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INSURANCE AND REIMBURSEMENT AGREEMENT
among
MBIA INSURANCE CORPORATION,
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2001-1, as the Trust
ABFS OSO, INC., as the Depositor
AMERICAN BUSINESS CREDIT, INC., as Originator and as Servicer
HOMEAMERICAN CREDIT, INC., as Originator
AMERICAN BUSINESS MORTGAGE SERVICES, INC., as Originator
AMERICAN BUSINESS FINANCIAL SERVICES, INC., as the Guarantor
THE CHASE MANHATTAN BANK, as Indenture Trustee
and
TRIPLE-A ONE FUNDING CORPORATION, as Initial Purchaser
Dated as of March 28, 2001
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TABLE OF CONTENTS
TABLE OF CONTENTS.................................................................................................i
ARTICLE I
DEFINITIONS..............................................................................................4
Section 1.1. General Definitions........................................................................4
Section 1.2. Generic Terms..............................................................................5
ARTICLE II
THE INSURANCE POLICY; REIMBURSEMENT......................................................................5
Section 2.1. Insurance Policy...........................................................................5
Section 2.2. Conditions Precedent to Issuance of the Insurance Policy...................................5
Section 2.3. Premium Supplement.........................................................................8
Section 2.4. Reimbursement Obligations..................................................................8
Section 2.5. Option to Fund Payments....................................................................9
Section 2.6. Subrogation................................................................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES...........................................................................9
Section 3.1. Representations and Warranties of the ABFS Companies.......................................9
Section 3.2. Representations and Warranties Incorporated by Reference..................................11
ARTICLE IV
COVENANTS...............................................................................................11
Section 4.1. Affirmative Covenants of the Originators..................................................11
Section 4.2. Affirmative Covenants of the Servicer, the Depositor and Trust...........................12
ARTICLE V
FURTHER AGREEMENTS......................................................................................13
Section 5.1. Obligations Absolute......................................................................13
Section 5.2. Reinsurance...............................................................................14
Section 5.3. Liability of MBIA.........................................................................14
Section 5.4. Fees and Expenses.........................................................................15
ARTICLE VI
INDEMNIFICATION.........................................................................................15
Section 6.1. Indemnification...........................................................................15
ARTICLE VII
DEFAULTS; REMEDIES......................................................................................17
Section 7.1. Events of Default.........................................................................17
Section 7.2. Remedies; No Remedy Exclusive.............................................................18
Section 7.3. Waivers...................................................................................18
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ARTICLE VIII
MISCELLANEOUS...........................................................................................19
Section 8.1. Amendments, Etc...........................................................................19
Section 8.2. Notices...................................................................................19
Section 8.3. No Waiver; Remedies and Severability......................................................20
Section 8.4. Payments..................................................................................21
Section 8.5. GOVERNING LAW, JURY TRIAL WAIVER; SUBMISSION TO JURISDICTION..............................21
Section 8.6. Indenture Trustee Acts or Omissions.......................................................22
Section 8.7. Survival of Representations and Warranties................................................22
Section 8.8. Bankruptcy................................................................................22
Section 8.9. Counterparts..............................................................................22
Section 8.10. Paragraph Headings, Etc..................................................................22
Section 8.11. Termination..............................................................................23
Section 8.12. Further Assurances.......................................................................23
Section 8.13. Consent of MBIA or the Initial Purchaser.................................................23
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INSURANCE AND REIMBURSEMENT AGREEMENT
THIS INSURANCE AND REIMBURSEMENT AGREEMENT (the "Insurance Agreement")
is made as of March 28, 2001 among MBIA INSURANCE CORPORATION, a New York stock
insurance company ("MBIA"), ABFS Mortgage Loan Warehouse Trust 2001-1, a
Delaware business trust (the "Trust"), ABFS OSO, Inc., a Delaware corporation
(the "Depositor"), American Business Credit, Inc., a Pennsylvania corporation
("ABC", and, in its capacity as servicer under the Sale and Servicing Agreement,
the "Servicer"), HomeAmerican Credit, Inc., a Pennsylvania corporation d/b/a
Upland Mortgage ("Upland"), American Business Mortgage Services, Inc., a New
Jersey corporation ("ABMS" and, together with ABC and Upland, each an
"Originator" and collectively the "Originators"), American Business Financial
Services, Inc., a Delaware corporation (the "Guarantor"), The Chase Manhattan
Bank, as indenture trustee under the Indenture referred to below (the "Indenture
Trustee") and Triple-A One Funding Corporation, a Delaware Corporation (the
"Initial Purchaser").
PRELIMINARY STATEMENTS
Pursuant to: (i) the Sale and Servicing Agreement, the Originators will
from time to time transfer certain Mortgage Loans to the Depositor and the
Depositor will simultaneously transfer such Mortgaged Loans to the Trust and
(ii) the Indenture, dated as of March 1, 2001 (as amended or modified from time
to time, the "Indenture"), between the Trust and the Indenture Trustee, the
Trust will issue the ABFS Mortgage Loan Warehouse Trust 2001-1, Mortgage Backed
Note (the "Note").
MBIA is authorized to transact a financial guaranty insurance business
in the State of New York and has agreed to issue to the Indenture Trustee for
the benefit of the Noteholder (as defined in the Indenture) the Insurance Policy
(as defined herein) substantially in the form of Exhibit A hereto.
The parties hereto, among other things, desire to specify the
conditions precedent to the issuance by MBIA of the Insurance Policy, the
payment of the related premium pursuant to the Premium Supplement (as defined
herein) and other amounts in respect thereof, the reimbursement obligations of
the Trust to MBIA, the indemnification obligations of the Trust, the
Originators, the Depositor and the Servicer hereunder, and to provide for
certain other matters related thereto.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained and as an inducement to MBIA to issue the Insurance Policy and
to set forth the obligations of the Servicer, the Depositor, the Originators and
the Trust to reimburse or indemnify, as the case may be, MBIA for the payment of
certain amounts as provided herein and in the Premium Supplement, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. General Definitions. The terms defined in this Article I
shall have the meanings provided herein for all purposes of this Insurance
Agreement, unless the context clearly requires otherwise, in both singular and
plural form, as appropriate. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Indenture.
