CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT (this "Custodial Agreement") dated as of
November 16, 2001, made by and among:
(i) ABFS REPO 2001, INC., a Delaware corporation (the
"Seller");
(ii) AMERICAN BUSINESS CREDIT, INC., a Pennsylvania
corporation ("ABC" or the "Company");
(iii) JPMORGAN CHASE BANK, a New York banking corporation (the
"Custodian"), and
(iv) CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the
"Buyer").
RECITALS
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The Seller and the Buyer are parties to the Master Repurchase
Agreement, dated as November 16, 2001 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Repurchase Agreement"), pursuant
to which the Buyer and Seller have agreed, subject to the terms and conditions
of the Repurchase Agreement, to enter into certain Transactions (as defined in
the Repurchase Agreement) for the purchase by the Buyer of certain Purchased
Assets and the resale of such Purchased Assets to the Seller on dates certain,
all as more particularly described in the Repurchase Agreement.
It is a condition precedent to the consummation of
Transactions pursuant to the Repurchase Agreement on or after the date hereof
that the parties hereto execute and deliver this Custodial Agreement to provide
for the appointment of the Custodian as custodian hereunder. This Custodial
Agreement is the Custody Agreement referred to in the Repurchase Agreement.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions.
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Unless otherwise defined herein, capitalized terms used but
not defined herein shall have the meanings set forth in the Repurchase
Agreement. The following terms shall have the following meanings:
"ABMS" means American Business Mortgage Services, Inc.
(formerly New Jersey Mortgage and Investment Corp.) and its permitted successors
and assigns.
"Assignment of Mortgage" means, with respect to any Mortgage,
an assignment of the 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
the Mortgage.
"Authorized Representative" shall have the meaning specified
in Section 19 hereof.
"Borrower" means the obligor or obligors on a Note, including
any Person that has acquired the related collateral and assumed the obligations
of the original obligor or obligors under the Note.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day upon which the New York Stock Exchange, the Federal Reserve
Bank of New York or the Custodian is obligated by law or executive order to be
closed.
"Collateral" shall mean any of the following items of property
of the Seller which may be delivered to the Custodian pursuant to the express
provisions of this Custodial Agreement: the Loans, any records relating thereto
belonging to any party other than Custodian, and all related servicing rights,
property, insurance, any principal amount of any Loan then payable and all
interest, dividends or other distribution related thereto, accounts (including
escrow accounts) and any other contract rights, payments, rights to payments
(including payments of interest or finance charges) general intangibles and
other assets relating to the Loans (including, without limitation, any other
accounts) or any interest in the Loans, the servicing of the Loans, and any
proceeds and distributions with respect to any of the foregoing and any other
property, rights, titles or interest as are specified on a Transaction Notice.
"Collateral Receipt" means a document duly executed by the
Seller with respect to each delivery of documents to Custodian relating to the
Purchased Assets in the form attached hereto as Annex 3.
"Collection Account" means the collection account established
pursuant to Section 28 hereof.
"Collection Period" shall have the meaning assigned thereto in
the Repurchase Agreement.
"Default" shall have the meaning assigned thereto in the
Repurchase Agreement.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Eastern Time" shall mean the time of day in New York, New
York.
"Event of Default" shall have the meaning assigned thereto in
the Repurchase Agreement. This definition is included for reference purposes
only, it being agreed that Custodian shall have no obligations or
responsibilities hereunder to determine or report to any party, in any event,
the existence or nonexistence of an Event of Default.
"Exception" shall mean, with respect to any Purchased Asset,
either (A)(i) variances from the requirements of Section 2 hereof with respect
to the Loan File (giving effect to the Seller's right to deliver certified
copies in lieu of original documents in certain circumstances), or (ii) any
Purchased Asset with respect to which the Custodian receives written notice or
has actual knowledge of a lien or security interest upon or in such Purchased
Asset in favor of a Person other than the Buyer, or (B)(i) a Loan which remains
subject to this Custodial Agreement on or after a date which is 180 days
following the initial Purchase Date for such Loan, (ii) a Loan that has been
released to the Company pursuant to Section 6(a) hereof in excess of 10 calendar
days, or (iii) a Purchased Asset that has been released under any Transmittal
Letter in the form of Annex 10 and 11 hereto in excess of the time period stated
in such Transmittal Letter for release.
"First Lien Loan" shall mean a Loan secured by the lien on the
related Mortgaged Property, subject to no prior mortgage liens on such Mortgaged
Property.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator having jurisdiction over
the Seller or the Company, any of their Subsidiaries or any of their properties.
"Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
"Loan" shall mean a mortgage loan which the Custodian has been
instructed to hold for the Buyer pursuant to this Custodial Agreement, and which
Loan includes, without limitation, (i) a Note and the related Mortgage and (ii)
all right, title and interest of the Seller in and to the Mortgaged Property
covered by such Mortgage.
"Loan Documents" shall mean, with respect to a Purchased
Asset, the documents comprising the Loan File for such Purchased Asset.
"Loan File" shall mean, as to each Purchased Asset, those
documents listed in the applicable portions of Section 2 of this Custodial
Agreement that are delivered to the Custodian or which at any time come into the
possession of the Custodian.
"Loan Schedule" shall mean a list of Purchased Assets to be
transferred by the Seller to the Buyer pursuant to the Repurchase Agreement and
attached to a Collateral Receipt, setting forth, as to each Purchased Asset, the
applicable information specified on Annex 1 to this Custodial Agreement.
"Loan Schedule and Exception Report" means a list of Purchased
Assets delivered by the Custodian to the Buyer on each Purchase Date and on each
Business Day for which any change has occurred in the information reflected in
the previously delivered Loan Schedule and Exception Report, reflecting the
Purchased Assets held by the Custodian for the benefit of the Buyer, which
includes codes indicating any Exceptions with respect to all Purchased Assets
listed thereon and each Purchased Asset listed thereon, as applicable. Each Loan
Schedule and Exception Report shall set forth (a) the Purchased Assets being
transferred to the Buyer on any applicable Purchase Date as well as the
Purchased Assets previously purchased by the Buyer and held by the Custodian
hereunder, and (b) all Exceptions with respect thereto, with any updates thereto
from the time last delivered. Each such Loan Schedule and Exception Report shall
supercede any previously delivered Loan Schedule and Exception Report.
"Lost Note Affidavit" means a lost note affidavit in the form
of Annex 9 attached to this Custodial Agreement.
"Margin Deficit" shall have the meaning assigned thereto in
the Repurchase Agreement.
"Market Value" shall have the meaning assigned thereto in the
Repurchase Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc., or its
successor in interest.
"Mortgage" shall mean the mortgage, deed of trust or other
instrument securing a Note, which creates a first lien on the fee in real
property securing the Note.
"Mortgaged Property" shall mean the real property (including
all improvements, buildings, fixtures, building equipment and personal property
thereon 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 a Note.
"Note" shall mean the original executed promissory note or
other evidence of the indebtedness of a mortgagor/borrower with respect to a
Loan.
"Originator" means either ABC, Upland or ABMS, as applicable.
"Permitted Investments" means any one or more of the following
obligations or securities acquired at a purchase price of not greater than par:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) (A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by or federal funds
sold by any depository institution or trust company
incorporated under the laws of the United States of America or
any state thereof and subject to supervision and examination
by federal and/or state authorities, so long as, at the time
of such investment or contractual commitment providing for
such investment, such depository institution or trust company
(or, in the case of the principal depository institution in a
depository institution holding company, debt obligations of
the depository institution holding company) or its ultimate
parent has a short-term uninsured debt rating in the highest
available rating category of Moody's and S&P and provided that
each such investment has an original maturity of no more than
365 days; and provided further that, if the depository or
trust company is a principal subsidiary of a bank holding
company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the
bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company
shall exceed 30 days, the short term rating of such
institution shall be A-1+ in the case of S&P if S&P is the
rating agency; and (B) any other demand or time deposit or
deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to
exceed 30 days with respect to any security described in
clause (i) above and entered into with a depository
institution or trust company (acting as principal) rated A-1+
or higher by S&P and rated A2 or higher by Moody's, provided,
however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause
(i) above and must (A) be valued daily at current market
prices plus accrued interest, (B) pursuant to such valuation,
be equal, at all times, to 105% of the cash transferred in
exchange for such collateral and (C) be delivered to the Buyer
or, if the Buyer is supplying the collateral, an agent for the
Buyer, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under
the laws of the United States of America or any State thereof
and that are rated by a rating agency in its highest long-term
unsecured rating category at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more
than 30 days after the date of acquisition thereof) that is
rated by a rating agency in its highest short-term unsecured
debt rating available at the time of such investment;
(vi) units of money market funds that have been rated
"AAA" by S&P and "Aaa" by Moody's; and
(vii) if previously confirmed in writing to the
Buyer, any other demand, money market or time deposit, or any
other obligation, security or investment.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, limited liability company,
trust, unincorporated association or government (or any agency, instrumentality
or political subdivision thereof).
"Purchased Assets" shall mean, with respect to a Transaction,
the related Loans and other "collateral" (as such term is used and defined in
the Repurchase Agreement), and all instruments, chattel paper, and general
intangibles comprising or relating to all of the foregoing. The term "Purchased
Assets" with respect to any Transaction at any time also shall include
Additional Purchased Assets delivered pursuant to Section 6(a) of the Repurchase
Agreement.
"Repurchase Agreement" shall have the meaning assigned thereto
in the section of this Custodial Agreement entitled "Recitals".
"Request for Release" means a request for release in the form
of Annex 5-C attached to this Custodial Agreement.
"Request for Release and Receipt" means a request for release
and receipt in the form of Annex 5-A attached to this Custodial Agreement.
"Request for Release of Documents and Receipt" means a request
for release of documents and receipt in the form of Annex 5-B attached to this
Custodial Agreement.
"Responsible Officer" shall mean, as to any Person, the chief
executive officer or, with respect to financial matters, the chief financial
officer of such Person.
"Review Procedures" shall have the meaning specified in
Section 4(d) hereof.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Second Lien Loan" shall mean a Loan secured by the lien on
the Mortgaged Property, subject to one prior mortgage lien on such Mortgaged
Property.
"Seller Loan Schedule" shall mean a list of Purchased Assets
setting forth, as to each Purchased Asset, the applicable information specified
on Annex 12 to this Custodial Agreement. With respect to any delivery of such
Seller Loan Schedule to the Custodian, the Seller Loan Schedule shall be in a
format acceptable to both Buyer and Custodian.
"Transaction" shall have the meaning assigned thereto in the
Repurchase Agreement.
"Transaction Notice" shall mean a document duly executed by
the Seller with respect to each delivery of documents to Custodian relating to
the Purchased Assets in the form attached hereto as Annex 14.
"Trust Receipt" shall mean a Trust Receipt in the form annexed
hereto as Annex 2 delivered to the Buyer by the Custodian covering all of the
Purchased Assets subject to this Custodial Agreement from time to time, as
reflected on the Loan Schedule and Exception Report attached thereto in
accordance with Section 4(e).
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect on the date hereof in the State of New York; provided that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions in the
Loan Documents relating to such perfection or effect of perfection or
non-perfection.
"Upland" means HomeAmerican Credit, Inc. (d/b/a Upland
Mortgage) and its permitted successors and assigns.
"Warehouse Lender's Release Letter" means a warehouse lender's
release letter in the form of Annex 13 attached to this Custodial Agreement.
Section 2. Delivery of Loan File.
