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INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.,
ABFS 1999-3, INC.
AMERICAN BUSINESS CREDIT, INC.
HOME AMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE
NEW JERSEY MORTGAGE AND INVESTMENT CORP.
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
ABFS MORTGAGE LOAN TRUST 1999-3
and
PRUDENTIAL SECURITIES INCORPORATED
Dated as of September 17, 1999
ABFS Mortgage Loan Trust 1999-3
Mortgage Backed Notes Series 1999-3
$218,900,000 Class A- I and Class A-2 Notes
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TABLE OF CONTENTS
Page
Section 1. Definitions.................................................................................3
Section 2. Representations, Warranties and Agreements of Financial Security............................5
Section 3. Representations, Warranties and Agreements of the Underwriter...............................7
Section 4. Indemnification.............................................................................7
Section 5. Indemnification Procedures..................................................................8
Section 6. Contribution................................................................................9
Section 7. Miscellaneous..............................................................................10
EXHIBIT
Exhibit A.........Opinion of General Counsel
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of September 17, 1999, among FINANCIAL
SECURITY ASSURANCE INC. ("Financial Security"), PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION (the "Depositor"), AMERICAN BUSINESS CREDIT, INC. (the
"Company"), ABFS 1999-3, INC. (the "Seller"), HOME AMERICAN CREDIT, INC.,
D/B/A UPLAND MORTGAGE ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP.
("NJMIC" and together with Upland, the "Originators"), ABFS MORTGAGE LOAN
TRUST 1999-3 (the "Issuer") and PRUDENTIAL SECURITIES INCORPORATED (the
"Underwriter"):
Section 1.Definitions. For purposes of this Agreement, the following
terms shall have the meanings provided below:
"Agreement" means this Indemnification Agreement, as amended from time to
time.
"Company Party" means any of the Company, its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of
the foregoing.
"Depositor Party" means any of the Depositor, its parent, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of
the foregoing.
"Financial Security Agreements" means this Agreement and the Insurance
"Financial Security Information" has the meaning provided in Section 2(g)
hereof.
"Financial Security Party" means any of Financial Security, its parent,
subsidiaries and affiliates, and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 4 hereof.
"Indemnifying Party" means any party required to provide indemnification
pursuant to Section 4 hereof.
"Indenture" means the Indenture, dated as of September 1, 1999, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means The Chase Manhattan Bank.
"Insurance Agreement" means the Insurance and Indemnity Agreement, dated
as of September 1, 1999, by and among Financial Security, the Depositor, the
Company, the Originators, the Issuer and the Seller.
"Issuer Party" means any of the Issuer, its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of
the foregoing.
"Losses" means (a) any actual out-of-pocket damages incurred by the party
entitled to indemnification or contribution hereunder, (b) any actual
out-of-pocket costs or actual expenses reasonably incurred by such party,
including reasonable fees or expenses of its counsel and other expenses
incurred in connection with investigating or defending any claim, action or
other proceeding which entitle such party to be indemnified hereunder (subject
to the limitations set forth in Section 5 hereof), to the extent not paid,
satisfied or reimbursed from Rinds provided by any other Person other than an
affiliate of such party (provided that the foregoing shall not create or imply
any obligation to pursue recourse against any such other Person), plus (c)
interest on the amount paid by the party entitled to indemnification or
contribution from the date of such payment to the date of payment by the party
who is obligated to indemnify or contribute hereunder at the statutory rate
applicable to judgments for breach of contract.
"Notes" means the $218,900,000 of the ABFS Mortgage Backed Notes, Series
19993, Class A- I Notes and Class A-2 Notes, issued by the Issuer pursuant to
the Indenture.
"Offering Circular" means the Prospectus dated June 23, 1999, including
the Prospectus Supplement thereto dated September 17, 1999, relating to the
Notes.
"Offering Document" means the Offering Circular and any amendments or
supplements thereto and any other material or documents delivered by the
Underwriter to any Person in connection with the offer or sale of the Notes.
"Originator Party" means any of the Originators, their parents,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization or other organization or entity (whether
governmental or private).
"Policy" means the financial guaranty insurance policy delivered by
Financial Security with respect to the Notes.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Seller Party" means any of the Seller, its parent, subsidiaries and
affiliates, and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of
the foregoing.
"Underwriting Agreement" means the Underwriting Agreement dated as of
August 31, 1999, between the Depositor and the Underwriter in respect of the
Notes.
"Underwriter Information" has the meaning provided in Section 3(c)
hereof.
