively, and the Loan Originator and the Depositor shall continue to file
on or before each fifth anniversary of the filing of any financing and
continuation statements such additional financing and continuation statements
until the Trust has terminated pursuant to Section 9.1 of the Trust Agreement.
The Indenture Trustee agrees to reasonably cooperate with the Loan Originator
and the Depositor in preparing, executing and filing such statements, at the
expense of the Loan Originator or the Depositor, as applicable; provided,
however, that the Indenture Trustee shall have no responsibility to prepare or
file such statements. The Servicer agrees to notify the Loan Originator and the
Depositor on the third Payment Date prior to each such fifth anniversary of the
requirement that they file such financing and continuation statements. The
filing of any such statement with respect to the Loan Originator and the
Depositor shall not be construed as any indication of an intent of any party
contrary to the expressed intent set forth in SECTION 2.03 hereof. If the Loan
Originator or the Depositor has ceased to do business whenever any such
financing and continuation statements must be filed or the Loan Originator or
the Depositor fails to file any such financing statements or continuation
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statements at least one month prior to the expiration thereof, each of the Loan
Originator and the Depositor does hereby make, constitute and appoint the
Indenture Trustee its attorney-in-fact, with full power and authority, to
execute and file in the Depositor's name and on the Depositor's behalf and at
the Depositor's expense any such financing statements or continuation statements
required under this SECTION 4.04.
SECTION 4.05 ESTABLISHMENT AND ADMINISTRATION OF ESCROW ACCOUNT.
(a) The Servicer shall maintain accurate records with respect to all
Loan Collateral reflecting the status of taxes, basic carrying costs and other
similar items that are or may become a lien thereon and the status of insurance
premiums and ground rent, if applicable, payable in respect thereof.
(b) After the occurrence of a Default or Event of Default under this
Agreement or the Indenture, the Majority Noteholders may, in their sole
discretion, direct the Servicer to, upon the occurrence and continuation of a
default under a Mortgage Loan, direct the Borrower thereunder to remit amounts
in respect of Escrow Payments to the Escrow Account, for application by the
Servicer in accordance with the Servicing Standard. In such event, the Servicer
shall establish the Escrow Account under an arrangement consented to in writing
by the Majority Noteholders in their reasonable discretion.
(c) The Servicer may direct any depository institution or trust
company in which the Escrow Accounts (to the extent permitted by law and subject
to the related Loan Documents) are maintained to invest the funds held therein
in one or more Permitted Investments; provided, however, that such funds must be
either (i) immediately available or (ii) available in accordance with a schedule
which will permit the Servicer to meet its payment obligations hereunder. The
Servicer shall be entitled to all income and gain realized from the investment
of funds deposited in the Escrow Accounts (to the extent permitted by law and
subject to the related Loan Documents). The Servicer shall deposit amounts from
its own funds in such Escrow Accounts to make whole any loss incurred in respect
of any such investment of funds therein immediately upon the realization of such
loss.
(d) Notwithstanding anything to the contrary in this Section 4.05,
upon the occurrence of a Lockbox Trigger Event, the Servicer shall cause each
Borrower required to make Escrow Payments to directly remit to the Lockbox
Account, such Escrow Payments for deposit into the Escrow Account.
SECTION 4.06 SUBSERVICING.
(a) The Servicer may, with the prior written consent of the Majority
Noteholders, which consent shall not be unreasonably withheld, enter into
Subservicing Agreements for any servicing and administration of Loans with any
institution that is an Eligible Servicer and in compliance with the laws of each
state necessary to enable it to perform its obligations under such Subservicing
Agreement. The Servicer shall give prior written notice to the Issuer and the
Indenture Trustee of the appointment of any Subservicer. The Servicer shall be
entitled to terminate any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement and to either service the related
Loans directly or enter into a Subservicing Agreement with a successor
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subservicer which qualifies hereunder. In the event that the Majority
Noteholders fail to respond to a request by the Servicer for consent to enter
into a Subservicing Agreement within three Business Days after receipt of such
request, the requested consent shall be deemed to have been granted.
In the event of termination of any Subservicer, and unless a successor
Subservicer has otherwise been appointed, all servicing obligations of such
Subservicer shall be assumed simultaneously by the Servicer without any
additional act or deed on the part of such Subservicer or the Servicer, and the
Servicer shall service directly the related Loans.
Each Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Indenture Trustee in the event
that the Servicer shall, for any reason, no longer be the Servicer. In no event
shall any Subservicing Agreement require the Indenture Trustee, as successor
Servicer, for any reason whatsoever to pay compensation to a Subservicer in
order to terminate such Subservicer.
(b) Notwithstanding any Subservicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Issuer, the Indenture Trustee and the Securityholders for the servicing and
administration of the Loans in accordance with the provisions of this Agreement
without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Loans. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on Loans
when the Subservicer has actually received such payments and, unless the context
otherwise requires, references in this Agreement to actions taken or to be taken
by the Servicer in servicing the Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer. The Servicer shall be entitled to enter
into any agreement with a Subservicer for indemnification of the Servicer by
such Subservicer, and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.
(c) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of an Event of Default with respect to the
Servicer), the successor Servicer, on behalf of the Issuer, the Indenture
Trustee and the Securityholders pursuant to Section 4.07 hereof, shall thereupon
assume all of the rights and obligations of the Servicer under each Subservicing
Agreement that the Servicer may have entered into, unless the successor Servicer
elects to terminate any Subservicing Agreement in accordance with its terms. The
successor Servicer shall be deemed to have assumed all of the Servicer's
interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if the Subservicing Agreements had
been assigned to the assuming party, except that the Servicer shall not thereby
be relieved of any liability or obligations under the Subservicing Agreements
which accrued prior to the transfer of servicing to the successor Servicer. The
Servicer, at its expense and without right of reimbursement therefor, shall,
upon request of the successor Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement and the Loans then
being serviced and an accounting of amounts collected and held by it and
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otherwise use its best efforts to effect the orderly and efficient transfer of
the Subservicing Agreements to the assuming party.
(d) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Issuer, the Indenture Trustee and the Securityholders, shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Servicer, in
its good faith business judgment, would require were it the owner of the related
Loans. The Servicer shall pay the costs of such enforcement at its own expense
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Loan or (ii) from a specific recovery of costs,
expenses or attorneys' fees against the party against which such enforcement is
directed.
(e) Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Loans involving a Subservicer shall be
deemed to be between the Subservicer and the Servicer alone and none of the
Issuer, the Indenture Trustee or the Securityholders shall be deemed parties
thereto or shall have any claims, rights, obligations, duties or liabilities
with respect to the Subservicer in its capacity as such except as set forth in
subsection (c) of this SECTION 4.06.
(f) In those cases where a Subservicer is servicing a Loan pursuant to
a Subservicing Agreement, the Subservicer will be required to establish and
maintain one or more accounts (collectively, the "Subservicing Account"). The
Subservicing Account shall be an Eligible Account. The Subservicer will be
required to deposit into the Subservicing Account, no later than the first
Business Day after receipt, all proceeds of Loans received by the Subservicer
and remit such proceeds to the Servicer for deposit in the Collection Account
not later than the Business Day following receipt thereof by the Subservicer.
Notwithstanding anything in this subsection (f) to the contrary, the Subservicer
shall only be able to withdraw funds from the Subservicing Account for the
purpose of remitting such funds to the Servicer for deposit into the Collection
Account. The Servicer shall require the Subservicer to cause any collection
agent of the Subservicer to send a copy to the Servicer of each statement of
monthly payments collected by or on behalf of the Subservicer within five
Business Days after the end of every month, and the Servicer shall compare the
information provided in such reports with the deposits made by the Subservicer
into the Collection Account for the same period. The Servicer shall be deemed to
have received payments on the Loans on the date on which the Subservicer has
received such payments.
SECTION 4.07 SUCCESSOR SERVICERS.
In the event that the Servicer is terminated pursuant to SECTION 10.01
hereof, or resigns pursuant to SECTION 9.04 hereof or otherwise becomes unable
to perform its obligations under this Agreement, the Majority Noteholders will
appoint a successor servicer in accordance with the provisions of SECTION 10.02
hereof.
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SECTION 4.08 MAINTENANCE OF INSURANCE.
(a) The Servicer shall cause to be maintained for each Foreclosure
Property acquired by the Trust such types and amounts of insurance coverage as
the Servicer shall deem reasonable.
(b) Any amounts collected by the Servicer under any Insurance Policies
shall be paid over or applied by the Servicer as follows:
(i) In the case of amounts received in respect of any Loan:
(A) for the restoration or repair of the affected Loan
Collateral, in which event such amounts shall be released to
the Borrower in accordance with the terms of the related
Promissory Note or
(B) to the extent not so used, in reduction of the Principal
Balance of the related Loan, in which event such amounts
shall be deposited into the Collection Account,
unless the related instruments require a different application, in which case
such amounts shall be applied in the manner provided therein; and
(ii) Subject to SECTION 4.10 hereof, in the case of amounts received
in respect of any Foreclosure Property, for the restoration or repair of such
Foreclosure Property, unless the Servicer determines, consistent with the
servicing standard set forth in SECTION 4.01 hereof, that such restoration or
repair is not in the best economic interest of the Trust, in which event such
amounts shall be deposited into the Collection Account as a payment received
from the operation of such Foreclosure Property.
(c) The Servicer will cause to be performed any and all acts required
to be performed by the Servicer to preserve the rights and remedies of the Trust
and the Indenture Trustee in any Insurance Policies applicable to the Loans
including, without limitation, in each case, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
co-insured, joint loss payee and mortgagee rights in favor of the Trust and the
Indenture Trustee.
SECTION 4.09 PERIODIC ADVANCES.
(a) If, on any Payment Date, the Servicer determines that any Monthly
Payments due on the Due Date immediately preceding such Payment Date have not
been received as of the close of business on the Business Day preceding such
Payment Date, the Servicer shall determine the amount of any Periodic Advance
required to be made with respect to the related Payment Date. The Servicer
shall, on or prior to such Payment Date, furnish a statement to the Indenture
Trustee (the information in such statement to be made available to the Initial
Noteholder upon request) setting forth the amount of such Monthly Payments which
were not received as of the close of business on the Business Day preceding the
related Payment Date, and shall include in the amount to be deposited in the
Collection Account on such Payment Date an amount equal to the Periodic Advance,
if any, from its own funds.
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(b) The Servicer shall designate on its records the specific Loans and
related installments (or portions thereof) as to which such Periodic Advance
shall be deemed to have been made for purposes of withdrawals from the
Collection Account pursuant to SECTION 5.01(c)(1).
SECTION 4.10 FORECLOSURE; REPOSSESSION AND ALTERNATIVES.
(a) If any monthly payment due under any Loan is not paid when the
same is due and payable, or if the Borrower fails to perform any other covenant
or obligation under such Loan and such failure continues beyond any applicable
grace period, the Servicer shall take such action as it shall deem to be in the
best interest of the Trust, including but not limited to proceeding against the
Loan Collateral securing such Loan, pursuing collection litigation or
alternative court proceedings to foreclosure or repossession actions. In the
event that the Servicer determines not to proceed against the Loan Collateral or
Borrower, as applicable, on or before the Determination Date following such
determination, the Servicer shall determine in good faith in accordance with the
Servicing Standard that all amounts which it expects to receive with respect to
such Loan have been received. If the Servicer makes such a determination, it
shall give notice to such effect to the Issuer and the Indenture Trustee.
(b) In accordance with the criteria for proceeding against the Loan
Collateral set forth in subsection (a) of this SECTION 4.10, unless otherwise
prohibited by applicable law or court or administrative order, the Servicer, on
behalf of the Trust and the Indenture Trustee, may, at any time, institute
repossession or foreclosure proceedings to the extent permitted by law, exercise
any power of sale to the extent permitted by law, obtain a deed in lieu of
foreclosure, or otherwise acquire possession of or title to the related Loan
Collateral, by operation of law or otherwise.
In accordance with the criteria for proceeding against the Loan
Collateral set forth in subsection (a) of this SECTION 4.10, the Servicer shall
institute foreclosure proceedings, repossess, exercise any power of sale to the
extent permitted by law, obtain a deed in lieu of foreclosure or otherwise
acquire possession of or title to any Loan Collateral, by operation of law or
otherwise, only in the event that in the Servicer's reasonable judgment such
action is likely to result in a positive economic benefit to the Trust by
creating net liquidation proceeds (after reimbursement of all amounts owed with
respect to such Loan to the Servicer).
With respect to any Mortgage Loan not covered under the Environmental
Policy, prior to acquiring any Foreclosure Property, however, the Servicer shall
cause a review to be performed, in accordance with the Servicing Standard, on
the related Mortgaged Property by a company such as Equifax, Inc. or Toxicheck,
and the scope of such review shall be limited to the review of public records
and documents for indications that such Mortgaged Property has on it, has under
it, or is near hazardous or toxic material or waste. If such review reveals that
the Mortgaged Property has on it, under it or is near hazardous or toxic
material or waste or reveals any other environmental problem, the Servicer shall
provide a copy to the Indenture Trustee of the related report with an attached
certification of a Responsible Officer that based on an analysis of all
available information (including potential clean up costs and liability claims)
at the time it is the best judgment of such Responsible Officer that such
foreclosure shall increase Net Liquidation Proceeds to the Indenture Trustee and
the Trust shall take title to such Mortgaged Property. The Indenture Trustee
shall promptly forward such report and certification to the Noteholders.
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(c) The Indenture Trustee shall furnish the Servicer, within 5 days
after request of the Servicer therefor, any powers of attorney and other
documents necessary and appropriate to carry out its duties hereunder, including
any documents or powers of attorney necessary to foreclose any Mortgage or
Security Agreement, as the case may be. The forms of any such powers or
documents shall be appended to such requests.
SECTION 4.11 TITLE, MANAGEMENT AND DISPOSITION OF FORECLOSURE
PROPERTY.
In the event that any Loan Collateral becomes a Foreclosure Property,
the deed or certificate of sale shall be taken in the name of the Indenture
Trustee for the benefit of the Securityholders. The Servicer shall manage,
conserve, protect and operate each Foreclosure Property for the Indenture
Trustee and the Securityholders solely for the purpose of the prudent and prompt
disposition and sale of such Foreclosure Property. The Servicer shall, either
itself or through an agent selected by the Servicer, manage, conserve, protect
and operate the Foreclosure Property in the same manner that it manages,
conserves, protects and operates other foreclosure property for its own account.
Subject to SECTION 4.10 hereof, the Servicer shall, consistent with
the Servicing Standard, foreclose upon or otherwise comparably convert the
ownership of Properties securing such of the Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments. In connection with realization upon defaulted Loans, the
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable, as shall be normal and usual in accordance with the Servicing
Standard and as shall meet the requirements of insurers under any insurance
policy required to be maintained hereunder with respect to the related Loan. The
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated herein.
The Servicer shall not be required to make any Servicing Advance, to
foreclose upon or repossess any Loan Collateral, or otherwise expend its own
funds toward the restoration of any Loan Collateral that shall have suffered
damage from any cause of damage to Loan Collateral such that the complete
restoration of such property is not fully reimbursable by the hazard insurance
policies required to be maintained pursuant to this Agreement unless it shall
determine in its reasonable judgment, as evidenced by a certificate of a
Servicing Officer, that such foreclosure or restoration, as the case may be,
will increase the proceeds of liquidation of the related Loan after
reimbursement to itself of Servicing Advances. Any Servicing Advances made with
respect to a Loan shall be recoverable by the Servicer only from recoveries on
such Loan except to the extent such Servicing Advance is deemed a Nonrecoverable
Servicing Advance.
The Servicer may offer to sell to any Person any Foreclosure Property,
if and when the Servicer determines, in a manner consistent with the Servicing
Standard, that such a sale would be in the best interests of the Trust. The
Servicer shall, consistent with the Servicing Standard, use its best efforts to
dispose of any Foreclosure Property acquired under SECTION 4.10 hereof within
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three years of the date of its acquisition on behalf of the Trust. The Servicer
shall give the Indenture Trustee not less than five days' prior notice of its
intention to sell any Foreclosure Property and shall accept the highest bid
received from any Person for any Foreclosure Property in an amount at least
equal to the sum of:
(1) the Principal Balance of the related foreclosed Loan; and
(2) all unpaid interest accrued thereon at the related Loan Interest
Rate through the date of sale.
In the absence of any such bid, the Servicer shall accept the highest
bid received from any Person that is determined to be a fair price for such
Foreclosure Property by the Servicer, if the highest bidder is a Person other
than an Interested Person, or by an Independent appraiser retained by the
Servicer, if the highest bidder is an Interested Person. In the absence of any
bid determined to be fair as aforesaid, the Servicer shall offer the affected
Foreclosure Property for sale to any Person, other than an Interested Person, in
a commercially reasonable manner for a period of not less than 10 or more than
30 days, and shall accept the highest cash bid received therefor in excess of
the highest bid previously submitted. If no such bid is received, any Interested
Person may resubmit its original bid and the Servicer shall accept the highest
outstanding cash bid, regardless of from whom received. No Interested Person
shall be obligated to submit a bid to purchase any Foreclosure Property and,
notwithstanding anything to the contrary herein, neither the Indenture Trustee,
in its individual capacity, nor any of its Affiliates may bid for or purchase
any Foreclosure Property pursuant hereto.