"ABFS Companies" means the Trust, the Servicer, the Depositor, the
Guarantor and the Originators.
"Affiliate" or "affiliate" has the meaning given to such term in the
Securities Exchange Act of 1934 and the rules and regulations thereunder.
"Closing Date" means March 28, 2001.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding has been commenced in any court without
the application or consent of such Person, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or any
substantial part of its assets, or any similar action with respect to such
Person under any law (foreign or domestic) relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts and such case
or proceeding continues undismissed or unstayed and in effect for a period of 60
days; or an order for relief with respect to such Person has been entered in an
involuntary case under the Bankruptcy Code or other similar laws (foreign or
domestic) now or hereafter in effect; or
(b) such Person has commenced a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall admit in writing its inability to, pay
its debts generally as they become due.
"Event of Default" has the meaning specified in Section 7.1.
"GAAP" means, at any particular time, United States generally accepted
accounting principles as in effect at such time, consistently applied.
"Governmental Authority" shall mean any national government (United
States or foreign), any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Insurance Policy" means that certain financial guaranty insurance
policy, delivered by MBIA under this Insurance Agreement in favor of the
Indenture Trustee for the benefit of the Noteholder, or any successor agreement,
instrument or document pursuant to which the payment of principal and interest
on the Note is guaranteed by MBIA.
"Late Payment Rate" means the Prime Rate in effect from time to time
plus 3%. The Late Payment Rate shall be computed on the basis of a year of 365
days calculating the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
"Premium" has the meaning given such term in the Premium Supplement.
"Premium Supplement" means that certain Premium Supplement between the
Trust and MBIA dated as of the Closing Date, as the same may be amended or
otherwise modified from time to time.
"Prime Rate" means, for any date of determination, the rate of interest
most recently published in the New York edition of the Wall Street Journal as
the prime rate (any change in such prime rate to be effective on the date such
change is published). In the event such rate is not published in such edition of
the Wall Street Journal, the "Prime Rate" for such date of determination shall
be the rate of interest as it is publicly announced by Citibank, N.A. at its
principal office in New York, New York as its prime rate (any change in such
prime rate of interest to be effective on the date such change is announced by
Citibank, N.A.).
"Repayment Amount" has the meaning given such term in Section 2.4
hereof.
"Transaction Documents" has the meaning given to such term in Section
2.2(a).
"UCC" means the Uniform Commercial Code as enacted and in effect in the
state of New York.
Section 1.2. Generic Terms. All words used herein shall be construed to
be of such gender or number as the circumstances require. The words "herein,"
"hereby," "hereof," "hereto," "hereinbefore" and "hereinafter," and words of
similar import, refer to this Insurance Agreement in its entirety and not to any
particular paragraph, clause or other subdivision, unless otherwise specified.
ARTICLE II
THE INSURANCE POLICY; REIMBURSEMENT
Section 2.1. Insurance Policy. MBIA agrees, subject to the conditions
hereinafter set forth, to issue the Insurance Policy on the Closing Date.
Section 2.2. Conditions Precedent to Issuance of the Insurance Policy.
The obligation of MBIA to issue the Insurance Policy under this Insurance
Agreement is subject to the satisfaction of each of the following conditions on
the Closing Date:
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(a) Each of the following documents shall have been duly authorized,
executed and delivered by each of the parties thereto (other than MBIA) and
shall be in full force and effect and in form and substance satisfactory to MBIA
and an executed counterpart of each thereof shall have been delivered to MBIA:
(i) the Sale and Servicing Agreement;
(ii) the Indenture;
(iii) the Trust Agreement;
(iv) the Premium Supplement;
(v) a specimen of the Note;
(vi) this Insurance Agreement; and
(vii) the other documents specified on Schedule 1
(items (i) through (viii), collectively, the "Transaction Documents").
(b) MBIA shall have received:
(i) copies certified by the Secretary or an Assistant Secretary
or Owner Trustee of each ABFS Company, dated the Closing
Date, of each such entity's articles of incorporation,
by-laws, limited partnership agreement, Trust Agreement or
other organizational documents, as applicable, and the
resolutions of each such entity's general partner, members,
certificateholders or Board of Directors, as applicable, or a
duly authorized committee thereof authorizing its execution
and delivery of each of the Transaction Documents executed by
such parties and of all documents evidencing other corporate
or entity action and governmental approvals, if any, that are
necessary for the consummation of the transactions
contemplated by the Transaction Documents;
(ii) a certificate, dated the Closing Date, of the Secretary or an
Assistant Secretary or Owner Trustee of each ABFS Company
certifying the names and true signatures of their officers
authorized to sign the Transaction Documents;
(iii) a certificate, dated the Closing Date, of a Responsible
Officer of each ABFS Company to the effect that the
representations and warranties of such party set forth in
each Transaction Document to which it is a party (i) are true
and correct on the Closing Date as if made on the Closing
Date, (ii) inure to the benefit of MBIA and the Initial
Purchaser, and (iii) since December 31, 2000, there has been
no material adverse change in the business, results of
operations or financial condition of such ABFS Company;
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(iv) favorable opinions, dated the Closing Date, satisfactory in
form and substance satisfactory to MBIA, from counsel to the
ABFS Companies, addressed to MBIA, with respect to such
matters as MBIA may reasonably require;
(v) evidence that UCC-1 financing statements covering (A) the
interests of the Indenture Trustee for the benefit of the
Noteholder and MBIA created by or pursuant to the Indenture
in the Collateral, shall have been executed by the Trust in
favor of the Indenture Trustee for the benefit of the
Noteholder and MBIA, (B) the interests of the Trust in the
Mortgage Loans and related general intangibles created by the
Sale and Servicing Agreement shall have been duly executed by
the Depositor in favor of the Trust and assigned to the
Indenture Trustee and (C) the interests of the Depositor in
the Mortgage Loans and related general intangibles created by
the Sale and Servicing Agreement shall have been duly
executed by each Originator in favor of the Depositor and
assigned to the Indenture Trustee, and that each of the
financing statements described in clauses (A) through (C)
shall have been duly filed in such place or places which, in
the opinion of counsel for the Initial Purchaser and MBIA,
are necessary or desirable to perfect said interests; and
(vi) such other documents, certificates, instruments, approvals
(and, if requested by MBIA, certified duplicates or executed
copies thereof) or opinions as MBIA may reasonably request.