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No later than 11:00 a.m. (Eastern Time) on the second Business
Day prior to each Purchase Date, the Seller shall (i) deliver and release to the
Custodian the following original documents pertaining to the Purchased Assets to
be transferred to the Buyer on such Purchase Date, each of which Purchased
Assets shall be identified in a Loan Schedule delivered therewith, with a copy
of such Loan Schedule delivered to the Buyer and (ii) deliver to Custodian a
Collateral Receipt (or, if another time is specified below for such release or
delivery at such other time);
(a) the original Note, endorsed by the last endorsee without
recourse either in blank or in the name of the Custodian as agent for the holder
of the Mortgage Loan, including all intervening endorsements showing a complete
chain of endorsement to the last endorsee or the Custodian, as the case may be;
(b) the related Mortgage with evidence of recording thereon or
a copy thereof certified by the applicable recording office;
(c) the recorded intervening assignments of mortgage, or copy
thereof certified by the applicable recording office, if any, showing a complete
chain of assignment from the originator of the related Mortgage Loan to the last
assignee;
(d) an Assignment of Mortgage in recordable form endorsed in
blank by the last assignee;
(e) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a Mortgage or
Note have been modified or such Mortgage or Note has been assumed; and
(f) an original title insurance policy (or (A) a copy of the
title insurance policy, or (B) a binder thereof or copy of such binder together
with a certificate from the related Originator that the original Mortgage has
been delivered to the title insurance company that issued such binder for
recordation).
(g) [reserved]
(h) A computer tape and schedule of loans containing the
information set forth on Annex 12 hereto.
(i) With respect to each Loan identified as a Business Purpose
Loan on the Loan Schedule, a business purpose affidavit of the Borrower whereby
the Borrower states, among other things, that (i) the proceeds of the Business
Purpose Loan are to be used exclusively to acquire an interest in or carry on a
business or commercial enterprise, and (ii) no portion of the proceeds of any
Business Purpose Loan are to be used by the borrower for personal, family,
household or consumer purposes.
In instances where the original recorded Mortgage and any
original recorded intervening assignment of mortgage thereof cannot be delivered
by the Seller to the Custodian on behalf of the Buyer prior to or concurrently
with the related Purchase Date, due to a delay in connection with recording, the
Seller may:
(x) In lieu of delivering such original recorded
Mortgage, deliver to the Custodian on behalf of the Buyer a
copy thereof provided that the related Originator certifies
that the original Mortgage has been delivered to a title
insurance company for recordation after receipt of its policy
of title insurance or binder thereof; and
(y) In lieu of delivering the original recorded
intervening assignment of mortgage, deliver to the Custodian
on behalf of the Buyer a copy of the intervening assignment of
mortgage certified by the related Originator.
The Seller shall deliver such original documents to the Custodian promptly when
they are received.
From time to time, the Seller shall forward to the Custodian
additional original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Loan approved by the Seller, in
accordance with the terms of the Repurchase Agreement accompanied by a
transmittal letter or memo clearly identifying the Loan to which such
document(s) relate(s), and upon receipt of any such other documents, the
Custodian shall hold such other documents in the Loan File for such Loan.
Section 3. [Reserved].
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Section 4. Transaction Notice; Loan Schedule and Exception
Report; Trust Receipt.
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(a) Not later than 11:00 a.m. (Eastern Time) on the second
Business Day prior to each Purchase Date, the Seller shall provide the Custodian
with (i) a Collateral Receipt, (ii) a related Loan Schedule (such information
contained on the Loan Schedule shall be delivered to the Custodian in
computer-readable form via electronic transmission) with respect to the
Purchased Assets to be transferred to the Buyer on such Purchase Date, (iii) the
Loan Files for all Purchased Assets identified on the Loan Schedule attached
thereto, and (iv) the related Transaction Notice in the form of Annex 14 hereto.
(b) If the Custodian has received all items specified in
Section 4(a) hereof by the time indicated therein, then on the related Purchase
Date, the Custodian will deliver to the Buyer, via facsimile and electronically
(if possible), no later than 3:30 p.m. (Eastern Time), a Trust Receipt, Loan
Schedule and Exception Report for each Purchased Asset transferred hereunder on
such date, with Exceptions identified by the Custodian as current as of the date
and time of delivery of such Loan Schedule and Exception Report. By delivering
each such Trust Receipt, the Custodian shall be deemed to have represented and
warranted to the Seller and the Buyer that the Custodian does in fact have
possession of each of the documents required to be delivered pursuant to Section
2 hereof in respect of each Purchased Asset listed therein, subject to any
Exceptions listed on a Loan Schedule and Exception Report, except any documents
released by the Custodian pursuant to the terms of this Custodial Agreement.
(c) Notwithstanding and in addition to the foregoing, on each
Purchase Date and on each Business Day for which any change has occurred in the
information reflected in the previously delivered Loan Schedule and Exception
Report, as of the opening of business on such day, the Custodian shall deliver
to the Seller and the Buyer, via facsimile and electronically, a Loan Schedule
and Exception Report, in each case no later than 11:00 a.m. (Eastern Time) which
shall reflect the Exceptions identified by the Custodian as of the Business Day
prior to the date of delivery of the applicable Loan Schedule and Exception
Report, with respect to all Purchased Assets held by the Custodian.
(d) Each Loan Schedule and Exception Report shall list all
Exceptions using such codes as shall be in form and substance agreed to by the
Custodian and the Seller. The delivery of each Loan Schedule and Exception
Report to the Buyer shall be the Custodian's representation that, other than the
Exceptions listed as part of the Exception Report: (i) all documents required to
be delivered in respect of such Purchased Asset pursuant to Section 2 of this
Custodial Agreement and the related Transaction Notice have been delivered and
are in the possession of the Custodian as part of the Loan File for such
Purchased Asset (giving effect to the Seller's right to deliver certified copies
in lieu of original documents in certain circumstances), (ii) all such documents
have been reviewed by the Custodian in accordance with the review procedures
attached hereto as Annex 4 (the "Review Procedures") and appear on their face to
be regular and to relate to such Purchased Asset and to satisfy the requirements
set forth in Section 2 of this Custodial Agreement, (iii) based upon a review of
the Note, items (b), (c), (d), and (f) of Annex 1 as set forth in the Loan
Schedule delivered by the Seller to the Custodian are correct and (iv) each
Purchased Asset identified on such Loan Schedule and Exception Report is being
held by the Custodian as the agent and bailee for the Buyer and/or its designees
pursuant to this Custodial Agreement. Each Loan Schedule and Exception Report
delivered to the Buyer by the Custodian shall cover all Purchased Assets
transferred to the Buyer by the Seller, shall supersede and cancel the
previously delivered Loan Schedule and Exception Report attached to the Trust
Receipt, and shall control and be binding upon the parties hereto.
(e) In connection with a Loan Schedule and Exception Report
delivered hereunder by the Custodian, the Custodian shall make no
representations as to and shall not be responsible to determine or verify (A)
the validity, legality, enforceability, due authorization, recordability, filing
or recording status or history, sufficiency, or genuineness of any of the
documents contained in each Loan File or (B) the collectability, insurability,
effectiveness or suitability of any such Purchased Asset. Subject to the
following sentence, the Seller and the Buyer hereby give the Custodian notice
that from and after the Purchase Date, the Buyer shall have an ownership and/or
security interest in each Purchased Asset identified on a Loan Schedule and
Exception Report until such time that the Custodian receives written notice from
the Buyer that the Buyer no longer has an ownership and/or security interest in
such Purchased Asset. In the event that the Buyer does not purchase a Purchased
Asset from the Seller prior to 5:00 p.m. (Eastern Time) on a Purchase Date, upon
notice thereof from the Seller, acknowledged by the Buyer, the Custodian shall
hold or release to the Seller, pursuant to the Seller's written instructions,
the Purchased Assets in respect of the Loan Schedule and Exception Report
delivered by the Custodian on such Purchase Date.
Section 5. Obligations of the Custodian.
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(a) The Custodian shall maintain continuous custody of all
items constituting the Loan Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Buyer therein. Each Note (and Assignment of Mortgage) and
Transaction Notice shall be maintained in fire resistant facilities.
(b) With respect to the documents constituting each Loan File,
the Custodian shall (i) act exclusively as the bailee of, and custodian for, the
Buyer for all purposes (including, but not limited to, maintaining possession of
the Loan File as agent for the Buyer for the purpose of perfecting the security
of Buyer in such Purchased Assets to the extent the Seller shall be deemed to
have pledged the Purchased Assets to Buyer pursuant to Section 8 of the
Repurchase Agreement), (ii) hold all documents constituting such Loan File
received by it as the bailee of, and custodian for, the Buyer and (iii) make
disposition thereof only in accordance with the terms of this Custodial
Agreement or with written instructions furnished by the Buyer (including
assigning the Mortgages and endorsing the Notes, without recourse, to the
designee of Buyer); provided, however, that in the event of a conflict between
the terms of this Custodial Agreement and the written instructions of the Buyer,
the Buyer's written instructions shall control.
(c) In the event that (i) the Seller, the Company, the Buyer
or the Custodian shall be served by a third party with any type of levy,
attachment, writ or court order with respect to any Loan File or any document
included within a Loan File or (ii) a third party shall institute any court
proceeding by which any Loan File or a document included within a Loan File
shall be required to be delivered otherwise than in accordance with the
provisions of this Custodial Agreement, the party receiving such service shall
promptly deliver or cause to be delivered to the other parties to this Custodial
Agreement copies of all court papers, orders, documents and other materials
concerning such proceedings. The Custodian shall, to the extent permitted by
law, continue to hold and maintain all the Loan Files that are the subject of
such proceedings pending a final, nonappealable order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Loan File or
any document included within such Loan File as directed in writing by the Buyer
if the Buyer's direction is consistent with such determination and will not
result in the Custodian's violating any order of any court or governmental
authority. Expenses of the Custodian incurred as a result of such proceedings
shall be borne by the Seller.
(d) (i) The Buyer hereby acknowledges that the Custodian shall
not be responsible for the validity and perfection of the Buyer's ownership of,
or security interest in, the Collateral hereunder or to take any steps to
establish or restore the same, other than the Custodian's obligation to take
possession of Collateral as set forth in Section 2 hereof and other than as
further provided in Section 5(d)(ii).
(ii) The Seller, the Buyer and the Custodian agree that the
Purchased Assets will be held for the Buyer by the Custodian as bailee,
financial intermediary and securities intermediary on Buyer's behalf, that the
Custodian will follow Buyer's written instructions directing transfer with
respect to any Purchased Assets, and that in no event shall any consent of the
Seller be required for the taking of any such action by the Custodian.
Notwithstanding anything to the contrary in this Custodial Agreement, in the
event of any dispute between conflicting claims by or conflicting instructions
from the Seller and the Buyer with respect to the Purchased Assets, cash or any
other matter covered by the Custodial Agreement, the Custodian shall follow the
instructions of the Buyer and disregard the instructions of the Seller with
respect to the Purchased Assets.
Section 6. Release of Collateral.
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(a) From time to time, the Company may request the temporary
withdrawal of the documentation relating to the Loans in the possession of the
Custodian for the purpose of correcting documentary deficiencies relating
thereto. Until the Custodian is otherwise notified in writing by the Buyer,
which notice shall be given by the Buyer only following the occurrence of a
Default, the Custodian shall permit the withdrawal of such documentation without
the written consent of the Buyer. Until the Custodian is otherwise notified in
writing by the Buyer, which notice shall be given by the Buyer only following
the occurrence of a Default, the Custodian is hereby authorized upon receipt of
written request of the Company (and written authorization of the Buyer with
respect to releases of documentation with respect to more than ten Loans on any
one day), to release documentation relating to Loans in the possession of the
Custodian to the Company, or its designee, for the purpose of correcting
documentary deficiencies relating thereto against a Request for Release and
Receipt executed by the Company in the form of Annex 5-A hereto. The Custodian
shall promptly notify the Buyer that it has released any Loan File to the
Company or its designee. The Company or its designee shall return to the
Custodian each document previously released from the Custodian's Loan File
within ten (10) calendar days. The Company hereby further represents and
warrants to the Buyer that any such request by the Company for release of
Collateral shall be solely for the purposes of correcting clerical or other
non-substantial documentation problems in preparation for returning such
Collateral to the Custodian for ultimate sale, securitization, or exchange and
that the Company has requested such release in compliance with all terms and
conditions of such release set forth in the Repurchase Agreement.
