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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 30, 1999
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 333-74859 13-3526694
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
One New York Plaza 10292
New York, New York (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (212) 778-1000
No Change
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Description of the Notes and the Mortgage Loans
Prudential Securities Secured Financing Corporation registered
issuances of up to $330,000,000 principal amount of Mortgage-Backed Notes on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Act"), by the Registration Statements on Form S-3
(Registration File No. 333-74859) (as amended, the "Registration Statement").
Pursuant to the Registration Statement, ABFS Mortgage Loan Trust 1999-1 (the
"Trust") issued approximately $184,075,000 in aggregate principal amount of its
Backed Notes Certificates (the "Notes"), on March 30, 1999. This Current Report
on Form 8-K is being filed to satisfy an undertaking to file copies of certain
agreements executed in connection with the issuance of the Certificates, the
forms of which were filed as Exhibits to the Registration Statement.
The Notes were issued pursuant to an Indenture (the "Indenture")
attached hereto as Exhibit 4.1, dated as of March 1, 1999, between ABFS Mortgage
Loan Trust 1999-1 (the "Trust") and The Bank of New York, in its capacity as
indenture trustee (the "Indenture Trustee"). The Notes consist of two classes of
senior notes, the Class A-1 Notes (the "Class A-1 Notes") and the Class A-2
Notes (the "Class A-2 Notes", and, collectively with the Class A-1 Notes, the
"Class A Notes") and two class of Trust Certificates (the "Trust Certificates").
Only the Class A Notes were offered. The Notes initially evidenced, in the
aggregate, 100% of the undivided beneficial ownership interests in the Trust.
The assets of the Trust consist primarily of fixed-rate, closed-end,
conventional, monthly pay, generally fully amortizing, business and consumer
purpose residential home equity or commercial loans (the "Mortgage Loans")
secured by first or second lien mortgages or deeds of trust (the "Mortgages") on
real properties (the "Mortgage Properties"). The Mortgaged Properties securing
the Mortgage Loans consist primarily of single family residences (which may be
detached, part of a two-to four-family dwelling, a condominium unit or a unit in
a planned unit development).
Interest distributions on the Class A Certificates are based on the
Notes Principal Balance thereof and the then applicable Mortgage-Backed Rate
thereof. The Mortgage Rate for the Class A-1 Notes is 6.545% per annum. The
Mortgage-Backed Rate for the Class A-2 Notes is 6.580%.
The Class A-1 Notes and the Class A-2 Notes have original Note
Principal Balances of $100,000,000 and $84,075,000 respectively.
As of the Closing Date, the Mortgage Loans possessed the
characteristics described in the Prospectus dated March 23, 1999 and the
Prospectus Supplement dated March 24 filed pursuant to Rule 424(b) (5) of the
Act on March 25,1999.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Not applicable
(b) Not applicable
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(c) Exhibits:
1.1 Underwriting Agreement, dated March 11, 1999, between Prudential
Securities Secured Financing Corporation and Prudential
Securities Incorporated.
1.2 Indemnification Agreement, dated as of March 24, 1999, among
Prudential Securities Secured Financing Corporation, Prudential
Securities Incorporated, American Business Credit, Inc.,
HomeAmerican Credit, Inc. d/b/a Upland Mortgage, New Jersey
Mortgage and Investment Corp., ABFS 1999-1, Inc., and Financial
Security Assurance Inc.
4.1 Indenture, dated as of March 1, 1999, between ABFS Mortgage Loan
Trust 1999-1 and the Bank of New York, as indenture trustee.
4.2 Unaffiliated Seller's Agreement, dated as of March 1, 1999, among
American Business Credit, Inc., Home American Credit, Inc. d/b/a/
Upland Mortgage, New Jersey Mortgage and Investment Corp.,
Prudential Securities Secured Financing Corporation, and ABFS
1999-1, Inc.
4.3 Sale and Servicing Agreement, dated as of March 1, 1999, among
Prudential Securities Secured Financing Corporation, American
Business Credit, Inc., ABFS Mortgage Loan Trust 1999-1, Chase
Bank of Texas, N.A., and The Bank of New York.
8.1 Opinion of Dewey Ballantine LLP, Counsel to Prudential Securities
Secured Corporation regarding certain tax matters.
10.1 Financial Guaranty Insurance Policy, dated March 1, 1999.
23.1 Consent of PricewaterhouseCoopers, L.L.P. regarding financial
statements of the Financial Security Assurance Inc. and their
report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
As Depositor and on behalf of ABFS
Mortgage Loan Trust 1999-1
Registrant
By: /s/ Evan Mitnick
-------------------------------
Name: Evan Mitnick
Title: Vice President
Dated: April 6, 1999
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement, dated March 11, 1999, between
Prudential Securities Secured Financing Corporation
and Prudential Securities Incorporated.
1.2 Indemnification Agreement, dated March 24, 1999,
among Prudential Securities Secured Financing
Corporation, Prudential Securities Incorporated,
American Business Credit, Inc., HomeAmerican Credit,
Inc. d/b/a Upland Mortgage, New Jersey Mortgage and
Investment Corp., ABFS 1999-1, Inc., and Financial
Security Assurance Inc.
4.1 Indenture, dated as of March 1, 1999, between ABFS
Mortgage Loan Trust 1999-1 and the Bank of New York,
as indenture trustee.
4.2 Unaffiliated Seller's Agreement, dated as of March 1,
1999, among American Business Credit, Inc., Home
American Credit, Inc. d/b/a/ Upland Mortgage, New
Jersey Mortgage and Investment Corp., Prudential
Securities Secured Financing Corporation, and ABFS
1999-1, Inc.
4.3 Sale and Servicing Agreement, dated as of March 1,
1999, among Prudential Securities Secured Financing
Corporation, American Business Credit, Inc., ABFS
Mortgage Loan Trust 1999-1, Chase Bank of Texas,
N.A., and The Bank of New York.
8.1 Opinion of Dewey Ballantine LLP, Counsel to
Prudential Securities Secured Corporation regarding
certain tax matters.
10.1 Financial Guaranty Insurance Policy, dated March 1,
1999.
23.1 Consent of PricewaterhouseCoopers, L.L.P. regarding
financial statements of the Financial Security
Assurance Inc. and their report.
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Exhibit 1.1
ABFS MORTGAGE LOAN TRUST 1999-1
MORTGAGE LOAN BACKED NOTES
SERIES 1999-1
UNDERWRITING AGREEMENT
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UNDERWRITING AGREEMENT
PRUDENTIAL SECURITIES INCORPORATED
One New York Plaza
New York, New York 10292
March 11, 1999
Ladies and Gentlemen:
Prudential Securities Secured Financing Corporation (the "Depositor")
proposes, subject to the terms and conditions stated herein and in the attached
Underwriting Agreement Standard Provisions, dated March 11, 1999 (the "Standard
Provisions"), between the Depositor and Prudential Securities Incorporated, to
issue and sell to you (the "Underwriter") the Securities specified in Schedule I
hereto (the "Offered Securities"). The Depositor agrees that each of the
provisions of the Standard Provisions is incorporated herein by reference in its
entirety, and shall be deemed to be a part of this Underwriting Agreement to the
same extent as if such provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall be deemed to have
been made at and as of the date of this Underwriting Agreement. Each reference
to the "Representative" herein and in the provisions of the Standard Provisions
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Standard Provisions are used herein as
therein defined. The Prospectus Supplement and the accompanying Prospectus
relating to the Offered Securities (together, the "Prospectus") are incorporated
by reference herein.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, the Depositor agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Depositor, at the time and place and at the purchase price to the
Underwriter and in the manner set forth in Schedule I hereto, the entire
original principal balance of the Offered Securities.
[Remainder of Page Intentionally Left Blank]
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof, including the provisions of the Standard
Provisions incorporated herein by reference, shall constitute a binding
agreement between the Underwriter and the Depositor.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: ________________________
Name:
Title:
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED
By: _________________________
Name:
Title:
[Signature Page to Underwriting Agreement]
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SCHEDULE I
Title of Offered Securities: ABFS Mortgage Loan Trust 1999-1,
Mortgage Backed Notes, Series
1999-1, Class A-1 and Class A-2.
Terms of Offered Securities: The Offered Securities shall have
the terms set forth in the
Prospectus and shall conform in all
material respects to the
descriptions thereof contained
therein, and shall be issued
pursuant to an Indenture, to be
dated as of March 1, 1999, between
the ABFS Mortgage Loan Trust
1999-1, as issuer, and The Bank of
New York, as indenture trustee.
Purchase Price: The purchase price for the Offered
Securities shall be 99.65% and
99.65% of the aggregate note
principal balance of the Class A-1
Notes and Class A-2 Notes,
respectively, as of the Closing
Date, plus accrued interest at the
rate of 6.545% per annum and 6.580%
per annum, on the aggregate note
principal balance of the Class A-1
Notes and Class A-2 Notes,
respectively, from, and including
March 1, 1999 to, but not including
the Closing Date.
Specified funds for payment of
Purchase Price: Federal Funds (immediately
available funds).
Required Ratings: Aaa by Moody's Investors Service,
Inc.
AAA by Standard & Poor's Ratings
Services
Closing Date: On or about March 30, 1999 at 10:00
A.M. eastern standard time or at
such other time as the Depositor
and the Underwriter shall agree.
Closing Location: Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, New York
10019.
Name and address of Representative: Designated Representative:
Prudential Securities Incorporated.
Address for Notices, etc.: One New York Plaza
New York, New York 10292
Attn: Joseph Donovan
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STANDARD PROVISIONS TO UNDERWRITING AGREEMENT
March 11, 1999
From time to time, Prudential Securities Secured Financing Corporation,
a Delaware corporation (the "Depositor") may enter into one or more underwriting
agreements (each, an "Underwriting Agreement") that provide for the sale of
designated securities to the several underwriters named therein (such
underwriters constituting the "Underwriters" with respect to such Underwriting
Agreement and the securities specified therein). The several underwriters named
in an Underwriting Agreement will be represented by one or more representatives
as named in such Underwriting Agreement (collectively, the "Representative").
The term "Representative" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. The standard provisions set forth
herein (the "Standard Provisions") may be incorporated by reference in any
Underwriting Agreement. These Standard Provisions shall not be construed as an
obligation of the Depositor to sell any securities or as an obligation of any of
the Underwriters to purchase such securities. The obligation of the Depositor to
sell any securities and the obligation of any of the Underwriters to purchase
any of the securities shall be evidenced by the Underwriting Agreement with
respect to the securities specified therein. An Underwriting Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of the communications
transmitted. The obligations of the underwriters under these Standard Provisions
and each Underwriting Agreement shall be several and not joint. Unless otherwise
defined herein, the terms defined in the Underwriting Agreement are used herein
as defined in the Prospectus referred to below.
1. The Offered Securities. The Depositor proposes to sell pursuant to
the applicable Underwriting Agreement to the several Underwriters named therein
home equity loan backed notes (the "Securities") representing indebtedness
secured primarily by the property of a trust which consists of two pools of home
equity loans (the "Mortgage Loans") and certain related property. The Securities
will be issued pursuant to an Indenture (the "Indenture") by and between ABFS
Mortgage Loan Trust 1999-1, as issuer (the "Issuer"), and The Bank of New York,
as indenture trustee (the "Indenture Trustee"). The Mortgage Loans will be
purchased by the Depositor pursuant to an Unaffiliated Seller's Agreement (the
"Unaffiliated Seller's Agreement") by and among the Depositor, ABFS 1999-1, Inc.
(the "Unaffiliated Seller"), American Business Credit, Inc. ("ABC"),
HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland") and New Jersey
Mortgage and Investment Corp ("NJMIC" and, collectively with ABC and Upland, the
"Originators"). The Mortgage Loans will be sold by the Depositor to the Issuer
pursuant to the terms of a Sale and Servicing Agreement (the "Sale and Servicing
Agreement") among the Issuer, the Depositor, the Indenture Trustee, Chase Bank
of Texas, N.A., as collateral agent (the "Collateral Agent"), and ABC, as
servicer (in such capacity, the "Servicer").
The terms and rights of any particular issuance of Securities shall be
as specified in the Underwriting Agreement relating thereto and in or pursuant
to the Indenture identified in such Underwriting Agreement. The Securities which
are the subject of any particular Underwriting Agreement into which these
Standard Provisions are incorporated are herein referred to as the "Offered
Securities."
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The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-74859),
including a prospectus relating to the Securities under the Securities Act of
1933, as amended (the "1933 Act"). The term "Registration Statement" means such
registration statement as amended to the date of the Underwriting Agreement. The
term "Base Prospectus" means the prospectus included in the Registration
Statement. The term "Prospectus" means the Base Prospectus together with the
prospectus supplement specifically relating to the Offered Securities, as first
filed with the Commission pursuant to Rule 424. The term "Preliminary
Prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Securities together with the Base Prospectus.
2. Offering by the Underwriters. Upon the execution of the Underwriting
Agreement applicable to any Offered Securities and the authorization by the
Representative of the release of such Offered Securities, the several
Underwriters propose to offer for sale to the public the Offered Securities at
the prices and upon the terms set forth in the Prospectus.
3. Purchase, Sale and Delivery of the Offered Securities. Unless
otherwise specified in the Underwriting Agreement, payment for the Offered
Securities shall be made by certified or official bank check or checks payable
to the order of the Depositor in immediately available or next day funds, at the
time and place set forth in the Underwriting Agreement, upon delivery to the
Representative for the respective accounts of the several Underwriters of the
Offered Securities registered in definitive form and in such names and in such
denominations as the Representative shall request in writing not less than five
full business days prior to the date of delivery. The time and date of such
payment and delivery with respect to the Offered Securities are herein referred
to as the "Closing Date".
4. Conditions of the Underwriters' Obligations. The respective
obligations of the several Underwriters pursuant to the Underwriting Agreement
shall be subject, in the discretion of the Representative, to the accuracy in
all material respects of the representations and warranties of the Depositor
contained herein as of the date of the Underwriting Agreement and as of the
Closing Date as if made on and as of the Closing Date, to the accuracy in all
material respects of the statements of the officers of the Issuer, the Depositor
and the Servicer made in any certificates pursuant to the provisions hereof and
of the Underwriting Agreement, to the performance by the Depositor of its
covenants and agreements contained herein and to the following additional
conditions precedent:
(a) All actions required to be taken and all filings required
to be made by or on behalf of the Depositor under the 1933 Act and the
Securities Exchange Act of 1934, as amended (the "1934 Act") prior to
the sale of the Offered Securities shall have been duly taken or made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect; (ii) no proceedings for such
purpose shall be pending before or threatened by the Commission, or by
any authority administering any state securities or "Blue Sky" laws;
(iii) any requests for additional information on the part of the
Commission shall have been complied with to the Representative's
reasonable satisfaction; (iv) since the respective dates as of which
information is given in the Registration Statement and the Prospectus
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except as otherwise stated therein, there shall have been no material
adverse change in the condition, financial or otherwise, earnings,
affairs, regulatory situation or business prospects of the Depositor;
(v) there are no material actions, suits or proceedings pending before
any court or governmental agency, authority or body or threatened,
affecting the Depositor or the transactions contemplated by the
Underwriting Agreement; (vi) the Depositor is not in violation of its
charter or its by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may
be bound, which violations or defaults separately or in the aggregate
would have a material adverse effect on the Depositor; and (vii) the
Representative shall have received, on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the
Depositor, to the foregoing effect.
(c) Subsequent to the execution of the Underwriting Agreement,
there shall not have occurred any of the following: (i) if at or prior
to the Closing Date, trading in securities on the New York Stock
Exchange shall have been suspended or any material limitation in
trading in securities generally shall have been established on such
exchange, or a banking moratorium shall have been declared by New York
State or federal authorities; (ii) if at or prior to the Closing Date,
there shall have been an outbreak or escalation of hostilities between
the United States and any foreign power, or of any other insurrection
or armed conflict involving the United States which results in the
declaration of a national emergency or war, and, in the reasonable
opinion of the Representative, makes it impracticable or inadvisable to
offer or sell the Offered Securities; or (iii) if at or prior to the
Closing Date, a general moratorium on commercial banking activities in
the State of New York shall have been declared by either federal or New
York State authorities.
(d) The Representative shall have received, on the Closing
Date, a certificate dated the Closing Date and signed by an executive
officer of the Depositor to the effect that attached thereto is a true
and correct copy of the letter from each nationally recognized
statistical rating organization (as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the 1933 Act) that
rated the Offered Securities and confirming that, unless otherwise
specified in the Underwriting Agreement, the Offered Securities have
been rated in the highest rating categories by each such organization
and that each such rating has not been rescinded since the date of the
applicable letter.
(e) The Representative shall have received, on the Closing
Date, an opinion of Dewey Ballantine LLP, special counsel for the
Depositor, dated the Closing Date, in form and substance satisfactory
to the Representative and containing opinions substantially to the
effect set forth in Exhibit A hereto.
(f) The Representative shall have received, on the Closing
Date, an opinion of counsel for the Servicer, the Unaffiliated Seller
and the Originators, dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriters and
containing opinions substantially to the effect set forth in Exhibit B
hereto.
(g) The Representative shall have received, on the Closing
Date, an opinion of counsel for the Indenture Trustee, dated the
Closing Date, in form and substance
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satisfactory to the Representative and counsel for the Underwriters and
containing opinions substantially to the effect set forth in Exhibit C
hereto.
(h) The Representative shall have received, on the Closing
Date, an opinion of counsel for the Issuer and First Union Trust
Company, National Association, as owner trustee (the "Owner Trustee"),
dated the Closing Date, in form and substance satisfactory to the
Representative and counsel for the Underwriters and containing opinions
substantially to the effect set forth in Exhibit D hereto.
(i) The Representative shall have received, on the Closing
Date, an opinion of Dewey Ballantine LLP, special counsel for the
Depositor, dated the Closing Date, with respect to the incorporation of
the Depositor, the validity of the Offered Securities, the Registration
Statement, the Prospectus and other related matters as the Underwriters
may reasonably require, and the Depositor shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(j) The Representative shall have received, on or prior to the
date of first use of the prospectus supplement relating to the Offered
Securities, and on the Closing Date if requested by the Representative,
letters of independent accountants of the Depositor in the form and
reflecting the performance of the procedures previously requested by
the Representative.
(k) The Depositor shall have furnished or caused to be
furnished to the Representative on the Closing Date a certificate of an
executive officer of the Depositor satisfactory to the Representative
as to the accuracy of the representations and warranties of the
Depositor herein at and as of such Closing Date as if made as of such
date, as to the performance by the Depositor of all of its obligations
hereunder to be performed at or prior to such Closing Date, and as to
such other matters as the Representative may reasonably request;
(l) The Servicer shall have furnished or caused to be
furnished to the Representative on the Closing Date a certificate of
officers of such Servicer in form and substance reasonably satisfactory
to the Representative;
(m) The Note Insurance Policy shall have been duly executed
and issued at or prior to the Closing Date and shall conform in all
material respects to the description thereof in the Prospectus
Supplement.
(n) The Representative shall have received, on the Closing
Date, an opinion of counsel to Financial Security Assurance Inc. (the
"Note Insurer"), dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriters and
containing opinions as to such matters as the Representative may
reasonably request.
(o) On or prior to the Closing Date there shall not have
occurred any downgrading, nor shall any notice have been given of (i)
any intended or potential downgrading or (ii) any review or possible
change in rating the direction of which has not been indicated, in the
rating accorded the Note Insurer's claims paying ability by any
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"nationally recognized statistical rating organization," as such term
is defined for purposes of the 1933 Act.
(p) There has not occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, since September
30, 1999, of the Note Insurer, that is in the Representative's judgment
material and adverse and that makes it in the Representative's judgment
impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
(q) The Representative shall have been furnished such further
information, certificates, documents and opinions as the Representative
may reasonably request.
5. Covenants of the Depositor. In further consideration of the
agreements of the Underwriters contained in the Underwriting Agreement, the
Depositor covenants as follows:
(a) To furnish the Representative, without charge, copies of
the Registration Statement and any amendments thereto including
exhibits and as many copies of the Prospectus and any supplements and
amendments thereto as the Representative may from time to time
reasonably request.
(b) Immediately following the execution of the Underwriting
Agreement, the Depositor will prepare a prospectus supplement setting
forth the principal amount, notional amount or stated amount, as
applicable, of Offered Securities covered thereby, the price at which
the Offered Securities are to be purchased by the Underwriters from the
Depositor, either the initial public offering price or prices or the
method by which the price or prices at which the Offered Securities are
to be sold will be determined, the selling concessions and
reallowances, if any, any delayed delivery arrangements, and such other
information as the Representative and the Depositor deem appropriate in
connection with the offering of the Offered Securities, but the
Depositor will not file any amendment to the Registration Statement or
any supplement to the Prospectus of which the Representative shall not
previously have been advised and furnished with a copy a reasonable
time prior to the proposed filing or to which the Representative shall
have reasonably objected. The Depositor will use its best efforts to
cause any amendment to the Registration Statement to become effective
as promptly as possible. During the time when a Prospectus is required
to be delivered under the 1933 Act, the Depositor will comply so far as
it is able with all requirements imposed upon it by the 1933 Act and
the rules and regulations thereunder to the extent necessary to permit
the continuance of sales or of dealings in the Offered Securities in
accordance with the provisions hereof and of the Prospectus, and the
Depositor will prepare and file with the Commission, promptly upon
request by the Representative, any amendments to the Registration
Statement or supplements to the Prospectus which may be necessary or
advisable in connection with the distribution of the Offered Securities
by the Underwriters, and will use its best efforts to cause the same to
become effective as promptly as possible. The Depositor will advise the
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Representative, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement or any amended
Registration Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed. The Depositor will
advise the Representative, promptly after it receives notice or obtains
knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any preliminary Prospectus or the
Prospectus, or the suspension of the qualification of the Offered
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose, or of
any request made by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional
information, and the Depositor will use its best efforts to prevent the
issuance of any such stop order or any order suspending any such
qualification, and if any such order is issued, to obtain the lifting
thereof as promptly as possible.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the 1933 Act, any event
occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary for any other reason to amend or supplement the Prospectus to
comply with the 1933 Act, to promptly notify the Representative thereof
and upon their request to prepare and file with the Commission, at the
Depositor's own expense, an amendment or supplement which will correct
such statement or omission or any amendment which will effect such
compliance.
(d) During the period when a prospectus is required by law to
be delivered in connection with the sale of the Offered Securities
pursuant to the Underwriting Agreement, the Depositor will file, on a
timely and complete basis, all documents that are required to be filed
by the Depositor with the Commission pursuant to Sections 13, 14, or
15(d) of the 1934 Act.
(e) To qualify the Offered Securities for offer and sale under
the securities or "Blue Sky" laws of such jurisdictions as the
Representative shall reasonably request and to pay all expenses
(including fees and disbursements of counsel) in connection with such
qualification of the eligibility of the Offered Securities for
investment under the laws of such jurisdictions as the Representative
may designate provided that in connection therewith the Depositor shall
not be required to qualify to do business or to file a general consent
to service of process in any jurisdiction.
(f) To make generally available to the Depositor's security
holders, as soon as practicable, but in any event not later than
eighteen months after the date on which the filing of the Prospectus,
as amended or supplemented, pursuant to Rule 424 under the 1933 Act
first occurs, an earnings statement of the Depositor covering a
twelve-month period beginning after the date of the Underwriting
Agreement, which shall satisfy the provisions of Section 11(a) of the
1933 Act and the applicable rules and regulations of the Commission
thereunder (including, at the option of the Depositor, Rule 158).
(g) For so long as any of the Offered Securities remain
outstanding, to furnish to the Representative upon request in writing
copies of such financial statements and other periodic and special
reports as the Depositor may from time to time distribute generally to
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its creditors or the holders of the Offered Securities and to furnish
to the Representative copies of each annual or other report the
Depositor shall be required to file with the Commission.
(h) For so long as any of the Offered Securities remain
outstanding, the Depositor will, or will cause the Servicer to, furnish
to the Representative, as soon as available, a copy of (i) the annual
statement of compliance delivered by the Servicer to the Indenture
Trustee under the applicable Sale and Servicing Agreement, (ii) the
annual independent public accountants' servicing report furnished to
the Indenture Trustee pursuant to the applicable Sale and Servicing
Agreement, (iii) each report regarding the Offered Securities mailed to
the holders of such Securities, and (iv) from time to time, such other
information concerning such Securities as the Representative may
reasonably request.
6. Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with, each Underwriter, as of the date of
the Underwriting Agreement, as follows:
(a) The Registration Statement including a prospectus relating
to the Securities and the offering thereof from time to time in
accordance with Rule 415 under the 1933 Act has been filed with the
Commission and such Registration Statement, as amended to the date of
the Underwriting Agreement, has become effective. No stop order
suspending the effectiveness of such Registration Statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission. A prospectus supplement specifically
relating to the Offered Securities will be filed with the Commission
pursuant to Rule 424 under the 1933 Act; provided, however, that a
supplement to the Prospectus prepared pursuant to Section 5(b) hereof
shall be deemed to have supplemented the base Prospectus only with
respect to the Offered Securities to which it relates. The conditions
to the use of a registration statement on Form S-3 under the 1933 Act,
as set forth in the General Instructions on Form S-3, and the
conditions of Rule 415 under the 1933 Act, have been satisfied with
respect to the Depositor and the Registration Statement. There are no
contracts or documents of the Depositor that are required to be filed
as exhibits to the Registration Statement pursuant to the 1933 Act or
the rules and regulations thereunder that have not been so filed.
(b) On the effective date of the Registration Statement, the
Registration Statement and the base Prospectus conformed in all
material respects to the requirements of the 1933 Act and the rules and
regulations thereunder, and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; on
the date of the Underwriting Agreement and as of the Closing Date, the
Registration Statement and the Prospectus conform, and as amended or
supplemented, if applicable, will conform in all material respects to
the requirements of the 1933 Act and the rules and regulations
thereunder, and on the date of the Underwriting Agreement and as of the
Closing Date, neither of such documents includes any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and neither of such documents as amended or supplemented,
if applicable, will include any untrue statement of a material fact or
omit to state any material fact required to be stated
7
<PAGE>
therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing does not apply to statements or
omissions in any of such documents based upon written information
furnished to the Depositor by any Underwriter specifically for use
therein.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the condition, financial or otherwise, earnings, affairs, regulatory
situation or business prospects of the Depositor, whether or not
arising in the ordinary course of the business of the Depositor.
(d) The Depositor has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(e) The Depositor has all requisite power and authority
(corporate and other) and all requisite authorizations, approvals,
orders, licenses, certificates and permits of and from all government
or regulatory officials and bodies to own its properties, to conduct
its business as described in the Registration Statement and the
Prospectus and to execute, deliver and perform these Standard
Provisions, the Underwriting Agreement, the Unaffiliated Seller's
Agreement and the Sale and Servicing Agreement, except such as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution by the Underwriter of the Offered Securities;
all such authorizations, approvals, orders, licenses, certificates are
in full force and effect and contain no unduly burdensome provisions;
and, except as set forth or contemplated in the Registration Statement
or the Prospectus, there are no legal or governmental proceedings
pending or, to the best knowledge of the Depositor, threatened that
would result in a material modification, suspension or revocation
thereof.
(f) The Offered Securities have been duly authorized, and when
the Offered Securities are issued and delivered pursuant to the
Underwriting Agreement, the Offered Securities will have been duly
executed, issued and delivered and will be entitled to the benefits
provided by the applicable Indenture, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally,
and to general principles of equity (regardless of whether the
entitlement to such benefits is considered in a proceeding in equity or
at law), and will conform in substance to the description thereof
contained in the Registration Statement and the Prospectus, and will in
all material respects be in the form contemplated by the Indenture.
(g) The execution and delivery by the Depositor of these
Standard Provisions, the Underwriting Agreement, the Unaffiliated
Seller's Agreement and the Sale and Servicing Agreement are within the
corporate power of the Depositor and none of the execution and delivery
by the Depositor of these Standard Provisions, the Underwriting
Agreement, the Unaffiliated Seller's Agreement and the Sale and
Servicing Agreement, the consummation by the Depositor of the
transactions therein contemplated, or the compliance by the Depositor
with the provisions thereof, will conflict with or result in a breach
of, or constitute a default under, the charter or the by-laws of the
Depositor or any of the
8
<PAGE>
provisions of any law, governmental rule, regulation, judgment, decree
or order binding on the Depositor or its properties, or any of the
provisions of any indenture, mortgage, contract or other instrument to
which the Depositor is a party or by which it is bound, or will result
in the creation or imposition of a lien, charge or encumbrance upon any
of its property pursuant to the terms of any such indenture, mortgage,
contract or other instrument, except such as have been obtained under
the 1933 Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters.