"Underwriter Party" means any of the Underwriter, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
Section 2. Representations, Warranties and Agreements of Financial
Security. Financial Security represents, warrants and agrees, as of the date
hereof and as of the Closing Date, as follows:
(a) Organization, Etc. Financial Security is a stock insurance company
duly organized, validly existing and authorized to transact financial guaranty
insurance business under the laws of the State of New York.
(b) Authorization, Etc. The Policy and the Financial Security
Agreements have been duly authorized, executed and delivered by Financial
Security.
(c) Validity, Etc. The Policy and the Financial Security Agreements
constitute valid and binding obligations of Financial Security, enforceable
against Financial Security in accordance with their terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles
of equity and subject, in the case of this Agreement, to principles of public
policy limiting the right to enforce the indemnification provisions contained
herein.
(d) Exemption From Registration. The Policy is exempt from registration
under the Securities Act.
(e) No Conflicts. Neither the execution or delivery by Financial
Security of the Policy or the Financial Security Agreements, nor the
performance by Financial Security of its obligations thereunder, will conflict
with any provision of the certificate of incorporation or the bylaws of
Financial Security or result in a breach of, or constitute a default under,
any material agreement or other instrument to which Financial Security is a
party or by which any of its property is bound nor violate any judgment, order
or decree applicable to Financial Security of any governmental or regulatory
body, administrative agency, court or arbitrator having jurisdiction over
Financial Security (except that, in the published opinion of the Securities
and Exchange Commission, the indemnification provisions of this Agreement,
insofar as they relate to indemnification for liabilities arising under the
Securities Act, are against public policy as expressed in the Securities Act
and are therefore unenforceable).
(f) Financial Information. The consolidated balance sheets of Financial
Security as of December 31, 1998 and the related consolidated statements of
income, changes in shareholder's equity and cash flows for the fiscal year
then ended, furnished by Financial Security for use in the Offering Circular,
fairly present in all material respects the financial condition of Financial
Security as of such dates and for such periods in accordance with generally
accepted accounting principles consistently applied (subject as to interim
statements to normal year-end adjustments) and since the date of the most
current interim consolidated balance sheet referred to above there has been no
change in the financial condition of Financial Security which would materially
and adversely affect its ability to perform its obligations under the Policy.
(g) Financial Security Information. The information in the Offering
Circular set forth under the caption "The Note Insurer" (as revised from time
to time in accordance with the provisions hereof, the "Financial Security
Information") is limited and does not purport to provide the scope of
disclosure required to be included in a prospectus with respect to a
registrant in connection with the offer and sale of securities of such
registrant registered under the Securities Act. Within such limited scope of
disclosure, however, as of the date of the Offering Circular and as of the
date hereof, the Financial Security Information does not contain any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading.
(h) Additional Information. Financial Security will furnish to the
Underwriter, the Company, the Seller, the Issuer or the Depositor, upon
request of the Underwriter, the Company, the Seller, the Issuer or the
Depositor, as the case may be, copies of Financial Security's most recent
financial statements (annual or interim, as the case may be) which fairly
present in all material respects the financial condition of Financial Security
as of the dates and for the periods indicated, in accordance with generally
accepted accounting principles consistently applied except as noted therein
(subject, as to interim statements, to normal year-end adjustments); provided,
however, that, if the Underwriter, the Company, the Seller, the Issuer or the
Depositor shall require a manually signed report or consent of Financial
Security's auditors in connection with such financial statements, such report
or consent shall be at the expense of the Underwriter, the Company, the
Seller, the Issuer or the Depositor, as the case may be. In addition, if the
delivery of an Offering Circular relating to the Notes is required at any time
prior to the expiration of nine months after the time of issue of the Offering
Circular in connection with the offering or sale of the Notes, the Depositor
or the Underwriter will notify Financial Security of such requirement to
deliver an Offering Circular and Financial Security will promptly provide the
Underwriter and the Depositor with any revisions to the Financial Security
Information that are in the judgment of Financial Security necessary to
prepare an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission.
(i) Opinion of Counsel. Financial Security will furnish to the Seller,
the Originators, the Depositor, the Underwriter, the Issuer and the Company on
the closing date for the sale of the Notes an opinion of its Associate General
Counsel, to the effect set forth in Exhibit A attached hereto, dated such
closing date and addressed to the Seller, the Originators, the Depositor, the
Underwriter, the Issuer and the Company.
(j) Consents and Reports of Independent Accountants. Financial Security
will furnish to the Underwriter, the Company, the Issuer and the Depositor,
upon request, as comfort from its independent accountants in respect of its
financial condition, (i) at the expense of the Person specified in the
Insurance Agreement, a copy of the Offering Circular, including either a
manually signed consent or a manually signed report of Financial Security's
independent accountants and (ii) the quarterly review letter by Financial
Security's independent accountants in respect of the most recent interim
financial statements of Financial Security.