(c) No statute, rule, regulation or order shall have been enacted,
entered or deemed applicable by any Governmental Authority which would make any
of the transactions contemplated by the Transaction Documents illegal or
otherwise prevent the consummation thereof.
(d) MBIA shall have received an executed copy of all legal opinions,
certificates, accountant's reports and other documents required to be furnished
by ABFS Companies in connection with the issuance of the Note, pursuant to the
Transaction Documents and each such legal opinion or certificate shall be
addressed to MBIA and the Initial Purchaser or accompanied by appropriate
reliance letters to MBIA except as otherwise agreed by MBIA.
(e) MBIA shall have received all amounts payable to it on or prior to
the Closing Date, if any, as provided in the Premium Supplement.
(f) MBIA shall have received true and correct copies of all approvals,
licenses and consents, if any, required in connection with the Transaction
Documents.
(g) All conditions in the Indenture to the issuance of the Note shall
have been satisfied, and all conditions in the Purchase Agreement relating to
the Initial Purchasers' obligation to purchase the Note shall have been
satisfied.
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(h) MBIA shall have received confirmation that the Note, when issued,
will be rated "BBB" by S&P and "Baa2" by Moody's (in each case without giving
effect to the Insurance Policy).
(i) No Default or Event of Default under the Indenture shall have
occurred.
Section 2.3. Premium Supplement. MBIA shall be entitled to receive a
Premium for the Insurance Policy in accordance with the terms and conditions of
the Premium Supplement and all other related fees and expenses payable pursuant
to such Premium Supplement. The Premium shall be paid under the Indenture and
shall be nonrefundable without regard to whether MBIA makes any payment under
the Insurance Policy or any other circumstances relating to the Note or
provision being made for payment of the Note prior to maturity. ABC, in its
capacity as Servicer, or as may otherwise be provided in the Indenture, shall
cause all payments of Premium to be made by wire transfer to an account
designated from time to time by MBIA by written notice to the Servicer or the
Indenture Trustee.
Section 2.4. Reimbursement Obligations. (a) In accordance with the
Indenture, MBIA shall be entitled to reimbursement for any payment made under
the Insurance Policy or pursuant to Section 2.5 hereof, which reimbursement
shall be payable to MBIA on the date that any amount is to be paid pursuant to a
Notice for Payment (as defined in the Insurance Policy). Such reimbursement
shall be made in an amount (the "Repayment Amount") equal to (i) the sum of the
amount paid or to be paid under the Insurance Policy or under Section 2.5 hereof
and all amounts previously paid that remain unreimbursed plus (ii) interest on
any and all amounts remaining unreimbursed (to the extent permitted by law, if
in respect of any unpaid amounts representing interest) from the date such
amounts became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate. Such reimbursement shall only
be made out of the Collateral as provided in the Indenture and in this Insurance
Agreement.
(b) In addition to MBIA's right of payment and reimbursement
as set forth in Section 2.4(a), each ABFS Company (other than the Trust) agrees
to reimburse MBIA (or the Trust, to the extent MBIA has previously been
reimbursed for such amount pursuant to Section 2.4(a)) in an amount equal to any
payment made under the Insurance Policy or pursuant to Section 2.5 hereof to the
extent that such payment arises from any failure by such ABFS Company (i) to
repurchase a Mortgage Loan required to be repurchased by it or (ii) to make any
payment or remittance required to be made by it pursuant to any Transaction
Document, in each case together with interest on any and all such amounts from
the date such amount was paid by MBIA under the Insurance Policy until amount is
reimbursed in full (after as well as before judgment), at a rate of interest
equal to the Late Payment Rate. Such right of reimbursement shall be in addition
to any and all rights of indemnification or any other rights of MBIA pursuant to
the Transaction Documents or under law or equity.
(c) Each ABFS Company agrees to reimburse MBIA for any
payments made by MBIA on behalf of, or advanced to, such ABFS Company,
including, without limitation, any amounts payable by such ABFS Company pursuant
to the Transaction Documents; provided that in the case of the Trust, such
reimbursement shall be made only out of the Collateral as provided in the
Indenture and in this Insurance Agreement.
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(d) Following termination of the Indenture pursuant to Section
10.01 thereof, the Servicer agrees to reimburse MBIA for any payments required
to be made pursuant to the Insurance Policy subsequent to the date of such
termination.
(e) All amounts to which MBIA is entitled pursuant to this
Section 2.4 are to be immediately due and payable without demand.
Section 2.5. Option to Fund Payments. MBIA or its designee shall
have the option, in lieu of making a payment under the Insurance Policy, to
advance to the Indenture Trustee in immediately available funds the amount
determined by MBIA to be payable by MBIA under the Insurance Policy. MBIA shall
remit any such amount directly to the Indenture Trustee, no later than the time
and date payment would otherwise be payable by MBIA under the Insurance Policy.
Any such amounts shall be reimbursed in accordance with Section 2.4 hereof.
Section 2.6. Subrogation. The interests, rights, and remedies of
MBIA described in Sections 2.4 and 6.1 of this Insurance Agreement are in
addition to, and not in lieu of, equitable rights of subrogation, and MBIA
reserves all of such rights. The Trust agrees to take, or cause to be taken, all
actions deemed reasonably desirable by MBIA to preserve, enforce, perfect, or
maintain the perfection in MBIA's favor of such interests, rights, and remedies
and such equitable rights of subrogation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the ABFS Companies.