(h) The Underwriting Agreement has been, and at the Closing
Date the Unaffiliated Seller's Agreement and the Sale and Servicing
Agreement will have been, duly authorized, executed and delivered by
the Depositor.
(i) At the Closing Date, each of the Underwriting Agreement,
the Unaffiliated Seller's Agreement and the Sale and Servicing
Agreement will constitute a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor, in accordance with its
terms, subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting the rights of creditors generally, and to general principles
of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or
at law).
(j) No filing or registration with, notice to, or consent,
approval, non-disapproval, authorization or order or other action of,
any court or governmental authority or agency is required for the
consummation by the Depositor of the transactions contemplated by the
Underwriting Agreement, the Unaffiliated Seller's Agreement or the Sale
and Servicing Agreement, except such as have been obtained and except
such as may be required under the 1933 Act, the rules and regulations
thereunder, or state securities or "Blue Sky" laws, in connection with
the purchase and distribution of the Offered Securities by the
Underwriters.
(k) The Depositor owns or possesses or has obtained all
material governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to lease, own or license, as the
case may be, and to operate, its properties and to carry on its
business as presently conducted and has received no notice of
proceedings relating to the revocation of any such license, permit,
consent, order or approval, which singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially
adversely affect the conduct of the business, results of operations,
net worth or condition (financial or otherwise) of the Depositor.
(l) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Depositor is a party or of which any property of the Depositor is the
subject which, if determined adversely to the Depositor would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, or business or
business prospects of the Depositor and, to the best of the Depositor's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
9
<PAGE>
(m) Each of the Offered Securities will, when issued, be a
"mortgage related security" as such term is defined in Section 3(a)(41)
of the 1934 Act.
(n) At the Closing Date or any Subsequent Transfer Date, as
the case may be, each of the Mortgage Loans which is a subject of the
Unaffiliated Seller's Agreement and the Sale and Servicing Agreement
and all such Mortgage Loans in the aggregate will meet the criteria for
selection described in the Prospectus, and at the Closing Date or any
Subsequent Transfer Date, as the case may be, the representations and
warranties made by the Depositor both the Unaffiliated Seller's
Agreement and the Sale and Servicing Agreement will be true and correct
as of such date.
(o) At the time of execution and delivery of the Unaffiliated
Seller's Agreement and the Sale and Servicing Agreement and on any
Subsequent Transfer Date, as the case may be, the Depositor will have
good and marketable title to the Mortgage Loans being transferred to
the Issuer pursuant to the Sale and Servicing Agreement, free and clear
of any lien, mortgage, pledge, charge, encumbrance, adverse claim or
other security interest (collectively, "Liens"), and will not have
assigned to any person (other than the Issuer and the Indenture
Trustee) any of its right, title or interest in such Mortgage Loans or
in such Unaffiliated Seller's Agreement or such Sale and Servicing
Agreement or the Offered Securities being issued pursuant thereto, the
Depositor will have the power and authority to transfer such Mortgage
Loans to the Issuer and to transfer the Offered Securities to each of
the Underwriters, and upon execution and delivery to the Issuer of the
Sale and Servicing Agreement and delivery to each of the Underwriters
of the Offered Securities, and on any Subsequent Transfer Date, as the
case may be, the Issuer will have good and marketable title to the
Mortgage Loans and each of the Underwriters will have good and
marketable title to the Offered Securities, in each case free and clear
of any Liens.
(p) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the
Underwriting Agreement, these Standard Provisions, the Indenture, the
Sale and Servicing Agreement and the Offered Securities have been or
will be paid at or prior to the Closing Date.
7. Indemnification and Contribution.
(a) The Depositor agrees to indemnify and hold harmless each
Underwriter (including Prudential Securities Incorporated acting in its capacity
as Representative and as one of the Underwriters), and each person, if any, who
controls any Underwriter within the meaning of the 1933 Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
10
<PAGE>
however, that the Depositor will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any preliminary Prospectus, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
(1) written information furnished to the Depositor by any Underwriter through
the Representative specifically for use therein or (2) information regarding the
Mortgage Loans except to the extent that the Depositor has been indemnified by
the Servicer. This indemnity agreement will be in addition to any liability
which the Depositor may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Depositor,
each of the Depositor's directors, each of the Depositor's officers who signed
the Registration Statement and each person, if any, who controls the Depositor,
within the meaning of the 1933 Act, against any losses, claims, damages or
liabilities to which the Depositor, or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or any other
prospectus relating to the Offered Securities, or arise out of or are based upon
the omission or alleged 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 statements or
alleged untrue statements or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Depositor by
any Underwriter through the Representative specifically for use therein; and
each Underwriter will reimburse any legal or other expenses reasonably incurred
by the Depositor or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have. The Depositor acknowledges
that the statements set forth under the caption "UNDERWRITING" in the Prospectus
Supplement constitute the only information furnished to the Depositor by or on
behalf of any Underwriter for use in the Registration Statement, any preliminary
Prospectus or the Prospectus, and each of the several Underwriters represents
and warrants that such statements are correct as to it.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 7 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by the
Depositor on the one hand, and the Underwriters on the other, from the offering
of the Offered Securities (taking into account the portion of the proceeds of
the offering realized by each), the Depositor's and the Underwriters' relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate
11
<PAGE>
in the circumstances. The Depositor and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro rata or
per capita allocation (even if the Underwriters were treated as one entity for
such purpose). No Underwriter or person controlling such Underwriter shall be
obligated to make contribution hereunder which in the aggregate exceeds the
total underwriting fee of the Offered Securities purchased by such Underwriter
under the Underwriting Agreement, less the aggregate amount of any damages which
such Underwriter and its controlling persons have otherwise been required to pay
in respect of the same or any substantially similar claim. The Underwriters'
obligation to contribute hereunder are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Depositor, each officer of the Depositor who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the 1933 Act, shall have the same rights to
contribution as the Depositor.
(d) The parties hereto agree that the first sentence of Section 5 of
the Indemnification Agreement (the "Indemnification Agreement") dated as of the
Closing Date among the Note Insurer, the Servicer, the Originators, the
Unaffiliated Seller, the Issuer, the Depositor and the Underwriter shall not be
construed as limiting the Depositor's right to enforce its rights under Section
7 of these Standard Provisions. The parties further agree that, as between the
parties hereto, to the extent that the provisions of Section 5 of the
Indemnification Agreement conflict with Section 7 hereof, the provisions of
Section 7 hereof shall govern.
8. Survival of Certain Representations and Obligations. The respective
representations, warranties, agreements, covenants, indemnities and other
statements of the Depositor, its officers and the several Underwriters set forth
in, or made pursuant to, the Underwriting Agreement shall remain in full force
and effect, regardless of any investigation, or statement as to the result
thereof, made by or on behalf of any Underwriter, the Depositor, or any of the
officers or directors or any controlling person of any of the foregoing, and
shall survive the delivery of and payment for the Offered Securities.
9. Termination.
(a) The Underwriting Agreement may be terminated by the Depositor by
notice to the Representative in the event that a stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings for that purpose shall have been instituted or threatened.
(b) The Underwriting Agreement may be terminated by the Representative
by notice to the Depositor in the event that the Depositor shall have failed,
refused or been unable to perform all obligations and satisfy all conditions to
be performed or satisfied hereunder by the Depositor at or prior to the Closing
Date.
(c) Termination of the Underwriting Agreement pursuant to this Section
9 shall be without liability of any party to any other party other than as
provided in Sections 7 and 11 hereof.
12
<PAGE>
10. Default of Underwriters. If any Underwriter or Underwriters
defaults or default in their obligation to purchase Offered Securities which it
or they have agreed to purchase under the Underwriting Agreement and the
aggregate principal amount of the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent (10%)
or less of the aggregate principal amount, notional amount or stated amount, as
applicable, of the Offered Securities to be sold under the Underwriting
Agreement, as the case may be, the other Underwriters shall be obligated
severally in proportion to their respective commitments under the Underwriting
Agreement to purchase the Offered Securities which such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so defaults or default and the aggregate principal amount of the
Offered Securities with respect to which such default or defaults occurs or
occur is more than ten percent (10%) of the aggregate principal amount, notional
amount or stated amount, as applicable, of Offered Securities to be sold under
the Underwriting agreement, as the case may be, and arrangements satisfactory to
the Representative and the Depositor for the purchase of such Offered Securities
by other persons (who may include one or more of the non-defaulting Underwriters
including the Representative) are not made within 36 hours after any such
default, the Underwriting Agreement will terminate without liability on the part
of any non-defaulting Underwriters or the Depositor except for the expenses to
be paid or reimbursed by the Depositor pursuant to Section 11 hereof. As used in
the Underwriting Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
11. Expenses. The Depositor agrees with the several Underwriters that:
(a) whether or not the transactions contemplated in the
Underwriting Agreement are consummated or the Underwriting Agreement is
terminated, the Depositor will pay all fees and expenses incident to
the performance of its obligations under the Underwriting Agreement,
including, but not limited to, (i) the Commission's registration fee,
(ii) the expenses of printing and distributing the Underwriting
Agreement and any related underwriting documents, the Registration
Statement, any preliminary Prospectus, the Prospectus, any amendments
or supplements to the Registration Statement or the Prospectus, and any
Blue Sky memorandum or legal investment survey and any supplements
thereto, (iii) fees and expenses of rating agencies, accountants and
counsel for the Depositor, (iv) the expenses referred to in Section
5(e) hereof, and (v) all miscellaneous expenses referred to in Item 30
of the Registration Statement;
(b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, reasonably incurred by the Underwriters in
connection with investigating, preparing to market and marketing the
Offered Securities and proposing to purchase and purchasing the Offered
Securities under the Underwriting Agreement will be borne and paid by
the Depositor if the Underwriting Agreement is terminated by the
Depositor pursuant to Section 9(a) hereof or by the Representative on
account of the failure, refusal or inability on the part of the
Depositor to perform all obligations and satisfy all conditions on the
part of the Depositor to be performed or satisfied hereunder; and
(c) the Depositor will pay the cost of preparing the
certificates for the Offered Securities.
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<PAGE>
Except as otherwise provided in this Section 11, the Underwriters agree
to pay all of their expenses in connection with investigating, preparing to
market and marketing the Offered Securities and proposing to purchase and
purchasing the Offered Securities under the Underwriting Agreement, including
the fees and expenses of their counsel and any advertising expenses incurred by
them in making offers and sales of the Offered Securities.
12. Notices. All communications under the Underwriting Agreement shall
be in writing and, if sent to the Underwriters, shall be mailed, delivered or
telegraphed and confirmed to the Representative at the address and to the
attention of the person specified in the Underwriting Agreement, and, if sent to
the Depositor, shall be mailed, delivered or telegraphed and confirmed to
Prudential Securities Secured Financing Corporation, One New York Plaza, New
York, New York 10292, Attention: Managing Director-Asset Backed Finance Group;
provided, however, that any notice to any Underwriter pursuant to the
Underwriting Agreement shall be mailed, delivered or telegraphed and confirmed
to such Underwriter at the address furnished by it.
13. Representative of Underwriters. Any Representative identified in
the Underwriting Agreement will act for the Underwriters of the Offered
Securities and any action taken by the Representative under the Underwriting
Agreement will be binding upon all of such Underwriters.
14. Successors. The Underwriting Agreement shall inure to the benefit
of and shall be binding upon the several Underwriters and the Depositor and
their respective successors and legal representatives, and nothing expressed or
mentioned herein or in the Underwriting Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of the Underwriting Agreement, or any provisions herein
contained, the Underwriting Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the
representations and warranties of the Depositor contained herein or in the
Underwriting Agreement shall also be for the benefit of any person or persons
who controls or control any Underwriter within the meaning of Section 15 of the
1933 Act, and (ii) the indemnities by the several Underwriters shall also be for
the benefit of the directors of the Depositor, the officers of the Depositor who
have signed the Registration Statement and any person or persons who control the
Depositor within the meaning of Section 15 of the 1933 Act. No purchaser of the
Offered Securities from any Underwriter shall be deemed a successor because of
such purchase. These Standard Provisions and each Underwriting Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
15. Time of the Essence. Time shall be of the essence of each
Underwriting Agreement.
16. Governing Law. These Standard Provisions and each Underwriting
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
[Signature Page Follows]
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If the foregoing is in accordance with your understanding, please sign
and return two counterparts hereof.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: _______________________
Name:
Title:
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED
By: _________________________________
Name:
Title:
[Signature Page to Underwriting Agreement Standard Provisions]
<PAGE>
Exhibit A
Opinions of Dewey Ballantine LLP,
special counsel for the Depositor
---------------------------------
(1) Each of the Unaffiliated Seller's Agreement, the Sale and Servicing
Agreement, the Underwriting Agreement and the Standard Provisions (collectively,
with the Indenture and the Indemnification Agreement, the "Documents")
constitutes the valid, legal and binding agreement of the Depositor, and is
enforceable against the Depositor in accordance with its terms.
(2) The Notes, assuming the due execution by the Issuer and due
authentication by the Indenture Trustee and payment therefor pursuant to the
Underwriting Agreement, are validly issued and outstanding and are entitled to
the benefits of the Indenture.
(3) No consent, approval, authorization or order of, registration or
filing with, or notice to, any governmental authority or court is required under
federal laws or the laws of the State of New York for the execution, delivery
and performance of the Documents or the offer, issuance, sale or delivery of the
Notes or the consummation of any other transaction contemplated thereby by the
Depositor, except such which have been obtained.
(4) The Registration Statement and the Prospectus (other than the
financial and statistical data included therein, as to which we are not called
upon to express any opinion), at the time the Registration Statement became
effective, as of the date of execution of the Underwriting Agreement and as of
the date hereof comply as to form in all material respects with the requirements
of the 1933 Act and the rules and regulations thereunder, and the Exchange Act
and the rules and regulations thereunder, and we do not know of any amendment to
the Registration Statement required to be filed, or of any contracts, indentures
or other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus, which has not been filed or described as required.
(5) The registration of the Trust Estate created by the Indenture under
the Investment Company Act of 1940 is not required.
(6) The statements in the Prospectus Supplement set forth under the
caption "DESCRIPTION OF THE NOTES," to the extent such statements purport to
summarize certain provisions of the Notes or of the Indenture, or of the Sale
and Servicing Agreement or of the Unaffiliated Seller's Agreement, are fair and
accurate in all material respects.
<PAGE>
Exhibit B
Opinions of Counsel to
the Servicer
----------------------
(1) The Servicer has been duly organized and is validly existing as a
corporation in good standing under the federal laws of the United States and is
duly qualified to transact business in the State of Pennsylvania.
(2) The Servicer has the requisite power and authority to execute and
deliver, engage in the transactions contemplated by, and perform and observe the
conditions of, each of the Documents to which it is a party.
(3) Each of the Documents to which the Servicer is a party have been
duly and validly authorized, executed and delivered by the Servicer, all
requisite corporate action having been taken with respect thereto, and each
constitutes the valid, legal and binding agreement of the Servicer, and are
enforceable against the Servicer in accordance with their respective terms.
(4) Neither the transfer of the Mortgage Loans to the Unaffiliated
Seller, nor the execution, delivery or performance by the Servicer of the each
of the Documents to which it is a party (A) conflicts or will conflict with or
results or will result in a breach of, or constitutes or will constitute a
default under or violates or will violate, (i) any term or provision of the
charter or by-laws of the Servicer; (ii) any term or provision of any material
agreement, contract, instrument or indenture, to which the Servicer or any of
its subsidiaries is a party or is bound; or (iii) any order, judgment, writ,
injunction or decree of any court or governmental agency or body or other
tribunal having jurisdiction over the Servicer or any of its properties; or (B)
results in, or will result in the creation or imposition of any lien, charge or
encumbrance upon the Trust Estate or upon the Notes, except as otherwise
contemplated by the Indenture.
(5) The endorsement and delivery of each Mortgage Note, and the
preparation, delivery and recording of an Assignment of Mortgage with respect to
each Mortgage is sufficient fully to transfer to the Unaffiliated Seller and its
assignees all right, title and interest of the Servicer in the Mortgage Note and
Mortgage, as noteholder and mortgagee or assignee thereof.
(6) No consent, approval, authorization or order of, registration or
qualification of or with or notice to, any court, governmental agency or body or
other tribunal is required under the laws of the State of New York or the
Commonwealth of Pennsylvania, for the execution, delivery and performance of
each of the Documents to which it is a party or the consummation of any other
transaction contemplated thereby by the Servicer, except such which have been
obtained.
(7) There are no legal or governmental suits, proceedings or
investigations pending or, to such counsel's knowledge, threatened against the
Servicer before any court, governmental agency or body or other tribunal (A)
which, if determined adversely to the Servicer, would individually or in the
aggregate have a material adverse effect on (i) the consolidated
<PAGE>
financial position, business prospects, stockholders' equity or results of
operations of the Servicer; (ii) the Servicer's ability to perform its
obligations under, or the validity or enforceability of, each of the Documents
to which it is a party; (iii) any Mortgage Note or Mortgaged Property, or the
title of any Mortgagor to any Mortgaged Property; or (B) which have not
otherwise been disclosed in the Registration Statement and to the best of such
counsel's knowledge, no such proceedings or investigations are threatened or
contemplated by governmental authorities or threatened by others.
<PAGE>
Exhibit C
Opinions of Counsel to
the Indenture Trustee
----------------------
(1) The Indenture Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the New York
and has the power and authority to enter into and to take all actions required
of it under the Indenture.
(2) Each of the Documents to which the Indenture Trustee is a party
have been duly authorized, executed and delivered by the Indenture Trustee and
each such Document constitutes the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance with
its terms, except as enforceability thereof may be limited by (A) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally, as such laws would apply in the event of a
bankruptcy, insolvency or reorganization or similar occurrence affecting the
Indenture Trustee, and (B) general principles of equity regardless of whether
such enforcement is sought in a proceeding at law or in equity.
(3) No consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part of the
Indenture Trustee in connection with its execution and delivery of each of the
Documents to which it is a party or the performance of its obligations
thereunder.
(4) The Notes have been duly authenticated and delivered by the
Indenture Trustee.
(5) The execution and delivery of, and performance by the Indenture
Trustee of its obligations under, each of the Documents to which it is a party
do not conflict with or result in a violation of any statute or regulation
applicable to the Indenture Trustee, or the charter or bylaws of the Indenture
Trustee, or to the best knowledge of such counsel, any governmental authority
having jurisdiction over the Indenture Trustee or the terms of any indenture or
other agreement or instrument to which the Indenture Trustee is a party or by
which it is bound.
<PAGE>
Exhibit D
Opinions of Counsel to
the Issuer
----------------------
(1) The Issuer is a Delaware business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the power and authority to enter into and to take all actions required of it
under the each of the Documents to which it is a party.
(2) Each of the Documents to which the Issuer is a party have been duly
authorized, executed and delivered by the Issuer and each such Document
constitutes the legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, except as enforceability
thereof may be limited by (A) bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally, as such
laws would apply in the event of a bankruptcy, insolvency or reorganization or
similar occurrence affecting the Issuer, and (B) general principles of equity
regardless of whether such enforcement is sought in a proceeding at law or in
equity.
(3) No consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part of the
Issuer in connection with its execution and delivery of the Documents to which
it is a party or the performance of its obligations thereunder.
(4) The Notes have been duly executed and delivered by the Issuer.
(5) The execution and delivery of, and performance by the Issuer of its
obligations under each of the Documents to which it is a party do not conflict
with or result in a violation of any statute or regulation applicable to the
Issuer, or the certificate of trust of the Issuer, or to the best knowledge of
such counsel, any governmental authority having jurisdiction over the Issuer or
the terms of any indenture or other agreement or instrument to which the Issuer
is a party or by which it is bound.
<PAGE>
Exhibit 1.2
INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.,
ABFS 1999-1, 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 1999-1
and
PRUDENTIAL SECURITIES INCORPORATED
Dated as of March 24, 1999
ABFS Mortgage Loan Trust 1999-1
Mortgage Backed Notes Series 1999-1
$184,075,000 Class A-1 and Class A-2 Notes
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Definitions.........................................................1
Section 2. Representations, Warranties and Agreements of Financial Security....3
Section 3. Representations, Warranties and Agreements of the Underwriter.......5
Section 4. Indemnification.....................................................6
Section 5. Indemnification Procedures..........................................6
Section 6. Contribution........................................................7
Section 7. Miscellaneous.......................................................8
EXHIBIT
Exhibit A.........Opinion of General Counsel
<PAGE>
-1-
INDEMNIFICATION AGREEMENT
-------------------------
INDEMNIFICATION AGREEMENT dated as of March 24, 1999, among FINANCIAL
SECURITY ASSURANCE INC. ("Financial Security"), PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION (the "Depositor"), AMERICAN BUSINESS CREDIT, INC. (the
"Company"), ABFS 1999-1, 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 1999-1
(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
Agreement.
"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.
<PAGE>
"Indenture" means the Indenture, dated as of March 1, 1999, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means The Bank of New York.
"Insurance Agreement" means the Insurance and Indemnity Agreement,
dated as of March 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 funds 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 $184,075,000 of the ABFS Mortgage Backed Notes,
Series 1999-1, Class A-1 Notes and Class A-2 Notes, issued by the Issuer
pursuant to the Indenture.
"Offering Circular" means the Prospectus dated March 23, 1999,
including the Prospectus Supplement thereto dated March 24, 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.
<PAGE>
-3-
"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
March 24, 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
<PAGE>
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, 1997 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
<PAGE>
-5-
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 McGraw-Hill
Companies Inc., or of its insurer financial strength by Moody's 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
<PAGE>
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 Kidder,
Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder
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
<PAGE>
-7-
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
<PAGE>
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.
<PAGE>
-9-
If to Financial Security:
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Re: ABFS Mortgage Loan Trust 1999-1
Mortgage Backed Notes, Series 1999-1
If to the Depositor: Prudential Securities Secured Financing
Corporation
One New York Plaza
New York, New York 10292
Attention: Managing Director, Asset-Backed
Finance Group
If to the Company: American Business Credit, Inc.
BalaPointe Office Centre
111 Presidential Boulevard
Suite 127
Bala Cynwyd, PA 19004
Attention: Jeffrey Ruben, Esq.
If to the Underwriter: Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Attention: Managing Director, Asset-Backed
Finance Group
If to the Seller: ABFS 1999-1, Inc.
BalaPointe Office Centre
111 Presidential Boulevard
Suite 127
Bala Cynwyd, PA 19004
Attention: Jeffrey Ruben, Esq.
If to the Issuer: ABFS Mortgage Loan Trust 1999-1
c/o First Union Trust Company, National
Association
One Rodney Square
920 King Street, Suite 102
Wilmington, DE 19801
Att: Corporate Trust Administration
If to the Originators: Home American Credit, Inc. D/B/A Upland
Mortgage
BalaPointe Office Centre
111 Presidential Boulevard
Suite 127
Bala Cynwyd, PA 19004
Attention: Jeffrey Ruben, Esq.
<PAGE>
New Jersey Mortgage and Investment Corp.
BalaPointe Office Centre
111 Presidential Boulevard
Suite 127
Bala Cynwyd, PA 19004
Attention: Jeffrey Ruben, 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.
<PAGE>
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 1999-1, 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 1999-1
By
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:
Title:
<PAGE>
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).
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 March 24, 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). Error! No table of contents
entries found.
<PAGE>
Exhibit 4.1
This INDENTURE, dated as of March 1, 1999 (as amended or supplemented
from time to time as permitted hereby, this "Indenture"), is between ABFS
MORTGAGE LOAN TRUST 1999-1, a Delaware business trust (together with its
permitted successors and assigns, the "Trust"), and THE BANK OF NEW YORK, a New
York banking corporation, as indenture trustee (together with its permitted
successors in the trusts hereunder, the "Indenture Trustee").
Preliminary Statement
The Trust has duly authorized the execution and delivery of this
Indenture to provide for its Mortgage Backed Notes, Series 1999-1 (the "Notes"),
issuable as provided in this Indenture. All covenants and agreements made by the
Trust herein are for the benefit and security of the Holders of the Notes and
the Note Insurer. The Trust is entering into this Indenture, and the Indenture
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Trust in accordance with its terms have been done.
Granting Clause
The Trust hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes and the Note Insurer, all of the Trust's
right, title and interest in and to (a) the Mortgage Loans in both Pool I and
Pool II listed in the Mortgage Loan Schedule attached as Schedule I to this
Indenture (including property that secures a Mortgage Loan that becomes an REO
Property), including the related Mortgage Files delivered or to be delivered to
the Collateral Agent, on behalf of the Indenture Trustee, pursuant to the Sale
and Servicing Agreement, including all payments of principal received, collected
or otherwise recovered after the Cut-Off Date for each Mortgage Loan, all
payments of interest due on each Mortgage Loan after the Cut-Off Date therefor
whenever received and all other proceeds received in respect of such Mortgage
Loans, any Subsequent Mortgage Loans and any Qualified Substitute Mortgage Loan,
(b) the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement,
(c) the Insurance Policies, (d) all cash, instruments or other property held or
required to be deposited in the Collection Account, the Distribution Accounts,
the Note Insurance Payment Account, the Pre-Funding Accounts, the Capitalized
Interest Accounts and the Cross-collateralization Reserve Accounts, including
all investments made with funds in such Accounts (but not including any income
on funds deposited in, or investments made with funds deposited in, such
Accounts other than the Pre-Funding Accounts, which income shall belong to and
be for the account of the Servicer), and (e) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquid
assets, including, without limitation, all insurance proceeds and condemnation
awards. Such Grants are made, however, in trust, to secure the Notes equally and
ratably without prejudice, priority or distinction between any Note and any
other Note by reason of difference in time of issuance or otherwise, and for the
benefit of the Note Insurer to secure (x) the payment of all amounts due on the
Notes in accordance with their terms, (y) the payment of all other sums payable
under this Indenture and (z) compliance with the provisions of this Indenture,
all as provided in this Indenture. All terms used in the foregoing granting
clauses that are defined in Appendix I are used with the meanings given in said
Appendix I.
<PAGE>
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Notes may be adequately and effectively protected. The Indenture Trustee
agrees that it will hold the Note Insurance Policy in trust and that it will
hold any proceeds of any claim upon the Note Insurance Policy, solely for the
use and benefit of the Noteholders in accordance with the terms hereof and the
Note Insurance Policy. In addition, the Indenture Trustee agrees that it will
acknowledge the Grant on each Subsequent Transfer Date of the related Subsequent
Mortgage Loans pursuant to the terms of the related Subsequent Pledge Agreement,
provided that the conditions precedent to the pledge of such Subsequent Mortgage
Loans contained in this Indenture and in the Sale and Servicing Agreement are
satisfied on or prior to such Subsequent Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the respective
meanings set forth in Appendix I for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of Default
or a Default known to the Indenture Trustee or of which the Indenture Trustee
has notice or knowledge, such reference shall be construed to refer only to an
Event of Default or Default of which the Indenture Trustee is deemed to have
notice or knowledge pursuant to Section 6.01(d). All other terms used herein
that are defined in the Trust Indenture Act (as hereinafter defined), either
directly or by reference therein, have the meanings assigned to them therein.
ARTICLE II
THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01. Forms Generally. The Notes shall be substantially in the
form set forth as Exhibit A attached hereto. Each Note may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
on which the Notes may be listed, or as may, consistently herewith, be
determined by the Trust, as evidenced by its execution thereof. Any portion of
the text of any Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Note.
The Definitive Notes may be produced in any manner determined by the
Trust, as evidenced by its execution thereof.
Section 2.02. Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Note attached hereto as Exhibit A.
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Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Notes shall be designated generally as the "ABFS Mortgage Loan
Trust 1999-1, Mortgage Backed Notes, Series 1999-1".
The Notes shall be issued in the form specified in Section 2.01 hereof.