In determining whether any bid constitutes a fair price for any
Foreclosure Property, the Servicer shall take into account, and any appraiser or
other expert in real estate matters shall be instructed to take into account, as
applicable, among other factors, the financial standing of any tenant of the
Foreclosure Property, the physical condition of the Foreclosure Property and the
state of the local and national economies.
Subject to the provisions of SECTION 4.10 hereof, the Servicer shall
act on behalf of the Indenture Trustee in negotiating and taking any other
action necessary or appropriate in connection with the sale of any Foreclosure
Property, including the collection of all amounts payable in connection
therewith. Any sale of a Foreclosure Property shall be without recourse to the
Indenture Trustee, the Servicer or the Trust and, if consummated in accordance
with the terms of this Agreement, neither the Servicer nor the Indenture Trustee
shall have any liability to any Securityholder with respect to the purchase
price therefor accepted by the Servicer or the Indenture Trustee.
The Servicer may contract with any independent contractor for the
operation and management of any Foreclosure Property; provided, however, that:
(i) the terms and conditions of any such contract shall not be
inconsistent with this Agreement;
(ii) any such contract shall require, or shall be administered to
require, that the independent contractor pay all costs and expenses
incurred in connection with the operation and management of such
Foreclosure Property, remit all related revenues (net of such costs and
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expenses) to the Servicer as soon as practicable, but in no event later
than 30 days following the receipt thereof by such independent contractor;
(iii) none of the provisions of this SECTION 4.11 relating to any such
contract or to actions taken through any such independent contractor shall
be deemed to relieve the Servicer of any of its duties and obligations
hereunder with respect to the operation and management of any such
Foreclosure Property; and
(iv) the Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such Foreclosure Property.
The Servicer shall be entitled to enter into any agreement with any
independent contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such
independent contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Servicer shall not be liable for
any fees owed by it to any such independent contractor and any amounts so
expended shall be deemed Servicing Advances. Each liquidation of a
Foreclosure Property shall be carried by the Servicer at such price and
upon such terms and conditions as the Servicer shall deem necessary or
advisable and as shall be normal and usual in its several servicing
activities, and the resulting Net Liquidation Proceeds shall be deposited
into the Collection Account pursuant to SECTION 5.01(b)(1) hereof.
SECTION 4.12 COMPLIANCE WITH REQUEST FOR INFORMATION.
The Servicer shall provide to the Indenture Trustee, upon its request,
information regarding the Notes and the Loans and such other information as the
Indenture Trustee shall be required to deliver to any Noteholder and any
prospective transferee designated by a Noteholder to satisfy a condition of
eligibility set forth under Rule 144A(d)(4) under the Securities Act of 1933, as
amended.
SECTION 4.13 LOCKBOX TRIGGER EVENT; LOCKBOX ACCOUNT.
In the event of the occurrence of a Lockbox Trigger Event:
(a) The Servicer, Depositor and Issuer shall each promptly execute and
deliver the Lockbox Agreement.
(b) The Servicer shall promptly cause Borrowers to make all payments
on the Loans (including, without limitation, Escrow Payments), irrespective of
method of payment, directly to the Lockbox Bank pursuant to the Lockbox
Agreement. Amounts received by a Lockbox Bank in respect of the Loans may
initially be deposited into a demand deposit account maintained by the Lockbox
Bank for the benefit of the Indenture Trustee, as secured party on behalf of the
Noteholders. The Lockbox Agreement shall require the Lockbox Bank to deposit all
payments on the Loans in the Lockbox Account no later than the Business Day
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after receipt, and to cause all amounts credited to the Lockbox Account on
account of such payments to be transferred to the Collection Account or Escrow
Account, as the case may be, in accordance with the written instructions of the
Servicer, no later than the second Business Day after receipt of such payments.
The Servicer shall pay all fees and costs incurred connection with the entering
into of the Lockbox Agreement, the establishment of the Lockbox Account and the
administration of the provisions of the Lockbox Agreement.
SECTION 4.14 VALUATION OF LOANS, HEDGE VALUE AND RETAINED SECURITIES
VALUE; MARKET VALUE AGENT.
(a) The Loan Originator hereby irrevocably appoints the Market Value
Agent to determine the Market Value of each Loan, the Hedge Value of each
Hedging Instrument and the Retained Securities Value of all Retained Securities.
(b) The Market Value Agent shall determine the Market Value of each
Loan in its reasonable judgment. In determining the Market Value of each Loan,
the Market Value Agent may consider any information that it may deem relevant
and may base such determination solely on its estimate of the projected proceeds
from such Loan's inclusion in a Securitization and the projected Retained
Securities Value of any Retained Securities to be issued in connection with such
Securitization, net of such Loan's ratable share of all costs and fees
associated with such Securitization, including, without limitation the costs of
issuance, underwriting and funding reserve accounts. The Market Value Agent's
determination, in its reasonable judgment, of Market Value shall be conclusive
and binding upon the parties hereto.
(c) On each Business Day the Market Value Agent shall determine in its
reasonable judgment the Hedge Value of each Hedging Instrument as of such
Business Day. In making such determination the Market Value Agent may rely
exclusively on quotations provided by the Hedging Counterparty, by leading
dealers in instruments similar to such Hedging Instrument, which leading dealers
may include the Market Value Agent and its Affiliates and such other sources of
information as the Market Value Agent may deem appropriate.
(d) On each Business Day, the Market Value Agent shall determine in
its reasonable judgment the Retained Securities Value of the Retained
Securities, if any, expected to be issued pursuant to such Securitization as of
the closing date of such Securitization. In making such determination the Market
Value Agent may rely exclusively on quotations provided by leading dealers in
instruments similar to such Retained Securities, which leading dealers may
include the Market Value Agent and its Affiliates and such other sources of
information as the Market Value Agent may deem appropriate.
ARTICLE V
ESTABLISHMENT OF TRUST ACCOUNTS
SECTION 5.01 COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT .
(a) (1) ESTABLISHMENT OF COLLECTION ACCOUNT. The Servicer, for the benefit
of the Securityholders, shall cause to be established and maintained one or
more Collection Accounts (collectively, the "COLLECTION ACCOUNT"), which
shall be separate Eligible Accounts entitled "Collection Account, LaSalle
National Bank, as Indenture Trustee, in trust for the FFCA Franchise Loan
Backed Notes, Series 1998-1". The Collection Account may be maintained with
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the Indenture Trustee or any other depository institution which satisfies
the requirements set forth in the definition of Eligible Account. The
creation of any Collection Account other than one maintained with the
Indenture Trustee shall be evidenced by a letter agreement between the
Servicer and the depository institution acceptable to the Majority
Noteholders. A copy of such letter agreement shall be furnished to the
Majority Noteholders and the Indenture Trustee and, upon request of any
Securityholder, to such Securityholder. Funds in the Collection Account
shall be invested in accordance with SECTION 5.03 hereof.
The Collection Account shall be established, as of the date hereof, as
an Eligible Account pursuant to the definition thereof. The Collection
Account may, upon written notice to the Issuer and the Indenture Trustee,
be transferred by the Servicer to a different depository institution so
long as such transfer is to an Eligible Account acceptable to the Majority
Noteholders.
(2) ESTABLISHMENT OF DISTRIBUTION ACCOUNT. No later than the date
hereof, the Servicer, for the benefit of the Noteholders, shall cause to be
established and maintained with LaSalle National Bank one or more
Distribution Accounts (collectively, the "Distribution Account"), which
shall be separate Eligible Accounts and may be interest bearing, entitled
"Distribution Account, LaSalle National Bank, as Indenture Trustee, in
trust for the FFCA Franchise Loan Backed Notes, Series 1998-1." Funds in
the Distribution Account shall not be invested.
(b) (1) DEPOSITS TO COLLECTION ACCOUNT. The Servicer shall deposit or cause
to be deposited (without duplication), within two (2) Business Days after
receipt thereof, into the Collection Account and retain therein in trust
for the benefit of the Securityholders:
(i) all payments on or in respect of each Loan conveyed pursuant to
SECTION 2.01(a)(iii) hereof;
(ii) all Net Liquidation Proceeds pursuant to SECTION 4.11 hereof;
(iii) all Insurance Proceeds not required to be applied to restoration
or repair of Loan Collateral pursuant to SECTION 4.05;
(iv) all Released Loan Collateral Proceeds;
(v) any amounts payable in connection with the repurchase of any
Loan and the amount of any Substitution Adjustment pursuant to
SECTIONS 2.05 and 3.05 hereof;
(vi) any Purchase Price payable in connection with a Servicer Call
pursuant to SECTION 3.07 hereof;
(vii) the deposit of the Termination Price under SECTION 11.01 hereof;
(viii) any Periodic Advances pursuant to SECTION 4.09;
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(ix) any cash Securitization Proceeds pursuant to SECTION 3.06; and
(x) any payments received under Hedging Instruments or the return of
amounts by the Hedging Counterparty pledged pursuant to prior
Hedge Funding Requirements;
(xi) all proceeds paid under the Environmental Policy and not
retained by the Servicer in connection with remediation of
Mortgaged Properties pursuant to SECTION 3.09 hereof; and
(xii) any Purchase Price payable in connection with a Loan Originator
Put remitted by the Loan Originator pursuant to SECTION 3.07
hereof.
(c) WITHDRAWALS FROM COLLECTION ACCOUNT; DEPOSITS TO DISTRIBUTION
ACCOUNT.
(1) WITHDRAWALS FROM COLLECTION ACCOUNT -- REIMBURSEMENT ITEMS.
Periodically, the Indenture Trustee (except as may be otherwise provided in
writing by the Collection Account Letter Agreement), at the direction of
the Servicer, shall make the following withdrawals from the Collection
Account prior to any other withdrawals, in no particular order of priority:
(i) to withdraw any amount not required to be deposited in the
Collection Account or deposited therein in error;
(ii) to withdraw the Servicing Advance Reimbursement Amount;
(iii) to clear and terminate the Collection Account in connection with
the termination of this Agreement;
(iv) to reimburse the Servicer for any Nonrecoverable Periodic
Advances;
(v) to make the payments set forth in SECTION 9.01(e) hereof;
(vi) to make any payments in respect of Servicer indemnities pursuant
to SECTION 9.01(f) hereof;
(vii) to pay to the Loan Originator any Retained Interest actually
received with respect to the related Loan; and
(viii) to reimburse the Servicer for unreimbursed Periodic Advances,
the Servicer's right to reimburse itself, pursuant to this
clause (viii) with respect to any Periodic Advance (other than
Nonrecoverable Advances, which are reimbursable pursuant to
clause (iv) above) being limited to amounts that represent
collections of interest (net of any related Retained Interest)
and principal received in respect of the particular Loan as to
which such Periodic Advance was made;
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(2) INDENTURE TRUSTEE DEPOSITS TO DISTRIBUTION ACCOUNT - PAYMENT
DATES. (a) On the Business Day prior to each Payment Date, the Indenture
Trustee shall deposit into the Distribution Account such amounts as are
required from the Transfer Obligation Account pursuant to SECTION 5.05(e),
5.05(f) and 5.05(g).
(b) After making all withdrawals specified in SECTION 5.01(c)(1)
above, on the Business Day prior to each Payment Date, the Indenture
Trustee, except as may be otherwise provided in the Collection Account
Letter Agreement, (based on information provided by the Servicer for such
Payment Date) shall withdraw from the Collection Account not later than
2:00 p.m. Phoenix, Arizona time and deposit into the Distribution Account
all remaining funds on deposit therein, provided that on or after any date
on which the long term senior unsecured debt of the Servicer is unrated or
rated at or below "BB" by Standard & Poor's Ratings Group, the Indenture
Trustee, except as may be otherwise provided in the Collection Account
Letter Agreement, shall make such withdrawal of remaining amounts from the
Collection Account on every other Business Day and deposit such funds in
the Distribution Account.
(3) WITHDRAWALS FROM DISTRIBUTION ACCOUNT -- PAYMENT DATES. On each
Payment Date, to the extent funds are available in the Distribution
Account, the Indenture Trustee (based on the information provided by the
Servicer contained in the Servicer's Remittance Report for such Payment
Date) shall make withdrawals therefrom by 3:00 p.m. (New York City time),
for application in the following order of priority:
(i) to distribute on such Payment Date the following amounts pursuant
to the Indenture in the following order: (a) to the Indenture
Trustee, an amount equal to the Indenture Trustee Fee and all
unpaid Indenture Trustee Fees from prior Payment Dates, (b) to
the Custodian, an amount equal to the Custodian Fee, if any, and
all unpaid Custodian Fees from prior Payment Dates, (c) to the
Servicer, (x) only if Servicer is not FFCA or any Affiliate
thereof, an amount equal to the Servicing Compensation and all
unpaid Servicing Compensation from prior Payment Dates and (y)
all Nonrecoverable Servicing Advances not previously reimbursed,
(d) to the Servicer, in trust for the Owner Trustee, an amount
equal to the Owner Trustee Fee and all unpaid Owner Trustee Fees
from prior Payment Dates, and;
(ii) to distribute on such Payment Date, the Hedge Funding Requirement
to the appropriate Hedging Counterparties; provided, that only
cash on or in respect of fixed rate Loans (including cash
Securitization Proceeds received therefrom) shall be distributed
for such purpose and; provided, further, that amounts distributed
pursuant to clause (i) above to the extent not attributable to a
specific Loan shall be deemed paid from Loans bearing a fixed
Loan Interest Rate, pro rata based on their aggregate Principal
Balances relative to the Pool Principal Balance on such Payment
Date;
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(iii) to the holders of the Notes pro rata, the sum of the Interest
Payment Amount for such Payment Date and the Interest
Carry-Forward Amount for the preceding Payment Date;
(iv) to the holders of the Notes pro rata, the sum of the Optimal
Principal Payment Amount for such Payment Date and the Principal
Carry-Forward Amount for the preceding Payment Date; provided,
however, that if (a) a Rapid Amortization Trigger shall have
occurred and not been Deemed Cured or (b) an Event of Default or
Default under this Agreement or the Indenture shall have
occurred, the holders of the Notes shall receive, in respect of
principal, all remaining amounts on deposit in the Collection
Account.
(v) to the Servicer if the Servicer is the Loan Originator or an
Affiliate thereof, an amount equal to the Servicing Compensation
for the related Payment Date and all unpaid Servicing
Compensation from prior Payment Dates;
(vi) to the Transfer Obligation Account, all remaining amounts until
the balance therein equals the Transfer Obligation Target Amount;
(vii) to each Indemnified Party (as defined in the Trust Agreement)
until all amounts due and owing under Issuer/Depositor
Indemnities (as defined in the Trust Agreement) are paid in full;
and
(viii) to the holders of the Trust Certificates of record on the next
preceding Record Date, pro rata, all amounts remaining therein.
The Majority Noteholders and the Issuer may agree, upon written notice
to the Indenture Trustee, to additional Payment Dates. In addition, there shall
be an additional Payment Date on (i) any day which Securitization Proceeds,
Purchase Prices or proceeds in respect of Put/Call Loans are deposited into the
Collection Account on or before 2 p.m. Phoenix, Arizona time, and (ii) the
Business Day after any day on which Securitization Proceeds, Purchase Prices or
proceeds in respect of Put/Call Loans are deposited into the Collection Account
after 2 p.m. Phoenix, Arizona time. The Issuer and the Majority Noteholders
shall give the Indenture Trustee at least one (1) Business Day's written notice
prior to such additional Payment Date and such notice shall specify each amount
in SECTION 5.01(c) to be withdrawn from the Collection Account and Distribution
Account on such day or shall otherwise specify the Persons and respective
amounts to whom such payments shall be made, with instructions for wiring funds
or mailing checks to such Persons.
Notwithstanding that the Notes have been paid in full, the
Indenture Trustee and the Servicer shall continue to maintain the Distribution
Account hereunder until this Agreement has been terminated.
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SECTION 5.02 PAYMENTS TO SECURITYHOLDERS.
(a) All distributions made on the Notes on each Payment Date will be
made on a pro rata basis among the Noteholders of record of the Notes on the
next preceding Record Date based on the Percentage Interest represented by their
respective Notes, without preference or priority of any kind, and, except as
otherwise provided in the next succeeding sentence, shall be made by wire
transfer of immediately available funds to the account of such Noteholder, if
such Noteholder shall own of record Notes in original Denominations aggregating
at least $250,000 and shall have so notified the Indenture Trustee, and
otherwise by check mailed to the address of such Noteholder appearing in the
Notes Register. The final distribution on each Note will be made in like manner,
but only upon presentment and surrender of such Note at the location specified
in the notice to Noteholders of such final distribution.