(b) From time to time until the Custodian is otherwise
notified in writing by the Buyer, which notice shall be given by the Buyer only
following the occurrence of a Default and as appropriate for the foreclosure or
servicing of any of the Loans (provided that the Custodian shall have no
obligation to inquire or determine whether any such notice complies with or
violates such requirement, or to recognize or comply with any conflicting advice
from the Seller or Company or any other Person), the Custodian shall, upon
written receipt from the Company or its designee of a Request for Release of
Documents and Receipt in the form of Annex 5-B hereto and written authorization
of the Buyer, release to the Company or its designee the related Custodian's
Loan File or the documents set forth in such request and receipt. The Custodian
shall promptly notify the Buyer that it has released any Loan File to the
Company or its designee.
The Company or its designee shall hold each Loan File
delivered to it pursuant to this Section 6(b) as bailee for the Buyer. The
Company or its designee shall return to the Custodian each document previously
released from the Custodian's Loan File within 10 calendar days. The Company
hereby further represents and warrants to the Buyer that any such request by the
Company or its designee for release of Collateral shall be solely for the
purposes of foreclosure or servicing of any of the Loans.
(c) (i) From time to time until otherwise notified in writing
by the Buyer, which notice shall be given by the Buyer only following the
occurrence of a Default (provided that the Custodian shall have no obligation to
inquire or determine whether any such notice complies with or violates such
requirement, or to recognize or comply with any conflicting advice from the
Company or any other Person), the Custodian is hereby authorized upon receipt of
written request of the Company and written approval by the Buyer to release Loan
Files in the possession of the Custodian to a third-party purchaser for the
purpose of resale thereof against a Request for Release executed by the Company
in the form of Annex 5-C hereto. On such Request for Release, the Company shall
indicate the Purchased Assets to be sold, the amount of sale proceeds
anticipated to be received, the date of such anticipated sale, the name and
address of the third-party purchaser, and the preferred method of delivery.
(ii) Any transmittal of documentation for Purchased Assets in
the possession of the Custodian in connection with the sale thereof to a
third-party purchaser will be under cover of a transmittal letter substantially
in the form attached hereto as Annex 10 duly completed by the Custodian and
executed by the Custodian. Any transmittal of documentation for Purchased Assets
in the possession of the Custodian in connection with the shipment to a
custodian or trustee in connection with the formation of a mortgage pool
supporting a mortgage-backed or asset-backed security (an "MBS") will be under
cover of a transmittal letter substantially in the form attached hereto as Annex
11. Promptly upon (x) the remittance by such third-party purchaser of the full
purchase price of the Purchased Asset or (y) the issuance of such MBS, the Buyer
shall notify the Custodian in writing thereof.
(d) From time to time until the Custodian is otherwise
notified in writing by the Buyer, and with the prior written consent of the
Buyer, the Seller may, subject to agreement with and acceptance by Buyer,
substitute for one or more Purchased Assets constituting the Collateral one or
more substitute Purchased Assets having aggregate Market Value equal to or
greater than the Market Value of the Purchased Assets being substituted for and
which Purchased Assets are substantially similar to the Purchased Assets they
are being substituted for, or obtain the release of one or more Purchased Assets
constituting Collateral hereunder; provided that, after giving effect to such
substitution or release, the Market Value of the then remaining Purchased Assets
shall not cause a Margin Deficit, which determination shall be made solely by
the Buyer in accordance with the Repurchase Agreement. In connection with any
such requested substitution, the Seller will provide written notice to the
Custodian and the Buyer no later than 3:00 p.m. (Eastern Time), on the date of
such request, specifying the Purchased Assets to be substituted for and the
substitute Purchased Assets to be transferred hereunder in substitution
therefor, if any, and shall deliver with such notice a Collateral Receipt and a
revised Loan Schedule indicating any substitute Purchased Assets. The Custodian
will effect the requested substitution or release no later than 5:00 p.m.
(Eastern Time), one Business Day following the day on which such request was
made after the Custodian has certified to the Buyer on such Business Day that
the matters set forth in Section 4(d) hereof with respect to any substitute
Purchased Assets are true and correct. Each such substitution or release shall
be deemed to be a representation and warranty by the Seller that any substitute
Purchased Assets are Purchased Assets and that after giving effect to such
substitution or release, the Market Value of the remaining Purchased Assets
shall not cause a Margin Deficit; provided however, the Custodian shall have no
responsibility for determining or verifying (i) the Market Value of any
Purchased Asset or (ii) the existence or absence of a Margin Deficit.
(e) So long as the Custodian has not received written notice
that a Default has occurred and is continuing, the Custodian and the Buyer shall
take such steps as they may reasonably be directed from time to time by the
Company in writing, which the Company deems necessary and appropriate, to
transfer promptly and deliver to the Company any Loan File in the possession of
the Custodian relating to any Purchased Asset previously subject to a
Transaction under the Repurchase Agreement but which the Company, with the
written consent of the Buyer (a copy of which shall have been delivered to the
Custodian), has notified the Custodian has ceased to be a Purchased Asset. In
furtherance of the foregoing, upon receipt of written request from the Company
in the form of Annex 5-D hereto, which must be acknowledged in writing by the
Buyer, and provided that no Default has occurred and is continuing, the
Custodian shall release to the Company the requested Loan Files.
(f) Following written notification by the Buyer (any notice to
the Custodian may be by facsimile) to the Custodian that a Default has occurred
and is continuing, the Custodian shall not release, or incur any liability to
the Company or any other Person for refusing to release, any item of Collateral
to the Company or any other Person without the express prior written consent and
at the direction of the Buyer.
(g) The Custodian shall use best efforts to monitor any
release of possession of Collateral under this Section 6, to track the period of
time which has elapsed for any such release of possession of Collateral.
Section 7. Fees and Expenses of Custodian.
------------------------------
The Custodian shall charge such fees for its services under
this Custodial Agreement as are set forth in a separate agreement between the
Custodian and the Company, as may be amended from time to time, the payment of
which fees, together with the Custodian's expenses (including attorneys' fees
and expenses) in connection herewith, shall be solely the obligation of the
Company.
Section 8. Removal or Resignation of Custodian.
-----------------------------------
(a) The Custodian may at any time resign and terminate its
obligations under this Custodial Agreement upon at least 60 days' prior written
notice to the Seller, the Company and the Buyer. Promptly after receipt of
notice of the Custodian's resignation, the Buyer shall appoint, by written
instrument, a successor custodian, subject to written approval by the Seller
(which approval shall not be unreasonably withheld). One original counterpart of
such instrument of appointment shall be delivered to each of the Seller, the
Company, the Custodian and the successor custodian.
(b) The Buyer, upon at least 60 days' prior written notice to
the Custodian, the Seller and the Company, may remove and discharge the
Custodian (or any successor custodian thereafter appointed) from the performance
of its obligations under this Custodial Agreement. Promptly after the giving of
notice of removal of the Custodian, the Buyer shall appoint, by written
instrument, a successor custodian, which appointment shall require no other
approval. One original counterpart of such instrument of appointment shall be
delivered to each of the Buyer, the Seller, the Company, the Custodian and the
successor custodian.
(c) In the event of any such resignation or removal, the
Custodian shall promptly transfer to the successor custodian, as directed in
writing, all the Loan Files being administered under this Custodial Agreement
and, if the endorsements on the Notes and the Assignments of Mortgage have been
completed in the name of the Custodian, assign the Mortgages and endorse without
recourse the Notes to the successor Custodian or as otherwise directed by the
Buyer. The cost of the shipment of Loan Files arising out of the removal or
resignation of the Custodian shall be at the expense of the Company. The Company
shall be responsible for the fees and expenses of the successor custodian and
the fees and expenses for endorsing the Notes and assigning the Mortgages to the
successor custodian if required pursuant to this paragraph. In the event that no
successor is appointed within sixty (60) days following written notice, the
Custodian may petition a court of competent jurisdiction for the appointment of
an appropriately qualified successor.
Section 9. Examination of Loan Files.
-------------------------
Upon two (2) Business Days prior written notice to the
Custodian and at the Company's expense, the Buyer, the Seller, the Company and
each of their respective agents, accountants, attorneys and auditors will be
permitted to examine the Loan Files, documents, records and other papers in the
possession of or under the control of the Custodian relating to any or all of
the Purchased Assets.
Section 10. Insurance of Custodian.
----------------------
At its own expense, the Custodian shall maintain at all times
during the existence of this Custodial Agreement and keep in full force and
effect fidelity insurance, theft of documents insurance, forgery insurance and
errors and omissions insurance. All such insurance shall be in amounts, with
standard coverage and subject to deductibles, all as is customary for insurance
typically maintained by banks which act as custodian of collateral substantially
similar to the Collateral. Upon request, the Buyer and Seller shall be entitled
to receive a certificate of the respective insurer that such insurance is in
full force and effect.
Section 11. Representations and Warranties.
------------------------------
(a) Each of the Custodian, the Seller and the Company
represents and warrants to the Buyer that:
(i) each of the Custodian, the Seller and the Company has
the corporate power and authority and the legal right to execute and deliver,
and to perform its obligations under, this Custodial Agreement, and has taken
all necessary corporate action to authorize its execution, delivery and
performance of this Custodial Agreement;
(ii) no consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any stockholder or
creditor of the Custodian) is required in connection with the execution,
delivery, performance, validity or enforceability of this Custodial Agreement;
and
(iii) this Custodial Agreement has been duly executed and
delivered on behalf of the Custodian, the Seller and the Company and constitutes
a legal, valid and binding obligation of the Custodian, the Seller and the
Company enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether enforcement is sought in a proceeding in equity or
at law).
(b) The Custodian represents and warrants to the Buyer that
the Custodian is not an Affiliate of the Seller or the Company.
Section 12. Statements.
----------
On the second Business Day prior to the 25th calendar day of
each month, the Custodian shall provide the Buyer and the Seller (so long as no
Event of Default has occurred and is continuing of which the Custodian has
actual knowledge) with a list of all the Purchased Assets for which the
Custodian holds a Loan File pursuant to this Custodial Agreement as of such
date. In addition, upon the written request of the Buyer, the Seller or the
Company, the Custodian shall provide the Buyer, the Seller, or the Company, as
applicable, with a list of all the Purchased Assets for which the Custodian
holds a Loan File pursuant to this Custodial Agreement as of the date of such
request. Any such list shall be in the form of a Loan Schedule and Exception
Report and shall be delivered via electronic tape.
Section 13. No Adverse Interest of Custodian.
--------------------------------
By execution of this Custodial Agreement, the Custodian
represents and warrants that it currently holds, and during the existence of
this Custodial Agreement shall hold, no adverse interest, by way of security or
otherwise, in any Purchased Asset, and hereby waives and releases any such
interest which it may have in any Purchased Asset as of the date hereof. The
Purchased Assets shall not be subject to any security interest, lien or right to
set-off by Custodian or any third party claiming through Custodian, and
Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or
otherwise grant any third party interest in, the Purchased Assets.
Section 14. Indemnification of Custodian.