Nothing in this Agreement shall be construed as a representation or
warranty by Financial Security concerning the rating of its insurance
financial strength by Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies Inc., or of its insurer financial strength by Xxxxx'x
Investors Service, Inc. or any other rating agency (collectively, the "Rating
Agencies"). The Rating Agencies, in assigning such ratings, take into account
facts and assumptions not described in the Offering Circular and the facts and
assumptions which are considered by the Rating Agencies, and the ratings
issued thereby, are subject to change over time.
Section 3. Representations, Warranties and Agreements of the
Underwriter. The Underwriter represents, warrants and agrees, as of the date
hereof and as of the Closing Date, as follows:
(a) Compliance With Laws. The Underwriter will comply in all material
respects with all legal requirements in connection with offers and sales of
the Notes and make such offers and sales in the manner provided in the
Offering Circular.
(b) Offering Document. The Underwriter will not use, or distribute to
other broker-dealers for use, any Offering Document in connection with the
offer and sale of the Notes unless such Offering Document includes such
information as has been furnished by Financial Security for inclusion therein
and the information therein concerning Financial Security has been approved by
Financial Security in writing. Financial Security hereby consents to the
information in respect of Financial Security included in the Offering
Circular. Each Offering Document will include the following statement: "The
Policy is not covered by the property/casualty insurance security fund
specified in Article 76 of the New York Insurance Law".
(c) Underwriting Information. The following information constitutes the
only information furnished by the Underwriter (the "Underwriter Information"):
(i) the statements set forth in the last two paragraphs on the front cover
page of the Offering Circular regarding market making; (ii) the statements set
forth under the heading "Underwriting"; and (iii) the statements set forth in
materials delivered by the Underwriter to the Depositor within the meaning of
the no-action letter dated May 20, 1994 issued by the Division of Corporation
Finance of the Securities Exchange Commission (the "Commission") to Xxxxxx,
Xxxxxxx Acceptance Corporation 1, Xxxxxx, Peabody & Co. Incorporated and
Xxxxxx Structured Asset Corporation and the no-action letter dated May 27,
1994 issued by the Division of Corporation Finance of the Commission to the
Public Securities Association and filed by the Sponsor with the Commission in
the Current Report or Reports on Form 8-K (the "Form 8-K"). The Underwriter
confirms that such statements (to such extent) are correct.
Section 4. Indemnification. (a) Financial Security agrees, upon the
terms and subject to the conditions provided herein, to indemnify, defend and
hold harmless each Depositor Party, each Company Party, each Seller Party,
each Originator Party, each Issuer Party and each Underwriter Party against
(i) any and all Losses incurred by them with respect to the offer and sale of
the Notes and resulting from Financial Security's breach of any of its
representations, warranties or agreements set forth in Section 2 hereof and
(ii) any and all Losses to which any Depositor Party, Company Party, Seller
Party, Originator Party, Issuer Party or Underwriter Party may become subject,
under the Securities Act or otherwise, insofar as such Losses arise out of or
result from an untrue statement of a material fact contained in any Offering
Document or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
omission was made in the Financial Security Information included therein in
accordance with the provisions hereof.
(b) The Underwriter agrees, upon the terms and subject to the
conditions provided herein, to indemnify, defend and hold harmless each
Financial Security Party against (i) any and all Losses incurred by them with
respect to the offer and sale of the Notes and resulting from the
Underwriter's breach of any of its representations, warranties or agreements
set forth in Section 3 hereof and (ii) any and all Losses to which any
Financial Security Party may become subject, under the Securities Act or
otherwise, insofar as such Losses arise out of or result from an untrue
statement of a material fact contained in any Offering Document or the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission was
made in the Underwriter Information included therein.
(c) Upon the incurrence of any Losses for which a party is entitled to
indemnification hereunder, the Indemnifying Party shall reimburse the
Indemnified Party promptly upon establishment by the Indemnified Party to the
Indemnifying Party of the Losses incurred.