(b) All distributions made on the Trust Certificates on each Payment
Date will be made pro rata among the holders of the Trust Certificates of record
on the next preceding Record Date based on their Percentage Interests (as
defined in the Trust Agreement), without preference or priority of any kind,
and, except as otherwise provided in the next succeeding sentence, shall be made
by wire transfer of immediately available funds to the account of each such
holder, if such holder shall own of record a Trust Certificate in an original
denomination aggregating at least 50% of the Percentage Interests (as defined in
the Trust Agreement) and shall have so notified the Indenture Trustee, and
otherwise by check mailed to the address of such Certificateholder appearing in
the Certificate Register. The final distribution on each Trust Certificate will
be made in like manner, but only upon presentment and surrender of such Trust
Certificate at the location specified in the notice to holders of the Trust
Certificates of such final distribution. Any amount distributed to the holders
of the Trust Certificates on any Payment Date shall not be subject to any claim
or interest of the Noteholders. In the event that at any time there shall be
more than one Certificateholder, the Indenture Trustee shall be entitled to
reasonable additional compensation from the Servicer for its obligations
hereunder, including, without limitation, its obligations to distribute funds
and produce and deliver statements.
(c) For purposes of this SECTION 5.02, the sole holder of the Trust
Certificates shall be deemed to be the Depositor until such time as the
Depositor provides written notice to the contrary to the Indenture Trustee and
the Initial Noteholder.
SECTION 5.03 TRUST ACCOUNTS; TRUST ACCOUNT PROPERTY.
(a) CONTROL OF TRUST ACCOUNTS. Each of the Trust Accounts established
hereunder has been pledged by the Issuer to the Indenture Trustee under the
Indenture and shall be subject to the lien of the Indenture. In addition to the
provisions hereunder, each of the Trust Accounts shall also be established and
maintained pursuant to the Indenture. Amounts distributed from each Trust
Account in accordance with the Indenture and this Agreement shall be released
from the lien of the Indenture upon such distribution thereunder or hereunder.
The Indenture Trustee shall possess all right, title and interest in and to all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (including all income thereon) and all such funds, investments, proceeds
and income shall be part of the Trust Account Property and the Trust Estate. If,
at any time, any Trust Account ceases to be an Eligible Account, the Indenture
Trustee (or the Servicer on its behalf) shall, within ten Business Days (or such
longer period, not to exceed 30 calendar days, with the prior written consent of
the Majority Noteholders) (i) establish a new Trust Account as an Eligible
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Account, (ii) terminate the ineligible Trust Account, and (iii) transfer any
cash and investments from such ineligible Trust Account to such new Trust
Account.
Except as may be otherwise provided in the Collection Account Letter
Agreement, with respect to the Trust Accounts, the Indenture Trustee agrees, by
its acceptance hereof, that each such Trust Account shall be subject to the sole
and exclusive custody and control of the Indenture Trustee for the benefit of
the Noteholders, and, except as may be otherwise provided in the Collection
Account Letter Agreement or as may be consented to in writing by the Majority
Noteholders, the Indenture Trustee shall have sole signature and withdrawal
authority with respect thereto.
The Servicer shall have the power, revocable by the Majority
Noteholder or by the Owner Trustee with the consent of the Indenture Trustee, to
instruct the Indenture Trustee or Owner Trustee to make withdrawals and payments
from the Trust Accounts for the purpose of permitting the Servicer to carry out
its duties hereunder or permitting the Indenture Trustee or Owner Trustee to
carry out their respective duties herein or under the Indenture or the Trust
Agreement, as applicable.
(b) (1) INVESTMENT OF FUNDS. Funds held in the Collection Account and
the Transfer Obligation Account may be invested (to the extent practicable and
consistent with any requirements of the Code) in Permitted Investments, as
directed by the Servicer prior to the occurrence and continuation of an Event of
Default, and by the Majority Noteholders thereafter, in writing or by telephone
or facsimile transmission confirmed in writing by the Loan Originator or
Majority Noteholders, as applicable. In any case, funds in the Collection
Account and the Transfer Obligation Account must be available for withdrawal
without penalty, and any Permitted Investments must mature or otherwise be
available for withdrawal, not later than the Business Day following the date of
such investment and, in any event one Business Day prior to the next Payment
Date and shall not be sold or disposed of prior to its maturity subject to
subsection (b)(2) of this Section. All interest and any other investment
earnings on amounts or investments held in the Collection Account and the
Transfer Obligation Account shall be deposited into the Collection Account or
the Transfer Obligation Account, as the case may be, immediately upon receipt by
the Indenture Trustee. All Permitted Investments in which funds in the
Collection Account or the Transfer Obligation Account are invested must be held
by or registered in the name of "LaSalle National Bank, as Indenture Trustee, in
trust for the FFCA Franchise Loan Backed Notes, Series 1998-1".
(2) INSUFFICIENCY AND LOSSES IN TRUST ACCOUNTS. If any amounts are
needed for disbursement from the Collection Account or the Transfer Obligation
Account held by or on behalf of the Indenture Trustee and sufficient uninvested
funds are not available to make such disbursement, the Indenture Trustee (or the
Servicer, as applicable) shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in the Collection Account or the Transfer
Obligation Account, as the case may be. The Indenture Trustee shall not be
liable for any investment loss or other charge resulting therefrom, unless such
loss or charge is caused by the failure of the Indenture Trustee to perform in
accordance with written directions provided pursuant to this SECTION 5.03.
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If any losses are realized in connection with any investment in the
Collection Account or the Transfer Obligation Account pursuant to this Agreement
and the Indenture, then the Loan Originator shall deposit the amount of such
losses (to the extent not offset by income from other investments in the
Collection Account or the Transfer Obligation Account, as the case may be) into
the Collection Account or the Transfer Obligation Trust Account, as the case may
be, immediately upon the realization of such loss. All interest and any other
investment earnings on amounts held in the Collection Account and the Transfer
Obligation Account shall be taxed to the Issuer and for federal and state income
tax purposes the Issuer shall be deemed to be the owner of the Collection
Account and/or the Transfer Obligation Account, as the case may be.
(c) Subject to Section 6.01 of the Indenture, the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency in any Trust
Account held by the Indenture Trustee resulting from any investment loss on any
Permitted Investment included therein (except to the extent that the Indenture
Trustee is an obligor and has defaulted thereon).
(d) With respect to the Trust Account Property, the Indenture Trustee
acknowledges and agrees that:
(1) any Trust Account Property that is held in deposit accounts shall
be held solely in the Eligible Accounts, subject to the last sentence of
subsection (a) of this SECTION 5.03; and, except as may be otherwise provided in
the Collection Account Letter Agreement, each such Eligible Account shall be
subject to the sole and exclusive dominion, custody and control of the Indenture
Trustee; and, without limitation on the foregoing, except as may be otherwise
provided in the Collection Account Letter Agreement, the Indenture Trustee shall
have sole signature authority with respect thereto;
(2) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph (a) of
the definition of "Delivery" in SECTION 1.01 hereof and shall be held, pending
maturity or disposition, solely by the Indenture Trustee or a securities
intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) acting
solely for the Indenture Trustee;
(3) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph (b) of the definition of
"Delivery" in SECTION 1.01 hereof and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such paragraph; and
(4) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (3) above shall be
delivered to the Indenture Trustee in accordance with paragraph (c) of the
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definition of "Delivery" in SECTION 1.01 hereof and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominee's) ownership of such
security.
(e) The Servicer shall have the power, revocable by the Majority
Noteholders or by the Issuer with the consent of the Majority Noteholders, to
instruct the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer or the Issuer to carry out
their respective duties hereunder or permitting the Indenture Trustee to carry
out its duties under the Indenture.
SECTION 5.04 ADVANCE ACCOUNT.
(a) The Servicer shall cause to be established and maintained in its
name, an Advance Account (the "ADVANCE ACCOUNT"), which need not be a segregated
account. The Advance Account shall be maintained with any financial institution
the Servicer elects.
(b) DEPOSITS AND WITHDRAWALS. Amounts in respect of the purchase of
Additional Note Principal Balances and Loans shall be deposited in and withdrawn
from the Advance Account as provided in SECTIONS 2.01(c) and 2.06 hereof,
Section 3.01 of the Note Purchase Agreement and Section 2.1 of the Loan Purchase
Agreement.
SECTION 5.05 TRANSFER OBLIGATION; TRANSFER OBLIGATION ACCOUNT.
(a) The Servicer, for the benefit of the Noteholders, shall cause to
be established and maintained in the name of the Indenture Trustee a Transfer
Obligation Account (the "TRANSFER OBLIGATION Account"), which shall be a
separate Eligible Account and may be interest-bearing, entitled "Transfer
Obligation Account, LaSalle National Bank, as Indenture Trustee, in trust for
the FFCA Franchise Loan Backed Notes, Series 1998-1." The Transfer Obligation
Account may be maintained with the Indenture Trustee or any other depository
institution which satisfies the requirements set forth in the definition of
Eligible Account. The establishment of a Transfer Obligation Account with a
depositary institution other than the Indenture Trustee shall be evidenced by a
letter agreement between the Servicer and such depository institution acceptable
to the Indenture Trustee. A copy of such letter agreement shall be furnished to
the Indenture Trustee and, upon request of any Securityholder, to such
Securityholder. Amounts in the Transfer Obligation Account shall be invested in
accordance with SECTION 5.03.
(b) In accordance with Section 2.3(b) of the Loan Purchase Agreement,
the Loan Originator shall deposit into the Transfer Obligation Account such
amounts as may be required thereby.
(c) On each Payment Date, the Indenture Trustee will deposit in the
Transfer Obligation Account any amounts required to be deposited therein
pursuant to SECTION 5.01(c)(3)(vi).
(d) On the date of each Securitization, the Indenture Trustee shall
withdraw from the Transfer Obligation Account such amount on deposit therein as
may be requested by the Majority Noteholders in writing to effect such
Securitization.
(e) On each Payment Date, the Indenture Trustee, upon the written
direction of the Servicer shall withdraw from the Transfer Obligation Account
and deposit into the Distribution Account on such Payment Date the lesser of (x)
the amount then on deposit in the Transfer Obligation Account and (y) the
Interest Carry-Forward Amount as of such date.
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(f) If with respect to any Payment Date the Overcollateralization
Shortfall exceeds the greater of (x) 1% of the aggregate Principal Balance of
all Loans as of the prior Business Day and (y) $250,000, the Indenture Trustee,
upon the written direction of the Servicer shall withdraw from the Transfer
Obligation Account and deposit into the Distribution Account on the Business Day
prior to such Payment Date the lesser of the amount then on deposit in the
Transfer Obligation Account and the amount of such Overcollateralization
Shortfall as of such date.
(g) If with respect to any Payment Date there shall exist a Hedge
Funding Requirement, the Indenture Trustee, upon the written direction of the
Servicer shall withdraw from the Transfer Obligation Account and deposit into
the Distribution Account on the Business Day prior to such Payment Date the
lesser of (x) the amount then on deposit in the Transfer Obligation Account
(after making all other required withdrawals therefrom with respect to such
Payment Date) and (y) the amount of such Hedge Funding Requirement as of such
date.
(h) In the event of the occurrence of an Event of Default under the
Indenture, the Indenture Trustee shall withdraw all remaining funds from the
Transfer Obligation Account and apply such funds in satisfaction of the Notes as
provided in Section 5.04(b) of the Indenture.
(i) Upon the date of the termination of this Agreement pursuant to
Article XI, the Indenture Trustee, at the written direction of the Loan
Originator, shall withdraw any remaining amounts from the Transfer Obligation
Account and remit all such amounts to the Loan Originator.
(j) The Indenture Trustee shall (i) at the direction of the Majority
Noteholders, return to the Loan Originator in the manner specified to the
Indenture Trustee by the Majority Noteholders in such direction all amounts
deposited in the Transfer Obligation Account by the Loan Originator in
connection therewith pursuant to Section 2.3(b)(v) of the Loan Purchase
Agreement, in the event that an Event of Default is waived by the Noteholders
and (ii) return to the Loan Originator at the written direction of the Servicer,
all amounts on deposit in the Transfer Obligation Account until the Majority
Noteholders provide written notice to the Indenture Trustee (with a copy to the
Loan Originator) of the occurrence of a default or event of default (however
defined) under any Basic Document with respect to the Issuer, FFCA or the
Depositor.
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
SECTION 6.01 STATEMENTS.
(a) On each Determination Date, the Servicer shall deliver to the
Indenture Trustee and the Initial Noteholder by facsimile, the receipt and
legibility of which shall be confirmed by telephone, and with hard copy thereof
to be delivered no later than one (1) Business Day after such Determination
Date, the Servicer's Remittance Report, setting forth the date of such Report
(day, month and year), the name of the Issuer (i.e., "FFCA Franchise Loan Owner
Trust 1998-1"), the Series designation of the Notes (i.e., "Series 1998-1") and
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the date of this Agreement, all in substantially the form set out in Exhibit B
hereto. Furthermore, on each Determination Date, the Servicer shall deliver to
the Indenture Trustee and the Initial Noteholder a magnetic tape or computer
disk providing, with respect to each Loan in the Loan Pool as of such
Determination Date: (i) the Loan Originator's internal loan identifying number;
(ii) if such Loan is an Adjustable Rate Loan, the current Loan Interest Rate;
(iii) the current Principal Balance with respect to such Loan; (iv) the date of
the last Monthly Payment paid in full; (v) the Corporate Fixed Charge Coverage
Ratio; (vi) with respect to the Unit-Level Fixed Charge Coverage Ratio, a flag
indicating whether such figure is a calculation of the Unit-Level Fixed Charge
Coverage Ratio with respect to the single unit or in the aggregate (if updated
from information provided in the Loan Schedule); (vii) the Corporate FCCR
Percentage; and (viii) such other information as may be reasonably requested by
the Majority Noteholders.
(b) (i) On any Business Day, upon the request of the Initial
Noteholder, the Servicer shall prepare and provide a statement setting forth the
following information as of the close of business on the prior Business Day:
(a) for each Loan with respect to which a Servicing Advance or
Periodic Advance is outstanding, (i) the aggregate amount of
Servicing Advances outstanding, (ii) the aggregate amount of
Periodic Advances outstanding and (iii) the outstanding Principal
Balance of such Loan; and
(b) the Pool Principal Balance.
(ii) On each Determination Date, the Servicer shall prepare and
provide to the Indenture Trustee for distribution to the Issuer, the Initial
Noteholder and each Certificateholder, a statement (the "PAYMENT STATEMENT"),
stating each date of a purchase of Additional Note Principal Balance (day, month
and year), the name of the Issuer (i.e., "FFCA Franchise Loan Owner Trust
1998-1"), the Series designation of the Notes (i.e., "Series 1998-1"), the date
of this Agreement and the following information:
(a) the aggregate amount of collections in respect of principal of
the Loans received by the Servicer during the preceding Due
Period;
(b) the aggregate amount of collections in respect of interest on the
Loans received by the Servicer during the preceding Due Period;
(c) all Insurance Proceeds received by the Servicer and not required
to be applied to restoration or repair of the related Loan
Collateral during the preceding Due Period;
(d) all Net Liquidation Proceeds deposited by the Servicer into the
Collection Account during the preceding Due Period;
(e) all Released Loan Collateral Proceeds deposited by the Servicer
into the Collection Account during the preceding Due Period;
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(f) the aggregate amount of all Periodic Advances and all Servicing
Advances, set forth separately, made by the Servicer during the
preceding Due Period;
(g) the aggregate of all amounts deposited into the Collection
Account in respect of the repurchase of Defective Loans and the
repurchase of Loans pursuant to SECTION 2.05 hereof during the
preceding Due Period;
(h) the aggregate Principal Balance of all Loans for which a Servicer
Call was exercised during the preceding Due Period;
(i) the aggregate Principal Balance of all Loans for which a Loan
Originator Put was exercised during the preceding Due Period;
(j) the aggregate amount of all payments received under Hedging
Instruments during the preceding Due Period;
(k) the aggregate amount of proceeds received in respect of the
Environmental Policy during the preceding Due Period;
(l) when applicable, the aggregate amount of cash Securitization
Proceeds received during the preceding Due Period;
(m) withdrawals from the Collection Account in respect of the
Servicing Advance Reimbursement Amount during the preceding Due
Period;
(n) withdrawals from the Collection Account in respect of
Nonrecoverable Periodic Advances during the preceding Due Period;
(o) the number and aggregate Principal Balance of all Loans that are
(i) 30-59 days Delinquent, (ii) 60-89 days Delinquent, (iii) 90
or more days Delinquent as of the related Payment Date;
(p) the aggregate amount of Liquidated Loan Losses incurred (i)
during the preceding Due Period, (ii) during the preceding three
Due Periods and (iii) since the Reset Date;
(q) the aggregate of the Principal Balances of all Loans in the Loan
Pool as of the related Payment Date; and
(r) the aggregate amount of all withdrawals from the Collection
Account pursuant to SECTION 5.01(c)(1)(i) hereof during the
preceding Due Period.
(iii) On the Business Day following each Business Day on which money
is deposited into the Collection Account, the Servicer shall cause to be
delivered to the Initial Noteholder by facsimile, the receipt and legibility of
which shall be confirmed by telephone, a statement setting forth the total
deposits into the Collection Account on the prior Business Day and the balance
in the Collection Account as of the close of business on the prior Business Day.