As of the date hereof and each Subsequent Transfer Date, each ABFS Company
represents and warrants, each as to those matters relating to itself, as
follows:
(a) Due Organization and Qualification. Each ABFS Company is either
a corporation or a Delaware business trust, duly organized, validly existing and
in good standing under the laws of its respective jurisdiction. Each ABFS
Company is duly qualified to do business, is in good standing and has obtained
all necessary licenses, permits, charters, registrations and approvals
(together, "approvals") necessary for the conduct of its business as currently
conducted and the performance of its obligations under the Transaction
Documents, in each jurisdiction in which the failure to be so qualified or to
obtain such approvals would render any Transaction Document unenforceable in any
respect or would have a material adverse effect upon the transactions
contemplated thereby.
(b) Power and Authority. Each ABFS Company has all necessary
corporate or other power and authority to conduct its business as currently
conducted, and to execute, deliver and perform its obligations under the
Transaction Documents and to consummate the Transaction contemplated thereby.
(c) Due Authorization. The execution, delivery and performance of
the Transaction Documents by each ABFS Company has been duly authorized by all
necessary corporate and other action and do not require any additional approvals
or consents, or other action by or any notice to or filing with any Person,
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including, without limitation, any governmental entity or any partners,
stockholders or certificateholders, which have not previously been obtained or
given by such ABFS Company.
(d) Noncontravention. Neither the execution and delivery of the
Transaction Documents by any ABFS Company, the consummation of the transactions
contemplated thereby nor the satisfaction of the terms and conditions of the
Transaction Documents:
(i) conflicts with or results in any breach or violation of
(A) any provision of the certificate of incorporation or
bylaws or Trust Agreement or other organizational
document, as applicable, of any ABFS Company or (B) any
law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award currently in
effect having applicability to any ABFS Company or any
of their properties, including regulations issued by an
administrative agency or other governmental authority
having supervisory powers over any ABFS Company;
(ii) constitutes a default by any ABFS Company under or a
breach of any provision of any loan agreement, mortgage,
indenture or other agreement or instrument to which any
ABFS Company is a party or by which any of their
respective properties, which are individually or in the
aggregate material to any ABFS Company, is or may be
bound or affected; or
(iii) results in or requires the creation of any lien upon or
in respect of any assets of any ABFS Company (other than
the liens created under the Transaction Documents).
(e) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative agency or
arbitrator against or affecting any ABFS Company or any of its or their
subsidiaries, or any properties or rights of any ABFS Company or any of its or
their subsidiaries, pending or, to any ABFS Company's knowledge after reasonable
inquiry, threatened, which, in any case, could reasonably be expected to have a
material adverse effect on the business, operations or financial condition with
respect to any ABFS Company.
(f) Valid and Binding Obligations. The Note, when executed,
authenticated and issued in accordance with the Indenture, and the Transaction
Documents, when executed and delivered by each ABFS Company, will constitute the
legal, valid and binding obligations of each ABFS Company named as a party
thereto, as applicable, enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equitable principles.
(g) Compliance With Securities Laws. The offer and sale of the Note
complies in all material respects with all requirements of law, including all
applicable registration requirements of applicable securities laws. Neither the
offer nor the sale of the Note has been or will be in violation of the
Securities Act or any other federal or state securities laws. None of the ABFS
Companies is required to be registered as an "investment company" under the
Investment Company Act.
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(h) Organizational Documents. Each ABFS Company is in compliance in
all material respects with its organizational documents, including without
limitation and as applicable, each ABFS Company's articles of incorporation,
bylaws, certificate of formation, partnership agreement or Trust Agreement, as
applicable.
(i) Accuracy of Information. All information heretofore furnished
by such ABFS Company or any of its Affiliates to the Initial Purchaser or MBIA
for purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is, and
all such information hereafter furnished in writing by such ABFS Company or any
of its Affiliates to the Initial Purchaser or MBIA will be, true and accurate in
every material respect on the date such information is stated or certified and
does not and will not contain any material misstatement of fact or omit to state
a material fact or any fact necessary to make the statements contained therein
not materially misleading.
Section 3.2. Representations and Warranties Incorporated by
Reference. This Section 3.2 incorporates by reference the representations and
warranties of each ABFS Company contained in the Transaction Documents. Each
ABFS Company represents and warrants to MBIA, as of the Closing Date and as of
each Subsequent Transfer Date, that each of the representations and warranties
made by it in each Transaction Document to which it is a party, each of which is
incorporated by reference as if herein written, is true and correct as of the
Closing Date and as of each Subsequent Transfer Date.
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originators. ABFS and
each Originator hereby jointly and severally covenants and agrees that during
the term of this Insurance Agreement and so long as any Note is outstanding or
any monetary obligation arising hereunder is owing and shall remain unpaid,
unless MBIA shall otherwise consent in writing:
(a) It will furnish to MBIA and the Initial Purchaser the
following:
(i) as soon as available and in any event within 120 days
after the end of each fiscal year of ABFS, a copy of
the audited financial statements (including balance
sheet, income statement and, if prepared, statement of
cash flows) for such year for ABFS and its consolidated
subsidiaries, certified by independent public
accountants or recognized national standing,
(ii) as soon as available and in any event within 45 days
after the end of each fiscal quarter of ABFS, a
consolidated balance sheet of ABFS and any consolidated
subsidiaries of ABFS, as of the end of such quarter,
and statements of income of ABFS and any consolidated
subsidiaries of ABFS, for such quarter, certified by
the chief financial officer or chief accounting officer
of ABFS and stating the information set forth therein
fairly presents the financial condition of ABFS and any
consolidated subsidiaries of ABFS in accordance with
GAAP as of and for the periods then ended, subject to
normal
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year-end adjustments as soon as available in any year
in which an annual report is prepared, a copy of such
report for such year;
(iii) together with the financial statements required under
each of clauses (i) and (ii), a Compliance Certificate
in substantially the form attached as Exhibit H to the
Sale and Servicing Agreement signed by the chief
financial officer of ABFS and dated the date of such
annual or quarterly financial statement, as applicable;
(iv) promptly, notice of (A) each action, suit or proceeding
before any Governmental Authority which may materially
adversely affect its, or any other of its Affiliates,
condition or operations, financial or otherwise; and
(B) any dispute or the commencement of any proceeding
with respect to any of its obligations under the Sale
and Servicing Agreement or any other Transaction
Document; and (C) such other information respecting its
business, properties, condition or operations,
financial or otherwise, as MBIA or the Initial
Purchaser may from time to time reasonably request; and
(v) copies of any material filing which any ABFS Company or
Affiliate thereof files with, or delivers to, the
Securities and Exchange Commission or any national
securities exchange.