Section 5. Indemnification Procedures. Except as provided below in
Section 6 with respect to contribution or in Section 7(e), the indemnification
provided herein by an Indemnifying Party shall be the exclusive remedy of any
and all Indemnified Parties for the breach of a representation, warranty or
agreement hereunder by an Indemnifying Party; provided, however, that each
Indemnified Party shall be entitled to pursue any other remedy at law or in
equity for any such breach so long as the damages sought to be recovered shall
not exceed the Losses incurred thereby resulting from such breach. In the
event that any action or regulatory proceeding shall be commenced or claim
asserted which may entitle an Indemnified Party to be indemnified under this
Agreement, such party shall give the Indemnifying Party written or telegraphic
notice of such action or claim reasonably promptly after receipt of written
notice thereof. The Indemnifying Party shall be entitled to participate in
and, upon notice to the Indemnified Party, assume the defense of any such
action or claim in reasonable cooperation with, and with the reasonable
cooperation of, the Indemnified Party. The Indemnified Party will have the
right to employ its own counsel in any such action in addition to the counsel
of the Indemnifying Party, but the fees and expenses of such counsel will be
at the expense of such Indemnified Party, unless (a) the employment of counsel
by the Indemnified Party at its expense has been authorized in writing by the
Indemnifying Party, (b) the Indemnifying Party has not in fact employed
counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, or (c) the named parties
to any such action or proceeding (including any impleaded parties) include
both the Indemnifying Party and one or more Indemnified Parties, and the
Indemnified Parties shall have been advised by counsel that there may be one
or more legal defenses available to them which are different from or
additional to those available to the Indemnifying Party (it being understood,
however, that the Indemnifying Party shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all
Depositor Parties, one such firm for all Underwriter Parties, one such firm
for Company Parties, one such firm for all Seller Parties, one such firm for
all Originator Parties, one such firm for all Issuer Parties and one such firm
for all Financial Security Parties, as the case may be, which firm shall be
designated in writing by the Depositor in respect of the Depositor Parties, by
the Underwriter in respect of the Underwriter Parties, by the Company in
respect of the Company Parties, by the Seller in respect of the Seller
Parties, by the Originators in respect of the Originator Parties, by the
Issuer in respect of the Issuer Parties and by Financial Security in respect
of the Financial Security Parties), in each of which cases the fees and
expenses of counsel will be at the expense of the Indemnifying Party and all
such fees and expenses will be reimbursed promptly as they are incurred. The
Indemnifying Party shall not be liable for any settlement of any such claim or
action unless the Indemnifying Party shall have consented thereto or be in
default in its obligations hereunder. Any failure by an Indemnified Party to
comply with the provisions of this Section shall relieve the Indemnifying
Party of liability only if such failure is prejudicial to the position of the
Indemnifying Party and then only to the extent of such prejudice.
Section 6. Contribution. (a) To provide for just and equitable
contribution if the indemnification provided by any Indemnifying Party is
determined to be unavailable for any Indemnified Party (other than due to
application of this Section), each Indemnifying Party shall contribute to the
Losses arising from any breach of any of its representations, warranties or
agreements contained in this Agreement in such proportion as is appropriate to
reflect (i) the benefits received by such Indemnifying Party relative to the
benefits received by the Indemnified Party or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Indemnifying Party on the one
hand and the Indemnified Party on the other in connection with such Loss;
provided, however, that an Indemnifying Party shall in no event be required to
contribute to all Indemnified Parties an aggregate amount in excess of the
Losses incurred by such Indemnified Parties resulting from the breach of
representations, warranties or agreements contained in this Agreement.
(b) The relative fault of each Indemnifying Party, on the one hand, and
of each Indemnified Party, on the other, shall be determined by reference to,
among other things, whether the breach of, or alleged breach of, any
representations, warranties or agreements contained in this Agreement relates
to information supplied by, or action within the control of, the Indemnifying
Party or the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such breach.
(c) The parties agree that Financial Security shall be solely
responsible for the Financial Security Information, the Underwriter shall be
solely responsible for the Underwriter Information and that, as and to the
extent provided in the Insurance Agreement, the balance of the Offering
Document shall be the responsibility of the Company, the Originators, the
Seller, the Issuer and the Depositor.
(d) Notwithstanding anything in this Section 6 to the contrary, the
Underwriter shall not be required to contribute an amount greater than the
excess, if any, of (x) the purchase prices paid by investors to the
Underwriter for the Notes over (y) the purchase price paid by the Underwriter
for the Notes.
(e) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to contribution
promptly upon establishment by the party entitled to contribution to the
contributor of the Losses incurred.
(g) The provisions relating to contribution set forth in this Section 6
do not limit the rights of any party to indemnification under Section 4.
Section 7. Miscellaneous.
(a) Notices. All notices and other communications provided for under
this Agreement shall be delivered to the address set forth below or to such
other address as shall be designated by the recipient in a written notice to
the other party or parties hereto.