----------------------------
The Company agrees to indemnify and hold the Custodian 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 and expenses, that may be imposed on, incurred by, or
asserted against it or them in any way relating to or arising out of this
Custodial Agreement or any action taken or not taken by it or them hereunder
unless such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements were imposed on, incurred by
or asserted against the Custodian because of the breach by the Custodian of its
obligations hereunder, which breach was caused by negligence, lack of good faith
or willful misconduct on the part of the Custodian or any of its directors,
officers, agents or employees. The foregoing indemnification shall survive any
resignation or removal of the Custodian or the termination or assignment of this
Custodial Agreement.
In the event that the Custodian fails to produce a Note,
Assignment of Mortgage or any other document related to a Purchased Asset that
was in its possession pursuant to Section 2 within two (2) Business Days after
required or requested by the Company or the Buyer (a "Custodial Delivery
Failure"), and provided that (i) Custodian previously delivered to the Buyer a
Loan Schedule and Exception Report which did not list such document as an
Exception on the related Purchase Date; (ii) such document is not outstanding
pursuant to a Request for Release and Receipt in the form annexed hereto as
Annex 5-A; and (iii) such document was held by the Custodian on behalf of the
Company or Buyer, as applicable, then the Custodian shall (a) with respect to
any missing Note, promptly deliver to the Buyer or Company upon request, a Lost
Note Affidavit in the form of Annex 9 hereto and (b) with respect to any missing
document related to such Purchased Asset, including but not limited to a missing
Note, at the Buyer's option, at any time the long term obligations of the
Custodian are rated below investment grade by Xxxxx'x or S&P, obtain on or
before 75 days following the Buyer's written request therefor, and thereafter
maintain an insurance bond in the name of the Buyer, and its successors in
interest and assigns, insuring against any losses associated with the loss of
such document, in an amount equal to the then outstanding principal balance of
the related Purchased Asset or such lesser amount requested by the Buyer in the
Buyer's sole discretion.
Section 15. Reliance of Custodian.
---------------------
In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any request, instruction,
certificate, opinion or other document furnished to the Custodian, reasonably
believed by the Custodian to be genuine and to have been signed or presented by
the proper party or parties and conforming to the requirements of this Custodial
Agreement; but in the case of any Loan Document or other request, instruction,
document or certificate which by any provision hereof is specifically required
to be furnished to the Custodian, the Custodian shall be obligated to examine
the same in accordance with the requirements of this Custodial Agreement. The
Custodian shall have no duties or obligations other than those specifically set
forth herein or as may subsequently be agreed in writing by the parties hereto
and no duty or obligations shall be implied with respect to this Custodial
Agreement or the Custodian's services hereunder. The Custodian shall use the
same degree of care and skill as is reasonably expected of financial
institutions acting in comparable capacities which are held to a standard of
care of ordinary negligence, and this Section 15 shall not be interpreted to
impose upon the Custodian a higher standard of care than that set forth in this
sentence. The Custodian may conclusively rely on and shall be fully protected in
acting upon any certificate, instrument, notice, letter, telegram or other
document delivered to it and in good faith believed to be genuine and to have
been signed by the proper party or parties. The Custodian may conclusively rely
on and shall be fully protected in acting upon the written instructions of the
Buyer and such employees and representatives of the Buyer as the Buyer may
designate in writing. The Custodian shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it, in good faith,
unless the Custodian was negligent in ascertaining the pertinent facts.
None of the provisions of this Custodial Agreement shall
require the Custodian to expend or risk its own funds or otherwise to incur any
liability, financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.
Whenever in the administration of the provisions of this
Custodial Agreement the Custodian shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering any action to be
taken hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Custodian, be deemed to be conclusively proved and established by a
certificate signed by one of the Buyer's, the Seller's, or the Company's
officers, as the case may be, and delivered to the Custodian and such
certificate, in the absence of negligence or bad faith on the part of the
Custodian, shall be full warrant to the Custodian for any action taken, suffered
or omitted by it under the provisions of this Custodial Agreement upon the faith
thereof.
The Custodian may consult with counsel and the advice or any
opinion of counsel that is promptly confirmed in writing shall be full and
complete authorization and protection in respect of any action taken or omitted
by it hereunder in good faith and in accordance with such advice or opinion of
counsel.
Any corporation into which the Custodian may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Custodian shall be a
party, or any corporation succeeding to the business of the Custodian shall be
the successor of the Custodian hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything herein to the contrary notwithstanding.
Section 16. Term of Custodial Agreement.
---------------------------
This Custodial Agreement shall terminate on the date the
Custodian receives written notice from the Buyer of the termination of the
Repurchase Agreement and payment in full of all amounts owing to the Buyer
thereunder. Promptly after written notice from the Buyer of the termination of
the Repurchase Agreement and payment in full of all amounts owing to the Buyer
thereunder, the Custodian shall deliver all documents remaining in the Loan
Files to the Seller, and this Custodial Agreement shall thereupon terminate.
Section 17. Notices.
-------
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when received by the
recipient party at the address shown on its signature page hereto, or at such
other addresses as may hereafter be furnished to each of the other parties by
like notice. Any such demand, notice or communication hereunder shall be deemed
to have been received on the date delivered to or received at the premises of
the addressee, except that facsimiles sent by machines that produce
confirmations of receipt shall be effective when sent. The Custodian's office is
located at the address set forth on its signature page hereto, and the Custodian
shall notify the Buyer, the Seller and the Company if such address should
change.
Section 18. Governing Law.
-------------
This Custodial Agreement shall be binding and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that neither Seller nor the Company nor Custodian may assign
this Custodial Agreement or any of its rights or obligations hereunder, except
with the prior written consent of Buyer, except to any successor to the business
of Custodian, whether by reorganization or otherwise shall act with like effect
as though originally named. Buyer may pledge or assign its security interest in
or lien on certain items of Purchased Assets held by Custodian hereunder,
whereupon Buyer will act for the benefit of such assignee hereunder. THIS
CUSTODIAL AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. THE SELLER AND THE COMPANY EACH WAIVES TRIAL BY JURY.
SELLER, COMPANY, CUSTODIAN, AND BUYER EACH IRREVOCABLY CONSENT TO THE
NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CUSTODIAL AGREEMENT. THE
PARTIES HEREBY SUBMIT TO, AND WAIVE ANY OBJECTION THEY MAY HAVE TO PERSONAL
JURISDICTION AND VENUE IN, XXX XXXXXX XX XXX XXXXX XX XXX XXXX AND THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OVER ANY DISPUTES
ARISING OUT OF OR RELATING TO THIS CUSTODIAL AGREEMENT.
Section 19. Authorized Representatives.
--------------------------
Each individual designated as an authorized representative of
the Buyer or its successors or assigns, the Seller, the Company and the
Custodian, respectively (an "Authorized Representative"), is authorized to give
and receive notices, requests and instructions and to deliver certificates and
documents in connection with this Custodial Agreement on behalf of the Buyer,
the Seller, the Company and the Custodian, as the case may be, and the specimen
signature for each such Authorized Representative, initially authorized
hereunder, is set forth on Annexes 6, 7-A, 7-B and 8 hereof, respectively. From
time to time, the Buyer, the Seller, the Company and the Custodian or their
respective successors or permitted assigns may, by delivering to the others a
revised annex, change the information previously given pursuant to this Section
19, but each of the parties hereto shall be entitled to rely conclusively on the
then current annex until receipt of a superseding annex.
Section 20. Amendment.
---------
This Custodial Agreement may be amended from time to time by
written agreement signed by the Seller, the Company, the Buyer and the
Custodian.
Section 21. Cumulative Rights.
-----------------
The rights, powers and remedies of the Custodian and the Buyer
under this Custodial Agreement shall be in addition to all rights, powers and
remedies given to the Custodian and the Buyer by virtue of any statute or rule
of law, the Repurchase Agreement or any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the Buyer's security interest in the Collateral.
Section 22. Binding Upon Successors.
-----------------------
All rights of the Custodian and the Buyer under this Custodial
Agreement shall inure to the benefit of the Custodian and the Buyer and their
successors and permitted assigns, and all obligations of the Seller and the
Company shall bind their successors and assigns.
Section 23. Entire Agreement; Severability.
------------------------------
This Custodial Agreement and the other Loan Documents contain
the entire agreement with respect to the Collateral among the Custodian, the
Buyer, the Seller and the Company. If any of the provisions of this Custodial
Agreement shall be held invalid or unenforceable, this Custodial Agreement shall
be construed as if not containing such provisions, and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.
Section 24. Execution In Counterparts.
-------------------------
This Custodial Agreement may be executed in counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
Section 25. Tax Reports.
-----------
The Custodian shall not be responsible for the preparation or
filing of any reports or returns relating to federal, state or local income
taxes with respect to this Custodial Agreement, other than in respect of the
Custodian's compensation or for reimbursement of expenses.
Section 26. Reproduction of Documents.
-------------------------
This Custodial Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 27. Seller Reports.
--------------
(a) The Seller shall provide to the Buyer, upon the Buyer's
request, a report (the "Seller Report") in electronic form acceptable to the
Buyer, which shall include a complete Seller Loan Schedule.
(b) On the second Business Day prior to each Repurchase Date,
the Seller shall deliver a Seller Report setting forth such information with
respect to each Loan as is mutually agreed upon by the Buyer, the Seller and the
Company including, but not limited to: (i) electronic performance data including
delinquency reports, pool analytic reports, and static pool reports (such as
delinquency, foreclosure and net charge-off reports), and (ii) stratification
reports summarizing the characteristics of the Loans.
Section 28. Collection Account.
------------------
The Company shall establish and maintain with the Custodian a
segregated account (the "Collection Account") in the name of "American Business
Credit, Inc., in trust for the benefit of Credit Suisse First Boston Mortgage
Capital LLC", and shall deposit therein all collections received by the Company
with respect to the Purchased Assets in the event that such collections for any
Collection Period exceed $750,000. The parties hereto intend that the Buyer
shall have control of the Collection Account.
On each date which is (i) a Repurchase Date on which the Buyer
and the Seller enter into a new Transaction pursuant to the terms of Section
3(b) of the Repurchase Agreement, or (ii) a date on which a Margin Deficit is
due, or (iii) following the date on which the Buyer has declared an Event of
Default, in accordance with the terms of the Repurchase Agreement, the Buyer
shall apply all funds in the Collection Account to the amounts owed to the Buyer
and shall instruct the Custodian on any scheduled Repurchase Date to remit any
such amounts to the Buyer, to the extent of the funds in the Collection Account.
Unless an Event of Default shall occur and be continuing, on or before 12:00
noon (Eastern Time) the Buyer shall instruct the Custodian to remit any excess
funds in the Collection Account to the Seller or its designee by wire transfer,
in compliance with the instructions of the Seller.
Unless the Buyer shall have given written notice to the
Custodian that an Event of Default shall have occurred and be continuing, the
Company may invest the funds in the Collection Account in one or more Permitted
Investments. Neither Seller, nor Company, nor any of their affiliates shall make
any withdrawals or disbursement of funds from amounts on deposit in the
Collection Account without the prior consent of the Buyer.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Custodial Agreement was duly executed
by the parties hereto as of the day and year first above written.
ABFS REPO 2001, INC. AMERICAN BUSINESS CREDIT, INC.