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(c) On each Determination Date, the Indenture Trustee shall deliver to
the Initial Noteholder a magnetic tape or computer disk in a form mutually
agreed the Initial Noteholder and the Indenture Trustee, setting forth the
following information:
(a) the aggregate amount of all deposits into the Distribution
Account from the Transfer Obligation Account pursuant to SECTION
5.05(e), 5.05(f) and 5.05(g) on the preceding payment Date;
(c) if the Servicer is not FFCA or an Affiliate thereof, the
aggregate amount of distributions in respect of Servicing
Compensation to the Servicer, and unpaid Servicing Compensation
from prior Payment Dates for the related Payment Date;
(d) the aggregate amount of distributions in respect of Indenture
Trustee Fees and unpaid Indenture Trustee Fees from prior Payment
Dates for the related payment Date;
(e) the aggregate amount of distributions in respect of Owner Trustee
Fees and unpaid Owner Trustee Fees from prior Payments Dates for
the related Payment Date;
(f) the aggregate amount of distributions in respect of the Custodian
Fee and unpaid Custodian Fees from prior Payment Dates for the
related Payment Date;
(g) if a Rapid Amortization Trigger shall have occurred and not been
Deemed Cured or a Default or Event of Default shall have occurred
hereunder or under the Indenture, the aggregate amount of
distributions on the Notes in respect of principal in excess of
the Optimal Principal Payment Amount and the Principal
Carry-Forward Amount for the related Payment Date;
(h) the aggregate amount of distributions in respect of Servicing
Compensation and unpaid Servicing Compensation from prior Payment
Dates, to the Servicer, if FFCA or an Affiliate thereof is the
Servicer, for the related Payment Date;
(i) the aggregate amount of distributions to the Transfer Obligation
Account for the related Payment Date;
(j) the aggregate amount of distributions in respect of
Issuer/Depositor Indemnities (as defined in the Trust Agreement)
for the related Payment Date;
(k) the aggregate amount of distributions to the holders of the Trust
Certificates for the related Payment Date; and
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(l) the Note Principal Balance of the Notes before and after giving
effect to distributions made to the holders of the Notes for the
related Payment Date.
All reports prepared by the Indenture Trustee of the withdrawals from
and deposits into the Collection Account will be based in whole or in part upon
the information provided to the Indenture Trustee by the Servicer, and the
Indenture Trustee may fully rely upon and shall have no liability with respect
to such information provided by the Servicer.
(d) On each Payment Date, the Indenture Trustee shall forward to the
holders of the Trust Certificates a copy of the Payment Statement in respect of
such Payment Date and a statement setting forth the amounts actually distributed
to such holders of the Trust Certificates on such Payment Date, together with
such other information as the Indenture Trustee deems necessary or appropriate.
SECTION 6.02 SPECIFICATION OF CERTAIN TAX MATTERS.
The Indenture Trustee shall comply with all requirements of the Code
and applicable state and local law with respect to the withholding from any
distributions made to any Noteholder of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith, giving due effect to any applicable exemptions from such withholding
and effective certifications or forms provided by the recipient. Any amounts
withheld pursuant to this SECTION 6.02 shall be deemed to have been distributed
to the Noteholders, as the case may be, for all purposes of this Agreement or
the Indenture.
ARTICLE VII
GENERAL SERVICING PROCEDURE
SECTION 7.01 DUE-ON-SALE; DUE-ON-ENCUMBRANCE.
(a) When any Borrower proposes to convey all or any portion of its
interests in Loan Collateral, or if such a conveyance has actually occurred, the
Servicer shall immediately give notice to the Initial Noteholder of such
conveyance and shall enforce any due-on-sale clause or due-on-encumbrance clause
contained in any Promissory Note or Mortgage or Security Agreement, to the
extent permitted under the terms of the Loan and applicable law and governmental
regulations. In the event that the Servicer determines, in accordance with the
Servicing Standard, that waiver of such clauses would be in accordance with the
Servicing Standard, the Servicer shall promptly give written notice to the
Majority Noteholders of its approval of any such subordinate lien. If a Borrower
applies for approval to place a subordinate monetary lien on Loan Collateral in
accordance with the terms of the Loan Documents, the Servicer shall promptly
give written notice to the Majority Noteholders of the requested encumbrance and
obtain and deliver to the Majority Noteholders such appraisals and other
supporting documentation as are required by the terms of the Loan Documents
together with such additional information as the Majority Noteholders shall
request to facilitate review and approval of the requested encumbrance. In the
event that the Servicer determines, in accordance with the Servicing Standard,
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that permitting such subordinate lien would be in accordance with the Servicing
Standard, the Servicer may consent to such lien and shall promptly give written
notice to the Majority Noteholders thereof. Any processing fees paid by a
Borrower in connection with an application for a subordinate monetary lien (net
of any fees and expenses of the Majority Noteholders including the Majority
Noteholders' counsel's fees and expenses) shall be retained by the Servicer as
Servicing Compensation. The Servicer shall not approve any request to
subordinate the lien of any Mortgage Loan to any other lien.
(b) If any Loan Collateral is to be conveyed to a Person by a
Borrower, and such Person is to enter into an assumption agreement or supplement
to the Promissory Note or Mortgage or Security Agreement which requires the
signature of the Indenture Trustee, or if an instrument of release signed by the
Indenture Trustee is required releasing the Borrower from liability on the Loan,
the Servicer shall deliver or cause to be delivered to the Majority Noteholders
for review, and upon the written approval thereof, to the Indenture Trustee for
signature the assumption agreement with the Person to whom the Loan Collateral
is to be conveyed and such modification agreement or supplement to the
Promissory Note or Mortgage or Security Agreement or other instruments as are
reasonable or necessary to carry out the terms of the Promissory Note or
Mortgage or Security Agreement or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Loan Collateral to such Person. The
Servicer shall also deliver or cause to be delivered to the Majority Noteholders
with the foregoing documents a letter explaining the nature of such documents
and the reason or reasons why the Indenture Trustee's signature is required.
With such letter the Servicer shall deliver to the Majority Noteholders and the
Indenture Trustee a certificate of a servicing officer certifying that: (i) a
Servicing Officer has examined and approved such documents as to form and
substance, (ii) the Indenture Trustee's execution and delivery thereof will not
conflict with or violate any terms of this Agreement (iii) any required consents
of insurers under any insurance policies required by this Agreement have been
obtained, (iv) there are no changes or modifications other than the identity of
the Borrower other than those previously approved in writing by the Majority
Noteholders and (v) if the seller/transferor of the Loan Collateral is to be
released from liability on the Loan, such release will not (based on the
Servicer's good faith determination) adversely affect the collectability of the
Loan. Upon the closing of the transactions contemplated by such documents, the
Servicer shall cause the originals of the assumption agreement, the release (if
any) or the modification or supplement to the Promissory Note or Mortgage or
Security Agreement to be delivered to the Indenture Trustee and deposited with
the Indenture Trustee's Loan File for such Loan.
Section 7.02 RELEASE OF LOAN FILES.
If with respect to any Loan:
(i) the outstanding Principal Balance of such Loan plus all interest
accrued thereon shall have been paid;
(ii) the Servicer shall have received, in escrow, payment in full of
such Loan in a manner customary for such purposes;
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(iii) such Loan has become a Defective Loan and has been repurchased
or a Qualified Substitute Loan has been conveyed to the Trust
pursuant to SECTION 3.05 hereof;
(iv) such Loan or the related Foreclosure Property has been sold in
connection with the termination of the Trust pursuant to SECTION
11.01 hereof;
(v) such Loan has been purchased by the Loan Originator in accordance
with the terms of SECTION 3.07;
(vi) the related Foreclosure Property has been sold pursuant to
SECTION 4.11 hereof; or
(vii) such Loan has been included in a Securitization and concurrently
with such release the Securitization Proceeds associated
therewith will be deposited into the Collection Account.
In each such case, the Servicer shall deliver a certificate to the
effect that the Servicer has complied with all of its obligations under this
Agreement with respect to such Loan and requesting that the Indenture Trustee
release to the Servicer the related Indenture Trustee's Loan File, and the
Indenture Trustee shall, within five Business Days or such shorter period as may
be required by applicable law, release, or cause the Custodian to release
(unless such Indenture Trustee's Loan File has previously been released), the
related Indenture Trustee's Loan File to the Servicer and execute and deliver
such instruments of transfer or assignment prepared and delivered to it by the
Servicer, in each case without recourse, representation or warranty as shall be
necessary to vest ownership of such Loan in the Servicer or such other Person as
may be specified in such certificate, the forms of any such instrument to be
appended to such certificate.
SECTION 7.03 SERVICING COMPENSATION.
As compensation for its services hereunder, the Servicer shall be
entitled to receive from the Collection Account the Servicing Fee, out of which
the Servicer shall pay any servicing fees owed or payable to any Subservicer.
Additional servicing compensation in the form of assumption fees, modification
fees, and other administrative fees (exclusive of any prepayment premiums),
insufficient funds charges, amounts remitted pursuant to SECTION 7.01 hereof and
late payment charges shall be part of the Servicing Compensation payable to the
Servicer hereunder and shall be paid either by the Servicer's retaining such
additional servicing compensation prior to deposit into the Collection Account
pursuant to SECTION 5.01(b)(1) hereof or, if deposited into the Collection
Account, as part of the Servicing Compensation withdrawn therefrom pursuant to
SECTION 5.01(c)(1) hereof.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for herein. The Loan
Originator also agrees to pay all reasonable costs and expenses incurred by any
successor Servicer or the Indenture Trustee in replacing the Servicer in the
event of a default by the Servicer in the performance of its duties under the
terms and conditions of this Agreement.
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SECTION 7.04 STATEMENT AS TO COMPLIANCE AND FINANCIAL STATEMENTS.
The Servicer will deliver to the Initial Noteholder:
(a) not later than 90 days following the end of each fiscal year of
the Servicer (beginning on March 31, 1999), an Officer's Certificate stating
that (i) a review of the activities of the Servicer during the preceding year
and of performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and what action the Servicer proposes to take with
respect thereto.
(b) As soon as available and in no event later than 45 days after the
end of each of the first three quarterly fiscal periods of FFCA, a Quarterly
Report on "Form 10-Q" filed by FFCA with the Securities and Exchange Commission.
(c) As soon as available and in no event later than 90 days after the
end of each fiscal year of FFCA, an Annual Report on "Form 10-K" filed by FFCA
with the Securities and Exchange Commission.
(d) As soon as available and in any event within 90 days after the end
of each fiscal year of FFCA, the annual report that is delivered to its
shareholders.
(e) Within 10 days after service of process on any of the following,
notice of all legal or arbitrable proceedings affecting the Servicer or any of
its subsidiaries that questions or challenges the validity or enforceability of
any of the Basic Documents or as to which there is a reasonable likelihood of
adverse determination which would result in a material adverse effect with
respect to the value of the Loans or the interests of any of the Securityholders
therein. The Servicer shall also furnish and certify to the requesting party
such other information as to (i) its organization, activities and personnel
relating to the performance of the obligations of the Servicer hereunder, (ii)
its financial condition, (iii) the Loans and (iv) the performance of the
obligations of any Subservicer under the related Subservicing Agreement, in each
case as the Indenture Trustee or the Depositor may reasonably request from time
to time.
SECTION 7.05 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than 90 days following the end of each fiscal year of the
Servicer (beginning on March 31, 1999), the Servicer at its expense shall cause
a nationally recognized firm of Independent Certified Public Accountants (which
may also render other services to the Servicer) to furnish a statement to the
Indenture Trustee, the Depositor and the Initial Noteholder to the effect that
such firm has examined certain documents and records relating to the servicing
of the Loans under this Agreement or of loans under pooling and servicing
agreements (including the Loans and this Agreement) substantially similar to one
another (such statement to have attached thereto a schedule setting forth the
pooling and servicing agreements covered thereby) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FHLMC, such firm confirms that such servicing has been conducted in
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compliance with such pooling and servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Attestation
Program for Mortgages serviced for FHLMC requires it to report, each of which
errors and omissions shall be specified in such statement. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
loans by Subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FHLMC (rendered
within one year of such statement) of Independent certified public accountants
with respect to the related Subservicer.
SECTION 7.06 RIGHT TO EXAMINE SERVICER RECORDS.
Each Securityholder, the Indenture Trustee, the Issuer and each of
their respective agents shall have the right upon reasonable prior notice,
during normal business hours and as often as reasonably required, to examine,
audit and copy, at the expense of the Person making such examination (but, in
the case of the Indenture Trustee, at the expense of the Servicer), any and all
of the books, records or other information of the Servicer (including without
limitation any Subservicer to the extent provided in the related Subservicing
Agreement), whether held by the Servicer or by another on behalf of the
Servicer, which may be relevant to the performance or observance by the Servicer
of the terms, covenants or conditions of this Agreement. In the case of the
supervisory agents and examiners of the Issuer, Indenture Trustee and the
Securityholders, access to the documentation regarding the Loans required by
applicable state and federal regulations shall be afforded without charge but
only upon reasonable request and during normal business hours at the offices of
the Servicer designated by it.
The Servicer also agrees to make available on a reasonable basis to
the Securityholders or any prospective Securityholder a knowledgeable financial
or accounting officer for the purpose of answering reasonable questions
respecting recent developments affecting the Servicer or the financial
statements of the Servicer and to permit the Securityholders and any prospective
Securityholder to inspect the Servicer's servicing facilities during normal
business hours for the purpose of satisfying the Securityholders and such
prospective Securityholder that the Servicer has the ability to service the
Loans in accordance with this Agreement.
SECTION 7.07 REPORTS TO THE INDENTURE TRUSTEE; COLLECTION ACCOUNT
STATEMENTS.
If the Collection Account is not maintained with the Indenture
Trustee, then not later than 25 days after each Record Date, the Servicer shall
forward to the Indenture Trustee a statement, certified by a Servicing Officer,
setting forth the status of the Collection Account as of the close of business
on the preceding Record Date and showing, for the period covered by such
statement, the aggregate of deposits into the Collection Account for each
category of deposit specified in SECTION 5.01(b)(1) hereof, the aggregate of
withdrawals from the Collection Account for each category of withdrawal
specified in SECTION 5.01(c)(1) hereof, in each case, for the related Due
Period.
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SECTION 7.08 ACCESS TO INFORMATION.
(a) The Servicer understands that, in connection with the transfer of
the Notes, Noteholders may request that the Servicer make available to the
Noteholders and to prospective Noteholders annual audited financial statements
of the Servicer for any or all of the most recently completed five fiscal years
for which such statements are available, which request shall not be unreasonably
denied.
(b) So long as any Notes remain outstanding, each of the Issuer and
any Noteholder shall, at any time and from time to time during regular business
hours, or at such other times upon reasonable notice to the Servicer and the
Servicer shall permit the Issuer and any Noteholder, or its agents or
representatives to:
(i) examine all books, records and documents (including computer tapes
and disks) in the possession or under the control of the Servicer relating
to the Loans, the servicing of the Loans and the compliance of the terms of
the Basic Documents, as may be reasonably requested;
(ii) visit the offices and property of the Servicer for the purpose of
examining such materials described in clause (b)(i) above;
(iii) consult with such professionals as may reasonably be aware of
the operations or condition of the Servicer, including, without limitation,
accountants and auditors, and the Servicer shall cause such professionals
to cooperate with any examination conducted in accordance with the terms of
this SECTION 7.08 and to provide access to those materials listed in
subclause (b)(i) above in the possession or under the control of such
professionals.
ARTICLE VIII
HEDGING
SECTION 8.01 HEDGING INSTRUMENTS.
(a) The Issuer, promptly upon the request of the Market Value Agent,
on behalf of the Majority Noteholders, shall enter into such Hedging Instruments
as the Market Value Agent, on behalf of the Majority Noteholders, may deem
appropriate to hedge the interest rate risk associated with the Notes
attributable to Loans bearing a fixed Loan Interest Rate and relative to the
expected Securitization Proceeds therefrom; provided that payments thereunder to
the Collection Account pursuant to SECTION 5.01(b)(1)(x) constitute qualifying
income under Section 856(c)(5)(G) of the Code. The Market Value Agent shall
determine, in its sole discretion, whether any Hedging Instrument conforms to
the requirements of SECTION 8.01(b) AND (c).
(b) Each Hedging Instrument shall expressly provide that in the event
of a Securitization, such portion of the Hedging Instrument shall terminate as
the Majority Noteholders deem appropriate to facilitate the hedging of the risks
specified in SECTION 8.01(a).
(c) Any Hedging Instrument that provides for any payment obligation on
the part of the Issuer must (i) be without recourse to the assets of the Issuer,
(ii) contain a non-petition covenant provision in the form of SECTION 12.L3,
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(iii) limit payment dates thereunder to Payment Dates and (iv) contain a
provision limiting any cash payments due on any day under such Hedging
Instrument solely to funds available therefor in the Collection Account on such
day pursuant to SECTION 5.01(c)(3)(ii) hereof and funds available therefor in
the Transfer Obligation Account.