(b) It shall comply with all terms, conditions and covenants made
by it in any Transaction Document to which it is a party.
Section 4.2. Affirmative Covenants of the Servicer, the Depositor
and Trust. Each of the Servicer, the Depositor and Trust hereby severally
covenants and agrees that during the term of this Insurance Agreement:
(a) It shall comply with the terms, conditions and covenants of
each Transaction Document to which it is a party and shall provide MBIA and the
Initial Purchaser with prompt written notice of any breach by any ABFS Company
of any provision of any such Transaction Document.
(b) It shall, within the period of six months prior to the
expiration of five years from the Closing Date and each five year anniversary
thereafter, file or cause to be filed such continuation statements or amendments
or other actions as may be required in order to maintain and continue the
protection of the interests of MBIA, the Noteholder and the Indenture Trustee
created by or pursuant to the Indenture in the Collateral and other assets
pledged to the Indenture Trustee by the Trust and the proceeds thereof.
(c) It will furnish to MBIA and the Initial Purchaser a copy of
each material certificate, report, statement, notice or other written
communication furnished by or on behalf of it, if any, to the Indenture Trustee
or any Rating Agency concurrently therewith and furnish to MBIA and the Initial
Purchaser promptly after receipt thereof, a copy of each material notice, demand
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or other written communication regarding any Transaction Document to which it is
a party received by it from the Indenture Trustee.
(d) In the case of the Trust only, it will furnish to MBIA and the
Initial Purchaser the following:
(i) within 90 days after the end of each fiscal year, the
annual unaudited balance sheet and income statement
(and cash flow statement, if prepared) of the Trust
prepared in accordance with GAAP for the period
involved and presenting fairly the financial condition
of the Trust as of the date thereof; and
(ii) promptly, notice of (A) each action, suit or proceeding
before any Governmental Authority which may materially
adversely affect its condition or operations, financial
or otherwise; and (B) any dispute or the commencement
of any proceeding with respect to any of its
obligations under the Indenture or any Transaction
Document; and (C) such other information respecting its
business, properties, condition or operations,
financial or otherwise, as MBIA may from time to time
reasonably request in writing.
(e) It will, from time to time during regular business hours as
requested by MBIA upon reasonable advance written notice, permit MBIA, or its
agents or representatives, (i) to examine and make copies of and abstracts from
all records in the possession or under the control of such Transaction Party
relating to the Trust Fund, and (ii) to visit the offices and properties of such
Transaction Party for the purpose of examining such materials described in
clause (i) above, and to discuss matters relating to the Trust Fund or such
Transaction Party's performance under any of the Transaction Documents and, in
each case, with any of the officers or employees of such Transaction Party
having knowledge of such matters.
(f) It will furnish to MBIA and the Initial Purchaser such other
information as MBIA or the Initial Purchaser may reasonably request.
ARTICLE V
FURTHER AGREEMENTS
Section 5.1. Obligations Absolute. The obligations of the ABFS
Companies pursuant to this Insurance Agreement are absolute and unconditional
and will be paid or performed strictly in accordance with the respective terms
thereof, irrespective of:
(a) any lack of validity or enforceability of, or any amendment or
other modifications of, or waiver with respect to, the Transaction Documents;
(b) any amendment or waiver of, or consent to departure from, the
Insurance Policy or any of the Transaction Documents;
13
(c) the existence of any claim, set off, defense or other rights it
may have at any time against the Indenture Trustee, any beneficiary or any
transferee of the Insurance Policy (or any persons or entities for whom the
Indenture Trustee, any such beneficiary or any such transferee may be acting),
MBIA, the Initial Purchaser or any other person or entity whether in connection
with the Insurance Policy, any Transaction Documents or any unrelated
transaction;
(d) any statement or any other document presented under the
Insurance Policy (including any Notice for Payment) proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever;
(e) the inaccuracy or alleged inaccuracy of any Notice for Payment,
Noteholder Statement, Servicer Remittance Report or any other report or document
upon which any drawing under the Insurance Policy is based;
(f) payment by MBIA under the Insurance Policy against presentation
of a draft or certificate which does not comply with the terms of the Insurance
Policy; provided, that such payment shall not have constituted gross negligence
of, or willful misconduct by, MBIA;
(g) the bankruptcy or insolvency of MBIA, the Initial Purchaser,
the Trust or any other Person;
(h) any default or alleged default of MBIA under the Insurance
Policy other than a default with respect to payment thereunder;
(i) any defense based upon the failure of the Indenture Trustee to
receive all or part of the proceeds of the sale of the Note or of the Servicer
to receive any or all of the Servicing Fee or other compensation required under
the Indenture or otherwise, or any nonapplication or misapplication of the
proceeds of any drawing upon the Insurance Policy; and
(j) any other circumstance or happening whatsoever; provided, that
the same shall not have constituted gross negligence of, or willful misconduct
by, MBIA or a default by MBIA with respect to its payment obligations under the
Insurance Policy.
Section 5.2. Reinsurance. MBIA shall have the right to give
participations in its rights under this Insurance Agreement and to enter into
contracts of reinsurance with respect to the Insurance Policy; provided, that
MBIA agrees that any such disposition will not alter or affect in any way
whatsoever MBIA's direct obligations hereunder and under the Insurance Policy
and provided further that any reinsurer or participant will not have any rights
against the Trust, the Depositor, the Originators, the Servicer, the Guarantor,
the Noteholder or the Indenture Trustee and that the Trust, the Depositor, the
Originators, the Servicer, the Guarantor, the Noteholder and the Indenture
Trustee shall have no obligation to have any communication or relationship
whatsoever with any reinsurer or participant in order to enforce the obligations
of MBIA hereunder and under the Insurance Policy. None of the ABFS Companies may
assign its obligations under this Insurance Agreement without the prior written
consent of MBIA.