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Balapointe Officer Centre Balapointe Officer Centre
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000 111 Presidential Blvd, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 Bala Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000 Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
JPMORGAN CHASE BANK CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By:_____________________________
By:_____________________________ Name:
Name: Title:
Title:
Address for Notices:
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices: Attention: Xxxxxx Xxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx Telecopier No.: (000) 000-0000
Xxx Xxxx, Xxx Xxxx 00000 Telephone No.: (000) 000-0000
Attention: Structured Finance - ABFS Administrator
Telecopier No.: (000) 000-0000 with a copy to (at same address):
Telephone No.: (000) 000-0000 Attention: Xxxxxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Annex 1
-------
INFORMATION TO BE PROVIDED WITH RESPECT TO THE LOANS
For each Loan, the Seller shall provide the following
information:
(a) the Seller's mortgage loan identifying number;
(b) the Borrower's name;
(c) the Mortgaged Property's street address, including the state and zip code;
(d) the original principal amount of the Loan;
(e) original months to maturity;
(f) original date of the Note;
(g) amount of the monthly payment at origination;
(h) current interest rate;
(i) current principal balance of the Loan;
(j) the date on which the last payment due under the Loan was made and applied;
(k) credit score, if available;
(l) a code indicating whether the Loan is a First Lien Loan or a Second Lien Loan;
(m) combined loan-to-value ratio;
(n) next payment due date;
(o) property type;
(p) Section 32 indicator;
(q) Business Purpose Loan indicator; and
(r) any other information as requested by the Buyer.
Annex 2
-------
FORM OF TRUST RECEIPT
[Date]
Credit Suisse First Boston Mortgage Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________________
Re: Custodial Agreement, dated as of November 16, 2001 (the
"Custodial Agreement"), among ABFS REPO 2001, Inc. (the
"Seller"), American Business Credit, Inc. (the "Company"),
JPMorgan Chase Bank (the "Custodian"), and Credit Suisse First
Boston Mortgage Capital LLC (the "Buyer").
Ladies and Gentlemen:
In accordance with the provisions of Section 4(b) of the
above-referenced Custodial Agreement (capitalized terms not otherwise defined
herein having the meanings ascribed to them in the Custodial Agreement), the
undersigned, as the Custodian, hereby certifies as to each Purchased Asset
described in the attached Loan Schedule and Exception Report all matters
(subject to the Exceptions listed therein) set forth in Section 4(d) of the
Custodial Agreement.
The delivery of the attached Loan Schedule and Exception
Report evidences that (i) the Custodian has reviewed all documents required to
be delivered in respect of each Purchased Asset listed herein pursuant to
Section 2 of the Custodial Agreement, and such documents other than the
Exceptions listed herein are in the possession of the Custodian as part of the
Loan File for such Purchased Asset, (ii) the Custodian is holding each Purchased
Asset identified on the Loan Schedule and Exception Report, pursuant to the
Custodial Agreement, as the bailee of and custodian for the Buyer and (iii) such
documents have been reviewed by the Custodian and appear on their face to be
regular and to relate to such Purchased Assets and satisfy the requirements set
forth in Section 2 of the Custodial Agreement and the Review Procedures.
The Custodian makes no representations as to, and shall not be
responsible to verify, (i) the validity, legality, enforceability, due
authorization, recordability, filing or recording status or history,
sufficiency, or genuineness of any of the documents contained in each Loan File
or (ii) the collectability, insurability, effectiveness or suitability of any
such Purchased Asset.
This Trust Receipt shall be deemed superseded and canceled
upon the issuance of a subsequent Trust Receipt to the Buyer covering the
Purchased Assets identified herein.
JPMORGAN CHASE BANK, as Custodian
By:__________________________________
Name:
Title:
Annex 3
-------
FORM OF COLLATERAL RECEIPT
Number: ______
Date: _______________
Aggregate Face Value: $______________
Aggregate Unpaid Principal Balance: $_______________
Credit Suisse First Boston Mortgage Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________________
JPMorgan Chase Bank
___________________________
___________________________
Attention: _______________
Re: Custodial Agreement, dated as of November 16, 2001 (the
"Custodial Agreement"), among ABFS REPO 2001, Inc. (the
"Seller"), American Business Credit, Inc., JPMorgan Chase Bank
(the "Custodian"), and Credit Suisse First Boston Mortgage
Capital LLC (the "Buyer").
In consideration of Buyer purchasing the Purchased Assets having an
aggregate face value and unpaid principal balance as indicated above, as more
fully described in a schedule attached hereto, the undersigned duly authorized
officer of Seller hereby certifies, represents and warrants that:
(a) on or prior to the date hereof, American Business Financial Services,
Inc. (the "Company") has caused a transfer, assign, set over and
convey, as a capital contribution, to Seller, without recourse, but
subject to the terms of the Master Contribution Agreement, dated as of
November 16, 2001 (the "Contribution Agreement"), between Company and
Seller, all rights, title and interest of the Company in and to the
Purchased Assets listed on the Loan Schedule attached hereto together
with the related files and all rights and obligations arising under the
documents contained therein, including the right to any prepayment
penalties or other charges payable in connection with any principal
prepayments on the Purchased Assets;
(b) upon payment by Buyer of the Purchase Price in respect of the
Transaction involving the Purchased Assets, all of the right (including
the power to convey title thereto), title and interest in and to each
document constituting the Loan Files delivered to Custodian or held by
or on behalf of Seller or Company with respect to each Purchased Asset,
shall be transferred, assigned, set over and otherwise conveyed to
Buyer.
(c) the required documents with respect to such Purchased Assets have been
or are hereby submitted to Custodian pursuant to the Custodial
Agreement;
(d) all other documents and Records (as defined in the Repurchase
Agreement) related to such Purchased Assets have been or will be
created and held by Seller in trust for Buyer;
(e) the following statements are true and correct on the date hereof: (i)
each of the representations and warranties contained in all of the
documents executed by Seller related to the Transactions relating to
the Purchased Assets identified herein are true and correct in all
material respects and (ii) no Default or Event of Default has occurred
and its continuing. At the request of Buyer, all documents related to
such Purchased Assets may be inspected or verified at any time by such
parties;
(f) each Loan listed on Schedule I hereto is secured by a valid and
enforceable "first lien" or "second lien" (as customarily referred to
in the industry), as indicated therein, on existing residential real
property; and
(g) (check the applicable statement below:)
_____ no lien exists with respect to the Purchased Assets listed on
the attached schedule or a lien secured by Purchased Assets
listed on the attached schedule is still in effect with Buyer;
or
_____ a lien secured by the Purchased Assets identified herein is
currently in effect and a Warehouse Lender's Release Letter
has been delivered to Buyer under separate cover.
ABFS REPO 2001, INC., as Seller
By:________________________
Name:
Title:
AMERICAN BUSINESS FINANCIAL SERVICES,
INC. [, as Company]
By:________________________
Name:
Title:
Annex 4
-------
REVIEW PROCEDURES
This Annex sets forth the Custodian's review procedures for
each item listed below delivered by the Seller pursuant to the Custodial
Agreement (the "Agreement") to which this Annex is attached. Capitalized terms
used herein and not defined herein shall have the meanings ascribed to them in
the Agreement.
1. The Note and the Mortgage each appears to bear an original
signature or signatures purporting to be the signature or signatures of the
Person or Persons named as the maker and Borrower or grantor, or in the case of
copies of the Mortgage permitted under Section 2(c) of the Agreement, such
copies bear a reproduction of such signature;
2. the principal amount of the Note is the same as the amount
specified on the related Mortgage;
3. the mortgagee is the same as the payee on the Note;
4. the Mortgage contains a legal description other than
address, city and state on the first page or in a schedule which is incorporated
by reference on the first page;
5. the notary section (acknowledgment) is present and attached
to the related Mortgage and is signed;
6. neither the original Note, nor the copy of the Mortgage
delivered pursuant to the Agreement, nor the original Assignment of Mortgage
contain any notations on their face which appear in the good faith judgment of
the Custodian to evidence any claims, liens, security interests, encumbrances or
restrictions on transfer;
7. the Note is endorsed "Pay to the order of _______________,
without recourse" or endorsed in another form acceptable to Buyer by the named
payee or Last Endorsee thereof;
8. each original Assignment of Mortgage and any intervening
assignment of mortgage, if applicable, appears to bear the original signature
purporting to be the signature of a representative of the named mortgagee or
beneficiary including any subsequent assignors (and any other necessary party),
as applicable, or in the case of copies permitted under Section 2(e) (in the
case of any original Assignment of Mortgage) or under Section 2(f) (in the case
of any intervening assignment) of the Agreement, that such copies appear to bear
a reproduction of such signature or signatures and the Officer's Certificate
certification of either the Seller or the Last Endorsee accompanying such copies
appears to bear an original signature or a reproduction of such signature, and
the intervening assignments of mortgage evidence on their face a complete chain
of assignment and transfer of the related Mortgage from the originating Person
or the Borrower (which chain may include, but which shall not be required to
include, the Company or the Seller);
9. the date of each intervening assignment is on or after the
date of the related Mortgage and/or the immediately preceding assignment, as the
case may be;
10. the notary section (acknowledgment) is present and
attached to each intervening assignment and is signed;
11. based upon a review of the Note, items (b), (c), (d) and
(f) of Annex 1 as set forth in the Loan Schedule delivered by the Seller to the
Custodian are correct;
12. the Collateral Receipt has been executed by an Authorized
Representative of the Seller; and
13. if the Loan is a Business Purpose Loan, a business purpose
affidavit has been delivered as required under Section 2(i).
Annex 5-A
---------
FORM OF REQUEST FOR RELEASE AND RECEIPT
Date: __________, 200_
JPMorgan Chase Bank
__________________________
__________________________
Attention: _______________
The undersigned, AMERICAN BUSINESS CREDIT, INC. (the
"Company"), acknowledges receipt from JPMORGAN CHASE BANK, acting as bailee of,
and custodian for (in such capacity, the "Custodian"), the exclusive benefit of
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") (capitalized terms
not otherwise defined herein are defined in that certain Custodial Agreement,
dated as of November 16, 2001 (the "Custodial Agreement"), among the Company,
the Custodian, ABFS REPO 2001, Inc. and the Buyer), of the following described
documentation for the identified Purchased Asset, possession of which is
entrusted to the Company solely for the purpose of correcting documentary
defects relating thereto:
Borrower Name Loan Number Note Amount Loan Document
------------- ----------- ----------- -------------
It is hereby acknowledged that a security interest pursuant to
the Uniform Commercial Code in the Collateral hereinabove described and in the
proceeds of said Collateral has been granted to the Buyer pursuant to the
Custodial Agreement.
In consideration of the aforesaid delivery by the Custodian,
the Company hereby agrees to hold said Collateral in trust for the Buyer as
provided under and in accordance with all provisions of the Custodial Agreement
and to return said Collateral to the Custodian no later than the close of
business on the tenth day following the date hereof or, if such day is not a
Business Day, on the immediately preceding Business Day.
AMERICAN BUSINESS CREDIT, INC.
By __________________________________
Name: _______________________________
Title: ______________________________
[IF TOTAL NUMBER OF OUTSTANDING LOAN FILES IS GREATER THAN 10, REQUEST FOR
RELEASE MUST BE SIGNED BY BUYER AS FOLLOWS:
Acknowledged and Agreed:
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC
By: ___________________________________
Name: _________________________________
Title: ________________________________
Date: _________________________________]
Documents returned to Custodian:
-------------------------------
JPMORGAN CHASE BANK
By ____________________________________
Name: _________________________________
Title: ________________________________
Date: _________________________________
Annex 5-B
---------
FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
[Date]
JPMorgan Chase Bank
__________________________
__________________________
Attention: __________________
Re: Custodial Agreement, dated as of November 16, 2001 (the
"Custodial Agreement"), among ABFS REPO 2001, Inc. (the
"Seller"), American Business Credit, Inc. (the "Company"),
JPMorgan Chase Bank (the "Custodian"), and Credit Suisse First
Boston Mortgage Capital LLC (the "Buyer").
In connection with the administration of the Loans held by you
as the Custodian on behalf of the Buyer, we request the release, to be delivered
to the Company, as servicer, of the (Loan File/[specify documents]) for the Loan
described below, for the reason indicated.