The Notes shall be issued in two Classes, the Class A-1 Notes and the Class A-2
Notes. The aggregate Original Note Principal Balance of Notes that may be
authenticated and delivered under the Indenture is limited to $100,000,000 of
Class A-1 Notes and $84,075,000 of Class A-2 Notes, except for the Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this
Indenture.
Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02(a) of
this Indenture, the principal of each Class of Notes shall be payable in
installments ending no later than the related Final Stated Maturity Date, unless
the unpaid principal of such Notes become due and payable at an earlier date by
declaration of acceleration or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to
the interest then due and payable on such Note and then to the principal
thereof. All computations of interest accrued on any Note shall be made on the
basis of a year of 360 days and twelve 30-day months.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Notes shall be made
in accordance with Section 5.07 hereof.
Section 2.04. Denominations. The Notes shall be issuable only as
registered Notes in the denominations equal to the Authorized Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Trust by an Authorized Officer of the Owner
Trustee. The signature of such Authorized Officer of the Owner Trustee on the
Notes may be manual or by facsimile.
Notes bearing the manual or facsimile signature of an individual who
was at any time an Authorized Officer of the Owner Trustee shall bind the Trust,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or was
not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Notes executed on behalf of the Trust to
the Authenticating Agent for authentication, and the Authenticating Agent shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
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No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in Section
2.02 hereof, executed by the Authenticating Agent by the manual signature of one
of its Authorized Officers or employees, and such certificate of authentication
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange. The
Trust shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Trust shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee is hereby initially appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Indenture
Trustee shall remain the Note Registrar throughout the term hereof. Upon any
resignation of the Indenture Trustee, the Servicer, on behalf of the Trust,
shall promptly appoint a successor, with the approval of the Note Insurer, or,
in the absence of such appointment, the Servicer, on behalf of the Trust, shall
assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Note at the office
or agency of the Trust to be maintained as provided in Section 3.02 hereof, the
Owner Trustee on behalf of the Trust, shall execute, and the Authenticating
Agent shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate initial Note Principal Balance.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations, and of a like aggregate Note Principal Balance,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Owner Trustee shall execute, and
the Authenticating Agent shall authenticate and deliver, the Notes that the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Trust, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form included in Exhibit A attached hereto, duly executed by the
Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar, on behalf of the Trust, may require
payment of a sum sufficient to cover any tax or other governmental charge as may
be imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.07 hereof not involving any transfer
or any exchange made by the Note Insurer.
No transfer of a Note shall be made to the Unaffiliated Seller or, to
the actual knowledge of a Responsible Officer of the Indenture Trustee, to any
of the Unaffiliated Seller's Affiliates, successors or assigns.
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The Note Registrar shall not register the transfer of a Note unless the
Note Registrar has received a representation letter from the transferee to the
effect that either (i) the transferee is not, and is not acquiring the Note on
behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of the Note by the transferee qualifies for exemptive
relief under a Department of Labor Prohibited Transaction Class Exemption. Each
Beneficial Owner of a Note which is a Book-Entry Note shall be deemed to make
one of the foregoing representations.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any
mutilated Note is surrendered to the Note Registrar or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (2) there is delivered to the Note Registrar such security or
indemnity as may be required by the Note Registrar to save each of the Trust,
the Note Insurer and the Note Registrar harmless, then, in the absence of notice
to the Note Registrar that such Note has been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and upon its request the
Note Registrar shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the same
tenor and aggregate initial principal amount bearing a number not
contemporaneously outstanding. If, after the delivery of such new Note, a bona
fide purchaser of the original Note in lieu of which such new Note was issued
presents for payment such original Note, the Note Registrar, shall be entitled
to recover such new Note from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover
upon the security or indemnity provided therefor to the extent of any loss,
damage, cost or expenses incurred by the Trust or the Note Registrar in
connection therewith. If any such mutilated, destroyed, lost or stolen Note
shall have become or shall be about to become due and payable, or shall have
become subject to redemption in full, instead of issuing a new Note, the Trust
may pay such Note without surrender thereof, except that any mutilated Note
shall be surrendered.
Upon the issuance of any new Note under this Section 2.07, the Note
Registrar, may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trust, the Indenture
Trustee or the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Trust, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Payments of Principal and Interest. (a) Payments on Notes
issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee
to the Clearing Agency or its nominee. Any installment of interest or principal
payable on any Definitive Notes
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that is punctually paid or duly provided for by the Trust on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered at the close of business on the Record
Date for such Class of Notes and such Distribution Date by either (i) check
mailed to such Person's address as it appears in the Note Register on such
Record Date, or (ii) by wire transfer of immediately available funds to the
account of a Noteholder, if such Noteholder (A) is the registered holder of
Definitive Notes having an initial principal amount of at least $1,000,000 and
(B) has provided the Indenture Trustee with wiring instructions in writing by
five (5) Business Days prior to the related Record Date or has provided the
Indenture Trustee with such instructions for any previous Distribution Date,
except for the final installment of principal payable with respect to such Note
(or the Redemption Price for any Note called for redemption, if such redemption
will result in payment of the then entire unpaid Note Principal Balance of such
Note), which shall be payable as provided in subsection (b) of this Section
2.08. A fee may be charged by the Indenture Trustee to a Holder of Definitive
Notes for any payment made by wire transfer. Any installment of interest or
principal not punctually paid or duly provided for shall be payable as soon as
funds are available to the Indenture Trustee for payment thereof, or if Section
5.07 applies, pursuant to Section 5.07.
(b) All reductions in the Note Principal Balance of a Note (or one or
more Predecessor Notes) effected by payments of installments of principal made
on any Distribution Date shall be binding upon all Holders of such Note and of
any Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not such payment is noted on such Note.
The final installment of principal of each Note (including the Redemption Price
of any Note called for optional redemption, if such optional redemption will
result in payment of the entire unpaid Note Principal Balance of such Note)
shall be payable only upon presentation and surrender thereof on or after the
Distribution Date therefor at the Corporate Trust Office of the Indenture
Trustee located within the United States of America pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Note will become due and payable on the next
Distribution Date, other than pursuant to a redemption pursuant to Article X, it
shall, no later than two (2) Business Days prior to such Distribution Date,
telecopy or hand deliver to each Person in whose name a Note to be so retired is
registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
(i) the Indenture Trustee expects that funds sufficient to pay
such final installment will be available in the related Distribution
Account on such Distribution Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Distribution Date, but only upon presentation
and surrender of such Note at the office or agency of the Note
Registrar maintained for such purpose pursuant to Section 3.02 (the
address of which shall be set forth in such notice) and (B) no interest
shall accrue on such Note after such Distribution Date.
A copy of such form of notice shall be sent to the Note Insurer by the
Indenture Trustee.
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Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) of this Section 2.08 and returned undelivered shall be held in
accordance with Section 3.03 hereof.
(d) Each (i) Indenture Trustee's Remittance Report, prepared by the
Indenture Trustee, based solely on the Servicer Remittance Report delivered to
the Indenture Trustee pursuant to the Sale and Servicing Agreement, and (ii)
each report regarding the Mortgage Loans delivered to the Indenture Trustee by
the Servicer pursuant to Section 5.16(b) of the Sale and Servicing Agreement,
shall be delivered by the Indenture Trustee to the Note Insurer, the Rating
Agencies, the Servicer, the Owner Trustee, the Depositor and each Noteholder as
the statements required pursuant to Section 8.06 hereof. Neither the Indenture
Trustee nor the Collateral Agent shall have any responsibility to recalculate,
verify or recompute information contained in any such tape, electronic data file
or disk or any such Servicer Remittance Report except to the extent necessary to
satisfy all obligations under this Section 2.08(d).
Within ninety (90) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a), (b)
and (c) in the definition of "Indenture Trustee's Remittance Report," aggregated
for such calendar year or the applicable portion thereof during which such
person was a Noteholder. Such obligation will be deemed to have been satisfied
to the extent that substantially comparable information is provided pursuant to
any requirements of the Code as are from time to time in force.
From time to time (but no more than once per calendar month), upon the
written request of the Depositor, the Servicer or the Note Insurer, the
Indenture Trustee shall report to the Depositor, the Servicer and the Note
Insurer the amount then held in each Account (including investment earnings
accrued) held by the Indenture Trustee and the identity of the investments
included therein. From time to time, at the request of the Note Insurer, the
Indenture Trustee shall report to the Note Insurer with respect to the actual
knowledge of a Responsible Officer, without independent investigation, of any
breach of any of the representations or warranties relating to individual
Mortgage Loans set forth in Section 3.03 of the Unaffiliated Seller's Agreement.
The Indenture Trustee shall also provide the Note Insurer such other information
within its control as may be reasonably requested by it.
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Trust including
but not limited to the Indenture Trustee, or the Note Insurer, may treat the
Person in whose name any Note is registered as the owner of such Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Note and (b) on any other date for all other purposes
whatsoever, and none of the Trust, the Indenture Trustee or any other agent of
the Trust, or the Note Insurer shall be affected by notice to the contrary.
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Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust, may
at any time deliver to the Note Registrar for cancellation any Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly canceled by the Note Registrar. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All
cancelled Notes held by the Note Registrar shall be held by the Note Registrar
in accordance with its standard retention policy, unless the Owner Trustee, on
behalf of the Trust shall direct by a Trust Order that they be destroyed or
returned to it.
Section 2.11. Authentication and Delivery of Notes. The Notes shall be
executed by an Authorized Officer of the Owner Trustee, on behalf of the Trust,
and delivered to the Authenticating Agent for authentication, and thereupon the
same shall be authenticated and delivered by the Authenticating Agent, upon a
Trust Request and upon receipt by the Authenticating Agent of all of the
following:
(a) A Trust Order authorizing the execution, authentication
and delivery of the Notes and specifying the Note Principal Balance and
the Percentage Interest of such Notes to be authenticated and
delivered.
(b) A Trust Order authorizing the execution and delivery of
this Indenture and the Sale and Servicing Agreement.
(c) One or more Opinions of Counsel (which opinion shall not
be at the expense of the Indenture Trustee or the Trust) addressed to
the Authenticating Agent and the Note Insurer or upon which the
Authenticating Agent and the Note Insurer are expressly permitted to
rely, complying with the requirements of Section 11.01, reasonably
satisfactory in form and substance to the Authenticating Agent and the
Note Insurer.
In rendering the opinions set forth above, such counsel may
rely upon Officer's Certificates of the Trust, the Owner Trustee, the
Unaffiliated Seller, the Originators, the Depositor, the Servicer and
the Indenture Trustee, without independent confirmation or verification
with respect to factual matters relevant to such opinions. In rendering
the opinions set forth above, such counsel need express no opinion as
to (A) the existence of, or the priority of the security interest
created by the Indenture against, any liens or other interests that
arise by operation of law and that do not require any filing or similar
action in order to take priority over a perfected security interest or
(B) the priority of the security interest created by this Indenture
with respect to any claim or lien in favor of the United States or any
agency or instrumentality thereof (including federal tax liens and
liens arising under Title IV of ERISA).
The acceptability to the Note Insurer of the Opinion of
Counsel delivered to the Authenticating Agent and the Note Insurer at
the Closing Date shall be conclusively evidenced by the delivery on the
Closing Date of the Note Insurance Policy.
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(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture
and the issuance of the Notes will not result in any breach of
any of the terms, conditions or provisions of, or constitute a
default under, the Trust's Certificate of Trust or any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Trust is a party or by which it is
bound, or any order of any court or administrative agency
entered in any proceeding to which the Trust is a party or by
which it may be bound or to which it may be subject, and that
all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Notes have been
complied with;
(ii) the Trust is the owner of each Mortgage Loan,
free and clear of any lien, security interest or charge, has
not assigned any interest or participation in any such
Mortgage Loan (or, if any such interest or participation has
been assigned, it has been released) and has the right to
Grant each such Mortgage Loan to the Indenture Trustee;
(iii) the information set forth in the Mortgage Loan
Schedule attached as Schedule I to this Indenture is correct;
(iv) the Trust has Granted to the Indenture Trustee
all of its right, title and interest in each Mortgage Loan;
and
(v) as of the Closing Date, no lien in favor of the
United States described in Section 6321 of the Code, or lien
in favor of the Pension Benefit Guaranty Corporation described
in Section 4068(a) of the ERISA, has been filed as described
in subsections 6323(f) and 6323(g) of the Code upon any
property belonging to the Trust.
(e) An executed counterpart of the Sale and Servicing
Agreement.
(f) An executed counterpart of the Unaffiliated Seller's
Agreement.
(g) An executed counterpart of the Trust Agreement.
(h) An executed copy of the Insurance Agreement.
(i) An original executed copy of the Note Insurance Policy.
(j) A copy of a letter from Moody's that is has assigned a
rating of "Aaa" to the Notes and a copy of a letter from S&P that it
has assigned a rating of "AAA" to the Notes.
Section 2.12. Book-Entry Note. The Notes will be issued initially as
one or more certificates in the name of Cede & Co., as nominee for the Clearing
Agency maintaining book-entry records with respect to ownership and transfer of
such Notes, and registration of the
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Notes may not be transferred by the Note Registrar except upon Book-Entry
Termination. In such case, the Note Registrar shall deal with the Clearing
Agency as representative of the Beneficial Owners of such Notes for purposes of
exercising the rights of Noteholders hereunder. Each payment of principal of and
interest on a Book-Entry Note shall be paid to the Clearing Agency, which shall
credit the amount of such payments to the accounts of its Clearing Agency
Participants in accordance with its normal procedures. Each Clearing Agency
Participant shall be responsible for disbursing such payments to the Beneficial
Owners of the Book-Entry Notes that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Beneficial Owners of the Book-Entry Notes that it
represents. All such credits and disbursements are to be made by the Clearing
Agency and the Clearing Agency Participants in accordance with the provisions of
the Notes. None of the Indenture Trustee, the Note Registrar, if any, the Trust
or the Note Insurer shall have any responsibility therefor except as otherwise
provided by applicable law. Requests and directions from, and votes of, such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System. (a) The book-entry
system through the Clearing Agency with respect to the Book-Entry Notes may be
terminated upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depositary with respect to the Notes
and the Indenture Trustee is unable to locate a qualified successor
Clearing Agency satisfactory to the Servicer, on behalf of the Trust;
(ii) The Majority Certificateholders, on behalf of the Trust,
in their sole discretion, elects to terminate the book-entry system by
notice to the Clearing Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event
of Default), the Beneficial Owners of no less than 51% of the Note
Principal Balance of the Book-Entry Notes advise the Indenture Trustee
in writing, through the related Clearing Agency Participants and the
Clearing Agency, that the continuation of a book-entry system through
the Clearing Agency to the exclusion of any Definitive Notes being
issued to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) of
this Section 2.13, the Indenture Trustee shall use all reasonable efforts to
notify all Beneficial Owners, through the Clearing Agency, of the occurrence of
such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same, in an aggregate outstanding Note Principal Balance
representing the interest of each, making such adjustments and allowances as it
may find necessary or appropriate as to accrued interest and previous calls for
redemption. Definitive Notes shall be issued only upon surrender to the
Indenture Trustee of the global Note
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by the Clearing Agency, accompanied by registration instructions for the
Definitive Notes. Neither the Trust nor the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon issuance of the
Definitive Notes, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall cease to be applicable and the provisions
relating to Definitive Notes shall be applicable.
Section 2.14. Pledge of Subsequent Mortgage Loans. (a) Subject to the
satisfaction of the conditions set forth in paragraph (b) of this Section 2.14,
in consideration of the Indenture Trustee's delivery on the related Subsequent
Transfer Dates to or upon the order of the Servicer, on behalf of the Trust, of
all or a portion of the balance of funds in either Pre-Funding Account, the
Trust shall on any Subsequent Transfer Date pledge, without recourse, to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, all
right, title and interest of the Trust in and to the related Subsequent Mortgage
Loans, including the outstanding principal of, and interest due on, such
Subsequent Mortgage Loans, and all other assets in the Trust Estate relating to
the Subsequent Mortgage Loans. In connection with such pledge, and pursuant to
Section 2.07 of the Unaffiliated Seller's Agreement and Section 2.09 of the Sale
and Servicing Agreement, the Trust does hereby also irrevocably pledge to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, all
of its rights under the Sale and Servicing Agreement, the Unaffiliated Seller's
Agreement, the related Subsequent Contribution Agreement and the related
Subsequent Transfer Agreement, including, without limitation, its right to
exercise the remedies created by Sections 2.06 and 3.05 of the Unaffiliated
Seller's Agreement for defective documentation and for breaches of
representations and warranties, agreement and covenants of the Unaffiliated
seller contained in Section 3.01, 3.02 and 3.03 of the Unaffiliated Seller's
Agreement.
The amount released from either Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of the
Aggregate Principal Balances of the Subsequent Mortgage Loans so pledged, as of
the related Subsequent Cut-Off Date.
(b) The Subsequent Mortgage Loans and the other property and rights
related thereto described in paragraph (a) of this Section 2.14 shall be pledged
by the Trust to the Indenture Trustee, for the benefit of the Noteholders and
the Note Insurer, only upon the satisfaction of each of the following conditions
on or prior to the related Subsequent Transfer Date:
(i) the Unaffiliated Seller shall have provided the Trust, the
Depositor, the Indenture Trustee, the Collateral Agent, the Rating
Agencies and the Note Insurer with an Addition Notice at least two (2)
Business Days prior to the Subsequent Transfer Date, which shall
include a Mortgage Loan Schedule listing the Subsequent Mortgage Loans,
and shall have provided any other information reasonably requested by
any of the foregoing parties with respect to the Subsequent Mortgage
Loans;
(ii) the Unaffiliated Seller shall have caused the Servicer to
deposit in the Collection Account all collections of (x) principal in
respect of the Subsequent Mortgage
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Loans received after the related Subsequent Cut-Off Date and (y)
interest due on the Subsequent Mortgage Loans after the related
Subsequent Cut-Off Date;
(iii) as of each Subsequent Transfer Date, neither the
Unaffiliated Seller nor the Depositor shall be insolvent, neither shall
be made insolvent by such transfer and neither shall be aware of any
pending insolvency;
(iv) such Subsequent Transfer shall not result in a material
adverse tax consequence to the Trust or the Holders of the Notes;
(v) the related Pre-Funding Period shall not have terminated;
(vi) the Unaffiliated Seller shall have delivered to the
Indenture Trustee an Officer's Certificate confirming the satisfaction
of each condition precedent specified in this paragraph (b) and each
complies with the terms of the Unaffiliated Seller's Agreement,
including each of the representations and warranties made with respect
thereto in Section 3.03 of the Unaffiliated Seller's Agreement;
provided, that each representation in Section 3.03(tt) (other than
clause (v)) may be waived or modified with the prior written consent of
the Note Insurer;
(vii) there shall have been delivered to the Note Insurer, the
Trust, the Collateral Agent, the Rating Agencies and the Indenture
Trustee, Independent Opinions of Counsel with respect to the transfer
of the Subsequent Mortgage Loans substantially in the form of the
Opinions of Counsel delivered to the Depositor, the Note Insurer, the
Trust, the Collateral Agent, the Rating Agencies and the Indenture
Trustee on the Closing Date (i.e. bankruptcy, corporate and tax
opinions);
(viii) the Indenture Trustee shall have received a written
consent from the Note Insurer in the form of Exhibit C hereto;
(ix) the Originators, the Unaffiliated Seller and the
Depositor shall have delivered to the Indenture Trustee an executed
copy of a Subsequent Transfer Agreement, substantially in the form of
Exhibit A to the Unaffiliated Seller's Agreement;
(x) the Depositor and the Trust shall have delivered to the
Indenture Trustee an executed copy of a Subsequent Contribution
Agreement, substantially in the form of Exhibit G to the Sale and
Servicing Agreement, and
(xi) the Trust and the Indenture Trustee shall have executed a
Subsequent Pledge Agreement, substantially in the form of Exhibit B
hereto.
(c) In connection with the transfer, assignment and pledge of the
Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the document
delivery requirements set forth in Section 2.05 of the Sale and Servicing
Agreement.
(d) On each Subsequent Transfer Date upon written instruction from the
Unaffiliated Seller, the Indenture Trustee shall withdraw from the related
Capitalized Interest Account and pay to the Unaffiliated Seller on such
Subsequent Transfer Date the Overfunded
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Interest Amount for such Subsequent Transfer Date, as calculated by the
Indenture Trustee with the cooperation of the Unaffiliated Seller and subject to
the approval of the Note Insurer.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes. The Trust will pay or cause to be duly
and punctually paid the principal of, and interest on, the Notes in accordance
with the terms of the Notes and this Indenture. The Notes shall be non-recourse
obligations of the Trust and shall be limited in right of payment to amounts
available from the Trust Estate as provided in this Indenture and the Trust
shall not otherwise be liable for payments on the Notes. No person shall be
personally liable for any amounts payable under the Notes. If any other
provision of this Indenture conflicts or is deemed to conflict with the
provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.
Section 3.02. Maintenance of Office or Agency. The Owner Trustee, at
the direction of the Majority Certificateholder, on behalf of the Trust, will
cause the Note Registrar to maintain its corporate trust office at a location in
the United States of America where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Trust in
respect of the Notes and this Indenture may be served. Such location shall be
the Corporate Trust Office of the Indenture Trustee.
The Owner Trustee, at the direction of the Majority Certificateholder,
on behalf of the Trust may also from time to time, at its own expense, designate
one or more other offices or agencies within the United States of America where
the Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, any designation
of an office or agency for payment of Notes shall be subject to Section 3.03
hereof. The Owner Trustee, at the direction of the Majority Certificateholder,
on behalf of the Trust will give prompt written notice to the Indenture Trustee
and the Note Insurer of any such designation or rescission and of any change in
the location of any such other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust. All payments
of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the related Distribution Account pursuant to Sections
8.02(a) or 5.07 hereof shall be made on behalf of the Trust by the Indenture
Trustee, and no amounts so withdrawn from the related Distribution Account for
payments on the Notes shall be paid over to the Trust under any circumstances
except as provided in this Section 3.03 or in Sections 5.07 or 8.02 hereof.
With respect to Definitive Notes, if the Trust shall have a Note
Registrar that is not also the Indenture Trustee, such Note Registrar shall
furnish, no later than the fifth (5th) calendar day after each Record Date, a
list, in such form as such Indenture Trustee may reasonably require, of the
names and addresses of the Holders of Notes and of the number of Individual
Notes held by each such Holder.
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Whenever the Trust shall have a Paying Agent other than the Indenture
Trustee, the Servicer, on behalf of the Trust, will, on or before the Business
Day next preceding each Distribution Date, direct the Indenture Trustee to
deposit with such Paying Agent an aggregate sum sufficient to pay the amounts
then becoming due (to the extent funds are then available for such purpose in
the related Distribution Account), such sum to be held in trust for the benefit
of the Persons entitled thereto. Any moneys deposited with a Paying Agent in
excess of an amount sufficient to pay the amounts then becoming due on the Notes
with respect to which such deposit was made shall, upon Trust Order, be paid
over by such Paying Agent to the Indenture Trustee for application in accordance
with Article VIII hereof.
Subject to the prior written consent of the Note Insurer, any Paying
Agent other than the Indenture Trustee may be appointed by Trust Order and at
the expense of the Trust. The Trust shall not appoint any Paying Agent (other
than the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (b) of the definition of the term "Permitted
Investments". The Servicer, on behalf of the Trust, will cause each Paying Agent
other than the Indenture Trustee to execute and deliver to the Indenture Trustee
and the Owner Trustee, on behalf of the Trust, an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(a) allocate all sums received for payment to the Holders of
Notes on each Distribution Date among such Holders in the proportion
specified in the applicable Indenture Trustee's Remittance Report, in
each case to the extent permitted by applicable law;
(b) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(c) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of the Notes if at
any time the Paying Agent ceases to meet the standards set forth above
required to be met by a Paying Agent at the time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give
the Indenture Trustee notice of any Default by the Trust (or any other
obligor upon the Notes) in the making of any payment required to be
made with respect to any Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, at any
time during the continuance of any such Default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent; and
(f) comply with all requirements of the Code, and all
regulations thereunder, with respect to withholding from any payments
made by it on any Notes of any applicable
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withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; provided, however, that
with respect to withholding and reporting requirements applicable to
original issue discount (if any) on any of the Notes, the Servicer, on
behalf of the Trust, has provided the calculations pertaining thereto
to the Indenture Trustee and the Paying Agent.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Note (or if earlier, three months before the date
on which such amount would escheat to a governmental entity under applicable
law) shall be discharged from such trust and paid to the Trust; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Trust for payment thereof (but only to the extent of the amounts so paid to
the Trust), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease. The Indenture Trustee may
adopt and employ, at the expense of the Trust, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or any Paying Agent, at the last address of record for each such
Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c) of
this Section 3.04, the Trust will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware or under
the laws of any other state of the United States of America, and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the other Basic Documents.
(b) Subject to Section 3.09(g) hereof, and with the prior written
consent of the Note Insurer, any entity into which the Trust may be merged or
with which it may be consolidated, or any entity resulting from any merger or
consolidation to which the Trust shall be a party, shall be the successor issuer
under this Indenture without the execution or filing of any paper, instrument or
further act to be done on the part of the parties hereto, anything in any
agreement relating to such merger or consolidation, by which any such Trust may
seek to retain certain powers, rights and privileges therefore obtaining for any
period of time following such merger or consolidation to the contrary
notwithstanding (other than Section 3.09(g)).
(c) Upon any consolidation or merger of or other succession to the
Trust in accordance with this Section 3.04, the Person formed by or surviving
such consolidation or
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merger (if other than the Trust) may exercise every right and power of, and
shall have all of the obligations of, the Trust under this Indenture with the
same effect as if such Person had been named as the issuer herein.
Section 3.05. Protection of Trust Estate. (a) The Trust will, from time
to time, execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action as may be
necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Sale and Servicing
Agreement, or the Unaffiliated Seller's Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the Note Insurer
in the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
(b) The Indenture Trustee shall not, and shall not permit the
Collateral Agent to, remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the Closing Date or cause or permit
ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such time unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
Section 3.06. Opinions as to the Trust Estate. On or before April 30th
in each calendar year, beginning in 2000, the Servicer, on behalf of the Trust,
shall furnish to the Indenture Trustee and the Note Insurer an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture Trustee
and the Note Insurer either stating that, in the opinion of such counsel, such
action has been taken as is necessary to maintain the lien and security interest
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain such
lien and security interest. Such Opinion of Counsel shall also describe all such
action, if any, that will, in the opinion of such counsel, be required to be
taken to maintain the lien and security interest of this Indenture with respect
to the Trust Estate until May 1st in the following calendar year.
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Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and
the other Basic Documents.
(b) The Trust shall not take any action and will use its Best Efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any of the Mortgage
Files or under any instrument included in the Trust Estate, or that would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents or instruments
contained in the Mortgage Files, except as expressly permitted in this
Indenture, the other Basic Documents or such document included in the Mortgage
File or other instrument or unless such action will not adversely affect the
interests of the Noteholders and the Note Insurer.
(c) If the Servicer or the Owner Trustee, on behalf of the Trust, shall
have knowledge of the occurrence of a default under the Sale and Servicing
Agreement or the Unaffiliated Seller's Agreement, the Servicer or the Owner
Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note
Insurer and the Rating Agencies thereof, and, in the case of the Servicer, shall
specify in such notice the action, if any, the Servicer is taking with respect
to such default.
(d) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify
the Note Insurer and the Rating Agencies. As soon as any successor Servicer is
appointed, the Indenture Trustee shall notify the Note Insurer and the Rating
Agencies, specifying in such notice the name and address of such successor
Servicer.
Section 3.08. Investment Company Act. The Trust shall at all times
conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any successor
statute), and the rules and regulations thereunder.
Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate, except as expressly permitted by this
Indenture and the other Basic Documents;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes by reason of the payment
of any taxes levied or assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than as permitted
by the Trust Agreement or other than in connection with, or relating
to, the issuance of the Notes pursuant to this Indenture, or amend the
Trust Agreement, as in effect on the Closing Date, other than in
accordance with Section 11.01 of the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an
indebtedness other than the Notes;
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(e) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such
indebtedness as may be incurred by the Trust in connection with the
issuance of the Notes pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or
liquidate in whole or in part (until the Notes are paid in full);
(g) (i) permit the validity or effectiveness of this Indenture
or any Grant to be impaired, or permit the lien of this Indenture to be
impaired, amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby, (ii) permit any lien, charge, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created
on or extend to or otherwise arise upon or burden the Trust Estate or
any part thereof or any interest therein or the proceeds thereof, or
(iii) permit the lien of this Indenture not to constitute a valid
perfected first priority security interest in the Trust Estate; or
(h) take any other action that should reasonably be expected
to, or fail to take any action if such failure should reasonably be
expected to, cause the Trust to be taxable as (x) an association
pursuant to Section 7701 of the Code or (y) a taxable mortgage pool
pursuant to Section 7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance. On or before April 30,
2000, and each April 30 thereafter, the Servicer, on behalf of the Trust, shall
deliver to the Indenture Trustee, the Note Insurer and the Depositor a written
statement, signed by an Authorized Officer of the Servicer, on behalf of the
Trust, stating that:
(a) a review of the fulfillment by the Trust during such year
of its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based
on such review, the Trust has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a Default in the fulfillment of any such covenant or condition,
specifying each such Default known to such Authorized Officer and the
nature and status thereof.
Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust
or otherwise with respect to any ownership or equity interest or security in or
of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Trust may make, or cause to be made, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under this Indenture and the other Basic Documents and the Trust
will not, directly or
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indirectly, make or cause to be made payments to or distributions from any
Distribution Account except in accordance with this Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes. For purposes
of federal, state and local income, franchise and any other income taxes, the
Trust will treat the Notes as indebtedness, and hereby instructs the Indenture
Trustee, Payee Agent and the Servicer, on behalf of the Trust to treat the Notes
as indebtedness for all applicable tax reporting purposes.
Section 3.13. Notice of Events of Default. The Servicer, on behalf of
the Trust, shall give the Indenture Trustee, the Note Insurer, the Rating
Agencies and the Depositor prompt written notice of each Event of Default
hereunder, each default on the part of the Servicer of its obligations under the
Sale and Servicing Agreement and each default on the part of the Unaffiliated
Seller of its obligations under the Unaffiliated Seller's Agreement.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the
Trust, will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) either
(i) all Notes theretofore authenticated and delivered (other
than (x) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.07 hereof, and (y) Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Trust, as provided in Section 3.03 hereof)
have been delivered to the Note Registrar for cancellation; or
(ii) all Notes not theretofore delivered to the Note Registrar
for cancellation,
(A) have become due and payable, or
(B) will become due and payable at the Final Stated Maturity
Date within one (1) year, or
(C) are to be called for redemption pursuant to Section
10.01 hereof within one (1) year under irrevocable
arrangements satisfactory to the Indenture Trustee for
the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the
Servicer,
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and the Servicer, in the case of clauses (ii)(A),
(ii)(B) or (ii)(C) above, has irrevocably deposited or
caused to be deposited with the Indenture Trustee, in
trust for such purpose, an amount sufficient to pay and
discharge the entire unpaid Note Principal Balance such
Notes not theretofore delivered to the Indenture Trustee
for cancellation, for principal and interest to the
Final Stated Maturity Date or to the applicable
Redemption Date, as the case may be, and in the case of
Notes that were not paid at the Final Stated Maturity
Date of their entire unpaid Note Principal Balance, for
all overdue principal and all interest payable on such
Notes to the next succeeding Distribution Date therefor;
(b) the Servicer, on behalf of the Trust, has paid or caused to be paid
all other sums payable hereunder by the Trust (including, without limitation,
amounts due the Note Insurer); and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Insurer an Officers' Certificate and an Opinion
of Counsel satisfactory in form and substance to the Indenture Trustee and the
Note Insurer each stating that all conditions precedent herein providing for the
satisfaction and discharge of this Indenture have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Trust (or of the Servicer in the
case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Trust or upon Trust Order all cash, securities and
other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (a) and (b) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and any Paying Agent to the Trust and the
Holders of Notes under Section 3.03 hereof, the obligations of the Indenture
Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of
Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes,
registration of transfers of Notes and rights to receive payments of principal
of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
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ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to Notes issued hereunder, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of
the Notes, on any Distribution Date, all or part of any Interest
Distribution Amount and any Net Mortgage Loan Interest Shortfalls due
on the Notes on such Distribution Date;
(b) if the Trust shall fail to distribute or cause to be
distributed to the Indenture Trustee, for the benefit of the holders of
the Notes, (x) on any Distribution Date, an amount equal to the
Principal Distribution Amount due on the Notes on such Distribution
Date, to the extent that sufficient funds are on deposit in the
Collection Account or (y) on the Final Stated Maturity Date for any
Class of Notes, the aggregate outstanding Note Principal Balance of
such Class of Notes;
(c) if the Trust shall breach or default in the due observance
of any one or more of the covenants set forth in clauses (a) through
(h) of Section 3.09 hereof;
(d) if the Trust shall consent to the appointment of a
custodian, receiver, trustee or liquidator (or other similar official)
of itself, or of a substantial part of its property, or shall admit in
writing its inability to pay its debts generally as they come due, or a
court of competent jurisdiction shall determine that the Trust is
generally not paying its debts as they come due, or the Trust shall
make a general assignment for the benefit of creditors;
(e) if the Trust shall file a voluntary petition in bankruptcy
or a voluntary petition or an answer seeking reorganization in a
proceeding under any bankruptcy laws (as now or hereafter in effect) or
an answer admitting the material allegation of a petition filed against
the Trust in any such proceeding, or the Trust shall, by voluntary
petition, answer or consent, seek relief under the provisions of any
now existing or future bankruptcy or other similar law providing for
the reorganization or winding-up of debtors, or providing for an
agreement, composition, extension or adjustment with its creditors;
(f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without
the consent (express or legally implied) of the Trust, a custodian,
receiver, trustee or liquidator (or other similar official) of the
Trust or any substantial part of its property, or sequestering any
substantial part of its respective property, and any such order,
judgment or decree or appointment or sequestration shall remain in
force undismissed, unstayed or unvacated for a period of ninety (90)
days after the date of entry thereof; or
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(g) if a petition against the Trust in a proceeding under
applicable bankruptcy laws or other insolvency laws, as now or
hereafter in effect, shall be filed and shall not be stayed, withdrawn
or dismissed within ninety (90) days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of
debtors which may apply to the Trust, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Trust
or any substantial part of its property, and such jurisdiction, custody
or control shall remain in force unrelinquished, unstayed or
unterminated for a period of ninety (90) days.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case, but with
the consent of the Note Insurer in the absence of a Note Insurer Default, the
Indenture Trustee may, and on request of the Note Insurer, in the absence of a
Note Insurer Default, or, with the prior written consent of the Note Insurer,
the Holders of Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Notes of both Classes, shall, declare all the Notes
to be immediately due and payable by a notice in writing to the Trust (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
such Notes, in an amount equal to the entire unpaid Note Principal Balance of
such Notes, together with accrued and unpaid interest thereon to the date of
such acceleration, shall become immediately due and payable, all subject to the
prior written consent of the Note Insurer in the absence of a Note Insurer
Default.
At any time after such a declaration of acceleration of maturity of the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter provided in this
Article V, the Note Insurer, in the absence of a Note Insurer Default, or the
Holders of Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes, with the prior written consent of the Note
Insurer, by written notice to the Trust and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(i) all payments of principal of, and interest on,
all Outstanding Notes and all other amounts that would then be
due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its
agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of Notes that have become due solely by such acceleration,
have been cured or waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default occurs and is continuing, the
Indenture Trustee may, with the prior written consent of the Note Insurer,
proceed to protect and enforce its rights and the rights of the Noteholders and
the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, or any
Noteholder against the Trust shall be limited to the preservation, enforcement
and foreclosure of the liens, assignments, rights and security interests under
the Indenture and no attachment, execution or other unit or process shall be
sought, issued or levied upon any assets, properties or funds of the Trust,
other than the Trust Estate relative to the Notes in respect of which such Event
of Default has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Notes may be sought or obtained by the Indenture Trustee or
any Noteholder against the Trust. The Indenture Trustee shall be entitled to
recover the costs and expenses expended by it pursuant to this Article V
including reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel.
Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing and the Notes been declared due and payable and such declaration
and its consequences have not been rescinded and annulled, the Indenture
Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof,
to the extent applicable) may, for the benefit of the Noteholders and the Note
Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts
then payable on the Notes, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03 hereof;
(b) in accordance with Section 5.17 hereof, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law;
(c) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee or the Holders
of the Notes and the Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all funds
on deposit in each of the Accounts pursuant to Section 5.07 hereof.
Section 5.05. Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement,
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composition or other judicial Proceeding relative to the Trust or any other
obligor upon any of the Notes or the property of the Trust or of such other
obligor or their creditors, the Indenture Trustee (irrespective of whether the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Trust for the payment of any overdue principal or interest) shall,
with the prior written consent of the Note Insurer, be entitled and empowered,
by intervention in such Proceeding or otherwise to:
(a) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Notes and file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel), the Noteholders and the
Note Insurer allowed in such Proceeding, and
(b) collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Noteholder and the Note Insurer to make such payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent to
the making of such payments directly to the Noteholders and the Note
Insurer, to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of Notes. All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee,
at the direction of the Note Insurer, shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. If the Notes have been
declared due and payable following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, any money collected by
the Indenture Trustee with respect to each Class of Notes pursuant to this
Article V or otherwise and any other monies that may then be held or thereafter
received by the Indenture Trustee as security for such Class of Notes shall be
applied in the following order, at the date or dates fixed by the Indenture
Trustee and, in case of the payment of the entire amount due on account of
principal of, and interest on, such Class of Notes, upon presentation and
surrender thereof:
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(a) first, to the Indenture Trustee, any unpaid Indenture
Trustee Fees with respect to such Class then due and any other amounts
payable and due to the Indenture Trustee with respect to such Class
under this Indenture, including any costs or expenses incurred by it in
connection with the enforcement of the remedies provided for in this
Article V;
(b) second, to the Servicer, any amounts required to pay the
Servicer for any unpaid Servicing Fees with respect to such Class then
due and to reimburse the Servicer for Periodic Advances with respect to
such Class previously made by, and not previously reimbursed to or
retained by, the Servicer and, upon the final liquidation of the
related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances with respect to such Class previously made by, and
not previously reimbursed to or retained by, the Servicer;
(c) third, to the payment of Interest Distribution Amounts
then due and unpaid upon the Outstanding Notes of such Class through
the day preceding the date on which such payment is made;
(d) fourth, to the payment of the Note Principal Balance of
each of the Outstanding Notes of such Class, up to the amount of their
respective unpaid Note Principal Balance, ratably, without preference
or priority of any kind;
(e) fifth, to the Note Insurer, as subrogee to the rights of
the Noteholders, (x) the aggregate amount necessary to reimburse the
Note Insurer for any unreimbursed Reimbursement Amounts for such Class
paid by the Note Insurer on prior Distribution Dates, together with
interest thereon at the "Late Payment Rate" specified in the Insurance
Agreement from the date such Reimbursement Amounts were due to the Note
Insurer to such Distribution Date, (y) the amount of any unpaid Premium
Amount for such Class then due, together with interest thereon at the
"Late Payment Rate" specified in the Insurance Agreement from the date
such amounts were due to such Distribution Date and (z) any other
amounts due and owing to the Note Insurer for such Class under the
Insurance Agreement;
(f) sixth, to the payment of any Net Mortgage Loan Interest
Shortfalls of such Class through the day preceding the date on which
such payment is made;
(g) seventh, for payment in respect of the other Class of
Notes, in the priority set forth in this Section 5.07, to the extent of
any shortfall in the payment of the amounts described in clauses (a)
through (f) with respect to such other Class;
(h) eighth, the remainder to the Holder of Trust Certificate
relating to such Class.
Section 5.08. Limitation on Suits. No Holder of a Note shall have any
right to institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee and the Note Insurer of a continuing Event of
Default;
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(b) the Holders of Notes representing not less than 25% of the
Note Principal Balance of the Outstanding Notes of both Classes shall
have made written request to the Indenture Trustee to institute
Proceedings in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture
Trustee indemnity in full against the costs, expenses and liabilities
to be incurred in compliance with such request;
(d) the Indenture Trustee, for sixty (60) days after its
receipt of such notice, request and offer of indemnity, has failed to
institute any such Proceeding;
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such sixty (60) day period
by the Holders of Notes representing more than 50% of the Note
Principal Balance of the Outstanding Notes of both Classes; and
(f) the consent of the Note Insurer shall have been obtained;
it being understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Notes or to obtain or to
seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of
Notes.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than 50% of the Note Principal Balances of the
Outstanding Notes of both Classes, the Indenture Trustee shall take the action
prescribed by the group representing a greater percentage of the Note Principal
Balances of the Outstanding Notes of both Classes.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections
3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to
recovery from amounts in the portion of the Trust Estate relating to such Note,
the Holder of any Note shall have the right, to the extent permitted by
applicable law, which right is absolute and unconditional, to receive payment of
each installment of interest on such Note on the respective Distribution Date
for such installments of interest, to receive payment of each installment of
principal of such Note when due (or, in the case of any Note called for
redemption, on the date fixed for such redemption) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Insurer and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and
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respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall
continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee,
the Note Insurer or by the Noteholders with the prior consent of the Note
Insurer, as the case may be.
Section 5.13. Control by Noteholders. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both
Classes on the applicable Record Date shall, with the consent of the Note
Insurer, have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale
of the Trust Estate shall be by the Holders of Notes representing the
percentage of the Note Principal Balance of the Outstanding Notes
specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii)
hereof is applicable; and
(c) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction; provided, however, that, subject to Section 6.01 hereof, the
Indenture Trustee need not take any action that it determines might
involve it in liability or be unjustly prejudicial to the Noteholders
not consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Notes of both Classes on the applicable Record Date may on behalf of the Holders
of all the Notes, and with the consent of the Note Insurer, waive any past
Default hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest
on any Note; or
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(b) in respect of a covenant or provision hereof that under
Section 9.02 hereof cannot be modified or amended without the consent
of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate Notes representing more than 10% of the
Note Principal Balance of the Outstanding Notes of both Classes, or to any suit
instituted by any Noteholder for the enforcement of the payment of any Interest
Distribution Amount or Principal Distribution Amount on any Note on or after the
related Distribution Date or for the enforcement of the payment of principal of
any Note on or after the Final Stated Maturity Date (or, in the case of any Note
called for redemption, on or after the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension of law wherever enacted, now or at any time hereafter in
force, that may affect the covenants in, or the performance of, this Indenture;
and the Trust (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 5.04 hereof shall
not be exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Notes and under this
Indenture with respect thereto shall have been paid. The Indenture Trustee may
from time to time postpone any public Sale by public announcement made at the
time and place of such Sale.
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(b) To the extent permitted by law, the Indenture Trustee shall not in
any private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
(i) the Holders of Notes representing not less than 50% of the
Note Principal Balance of the Notes of both Classes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Holders of the Notes, in
full payment thereof in accordance with Section 5.07 hereof, on the
Distribution Date next succeeding the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of the
Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof
for purposes of this Section 5.17(b). In the absence of a Note Insurer Default,
no Sale hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (ii) of subsection (b) of this Section 5.17 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee, acting in its capacity as
Indenture Trustee (i) on behalf of the Noteholders and the Note Insurer, shall
prevent such Sale and bid an amount (which shall include the Indenture Trustee's
right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more
than the highest other bid in order to preserve the Trust Estate on behalf of
the Noteholders and the Note Insurer.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Holder or Holders of Notes may bid for and purchase
the property offered for Sale, and upon compliance with the terms of
sale may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money therefor,
deliver any Outstanding Notes or claims for interest thereon in lieu of
cash up to the amount that shall, upon distribution of the net proceeds
of such Sale, be payable thereon, and such Notes, in case the amounts
so payable thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after being appropriately stamped to
show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale thereof,
and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A)
the amount that would be payable to the Holders of the Notes as a
result of such Sale in accordance with Section 5.07 hereof on the
Distribution Date next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the
Notes in order to complete any such Sale or in order for the net Sale
price to be credited against such Notes, and any property so acquired
by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
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(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Trust to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek
and recover judgment under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee, the Note Insurer or the Holders of Notes shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Trust or by
the levy of any execution under such judgment upon any portion of the Trust
Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the
Trust. The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. Holders of the Notes shall have no
recourse against the trust estate granted as security for any other series of
Notes issued by the Trust, and no judgment against the Trust for any amount due
with respect to the Notes may be enforced against either the trust estate
securing any other series or any other assets of the Trust, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Trust. The Noteholders shall have no recourse
against the Owner Trustee, the Indenture Trustee, Note Registrar, Authenticating
Agent, Collateral Agent, the Depositor, the Unaffiliated Seller, the Servicer or
any of their respective Affiliates, or to the assets of any of the foregoing
entities.
Section 5.20. Application of the Trust Indenture Act. Pursuant to
Section 316(a) of the TIA, all provisions automatically provided for in Section
316(a) are hereby expressly excluded.
Section 5.21. Note Insurer Default. Notwithstanding anything elsewhere
in this Indenture or in the Notes to the contrary, if a Note Insurer Default
exists, the provisions of this Article V and all other provisions of this
Indenture which (a) permit the Note Insurer to exercise rights of the
Noteholders, (b) restrict the ability of the Noteholders or the Indenture
Trustee to act without the consent or approval of the Note Insurer, (c) provide
that a particular act or thing must be acceptable to the Note Insurer, (d)
permit the Note Insurer to direct (or otherwise to require) the actions of the
Indenture Trustee or the Noteholders, (e) provide that any action or omission
taken with the consent, approval or authorization of the Note Insurer shall be
authorized hereunder or shall not subject the party taking or omitting to take
such action to any liability hereunder or (f) which have a similar effect, shall
be of no further force and effect and the Indenture Trustee shall administer the
Trust Estate and perform its obligations hereunder solely for the benefit of the
Holders of the Notes. Nothing in the foregoing sentence, nor any action
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taken pursuant thereto or in compliance therewith, shall be deemed to have
released the Note Insurer from any obligation or liability it may have to any
party or to the Noteholders hereunder, under any other agreement, instrument or
document (including, without limitation, the Note Insurance Policy) or under
applicable law.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee need perform only those duties that
are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Sections 5.13 or 5.17
hereof or exercising any trust or power or remedy conferred upon the
Indenture Trustee under this Indenture.
(d) Except with respect to duties of the Indenture Trustee prescribed
by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes
under this Indenture, the Indenture Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Sections 5.01(e) or 5.01(f)
hereof or any Default described in Sections 5.01(c) or
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5.01(d) hereof or of any event described in Section 3.05 hereof unless a
Responsible Officer assigned to and working in the Indenture Trustee's corporate
trust department and having direct responsibility for this Indenture has actual
knowledge thereof or unless written notice of any event that is in fact such an
Event of Default or Default is received by the Indenture Trustee at the
Corporate Trust Office, and such notice references the Notes generally, the
Trust, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it under this Indenture or the other Basic Documents.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Trust in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of the Notes, whether
such extinguishment occurs through a Sale of the Trust Estate to another Person,
the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the
rights, powers and duties of the Indenture Trustee with respect to the Trust
Estate (or the proceeds thereof), the Noteholders and the Note Insurer and the
rights of Noteholders and the Note Insurer shall continue to be governed by the
terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 9.08 of the Sale and Servicing
Agreement shall at all times retain possession of the Indenture Trustee's
Mortgage Files in the State of Delaware or the State of New York (or, with
respect to the Chase Bank of Texas, N.A., as initial Collateral Agent, in the
State of Texas), except for those Indenture Trustee's Mortgage Files or portions
thereof released to the Servicer or the Note Insurer pursuant to this Indenture,
the Unaffiliated Seller's Agreement or the Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.01, the Indenture Trustee shall have
no duty (A) to see to any recording, filing, or depositing of this Indenture or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording, filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate from funds available in the Distribution
Accounts or (D) to confirm or verify the contents of any reports or certificates
of the Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
Section 6.02. Notice of Default. Immediately after the occurrence of
any Default known to the Indenture Trustee, the Indenture Trustee shall transmit
by mail to the Note
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Insurer and the Depositor notice of each such Default and, within ninety (90)
days after the occurrence of any Default known to the Indenture Trustee, the
Indenture Trustee shall transmit by mail to all Holders of Notes notice of each
such Default, unless such Default shall have been cured or waived; provided,
however, that in no event shall the Indenture Trustee provide notice, or fail to
provide notice of a Default known to the Indenture Trustee in a manner contrary
to the requirements of the Trust Indenture Act. Concurrently with the mailing of
any such notice to the Holders of the Notes, the Indenture Trustee shall
transmit by mail a copy of such notice to the Rating Agencies.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Note Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers.
(e) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Noteholders or the Note Insurer, pursuant to the
provisions of this Indenture, unless such Noteholders or the Note Insurer shall
have offered to the Indenture Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or thereby.
(f) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Noteholders
or the Note Insurer; provided, however, that if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Indenture Trustee, not reasonably assured to the Indenture Trustee by the
security afforded to it by the terms of this Indenture, the Indenture Trustee
may require reasonable indemnity against such cost, expense or liability as a
condition to taking any such action.
(g) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not
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be answerable for anything other than its negligence or willful misconduct in
the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except, with respect to the
Indenture Trustee, the certificates of authentication on the Notes, shall be
taken as the statements of the Trust, and the Owner Trustee, the Indenture
Trustee and the Authenticating Agent assume no responsibility for their
correctness. The Owner Trustee and Indenture Trustee make no representations
with respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Notes. Neither the Indenture Trustee nor the Owner Trustee
shall be accountable for the use or application by the Trust of the Notes or the
proceeds thereof or any money paid to the Trust or upon a Trust Order pursuant
to the provisions hereof.
Section 6.05. May Hold Notes. The Indenture Trustee, any Agent, or any
other agent of the Trust, in its individual or any other capacity, may become
the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13 hereof, may
otherwise deal with the Trust or any Affiliate of the Trust with the same rights
it would have if it were not Indenture Trustee, Agent or such other agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by this Indenture or by law. The Indenture Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Trust and except to the extent of income or other gain on
investments that are obligations of the Indenture Trustee, in its commercial
capacity, and income or other gain actually received by the Indenture Trustee on
investments, which are obligations of others.
Section 6.07. Eligibility, Disqualification. Irrespective of whether
this Indenture is qualified under the TIA, this Indenture shall always have an
indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and
surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject
to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b)
be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by
Moody's; provided, however, that the Indenture Trustee's separate capital and
surplus shall at all times be at least the amount required by TIA Section
310(a)(2). If the Indenture Trustee publishes annual reports of condition of the
type described in TIA Section 310(a)(1), its combined capital and surplus for
purposes of this Section 6.08 shall be as set forth in the latest such report.
If at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.
Section 6.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture
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Trustee pursuant to this Article VI shall become effective until the acceptance
of appointment by the successor Indenture Trustee under Section 6.10 hereof.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Trust, the Note Insurer and each Rating Agency. If an
instrument of acceptance by a successor Indenture Trustee shall not have been
delivered to the Indenture Trustee within thirty (30) days after the giving of
such notice of resignation, the resigning Indenture Trustee may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(c) The Indenture Trustee may be removed at any time by the Note
Insurer or, with the consent of the Note Insurer, by Act of the Holders
representing more than 50% of the Note Principal Balance of the Outstanding
Notes of both Classes, by written notice delivered to the Indenture Trustee and
to the Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 hereof and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.07 hereof after
written request therefor by the Trust or by any Noteholder; or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.08 hereof or shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a
Trust Order, with the consent of the Note Insurer, may remove the Indenture
Trustee, and the Owner Trustee, on behalf of the Trust by a Trust Order, shall
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint a successor
Indenture Trustee acceptable to the Note Insurer and to vest in such successor
Indenture Trustee any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Indenture; provided, however,
if the Owner Trustee, on behalf of the Trust and the Note Insurer do not join in
such appointment within fifteen (15) days after the receipt by it of a request
to do so, or in case an Event of Default has occurred and is continuing, the
Indenture Trustee may petition a court of competent jurisdiction to make such
appointment, or (y) subject to Section 5.15 hereof, and, in the case of a
conflicting interest as described in clause (i) above, unless the Indenture
Trustee's duty to resign has been stayed as provided in TIA Section 310(b), the
Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at
least six (6) months may, on behalf of himself and all others similarly
situated, with the consent of the Note Insurer, petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a Trust
Order shall promptly appoint a successor Indenture
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Trustee acceptable to the Note Insurer. If within one (1) year after such
resignation, removal or incapability or the occurrence of such vacancy a
successor Indenture Trustee shall be appointed by the Note Insurer or, with the
consent of the Note Insurer, by Act of the Holders of Notes representing more
than 50% of the Note Principal Balance of the Outstanding Notes of both Classes
delivered to the Trust and the retiring Indenture Trustee, the successor
Indenture Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Indenture Trustee and supersede the
predecessor Indenture Trustee appointed by the Trust. If no successor Indenture
Trustee shall have been so appointed by the Trust, the Note Insurer or
Noteholders and shall have accepted appointment in the manner hereinafter
provided, any Noteholder who has been a bona fide Holder of a Note for at least
six (6) months may, on behalf of himself and all others similarly situated, with
the consent of the Note Insurer, petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
(f) The Servicer, on behalf of the Trust, shall give notice of each
resignation and each removal of the Indenture Trustee and each appointment of a
successor Indenture Trustee to the Holders of Notes and the Note Insurer. Each
notice shall include the name of the successor Indenture Trustee and the address
of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge
and deliver to the Trust, the Note Insurer and the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee. Notwithstanding the foregoing, on request of the Owner Trustee, on
behalf of the Trust, or the successor Indenture Trustee, such retiring Indenture
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder. Upon request of any such successor
Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall, with the
written consent of the Note Insurer, execute and deliver any and all instruments
for more fully and certainly vesting in and confirming to such successor
Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article VI.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into which
the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Notes have
been
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authenticated, but not delivered, by the Indenture Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Indenture Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Indenture Trustee had
authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, for the purpose of meeting the legal requirements of the TIA
or of any jurisdiction in which any of the Trust Estate may at the time be
located, the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the Note Insurer or of the Holders of
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes with respect to which a co-trustee or separate
trustee is being appointed, with the written consent of the Note Insurer, the
Owner Trustee, on behalf of the Trust, shall for such purpose join with the
Indenture Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of the Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 6.13. If the Owner Trustee, on
behalf of the Trust, does not join in such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an Event of Default
has occurred and is continuing, the Indenture Trustee alone shall have power to
make such appointment. All fees and expenses of any co-trustee or separate
trustee shall be payable by the Trust.
Should any written instrument from the Trust be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Owner Trustee, on behalf of the Trust, with the written consent of the Note
Insurer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) The Notes shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee
hereunder, shall be exercised, solely by the Indenture Trustee.
(b) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee or by the
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Indenture Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations shall
be exercised and performed by such co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in
writing, executed by it, with the concurrence of the Owner Trustee, on
behalf of the Trust, evidenced by a Trust Order, may accept the
resignation of or remove any co-trustee or separate trustee appointed
under this Section 6.13, and, in case an Event of Default has occurred
and is continuing, the Indenture Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Trust, but upon the written request of
the Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall
join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the
manner provided in this Section 6.13.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture
Trustee, or any other such trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
Section 6.14. Authenticating Agents. The Owner Trustee, acting at the
direction of the Majority Certificateholders, shall appoint an Authenticating
Agent with power to act on the Trust's behalf and subject to the direction of
the Majority Certificateholders in the authentication and delivery of the Notes
designated for such authentication and, containing provisions therein for such
authentication (or with respect to which the Owner Trustee acting at the
direction of the Majority Certificateholders, has made other arrangements,
satisfactory to the Indenture Trustee and such Authenticating Agent, for
notation on the Notes of the authority of an Authenticating Agent appointed
after the initial authentication and delivery of such Notes) in connection with
transfers and exchanges under Section 2.06 hereof, as fully to all intents and
purposes as though the Authenticating Agent had been expressly authorized by
Section 2.06 hereof to authenticate and deliver Notes. For all purposes of this
Indenture (other than in connection with the authentication and delivery of
Notes pursuant to Sections 2.05 and 2.11 hereof in connection with their initial
issuance), the authentication and delivery of Notes by the Authenticating Agent
pursuant to this Section 6.14 shall be deemed to be the authentication and
delivery of Notes "by the Indenture Trustee." Such Authenticating Agent shall at
all times be a Person that both meets the requirements of Section 6.07 hereof
for the Indenture Trustee hereunder and has an office for presentation of Notes
in the United States of America. The Indenture Trustee shall initially be the
Authenticating Agent and shall be the Note Registrar as provided in Section 2.06
hereof. The office from which the Indenture Trustee shall perform its duties as
Note Registrar and Authenticating Agent shall be its Corporate Trust Office. Any
Authenticating Agent appointed pursuant to the terms of this Section 6.14 or
pursuant to the
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terms of any supplemental indenture shall deliver to the Indenture Trustee as a
condition precedent to the effectiveness of such appointment an instrument
accepting the trusts, duties and responsibilities of Authenticating Agent and of
Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee for
and holding the Indenture Trustee harmless against, any loss, liability or
expense (including reasonable attorneys' fees) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance,
administration of the trust or exercise of authority by such Authenticating
Agent, Note Registrar or co-Note Registrar.
Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate trust business of
any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14, without the execution or filing of any further act on the part of
the parties hereto or the Authenticating Agent or such successor corporation or
banking association.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trust. The Owner Trustee, acting at the direction
of the Majority Certificateholders, may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Indenture Trustee. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
promptly appoint a successor Authenticating Agent, shall give written notice of
such appointment to the Indenture Trustee, and shall mail notice of such
appointment to all Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e) hereof, to pay
to any Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such
payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04
and 6.05 hereof shall be applicable to any Authenticating Agent.
Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee
shall, on or prior to the Closing Date, execute and deliver the acknowledgement
of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale
and Servicing Agreement.
(b) The Indenture Trustee shall cause the Collateral Agent to (i) on or
prior to the Closing Date, execute and deliver the acknowledgement of receipt of
the Mortgage Loans required by Section 2.06(b)(i) of the Sale and Servicing
Agreement, (ii) on or prior to thirty (30) days following the Closing Date,
execute and deliver the Initial Certificate required by Section 2.06(b)(ii) of
the Sale and Servicing Agreement, and (iii) on or prior to ninety (90) days
following the Closing Date, execute and deliver the Final Certification required
by Section 2.06(b)(iii) of the Sale and Servicing Agreement.
(c) In giving each of the acknowledgements, the Initial Certification
and the Final Certification referred to in clauses (a) and (b) of this Section
6.15, neither the Indenture Trustee
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nor the Collateral Agent shall be under any duty or obligation (i) to inspect,
review or examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereto are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face or (ii) to
determine whether any Mortgage File should include a flood insurance policy, any
rider, addenda, surety or guaranty agreement, power of attorney, buy down
agreement, assumption agreement, modification agreement, written assurance or
substitution agreement.
(d) In the event that the Mortgage Loans are required to be recorded in
accordance with the provisions of Article II of the Sale and Servicing
Agreement, no later than the fifth Business Day of each third month, commencing
in June 1999, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer and the Note Insurer a recordation report dated as of the first
day of such month, identifying those Mortgage Loans for which it has not yet
received (i) an original recorded Mortgage or a copy thereof certified to be
true and correct by the public recording office in possession of such Mortgage
or (ii) an original recorded Assignment of Mortgage to the Indenture Trustee and
any required intervening Assignments of Mortgage or a copy thereof certified to
be a true and correct copy by the public recording office in possession of such
Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses. The Indenture
Trustee shall be entitled to receive the Indenture Trustee Fee on each
Distribution Date as provided herein. The Indenture Trustee also shall be
entitled to (i) payment of or reimbursement for expenses, disbursements and
advances incurred or made by the Indenture Trustee in accordance with any of the
provisions of this Indenture (including, but not limited to, the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ), and (ii) indemnification against losses,
liability and expenses, including reasonable attorney's fees, incurred, arising
out of or in connection with this Indenture, the Notes and the Sale and
Servicing Agreement. The Indenture Trustee and any director, officer, employee
or agent of the Indenture Trustee shall be indemnified by the Trust and held
harmless against any loss, liability or reasonable expense incurred in
connection with this Indenture or the Notes, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance by the Indenture Trustee of its duties hereunder. The
obligations of the Servicer and the Trust under this Section 6.16 shall survive
termination of the Trust and payment of the Notes, and shall extend to any
co-Indenture Trustee or separate-Indenture Trustee appointed pursuant to this
Article VI.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and
Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be
furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Distribution Date occurring
closest to six (6) months after the Closing Date and each Distribution Date
occurring at six (6) month intervals thereafter, all information in the
possession or control of the Note Registrar, in such form as the Indenture
Trustee may reasonably require, as to names and addresses of the Holders of
Notes, and (ii) at such other times, as the Indenture Trustee may
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request in writing, within thirty (30) days after receipt by the Note Registrar
of any such request, a list of similar form and content as of a date not more
than ten (10) days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
(b) In addition to furnishing to the Indenture Trustee the Noteholder
lists, if any, required under clause (a) of this Section 7.01, the Note
Registrar shall also furnish all Noteholder lists, if any, required under
Section 3.03 hereof at the times required by such Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list, if any, furnished to the Indenture Trustee as
provided in Section 7.01 hereof and the names and addresses of the Holders of
Notes received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 hereof upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Trust, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60) days
after December 31 of each year (the "reporting date"), commencing with the year
after the issuance of the Notes, (i) the Indenture Trustee shall, if required by
TIA Section 313(a), mail to all Holders a brief report dated as of such
reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee
shall, to the extent not set forth in the Indenture Trustee's Remittance Report
pursuant to Section 2.08(d) hereof, also mail to Holders of Notes and the Note
Insurer with respect to which it has made advances, any reports with respect to
such advances that are required by TIA Section 313(b)(2); and, the Indenture
Trustee shall also mail to Holders of Notes and the Note Insurer any reports
required by TIA Section 313(b)(1). For purposes of the information required to
be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1)
(if applicable), or 313(b)(2), the principal amount of indenture securities
outstanding on the date as of which such information is provided shall be the
Note Principal Balance of the then Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Holders of Notes and the Note Insurer be filed
by the Indenture Trustee with the Commission and with each securities exchange
upon which the Notes are listed. The Servicer, on behalf of the Trust, will
notify the Indenture Trustee when the Notes are listed on any securities
exchange.
Section 7.04. Reports by Trust. The Servicer, on behalf of the Trust,
(a) shall deliver to the Indenture Trustee within fifteen (15) days after the
Trust is required to file the same with the Commission copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules
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and regulations prescribe) that the Trust is required to file with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, and (b) shall also comply with the other provisions of TIA
Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust
hereby directs the Indenture Trustee to establish, on or before the Closing
Date, for each Class of Notes, at its Corporate Trust Office, one or more
Eligible Accounts that shall collectively be the "Distribution Account" for such
Class. The Indenture Trustee shall promptly deposit in the related Distribution
Account (i) the Servicer Remittance Amount for the related Pool received by it
from the Servicer on the Servicer Distribution Date pursuant to the Sale and
Servicing Agreement, (ii) any other funds from any deposits for such Pool to be
made by the Servicer pursuant to the Sale and Servicing Agreement, (iii) any
amount for such Pool required to be deposited in such Distribution Account
pursuant to this Section 8.01, (iv) all amounts for such Pool received pursuant
to Section 8.03 hereof, (v) any amount for such Pool required to be deposited
pursuant to Section 8.05 hereof, (vi) on each Distribution Date, in accordance
with the Servicer Remittance Report, the Shortfall Amount for the related Class,
until paid in full, first, from the Distribution Account relating to the other
Class of Notes, to the extent of the Net Monthly Excess Cashflow from the other
Pool of Mortgage Loans remaining after payment of any Net Mortgage Loan Interest
Shortfalls for such other Pool, second, from the Cross-collateralization Reserve
Account relating to this Class of Notes, and third, from the
Cross-collateralization Reserve Account relating to the other Class of Notes,
and (vii) all other amounts for such Pool received for deposit in such
Distribution Account, including the payment of any Loan Repurchase Price for a
Mortgage Loan in such Pool received by the Indenture Trustee. All amounts that
are deposited from time to time in a Distribution Account are subject to
withdrawal by the Indenture Trustee for the purposes set forth in Sections 8.02
hereof. All funds withdrawn from a Distribution Account pursuant to Section 8.02
hereof for the purpose of making payments to the Holders of Notes shall be
applied in accordance with Sections 3.03 and 8.02 hereof.
(b) The Trust hereby directs the Indenture Trustee to establish for
each Class of Notes, at its Corporate Trust Office, an Eligible Account which
shall be the "Pre-Funding Account" for such Class of Notes. On the Closing Date,
the Indenture Trustee shall deposit the Original Pre-Funded Amount for each
Class of Notes in the related Pre-Funding Account from the proceeds of the sale
of the related Class of Notes. The Indenture Trustee shall withdraw and
distribute or cause to be distributed funds on deposit therein only at the times
specified below, based on written instructions provided by the Servicer or other
party as indicated:
(i) on any Subsequent Transfer Date, the Unaffiliated Seller
shall instruct in writing the Indenture Trustee to withdraw from the
related Pre-Funding Account an amount equal to 100% of the aggregate
Principal Balances as of the related Subsequent Cut-Off Date of the
Subsequent Mortgage Loans sold to the Trust in respect of the related
Pool and pledged to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, on such Subsequent Transfer Date and
pay such amount to or upon the order of the Unaffiliated Seller upon
satisfaction of the conditions set forth in Section 2.14 hereof
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with respect to such transfer; the Indenture Trustee may conclusively
rely on such written instructions from the Unaffiliated Seller;
(ii) if the Pre-Funding Amount for a Class of Notes (exclusive
of Pre-Funding Earnings for such Class) has been reduced to $100,000 or
less by the April 1999 Distribution Date, then, on such Distribution
Date, after giving effect to any reductions in the related Pre-Funding
Account on such date, the Indenture Trustee shall withdraw, from the
related Pre-Funding Account on such date and deposit in the
Distribution Account relating to such Class, the amount on deposit in
such Pre-Funding Account, other than any Pre-Funding Earnings, for
payment to the related Noteholders as a prepayment of principal on such
Distribution Date;
(iii) if any amounts remain on deposit in either Pre-Funding
Account at the close of business on April 30, 1999, the Indenture
Trustee shall withdraw, from such Pre-Funding Account on the following
Distribution Date and deposit in the Distribution Account relating to
the related Class, the amount on deposit in such Pre-Funding Account,
other than any Pre-Funding Earnings, for payment to the related
Noteholders as a prepayment of principal on such Distribution Date; and
(iv) on the April 1999 and May 1999 Distribution Dates, the
Indenture Trustee shall transfer from each Pre-Funding Account to the
related Distribution Account, the Pre-Funding Earnings, if any,
applicable to such Distribution Date.
(c) The Trust hereby directs the Indenture Trustee to establish for
each Class of Notes, at its Corporate Trust Office, an Eligible Account which
shall be the "Capitalized Interest Account" for such Class of Notes. On the
Closing Date, the Indenture Trustee shall deposit the Original Capitalized
Interest Amount for each Class of Notes in the related Capitalized Interest
Account from the proceeds of the sale of the related Class of Notes. The
Indenture Trustee shall withdraw and distribute or cause to be distributed funds
on deposit therein only at the times specified below, based on written
instructions provided by the Servicer or other party as indicated:
(i) on the April 1999 and the May 1999 Distribution Dates, the
Indenture Trustee shall transfer from each Capitalized Interest Account
to the related Distribution Account, the applicable Capitalized
Interest Requirement, if any, for such Class and such Distribution
Date; and
(ii) on the Distribution Date immediately following, or on
which, the amount on deposit in the related Pre-Funding Account is
reduced to zero, any amounts remaining in either Capitalized Interest
Account, after taking into account the transfers in respect of the
Distribution Date described in clause (i) above, shall be paid to the
Unaffiliated Seller.
(d) The Trust hereby directs the Indenture Trustee to establish, on or
before the Closing Date, for each Class of Notes, at its Corporate Trust Office,
an Eligible Account that shall be the "Cross-collateralization Reserve Account"
for such Class. The Indenture Trustee
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shall deposit and withdraw funds in each Cross-collateralization Reserve Account
in accordance with the provisions of Sections 8.01(a) and 8.02(a) hereof.
(e) So long as no Default or Event of Default shall have occurred and
be continuing, amounts held in the Accounts, other than the Note Insurance
Payment Account, shall be invested in Permitted Investments, which Permitted
Investments shall mature no later than the Business Day preceding the
immediately following Distribution Date.
All income or other gains, if any, from investment of moneys deposited
in the Distribution and Collection Accounts shall be for the benefit of the
Servicer and on each Distribution Date, any such amounts may be released from
the Accounts and paid to the Servicer as part of its compensation for acting as
Servicer. Any loss resulting from such investment of moneys deposited in an
Account shall be reimbursed immediately as incurred to the related Account by
the Servicer. Subject to Section 6.01 hereof and the preceding sentence, neither
the Indenture Trustee nor the Servicer shall in any way be held liable by reason
of any insufficiency in the Accounts.
The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any Account held by the Indenture Trustee resulting from
any investment loss on any Permitted Investment included therein (except to the
extent that the Indenture Trustee is the obligor and has defaulted thereon).
(f) Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold
all such money and property received by it as part of the Trust Estate and shall
apply it as provided in this Indenture.
If the Indenture Trustee shall not have received the Servicer
Remittance Amount by close of business on any related Servicer Distribution
Date, the Indenture Trustee shall, unless the Servicer shall have made
provisions satisfactory to the Indenture Trustee for delivery to the Indenture
Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice,
with a copy to the Note Insurer, to the Servicer of its failure to remit such
Servicer Remittance Amount and that such failure, if not remedied by the close
of business on the Business Day after the date upon which such notice is
delivered to the Servicer, shall constitute a Servicer Event of Default under
the Sale and Servicing Agreement. If the Indenture Trustee shall subsequently
receive any such Servicer Remittance Amount by the close of business on such
Business Day, such Servicer Event of Default shall not be deemed to have
occurred. Notwithstanding any other provision hereof, the Indenture Trustee
shall deliver to the Servicer, or its designee or assignee, any Servicer
Remittance Amount received with respect to a Mortgage Loan after the related
Servicer Distribution Date to the extent that the Servicer previously made
payment or provision for payment with respect to such Servicer Remittance Amount
in accordance with this Section 8.01, and any such Servicer Remittance Amount
shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the Sale
and Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described
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above, the Servicer shall fail to remit the Servicer Remittance Amount on any
Servicer Distribution Date, the Indenture Trustee shall deliver a second notice
to the Servicer, the Trust and the Note Insurer by the close of business on the
third Business Day prior to the related Distribution Date indicating that a
Servicer Event of Default occurred and is continuing under the Sale and
Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as
are required of the Indenture Trustee under Article VII of the Sale and
Servicing Agreement. In addition, if a default occurs in any other performance
required under the Sale and Servicing Agreement, the Indenture Trustee may, and
upon the request of the Note Insurer or, with the consent of the Note Insurer,
the Holders of Notes representing more than 50% of the Note Principal Balance of
the Outstanding Notes of both Classes shall, take such action as may be
appropriate to enforce such payment or performance including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and to proceed thereafter as provided in Article V hereof.
Section 8.02. Distributions; Statements. On each Distribution Date,
unless the Notes have been declared due and payable pursuant to Section 5.02
hereof and moneys collected by the Indenture Trustee are being applied in
accordance with Section 5.07 hereof, Available Funds on deposit in each
Distribution Account on any Distribution Date or Redemption Date shall be
withdrawn from such Distribution Account, in the amounts required (based solely
on the Servicer's Remittance Report delivered to the Indenture Trustee on or
before such Distribution Date), for application on such Distribution Date in
respect of payments relating to the applicable Pool of Mortgage Loans and the
related Class of Notes as follows:
(i) to the Indenture Trustee, an amount equal to the Indenture
Trustee Fees then due to it with respect to the related Class of Notes;
(ii) from amounts then on deposit in the related Distribution
Account (excluding any Insured Payments), to the Note Insurer, the
lesser of (x) the excess of (i) the amount then on deposit in such
Distribution Account over (ii) the Insured Distribution Amount for such
Pool on such Distribution Date and (y) the sum of the amount of all
Reimbursement Amounts relating to such Class of Notes which have not
been previously paid as of such Distribution Date and any other amounts
relating to such Class then due to the Note Insurer pursuant to the
Insurance Agreement;
(iii) from amounts then on deposit in the related Distribution
Account, to the Holders of the related Class of Notes, the Distribution
Amount for such Class;
(iv) from amounts then on deposit in the related Distribution
Account, to the Holders of the related Class of Notes, the amount of
any Net Mortgage Loan Interest Shortfalls for such Class;
(v) from amounts then on deposit in the related Distribution
Account, to the Cross-collateralization Reserve Account relating to the
other Class of Notes, the Reserve Payment Amount for such Class;
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(vi) following the making by the Indenture Trustee of all
allocations, transfers and disbursements described above, from amounts
then on deposit in the related Distribution Account, the Indenture
Trustee shall distribute to the Holders of the related Trust
Certificates, the amount remaining on such Distribution Date, if any.
Section 8.03. Claims against the Note Insurance Policy. (a) Within two
(2) Business Days of receipt of each Servicer Remittance Report, the Indenture
Trustee shall determine with respect to the immediately following Distribution
Date, the amount to be on deposit in each Distribution Account on such
Distribution Date as a result of the (i) Servicer's remittance of the Servicer
Remittance Amount on the related Servicer Distribution Date, and (ii) any
transfers to each Distribution Account made from the related Capitalized
Interest Account and/or the related Pre-Funding Account relating to such
Distribution Date pursuant to Section 8.01 hereof, excluding the amount of any
Insured Payment and prior to the application of the amounts described in clauses
(i) through (vi) of Section 8.02 hereof for the related Distribution Date.
(b) If on any Distribution Date there is an Available Funds Shortfall
for either Pool, the Indenture Trustee shall complete a Notice in the form of
Exhibit A to the Note Insurance Policy and submit such notice to the Note
Insurer no later than 12:00 noon New York City time on the second Business Day
preceding such Distribution Date as a claim for an Insured Payment in an amount
equal to such Available Funds Shortfall for such Pool.
(c) The Indenture Trustee shall establish a separate Eligible Account
for the benefit of Holders of the Notes and the Note Insurer referred to herein
as the "Note Insurance Payment Account" over which the Indenture Trustee shall
have exclusive control and sole right of withdrawal. The Indenture Trustee shall
deposit upon receipt any amount paid under the Note Insurance Policy in the Note
Insurance Payment Account and distribute such amount only for purposes of
payment to the Noteholders of the related Pool of the Insured Distribution
Amount for such Pool for which a claim was made and such amount may not be
applied to satisfy any costs, expenses or liabilities of the Servicer, the
Indenture Trustee or the Trust. Amounts paid under the Note Insurance Policy, to
the extent needed to pay the Insured Distribution Amount shall be transferred to
the related Distribution Account on the related Distribution Date and disbursed
by the Indenture Trustee to the Noteholders in accordance with Section 8.02. It
shall not be necessary for such payments to be made by checks or wire transfers
separate from the checks or wire transfers used to pay the Insured Distribution
Amount with other funds available to make such payment. However, the amount of
any payment of principal or of interest on the Notes to be paid from funds
transferred from the Note Insurance Payment Account shall be noted as provided
in subsection (d) of this Section 8.03 in the Note Register and in the Indenture
Trustee's Remittance Report. Funds held in the Note Insurance Payment Account
shall not be invested. Any funds remaining in the Note Insurance Payment Account
on the first Business Day following a Distribution Date shall be returned to the
Note Insurer pursuant to the written instructions of the Note Insurer by the end
of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Note from moneys
received under the Note Insurance Policy. The Note Insurer shall have the right
to inspect such records at
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reasonable times during normal business hours upon one (1) Business Day's prior
notice to the Indenture Trustee.
(e) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Insured Payment has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so notify the Note Insurer, shall comply with
the provisions of the Note Insurance Policy to obtain payment by the Note
Insurer of such voided Insured Payment, and shall, at the time it provides
notice to the Note Insurer, notify, by mail to the Noteholders of the affected
Notes that, in the event any Noteholder's Insured Payment is so recovered, such
Noteholder will be entitled to payment pursuant to the Note Insurance Policy, a
copy of which shall be made available through the Indenture Trustee, the Note
Insurer or the Note Insurer's fiscal agent, if any, and the Indenture Trustee
shall furnish to the Note Insurer or its fiscal agent, if any, its records
evidencing the payments which have been made by the Indenture Trustee and
subsequently recovered from the Noteholders, and dates on which such payments
were made.
(f) The Indenture Trustee shall promptly notify the Note Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Indenture Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law (a "Preference Claim") of any distribution made with respect to the
Notes. Each Noteholder, by its purchase of Notes, the Servicer and the Indenture
Trustee agree that, the Note Insurer (so long as no Note Insurer Default exists)
may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to such Preference Claim and (ii) the posting of any surety,
supersedeas or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Note Insurer shall be subrogated to, and each
Noteholder, the Servicer and the Indenture Trustee hereby delegate and assign to
the Note Insurer, to the fullest extent permitted by law, the rights of the
Servicer, the Indenture Trustee and each Noteholder in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to any
adversary proceeding or action with respect to any court order issued in
connection with any such Preference Claim.
(g) The Indenture Trustee shall, upon retirement of the Notes, furnish
to the Note Insurer a notice of such retirement, and, upon retirement of the
Notes and the expiration of the term of the Note Insurance Policy, surrender the
Note Insurance Policy to the Note Insurer for cancellation.
(h) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests hereunder without limiting the rights or
affecting the interests of the Noteholders as otherwise set forth herein.
(i) Each Noteholder, by its purchase of Notes, and the Indenture
Trustee hereby agree that, unless a Note Insurer Default exists and is
continuing, the Note Insurer shall have the right to direct all matters relating
to the Notes in any proceeding in a bankruptcy of the Trust,
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including without limitation any proceeding relating to a Preference Amount and
the posting of any surety or Note pending any such appeal.
(j) Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Notes which is made with moneys
received pursuant to the terms of the Note Insurance Policy shall not be
considered payment of the Notes from the Trust. The Trust and the Indenture
Trustee acknowledge, and each Holder by its acceptance of a Note agrees, that
without the need for any further action on the part of the Note Insurer, the
Trust, the Indenture Trustee or the Note Registrar (x) to the extent the Note
Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Notes to the Holders of such Notes, the Note Insurer will be
fully subrogated to, and each Noteholder, the Trust and the Indenture Trustee
hereby delegate and assign to the Note Insurer, to the fullest extent permitted
by law, the rights of such Holders to receive such principal and interest from
the Trust, including, without limitation, any amounts due to the Noteholders in
respect of securities law violations arising from the offer and sale of the
Notes, and (y) the Note Insurer shall be paid such amounts from the sources and
in the manner provided herein for the payment of such amounts.
Section 8.04. General Provisions Regarding the Distribution Accounts
and Mortgage Loans. (a) Each Distribution Account shall relate solely to the
Notes of the related Class and to the Mortgage Loans in the related Pool,
Permitted Investments and other property securing the related Notes. Funds and
other property in each Distribution Account shall not be commingled with the
other Distribution Account or any other moneys or property of the Trust or any
Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may hold
any funds or other property received or held by it as part of a Distribution
Account in collective accounts maintained by it in the normal course of its
business and containing funds or property held by it for other Persons (which
may include the Trust or an Affiliate); provided, that such accounts are under
the sole control of the Indenture Trustee and the Indenture Trustee maintains
adequate records indicating the ownership of all such funds or property and the
portions thereof held for credit to the related Distribution Account.
(b) If any amounts are needed for payment from a Distribution Account
and sufficient uninvested funds are not available therein to make such payment,
the Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in such Distribution Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Indenture
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Distribution Accounts. The Indenture Trustee shall
relinquish possession of such items, or direct its agent to do so, only for
purposes of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the
Distribution Accounts, against delivery of the amount receivable in connection
with any sale.
(d) The Indenture Trustee shall not invest any part of the Trust Estate
in Permitted Investments that constitute uncertificated securities (as defined
in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant
jurisdiction) or in any other book-entry securities
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unless it has received an Opinion of Counsel reasonably satisfactory in form and
substance to the Indenture Trustee setting forth, with respect to each type of
security for which authority to invest is being sought, the procedures that must
be followed to maintain the lien and security interest created by this Indenture
with respect to the Trust Estate.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Unaffiliated Seller set forth in Section
3.03 of the Unaffiliated Seller's Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Unaffiliated Seller to either cure,
repurchase or substitute for such Mortgage Loan as provided in Section 3.05 of
the Unaffiliated Seller's Agreement. Upon any purchase of or substitution for a
Deleted Mortgage Loan by the Unaffiliated Seller in accordance with Section 3.05
of the Unaffiliated Seller's Agreement, the Indenture Trustee shall cause the
Collateral Agent to deliver the Indenture Trustee's Mortgage File relating to
such Deleted Mortgage Loan to the Unaffiliated Seller, and the Trust, the
Collateral Agent and the Indenture Trustee shall execute such instruments of
transfer as are necessary to convey title to such Deleted Mortgage Loan to the
Unaffiliated Seller from the lien of this Indenture.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Distribution Date, the Indenture Trustee shall
deliver the written reports required by Section 2.08(d) to Noteholders of record
as of the related Record Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Indenture Trustee's Remittance Reports and other reports delivered since the
Closing Date pursuant to Section 2.08(d) hereof, (c) any Officers' Certificates
delivered to the Indenture Trustee since the Closing Date as described in the
Indenture and (d) any Accountants' reports delivered to the Indenture Trustee
since the Closing Date as required under the Sale and Servicing Agreement.
Copies of any and all of the foregoing items will be available from the
Indenture Trustee upon request; however, the Indenture Trustee will be permitted
to require payment of a sum sufficient to cover the reasonable costs and
expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid.
Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate to
the Trust (other than any cash held for the payment of the Notes pursuant to
Section 3.03 or 4.02 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder, enter into or consent to any
amendment or supplement to the Sale and Servicing Agreement for the purpose of
increasing the obligations or duties of any party other than the Indenture
Trustee or the Holders of the Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation of satisfaction of
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the Rating Agency Condition or (ii) if its own rights, duties or immunities
would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and
Servicing Agreement. As is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer the Mortgage Files for such Mortgage Loan upon receipt by the
Indenture Trustee and the Collateral Agent on or prior to the date such release
is to be made of:
(a) such Officer's Certificates, if any, as are required by
the Sale and Servicing Agreement; and
(b) a Request for Release, executed by the Servicer, providing
that the Servicer will hold or retain the Indenture Trustee's Mortgage
Files in trust for the benefit of the Indenture Trustee, the Note
Insurer and the Holders of Notes.
Section 8.10. Servicer as Agent. In order to facilitate the servicing
of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of
the Mortgage Loans has been appointed by the Trust to retain, in accordance with
the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into
the related Distribution Account on or prior to the related Servicer
Distribution Date.
Section 8.11. Termination of Servicer. In the event of an event of the
occurrence of a Servicer Event of Default specified in Section 7.01 of the Sale
and Servicing Agreement, the Indenture Trustee may, with the consent of the Note
Insurer or, with the prior written consent of the Note Insurer, the Holder of
Notes representing not less than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes, and shall, upon the direction of the Note
Insurer (or as otherwise provided in the Sale and Servicing Agreement),
terminate the Servicer as provided in Section 7.01 of the Sale and Servicing
Agreement. If the Indenture Trustee terminates the Servicer, the Indenture
Trustee shall, pursuant to Section 7.02 of the Sale and Servicing Agreement,
assume the duties of the Servicer or appoint a successor Servicer acceptable to
the Trust, the Note Insurer and the Rating Agencies and meeting the requirements
set forth in the Sale and Servicing Agreement.
Section 8.12. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to be
taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with
releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
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Section 8.13. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Note Insurer, appoint one or more Collateral Agents to hold all
or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture
Trustee. Such Collateral Agent shall meet the requirements of Article IX of the
Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be
governed by said Article IX. Chase Bank of Texas, N.A. is hereby appointed as
the initial Collateral Agent hereunder.