Section 5.3. Liability of MBIA. Each ABFS Company agrees that
neither MBIA, nor the Initial Purchaser, nor any of their respective officers,
directors or employees shall be liable or responsible for (except to the extent
14
of its or their own gross negligence or willful misconduct): (a) the use which
may be made of the Insurance Policy by or for any acts or omissions of another
Person in connection therewith or (b) the validity, sufficiency, accuracy or
genuineness of any documents delivered to MBIA or the Initial Purchaser, or of
any endorsement(s) thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged. In furtherance
and not in limitation of the foregoing, MBIA and the Initial Purchaser may
accept documents that appear on their face to be in order, without
responsibility for further investigation.
Section 5.4. Fees and Expenses. Subject to Section 5.03 of the Sale
and Servicing Agreement, the ABFS Companies jointly and severally agree to pay
any and all charges, fees, costs and expenses that the Insurer and the Initial
Purchaser may reasonably pay or incur (including, but not limited to, attorneys'
and accountants' fees and expenses) in connection with the transactions
contemplated by the Transaction Documents, including all charges, fees, costs
and expenses relating to (i) any accounts established to facilitate payments
under the Insurance Policy to the extent MBIA has not been immediately
reimbursed on the date that any amount is paid by MBIA under the Insurance
Policy, (ii) the enforcement, defense or preservation of any rights in respect
of any of the Transaction Documents, including, without limitation, instituting,
defending, monitoring or participating in any litigation or proceeding
(including, without limitation, any insolvency or bankruptcy proceeding in
respect of any Transaction participant or any affiliate thereof) relating to any
of the Transaction Documents, any party to any of the Transaction Documents, in
its capacity as such a party, or the transactions contemplated thereby, (iii)
the negotiation, preparation, execution and delivery of this Insurance
Agreement, the Transaction Documents and all other documents delivered with
respect thereto, (iv) any amendment, waiver or other action with respect to, or
related to, any Transaction Document, whether or not executed or completed and
(v) rating agency fees. For purposes of the foregoing, MBIA's costs and expenses
shall include a reasonable allocation of compensation and overhead attributable
to the time of employees of MBIA spent in connection with the actions described
in clause (ii) above, and MBIA reserves the right to charge a reasonable fee as
a condition to executing any waiver or consent proposed in respect of any of the
Transaction Documents. All such charges, fees, costs and expenses shall be
payable on the Closing Date (to the extent they are due and payable on or prior
to such date) upon the presentation of an invoice for any such charges, fees,
costs and expenses, provided that if an invoice therefor is presented subsequent
to the Closing Date the amount of such invoice shall be payable on the date it
is presented.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification.
(a) In addition to any and all rights of indemnification or any
other rights of MBIA or the Initial Purchaser pursuant hereto or under law or
equity, each ABFS Company, and any successor thereto agree, to the extent set
forth below, to pay, and to protect, indemnify and save harmless, MBIA, the
Initial Purchaser and their respective officers, directors, shareholders,
employees, agents and each person, if any, who controls either of MBIA or the
Initial Purchaser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Securities Exchange Act (each such Person being an
"Indemnitee") from and against any and all claims, losses, liabilities
(including penalties), actions, suits, judgments, demands, damages, costs or
15
reasonable expenses (including, without limitation, reasonable fees and expenses
of attorneys, consultants and auditors and reasonable costs of investigations)
or obligations whatsoever paid by any Indemnitee (or which may be claimed
against any Indemnitee) (herein collectively referred to as "Liabilities") of
any nature arising out of or relating to the transactions contemplated by the
Transaction Documents by reason of:
(i) any act or omission of such ABFS Company or the
allegation thereof, in connection with the offering,
issuance, sale or delivery of the Note;
(ii) the breach by such ABFS Company of any of its
obligations under this Insurance Agreement or any of
the Transaction Documents;
(iii) the breach by such ABFS Company of any representation
or warranty contained in the Transaction Documents or
in any certificate or report furnished or delivered to
MBIA or the Initial Purchaser thereunder;
(iv) the violation by such ABFS Company of any federal or
state laws, rules or regulations relating to the
transactions contemplated by the Transaction Documents
or the origination or servicing of the Mortgage Loans,
including, without limitation, any consumer protection,
lending and disclosure laws and any laws with respect
to the maximum amount of interest permitted to be
received on account of any loan of money or with
respect to the Mortgage Loans;
(v) the violation by such ABFS Company of any federal or
state securities, banking or antitrust laws, rules or
regulations in connection with the issuance, offer and
sale of the Note or the transactions contemplated by
the Transaction Documents; and
(vi) the misfeasance or malfeasance of, or negligence or
theft committed by, any director, officer, employee or
agent of such ABFS Company.
Notwithstanding anything to the contrary in this Agreement or
any other Transaction Document, for purposes of the indemnification obligations
set forth in this Section 6.01, any representation or warranty made by any ABFS
Company in any Transaction Document that is qualified or limited "to the
knowledge" of such ABFS Company or words of like import shall not be deemed to
be so qualified or limited.
The obligations of the Guarantor, the Servicer and the
Originators under this Section 6.1 shall be joint and several.
(b) The Servicer and the Originators jointly and severally agree to
indemnify the Trust and MBIA for any and all Liabilities, and to pay in advance
an amount sufficient to fully protect and compensate the Trust and MBIA for any
future risk of loss that is or may be incurred by the Trust or MBIA due to (i)
any claim, counterclaim, rescission, setoff or defense asserted by an Obligor
under any Mortgage Loan subject to the Federal Trade Commission regulations
provided in 16 C.F.R. Part 433 and under any Mortgage Loan which is a "mortgage"
as such term is defined in 15 U.S.C. ss. 1602(aa), (ii) any agreement or
acquiescence by the Servicer or an Originator to any reduction, rebate,
rescheduling or delay of any payments due and owing by any Obligor under any
Mortgage Loan based upon an agreement on the part of the Servicer or any
16
Originator to make or rebate any future payments on such Mortgage Loan, (iii)
any agreement on the part of the Servicer or any Originator to make or rebate
any future payments on any Mortgage Loan or (iv) any settlement of any judicial
proceeding or any claim, action or proceeding of any regulatory body.