(d) Each Hedging Instrument must (i) provide for the direct payment of
any amounts thereunder to the Collection Account pursuant to SECTION
5.01(b)(1)(x), (ii) contain an assignment of all of the Issuer's rights (but
none of its obligations) under such Hedging Instrument to the Indenture Trustee
and shall include an express consent of the Hedging Counterparty to such
assignment, (iii) provide that in the event of the occurrence of an Event of
Default, such Hedging Instrument shall terminate upon the direction of the
Majority Noteholders, (iv) prohibit the Hedging Counterparty from "setting-off"
or "netting" other obligations of the Issuer or its Affiliates against such
Hedging Counterparty's payment obligations thereunder, and (v) provide that the
appropriate portion of the Hedging Instrument will terminate upon the removal of
the related Loans from the Trust Estate.
(e) The Issuer shall not pledge or otherwise transfer or encumber any
of its assets in order to secure its obligations in respect of any Hedge Funding
Requirements.
(f) The aggregate notional amount of all Hedging Instruments shall not
exceed the Note Principal Balance as of the date on which each Hedging
Instrument is entered into by the Issuer and a Hedging Counterparty.
ARTICLE IX
THE SERVICER
SECTION 9.01 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) The Servicer shall indemnify the Loan Originator, the Owner
Trustee, the Trust, the Depositor, the Indenture Trustee and the Noteholders,
their respective officers, directors, employees, agents and "control persons,"
as such term is used under the Act and under the Securities Exchange Act of 1934
as amended (each an "INDEMNIFIED PARTY") and hold harmless each of them against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of any of the Servicer's representations and warranties
and covenants contained in this Agreement or in any way relating to the failure
of the Servicer to perform its duties and service the Loans in compliance with
the terms of this Agreement; provided, however, that if the Servicer is not
liable pursuant to the provisions of SECTION 9.01(d) hereof for its failure to
perform its duties and service the Loans in compliance with the terms of this
Agreement, then the provisions of this SECTION 9.01 shall have no force and
effect with respect to such failure.
(b) The Loan Originator, the Depositor, the Indenture Trustee or the
Noteholders, as the case may be, shall promptly notify the Servicer if a claim
is made by a third party with respect to a breach of any of the Servicer's
representations and warranties and covenants contained in this Agreement or in
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any way relating to the failure of the Servicer to perform its duties and
service the Loans in compliance with the terms of this Agreement. The Servicer
shall promptly notify the Indenture Trustee and the Depositor of any claim of
which it has been notified pursuant to this SECTION 9.01 by a Person other than
the Depositor, and, in any event, shall promptly notify the Depositor of its
intended course of action with respect to any claim.
(c) The Servicer shall be entitled to participate in and, upon notice
to the Indemnified Party, assume the defense of any such action or claim in
reasonable cooperation with, and with the reasonable cooperation of, the
Indemnified Party. The Indemnified Party will have the right to employ its own
counsel in any such action in addition to the counsel of the Servicer, but the
fees and expenses of such counsel will be at the expense of such Indemnified
Party, unless (i) the employment of counsel by the Indemnified Party at its
expense has been authorized in writing by the Servicer, (ii) the Servicer has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both the Servicer and one or more Indemnified
Parties, and the Indemnified Parties shall have been advised by counsel that
there may be one or more legal defenses available to them which are different
from or additional to those available to the Servicer. The Servicer shall not be
liable for any settlement of any such claim or action unless the Servicer shall
have consented thereto or be in default on its obligations hereunder. Any
failure by an Indemnified Party to comply with the provisions of this SECTION
9.01 shall relieve the Servicer of liability only if such failure is materially
prejudicial to the defense of the Servicer of such claim or action and then only
to the extent of such prejudice.
(d) None of the Loan Originator, the Depositor or the Servicer or any
of their respective Affiliates, directors, officers, employees or agents shall
be under any liability to the Owner Trustee, the Issuer, the Indenture Trustee
or the Securityholders for any action taken, or for refraining from the taking
of any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Loan
Originator, the Depositor, the Servicer or any of their respective Affiliates,
directors, officers, employees, agents against the remedies provided herein for
the breach of any warranties, representations or covenants made herein, or
against any expense or liability specifically required to be borne by such party
without right of reimbursement pursuant to the terms hereof, or against any
expense or liability which would otherwise be imposed by reason of misfeasance,
bad faith or negligence in the performance of the respective duties of the
Servicer, the Depositor or the Loan Originator, as the case may be. The Loan
Originator, the Depositor, the Servicer and any of their respective Affiliates,
directors, officers, employees, agents may rely in good faith on any document of
any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder.
(e) The Servicer, the Loan Originator, the Depositor, the Indenture
Trustee and any of their respective directors, officers, employees, agents,
Affiliates and "control persons," as such term is used under the Act and the
Securities Exchange Act of 1934, as amended, shall be indemnified by the Trust
and held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
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Securities, other than any loss, liability or expense related to any specific
Loan or Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Except as otherwise provided herein, none of
the Loan Originator, the Depositor, the Servicer or the Indenture Trustee shall
be under any obligation to appear in, prosecute or defend any legal action that
is not related to its respective duties under this Agreement and which may
involved it in any expenses or liability; provided, however, that, except as
otherwise provided herein, any of the Loan Originator, the Depositor, the
Servicer or the Indenture Trustee may, with the prior consent of the Majority
Noteholders, in its discretion undertake any such action which it may deem
necessary or desirable with respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Issuer hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be reimbursed therefor out of the Collection Account, to the
extent that funds are available therein, as provided in SECTION 5.01(c)(1).
(f) The Servicer and any Affiliate thereof shall be indemnified and
held harmless by the Owner Trust against any liability or expense incurred in
connection with any third party claims brought against the Servicer and any
Affiliate thereto, which are related to the servicing of the Loans in accordance
with this Agreement, including actions taken by the Servicer in accordance with
written instructions given to the Servicer by the Noteholders, other than any
liability or expense: (i) specifically required to be borne thereby pursuant to
the terms hereof or otherwise incidental to the performance of obligations and
duties hereunder, including the prosecution of enforcement actions in respect of
any specific Loan or Loans (except as any such liability or expense shall be
otherwise reimbursable pursuant to this Agreement); (ii) incurred in connection
with any breach of a representation, warranty or covenant made therein; (iii)
incurred by reason of misfeasance, bad faith or negligence by the Servicer or
its Affiliates in the performance of its or their obligations or duties
hereunder; (iv) incurred in connection with any violation by the Servicer or its
Affiliates of any state or federal securities law; (v) claims for which the
Servicer is required to indemnify any Person pursuant to this SECTION 9.01; or
(vi) which result from the failure of the Servicer to service and administer the
Loans in strict compliance with the terms of this Agreement.
(g) SERVICER TO INDEMNIFY INDENTURE TRUSTEE. The Servicer agrees to
perform all of its obligations set forth in Section 6.07 of the Indenture.
SECTION 9.02 MERGER OR CONSOLIDATION OF THE SERVICER.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and will obtain and preserve its qualification to
do business as a foreign corporation and maintain such other licenses and
permits in each jurisdiction necessary to protect the validity and
enforceability of each Basic Document to which it is a party and each of the
Loans and to perform its duties under each Basic Document to which it is a
party; provided, however, that the Servicer may merge or consolidate with any
other corporation upon the satisfaction of the conditions set forth in the
following paragraph.
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Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be an Eligible Servicer and shall be the successor of the
Servicer, as applicable hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding. The Servicer shall send notice of any such merger,
conversion, consolidation or succession to the Indenture Trustee and the Issuer.
SECTION 9.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities respecting any matters arising hereunder. Subject to the terms of
SECTION 9.01 hereof, the Servicer shall have no obligation to appear with
respect to, prosecute or defend any legal action which is not incidental to the
Servicer's duty to service the Loans in accordance with this Agreement.
SECTION 9.04 SERVICER NOT TO RESIGN; ASSIGNMENT.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) with the consent of the Indenture Trustee or (b) upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to clause (b) of the preceding
sentence permitting the resignation of the Servicer shall be evidenced by an
independent opinion of counsel to such effect delivered (at the expense of the
Servicer) to the Indenture Trustee. No resignation of the Servicer shall become
effective until a successor servicer, appointed pursuant to the provisions of
SECTION 10.02 hereof and satisfying the requirements of SECTION 4.07 hereof with
respect to the qualifications of a successor Servicer, shall have assumed the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder and any agreement, instrument or act purporting to effect
any such assignment, transfer, delegation or appointment shall be void.
The Servicer agrees to cooperate with any successor Servicer in
effecting the transfer of the Servicer's servicing responsibilities and rights
hereunder pursuant to the first paragraph of this SECTION 9.04, including,
without limitation, the transfer to such successor of all relevant records and
documents (including any Loan Files in the possession of the Servicer) and all
amounts received with respect to the Loans and not otherwise permitted to be
retained by the Servicer pursuant to this Agreement. In addition, the Servicer,
at its sole cost and expense, shall prepare, execute and deliver any and all
documents and instruments to the successor Servicer including all Loan Files in
its possession and do or accomplish all other acts necessary or appropriate to
effect such termination and transfer of servicing responsibilities.
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SECTION 9.05 RELATIONSHIP OF SERVICER TO ISSUER AND THE INDENTURE
TRUSTEE.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Issuer and the Indenture Trustee under
this Agreement is intended by the parties hereto to be that of an independent
contractor and not of a joint venturer, agent or partner of the Issuer or the
Indenture Trustee.
SECTION 9.06 SERVICER MAY OWN SECURITIES.
Each of the Servicer and any Affiliate of the Servicer may in its
individual or any other capacity become the owner or pledgee of Securities with
the same rights as it would have if it were not the Servicer or an Affiliate
thereof except as otherwise specifically provided herein. Securities so owned by
or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Securities; provided,
however, that any Securities owned by the Servicer or any Affiliate thereof,
during the time such Securities are owned by them, shall be without voting
rights for any purpose set forth in this Agreement. The Servicer shall notify
the Indenture Trustee promptly after it or any of its Affiliates becomes the
owner or pledgee of a Security.
ARTICLE X
DEFAULT
SECTION 10.01 EVENTS OF DEFAULT.
(a) In case one or more of the following Events of Default by the
Servicer shall occur and be continuing, that is to say:
(i) any failure by Servicer to deposit (A) into the Collection Account
in accordance with SECTION 5.01(B) any amount required to be deposited by
it under any Basic Document to which it is a party, which failure continues
unremedied for two days following the date on which such deposit was first
requested to be made or (B) the full amount of any Periodic Advance
required to be made on the day such Periodic Advances are required to be
made, which failure continues unremedied until 12:00 p.m. New York City
time on the Business Day following such day; or
(ii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the material covenants or
agreements on the part of the Servicer, contained in any Basic Document to
which it is a party, which continues unremedied for a period of 30 days
(or, in the case of payment of insurance premiums, for a period of 15 days)
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by any other party
hereto or to the Servicer (with copy to each other party hereto), by
Holders of 25% of the Percentage Interests (as defined in the Indenture) of
the Notes or the Certificates; or
(iii) any breach on the part of the Servicer of any representation or
warranty contained in any Basic Document to which it is a party that
materially and adversely affects the interests of any of the parties hereto
or any Securityholder and which continues unremedied for a period of 30
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days after the date on which notice of such breach, requiring the same to
be remedied, shall have been given to the Servicer by any other party
hereto or to the Servicer (with copy to each other party hereto), by the
Initial Noteholder or Holders of 25% of the Percentage Interests of the
Notes or the Certificates; or
(iv) there shall have been commenced before a court or agency or
supervisory authority having jurisdiction in the premises an involuntary
proceeding against the Servicer under any present or future federal or
state bankruptcy, insolvency or similar law for the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of
its affairs, which action shall not have been dismissed for a period of 60
days; or
(v) the Servicer shall consent to the appointment of a conservator,
receiver, liquidator, trustee or similar official in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to it or of or relating to all or
substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations, or take any corporate action in furtherance of the
foregoing; or
(vii) FFCA or any Subsidiary of FFCA shall incur any Debt such that
the ratio of Consolidated Income Available for Debt Service to Quarterly
Service Charge for the most recent fiscal quarter for which consolidated
financial statements of FFCA are available is less than 1.75 to 1.0 on a
pro forma basis after giving effect to the incurrence of such Debt and the
application of the proceeds therefrom; or
(viii) the rating of the long-term, senior, unsecured debt obligations
of the Servicer is withdrawn by Xxxxx'x or S&P or is downgraded below Ba2,
by Xxxxx'x, or BB, by S&P.
(b) Then, and in each and every such case, so long as an Event of
Default shall not have been remedied, the Indenture Trustee or the Majority
Noteholders, by notice in writing to the Servicer may, in addition to whatever
rights such Person may have at law or in equity to damages, including injunctive
relief and specific performance, may terminate all the rights and obligations of
the Servicer under this Agreement and in and to the Loans and the proceeds
thereof, as servicer under this Agreement. Upon receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Loans or otherwise, shall, subject to SECTION 10.02
hereof, pass to and be vested in a successor servicer, and the successor
servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, including, but
not limited to, the transfer and endorsement or assignment of the Loans and
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related documents. The Servicer agrees to cooperate with the successor servicer
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the successor servicer
for administration by it of all amounts which shall at the time be credited by
the Servicer to each Collection Account or thereafter received with respect to
the Loans.
(c) Immediately upon the occurrence hereunder or under the Indenture
of an Event of Default or a Default, the Loan Originator, shall, upon the
request of the Majority Noteholders provide to the Indenture Trustee and the
Initial Noteholder for each (i) Mortgage, (ii) power of attorney pursuant to
which a Mortgage was executed, (iii) assumption, modification, consolidation or
extension agreement relating to a Mortgage, (iv) Assignment of Mortgage, (v)
assignment of leases or rents, (vi) UCC-1 Financing Statement and UCC
continuation statement, (vii) Security Agreement and (viii) assumption,
modification, consolidation or extension agreement relating to a Security
Agreement with respect to which the Indenture Trustee's Loan File does not
contain the original, a certificate or certificates of (x) in the case of items
(i) and (ii) a Responsible Officer of the Loan Originator, the closing attorney
or an officer of the title insurer or agent of the title insurer that issued the
related Title Policy and (y) in the case of the remaining items, a Responsible
Officer of the Loan Originator, certifying that such copy is a true, correct and
complete copy of the related original, which original has not been returned from
the applicable public recording office.
SECTION 10.02 APPOINTMENT OF SUCCESSOR.
On and after the date the Servicer receives a notice of termination
pursuant to SECTION 10.01 hereof, or the Indenture Trustee receives the
resignation of the Servicer evidenced by an Opinion of Counsel or accompanied by
the consents required by SECTION 9.04 hereof, or the Servicer is removed as
servicer pursuant to this Article X or SECTION 4.01(f)(ii), then, subject to
SECTION 4.07 hereof, the Majority Noteholders shall appoint a successor servicer
to be the successor in all respects to the Servicer in its capacity as Servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof; provided,
however, that the successor servicer shall not be liable for any actions of any
servicer prior to it.
The successor servicer shall be obligated to make Servicing Advances
hereunder. As compensation therefor, the successor servicer appointed pursuant
to the following paragraph, shall be entitled to all funds relating to the Loans
which the Servicer would have been entitled to receive from the Collection
Account pursuant to SECTION 5.01(c) hereof as if the Servicer had continued to
act as servicer hereunder, together with other Servicing Compensation in the
form of assumption fees, late payment charges or otherwise as provided in
SECTION 7.03 hereof. The Servicer shall not be entitled to any termination fee
if it is terminated pursuant to SECTION 10.01 hereof but shall be entitled to
any accrued and unpaid Servicing Fee to the date of termination.
Any collections received by the Servicer after removal or resignation
shall be endorsed by it to the Indenture Trustee and remitted directly to the
successor servicer. The compensation of any successor servicer appointed shall
be the Servicing Fee, together with other Servicing Compensation provided for
herein. The Indenture Trustee, the Issuer, any Custodian, the Servicer and any
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such successor servicer shall take such action, consistent with this Agreement,
as shall be reasonably necessary to effect any such succession. Any costs or
expenses incurred by the Indenture Trustee in connection with the termination of
the Servicer and the succession of a successor servicer shall be an expense of
the outgoing Servicer and, to the extent not paid thereby, an expense of such
successor servicer. The Servicer agrees to cooperate with the Indenture Trustee
and any successor servicer in effecting the termination of the Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
successor servicer all documents and records reasonably requested by it to
enable it to assume the Servicer's functions hereunder and shall promptly also
transfer to the successor servicer all amounts which then have been or should
have been deposited in any Trust Account maintained by the Servicer or which are
thereafter received with respect to the Loans. No successor servicer shall be
held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer hereunder. No appointment of a successor to the Servicer
hereunder shall be effective until written notice of such proposed appointment
shall have been provided by the Indenture Trustee to the Initial Noteholder, the
Issuer and the Depositor and the Depositor, the Majority Noteholders and the
Issuer shall have consented in writing thereto.
In connection with such appointment and assumption, the Majority
Noteholder may make such arrangements for the compensation of such successor
servicer out of payments on the Loans as they and such successor servicer shall
agree.