Borrower's Name, Address & Zip Code: Ship Files To:
----------------------------------- -------------
Name:
Address:
Telephone Number:
Loan Number:
-----------
Reason for Requesting Documents (check one)
-------------------------------
__1. Loan Paid in Full. (The Company hereby certifies that all amounts received
in connection therewith have been credited to the Buyer.)
__2. Loan Liquidated By _____________ (The Company hereby certifies that all
proceeds of foreclosure, insurance, condemnation or other liquidation have been
finally received and credited to the Buyer.)
__3. Loan in Foreclosure.
__4. Other (explain) ____________________________
If box 1 or 2 above is checked, and if all or part of the Loan
File was previously released to us, please release to us our previous request
and receipt on file with you, as well as any additional documents in your
possession relating to the specified Loan.
If box 3 or 4 above is checked, upon our return of all of the
above documents to you as the Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
It is hereby acknowledged that a security interest pursuant to
the Uniform Commercial Code in the Collateral hereinabove described and in the
proceeds of said Collateral has been granted to the Buyer pursuant to the
Custodial Agreement.
In consideration of the aforesaid delivery by the Custodian,
the Company hereby agrees to hold said Collateral in trust for the Buyer as
provided under and in accordance with all provisions of the Custodial Agreement
and to return said Collateral to the Custodian no later than the close of
business on the tenth day following the date hereof or, if such day is not a
Business Day, on the immediately preceding Business Day.
The Company hereby acknowledges that it shall hold said
Collateral in trust for, and as bailee of, the Buyer and shall return said
Collateral only to the Custodian.
AMERICAN BUSINESS CREDIT, INC.
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Acknowledged and Agreed:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Acknowledgment of Documents returned to the Custodian:
JPMORGAN CHASE BANK
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Annex 5-C
---------
FORM OF REQUEST FOR RELEASE
Date: __________, 200_
JPMorgan Chase Bank
_______________________
_______________________
Attention: _______________
The undersigned, American Business Credit, Inc. (the
"Company"), requests release from JPMorgan Chase Bank, acting as agent, bailee
and custodian (in such capacity "Custodian") for the exclusive benefit of Credit
Suisse First Boston Mortgage Capital LLC as Buyer (the "Buyer"; capitalized
terms not otherwise defined herein are defined in that certain Repurchase
Agreement, dated as of November 16, 2001 (as amended, the "Repurchase
Agreement"), between ABFS REPO 2001, Inc. and the Buyer), of the following
described documentation for the identified Purchased Assets, possession of which
shall be delivered to ____________________ (the "Approved Purchaser") in
connection with the sale or securitization thereof. The anticipated closing date
for such sale is ______________ and the anticipated purchase or securitization
proceeds [MBS] shall equal: $__________________.
Borrower Name Loan Number Note Amount Loan Document
------------- ----------- ----------- -------------
Please send the referenced documentation to:
[NAME OF APPROVED PURCHASER ]
[ADDRESS]
[TELEPHONE]
[ATTENTION:]
Please deliver documents to the Approved Purchaser via
__________________, accompanied by a transmittal letter in the form of Annex
[10][11].
AMERICAN BUSINESS CREDIT, INC.
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Acknowledged and Agreed:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
---
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Annex 5-D
---------
FORM OF REQUEST FOR RELEASE
Date: __________, 200_
JPMorgan Chase Bank
_______________________
_______________________
Attention: _______________
The undersigned, American Business Credit, Inc. (the
"Company"), requests release from JPMorgan Chase Bank, acting as agent, bailee
and custodian (in such capacity "Custodian") for the exclusive benefit of Credit
Suisse First Boston Mortgage Capital LLC as Buyer (the "Buyer"; capitalized
terms not otherwise defined herein are defined in that certain Repurchase
Agreement, dated as of November 16, 2001 (as amended, the "Repurchase
Agreement"), between ABFS REPO 2001, Inc. and the Buyer), of the following
described documentation for the identified Purchased Assets, possession of which
shall be delivered to the Company due to the fact that such Purchased Asset is
no longer a Purchased Asset.
Mortgage Name Loan Number Note Amount
------------- ----------- -----------
Please send the referenced documentation to:
AMERICAN BUSINESS CREDIT, INC.
[ADDRESS]
[TELEPHONE]
[ATTENTION:]
AMERICAN BUSINESS CREDIT, INC.
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Acknowledged and Agreed:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Date:_____________________________________________
Annex 6
-------
AUTHORIZED REPRESENTATIVES OF BUYER
Name Specimen Signature
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
Annex 7-A
---------
AUTHORIZED REPRESENTATIVES OF SELLER
Name Specimen Signature
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
Annex 7-B
---------
AUTHORIZED REPRESENTATIVES OF COMPANY
Name Specimen Signature
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
Annex 8
-------
AUTHORIZED REPRESENTATIVES OF CUSTODIAN
Name Specimen Signature
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
________________________ __________________________
Annex 9
-------
FORM OF LOST NOTE AFFIDAVIT
I, as ___________________________ (title) of JPMorgan Chase
Bank (the "Custodian"), am authorized to make this Affidavit on behalf of the
Custodian. In connection with the administration of the Loans held by the
Custodian on behalf Credit Suisse First Boston Mortgage Capital LLC (the
"Buyer"), _______________ (hereinafter called "Deponent"), being duly sworn,
deposes and says that:
1. Custodian's address is: __________________________________;
2. Custodian previously delivered to the Buyer a Loan Schedule
and Exception Report with respect to such Note and/or Assignment of Mortgage
which did not indicate such Note and/or Assignment of Mortgage as missing;
3. Such Note and/or Assignment of Mortgage was assigned or
sold to the Buyer by ABFS REPO 2001, Inc. pursuant to the terms and provisions
of a Master Repurchase Agreement, dated and effective as of November 16, 2001,
between Buyer and Seller, as amended;
4. Such Note and/or Assignment or Mortgage is not outstanding
pursuant to a Request for Release of Documents;
5. Aforesaid Note and/or Assignment of Mortgage (hereinafter
called the "Original") has been lost;
6. Deponent has made or has caused to be made a diligent
search for the Original and has been unable to find or recover same;
7. The Custodian was the Custodian of the Original at the time
of loss;
8. Deponent agrees that, if said Original should ever come
into Custodian's possession, custody or power, Custodian will immediately and
without consideration surrender the Original to the Buyer;
9. Attached hereto is a true and correct copy of (i) the Note,
endorsed in blank by the Mortgagee, as provided by [SELLER/COMPANY] or its
designee and (ii) the Mortgage which secures the Note, which Mortgage is
recorded at ___________________;
10. Deponent hereby agrees that the Custodian (a) shall
indemnify and hold harmless the Buyer, its successors, and assigns, against any
loss, liability or damage, including reasonable attorney's fees, resulting from
the unavailability of any Originals, including but not limited to any loss,
liability or damage arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that it has already purchased a mortgage
loan evidenced by the Originals or any interest in such mortgage loan, (iii) any
claim of any borrower with respect to the existence of terms of a Loan evidenced
by the Originals, (iv) the issuance of new instrument in lieu thereof and (v)
any claim whether or not based upon or arising from honoring or refusing to
honor the Original when presented by anyone, excluding, however, special,
incident, punitive or consequential damages, which in no event shall be paid by
the Custodian (items (i) through (iv) above are hereinafter referred to as the
"Losses") and (b) if required by any rating agency in connection with placing
such Originals into a structured and rated transaction, shall obtain a surety
bond from an insurer acceptable to the applicable rating agency in an amount
acceptable to such rating agency to cover any Losses with respect to such
Originals; and
11. This Affidavit is intended to be relied on by the Buyer,
its successors, and assigns and _______________________ represents and warrants
that it has the authority to perform its obligations under this Affidavit.
EXECUTED THIS ____ day of _______, 200_, on behalf of the Custodian by:
____________________________________
Signature
____________________________________
Typed Name
On this _________ day of _______________________, 200_, before
me appeared ____________________________________________, to me personally know,
who being duly sworn did say that she/he is the ______________________________
of ______________________, and that said Affidavit of Lost Note was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
________________________________________
Notary Public in and for the
State of ____________________________.
My Commission expires: _______________.
Annex 10
--------
FORM OF TRANSMITTAL LETTER
[Custodian Letterhead]
[Date]
[Approved Purchaser]
____________________________
____________________________
Re: Shipment of Purchased Assets for Purchase
Ladies and Gentlemen:
Attached please find those Purchased Assets listed separately
on the attached schedule, which Purchased Assets are being delivered to you for
purchase.
The Purchased Assets comprise a portion of the "Collateral"
under (and as such term and capitalized terms not otherwise defined herein are
defined in) that certain Master Repurchase Agreement (as amended, the
"Repurchase Agreement"), dated as of November 16, 2001, between ABFS REPO 2001,
Inc. (the "Seller") and Credit Suisse First Boston Mortgage Capital LLC (the
"Buyer"). Each of the Purchased Assets is subject to an ownership and/or
security interest in favor of the Buyer, which ownership and/or security
interest shall be automatically released upon your remittance of the full amount
of the purchase price of such Purchased Asset (as set forth on the schedule
attached hereto) by wire transfer to the following account of the Buyer:
Bank: _________________
ABA: __________________
Acct: _________________
Re: ___________________
Attn: _________________
Pending your purchase of each Purchased Asset and until
payment therefor is received, the aforesaid ownership and/or security interest
therein will remain in full force and effect, and you shall hold possession of
such Collateral and the documentation evidencing same as custodian, agent and
bailee for and on behalf of the Buyer. In the event that any Purchased Asset is
unacceptable for purchase, return the rejected item directly to the Custodian at
its address set forth below. In no event shall any Purchased Asset be returned
to, or sales proceeds remitted to, the Seller, American Business Credit, Inc. or
any of their Affiliates. The Purchased Asset must be so returned or sales
proceeds remitted in full no later than ten (10) days from the date hereof. If
you are unable to comply with the above instructions, please so advise the
undersigned Custodian immediately.
NOTE: BY ACCEPTING THE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE BUYER ON THE
TERMS DESCRIBED IN THIS LETTER. THE CUSTODIAN REQUESTS THAT YOU ACKNOWLEDGE
RECEIPT OF THE ENCLOSED LOANS AND THIS LETTER BY SIGNING AND RETURNING THE
ENCLOSED COPY OF THIS LETTER TO THE CUSTODIAN; HOWEVER, YOUR FAILURE TO DO SO
DOES NOT NULLIFY SUCH CONSENT.
Very truly yours,
JPMORGAN CHASE BANK
as Custodian
By____________________________________
Name:_________________________________
Title:________________________________
Address:
RECEIPT ACKNOWLEDGED:
[APPROVED PURCHASER]
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Annex 11
--------
FORM OF TRANSMITTAL LETTER
[Custodian Letterhead]
[Date]
[Custodian/Trustee/Agency]
___________________________
___________________________
Re: Shipment of Purchased Assets for Pool Formation
Ladies and Gentlemen:
Attached please find those Purchased Assets listed separately
on the attached schedule, which are being delivered to you, as
custodian/trustee, for certification in connection with the formation of a
mortgage pool supporting the issuance of a mortgage-backed or asset-backed
security (the "MBS") described as follows: ______________________.
The Purchased Assets comprise a portion of the "Collateral"
under (and as such term and capitalized terms not otherwise defined herein are
defined in) that certain Master Repurchase Agreement, dated as of November 16,
2001, between ABFS REPO 2001, Inc. (the "Seller") and Credit Suisse First Boston
Mortgage Capital LLC (the "Buyer"). Each of the Purchased Assets is subject to
an ownership and/or security interest in favor of the Buyer, which ownership
and/or security interest shall be automatically released in accordance with the
terms of the related Remittance Agency Agreement and Security Release
Certification.