(c) Promptly after receipt by an indemnified party under this
Section 6.1 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any ABFS Company under
this Section 6.1, notify such ABFS Company in writing of the commencement
thereof, but the omission to so notify any ABFS Company will not relieve such
ABFS Company from any liability which such ABFS Company may have to any
indemnified party hereunder except to the extent such ABFS Company has been
prejudiced thereby. In case any such action is brought against any indemnified
party, and it notifies the Servicer of the commencement thereof, the Servicer
will be entitled to participate therein and, to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party. After notice from the
Servicer to such indemnified party of its election to assume the defense
thereof, the ABFS Companies will not be liable to such indemnified party under
this Section 6.1 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the parties in any such action
include both the indemnified party and any ABFS Company and the indemnified
party shall have reasonably concluded that representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties and the indemnifying party shall be liable for the expenses of such
separate counsel. The indemnifying parties shall not be liable for the expenses
of more than one separate counsel.
(d) The indemnity provisions set forth in this Section 6.1 shall
survive the termination of this Insurance Agreement and shall survive until the
statute of limitations has run on any causes of action which arise from one of
these reasons and until all suits filed as a result thereof have been finally
concluded.
ARTICLE VII
DEFAULTS; REMEDIES
Section 7.1. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" hereunder:
(a) any failure on the part of any ABFS Company duly to observe or
perform in any material respect any of the covenants or agreements on the part
of such ABFS Company contained in any Transaction Document, or the failure of
any representation or warranty made pursuant to any Transaction Document to be
true and correct, which failure continues unremedied for a period of thirty (30)
days after the date on which written notice of such failure, requiring the same
17
to be remedied, shall have been given to such ABFS Company by the Note Insurer
or the Initial Purchaser; or
(b) any ABFS Company shall fail to pay to MBIA or the Initial
Purchaser when due any amount payable by any such ABFS Company under this
Agreement or the Transaction Documents and such failure shall remain unremedied
for one Business Day; or
(c) the occurrence of a Servicer Event of Default or an Event of
Default under the Indenture (as defined therein); or
(d) the occurrence of an Event of Bankruptcy with respect to any
ABFS Company.
Section 7.2. Remedies; No Remedy Exclusive.
(a) Upon the occurrence of an Event of Default, MBIA or the Initial
Purchaser may exercise any one or more of the rights and remedies set forth
below:
(i) exercise any rights and remedies afforded to it under
the Transaction Documents in accordance with the terms
of the Transaction Documents or direct the Indenture
Trustee to exercise such remedies in accordance with
the terms of the Transaction Documents; or
(ii) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the
amounts then due and thereafter to become due under the
Transaction Documents, or to enforce performance and
observance of any obligation, agreement or covenant of
any ABFS Company under the Transaction Documents, as
applicable.
(b) Unless otherwise expressly provided, no remedy herein conferred
upon or reserved is intended to be exclusive of any other available remedy, but
each remedy shall be cumulative and shall be in addition to other remedies given
under the Transaction Documents or existing at law or in equity. No delay or
omission to exercise any right or power accruing under the Transaction Documents
upon the happening of any event set forth in Section 7.1 hereof shall impair any
such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle MBIA or the Initial Purchaser to exercise any
remedy reserved to MBIA or the Initial Purchaser in this Article, it shall not
be necessary to give any notice, other than such notice as may be expressly
required in this Article VII.
Section 7.3. Waivers.
(a) No failure by MBIA or the Initial Purchaser to exercise, and no
delay by MBIA or the Initial Purchaser in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by MBIA or the Initial Purchaser of
any right hereunder shall not preclude the exercise of any other right, and the
remedies provided herein to MBIA and the Initial Purchaser are declared in every
case to be cumulative and not exclusive of any remedies provided by law or
equity.
18
(b) MBIA shall have the right, to be exercised in its complete
discretion, to waive any Event of Default hereunder, by a writing setting forth
the terms, conditions and extent of such waiver signed by MBIA and delivered to
the ABFS Companies. Unless such writing expressly provides to the contrary, any
waiver so granted shall extend only to the specific event or occurrence which
gave rise to the Event of Default so waived and not to any other similar event
or occurrence which occurs subsequent to the date of such waiver.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Amendments, Etc. No amendment or waiver of any
provision of this Insurance Agreement, nor consent to any departure therefrom,
shall in any event be effective unless in writing and signed by all of the
parties hereto; provided that any waiver so granted shall extend only to the
specific event or occurrence so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
Section 8.2. Notices. Except to the extent otherwise expressly
provided herein, all notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (and if sent by mail,
certified or registered, return receipt requested) or by facsimile transmission
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand, or three (3) Business Days after
being deposited in the mail, postage prepaid, or, in the case of facsimile
transmission, when sent, addressed as follows or to such other address or
facsimile number as set forth in a written notice delivered by a party to each
other party hereto:
If to the Servicer:
------------------
American Business Credit, Inc.
c/o American Business Financial Services, Inc.
Xxxxxxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Bala Cynward, Pennsylvania 19004
Attention: Xxxxxxx X. Xxxxx
If to Upland:
------------
HomeAmerican Credit, Inc., d/b/a Upland Mortgage
c/o American Business Financial Services, Inc.
Xxxxxxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Bala Cynward, Pennsylvania 19004
Attention: Xxxxxxx X. Xxxxx
If to ABMS:
----------
American Business Mortgage Services, Inc.
c/o American Business Financial Services, Inc.
19
Balapointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
If to the Guarantor:
-------------------
American Business Financial Services, Inc.
Xxxxxxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Bala Cynward, Pennsylvania 19004
Attention: Xxxxxxx X. Xxxxx
If to the Trust:
---------------
ABFS Mortgage Loan Warehouse Trust 2001-1
c/o First Union Trust Company, National Association, as Owner Trustee
One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trustee Administration
If to MBIA:
----------
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Risk Management Consumer Asset-Backed Securities
If to the Initial Purchaser:
---------------------------
Triple-A One Funding Corporation
c/o MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Risk Management - Consumer Asset-Backed Securities
Section 8.3. No Waiver; Remedies and Severability. No failure on
the part of MBIA or the Initial Purchaser to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. The
parties further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereunder is unavailable or unenforceable
shall not affect in any way the ability of any party to pursue any other remedy
20
available to it. In the event any provision of this Insurance Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, the
parties hereto agree that such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 8.4. Payments. (a) All payments to MBIA hereunder shall be
made in lawful currency of the United States and in immediately available funds
and shall be made prior to 2:00 p.m. (New York City time) on the date such
payment is due by wire transfer to such office or account as MBIA may direct.
Payments received by MBIA after 2:00 p.m. (New York City time) shall be deemed
to have been received on the next succeeding Business Day, and such extension of
time shall be included in computing interest, commissions or fees, if any, in
connection with such payment. (b) Whenever any payment under this Insurance
Agreement shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such cases be included in computing interest, commissions or fees,
if any, in connection with such payment.
(c) MBIA shall be entitled to interest on all amounts owed to MBIA
under the Transaction Documents at a rate of interest equal to the Late Payment
Rate.
(d) Unless otherwise specified herein, interest payable to MBIA
under this Insurance Agreement shall be calculated on the basis of a 360 day
year and the actual number of days elapsed and shall be payable on demand.
Section 8.5. GOVERNING LAW, JURY TRIAL WAIVER; SUBMISSION TO
JURISDICTION. THIS INSURANCE AGREEMENT SHALL BE CONSTRUED, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INSURANCE AGREEMENT, THE INSURANCE POLICY OR
ANY TRANSACTION CONTEMPLATED HEREBY, THEREBY OR BY THE INDENTURE AND FOR ANY
COUNTERCLAIM THEREIN.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INSURANCE AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
WITH RESPECT TO THE FOREGOING CONSENT TO JURISDICTION, EACH OF THE PARTIES
HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
21
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS INSURANCE AGREEMENT SHALL AFFECT ANY RIGHT THAT A PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS INSURANCE
AGREEMENT AGAINST ANY OTHER PARTY OR ITS RESPECTIVE PROPERTIES IN THE COURT OF
ANY JURISDICITON.
Section 8.6. Indenture Trustee Acts or Omissions. Neither MBIA nor
the Initial Purchaser nor any of their respective officers, directors, employees
or agents shall be liable or responsible for: (i) the use which may be made of
the Insurance Policy or for any acts or omissions of the Indenture Trustee or
any transferee in connection therewith or (ii) any other circumstances
whatsoever in making or failing to make a drawing under the Insurance Policy.
Section 8.7. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Insurance Agreement.
Section 8.8. Bankruptcy. To the extent that the Servicer, the
Originators, the Depositor or the Trust makes a payment to MBIA or the Initial
Purchaser or MBIA or the Initial Purchaser receives any payment or proceeds with
respect to the Repayment Amount or any other amount payable in connection with
this Insurance Agreement, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a Indenture Trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent such payment or proceeds are set aside, the Repayment Amount
or any other amount payable in connection with this Insurance Agreement or part
or parts thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by MBIA
or the Initial Purchaser, as applicable.
Section 8.9. Counterparts. This Insurance Agreement maybe executed
in counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 8.10. Paragraph Headings, Etc. The headings of paragraphs
contained in this Insurance Agreement are provided for convenience only. They
form no part of this Insurance Agreement and shall not affect its construction
or interpretation.
Section 8.11. Termination. This Insurance Agreement shall terminate
on the date that the Indenture terminates. The reimbursement provisions set
forth in Sections 2.4 hereof, and the provisions of Section 5.1, Section 5.3,
22
Section 5.4, Section 6.1 and Section 8.4 hereof and similar indemnification and
reimbursement provisions contained in this Insurance Agreement, shall survive
the termination of this Insurance Agreement and the termination of the Insurance
Policy in whole or in part.
Section 8.12. Further Assurances. To the extent permitted by law,
the ABFS Companies agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as MBIA or the Initial Purchaser
may request and as may be required in MBIA's or the Initial Purchaser's judgment
to effectuate the intention of or facilitate the performance of this Insurance
Agreement.
Section 8.13. Consent of MBIA or the Initial Purchaser. In the
event that the consent of MBIA or the Initial Purchaser is required under any of
the Transaction Documents, the determination whether to grant or withhold such
consent shall be made by MBIA or the Initial Purchaser, as applicable, in its
sole discretion without any implied duty towards any other person, except as
otherwise expressly provided therein.
23
IN WITNESS WHEREOF, the parties hereto have executed this Insurance
Agreement, all as of the day and year first above mentioned.
MBIA INSURANCE CORPORATION
By:
----------------------------------
Name:
Title
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2001-1, as the Trust
By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement.
By:
----------------------------------
Name:
Title
ABFS OSO, INC., as the Depositor
By:
----------------------------------
Name:
Title
AMERICAN BUSINESS CREDIT, INC., as Originator and Servicer
By:
----------------------------------
Name:
Title
HOMEAMERICAN CREDIT, INC., as Originator
By:
----------------------------------
Name:
Title
AMERICAN BUSINESS MORTGAGE SERVICES, INC., as Originator
By:
----------------------------------
Name:
Title
AMERICAN BUSINESS FINANCIAL SERVICES, INC., as Guarantor
By:
----------------------------------
Name:
Title
25
TRIPLE-A ONE FUNDING CORPORATION, as Initial Purchaser
By: MBIA Insurance Corporation, its Attorney-in-Fact
By:
----------------------------------
Name:
Title
26