SECTION 10.03 WAIVER OF DEFAULTS.
The Majority Noteholders may waive any events permitting removal of
the Servicer as servicer pursuant to this Article X; provided, however, that the
Majority Noteholders may not waive a default in making a required distribution
on a Note or Trust Certificate without the consent of the related Noteholder or
Certificateholder. Upon any waiver of a past default, such default shall cease
to exist and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived.
SECTION 10.04 ACCOUNTING UPON TERMINATION OF SERVICER.
Upon termination of the Servicer under this Article X, the Servicer
shall, at its own expense:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee the funds in any Trust Account maintained by
the Servicer;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee all Loan Files and related documents and
statements held by it hereunder and a Loan portfolio computer tape;
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(c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and to the Issuer and the Securityholders a
full accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for payments or
charges with respect to the Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Loans to its successor and to more fully and definitively vest
in such successor all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer under this Agreement.
ARTICLE XI
TERMINATION
SECTION 11.01 TERMINATION.
This Agreement shall terminate upon either: (a) the later of (i) the
satisfaction and discharge of the Indenture and the provisions thereof or (ii)
the disposition of all funds with respect to the last Loan and the remittance of
all funds due hereunder and the payment of all amounts due and payable
(including, without limitation, indemnification payments payable pursuant to any
Basic Document) to the Indenture Trustee, the Owner Trustee, the Issuer and the
Custodian, written notice of the occurrence of either of which shall be provided
to the Indenture Trustee by the Servicer; or (b) the mutual consent of the
Servicer, the Depositor, the Loan Originator and all Securityholders in writing
and delivered to the Indenture Trustee by the Servicer.
SECTION 11.02 OPTIONAL TERMINATION.
The Servicer may, at its option, effect an early termination of the
Trust on any Payment Date on or after the Clean-up Call Date. The Servicer shall
effect such early termination by providing notice thereof to the Indenture
Trustee and Owner Trustee and by purchasing all of the Loans at a purchase
price, payable in cash, equal to or greater than the Termination Price. The
expense of any Independent appraiser required under this SECTION 11.02 shall be
a nonreimbursable expense of the Servicer.
Any such early termination by the Servicer shall be accomplished by
depositing into the Collection Account on the third Business Day prior to the
Payment Date on which the purchase is to occur the amount of the Termination
Price to be paid. The Termination Price and any amounts then on deposit in the
Collection Account (other than any amounts withdrawable pursuant to SECTION
5.01(c)(1) hereof) shall be distributed by the Indenture Trustee (except as may
be otherwise provided in the Collection Account Letter Agreement) pursuant to
SECTION 5.01(c)(3) and Section 9.1 of the Trust Agreement on the next succeeding
Payment Date; and any amounts received with respect to the Loans and Foreclosure
Properties subsequent to the final Payment Date shall belong to the purchaser
thereof.
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SECTION 11.03 NOTICE OF TERMINATION.
Notice of termination of this Agreement or of early redemption and
termination of the Trust shall be sent (i) by the Indenture Trustee to the
Noteholders in accordance with Section 10.02 of the Indenture and (ii) by the
Owner Trustee to the Certificateholders in accordance with Section 9.1(d) of the
Trust Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01 ACTS OF NOTEHOLDERS.
Except as otherwise specifically provided herein, whenever action,
consent or approval of the Securityholders is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Securityholders if the Majority
Securityholders agree to take such action or give such consent or approval.
SECTION 12.02 AMENDMENT.
(a) This Agreement may be amended from time to time by the Depositor,
the Servicer, the Loan Originator, the Indenture Trustee and the Issuer by
written agreement with notice thereof to the Securityholders, without the
consent of any of the Securityholders, to cure any error or ambiguity, to
correct or supplement any provisions hereof which may be defective or
inconsistent with any other provisions hereof or to add any other provisions
with respect to matters or questions arising under this Agreement; provided,
however, that such action will not adversely affect in any material respect the
interests of the Securityholders. An amendment described above shall be deemed
not to adversely affect in any material respect the interests of the
Securityholders if an Opinion of Counsel is obtained to such effect.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Loan Originator, the Indenture Trustee and the
Issuer by written agreement, with the prior written consent of the Majority
Noteholders, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Securityholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
collections of payments on Loans or distributions which are required to be made
on any Security, without the consent of the holders of 100% of the Notes, (ii)
adversely affect in any material respect the interests of any of the holders of
the Notes in any manner other than as described in clause (i), without the
consent of the holders of 100% of the Notes, or (iii) reduce the percentage of
the Notes, the consent of which is required for any such amendment, without the
consent of the holders of 100% of the Notes.
(c) It shall not be necessary for the consent of Securityholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.
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Prior to the execution of any amendment to this Agreement, the Issuer
and the Indenture Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Issuer and the Indenture Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Issuer's
own rights, duties or immunities of the Issuer or the Indenture Trustee, as the
case may be, under this Agreement.
SECTION 12.03 RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Agreement, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the Loan
Collateral is situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at the Noteholders'
expense on direction of the Majority Noteholders but only when accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Noteholders or is necessary for the
administration or servicing of the Loans.
SECTION 12.04 DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until terminated
as herein provided.
SECTION 12.05 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 12.06 NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if (i) delivered personally, mailed
by overnight mail, certified mail or registered mail, postage prepaid, or (ii)
transmitted by telecopy, upon telephone confirmation of receipt thereof (with a
copy delivered by overnight courier), as follows: (I) in the case of the
Depositor, to FFCA Loan Warehouse Corporation, The Perimeter Center, 00000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, telecopy
number: (000) 000-0000, telephone number: (000) 000-0000 or such other addresses
or telecopy or telephone numbers as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Depositor; (II)
in the case of the Issuer, to FFCA Franchise Loan Owner Trust 1998-1, c/o
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration, telecopy
number: (000) 000-0000, telephone number: (000) 000-0000 or such other address
or telecopy or telephone numbers as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Depositor; (III)
in the case of the Loan Originator, to FFCA Acquisition Corporation, The
Perimeter Center, 00000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Xxxxxx
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X. Xxxxx, telecopy number: (000) 000-0000, telephone number: (000) 000-0000 or
such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Securityholders and the other parties hereto in writing by the
Loan Originator, (IV) in the case of the Servicer, to Franchise Finance
Corporation of America, The Perimeter Center, 00000 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, telecopy number: (480)
000-0000, telephone number: (000) 000-0000 or such other addresses or telecopy
or telephone numbers as may hereafter be furnished to the Securityholders and
the other parties hereto in writing by the Servicer; (V) in the case of the
Indenture Trustee, to LaSalle Bank National Association, 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Asset-Backed Securities
Trust Services Group, FFCA Franchise Loan Owner Trust 1998-1 telecopy number:
(000) 000-0000, telephone number: (000) 000-0000 or such other addresses or
telecopy or telephone numbers as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Indenture
Trustee; (VI) in the case of the Initial Noteholder, to Xxxxxx Xxxxxxx
Securitization Funding Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxxxxxx, telecopy number: (000) 000-0000, telephone number: (212)
761-2063; and (VII) in the case of the Securityholders, as set forth in the Note
Register. Any such notices shall be deemed to be effective with respect to any
party hereto upon the receipt of such notice or telephone confirmation thereof
by such party, except; provided, that notices to the Securityholders shall be
effective upon mailing or personal delivery.
SECTION 12.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
SECTION 12.08 NO PARTNERSHIP.
Nothing herein contained shall be deemed or construed to create any
partnership or joint venture between the parties hereto and the services of the
Servicer shall be rendered as an independent contractor.
SECTION 12.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same Agreement.
SECTION 12.10 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
Servicer, the Loan Originator, the Depositor, the Indenture Trustee, the Issuer
and the Noteholders and their respective successors and permitted assigns.
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SECTION 12.11 HEADINGS.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
SECTION 12.12 ACTIONS OF SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Securityholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by 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 Depositor, the Servicer or the Issuer. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Depositor, the Servicer and the Issuer if made in the manner provided in this
SECTION 12.12.
(b) The fact and date of the execution by any Securityholder of any
such instrument or writing may be proved in any reasonable manner which the
Depositor, the Servicer or the Issuer deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder shall bind every holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Depositor, the Servicer or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Security.
(d) The Depositor, the Servicer or the Issuer may require additional
proof of any matter referred to in this SECTION 12.12 as it shall deem
necessary.
SECTION 12.13 NON-PETITION AGREEMENT.
Notwithstanding any prior termination of any Basic Document, the Loan
Originator, the Servicer, the Depositor and the Indenture Trustee each severally
and not jointly covenants that it shall not, prior to the date which is one year
and one day after the payment in full of the all of the Notes, acquiesce,
petition or otherwise, directly or indirectly, invoke or cause the Trust or the
Depositor to invoke the process of any governmental authority for the purpose of
commencing or sustaining a case against the Trust or Depositor under any Federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or Depositor or any substantial part of their respective property
or ordering the winding up or liquidation of the affairs of the Trust or the
Depositor.
SECTION 12.14 HOLDERS OF THE TRUST CERTIFICATES.
(a) Any sums to be distributed or otherwise paid hereunder or under
the Trust Agreement to the holders of the Trust Certificates shall be paid to
such holders pro rata based on their Percentage Interests (as defined in the
Trust Agreement);
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(b) Where any act or event hereunder is expressed to be subject to the
consent or approval of the holders of the Trust Certificates, such consent or
approval shall be capable of being given by the holder or holders evidencing in
the aggregate not less than 51% of the Percentage Interests (as defined in the
Trust Agreement).
SECTION 12.15 FFCA TO GUARANTEE CERTAIN LOAN ORIGINATOR OBLIGATIONS.
(a) FFCA hereby unconditionally guarantees to the Indenture Trustee
and the Noteholders the due and punctual payment of all amounts payable by the
Loan Originator under Sections 2.3 and 3.1 of the Loan Purchase Agreement and
SECTIONS 2.05, 3.05 AND 3.07(a) hereof (collectively, the "GUARANTEED
OBLIGATIONS") when and as such obligations thereunder shall become due and
payable. In case of the inability of the Loan Originator to pay punctually any
such amounts, FFCA hereby agrees, upon written demand by the Indenture Trustee
or the Majority Noteholders, to pay or cause to be paid any such amounts
punctually when and as the same shall become due and payable (exclusive of any
grace period).
(b) FFCA hereby agrees that its obligations under this SECTION 12.15
constitute a guaranty of payment when due and not of collection.
(c) FFCA hereby agrees that its obligations under this SECTION 12.15
shall be unconditional, irrespective of the validity, regularity or
enforceability of any Basic Document to which the Loan Originator is a party
against the Loan Originator, the absence of any action to enforce the Loan
Originator's obligations under any Basic Document to which it is a party, any
waiver or consent by the Indenture Trustee or the Majority Noteholders with
respect to any of the Guaranteed Obligations or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a FFCA
(other than the defenses of statute of limitations or payment (as such defenses
may apply to FFCA), which are not waived); PROVIDED, HOWEVER, that FFCA shall be
entitled to exercise any right that the Loan Originator could have exercised
under each Basic Document to which the Loan Originator is a party to cure any
default in respect of the Guaranteed Obligations.
(d) FFCA hereby waives (i) promptness, diligence, presentment, demand
of payment, protest, order and, except as set forth in paragraph (a) hereof,
notice of any kind in connection with each Basic Document to which the Loan
Originator is a party, or (ii) any requirement that the Indenture Trustee or the
Noteholders exhaust any right to take any action against the Loan Originator or
any other person prior to or contemporaneously with proceeding to exercise any
right against FFCA under this SECTION 12.15.
SECTION 12.16 REPORTS IN ELECTRONIC FORM.
Notwithstanding anything to the contrary in this Agreement, any report
required to be furnished by a party to this Agreement to the Initial Noteholder
may be furnished by magnetic tape or computer disk in a form mutually agreed to
by the Initial Noteholder and the party providing such information, provided
that such report is delivered timely in accordance with the terms herein.
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SECTION 12.17 LIMITATION OF OWNER TRUSTEE LIABILITY.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Trustee of FFCA Franchise Loan Owner
Trust 1998-1, in the exercise of the powers and authority conferred and vested
in it, (b) each of the representations, undertakings and agreements herein made
on the part of the Trust is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose for binding only the Trust, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or any other related documents.
SECTION 12.18 NO AGENCY.
Nothing contained herein or in the Basic Documents shall be construed
to create an agency or fiduciary relationship between the Initial Noteholder and
its Affiliates and the Issuer, Depositor, Loan Originator or the Servicer.
Except as otherwise set forth in the Basic Documents or as provided by
applicable law, the Initial Noteholder and its Affiliates shall not have any
express or implied duty to the Issuer, Depositor, Loan Originator or the
Servicer in connection with a disposition of Loans, including without
limitation, any Securitization pursuant to SECTION 3.06, any Loan Originator Put
or Servicer Call pursuant to SECTION 3.07 hereof nor any Whole Loan Sale
pursuant to SECTION 3.10 hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Issuer, the Depositor, the Servicer, the Loan
Originator and the Indenture Trustee have caused their names to be signed by
their respective officers thereunto duly authorized, as of the day and year
first above written, to this Sale and Servicing Agreement.
FFCA FRANCHISE LOAN OWNER TRUST 1998-1,
as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Senior Financial Services Officer
FFCA LOAN WAREHOUSE CORPORATION,
as Depositor
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
FFCA ACQUISITION CORPORATION
as Loan Originator
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
FRANCHISE FINANCE CORPORATION OF AMERICA,
as Servicer
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
LASALLE BANK NATIONAL ASSOCIATION f/k/a
LASALLE NATIONAL BANK
as Indenture Trustee
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE STATE OF Delaware )
)
COUNTY OF New Castle )
BEFORE ME, the undersigned authority, a Notary Public, on this 28 day of
December, 2000 personally appeared Xxxxxxxx Xxxxxxx, known to me to be a person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said WILMINGTON TRUST
COMPANY, a Delaware banking corporation, not in its individual capacity but in
its capacity as Owner Trustee of FFCA FRANCHISE LOAN OWNER TRUST 1998-1, a
Delaware business trust, as Issuer, and that such person executed the same as
the act of said business trust for the purpose and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF Delaware, this the 28 day of December,
2000.
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Notary Public, State of Delaware
Xxxxxx X. Xxxxx
Notary Public Delaware
My commission expires February 16, 0000
XXX XXXXX XX Xxxxxxx )
)
COUNTY OF Maricopa )
BEFORE ME, the undersigned authority, a Notary Public, on this 1st day of
January, 2001 personally appeared Xxxxxx X. Xxxxx, known to me to be a person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said FFCA LOAN WAREHOUSE
CORPORATION, as the Depositor, and that he executed the same as the act of such
corporation for the purpose and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF Arizona, this the 1st day of January, 2001.
/s/ Xxxxx Xxxxxxx
-----------------------------------------
Notary Public, State of Arizona
My commission expires:
11/16/04
-------------------------
THE STATE OF Arizona )
)
COUNTY OF Maricopa )
BEFORE ME, the undersigned authority, a Notary Public, on this 1st day of
January, 2001 personally appeared Xxxxxx X. Xxxxx, known to me to be the person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said FFCA ACQUISITION
CORPORATION, as the Loan Originator, and that he executed the same as the act of
such corporation for the purposes and consideration therein expressed, and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF FFCA ACQUISITION CORPORATION, this the 1st
day of January, 2001.
/s/ Xxxxx Xxxxxxx
-----------------------------------------
Notary Public, State of Arizona
My commission expires:
11/16/04
-------------------------
THE STATE OF Arizona )
)
COUNTY OF Maricopa )
BEFORE ME, the undersigned authority, a Notary Public, on this 1st day of
January, 2001 personally appeared Xxxxxx X. Xxxxx, known to me to be the person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said FRANCHISE FINANCE
CORPORATION OF AMERICA, as the Servicer, and that he executed the same as the
act of such corporation for the purposes and consideration therein expressed,
and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF FRANCHISE FINANCE CORPORATION OF AMERICA,
this the 1st day of January, 2001.
/s/ Xxxxx Xxxxxxx
-----------------------------------------
Notary Public, State of Arizona
My commission expires:
11/16/04
-------------------------
THE STATE OF Illinois )
)
COUNTY OF Xxxx )
BEFORE ME, the undersigned authority, a Notary Public, on this 1st day of
December, 2000 personally appeared Xxxxx X. Xxxx, known to me to be the person
and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said LASALLE BANK NATIONAL
ASSOCIATION f/k/a LASALLE NATIONAL BANK, as the Indenture Trustee, and that she
executed the same as the act of such entity for the purposes and consideration
therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF LASALLE BANK NATIONAL ASSOCIATION this the
___ day of December, 2000.
/s/ Xxxxxxxx Xxxxxxx
-----------------------------------------
Notary Public, State of Illinois
My commission expires:
5/19/2004
-------------------------
EXHIBIT A
FORM OF NOTICE OF ADDITIONAL NOTE PRINCIPAL BALANCE
[Letterhead of FFCA Loan Warehouse Corporation]
[Date]
FFCA Franchise Loan Owner Trust 1998-1
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Securities Trust
Services Group, FFCA Franchise Loan
Owner Trust 1998-1
Re: FFCA FRANCHISE LOAN BACKED NOTES SERIES 1998-1
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Sale and Servicing
Agreement, dated as of January 1, 2001 (the "SALE AND SERVICING AGREEMENT"),
among FFCA Franchise Loan Owner Trust 1998-1, FFCA Loan Warehouse Corporation,
as Depositor, FFCA Acquisition Corporation, as Loan Originator, Franchise
Finance Corporation of America, as Servicer and LaSalle Bank National
Association, as Indenture Trustee, hereinafter as such agreement may have been,
or may from time to time be, amended, supplemented or otherwise modified.