Pending the Buyer's release of the aforesaid ownership and/or
security interest, such interests will remain in full force and effect and you
shall hold possession of such Collateral and the documentation evidencing same
as custodian, agent and bailee for and on behalf of the Buyer. In the event that
any Purchased Asset is unacceptable for purchase, return the rejected item
directly to the Custodian at its address set forth below. In no event shall any
Purchased Asset be returned to, or sales proceeds remitted to, the Seller,
American Business Credit, Inc. or any of their Affiliates. The Purchased Asset
must be so returned or sales proceeds remitted in full no later than sixty (60)
days from the date hereof. If you are unable to comply with the above
instructions, please so advise the undersigned Custodian immediately.
NOTE: BY ACCEPTING THE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE BUYER ON THE
TERMS DESCRIBED IN THIS LETTER. THE CUSTODIAN REQUESTS THAT YOU ACKNOWLEDGE
RECEIPT OF THE ENCLOSED LOANS AND THIS LETTER BY SIGNING AND RETURNING THE
ENCLOSED COPY OF THIS LETTER TO THE CUSTODIAN; HOWEVER, YOUR FAILURE TO DO SO
DOES NOT NULLIFY SUCH CONSENT.
Very truly yours,
JPMORGAN CHASE BANK, as Custodian
By____________________________________
Name:_________________________________
Title:________________________________
Address:
RECEIPT ACKNOWLEDGED:
[CUSTODIAN/TRUSTEE]
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Annex 12
--------
FORM OF SELLER LOAN SCHEDULE
Annex 13
--------
FORM OF WAREHOUSE LENDER'S RELEASE LETTER
Date: ______________, 200_
Credit Suisse First Boston Mortgage Capital LLC
_______________________
_______________________
Attention: _______________
RE: [American Business Credit, Inc.] [HomeAmerican Credit, Inc.
d/b/a Upland Mortgage] [American Business Mortgage Services,
Inc.]
Number of Loans:_____ Unpaid Balance: $________
The undersigned (the "Warehouse Lender") hereby releases all
right, interest or claim of any kind with respect to the loans (including all
related items constituting the complete file for each such loan) constituting
the mortgage pool referenced above, as may be further described in the attached
schedule, such release to be effective automatically without any further action
by any party, upon payment for the account of Seller of $ in immediately
available funds to the following account:
Bank: _________________
ABA: __________________
Acct: _________________
_______________________
Re: ___________________
Attn: _________________
Very truly yours,
______________________, as Warehouse Lender
By:________________________________________
Name:______________________________________
Title:_____________________________________
Telephone:_________________________________
Annex 14
--------
FORM OF TRANSACTION NOTICE
[Date]
Credit Suisse First Boston Mortgage Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________________
JPMorgan Chase Bank
________________________
________________________
Attention: _______________
Transaction No. _____
Ladies and Gentlemen:
The undersigned executes and delivers this notice ("Notice")
pursuant to the requirements of the Master Repurchase Agreement, dated as of
November 16, 2001 (as amended, the "Repurchase Agreement"), between Credit
Suisse First Boston Mortgage Capital LLC ("Buyer") and ABFS REPO 2001, Inc.
("Seller"), and the Custodial Agreement, dated as of November 16, 2001 (the
"Custodial Agreement"), among Seller, Buyer, American Business Credit, Inc. (the
"Company") and JPMorgan Chase Bank ("Custodian") in connection with the
submission for sale thereunder on __________, 200_ (the "Purchase Date") of the
Purchased Assets identified on the Loan Schedule each delivered herewith and the
delivery of the related Loan Files to Custodian pursuant to Section 2 of the
Custodial Agreement. All capitalized terms used in this Notice without
definition shall have the same meanings herein as they have in the Repurchase
Agreement or the Custodial Agreement.
The Company hereby represents and certifies to Buyer as
follows:
1. As of this date, Company and Seller are in compliance with
all of the terms and conditions of the Custodial Agreement. The Loan File as
defined in the Custodial Agreement is complete and has been delivered to Buyer.
2. Except as otherwise previously disclosed in writing to
Buyer, Company's and Seller's representations and warranties set forth in the
Repurchase Agreements and any other related document are true and accurate as of
the date of this Notice.
3. The Purchased Assets, which are identified on such Computer
Tape, satisfy the requirements of the eligibility set forth in the Repurchase
Agreement and all related agreements among Buyer, Seller and Company.
4. Upon payment by Buyer of the Purchase Price in respect of
the Transaction involving the Purchased Assets, all of the right (including the
power to convey title thereto), title and interest in and to each document
constituting the Loan Files delivered to Custodian or held by or on behalf of
Seller or Company with respect to each Purchased Asset, shall be transferred,
assigned, set over and otherwise conveyed to Buyer.
5. The general terms of the sale are:
A. Number of Purchased Assets:___
B. Aggregate Outstanding Principal Amount of the Purchased
Assets as of the Purchase Date:
C. Purchase Date:
D. Pricing Rate:
E. Characteristics of each Purchased Asset:
[for each Purchased Asset attach a Loan Schedule]
[On the date hereof, the Company does hereby transfer, assign,
set over and convey, as a capital contribution, to Seller, without recourse, but
subject to the terms of the Master Contribution Agreement, dated as of November
16, 2001 (the "Contribution Agreement"), between Company and Seller, all rights,
title and interest of the Company] in and to the Purchased Assets listed on the
Loan Schedule attached hereto together with the related files and all rights and
obligations arising under the documents contained therein, including the right
to any prepayment penalties or other charges payable in connection with any
principal prepayments on the Purchased Assets.
The Company confirms to the Seller that the covenants set
forth in Section 5 of the Contribution Agreement are true and correct as of the
date hereof.
AMERICAN BUSINESS CREDIT, INC., as Company
By:________________________________________
Name:______________________________________
Title:_____________________________________
ABFS REPO 2001, INC., as Seller
By:________________________________________
Name:______________________________________
Title:_____________________________________
APPENDIX A
Representations, Warranties and Indemnities in
Favor of Buyer and Subsequent Purchasers with
Respect to the Purchased Assets
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings assigned to them in the Repurchase Agreement or if not assigned in the
Repurchase Agreement, the Custodial Agreement.
The Seller represents and warrants with respect to the Purchased Assets being
conveyed by it to the Buyer pursuant to the Repurchase Agreement as of each
Purchase Date (or such other date as specified below) as follows:
a. The information set forth in the Loan Schedule is complete, true and
correct;
b. The information provided by the Originators or any Affiliate to the Buyer
in connection with a Loan is true and correct in all material respects on
the date or dates when such information is furnished;
c. Each Mortgage is a valid first or second lien on a fee simple (or its
equivalent under applicable state law) estate in the real property securing
the amount owed by the Borrower under the Note subject only to (i) the lien
of current real property taxes and assessments which are not delinquent,
(ii) with respect to any Loan identified on the Loan Schedule as secured by
a second lien, the related first mortgage loan, (iii) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally in the area wherein the property subject to the Mortgage is
located or specifically reflected in the appraisal obtained in connection
with the origination of the related Loan and (iv) other matters to which
like properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage;
d. Immediately prior to the sale or contribution by the related Originator to
the Seller, such Originator had good title to, and was the sole owner of
each Loan, free of any interest of any other Person, and the such
Originator has conveyed all right, title and interest in each Loan to the
Seller;
e. No payment of principal or interest on or in respect of any Loan remains
unpaid for sixty (60) or more days past the date the same was due in
accordance with the related Note without regard to applicable grace
periods;
f. At origination, no Loan had an original term to maturity of greater than
360 months;
g. There is no mechanics' lien or claim for work, labor or material (and no
rights are outstanding that under law could give rise to such lien)
affecting the premises subject to any Mortgage which is or may be a lien
prior to, or equal or coordinate with, the lien of such Mortgage, except
those which are insured against by the title insurance policy referred to
in (bb) below;
h. There is no delinquent tax or assessment lien against any Mortgaged
Property;
i. Such Loan, the Mortgage, and the Note, including, without limitation, the
obligation of the Borrower to pay the unpaid principal of and interest on
the Note, are each not subject to any right of rescission (or any such
rescission right has expired in accordance with applicable law), set-off,
counterclaim, or defense, including the defense of usury, nor will the
operation of any of the terms of the Note or the Mortgage, or the exercise
of any right thereunder, render either the Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim, or defense, including the defense of usury, and no
such right of rescission, set-off, counterclaim, or defense has been
asserted with respect thereto;
j. The Mortgaged Property is free of material damage and is in good repair,
and there is no pending or threatened proceeding for the total or partial
condemnation of the Mortgaged Property;
k. Neither the Originators nor the Seller has received a notice of default of
any first mortgage loan secured by the Mortgaged Property which has not
been cured;
l. No Loan had, at the date of origination, a combined loan-to-value ratio in
excess of 100%;
m. The Loan was not originated in a program in which the amount of
documentation in the underwriting process was limited in comparison to an
Originator's normal documentation requirements;
n. The Loans were (i) originated or purchased by an Originator in the normal
course of its business, (ii) not selected by the Seller or the Originators
for Transactions on any basis adverse to the Buyer relative to the
portfolio of similar mortgage loans of the Seller or the Originators and
(iii) prior to the Closing Date, serviced by the Servicer or an Affiliate
thereof in accordance with accepted services practices of prudent mortgage
lending institutions which service for their own accounts mortgage loans
similar to the Loans;
o. With respect to Loans which are secured by a lien on leasehold interests
the cost of the leasehold expense has been factored into the debt-to-income
calculations with respect to the related Borrower and the maturity date of
the ground lease is later than the maturity date of the Loan;
p. Each Mortgage contains customary and enforceable provisions which render
the rights and remedies of the holder thereof adequate for the realization
against the related Mortgaged Property of the benefits of the security
including (A) in the case of a Mortgage designated as a deed of trust, by
trustee's sale and (B) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the related Borrower which would
materially interfere with the right to sell the related Mortgaged Property
at a trustee's sale or the right to foreclose the related Mortgage. The
Mortgage contains customary and enforceable provisions for the acceleration
of the payment of the principal balance of such Loan in the event all or
any part of the related Mortgaged Property is sold or otherwise transferred
without the prior written consent of the holder thereof;
q. The proceeds of such Loan have been fully disbursed, including reserves set
aside by the Seller or the Originators, there is no requirement for, and
neither the Seller nor the Originators shall make any, future advances
thereunder. Any future advances made prior to the Purchase Date have been
consolidated with the principal balance secured by the Mortgage, and such
principal balance, as consolidated, bears a single interest rate and single
repayment term reflected on the Loan Schedule. The Principal Balance does
not exceed the original principal amount of such Loan. Except with respect
to no more than $150,000 of escrow funds in the aggregate with respect to
all Loans, any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds therefor
have been complied with. All costs, fees, and expenses incurred in making,
or recording such Loan have been paid;
r. All Loans were originated in compliance with the Originators' Underwriting
Guidelines;
s. The terms of the Mortgage and the Note have not been impaired, waived,
altered, or modified in any respect, except by a written instrument which
has been recorded, if necessary, to protect the interest of the Buyer. The
substance of any such alteration or modification will be reflected on the
Loan Schedule and, to the extent necessary, has been or will be approved by
(i) the insurer under the applicable mortgage title insurance policy, and
(ii) the insurer under any other insurance policy required hereunder for
such Loan where such insurance policy requires approval and the failure to
procure approval would impair coverage under such policy;
t. No instrument of release, waiver, alteration, or modification has been
executed in connection with such Loan, and no Borrower has been released,
in whole or in part, except in connection with an assumption agreement
which has been approved by the insurer under any insurance policy required
hereunder for such Loan where such policy requires approval and the failure
to procure approval would impair coverage under such policy, and which is
part of the Loan File and has been delivered to the Custodian, on behalf of
the Buyer, and the terms of which are reflected in the Loan Schedule;
u. There is no default, breach, violation, or event of acceleration existing
under the Mortgage or the Note and no event which, with the passage of time
or with notice and the expiration of any grace or cure period, would