Section 8.14. Rights of the Note Insurer to Exercise Rights of
Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Noteholders under this Indenture, without any further consent of
the Noteholders, including, without limitation:
(a) the right to require the Servicer to effect foreclosures
upon Mortgage Loans upon failure of the Servicer to do so;
(b) the right to require the Unaffiliated Seller to repurchase
or substitute for Deleted Mortgage Loans pursuant to Section 8.05;
(c) the right to direct the actions of the Indenture Trustee
during the continuance of an Event of Default; and
(d) the right to vote on proposed amendments to this
Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default
exists, the rights specifically set forth above may be exercised by the
Noteholders only with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 hereof and notwithstanding
any provision in this Indenture to the contrary, so long as a Note Insurer
Default has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Note Insurer.
All notices, statements, reports, certificates or opinions required by
this Indenture to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note
Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of
the Noteholders and the Note Insurer, and all references in this Indenture and
in the Notes to the benefit of Holders of the Notes shall be deemed to include
the Note Insurer (provided there does not exist a Note Insurer Default).
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the Holders of
any Notes, the Trust and the Indenture Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(a) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(b) to add to the conditions, limitations and restrictions on
the authorized amount, terms and purposes of the issuance,
authentication and delivery of any Notes, as herein set forth,
additional conditions, limitations and restrictions thereafter to be
observed;
(c) to evidence the succession of another Person to the Trust
to the extent permitted herein, and the assumption by any such
successor of the covenants of the Trust herein and in the Notes
contained;
(d) to add to the covenants of the Trust, for the benefit of
the Holders of all Notes and the Note Insurer, or to surrender any
right or power herein conferred upon the Trust;
(e) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to amend any other provisions with respect to
matters or questions arising under this Indenture, which shall not be
inconsistent with the provisions of this Indenture, provided that such
action shall not adversely affect in any material respect the interests
of the Holders of the Notes or the Holders of the Trust Certificates;
provided, that the amendment shall not be deemed to adversely affect in
any material respect the interests of the Holders of the Notes and the
Note Insurer if the Person requesting the amendment obtains written
confirmation of the satisfaction of the Rating Agency Condition; or
(f) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly required by the TIA.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Insurer and with the consent of Holders of Notes
representing not less than a majority of the Note Principal Balance of all
Outstanding Notes of both Classes by Act of said Holders delivered to the Trust
and the Indenture Trustee, the Trust and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture;
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provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(a) change any Distribution Date or the Final Stated Maturity
Date of the Notes or, with respect to the Notes, reduce the Note
Principal Balance thereof, the Note Rate thereon or the Redemption
Price with respect thereto, change the earliest date on which any Note
may be redeemed at the option of the Servicer, change any place of
payment where, or the coin or currency in which, any Note or any
interest thereon is payable, or impair the right to institute suit for
the enforcement of the payment of any installment of interest due on
any Note on or after the Final Stated Maturity Date thereof or for the
enforcement of the payment of the entire remaining unpaid principal
amount of any Note on or after the Final Stated Maturity Date (or, in
the case of redemption, on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(c) modify any of the provisions of this Section 9.02 or
Sections 5.13 or 5.17(b) hereof, except to increase any percentage
specified therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(d) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(e) permit the creation of any lien other than the lien of
this Indenture with respect to any part of the Trust Estate or
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
afforded by the lien of this Indenture;
(f) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the Interest Distribution Amount
or Principal Distribution Amount for any Distribution Date and any
Class (including the calculation of any of the individual components of
such amounts) or to affect rights of the Holders of the Notes to the
benefits of any provisions for the mandatory redemption of Notes
contained herein; or
(g) incur any indebtedness, other than the Notes, that would
cause the Trust or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
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It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Trust and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties or immunities under this Indenture or
otherwise. The Servicer, on behalf of the Trust, shall cause executed copies of
any supplemental indentures to be delivered to the Note Insurer and the Rating
Agencies.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes to which such
supplemental indenture relates that have theretofore been or thereafter are
authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the TIA as then in effect so long as this Indenture shall then be qualified
under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Owner Trustee, acting at the
direction of the Majority Certificateholders, shall so determine, new Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Owner
Trustee, acting at the direction of the Majority Certificateholders, to any such
supplemental indenture may be prepared by the Servicer and executed by the Owner
Trustee, acting at the direction of the Majority Certificateholders, on behalf
of the Trust, and authenticated and delivered by the Indenture Trustee in
exchange for Outstanding Notes.
Section 9.07. Amendments to Governing Documents. The Indenture Trustee
shall, upon a Trust Request, consent to any proposed amendment to the Trust's
governing documents, or an amendment to or waiver of any provision of any other
document relating to the
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Trust's governing documents, such consent to be given without the necessity of
obtaining the consent of the Holders of any Notes upon receipt by the Indenture
Trustee of:
(a) an Officer's Certificate, to which such proposed amendment
or waiver shall be attached, stating that such attached copy is a true
copy of the proposed amendment or waiver and that all conditions
precedent to such consent specified in this Section 9.07 have been
satisfied; and
(b) written confirmation of the satisfaction of the Rating
Agency Condition with respect to such proposed amendment.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) At the option of the Servicer, and at
its sole cost and expense, (x) this Indenture may be terminated and all the
Notes may be redeemed in whole, but not in part, on any Redemption Date after
the Clean-Up Call Date by purchase of all of the outstanding Mortgage Loans and
REO Properties at a price equal the Termination Price or (y) the Class A-1 Notes
or the Class A-2 Notes may be redeemed in whole, but not in part, on any
Redemption Date after the related Note Clean-Up Call Date at the applicable Note
Termination Price.
(b) Any such purchase or redemption shall be accomplished by deposit
into the related Distribution Account or Accounts of the applicable Redemption
Price on the Servicer Distribution Date preceding the Redemption Date. The
amounts on deposit therein shall be distributed by the Indenture Trustee on such
Redemption Date in accordance with the priority set forth in Section 8.02
hereof. No termination or redemption is permitted without the prior written
consent of the Note Insurer if it would result in a draw on the Note Insurance
Policy.
(c) Notice of the election to redeem any Notes pursuant to subsection
(a) of this Section 10.01 shall be furnished to the Indenture Trustee not later
than thirty (30) days prior to the Distribution Date selected for such
redemption. Upon receiving such notice, the Indenture Trustee shall notify each
Holder of such Notes and Note Insurer of such election pursuant to Section 10.02
hereof. Any expenses associated with the compliance of the provisions hereof in
connection with a redemption of the Notes shall be paid by the Servicer.
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(d) Upon the redemption of all of the Notes, the Mortgage Loans in the
Trust Estate shall be released and delivered to the Servicer. In the case of a
redemption of the Class A-2 Notes only, the Mortgage Loans in Pool II will not
be released from the lien of the Indenture until such time as the Class A-1
Notes are either redeemed or terminated. In such case, the Pool II Mortgage
Loans will continue to be pledged to the Indenture Trustee, on behalf of the
Noteholders and the Note Insurer, to secure the obligations of the Trust with
respect to the Class A-1 Notes. In the case of a redemption of the Class A-1
Notes only, the Mortgage Loans in Pool I will not be released from the lien of
the Indenture until such time as the Class A-2 Notes are either redeemed or
terminated. In such case, the Pool I Mortgage Loans will continue to be pledged
to the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, to
secure the obligations of the Trust with respect to the Class A-2 Notes.
(e) Upon receipt of the notice from the Servicer of its election to
redeem any Notes pursuant to Section 10.01(a) hereof, the Indenture Trustee
shall prepare and deliver to the Trust, the Servicer and the Note Insurer, no
later than the related Redemption Date, an Indenture Trustee's Remittance Report
stating therein that it has determined that the conditions to redemption at the
option of the Servicer have been satisfied and setting forth the amount, if any,
to be withdrawn from each Distribution Account and paid to the Servicer as
reimbursement for Nonrecoverable Advances in respect of the related Mortgage
Loans and such other information as may be required to accomplish such
redemption.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust by
first class mail, postage prepaid, mailed not less than ten days prior to the
Redemption Date to each Holder of Notes to be redeemed, such Holders being
determined as of the Record Date for such Distribution Date, and to the Note
Insurer.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price at which the Notes of such Class will be
redeemed; and
(c) the fact of payment in full on such Notes, the place where such
Notes are to be surrendered for payment of the Redemption Price (which shall be
the office or agency of the Trust to be maintained as provided in Section 3.02
hereof), and that no interest shall accrue on such Note for any period after the
date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Notes to
be redeemed shall, on the applicable Redemption Date, become due and payable at
the Redemption Price and (unless the Trust shall default in the payment of the
Redemption Price) no interest shall accrue on such Redemption Price for any
period after such Redemption Date; provided, however, that if such
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Redemption Price is not paid on the Redemption Date, the Note Principal Balance
shall, until paid, bear interest from the Redemption Date at the applicable Note
Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any action
under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(b) Every certificate, opinion or letter with respect to compliance
with a condition or covenant provided for in this Indenture, including one
furnished pursuant to specific requirements of this Indenture relating to a
particular application or request (other than certificates provided pursuant to
TIA Section 314(a)(4)) shall include and shall be deemed to include (regardless
of whether specifically stated therein) the following:
(i) a statement that each individual signing such certificate,
opinion or letter has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of the Trust may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer
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knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any Opinion of Counsel may be
based on the written opinion of other counsel, in which event such Opinion of
Counsel shall be accompanied by a copy of such other counsel's opinion and shall
include a statement to the effect that such counsel believes that such counsel
and the Indenture Trustee may reasonably rely upon the opinion of such other
counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Trust
shall deliver any document as a condition of the granting of such application,
or as evidence of the Trust's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Trust to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(ii) hereof.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Trust, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Trust's right to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d)
hereof.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Trust. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution
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thereof. Whenever such execution is by an officer of a corporation or a member
of a partnership on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer
and Trust. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Trust
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Indenture
Trustee at its Corporate Trust Office; or
(b) the Trust by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder (except as provided in
Section 5.01(c) and (d)) hereof if in writing and mailed, first-class
postage prepaid, to the Trust addressed to it at ABFS Mortgage Loan
Trust 1999-1, in care of First Union Trust Company, National
Association, One Rodney Square, 920 King Street, Suite 102, Wilmington,
Delaware, 19801, Attention: Corporate Trust Administration, or at any
other address previously furnished in writing to the Indenture Trustee
by the Trust.
(c) the Note Insurer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to Financial Security
Assurance Inc. addressed to it at 350 Park Avenue, New York, New York,
10022, Attention: Surveillance Department (in each case in which notice
or other communication to the Note Insurer refers to an Event of
Default, a claim on the Note Insurance Policy or with respect to which
failure on the part of the Note Insurer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of each of the
General Counsel and the Head--Financial Guaranty Group and shall be
marked to indicate "URGENT MATERIAL ENCLOSED"), or at any other address
previously furnished in writing to the Indenture Trustee by the Note
Insurer; or
(d) the Depositor by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage paid, to Prudential Securities
Secured Financing Corporation c/o Prudential Securities Incorporated,
One New York Plaza, New York, New York 10292; Attention: Managing
Director - Asset-Backed Finance Group, or at any other address
previously furnished in writing to the Indenture Trustee by the
Depositor; or
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(e) the Unaffiliated Seller or the Servicer by the Indenture
Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage paid, to such
party, in care of American Business Financial Services, Inc.,
BalaPointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala
Cynwyd, Pennsylvania, 19004, Attention: General Counsel or at any other
address previously furnished in writing to the Indenture Trustee by the
Unaffiliated Seller or the Servicer; or
(f) the Underwriter by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to Prudential Securities Incorporated,
One New York Plaza, New York, New York 10292, Attention: Managing
Director - Asset-Backed Finance, or at any other address previously
furnished in writing to the Indenture Trustee by the Underwriter.
Notices required to be given to the Rating Agencies by the Trust or the
Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to (i) in the case of Moody's, at the following
address: Moody's Investors Service, Inc., Residential Mortgage Monitoring
Department, 99 Church Street, New York, New York 10007 and (ii) in the case of
S&P, at the following address: Standard & Poor's Ratings Services, 26 Broadway,
15th Floor, New York, New York, 10004, Attention: Asset-Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designed by written notice to the other parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
60
<PAGE>
Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
Section 11.07. Conflict With Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether so
expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any
Distribution Date, Redemption Date or any other date on which principal of or
interest on any Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of any such
Distribution Date, Redemption Date or other date for the payment of principal of
or interest on any Note and no interest shall accrue for the period from and
after any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
61
<PAGE>
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or
3.06 hereof.
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Trust or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Trust
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note,
hereby covenant and agree that they will not at any time institute against the
Unaffiliated Seller or the Trust, or join in any institution against the
Unaffiliated Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents. In addition, the Indenture Trustee will on behalf of the Holders of
the Notes, (a) file a written objection to any motion or other proceeding
seeking the substantive consolidation of any Originator with the Unaffiliated
Seller or the Trust, (b) file an appropriate memorandum of points and
authorities or other brief in support of such objection, or (c) endeavor to
establish at the hearing on such objection that the substantive consolidation of
such entity would be materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following the
termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the Note
Insurer, during the Trust's normal business hours, to examine all of books of
account, records, reports and other papers of the Trust, to make copies and
extracts therefrom, to cause such books to be audited by Independent Accountants
selected by the Indenture Trustee or the Note Insurer, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Trust hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as
62
<PAGE>
often as may be reasonably requested. Any expense incident to the exercise by
the Indenture Trustee of any right under this Section 11.18 shall be borne by
the Trust.
Section 11.19. Usury. The amount of interest payable or paid on any
Note under the terms of this Indenture shall be limited to an amount that shall
not exceed the maximum nonusurious rate of interest allowed by the applicable
laws of the United States or the State of New York (whichever shall permit the
higher rate), that could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Note exceeds
the Highest Lawful Rate, the Trust stipulates that such excess amount will be
deemed to have been paid as a result of an error on the part of both the
Indenture Trustee, acting on behalf of the Holder of such Note, and the Trust,
and the Holder receiving such excess payment shall promptly, upon discovery of
such error or upon notice thereof from the Trust or the Indenture Trustee,
refund the amount of such excess or, at the option of the Indenture Trustee,
apply the excess to the payment of principal of such Note, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee
for the benefit of Holders of Notes for the use, forbearance or detention of
money shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Notes.
Section 11.20. Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default
exists. At such time as the Notes are no longer Outstanding under this
Indenture, and no amounts owed to the Note Insurer under the Basic Documents
remain unpaid, the Note Insurer's rights under this Indenture shall terminate.
Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as
a third- party beneficiary of this Indenture which shall be binding upon and
inure to the benefit of the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to
its obligations under the Note Insurance Policy, the Noteholders shall succeed
to the Note Insurer's rights hereunder. Without limiting the generality of the
foregoing, all covenants and agreements in this Indenture that expressly confer
rights upon the Note Insurer shall be for the benefit of and run directly to the
Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Indenture.
[Remainder of Page Intentionally Left Blank]
63
<PAGE>
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST 1999-1
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee
under the Trust Agreement
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Indenture Trustee
By: ____________________________________
Name:
Title:
[Signature Page to Indenture]
+++
<PAGE>
EXECUTED COPY
INDENTURE
dated as of March 1, 1999
by and between
ABFS MORTGAGE LOAN TRUST 1999-1,
as Issuer
and
THE BANK OF NEW YORK,
as Indenture Trustee
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ...................................................... 2
Section 1.01. General Definitions ................................. 2
ARTICLE II THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS .................. 2
Section 2.01. Forms Generally ..................................... 2
Section 2.02. Form of Certificate of Authentication ............... 2
Section 2.03. General Provisions With Respect to Principal
and Interest Payment ............................. 3
Section 2.04. Denominations ....................................... 3
Section 2.05. Execution, Authentication, Delivery and Dating ...... 3
Section 2.06. Registration, Registration of Transfer and
Exchange ......................................... 4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes .......... 5
Section 2.08. Payments of Principal and Interest .................. 5
Section 2.09. Persons Deemed Owner ................................ 7
Section 2.10. Cancellation ........................................ 8
Section 2.11. Authentication and Delivery of Notes ................ 8
Section 2.12. Book-Entry Note ..................................... 9
Section 2.13. Termination of Book Entry System .................... 10
Section 2.14. Pledge of Subsequent Mortgage Loans ................. 11
ARTICLE III COVENANTS ...................................................... 13
Section 3.01. Payment of Notes .................................... 13
Section 3.02. Maintenance of Office or Agency ..................... 13
Section 3.03. Money for Note Payments to Be Held In Trust ......... 13
Section 3.04. Existence of Trust .................................. 15
Section 3.05. Protection of Trust Estate .......................... 16
Section 3.06. Opinions as to the Trust Estate ..................... 16
Section 3.07. Performance of Obligations .......................... 17
Section 3.08. Investment Company Act .............................. 17
Section 3.09. Negative Covenants .................................. 17
Section 3.10. Annual Statement as to Compliance ................... 18
Section 3.11. Restricted Payments ................................. 18
Section 3.12. Treatment of Notes as Debt for Tax Purposes ......... 19
Section 3.13. Notice of Events of Default ......................... 19
Section 3.14. Further Instruments and Acts ........................ 19
ARTICLE IV SATISFACTION AND DISCHARGE ...................................... 19
Section 4.01. Satisfaction and Discharge of Indenture ............. 19
Section 4.02. Application of Trust Money .......................... 20
<PAGE>
ARTICLE V DEFAULTS AND REMEDIES ............................................ 21
Section 5.01. Event of Default .................................... 21
Section 5.02. Acceleration of Maturity; Rescission and
Annulment ........................................ 22
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee ................. 23
Section 5.04. Remedies ............................................ 23
Section 5.05. Indenture Trustee May File Proofs of Claim .......... 23
Section 5.06. Indenture Trustee May Enforce Claims Without
Possession of Notes .............................. 24
Section 5.07. Application of Money Collected ...................... 24
Section 5.08. Limitation on Suits ................................. 25
Section 5.09. Unconditional Rights of Noteholders to Receive
Principal and Interest ........................... 26
Section 5.10. Restoration of Rights and Remedies .................. 26
Section 5.11. Rights and Remedies Cumulative ...................... 27
Section 5.12. Delay or Omission Not Waiver ........................ 27
Section 5.13. Control by Noteholders .............................. 27
Section 5.14. Waiver of Past Defaults ............................. 27
Section 5.15. Undertaking for Costs ............................... 28
Section 5.16. Waiver of Stay or Extension Laws .................... 28
Section 5.17. Sale of Trust Estate ................................ 28
Section 5.18. Action on Notes ..................................... 30
Section 5.19. No Recourse to Other Trust Estates or Other
Assets of the Trust .............................. 30
Section 5.20. Application of the Trust Indenture Act .............. 30
Section 5.21. Note Insurer Default ................................ 30
ARTICLE VI THE INDENTURE TRUSTEE ........................................... 31
Section 6.01. Duties of Indenture Trustee ......................... 31
Section 6.02. Notice of Default ................................... 32
Section 6.03. Rights of Indenture Trustee ......................... 33
Section 6.04. Not Responsible for Recitals or Issuance of
Notes ............................................ 34
Section 6.05. May Hold Notes ...................................... 34
Section 6.06. Money Held in Trust ................................. 34
Section 6.07. Eligibility, Disqualification ....................... 34
Section 6.08. Indenture Trustee's Capital and Surplus ............. 34
Section 6.09. Resignation and Removal; Appointment of
Successor ........................................ 34
Section 6.10. Acceptance of Appointment by Successor
Indenture Trustee ................................ 36
Section 6.11. Merger, Conversion, Consolidation or Succession
to Business of Indenture Trustee ................. 36
Section 6.12. Preferential Collection of Claims Against
Trust ............................................ 37
Section 6.13. Co-Indenture Trustees and Separate Indenture
Trustees ......................................... 37
Section 6.14. Authenticating Agents ............................... 38
Section 6.15. Review of Mortgage Files ............................ 39
Section 6.16. Indenture Trustee Fees and Expenses ................. 40
<PAGE>
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS ................................. 40
Section 7.01. Note Registrar to Furnish Indenture Trustee
Names and Addresses of Noteholders ............... 40
Section 7.02. Preservation of Information; Communications
to Noteholders ................................... 41
Section 7.03. Reports by Indenture Trustee ........................ 41
Section 7.04. Reports by Trust .................................... 41
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL,
AND RELEASES ............................................................ 42
Section 8.01. Accounts; Investment; Collection of Moneys .......... 42
Section 8.02. Distributions; Statements ........................... 45
Section 8.03. Claims against the Note Insurance Policy ............ 46
Section 8.04. General Provisions Regarding the Distribution
Accounts and Mortgage Loans ...................... 48
Section 8.05. Releases of Deleted Mortgage Loans .................. 49
Section 8.06. Reports by Indenture Trustee to Noteholders;
Access to Certain Information .................... 49
Section 8.07. Release of Trust Estate ............................. 49
Section 8.08. Amendment to Sale and Servicing Agreement ........... 49
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale
and Servicing Agreement .......................... 50
Section 8.10. Servicer as Agent ................................... 50
Section 8.11. Termination of Servicer ............................. 50
Section 8.12. Opinion of Counsel .................................. 50
Section 8.13. Appointment of Collateral Agents .................... 51
Section 8.14. Rights of the Note Insurer to Exercise Rights
of Noteholders ................................... 51
Section 8.15. Trust Estate and Accounts Held for Benefit of
the Note Insurer ................................. 51
ARTICLE IX SUPPLEMENTAL INDENTURES ......................................... 52
Section 9.01. Supplemental Indentures Without Consent of
Noteholders ...................................... 52
Section 9.02. Supplemental Indentures With Consent of
Noteholders ...................................... 52
Section 9.03. Execution of Supplemental Indentures ................ 54
Section 9.04. Effect of Supplemental Indentures ................... 54
Section 9.05. Conformity With Trust Indenture Act ................. 54
Section 9.06. Reference in Notes to Supplemental Indentures ....... 54
Section 9.07. Amendments to Governing Documents ................... 54
ARTICLE X REDEMPTION OF NOTES .............................................. 55
Section 10.01. Redemption .......................................... 55
Section 10.02. Form of Redemption Notice ........................... 56
Section 10.03. Notes Payable on Optional Redemption ................ 56
ARTICLE XI MISCELLANEOUS ................................................... 57
Section 11.01. Compliance Certificates and Opinions ................ 57
Section 11.02. Form of Documents Delivered to Indenture
Trustee .......................................... 57
<PAGE>
Section 11.03. Acts of Noteholders ................................. 58
Section 11.04. Notices, etc., to Indenture Trustee, the Note
Insurer and Trust ................................ 59
Section 11.05. Notices and Reports to Noteholders; Waiver of
Notices .......................................... 60
Section 11.06. Rules by Indenture Trustee .......................... 61
Section 11.07. Conflict With Trust Indenture Act ................... 61
Section 11.08. Effect of Headings and Table of Contents ............ 61
Section 11.09. Successors and Assigns .............................. 61
Section 11.10. Separability ........................................ 61
Section 11.11. Benefits of Indenture ............................... 61
Section 11.12. Legal Holidays ...................................... 61
Section 11.13. Governing Law ....................................... 61
Section 11.14. Counterparts ........................................ 61
Section 11.15. Recording of Indenture .............................. 62
Section 11.16. Trust Obligation .................................... 62
Section 11.17. No Petition ......................................... 62
Section 11.18. Inspection .......................................... 62
Section 11.19. Usury ............................................... 63
Section 11.20. Note Insurer Default ................................ 63
Section 11.21. Third-Party Beneficiary ............................. 63
APPENDICES, SCHEDULES AND EXHIBITS
Appendix I Defined Terms
Schedule l Mortgage Loan Schedule
Exhibit A Form of Note
Exhibit B Form of Subsequent Pledge Agreement
Exhibit C Form of Note Insurer Consent for Subsequent Mortgage Loans
<PAGE>
CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.*
Trust Indenture Act of 1939 Indenture Section
- --------------------------- -----------------
Section 310
(a)(1)................................. 6.07
(a)(2)................................. 6.07, 6.08
(a)(3)................................. 6.13
(a)(4)................................. Not Applicable
(a)(5)................................. 6.07
(b).................................... 6.07, 6.09
(c).................................... Not Applicable
Section 311
(a).................................... 6.12
(b).................................... 6.12
(c).................................... Not Applicable
Section 312
(a).................................... 7.01(a), 7.02(a)
(b).................................... 7.02(b)
(c).................................... 7.02(c)
Section 313
(a).................................... 7.03(a)
(b).................................... 7.03(a)
(c).................................... 11.05
(d).................................... 7.03(b)
Section 314
(a)(1)................................. 7.04
(a)(2)................................. 7.04
(a)(3)................................. 7.04
(a)(4)................................. 7.04
(b)(1)................................. 2.11(c), 11.01
(b)(2)................................. 3.06
(c)(1)................................. 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)................................. 2.11(c), 4.01,
8.02(d), 11.01
(c)(3)................................. 8.02(d)
(d)(1)................................. 11.01(a)
(d)(2)................................. 11.01(a)
(d)(3)................................. 11.01(a)
(e).................................... 11.01(b)
- ----------
* This Cross-Reference Table is not part of the Indenture.
<PAGE>
Section 315
(a).................................... 6.01(b), 6.01(c)(1)
(b).................................... 6.02, 11.05
(c).................................... 6.01(a)
(d)(1)................................. 6.01(b), 6.01(c)
(d)(2)................................. 6.01(c)(2)
(d)(3)................................. 6.01(c)(3)
(e).................................... 5.15
Section 316
(a).................................... 5.20
(b).................................... 5.09
(c).................................... 5.20
Section 317
(a)(1)................................. 5.03
(a)(2)................................. 5.05
(b).................................... 3.01
Section 318
(a).................................... 11.07
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT A
FORM OF NOTE
ABFS MORTGAGE LOAN TRUST 1999-1
CLASS A-[1][2] NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE INSURANCE POLICY
AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
-------------------------------------------
Note No.: CUSIP No.:
A-[1][2]-
Class A-1 Original Note Principal Balance: Percentage Interest:
$__________ 100%
Date of Indenture: First Distribution Date:
As of March 1, 1999 April 26, 1999
------------------------------------------
A-1
<PAGE>
ABFS MORTGAGE LOAN TRUST 1999-1
MORTGAGE BACKED NOTES, SERIES 1999-1, CLASS A-[1][2]
ABFS Mortgage Loan Trust 1999-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $__________ (_________________________
Thousand Dollars) payable on each Distribution Date in an amount equal to the
result obtained by multiplying (x) the Percentage Interest of this Note set
forth on the cover page hereof, by (y) the aggregate amount, if any, payable
from the related Distribution Account in respect of principal on the Class
A-[1][2] Notes, pursuant to the Indenture, dated as of March 1, 1999, between
the Trust and The Bank of New York, a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid
Note Principal Balance of this Note shall be due and payable on the earlier of
(i) the Distribution Date occurring in May 2030 (this Note's "Final Stated
Maturity Date"), (ii) the Redemption Date, if any, applicable to this Notes
pursuant to Article X of the Indenture or (iii) the date on which an Event of
Default shall have occurred and be continuing, if the Notes have been declared
to be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. Capitalized terms used but not defined herein are defined in Appendix
I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the
25th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 25th day (each a "Distribution Date"), commencing
on the first Distribution Date specified on the cover page hereof, to the Person
in whose name this Note is registered at the close of business on the applicable
Record Date, in an amount equal to the product of (a) the Percentage Interest
evidenced by this Note and (b) the sum of the amounts to be paid on the Class
A-[1][2] Notes with respect to such Distribution Date, all as more specifically
set forth in the Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon
written request at least five (5) days prior to the related Record Date with
appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Principal Balance of at least $1,000,000), any payment of principal
or interest, other than the final installment of principal or interest, shall be
made by wire transfer to an account in the United States of America designated
by such Holder reasonably satisfactory to the Indenture Trustee.
On each Distribution Date, Noteholders will be entitled to receive
interest payments in an aggregate amount equal to the Current Interest for such
Class for such Distribution Date, together with principal payments in an
aggregate amount equal to the Principal Distribution Amount for such Class for
such Distribution Date, plus, until the Over-collateralization Amount for the
related Pool and such Distribution Date is equal to the Specified
Over-collateralization Amount for such Pool and such Distribution Date, the Net
Monthly Excess Cashflow, if any, for such Pool and such Distribution Date. The
"Note Principal Balance" of a Note as of any date of determination is equal to
the initial Note Principal Balance thereof as of the Closing Date, reduced by
the aggregate of all amounts previously paid with respect to such Note on
account of principal.
A-2
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Trust
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Trust,
designated as the "ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes,
Series 1999-1, Class A-[1][2]," issued under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Trust, the Indenture
Trustee and the Holders of the Notes. Also issued under the Indenture are the
"ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class
A[1][2]." To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
The Class A-[1][2] Notes are and will be equally and ratably secured by
the Mortgage Loans in the Pool [I][II], the other collateral related thereto
pledged as security therefor as provided in the Indenture, and, to the extent
provided in the Indenture, by the Mortgage Loans in Pool [I][II].
As described above, the entire unpaid Note Principal Balance of this
Note shall be due and payable on the earlier of the Final Stated Maturity Date
and any Redemption Date applicable to such Class, pursuant to Article X of the
Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal
Balance of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing if the Indenture Trustee, at the
direction or upon the prior written consent of Financial Security Assurance Inc.
(the "Note Insurer") in the absence of a Note Insurer Default, or the Holders of
the Notes representing not less than 50% of the Note Principal Balance of the
Outstanding Notes (with the prior written consent of the Note Insurer in the
absence of a Note Insurer Default) of both Classes, shall have declared the
Notes to be immediately due and payable in the manner provided in Section 5.02
of the Indenture. All principal payments on the Notes shall be made pro rata to
the Noteholders entitled thereto.
The Note Insurer, in consideration of the payment of the premium and
subject to the terms of the Note Guaranty Insurance Policy (the "Note Insurance
Policy") thereby has unconditionally and irrevocably guaranteed the payment of
the Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i) the
Note Insurer shall be deemed to be the holder of the Notes for certain purposes
specified in the Indenture and will be entitled to exercise all rights of the
Noteholders thereunder, including the rights of Noteholders relating to the
occurrence of, and the remedies with respect to, an Event of Default, without
the consent of such Noteholders, and (ii) the Indenture Trustee may take actions
which would otherwise be at its option or within its discretion, including
actions relating to the occurrence of, and the remedies with respect to, an
Event of Default, only at the direction of the Note Insurer. In addition, on
each Distribution Date, after the Noteholders have been paid all
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amounts to which they are entitled, the Note Insurer will be entitled to be
reimbursed for any unreimbursed Insured Payments, unreimbursed Premium Amounts
(each with interest thereon at the "Late Payment Rate" specified in the
Insurance Agreement) and any other amounts owed under the Note Insurance Policy.
The Trust shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the Note Insurance Policy will be sole source of
payments on the Notes, and each Holder hereof, by its acceptance of this Note,
agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate and the Note Insurance Policy as provided in the
Indenture and (ii) such Holder shall have no recourse to the Trust, the Owner
Trustee, the Indenture Trustee, the Depositor, the Seller, the Servicer or any
of their respective affiliates, or to the assets of any of the foregoing
entities, except the assets of the Trust pledged to secure the Notes pursuant to
the Indenture.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Notwithstanding the foregoing, in the case of Definitive
Notes, upon written request at least five days prior to the related Record Date
with appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Principal Balance of at least $1,000,000), any payment of principal
or interest, other than the final installment of principal or interest, shall be
made by wire transfer to an account in the United States of America designated
by such Holder reasonably satisfactory to the Indenture Trustee. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Trust, will notify the Person who was the Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes.
As provided in the Indenture, the Indenture may be terminated and the
Notes redeemed in whole, but not in part, at the option of the Servicer, on any
Distribution Date on and after the date on which the Aggregate Principal Balance
of all of the Mortgage Loans is less than 10% of the Maximum Collateral Amount
for Pool I and Pool II. As provided in the Indenture,
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either Class of Notes may be redeemed in whole, but not in part, at the option
of the Servicer, on any Distribution Date on and after the date on which the
unpaid Note Principal Balance of such Class of Notes is less than or equal to
10% of the Original Note Principal Balance for such Class of Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Trust pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
In the case of a transfer of a Class A-[1][2] Note, the Note Registrar
shall not register the transfer of this Note unless the Note Registrar has
received a representation letter from the transferee to the effect that either
(i) the transferee is not, and is not acquiring the Note on behalf of or with
the assets of, an employee benefit plan or other retirement plan or arrangement
that is subject to Title I of the Employee Retirement Income Security Act or
1974, as amended, or Section 4975 of the Code or (ii) the acquisition and
holding of this Note by the transferee qualifies for exemptive relief under a
Department of Labor Prohibited Transaction Class Exemption. Each Beneficial
Owner, by acceptance of a beneficial interest herein, shall be deemed to make
one of the foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the
case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Trust or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the
case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees by accepting the benefits
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of the Indenture that such Noteholder or Beneficial Owner will not at any time
institute against American Business Financial Services, Inc. or the Trust, or
join in any institution against American Business Financial Services, Inc. or
the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture, the Trust Agreement, the Unaffiliated Seller's Agreement, the Sale
and Servicing Agreement, the Insurance Agreement and the Indemnification
Agreement (the "Basic Documents").
The Trust has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Trust
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this Note,
the Trust, the Indenture Trustee and any agent of the Trust or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Trust, the Indenture Trustee or any such agent shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Notes under the Indenture at any time
by the Trust with the consent of the Note Insurer and the Holders of Notes
representing a majority of the Note Principal Balance of all Outstanding Notes.
The Indenture also contains provisions permitting the (i) Note Insurer or (ii)
if a Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Principal Balance of Outstanding Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Trust with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Note Insurer or by the
Holder of this Note (or any one or more Predecessor Notes) shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the
Trust under the Indenture.
Initially, each Class of Notes will be represented by one Note
registered in the name of Cede & Co. as nominees of the Clearing Agency. The
Notes will be delivered in denominations as provided in the Indenture and
subject to certain limitations therein set forth. The Notes are exchangeable for
a like aggregate initial Note Principal Balance of Notes of different authorized
denominations, as requested by the Holder surrendering the same.
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<PAGE>
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Trust, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to herein, or
be valid or obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Trust has caused this Instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Dated:
ABFS MORTGAGE LOAN TRUST 1999-1
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By: __________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[1][2] Notes designated above and referred
to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Authenticating Agent
By: __________________________________
Authorized Signatory
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<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: _______________________________*/
Signature Guaranteed:
______________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
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<PAGE>
EXHIBIT B
FORM OF SUBSEQUENT PLEDGE AGREEMENT
This SUBSEQUENT PLEDGE AGREEMENT, dated as of __________, 1999 (the
"Subsequent Transfer Date"), is entered into by and between ABFS MORTGAGE LOAN
TRUST 1999-1, as issuer (the "Trust"), and THE BANK OF NEW YORK, as indenture
trustee (the "Indenture Trustee").
W I T N E S S E T H:
Reference is hereby made to that certain Indenture, dated as of March
1, 1999 (the "Indenture"), by and between the Trust and the Indenture Trustee.
Pursuant to the Indenture, the Trust agreed to pledge, and the Indenture Trustee
agreed to accept, from time to time, a security interest in Subsequent Mortgage
Loans (as defined below). The Indenture provides that each such pledge of
Subsequent Mortgage Loans be evidenced by the execution and delivery of a
Subsequent Pledge Agreement such as this Subsequent Pledge Agreement.
The assets pledged to the Indenture Trustee pursuant to this Subsequent
Pledge Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool
II listed in the Mortgage Loan Schedule attached hereto (including property that
secures a Subsequent Mortgage Loan that becomes an REO Property), including the
related Mortgage Files delivered or to be delivered to the Collateral Agent, on
behalf of the Indenture Trustee, including all payments of principal received,
collected or otherwise recovered after the Subsequent Cut-Off Date for each
Subsequent Mortgage Loan, all payments of interest accruing on each Subsequent
Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and
all other proceeds received in respect of such Subsequent Mortgage Loans, (b)
the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I and $_________ in Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Subsequent Pledge
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.
Section 2. Pledge. In consideration of $__________ (such amount being
approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans) from the Indenture Trustee, the Trust hereby pledges to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, without
recourse, all of the Trust's right, title and interest
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<PAGE>
in, to, and under the Subsequent Mortgage Loans and related assets described
above, whether now existing or hereafter arising.
In connection with such pledge, the Originators and the Unaffiliated
Seller shall satisfy the document delivery requirements set forth in Section
2.05 of the Sale and Servicing Agreement with respect to each Subsequent
Mortgage Loan.
In connection with such pledge, the Servicer shall make a Special
Advance of $________ as set forth in Section 5.18(b) of the Sale and Servicing
Agreement.
Section 3. Representations and Warranties Concerning the Subsequent
Mortgage Loans. With respect to each Subsequent Mortgage Loan, the Trust hereby
assigns each of the representations and warranties made by the Originators and
the Unaffiliated Seller in Section 3 of the Subsequent Transfer Agreement, for
the benefit of the Indenture Trustee, the Note Insurer and the Noteholders, on
which the Indenture Trustee relies in accepting the pledge of the Subsequent
Mortgage Loans and the Note Insurer relies in connection with the Note Insurance
Policy. Such representations and warranties speak as of the Subsequent Transfer
Date unless otherwise indicated, and shall survive each pledge, assignment,
transfer and conveyance of the respective Subsequent Mortgage Loans to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any
Noteholder of a breach of any of the representations and warranties made by the
Originators and the Unaffiliated Seller pursuant to Section 3.03 of the
Unaffiliated Seller's Agreement or Section 3 of any Subsequent Transfer
Agreement, the party discovering such breach shall give prompt written notice to
such other Person; provided, that the Indenture Trustee shall have no duty to
inquire or to investigate the breach of any such representations and warranties.
The Originators and the Unaffiliated Seller will be obligated to repurchase a
Subsequent Mortgage Loan which breaches a representation or warranty in
accordance with the provisions of Section 4.02 of the Sale and Servicing
Agreement or to indemnify as described in Section 3.05(g) of the Unaffiliated
Seller's Agreement. Such repurchase and indemnification obligation of the
Originators and the Unaffiliated Seller shall constitute the sole remedy against
the Originators and the Unaffiliated Seller, and the Trust for such breach
available to the Servicer, the Trust, the Indenture Trustee, the Note Insurer
and the Noteholders.
Section 5. Amendment. This Subsequent Pledge Agreement may be amended
from time to time by the Trust and the Indenture Trustee only with the prior
written consent of the Note Insurer (or, in the event of a Note Insurer Default,
the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT PLEDGE
AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT PLEDGE
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<PAGE>
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
Section 7. Counterparts. This Subsequent Pledge Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Pledge Agreement will inure to the benefit of and be binding upon the parties
hereto, the Note Insurer, the Noteholders, and their respective successors and
permitted assigns.
Section 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Pledge Agreement and are
incorporated into this Subsequent Pledge Agreement for all purposes.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused
this Subsequent Pledge Agreement to be duly executed by their respective
officers as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST
1999-1, as Issuer
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By: ________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Indenture Trustee
By: ________________________________
Name:
Title:
[Signature Page to Subsequent Pledge Agreement]
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<PAGE>
EXHIBIT C
FORM OF NOTE INSURER CONSENT TO
SUBSEQUENT MORTGAGE LOANS
__________, 1999
The Bank of New York,
as Indenture Trustee
101 Barclay Street
New York, New York 10286
Re: ABFS Mortgage Loan Trust 1999-1;
Mortgage Backed Notes, Series 1999-1
------------------------------------
Ladies and Gentlemen:
Reference is made to the Indenture, dated as of March 1, 1999 (the
"Indenture"), by and between ABFS Mortgage Loan Trust 1999-1, as issuer (the
"Trust"), and you, as indenture trustee (the "Indenture Trustee"). Pursuant to
Section 2.14(b)(viii) of the Indenture, the undersigned hereby approves and
consents to the acquisition of the Subsequent Mortgage Loans listed on Schedule
I attached hereto aggregating $____________ in Aggregate Principal Balance by
the Trust and the subsequent pledge of such Subsequent Mortgage Loans by the
Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer.
FINANCIAL SECURITY ASSURANCE INC.
By: ________________________________
Name:
Title:
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<PAGE>
Exhibit 4.1A
APPENDIX I
DEFINED TERMS
"Accepted Servicing Practices": The Servicer's normal servicing
practices, which in general will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service, for their own account,
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties are located.
"Account": Any of the Collection Account, the Distribution Accounts,
the Cross-collateralization Reserve Accounts, the Note Insurance Payment
Account, the Pre-Funding Accounts or the Capitalized Interest Accounts.
"Accountant": A Person engaged in the practice of accounting who
(except when the Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Trust or an Affiliate of the Trust.
"Accrual Period": With respect to the Notes and any Distribution Date,
the prior calendar month.
"Act": With respect to any Noteholder, as defined in Section 11.03 of
the Indenture.
"Addition Notice": A written notice from the Unaffiliated Seller to the
Depositor, the Trust, the Indenture Trustee, the Collateral Agent, the Rating
Agencies and the Note Insurer that the Unaffiliated Seller desires to make a
Subsequent Transfer.
"Adjusted Note Rate": With respect to any Distribution Date for the
Class A-1 Notes, the percentage equal to (i) the Class A-1 Note Rate plus (ii)
the Premium Percentage for such Class; with respect to any Distribution Date for
the Class A-2 Notes, the percentage equal to (i) the Class A-2 Note Rate plus
(ii) the Premium Percentage for such Class.
"Administrative Costs": With respect to each Class of Notes and any
Distribution Date, the sum of the Indenture Trustee Fee, the Premium Amount and
the Servicing Fee for such Distribution Date and such Class of Notes.
"Affiliate": With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE>
"Agent": Any Note Registrar, Collateral Agent, or Authenticating Agent.
"Aggregate Principal Balance": With respect to any Mortgage Loans and
any date of determination, the aggregate of the Principal Balances of such
Mortgage Loans as of such date of determination.
"Appraised Value": As to any Mortgaged Property, the appraised value of
the Mortgaged Property based upon the appraisal made by or on behalf of the
related Originator at the time referred to in the related Basic Documents or, in
the case of a Mortgage Loan that is a purchase money mortgage loan, the sales
price of the Mortgaged Property, if such sales price is less than such appraised
value.
"Assignment of Mortgage": With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Owner Trustee, acting at the direction of the Majority
Certificateholders, pursuant to Section 6.14 of the Indenture, until any
successor Authenticating Agent for the Notes is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Indenture Trustee. Any Authenticating Agent other than the
Indenture Trustee shall sign an instrument under which it agrees to be bound by
all of the terms of this Indenture applicable to the Authenticating Agent.
"Authorized Denominations": Each Class of Notes is issuable only in the
minimum Percentage Interest corresponding to a minimum denomination of $1,000 or
integral multiples of $1,000 in excess thereof; provided, however, that one Note
of each Class is issuable in a denomination equal to any such multiple plus an
additional amount such that the aggregate denomination of all Notes of such
Class shall be equal to the Original Note Principal Balance of such Class.
"Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee or the Collateral Agent, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer,
any financial services officer or any other officer of the Owner Trustee or the
Collateral Agent customarily performing functions similar to those performed by
the above officers and (iii) any other Person, the chairman, chief operating
officer, president or any vice president of such Person.
"Available Funds": With respect to any Distribution Date and any
Distribution Account, the amount to be on deposit in such Distribution Account
on such Distribution Date (excluding the amount of any Insured Payment and prior
to the application of such amounts as described in Section 8.02 of the Indenture
for such Distribution Date) as a result of (a) the Servicer's remittance of the
Servicer Remittance Amount on the related Servicer Distribution Date, (b) any
transfers to such Distribution
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Account made from the related Capitalized Interest Account and/or the related
Pre-Funding Account and relating to such Distribution Date pursuant to Section
8.01 of the Indenture, and (c) any transfers to such Distribution Account in
respect of the Shortfall Amount for such Class and such Distribution Date
pursuant to Section 8.01 of the Indenture, until such Shortfall Amount is paid
in full, made first, to the extent of the Net Monthly Excess Cashflow for the
other Pool of Mortgage Loans remaining after payment of any Net Mortgage Loan
Interest Shortfalls for such other Pool, from the Distribution Account relating
to such other Pool, second, from the Cross-collateralization Reserve Account
relating to this Pool, and third, from the Cross-collateralization Reserve
Account relating to the other Pool. For purposes of calculating the Available
Funds, any Loan Repurchase Price or Substitution Adjustment that is paid shall
be deemed deposited in the Distribution Account in the Due Period preceding such
Servicer Distribution Date.
"Available Funds Shortfall": With respect to any Distribution Date and
any Class, an amount equal to the excess of the Insured Distribution Amount for
such Distribution Date and for such Class over the Available Funds for such
Distribution Date and such Class available for distribution in respect of such
Insured Distribution Amount.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Basic Documents": The Indenture, the Trust Agreement, the Sale and
Servicing Agreement, the Unaffiliated Seller's Agreement, the Insurance
Agreement and the Indemnification Agreement.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who
is the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (as either a Direct Participant or an Indirect Participant,
in accordance with the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Trust or the
Servicer or any other agent of the Trust, as the case may be, in its reasonable
discretion. Such efforts do not require the Trust or the Servicer or any other
agent of the Trust, as the case may be, to enter into any litigation,
arbitration or other legal or quasi-legal proceeding, nor do they require the
Trust or the Servicer or any other agent of the Trust, as the case may be, to
advance or expend fees or sums of money in addition to those specifically set
forth in this Indenture and the Sale and Servicing Agreement.
"Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant in
accordance with the rules of such Clearing Agency).
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<PAGE>
"Book-Entry Termination": The time at which the book-entry registration
of the Book-Entry Notes shall terminate, as specified in Section 2.13 of the
Indenture.
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a
day that is either a legal holiday or a day on which the Note Insurer or banking
institutions in the State of New York, the State of Delaware, the State of New
Jersey, the State of North Carolina, or the state in which the Indenture
Trustee's office from which payments will be made to Certificateholders, are
authorized or obligated by law, regulation or executive order to be closed.
"Business Purpose Property": Any mixed-use property, commercial
property, or four or more unit multifamily property.
"Capitalized Interest Account": Each of the Capitalized Interest
Accounts established in accordance with Section 8.01(c) of the Indenture and
maintained by the Indenture Trustee.
"Capitalized Interest Requirement": With respect to each Class of Notes
and the Distribution Date occurring in April 1999 and May 1999, (A) the product
of (i) one-twelfth of the related Adjusted Note Rate as calculated as of such
Distribution Date and (ii) the related Pre-Funded Amount as of the first day of
the related Due Period, minus (B) thirty (30) days' interest, at the related
Mortgage Interest Rate, on the Subsequent Mortgage Loans for the related Pool
transferred to the Trust during the related Due Period which had a Due Date
after the related Subsequent Cut-Off Date during the related Due Period, minus
(C) the amount of any Pre-Funding Earnings for the related Pool earned from the
last Distribution Date (or the Closing Date with respect to the April 1999
Distribution Date). In no event will the Capitalized Interest Requirement for
either Pool be less than zero.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Civil Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan as to which there has been a reduction in the amount
of interest collectible thereon for the most recently ended Due Period as a
result of the application of the Civil Relief Act, the amount, if any, by which
(a) interest collectible on such Mortgage Loan during the most recently ended
calendar month is less than (b) the sum of one month's interest on the Principal
Balance of such Mortgage Loan, calculated at a rate equal to the related
Mortgage Interest Rate.
"Class": Each class of Notes designated as the Class A-1 Notes and the
Class A-2 Notes.
"Class A-1 Current Interest": With respect to the Class A-1 Notes for
any Distribution Date, the interest accrued during the related Accrual Period at
the Class A-1
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Note Rate applicable to such Distribution Date on the Class A-1 Note Principal
Balance as of such Distribution Date (and prior to making any distributions on
such Distribution Date).
"Class A-1 Distribution Amount": With respect to the Class A-1 Notes
for any Distribution Date, the amount to be distributed to the Holders of the
Class A-1 Notes on such Distribution Date, applied first to interest and then to
principal, which amount shall be the sum of (i) any moneys released from the
Pre-Funding Account as a prepayment of principal on the Class A-1 Notes pursuant
to Section 8.01(b) of the Indenture, and (ii) the lesser of (x) the Class A-1
Formula Distribution Amount for such Distribution Date and (y) the amount
(including any applicable portion of any Insured Payment) available for
distribution on account of the Class A-1 Notes for such Distribution Date.
"Class A-1 Formula Distribution Amount": With respect to the Class A-1
Notes for any Distribution Date, the sum of the Class A-1 Interest Distribution
Amount and the Class A-1 Principal Distribution Amount.
"Class A-1 Interest Distribution Amount": With respect to the Class A-1
Notes for any Distribution Date, an amount equal to the Class A-1 Current
Interest less the Class A-1 Mortgage Loan Interest Shortfall Amount.
"Class A-1 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool I and any Distribution Date, the sum of (x) the
excess, if any, of the aggregate Prepayment Interest Shortfalls for the related
Due Period over the aggregate amount of Compensating Interest paid by the
Servicer in respect thereto and (y) the aggregate amount of Civil Relief Act
Interest Shortfalls in respect of which the Servicer did not make a Servicer
Advance.
"Class A-1 Note": Any Note designated as a "Class A-1 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A-1 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-1 Notes less any amounts
actually distributed with respect to principal thereon on all prior Distribution
Dates.
"Class A-1 Note Rate": With respect to any Distribution Date, the per
annum rate equal to 6.545%; provided, that, on any Distribution Date after the
Note Clean-Up Call Date for the Class A-1 Notes, the Class A-1 Note Rate will be
7.045%.
"Class A-1 Principal Distribution Amount": With respect to the Class
A-1 Notes for any Distribution Date, the lesser of (x) the Principal
Distribution Amount for Pool I for such Distribution Date, and (y) the Class A-1
Note Principal Balance as of such Distribution Date.
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"Class A-2 Current Interest": With respect to the Class A-2 Notes for
any Distribution Date, the interest accrued during the related Accrual Period at
the Class A-2 Note Rate applicable to such Distribution Date on the Class A-2
Note Principal Balance as of such Distribution Date (and prior to making any
distributions on such Distribution Date).
"Class A-2 Distribution Amount": With respect to the Class A-2 Notes
for any Distribution Date, the amount to be distributed to the Holders of the
Class A-2 Notes on such Distribution Date, applied first to interest and then to
principal, which amount shall be the lesser of (x) the Class A-2 Formula
Distribution Amount for such Distribution Date and (y) the amount (including any
applicable portion of any Insured Payment) available for distribution on account
of the Class A-2 Notes for such Distribution Date.
"Class A-2 Formula Distribution Amount": With respect to the Class A-2
Notes for any Distribution Date, the sum of the Class A-2 Interest Distribution
Amount and the Class A-2 Principal Distribution Amount.
"Class A-2 Interest Distribution Amount": With respect to the Class A-2
Notes for any Distribution Date, an amount equal to (a) the related Class A-2
Current Interest, less the Class A-2 Mortgage Loan Interest Shortfall Amount.
"Class A-2 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool II and any Distribution Date, the sum of (x) the
excess, if any, of the aggregate Prepayment Interest Shortfalls for the related
Due Period over the aggregate amount of Compensating Interest paid by the
Servicer in respect thereto and (y) the aggregate amount of Civil Relief Act
Interest Shortfalls in respect of which the Servicer did not make a Servicer
Advance.
"Class A-2 Note": Any Note designated as a "Class A-2 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-2 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.
"Class A-2 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-2 Notes less any amounts
actually distributed with respect to principal thereon on all prior Distribution
Dates.
"Class A-2 Note Rate": With respect to any Distribution Date, the per
annum rate equal to 6.580%; provided that, on any Distribution Date after the
Note Clean-up Call Date for the Class A-2 Notes, the Class A-2 Note Rate will be
7.080%.
"Class A-2 Principal Distribution Amount": With respect to the Class
A-2 Notes for any Distribution Date, the lesser of (x) the Principal
Distribution Amount for Pool II for such Distribution Date and (y) the Class A-2
Note Principal Balance as of such Distribution Date.
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"Clean-Up Call Date": The first Distribution Date after the sum of the
Aggregate Principal Balances of the Mortgage Loans in Pool I and Pool II is less
than 10% of the sum of the Maximum Collateral Amount for Pool I and Pool II.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Notes, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"Closing Date": March 30, 1999.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral Agent": Chase Bank of Texas, N.A., a national banking
association, or its successor-in-interest, or any successor Collateral Agent
appointed as provided in Section 9.08 of the Sale and Servicing Agreement.
"Collection Account": The Eligible Account established and maintained
by the Servicer pursuant to Section 5.02(b) of the Sale and Servicing Agreement.
"Combined Loan-to-Value Ratio" or "CLTV": As to any Mortgage Loan at
any time, the fraction, expressed as a percentage, the numerator of which is the
sum of (i) the Principal Balance thereof at such time and (ii) if such Mortgage
Loan is subject to a second mortgage, the unpaid principal balance of any
related first mortgage loan or loans, if any, as of such time, and the
denominator of which is the Appraised Value of any related Mortgaged Property or
Properties as of the date of the appraisal used by or on behalf of the
Unaffiliated Seller to underwrite such Mortgage Loan.
"Commission": The United States Securities and Exchange Commission.
"Compensating Interest": As defined in Section 6.05 of the Sale and
Servicing Agreement.
"Corporate Trust Office": With respect to (x) the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be principally administered, which office at
the date of the execution of the Basic Documents is located at 101 Barclay
Street, New York, New York, 10286, Attention: ABFS Mortgage Loan Trust 1999-1;
(y) the Owner Trustee, the principal office of the Owner Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of the Basic Documents is located at
One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration; and (z) the Collateral Agent, the
principal office of the Collateral Agent at which at any particular time its
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corporate trust business shall be principally administered, which office at the
date of the execution of the Basic Documents is located at 801 West Greens Road,
Houston, Texas 77067, Attention: Custody Manager.
"Cross-collateralization Reserve Accounts": With respect to each Class
of Notes, the segregated trust account, which shall be an Eligible Account,
established and maintained pursuant to Section 8.01(d) of the Indenture and
entitled "The Bank of New York, as Indenture Trustee for ABFS Mortgage Loan
Trust 1999-1 Mortgage Backed Notes, Series 1999-1, Class A-[1][2],
Cross-collateralization Reserve Account," as the case may be, on behalf of the
related Noteholders and the Note Insurer.
"Cumulative Loan Loss": With respect to any period, the sum of all
Liquidated Loan Losses which occurred during such period.
"Cumulative Loss Percentage": As of any date of determination thereof,
the aggregate of all Liquidated Loan Losses since the Closing Date as a
percentage of the sum of (i) the aggregate Principal Balance of the Initial
Mortgage Loans as of the Initial Cut-Off Date and (ii) the aggregate Principal
Balance of any Subsequent Mortgage Loans transferred to the Trust as of the
related Subsequent Cut-Off Date.
"Cumulative Loss Test": The Cumulative Loss Test for each period
indicated below is satisfied if the Cumulative Loss Percentage for such period
does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
------ --------------------------
1st - 24th Distribution Date 1.00%
25th - 36th Distribution Date 1.50%
37th - 48th Distribution Date 1.75%
49th - 60th Distribution Date
and thereafter 2.00%
"Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
Delinquency.
"Cut-Off Date": With respect to the Initial Mortgage Loans, the Initial
Cut-Off Date, and with respect to the Subsequent Mortgage Loans, the Subsequent
Cut-Off Date.
"Cut-Off Date Aggregate Principal Balance": Means the aggregate unpaid
principal balance of the Initial Mortgage Loans as of the Initial Cut-Off Date
(or, with respect to Initial Mortgage Loans which were originated after the
Initial Cut-Off Date, as of the date of origination). The Cut-Off Date Aggregate
Principal Balance for the Trust is $167,633,030.25. The Cut-Off Date Aggregate
Principal Balance for Pool I and Pool II is $89,436,393.09 and $78,196,637.16,
respectively.