Capitalized terms not defined herein shall have the meanings assigned to such
terms in the Sale and Servicing Agreement.
The undersigned ________________, a duly appointed [Senior]
[Executive] [Vice President] [President] of FFCA Loan Warehouse Corporation,
acting in such capacity, hereby requests and advance of Additional Note
Principal Balance in an amount of $_____________, such amount to be advanced on
__________________, a Business Day at least two Business Days from the date
hereof for a [Loan] [Table-Funded Loan].
Very truly yours,
FFCA LOAN WAREHOUSE CORPORATION
By:
-----------------------------------------
Name:
Title:
EXHIBIT B
SERVICER'S REMITTANCE REPORT
1. FFCA Loan Number
2. Beginning Scheduled Principal Balance
3. Scheduled Principal Amount
4. Prepayment Penalty
5. Partial Prepayment Amount
6. Full Prepayment Amount
7. Prepayment Date
8. Prepayment Interest Shortfall Amount
9. Ending Scheduled Principal Balance
10. Current Index Rate
11. Current Gross Rate
12. Scheduled Interest Amount
13. Scheduled P&I Amount
14. Next Index Rate
15. Next Note Rate
16. Paid Thru Date
17. Recovered Delinquency Amount
18. Current P&I Advance Xxxxxx
00. Xxxxxxxxxxx X&X Advance Amount
20. Property Protection Advance Amount
21. Xxxxxx
00. Foreclosure Date
23. Real Estate Owned Date
24. Real Estate Owned Book Value
25. Bankruptcy Date
26. Modification Date
27. Liquidation Proceeds
28. liquidation Expenses
29. Liquidation Date
30. Special Servicing Transfer Date
31. Net Operating Income
32. Net Operating Income Date
33. Unit-Level Fixed Charge Coverage
34. Unit-Level Fixed Charge Coverage Date
EXHIBIT C
FORM OF S&SA ASSIGNMENT
ASSIGNMENT NO.____ OF LOANS ("S&SA ASSIGNMENT"), dated
____________________ (the "TRANSFER Date"), by FFCA LOAN WAREHOUSE CORPORATION
(the "DEPOSITOR") to FFCA FRANCHISE LOAN OWNER TRUST 1998-1 (the "Issuer")
pursuant to the Sale and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, the Depositor and the Issuer are parties to the Third Amended
and Restated Sale and Servicing Agreement, dated as of January 1, 2001 (the
"SALE AND SERVICING AGREEMENT"), among the Issuer, the Depositor, FFCA
Acquisition Corporation, as Loan Originator, Franchise Finance Corporation of
America, as Servicer and LaSalle Bank National Association, as Indenture
Trustee, hereinafter as such agreement may have been, or may from time to time
be, amended, supplemented or otherwise modified;
WHEREAS, pursuant to the Sale and Servicing Agreement, the Depositor
wishes to sell, convey, transfer and assign Loans to the Issuer in exchange for
consideration consisting of cash, the Trust Certificates and other good and
valid consideration the receipt and sufficiency of which is hereby acknowledged;
and
WHEREAS, the Issuer is willing to acquire such Loans subject to the
terms and conditions hereof and of the Sale and Servicing Agreement;
NOW THEREFORE, the Depositor and the Issuer hereby agree as follows:
1. DEFINED TERMS. All capitalized terms defined in the Sale and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
2. DESIGNATION OF LOANS. The Depositor does hereby deliver herewith a
Loan Schedule containing a true and complete list of each Loan to be conveyed on
the Transfer Date. Such list is marked as Schedule A to this S&SA Assignment and
is hereby incorporated into and made a part of this S&SA Assignment.
3. CONVEYANCE OF LOANS. (a) The Depositor hereby transfers, assigns
and conveys to the Issuer, without recourse, all of the right, title and
interest of the Depositor in and to the Loans and all proceeds thereof listed on
the Loan Schedule attached hereto, including all interest and principal (i) for
each Loan having a Transfer Date from and including the first day of a calendar
month to and including the Business Day preceding a Payment Date, received on or
after the opening of business of the Transfer Cutoff Date and (ii) for each Loan
having a Transfer Date from and including a Payment Date to and including the
last day of a calendar month, due on the Loan after the close of business on the
Transfer Cutoff Date), in each case whether received by the Loan Originator, the
Depositor or the Servicer, together with all right, title and interest in and to
the proceeds of any related Insurance Policies and all of the Depositor's right,
title and interest in and to (but none of its obligations under) the Loan
Purchase Agreement and all proceeds of the foregoing.
4. ISSUER ACKNOWLEDGES ASSIGNMENT. As of the Transfer Date, pursuant
to this S&SA Assignment and Section 2.01(a) of the Sale and Servicing Agreement,
the Issuer acknowledges its receipt of the Loans listed on the attached Loan
Schedule and all other related property.
5. ACCEPTANCE OF RIGHTS BUT NOT OBLIGATIONS. The foregoing sale,
transfer, assignment, set over and conveyance does not, and is not intended to,
result in a creation or an assumption by the Issuer of any obligation of the
Depositor, the Loan Originator or any other Person in connection with this S&SA
Assignment or under any agreement or instrument relating thereto except as
specifically set forth herein.
6. DEPOSITOR ACKNOWLEDGES RECEIPT OF CONSIDERATION. The Depositor
hereby acknowledges receipt of payment for the Loans and related property hereby
conveyed from funds deposited into the Advance Account.
[TO BE INSERTED WHEN APPLICABLE] [7. ASSIGNMENT OF CERTAIN SWAP
AGREEMENTS. The Depositor hereby sells, transfers and assigns all of its right
title and interest in to and under, its rights and obligations and the Issuer
does hereby accept and assume all of the Depositor's rights and obligations
under the following confirmation(s) issued under that certain master agreement
between the Depositor and Xxxxxx Xxxxxxx Capital Services, Inc. [___] (the "SWAP
AGREEMENT").]
[7./8.] CONDITIONS PRECEDENT. The conditions precedent in Section
2.06(a) of the Sale and Servicing Agreement have been satisfied.
[8./9.] AMENDMENT OF THE SALE AND SERVICING AGREEMENT. The Sale and
Servicing Agreement is hereby amended by providing that all references to the
"Sale and Servicing Agreement", "this Agreement" and "herein" shall be deemed
from and after the Transfer Date to be a dual reference to the Sale and
Servicing Agreement as supplemented by this S&SA Assignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants and
conditions of the Sale and Servicing Agreement shall remain unamended and the
Sale and Servicing Agreement shall continue to be, and shall remain, in full
force and effect in accordance with its terms and except as expressly provided
herein, this S&SA Assignment shall not constitute or be deemed to constitute a
waiver of compliance with or consent to noncompliance with any term or provision
of the Sale and Servicing Agreement.
[9./10.] COUNTERPARTS. This S&SA Assignment may be executed in any
number of counterparts all of which taken together shall constitute one and the
same instrument.
-2-
IN WITNESS WHEREOF, the undersigned have caused this S&SA Assignment
to be duly executed and delivered by their respective duly authorized officers
on the day and year first above written.
FFCA LOAN WAREHOUSE CORPORATION,
as Depositor
By:
------------------------------------------
Name:
Title:
FFCA FRANCHISE LOAN OWNER TRUST 1998-1,
as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By:
------------------------------------------
Name:
Title:
SCHEDULE A
[LOAN SCHEDULE]
EXHIBIT D
LIST OF REFERENCED DOCUMENTS
1. Financial Statements of FFCA.
2. Loan delinquency history reports.
3. Default/Loss history reports.
4. Underwriting Guidelines.
5. Index of Form Documents:
(a) Loan Agreement;
(b) Promissory Note;
(c) Deed of Trust;
(d) Mortgage;
(e) Guaranty - Multi Guarantors;
(f) Guaranty - Single Guarantors;
(g) Environmental Indemnity Agreement;
(h) Underlying Borrower's Legal Opinion; and
(i) Form of Estoppel.
6. Environmental Policy entitled "Secured Creditor - Secured Creditor Impaired
Property Policy."
7. Servicing Procedures & Policy Manual.
8. Hedging Procedures & Policy Manual.
9. Geographic Information Systems Procedures & Policy Booklet.
10. Asset Management Presentation dated January 27, 1998.
11. List of FFCA Approved Concepts/Brands.
12. FFCA written research reports on Approved Concepts/Brands.
13. Example of FFCA regression model entitled; "Burger King Regression Model."
All of such Referenced Documents are attached hereto.
EXHIBIT E
BAILEE AGREEMENT
[ DATE ]
[NAME OF BAILEE]
[ADDRESS OF BAILEE]
Attention: ______________________
Re: Bailee Agreement (the "BAILEE AGREEMENT") in connection with the
sale of certain Loans by FFCA Acquisition Corporation (the "LOAN
ORIGINATOR") to FFCA Loan Warehouse Corporation (the "DEPOSITOR")
and by the Depositor to FFCA Franchise Loan Owner Trust 1998-1
(the "ISSUER") and the pledge by Issuer of such Loans to LaSalle
Bank National Association, as indenture trustee (the "INDENTURE
TRUSTEE").
Gentlemen and Mesdames:
In consideration of the mutual promises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Loan Originator, Xxxxxx Xxxxxxx Securitization Funding Inc.
(the "INITIAL NOTEHOLDER") and ________________________ (the "BAILEE") hereby
agree as follows:
1. The Loan Originator shall deliver to the Bailee and Settlement
Agent in connection with any loans delivered to the Bailee hereunder (each, a
"LOAN") an Identification Certificate in the form of ATTACHMENT A attached
hereto to which shall be attached a Loan Schedule and Exception Report
identifying which Loans are being delivered to the Bailee hereunder. Such Loan
Schedule shall contain the following fields of information: (i) the Loan
Originator's internal loan identifying number; (ii) the Borrower's name as it
appears on the related Promissory Note; (iii) the name of the Borrower group (to
be input consistently for purposes of computing the Individual Borrower
Concentration); (iv) in the case of a Mortgage Loan, xxx xxxxxx xxxxxxx, xxxx,
xxxxx and zip code of the Mortgaged Property; (v) the original Principal
Balance; (vi) the Transfer Cutoff Date Principal Balance; (vii) the Loan
Interest Rate at origination; (viii) the date of origination; (ix) the industry
segment (e.g., CD Facility, C&G Store, QSR Store); (x) the type of Loan (e.g.,
Mortgage, Equipment); (xi) the Monthly Payment as of such Transfer Cutoff Date;
(xii) the scheduled maturity date under the Promissory Note; (xiii) the
Corporate Fixed Charge Coverage Ratio; (xiv) with respect to the Unit-Level
Fixed Charge Coverage Ratio, a flag indicating whether such figure is a
calculation of the Unit-Level Fixed Charge Coverage Ratio with respect to the
single unit or in the aggregate; (xv) the Brand; (xvi) a Prepayment Code; (xvii)
a Product Code with respect to such Loan; (xviii) if such Loan is an Adjustable
Rate Loan, the interest rate spread over LIBOR; (xix) in the case of a Mortgage
Loan, the loan to replacement cost ratio for the related Mortgaged Property (if
obtained); (xx) the Maximum Advance Factor, to the extent changed by written
agreement between the Servicer and the Majority Noteholders in their sole
discretion; (xxi) a code indicating whether the Loan is a Table-Funded Loan; and
(xxii) such other information as may be reasonably requested by the Majority
Noteholders.
2. On or prior to the "TRANSFER DATE" indicated on the Identification
Certificate delivered by the Loan Originator, the Loan Originator shall have
caused to be delivered to the Bailee, as bailee for hire, the following original
documents (collectively, the "INDENTURE TRUSTEE'S LOAN FILE") for each Loan
listed in EXHIBIT 1 to such Identification Certificate:
(i) With respect to each Mortgage Loan:
(a) The original Promissory Note, endorsed by the Loan Originator in
blank in the following form: "Pay to the order of ______________________,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from origination of the Mortgage Loan to the
Loan Originator;
(b) The original Mortgage with evidence of recording thereon (or, if
the original Mortgage has not been returned from the applicable public
recording office or is not otherwise available, a copy of the original
Mortgage submitted for recording) and, if the Mortgage was executed
pursuant to a power of attorney, the original power of attorney with
evidence of recording thereon (or, if the original power of attorney has
not been returned from the applicable public recording office or is not
otherwise available, a copy of the original power of attorney submitted for
recording);
(c) The original executed Assignment of Mortgage, in recordable form.
The Assignment of Mortgage may be a blanket assignment, to the extent such
assignment is effective under applicable law, for Mortgages covering
Mortgaged Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, an Assignment of Mortgage need not be included
in the individual Indenture Trustee's Loan File;
(d) All original intervening assignments of mortgage, with evidence of
recording thereon, showing a complete chain of assignment from origination
of the Mortgage Loan to the Loan Originator (or, if any such assignment of
mortgage has not been returned from the applicable public recording office
or is not otherwise available, a copy of such assignment of mortgage
submitted for recording);
(e) The original of the guaranty (if any) executed in connection with
the Promissory Note or related lease;
(f) The originals of all assumption, modification, consolidation or
extension agreements relating to the Mortgage with evidence of recording
thereon, (or, if the originals have not been returned from the applicable
public recording office or are not otherwise available, a copy of such
originals submitted for recording);
(g) The original attorney's opinion of title and abstract of title or
the original mortgagee title insurance policy, or if the original mortgagee
title insurance policy has not been issued, the irrevocable commitment to
issue the same;
-2-
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage Loan;
(i) The original assignment of leases and rents, if separate from the
related Mortgage, with evidence of recording thereon, or a copy of the
original that has been or will, on or prior to the related Transfer Date be
submitted for recordation in the appropriate governmental recording office
of the jurisdiction where the Mortgaged Property is located;
(j) The original assignment of assignment of leases and rents, if the
assignment of leases and rents is separate from the related Mortgage, from
the Loan Originator in blank, in form and substance acceptable for
recording;
(k) A copy of the UCC-1 Financing Statements and all necessary UCC
continuation statements with evidence of filing and/or recording thereon or
copies thereof that have been sent for filing and/or recording on or
promptly after closing, and UCC Assignments executed by the Loan Originator
in blank, which UCC Assignments shall be in form and substance acceptable
for filing and/or recording;
(l) An environmental indemnity agreement (if any);
(m) An Assignment of Loan Documents; and
(n) the original Loan Agreement.
(ii) With respect to each Equipment Loan:
(a) The original Promissory Note, endorsed by the Loan Originator in
blank in the following form: "Pay to the order of ______________________,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from origination of the Loan to the Loan
Originator;
(b) The original Security Agreement and, if the Security Agreement was
executed pursuant to a power of attorney, the original power of attorney;
(c) The original Loan Agreement, to the extent not encompassed in the
Loan Agreement with respect to the related Mortgage Loan;
(d) The original of the guaranty (if any) executed in connection with
the Promissory Note or related lease;
(e) The originals of all assumption, modification, consolidation or
extension agreements relating to the Security Agreement, or true and
correct copies thereof;
(f) A true and correct copy of the UCC-1 Financing Statements and all
necessary UCC continuation statements with evidence of filing and/or
recording thereon or true copies thereof that have been sent for filing
and/or recording on or promptly after closing, and UCC Assignments executed
-3-
by the Loan Originator in blank, which UCC Assignments shall be in form and
substance acceptable for filing and/or recording; and
(g) An Assignment of Loan Documents.
3. The Bailee shall issue and deliver to the Indenture Trustee and the
Custodian, prior to 2:00 p.m. New York City time on the Transfer Date by
facsimile, (i) a Bailee Trust Receipt in the form of ATTACHMENT B attached
hereto (the "TRUST RECEIPT") which Trust Receipt shall state that the Bailee has
received the documents comprising each Indenture Trustee's Loan File for each
Loan listed on the related Loan Schedule, except for such documents listed on
the Loan Schedule and Exception Report attached thereto (with a copy to the
Initial Noteholder via facsimile) and (ii) a copy of the executed documents
listed in Paragraph 2(i)(a) or Paragraph 2(ii)(a).