If to Financial Security: Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Surveillance Department
Re: ABFS Mortgage Loan Trust 1999-3
Mortgage Backed Notes, Series 1999-3
If to the Depositor: Prudential Securities Secured Financing Corporation
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director, Asset-Backed Finance
Group
If to the Company: American Business Credit, Inc.
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
If to the Underwriter: Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director, Asset-Backed Finance
Group
If to the Seller: ABFS 1999-3, Inc.
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
If to the Issuer: ABFS Mortgage Loan Trust 1999-3
c/o First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Att: Corporate Trust Administration
If to the Originators: Home American Credit, Inc. D/B/A Upland Mortgage
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
New Jersey Mortgage and Investment Corp.
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
(b) Governing, Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(c) Assignments. This Agreement may not be assigned by any party
without the express written consent of each other party. Any assignment made
in violation of this Agreement shall be null and void.
(d) Amendments. Amendments to this Agreement shall be in writing signed
by each party hereto.
(e) Survival, Etc. The indemnity and contribution agreements contained
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Indemnifying
Party, (ii) the issuance of the Notes or (iii) any termination of this
Agreement or the Policy. The indemnification provided in this Agreement will
be in addition to any liability which the parties may otherwise have and shall
in no way limit any obligations of the Company, the Depositor, the Seller, the
Originators, the Issuer or the Underwriter under the Underwriting Agreement or
the Insurance Agreement, as applicable.
(f) Counterparts. This Agreement may be executed in counterparts by the
parties hereto, and all such counterparts shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
FINANCIAL SECURITY ASSURANCE INC.
By___________________________________________
Name:
Title:
ABFS 1999-3, INC.
By___________________________________________
Name:
Title:
AMERICAN BUSINESS CREDIT, INC.
By___________________________________________
Name:
Title:
HOME AMERICAN CREDIT, INC. D/B/A
UPLAND MORTGAGE
By___________________________________________
Name:
Title:
NEW JERSEY MORTGAGE AND INVESTMENT CORP.
By___________________________________________
Name:
Title:
PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION
By___________________________________________
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By___________________________________________
Name:
Title:
ABFS MORTGAGE LOAN TRUST 1999-3
By___________________________________________
Name:
Title:
By FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement
By:__________________________________________
Title:_______________________________________
EXHIBIT A
OPINION OF GENERAL COUNSEL
Based upon the foregoing, I am of the opinion that:
1. Financial Security is a stock insurance company duly organized,
validly existing and authorized to transact financial guaranty insurance
business under the laws of the State of New York.
2. The Policy and the Agreements have been duly authorized, executed
and delivered by Financial Security.
3. The Policy and the Agreements constitute valid and binding
obligations of Financial Security, enforceable against Financial Security in
accordance with their terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other
similar laws affecting the enforceability of creditors' rights generally
applicable in the event of the bankruptcy or insolvency of Financial Security
and to the application of general principles of equity and subject, in the
case of the Indemnification Agreement, to principles of public policy limiting
the right to enforce the indemnification provisions contained therein insofar
as they relate to indemnification for liabilities arising under applicable
securities laws.
4. The Policy is exempt from registration under the Securities Act of
1933, as amended (the "Act").
5. Neither the execution or delivery by Financial Security of the
Policy or the Agreements, nor the performance by Financial Security of its
obligations thereunder, will conflict with any provision of the certificate of
incorporation or the by-laws of Financial Security or, to the best of my
knowledge, result in a breach of, or constitute a default under, any agreement
or other instrument to which Financial Security is a party or by which it or
any of its property is bound or, to the best of my knowledge, violate any
judgment, order or decree applicable to Financial Security of any governmental
or regulatory body, administrative agency, court or arbitrator having
jurisdiction over Financial Security (except that in the published opinion of
the Securities and Exchange Commission the indemnification provisions of the
Indemnification Agreement, insofar as they relate to indemnification for
liabilities arising under the Act, are against public policy as expressed in
the Act and are therefore unenforceable).
6. In addition, please be advised that I have reviewed the description
of Financial Security under the caption "The Note Insurer" in the Prospectus
Supplement dated September 17, 1999 (the "Offering Document") of the Depositor
with respect to the Notes. The information provided in the Offering Document
with respect to Financial Security is limited and does not purport to provide
the scope of disclosure required to be included in a prospectus with respect
to a registrant under the Act in connection with a public offering and sale of
securities of such registrant. Within such limited scope of disclosure,
however, there has not come to my attention any information which would cause
me to believe that the description of Financial Security referred to above, as
of the date of the Offering Document or as of the date of this opinion,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except that I express no opinion with respect to any financial statements or
other financial information contained or referred to therein).