constitute such a default, breach, violation or event of acceleration, and
neither the Originators nor the Seller has waived any such default, breach,
violation or event of acceleration. All taxes, governmental assessments
(including assessments payable in future installments), insurance premiums,
water, sewer, and municipal charges, leaseholder payments, or ground rents
which previously became due and owing in respect of or affecting the
related Mortgaged Property have been paid. Neither the Originators nor the
Seller has advanced funds, or induced, solicited, or knowingly received any
advance of funds by a party other than the Borrower, directly or
indirectly, for the payment of any amount required by the Mortgage or the
Note;
v. All of the improvements which were included for the purposes of determining
the appraised value of the Mortgaged Property were completed at the time
that such Loan was originated and lie wholly within the boundaries and
building restriction lines of such Mortgaged Property. Except for de
minimis encroachments, no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses, and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property
(including all such improvements which were included for the purpose of
determining such appraised value) and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriters certificates, have been made or obtained
from the appropriate authorities and the Mortgaged Property is lawfully
occupied under applicable law;
w. No circumstances or conditions exist with respect to the Mortgage, the
Mortgaged Property, the Borrower, or the Borrower's credit standing that
can be reasonably expected to cause such Loan to become delinquent or
adversely affect the value or marketability of such Loan, other than any
such circumstances or conditions permitted under the Originator's
Underwriting Guidelines;
x. All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (i) in compliance with
any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located and (ii) (A) organized under the
laws of such state, (B) qualified to do business in such state, (C) federal
savings and loan associations or national banks having principal offices in
such state, (D) not doing business in such state, or (E) not required to
qualify to do business in such state;
y. The Note and the Mortgage are genuine, and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement
of creditors' rights generally and except that the equitable remedy of
specific performance and other equitable remedies are subject to the
discretion of the courts. All parties to the Note and the Mortgage had
legal capacity to execute the Note and the Mortgage and convey the estate
therein purported to be conveyed, and the Note and the Mortgage have been
duly and properly executed by such parties or pursuant to a valid
power-of-attorney that has been recorded with the Mortgage;
z. The sale, transfer and conveyance of the Note and the Mortgage as and in
the manner contemplated by the Repurchase Agreement is sufficient (i) to
fully to transfer to the Buyer all right, title, and interest of the Seller
and the Originators thereto as note holder and mortgagee and (ii) to the
extent an Originator or the Seller retains an interest in such Note or
Mortgage despite such sale, transfer and conveyance, to grant to the Buyer
the security interest referred to in the Repurchase Agreement. The Mortgage
has been duly assigned by the Originators and/or to the Seller to the Buyer
and the Note has been duly endorsed. The Assignment of Mortgage delivered
to the Custodian, on behalf of the Buyer, pursuant to the Custody Agreement
is in recordable form and is acceptable for recording under the laws of the
applicable jurisdiction. The endorsement of the Note, the delivery to the
Custodian, on behalf of the Buyer, of the endorsed Note, and such
Assignment of Mortgage, and the delivery of such Assignment of Mortgage to
the Custodian, on behalf of the Buyer, for recording are sufficient to
permit the Buyer to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Seller or any of the Originators, and are sufficient to prevent any other
sale, transfer, assignment, pledge, or hypothecation of the Note and
Mortgage by the Seller or any of the Originators from being enforceable,
even if the Servicer does not record such Assignment of Mortgage in the
applicable recording office. The Buyer shall have a first priority
perfected security interest in the Loans;
aa. Any and all requirements of any federal, state, or local law including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, or
disclosure laws applicable to such Loan have been complied with, and the
Servicer shall maintain in its possession, available for the Buyer's
inspection, and shall deliver to the Buyer or its designee upon demand,
evidence of compliance with all such requirements. The consummation of the
transactions contemplated by the Program Documents will not cause the
violation of any such laws;
bb. Such Loan is covered by an ALTA mortgage title insurance policy or such
other generally used and acceptable form of policy, issued by and the valid
and binding obligation of a title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller,
and its successors and assigns, as to the first or second priority lien, as
applicable, of the Mortgage in the original principal amount of such Loan.
The assignment to the Buyer of the Seller's interest in such mortgage title
insurance policy does not require the consent of or notification to the
insurer. Such mortgage title insurance policy is in full force and effect
and will be in full force and effect and inure to the benefit of the Buyer
upon the consummation of the transactions contemplated by the Repurchase
Agreement. No claims have been made under such mortgage title insurance
policy and none of the Seller, the Originators nor any prior holder of the
Mortgage has done, by act or omission, anything which would impair the
coverage of such mortgage title insurance policy;
cc. All improvements upon the Mortgaged Property are insured against loss by
fire, hazards of extended coverage, and such other hazards as are customary
in the area where the Mortgaged Property is located. If the Mortgaged
Property at origination was located in an area identified on a flood hazard
boundary map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance
has been made available), such Mortgaged Property was covered by flood
insurance at origination. Each individual insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be
in full force and effect and inure to the benefit of the Buyer upon the
consummation of the transactions contemplated by the Repurchase Agreement,
and contain a standard mortgage clause naming the originator of such Loan,
and its successors and assigns, as mortgagee and loss payee. All premiums
thereon have been paid. The Mortgage obligates the Borrower to maintain all
such insurance at the Borrower's cost and expense, and upon the Borrower's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Borrower's cost and expense and to seek
reimbursement therefor from the Borrower, and none of the Seller, the
related Originator or any prior holder of the Mortgage has acted or failed
to act so as to impair the coverage of any such insurance policy or the
validity, binding effect, and enforceability thereof;
dd. If the Mortgage constitutes a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been properly designated and
currently so serves and is named in such Mortgage, and no fees or expenses
are or will become payable by the Buyer to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Borrower;
ee. The Mortgaged Property consists of one or more parcels of real property
separately assessed for tax purposes. To the extent there is erected
thereon a detached or an attached one-family residence or a detached
two-to-six-family dwelling, or an individual condominium unit in a low-rise
condominium, or an individual unit in a planned unit development, or a
commercial property, a manufactured dwelling, or a mixed use or multiple
purpose property, such residence, dwelling or unit is not (i) a unit in a
cooperative apartment, (ii) a property constituting part of a syndication,
(iii) a time share unit, (iv) a property held in trust, (v) a mobile home,
(vi) a log-constructed home, or (vii) a recreational vehicle;
ff. There exist no material deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made or which the Seller or the related
Originator expects not to be cured, and no escrow deposits or payments of
other charges or payments due the Seller have been capitalized under the
Mortgage or the Note;
gg. Such Loan was not originated at a below market interest rate. Such Loan
does not have a shared appreciation feature, or other contingent interest
feature;
hh. The origination and collection practices used by the Seller, the
Originators or the Servicer with respect to such Loan have been in all
respects legal, proper, prudent, and customary in the mortgage origination
and servicing business;
ii. The Borrower has, to the extent required by applicable law, executed a
statement to the effect that the Borrower has received all disclosure
materials, if any, required by applicable law with respect to the making of
fixed-rate mortgage loans. The Servicer shall maintain or cause to be
maintained such statement in the Loan File;
jj. The appraisal report with respect to the Mortgaged Property contained in
the Loan File was signed prior to the approval of the application for such
Loan by a qualified appraiser, duly appointed by the originator of such
Loan, who had no interest, direct or indirect, in the Mortgaged Property or
in any loan made on the security thereof and whose compensation is not
affected by the approval or disapproval of such application;
kk. Each of the Originators and the Seller has no knowledge with respect to the
Mortgaged Property of any governmental or regulatory action or third party
claim made, instituted or threatened in writing relating to a violation of
any applicable federal, state or local environmental law, statute,
ordinance, regulation, order, decree or standard;
ll. Each Loan is a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code;
mm. With respect to second lien Loans:
(i) neither the Seller nor the Originators have any knowledge that the
Borrower has received notice from the holder of the prior mortgage
that such prior mortgage is in default,
(ii) no consent from the holder of the prior mortgage is needed for the
creation of the second lien Mortgage or, if required, has been
obtained and is in the related Loan File,
(iii) if the prior mortgage has a negative amortization, the combined
loan-to-value ratio was determined using the maximum loan amount of
such prior mortgage, and
(iv) the related first mortgage loan encumbering the related Mortgaged
Property does not have a mandatory future advance provision;
nn. No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Loan has taken place on the part of any
person, including without limitation the Borrower, any appraiser, any
builder or developer, or any other party involved in the origination of the
Loan or in the application of any insurance in relation to such Loan;
oo. Each Mortgaged Property is in compliance with all environmental laws,
ordinances, rules, regulations and orders of federal, state or governmental
authorities relating thereto. No hazardous material has been or is
incorporated in, stored on or under (other than properly stored materials
used for reasonable residential purposes), released from, treated on,
transported to or from, or disposed of on or from, any Mortgaged Property
such that, under applicable law (A) any such hazardous material would be
required to be eliminated before the Mortgaged Property could be altered,
renovated, demolished or transferred, or (B) the owner of the Mortgaged
Property, or the holder of a security interest therein, could be subjected
to liability for the removal of such hazardous material or the elimination
of the hazard created thereby. Neither the Seller, Originator nor any
Borrower has received notification from any federal, state or other
governmental authority relating to any hazardous materials on or affecting
the Mortgaged Property or to any potential or known liability under any
environmental law arising from the ownership or operation of the Mortgaged
Property. For the purposes of this subsection, the term "hazardous
materials" shall include, without limitation, gasoline, petroleum products,
explosives, radioactive materials, polychlorinated biphenyls or related or
similar materials, asbestos or any material containing asbestos, lead,
lead-based paint and any other substance or material as may be defined as a
hazardous or toxic substance by any federal, state or local environmental
law, ordinance, rule, regulation or order, including, without limitation,
CERCLA, the Clean Air Act, the Clean Water Act, the Resource Conservation
and Recovery Act, the Toxic Substances Control Act and any regulations
promulgated pursuant thereto;
pp. With respect to any Business Purpose Loan, the related Note contains an
acceleration clause, accelerating the maturity date under the Note to the
date the individual guarantying such loan, if any, becomes subject to any
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally;
qq. None of the Loans are Section 32 loans subject to the Home Ownership and
Equity Protection Act;
rr. For each Business Purpose Loan, the Borrower has executed an affidavit of
business purpose whereby the Borrower states, among other things, that (i)
the proceeds of the Business Purpose Loan are to be used exclusively to
acquire an interest in or carry on a business or commercial enterprise, and
(ii) no portion of the proceeds of any Business Purpose Loan are to be used
by the borrower for personal, family, household or consumer purposes;
ss. For each Business Purpose Loan, the Borrower is the principal for the
business or commercial enterprise for which the proceeds of such Business
Purpose Loan will be applied;
tt. The Mortgage Interest Rate for each Loan is fixed;
uu. None of the Loans has a loan-to-value ratio (or combined loan-to-value
ratio with respect to second lien loans) of 100% or greater;
vv. None of the Loans has an unpaid principal balance of $750,000 or greater;
ww. As of the initial Purchase Date with respect to any Loan, such Loan had a
remaining scheduled maturity date of at least one year following such
initial Purchase Date; and
xx. None of the Loans had an original principal balance of less than $15,000.