For purposes of this Bailee Agreement:
(a) the "LOAN SCHEDULE AND EXCEPTION REPORT" shall mean a list,
reflecting the Loans held by the Bailee for the benefit of the Indenture
Trustee, which includes codes indicating any Exceptions with respect to
each Loan listed thereon, to be delivered by the Bailee to the Initial
Noteholder and the Indenture Trustee on the Transfer Date. Each Loan
Schedule and Exception Report shall set forth (a) the Loans being pledged
to the Indenture Trustee on the related Transfer Date as well as the Loans
previously pledged to the Indenture Trustee (if any) and held by the Bailee
under this Bailee Agreement, and (b) all Exceptions with respect thereto,
with any updates thereto from the time such Loan Schedule and Exception
Report was last delivered; and
(b) an "EXCEPTION" shall mean, with respect to any Loan, any of the
following: (i) the variances from the requirements of Section 2 hereof with
respect to the Indenture Trustee's Loan Files (giving effect to the Loan
Originator's right to deliver certified copies in lieu of original
documents in certain circumstances), and (ii) any Loan with respect to
which the Bailee receives written notice or has actual knowledge of a lien
or security interest in favor of a person other than the Indenture Trustee
with respect to such Loan.
4. On the applicable Transfer Date, in the event that the Initial
Noteholder fails to purchase Notes secured by the Loans identified in the
related Identification Certificate, the Loan Originator shall deliver by 5:30
p.m., New York time, by facsimile to the Bailee, at ( ) ____-______ to the
attention of ______________, an authorization (the "FACSIMILE AUTHORIZATION")
acknowledged by the Initial Noteholder to release the Indenture Trustee's Loan
Files with respect to the Loans identified therein to the Loan Originator. Upon
receipt of such Facsimile Authorization, the Bailee shall release the Indenture
Trustee's Loan Files to the Loan Originator in accordance with the Loan
Originator's instructions.
5. On or after the Transfer Date, the Bailee shall forward the
Indenture Trustee's Loan Files to (i) LaSalle Bank National Association, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Asset-Backed
Securities Trust Services Group, FFCA Franchise Loan Owner Trust 1998-1 (the
"CUSTODIAN") by overnight courier for receipt by the Custodian or (ii) the Loan
-4-
Originator with respect to Loans for which the Bailee received a Facsimile
Authorization, in each case for receipt no later than three (3) Business Days
following the applicable Transfer Date (the "DELIVERY DATE").
6. From and after the applicable Transfer Date until the time of
receipt of the Facsimile Authorization by the Bailee or receipt of the Indenture
Trustee's Loan File by the Custodian, the Bailee (a) shall maintain continuous
custody and control of the related Indenture Trustee's Loan Files as bailee for
the Indenture Trustee and (b) is holding the related Loans as sole and exclusive
bailee for the Indenture Trustee unless and until otherwise instructed in
writing by the Indenture Trustee.
7. The Loan Originator agrees to indemnify and hold the Bailee and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Bailee
Agreement or any action taken or not taken by it or them hereunder. The
foregoing indemnification shall survive any resignation or removal of the Bailee
or the termination or assignment of this Bailee Agreement.
8. (a) In the event that the Bailee fails to deliver a Promissory
Note, Assignment of Mortgage or any other document related to a Loan that was in
its possession (a "CUSTODIAL DELIVERY FAILURE"), and PROVIDED that the Bailee
previously delivered to the Indenture Trustee a Trust Receipt which did not list
such document as an Exception on the Transfer Date, the Bailee shall indemnify
the Indenture Trustee or Loan Originator in accordance with the succeeding
paragraph of this Section 8.
(b) The Bailee agrees to indemnify and hold the Loan Originator, and
its respective affiliates and designees, the Indenture Trustee, its affiliates
and the directors, officers, employees and agents of the Indenture Trustee and
its affiliates, harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including reasonable attorney's fees, that may
be imposed on, incurred by, or asserted against it or them in any way relating
to or arising out of the Bailee's negligence, lack of good faith or willful
misconduct which results in a failure to perform its obligations under this
Agreement or Bailee's Custodial Delivery Failure. The foregoing indemnification
shall survive any termination or assignment of this Bailee Agreement.
9. The Bailee hereby represents, warrants and covenants that the
Bailee is not an affiliate of or otherwise controlled by the Loan Originator or
its Affiliates.
10. The agreement set forth in this Bailee Agreement letter may not be
modified, amended or altered, except by written instrument, executed by all of
the parties hereto.
11. This Bailee Agreement may not be assigned by the Loan Originator
or the Bailee without the prior written consent of the Initial Noteholder.
-5-
12. For the purpose of facilitating the execution of this Bailee
Agreement letter as herein provided and for other purposes, this Bailee
Agreement letter may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
13. Capitalized words used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement.
14. THIS BAILEE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAWS PROVISIONS
THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Very truly yours,
FFCA ACQUISITION CORPORATION,
as Loan Originator
By:
----------------------------------------
Name:
Title:
XXXXXX XXXXXXX SECURITIZATION FUNDING INC.,
as Initial Noteholder
By:
----------------------------------------
Name:
Title:
[NAME OF BAILEE]
Bailee
By:
----------------------------------------
Name:
Title:
ATTACHMENT A
IDENTIFICATION CERTIFICATE
On this _____ day of ____ __, 20__ (the "TRANSFER DATE"), FFCA
Acquisition Corporation (the "LOAN ORIGINATOR"), under that certain Bailee
Agreement, dated as of ____ __, 20__ (the "BAILEE AGREEMENT"), among the Loan
Originator, ________________ (the "BAILEE") and Xxxxxx Xxxxxxx Securitization
Funding Inc. (the "INITIAL NOTEHOLDER"), does hereby instruct the Bailee to
hold, in its capacity as Bailee, the Indenture Trustee's Loan Files with respect
to the Loans listed on EXHIBIT 1 hereto, which Loans shall be subject to the
terms of the Bailee Agreement as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Bailee Agreement.
IN WITNESS WHEREOF, the Loan Originator has caused this Identification
Certificate to be executed and delivered by its duly authorized officer as of
the day and year first above written.
FFCA ACQUISITION CORPORATION,
By:
----------------------------------------
Name:
Title:
EXHIBIT 1 TO ATTACHMENT A
LOAN SCHEDULE
ATTACHMENT B
BAILEE TRUST RECEIPT AND CERTIFICATION
____________ __, 20__
LaSalle Bank National Association, as Custodian
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Securities Trust Services Group
FFCA Franchise Loan Owner Trust 1998-1
Re: Bailee Letter, dated as of ______, 20__ (the "BAILEE AGREEMENT")
among FFCA Acquisition Corporation, Xxxxxx Xxxxxxx Securitization
Funding Inc. and _______________ (the "BAILEE")
Gentlemen and Mesdames:
In accordance with the provisions of Paragraph 3 of the
above-referenced Bailee Agreement, the undersigned, as the Bailee, hereby
certifies that as to each loan described in the "LOAN SCHEDULE" (Exhibit 1), a
copy of which is attached hereto, it has reviewed the Indenture Trustee's Loan
File and has determined that (subject to the exceptions listed in the Loan
Schedule and Exception Report attached hereto) (i) all documents are in its
possession and (ii) such documents have been reviewed by it and appear regular
on their face and relate to such loan, and based on such review, the foregoing
documents on their face satisfy the requirements set forth in Paragraph 2 of the
Bailee Agreement.
Subject to the Bailee Agreement, the Bailee hereby confirms that it is
holding each such Indenture Trustee's Loan File as agent and bailee for the
exclusive use and benefit of the Indenture Trustee pursuant to the terms of the
Bailee Agreement.
All initially capitalized terms used herein shall have the meanings
ascribed to them in the above-referenced Bailee Agreement.
-------------------------------------
BAILEE
By:
---------------------------------
Name:
Title:
EXHIBIT 1 TO ATTACHMENT B
LOAN SCHEDULE
EXHIBIT F
FORM OF ESCROW INSTRUCTIONS
[SETTLEMENT AGENT]
-----------------------------------
-----------------------------------
Re: Escrow Instructions for funds held for origination of Table-Funded Loans
Ladies and Gentlemen:
In connection with the administration of the funds held by you for the
origination of Table-Funded Loans [NAME OF SETTLEMENT AGENT], as Settlement
Agent, is hereby notified and instructed to act in accordance with the escrow
instructions provided below.
Capitalized terms not otherwise defined herein are defined in that
certain Third Amended and Restated Sale and Servicing Agreement, dated as of
January 1, 2001 by and among FFCA FRANCHISE LOAN OWNER TRUST 1998-1, FFCA LOAN
WAREHOUSE CORPORATION, as depositor (the "DEPOSITOR"), FFCA ACQUISITION
CORPORATION, as loan originator (the "LOAN ORIGINATOR"), FRANCHISE FINANCE
CORPORATION OF AMERICA, as servicer (the "SERVICER"), and LASALLE BANK NATIONAL
ASSOCIATION, as indenture trustee on behalf of the Noteholders (the "INDENTURE
TRUSTEE"), hereinafter as such agreement may have been, or may from time to time
be, amended, supplemented or otherwise modified.
ESCROW INSTRUCTIONS:
1. The funds to be used for closing this transaction, as described in
the Wire Instructions on Attachment A hereto, may be provided via wire transfer
from Xxxxxx Xxxxxxx Securitization Funding Inc. (the "INITIAL NOTEHOLDER"). You
are to hold the closing funds provided by the Initial Noteholder in trust for
the benefit of the Initial Noteholder until such time as the funds are disbursed
in accordance with these escrow instructions, upon receiving (i) an
Identification Certificate from the Loan Originator (in the form of Attachment B
hereto) and (ii) a written authorization from the Initial Noteholder via
facsimile, in the form of Attachment A hereto, authorizing such disbursement.
2. If the mortgage loan is not funded by the close of business on the
originally scheduled Transfer Date on which you receive the closing funds, you
are to return the closing funds provided by the Initial Noteholder via federal
funds wire transfer to the Initial Noteholder as follows [INSERT WIRE TRANSFER
INSTRUCTIONS], no later than 5:30 p.m., New York City time, on the originally
scheduled Transfer Date.
3. The Settlement Agent shall not be liable hereunder except for its
own negligence or willful misconduct and the Loan Originator agrees to indemnify
the Settlement Agent for and hold it harmless as to any loss, liability, or
expense, including attorney fees, incurred without negligence or willful
misconduct on the part of the Settlement Agent and arising out of or in
connection with the Settlement Agent's duties under this Agreement.
These instructions shall be irrevocable and can only be modified with
the approval in writing of the Initial Noteholder, as directed by the Initial
Noteholder.
NOTE: BY ACCEPTING THE FUNDS DELIVERED TO YOU, YOU CONSENT TO BE THE
SETTLEMENT AGENT AND BAILEE FOR THE INITIAL NOTEHOLDER ON THE TERMS DESCRIBED IN
THIS LETTER AND THAT THE INITIAL NOTEHOLDER IS AN INTENDED THIRD PARTY
BENEFICIARY HEREOF. THE INITIAL NOTEHOLDER REQUESTS THAT YOU ACKNOWLEDGE RECEIPT
OF THE FUNDS AND THIS LETTER BY SIGNING AND RETURNING THE ENCLOSED COPY OF THIS
LETTER TO THE INITIAL NOTEHOLDER; HOWEVER, YOUR FAILURE TO DO SO DOES NOT
NULLIFY SUCH CONSENT.
Very truly yours,
FFCA ACQUISITION CORPORATION
as Loan Originator
By:
-------------------------------------
Name:
Title:
Address for notices:
Address:_________________________________
City, state, zip_________________________
Attention:_______________________________
Facsimile No. ___________________________
Telephone No. ___________________________
ACKNOWLEDGED AND AGREED
[NAME OF SETTLEMENT AGENT]
By:_____________________________
Print Name:_____________________
Title: _________________________
Date:___________________________
Address for notices:
Address:________________________
City, state, zip________________
Attention:______________________
Facsimile No. __________________
Telephone No. __________________
ATTACHMENT A TO THE ESCROW INSTRUCTIONS
WIRE INSTRUCTIONS
FUNDS TO BE RECEIVED BY SETTLEMENT AGENT
Funds provided by Initial Noteholder: ________________
Funds provided by Loan Originator: ________________
Funds provided by ____________: ________________
Total funds received by Settlement Agent ________________
FUNDS TO BE DISBURSED BY SETTLEMENT AGENT
Amount: ________________________
Receiving Bank: ________________________
Bank ABA Number: ________________________
Beneficiary: ________________________
Account Number: ________________________
Reference: ________________________
Escrow Officer: ________________________
Escrow Number: ________________________
ACKNOWLEDGED AND AGREED
INITIAL NOTEHOLDER
By:_____________________________
Print Name:_____________________
Title: _________________________
Date:___________________________
Facsimile No. __________________
Telephone No. __________________
ATTACHMENT B TO THE ESCROW INSTRUCTIONS
IDENTIFICATION CERTIFICATE
On this _____ day of ____ __, 20__ (the "TRANSFER DATE"), FFCA
Acquisition Corporation (the "LOAN ORIGINATOR"), under that certain Bailee
Agreement, dated as of ____ __, 20__ (the "BAILEE AGREEMENT"), among the Loan
Originator, ________________ (the "BAILEE") and Xxxxxx Xxxxxxx Securitization
Funding Inc. (the "INITIAL NOTEHOLDER"), does hereby instruct the Bailee to
hold, in its capacity as Bailee, the Indenture Trustee's Loan Files with respect
to the Loans listed on EXHIBIT 1 hereto, which Loans shall be subject to the
terms of the Bailee Agreement as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Bailee Agreement.
IN WITNESS WHEREOF, the Loan Originator has caused this Identification
Certificate to be executed and delivered by its duly authorized officer as of
the day and year first above written.
FFCA ACQUISITION CORPORATION,
By:
---------------------------------------
Name:
Title:
EXHIBIT 1 TO ATTACHMENT B
LOAN SCHEDULE
EXHIBIT G
FORM OF LOAN ORIGINATOR PUT NOTICE
[Date]
FFCA Acquisition Corporation
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Re: FFCA FRANCHISE LOAN BACKED NOTES SERIES 1998-1
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Sale and Servicing
Agreement, dated as of January 1, 2001 (the "SALE AND SERVICING AGREEMENT"), by
and among FFCA Franchise Loan Owner Trust 1998-1, FFCA Loan Warehouse
Corporation, as Depositor, FFCA Acquisition Corporation, as Loan Originator,
Franchise Finance Corporation of America, as Servicer and LaSalle Bank National
Association, as Indenture Trustee, hereinafter as such agreement may have been,
or may from time to time be, amended, supplemented or otherwise modified.
Capitalized terms not defined herein shall have the meanings assigned to such
terms in the Sale and Servicing Agreement.
Pursuant to Section 3.07(a) of the Sale and Servicing Agreement, we
demand that you repurchase the following Loan listed below on [specify date] for
the following reason:
______ The Loan has become 30 or more days Delinquent
______ The Loan is a Defaulted Loan
______ The Loan has been in default for a period of 30 days or more
______ The Loan has been determined to be ineligible for a Securitization by
mutual agreement of the Majority Noteholders and the Servicer.
______ The Loan is a Mortgage Loan with respect to which the Loan
Originator did not enforce a due-on-sale or due-on-encumbrance
clause pursuant to Section 7.01 of the Sale and Servicing Agreement.
___________________________________ $__________________________________
LOAN NAME PURCHASE PRICE
Very truly yours,
By:
-----------------------------------
Name:
----------------------------
Title:
----------------------------
On behalf of the Majority Noteholders
WITH A COPY TO:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Securities Trust Services Group
FFCA Franchise Loan Owner Trust 1998-1
EXHIBIT H
FORM OF SERVICER CALL NOTICE
[Date]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Securities Trust Services Group
FFCA Franchise Loan Owner Trust 1998-1
Re: FFCA Franchise Loan Backed Notes Series 1998-1
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Sale and Servicing
Agreement, dated as of January 1, 2001 (the "SALE AND SERVICING AGREEMENT"), by
and among FFCA Franchise Loan Owner Trust 1998-1, FFCA Loan Warehouse
Corporation, as Depositor, FFCA Acquisition Corporation, as Loan Originator,
Franchise Finance Corporation of America, as Servicer and LaSalle Bank National
Association, as Indenture Trustee, hereinafter as such agreement may have been,
or may from time to time be, amended, supplemented or otherwise modified.
Capitalized terms not defined herein shall have the meanings assigned to such
terms in the Sale and Servicing Agreement.
Pursuant to Section 3.07(b) of the Sale and Servicing Agreement, we
are notifying you that we will repurchase the following Loan listed below on
[specify date] for the following reason:
______ The Loan has become 30 or more days Delinquent
______ The Loan is a Defaulted Loan
______ The Loan has been in default for a period of 30 days or more
______ The Loan has been determined to be ineligible for a Securitization by
mutual agreement of the Majority Noteholders and the Servicer.
______ The Loan is a Mortgage Loan with respect to which the Loan
Originator did not enforce a due-on-sale or due-on-encumbrance
clause pursuant to Section 7.01 of the Sale and Servicing Agreement.
___________________________________ $__________________________________
LOAN NAME PURCHASE PRICE
Very truly yours,
FRANCHISE FINANCE CORPORATION OF AMERICA
By:
-----------------------------------
Name:
----------------------------
Title:
----------------------------
With a copy to the Majority Noteholders to the Attention of:
MSSFI
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx