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"Cut-Off Date Principal Balance": Means as to each Initial Mortgage
Loan, its unpaid principal balance as of the Initial Cut-Off Date (or, with
respect to Initial Mortgage Loans which were originated after the Initial
Cut-Off Date, as of the date of origination).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"Default": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding Principal Balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Notes": Notes other than Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
"Delinquency Ratio": With respect to any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are sixty (60) or more
days Delinquent, in foreclosure or converted to REO Property as of the last day
of such Due Period and (b) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans as of the last day of such Due Period.
"Delinquent": A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"Depositor": Prudential Securities Secured Financing Corporation, a
Delaware corporation.
"Direct Participant": Any broker-dealer, bank or other financial
institution for which the Clearing Agency holds Notes from time to time as a
securities depositary.
"Distribution Account": With respect to each Class of Notes, the
segregated trust account, which shall be an Eligible Account, established and
maintained pursuant to Section 8.01(a) of the Indenture and entitled "The Bank
of New York, as
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Indenture Trustee for ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes,
Series 1999-1, Class A-[1][2], Distribution Account," as the case may be, on
behalf of the related Noteholders and the Note Insurer.
"Distribution Amount": The Class A-1 Distribution Amount or the Class
A-2 Distribution Amount, as applicable.
"Distribution Date": The 25th day of any month or if such 25th day is
not a Business Day, the first Business Day immediately following, commencing on
April 26, 1999.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month preceding the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due.
"Due Period": With respect to each Distribution Date, the calendar
month preceding the related Distribution Date.
"Eligible Account": Either (A) an account or accounts maintained with
an institution (which may include the Indenture Trustee; provided, that the
Indenture Trustee otherwise meets these requirements) whose deposits are insured
by the FDIC, the unsecured and uncollateralized debt obligations of which
institution shall be rated "AA" or better by S&P and "Aa2" or better by Moody's
and in the highest short term rating category by S&P and Moody's, and which is
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution (including
the Indenture Trustee) duly organized, validly existing and in good standing
under the applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing under the
federal banking laws, (iv) a principal subsidiary of a bank holding company, or
(v) approved in writing by the Note Insurer and the Rating Agencies or (B) a
trust account or accounts maintained with the trust department of a federal or
state chartered depository institution or trust company (which may include the
Indenture Trustee; provided, that the Indenture Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Excess Over-collateralized Amount": With respect to a Pool of Mortgage
Loans and any Distribution Date, the excess, if any, of (x) the
Over-collateralized Amount for such Pool that would apply on such Distribution
Date after taking into account the payment of the Class A-1 Distribution Amount
or the Class A-2 Distribution Amount, as applicable, on such Distribution Date
(except for any distributions of Over-collateralization Reduction Amounts for
such Pool on such Distribution Date) over (y) the related Specified
Over-collateralized Amount for such Pool for such Distribution Date; provided,
however, that the Excess Over-collateralized Amount for the period
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beginning with the Distribution Date as to which clause (b)(i)(y)(A) of
"Specified Over-collateralized Amount" applies (the "Trigger Date") and ending
on the Distribution Date occurring in the month six months subsequent to the
Trigger Date (inclusive) shall be limited to the amount obtained using the
following formula.
n
--- x E.S.A.
6
Where "n" is equal to the number of Distribution Dates that have
occurred since the Trigger Date and "E.S.A." is equal to the amount of Excess
Over-collateralized Amount that would otherwise be obtained for such
Distribution Date without regard to the provisions of this proviso.
"Exchange Act": Means the Securities Exchange Act of 1934, as amended.
"Event of Default": As defined in Section 5.01 of the Indenture.
"Fannie Mae": The Federal National Mortgage Association, and any
successor thereto.
"FDIC": The Federal Deposit Insurance Corporation, and any successor
thereto.
"Final Certification": A certification as to the completeness of each
Indenture Trustee's Mortgage File prepared by the Collateral Agent, on behalf of
the Indenture Trustee, and provided by the Collateral Agent within ninety (90)
of the Closing Date pursuant to Section 2.06(a)(iii) of the Sale and Servicing
Agreement.
"Final Stated Maturity Date": With respect to both the Class A-1 Notes
and the Class A-2 Notes, the May 2030 Distribution Date.
"Foreclosure Profits": As to any Distribution Date, the excess, if any,
of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a
Liquidated Mortgage Loan during the related Due Period over (ii) the sum of the
unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and
unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal
Balance thereof from the Due Date on which interest was last paid by the
Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO
Mortgage Loan, from the Due Date on which interest was last deemed to have been
paid pursuant to Section 5.06 of the Sale and Servicing Agreement) to the Due
Date in the month succeeding the date the Loan became a Liquidated Mortgage
Loan.
"Freddie Mac": The Federal Home Loan Mortgage Corporation, and any
successor thereto.
"GAAP": Generally accepted accounting principles, consistently applied.
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"Grant": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan
and the related Mortgage Files, a Permitted Investment, the Sale and Servicing
Agreement, the Unaffiliated Seller's Agreement, or any other instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including without limitation the immediate and
continuing right to claim for, collect, receive and give receipts for principal
and interest payments thereunder, Insurance Proceeds, Loan Purchase Prices and
all other moneys payable thereunder and all proceeds thereof, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
Granting party or otherwise, and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"Highest Lawful Rate": As defined in Section 11.19 of the Indenture.
"I&I Payments": Payments due and owing under the Insurance Agreement
other than pursuant to Section 3.02(b) of such Insurance Agreement.
"Indemnification Agreement": As defined in the Insurance Agreement.
"Indenture": The Indenture, dated as of March 1, 1999, between the
Trust and the Indenture Trustee, relating to the issuance of the Notes.
"Indenture Trustee": The Bank of New York, a New York banking
corporation, or its successor-in-interest, or any successor Indenture Trustee
appointed as provided for in Section 6.09 of the Indenture.
"Indenture Trustee Fee": As to any Distribution Date, the fee payable
to the Indenture Trustee in respect of its services as Indenture Trustee
pursuant to Section 6.16 of the Indenture that accrues at a monthly rate equal
to one-twelfth of 0.025% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.
"Indenture Trustee's Mortgage File": The documents delivered to the
Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05
of the Sale and Servicing Agreement.
"Indenture Trustee's Remittance Report": The statement prepared
pursuant to Section 2.08(d) of the Indenture, containing the following
information with respect to each Class:
(a) the amount of the distribution with respect to the each
Class of Notes and the Trust Certificates;
(b) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein and separately
identifying any Over-collateralization Increase Amounts for each Pool;
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(c) the amount of such distributions allocable to interest and
the calculation thereof;
(d) the Note Principal Balance of each Class of Notes as of
such Distribution Date, together with the Note Principal Balance of
each Class of Notes (based on a Note in an original Note Principal
Balance of $1,000) then outstanding, in each case after giving effect
to any payment of principal on such Distribution Date;
(e) the amount of any Insured Payment included in the amounts
distributed to the Noteholders on such Distribution Date;
(f) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in such distribution;
(g) the amounts, if any, of any Liquidated Loan Losses for
consumer purpose loans and for business purpose loans for the related
Due Period and cumulative Liquidated Loan Losses since the Closing Date
for consumer purpose loans and for business purpose loans; and
(h) the Pre-Funding Amount for each Class on such Distribution
Date.
Items (a), (b) and (c) above shall, with respect to each Class of
Notes, be presented on the basis of a Note having a $1,000 denomination. In
addition, by January 31 of each calendar year following any year during which
the Notes are outstanding, the Indenture Trustee shall furnish a report to each
Holder of record if so requested in writing at any time during each calendar
year as to the aggregate of amounts reported pursuant to (a), (b) and (c) with
respect to the Notes for such calendar year.
"Independent": When used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Trust and any other obligor
upon the Notes, (ii) does not have any direct financial interest or any material
indirect financial interest in the Trust or in any such other obligor or in an
Affiliate of the Trust or such other obligor, and (iii) is not connected with
the Trust or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by a Trust Order and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.
"Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Note.
"Individual Note": A Note of an Original Note Principal Balance of
$1,000; a Note of an Original Note Principal Balance in excess of $1,000 shall
be deemed to be a number of Individual Notes equal to the quotient obtained by
dividing such Original Note Principal Balance amount by $1,000.
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"Initial Certification": A certification as to the completeness of each
Mortgage File prepared by the Collateral Agent, on behalf of the Indenture
Trustee, and provided by the Collateral Agent within thirty (30) of the Closing
Date pursuant to Section 2.06(a)(ii) of the Sale and Servicing Agreement.
"Initial Cut-Off Date": The close of business on February 28, 1999 (or
with respect to any Initial Mortgage Loan originated or otherwise acquired by an
Originator after February 28, 1999, the date of origination or acquisition of
such Initial Mortgage Loan).
"Initial Mortgage Loans": The Mortgage Loans delivered by the Trust on
the Closing Date.
"Initial Over-collateralized Amount": With respect to any Pool, an
amount equal to 0.50% of the Maximum Collateral Amount for such Pool.
"Insurance Agreement": The Insurance and Indemnity Agreement dated as
of March 1, 1999 among the Note Insurer, the Depositor, the Trust, the Servicer,
the Unaffiliated Seller, and the Originators as such agreement may be amended or
supplemented in accordance with the provisions thereof.
"Insurance Policies": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Trust or the Indenture Trustee has any
interest therein.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with Accepted Servicing Practices. "Insurance
Proceeds" do not include "Insured Payments."
"Insured Distribution Amount": With respect to any Distribution Date
and for any Pool, is the sum of (i) the Interest Distribution Amount for such
Pool, (ii) the amount of the Over-collateralization Deficit applicable to such
Pool, if any, with respect to such Distribution Date, and (iii) with respect to
the Distribution Date which is a Final Stated Maturity Date, the outstanding
Note Principal Balance for the related Class of Notes.
"Insured Payment": With respect to any Distribution Date and any Class
of Notes, the Available Funds Shortfall for such Class.
"Interest Distribution Amount": The Class A-1 Interest Distribution
Amount or the Class A-2 Interest Distribution Amount, as applicable.
"Late Payment Rate": Has the meaning ascribed thereto in the Insurance
Agreement.
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"Letter Agreement": The Letter of Representations to the Clearing
Agency from the Indenture Trustee and the Trust dated March 24, 1999.
"Liquidated Loan Loss": With respect to any Distribution Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan prior to the Due Date preceding such
Distribution Date, equal to the excess of (i) the unpaid Principal Balance of
each such Liquidated Mortgage Loan, plus accrued interest thereon in accordance
with the amortization schedule at the time applicable thereto at the applicable
Mortgage Interest Rate from the Due Date as to which interest was last paid with
respect thereto through the Due Date in the month succeeding the date such Loan
became a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with
respect to such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines that all Liquidation Proceeds which it
expects to recover have been recovered.
"Liquidation Expenses": Expenses incurred by the Servicer in connection
with the liquidation of any defaulted Mortgage Loan or property acquired in
respect thereof (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to
Sections 5.04 and 5.06 of the Sale and Servicing Agreement respecting the
related Mortgage Loan and any unreimbursed expenditures for real property taxes
or for property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds.
"Liquidation Proceeds": The amount (other than Insurance Proceeds)
received by the Servicer in connection with (i) the taking of all or a part of
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan through a Indenture Trustee's
sale, foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of
any other security for such Mortgage Loan, including, without limitation,
pledged equipment, inventory and working capital and assignments of rights and
interests made by the related Mortgagor.
"Loan Repurchase Price": With respect to any Mortgage Loan, the
Principal Balance of such Mortgage Loan as of the date of purchase, plus all
accrued and unpaid interest on such Principal Balance computed, as of the next
succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest
Rate, net of the Servicing Fee if the Unaffiliated Seller or any of its
Affiliates is the Servicer, plus the amount of any unreimbursed Servicing
Advances made by the Servicer with respect to such Mortgage Loan, which purchase
price shall be deposited in the Collection Account on the next succeeding
Servicer Distribution Date, after deducting therefrom any amounts received in
respect of such repurchased Mortgage Loan or Loans and being held in the
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Collection Account for future distribution to the extent such amounts have not
yet been applied to principal or interest on such Mortgage Loan.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan as of
its date of origination, the ratio on such date borne by the outstanding
Principal Balance of the Mortgage Loan to the Appraised Value of the related
Mortgaged Property.
"Majority Certificateholders": The Holder or Holders of Trust
Certificates evidencing Percentage Interests in excess of 51% in the aggregate.
"Majority Noteholders": The Holder or Holders of Notes evidencing
Percentage Interests in excess of 51% in the aggregate.
"Maximum Collateral Amount": The sum of the Original Pool Principal
Balance and the Original Pre-Funded Amount for each Class of Notes.
"Monthly Payment": As to any Mortgage Loan (including any REO Mortgage
Loan) and any Due Date, the payment of principal and interest due thereon as
specified for such Due Date in the related amortization schedule at the time
applicable thereto (after adjustment for any Curtailments and Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than Deficient
Valuations, or similar proceeding or any moratorium or similar waiver or grace
period).
"Monthly Servicing Fee": As defined in Section 5.08 of the Sale and
Servicing Agreement.
"Moody's": Moody's Investors Service, Inc., a corporation organized and
existing under Delaware law, or any successor thereto and if such corporation no
longer for any reason performs the services of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized rating
agency designated by the Note Insurer.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on the Mortgaged Property.
"Mortgage File": As described in Exhibit A to the Sale and Servicing
Agreement.
"Mortgage Interest Rate": As to any Mortgage Loan, the per annum fixed
rate at which interest accrues on the unpaid Principal Balance thereof.
"Mortgage Loan Interest Shortfall": With respect to any Distribution
Date, as to any Mortgage Loan, the sum of (a) the excess, if any, of the
Prepayment Interest Shortfall for such Mortgage Loan for the related Due Period
over the Compensating Interest for such Mortgage Loan paid by the Servicer in
respect thereto and (b) any Civil Relief Act Interest Shortfall in respect of
which the Servicer did not make a Servicer Advance.
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"Mortgage Loan Schedule": The schedule of Initial Mortgage Loans as of
the Initial Cut-Off Date attached as Schedule I to the Indenture, which will be
deemed to be modified automatically to reflect any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage Loan, including
the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The
initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and
any subsequent Mortgage Loan Schedule provided in connection with the Subsequent
Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its
identifying number and the name of the related Mortgagor; (ii) the billing
address for the related Mortgaged Property including the state and zip code;
(iii) its date of origination; (iv) the original number of months to stated
maturity; (v) the original stated maturity; (vi) the original Principal Balance;
(vii) its Principal Balance as of the applicable Cut-Off Date; (viii) the
Mortgage Interest Rate; (ix) the scheduled monthly payment of principal and
interest and (x) a Pool designation.
"Mortgage Loans": The Initial Mortgage Loans and the Subsequent
Mortgage Loans, together with any Qualified Substitute Mortgage Loans
substituted therefor in accordance with the Basic Documents, as from time to
time are held as a part of the Trust, the Initial Mortgage Loans originally so
held being identified in the initial Mortgage Loan Schedule. When used in
respect of any Distribution Date, the term Mortgage Loans shall mean all
Mortgage Loans (including those in respect of which the Indenture Trustee has
acquired the related Mortgaged Property) which have not been repaid in full
prior to the related Due Period, did not become Liquidated Mortgage Loans prior
to such related Due Period or were not repurchased or replaced by the
Unaffiliated Seller prior to such related Due Period.
"Mortgage Note": The original, executed note or other evidence of any
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Portfolio Performance Test": The Mortgage Portfolio
Performance Test is satisfied for any date of determination thereof if either
(a) (i) the Rolling Six Month Delinquency Rate is less than or equal to 11.00%,
(ii) the Over-collateralization Loss Test is satisfied and (iii) if the Twelve
Month Loss Amount is not greater than or equal to 1.25% of the Principal Balance
of the Mortgage Loans in each Pool as of the first day of the twelfth preceding
calendar month or (b) the Note Insurer, by notice to the Trust, the Servicer,
the Indenture Trustee and the Collateral Agent, expressly waives in writing
compliance with the foregoing tests for such Distribution Date.
"Mortgaged Property": The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple interest in one or more parcels of
land.
"Mortgagor": The obligor on a Mortgage Note.
"Net Foreclosure Profits": As to any Distribution Date, the excess, if
any, of (i) the aggregate Foreclosure Profits with respect to such Distribution
Date over (ii) Liquidated Loan Losses with respect to such Distribution Date.
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"Net Liquidation Proceeds": As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances and Servicing Advances made by the Servicer. For all purposes
of the Basic Documents, Net Liquidation Proceeds shall be allocated first to
accrued and unpaid interest on the related Mortgage Loan and then to the unpaid
Principal Balance thereof.
"Net Monthly Excess Cashflow": With respect to any Distribution Date
and any Pool, the excess of (x) the Available Funds for such Pool then on
deposit in the related Distribution Account over (y) the sum of (i) the Interest
Distribution Amount for such Pool and such Distribution Date, (ii) the Principal
Distribution Amount for such Pool and such Distribution Date, calculated for
this purpose without regard to any Over-collateralization Increase Amount (or
portion thereof included therein) for such Pool and such Distribution Date,
(iii) the amounts due to the Note Insurer for such Pool on such Distribution
Date pursuant to Section 8.02(ii) of the Indenture, and (iv) the Indenture
Trustee Fees allocable to such Pool for such Distribution Date.
"Net Mortgage Loan Interest Shortfall Amount": The Class A-1 Mortgage
Loan Interest Shortfall or the Class A-2 Mortgage Loan Interest Shortfall
Amount, as applicable.
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds net of
any related expenses of the Servicer.
"Net Weighted Average Mortgage Interest Rate": With respect to any Due
Period, the weighted average Mortgage Interest Rates (weighted by Principal
Balances) of the Mortgage Loans, calculated at the opening of business on the
first day of such Due Period, less the Servicing Fee Rate, and less the Premium
Percentage.
"Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 5.03 of the Sale and Servicing Agreement, or (b) a Periodic
Advance proposed to be made in respect of a Mortgage Loan or REO Property either
of which, in the good faith business judgment of the Servicer, as evidenced by
an Officer's Certificate delivered to the Note Insurer and the Indenture Trustee
no later than the Business Day following such determination, would not
ultimately be recoverable pursuant to Section 5.03 of the Sale and Servicing
Agreement.
"Note": Any Class A-1 Note or Class A-2 Note executed by the Owner
Trustee on behalf of the Trust and authenticated by the Indenture Trustee.
"Noteholder" or "Holder": Each Person in whose name a Note is
registered in the Note Register, except that, solely for the purposes of giving
any consent, waiver, request or demand pursuant to the Indenture, any Note
registered in the name of the Servicer or any Subservicer or the Unaffiliated
Seller, or any Affiliate of any of them, shall be deemed not to be outstanding
and the undivided Percentage Interest evidenced thereby shall not be taken into
account in determining whether the requisite percentage of Notes necessary to
effect any such consent, waiver, request or demand has been obtained.
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For purposes of any consent, waiver, request or demand of Noteholders pursuant
to the Indenture, upon the Indenture Trustee's request, the Servicer and the
Unaffiliated Seller shall provide to the Indenture Trustee a notice identifying
any of their respective Affiliates or the Affiliates of any Subservicer that is
a Noteholder as of the date(s) specified by the Indenture Trustee in such
request. Any Notes on which payments are made under the Note Insurance Policy
shall be deemed to be Outstanding and held by the Note Insurer to the extent of
such payment.
"Note Clean-Up Call Date": With respect to the Class A-1 Notes, the
first Distribution Date after the Class A-1 Note Principal Balance is less than
or equal to 10% of the Original Note Principal Balance of the Class A-1 Notes;
with respect to the Class A-2 Notes, the first Distribution Date after the Class
A-2 Note Principal Balance is less than or equal to 10% of the Original Note
Principal Balance of the Class A-2 Notes.
"Note Insurance Payment Account": The Note Insurance Payment Account
established in accordance with Section 8.03(c) of the Indenture and maintained
by the Indenture Trustee.
"Note Insurance Policy": The Financial Guaranty Insurance Policy No.
50792-N, all endorsements thereto dated the Closing Date, issued by the Note
Insurer for the benefit of the Noteholders.
"Note Insurer": Financial Security Assurance Inc., a monoline stock
insurance company organized and created under the laws of the State of New York,
and any successors thereto.
"Note Insurer Default": The existence and continuance of any of the
following:
(a) the Note Insurer shall have failed to make a required
payment when due under the Note Insurance Policy;
(b) the Note Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation, or reorganization
that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or any other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, indenture trustee, agent, or receiver for the
Note Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, indenture trustee,
agent, or receiver of the Note Insurer or of all or any material
portion of its property.
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"Note Principal Balance": As to any particular Note and date of
determination, the product of the Percentage Interest evidenced thereby and the
aggregate principal balance of all Notes of the same Class as of such date of
determination. The Trust Certificates do not have a "Note Principal Balance".
"Note Rate": The Class A-1 Note Rate or the Class A-2 Note Rate, as
applicable.
"Note Register": As defined in Section 2.06 of the Indenture.
"Note Registrar": As defined in Section 2.06 of the Indenture.
"Note Termination Price": With respect to either Class, an amount equal
to the sum of (i) 100% of the aggregate Note Principal Balance of such Class,
plus accrued and unpaid interest thereon, and (ii) any unreimbursed amounts due
to the Note Insurer under the Basic Documents and any I&I Payments.
"Notes": The Class A-1 Notes and the Class A-2 Notes.
"Officer's Certificate": A certificate signed by the chairman of the
board, the president or a vice president and the treasurer, the secretary or one
of the assistant treasurers or assistant secretaries of the Unaffiliated Seller,
the Servicer, or the Depositor, or, with respect to the Trust, a certificate
signed by a Responsible Officer of the Owner Trustee, at the direction of the
related Majority Certificateholders as required by any Basic Document.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Unaffiliated Seller, the Servicer, the Depositor,
the Indenture Trustee, the Owner Trustee, a Noteholder or a Noteholder's
prospective transferee or the Note Insurer (including except as otherwise
provided herein, in-house counsel) reasonably acceptable to each addressee of
such opinion and experienced in matters relating to the subject of such opinion.
"Original Note Principal Balance": As of the Closing Date and as to the
Class A-1 Notes, $100,000,000.00 and as to the Class A-2 Notes, $84,075,000.00.
The Trust Certificates do not have an "Original Note Principal Balance."
"Original Pool Principal Balance": The aggregate Principal Balance of
the Mortgage Loans, as of the Initial Cut-Off Date, which amount for the Trust
is equal to $167,152,311.98. The Original Pool Principal Balance for Pool I and
Pool II is $89,127,717.90 and $78,024,594.08, respectively.
"Original Capitalized Interest Amount": With respect to the Class A-1
Notes, $80,287.09 and with respect to the Class A-2 Notes, $46,065.42
"Original Pre-Funded Amount": With respect to the Class A-1 Notes,
$11,374,794.66 and with respect to the Class A-2 Notes, $6,472,893.36.
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"Originators": American Business Credit, Inc., HomeAmerican Credit,
Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp.
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:
(a) Definitive Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Holders of such Notes; provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been made;
(c) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser (as defined by the Uniform
Commercial Code of the applicable jurisdiction); and
(d) Notes alleged to have been destroyed, lost or stolen that
have been paid as provided for in Section 2.07 of the Indenture;
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Principal Balance of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Notes owned by the Trust, any other obligor upon the Notes or any Affiliate of
the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Trust, any other obligor upon the Notes or any Affiliate of
the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other
obligor; provided, further, however, that Notes that have been paid with the
proceeds of the Note Insurance Policy shall be deemed to be Outstanding for the
purposes of this Indenture, such payment to be evidenced by written notice from
the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed
to be the Holder thereof to the extent of any payments thereon made by the Note
Insurer which have not been reimbursed.
"Over-collateralization Deficit": As of any Distribution Date, the
amount, if any, by which (a) the aggregate Note Principal Balance of the Notes,
after taking into account the payment of the Principal Distribution Amount for
each Pool (except for any
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amount in respect of the Over-collateralization Deficit) on such date exceeds
(b) the sum of (i) the Aggregate Principal Balances of the Mortgage Loans in
such Pool determined as of the end of the immediately preceding Due Period, (ii)
the amount, if any, on deposit in the Pre-Funding Accounts as of the close of
business on the last day of the immediately preceding Due Period, and (iii) the
amount on deposit in the Cross-collateralization Reserve Accounts on such
Distribution Date, after application of all amounts due on such Distribution
Date.
"Over-collateralization Deficiency Amount": With respect to any
Distribution Date and any Pool, the difference, if greater than zero, between
(a) the Specified Over-collateralized Amount for such Pool applicable to such
Distribution Date and (b) the Over-collateralized Amount for such Pool
applicable to such Distribution Date prior to taking into account the payment of
any related Over-collateralization Increase Amount for such Pool on such
Distribution Date.
"Over-collateralization Increase Amount": With respect to any
Distribution Date and any Pool, the lesser of:
(a) the Over-collateralization Deficiency Amount for such Pool
as of such Distribution Date (after taking into account the payment of
the Principal Distribution Amount for such Pool on such Distribution
Date (except for any Over-collateralization Increase Amount for such
Pool)); and
(b) (i) with respect to the first Distribution Date, zero, and
(ii) with respect to any other Distribution Date,
100% of the amount of Net Monthly Excess Cashflow on such
Distribution Date.
"Over-collateralization Loss Test": The Over-collateralization Loss
Test for any period set out below is satisfied if the Cumulative Loss Percentage
for such period does not exceed the percentage set out for such period below:
Period Cumulative Loss Percentage
---------------------------------- --------------------------
1st - 12th Distribution Date 0.75%
13th - 24th Distribution Date 1.25%
25th - 36th Distribution Date 1.75%
37th - 48th Distribution Date 2.00%
49th - 60th Distribution Date
and thereafter 2.50%
"Over-collateralization Reduction Amount": With respect to any Pool and
Distribution Date, is the positive difference, if any, between (a) the
Over-collateralized Amount for such pool that would apply on such Distribution
Date after taking into account all distributions to be made on such Distribution
Date (except for any distributions of related Over-collateralization Reduction
Amounts as described in this sentence) and (b) the Specified Over-collateralized
Amount for such Pool to the extent of principal available for distribution.
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"Over-collateralized Amount": As of any Distribution Date and any Pool,
the difference, if any, between (a) the sum of (i) the aggregate Principal
Balances of the Mortgage Loans in such Pool as of the close of business on the
last day of the related Due Period and (ii) the amount on deposit in the related
Pre-Funding Account as of the close of business on the last day of the
immediately preceding Due Period and (b) the aggregate Note Principal Balance of
the related Class as of such Distribution Date (after taking into account the
payment of the Principal Distribution Amount for such Pool on such Distribution
Date, except for any portion thereof related to an Insured Payment); provided,
however, that such amount shall not be less than zero.
"Overfunded Interest Amount": With respect to each Pool and each
Subsequent Transfer Date occurring in March 1999, the excess of (i) the amount
on deposit in the related Capitalized Interest Account, over (ii) two-months'
interest calculated at the related Adjusted Note Rate on the amount on deposit
in the related Pre-Funding Account (net of any Pre-Funding Earnings for such
Pre-Funding Account) immediately following such Subsequent Transfer Date
(disregarding any amount applied from such Pre-Funding Account to a Subsequent
Mortgage Loan that does not have a Due Date in March 1999).
With respect to each Pool and each Subsequent Transfer Date occurring
in April 1999, the excess of (i) the amount on deposit in the related
Capitalized Interest Account, over (ii) one-month's interest calculated at the
related Adjusted Note Rate on the amount on deposit in the related Pre-Funding
Account (net of any Pre-Funding Earnings for such Pre-Funding Account)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the such Pre-Funding Account to a Subsequent Mortgage Loan that
does not have a Due Date in April 1999).
"Owner-Occupied Mortgaged Property": A Residential Dwelling as to which
(a) the related Mortgagor represented an intent to occupy as such Mortgagor's
primary residence at the origination of the Mortgage Loan, and (b) the
Unaffiliated Seller has no actual knowledge that such Residential Dwelling is
not so occupied.
"Ownership Interest": As to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
"Owner Trustee": First Union Trust Company, National Association, a
national banking association, not in its individual capacity, but solely as
owner trustee under the Trust Agreement, and any successor owner trustee
thereunder.
"Owner Trustee Fee": As defined in Section 8.01 of the Trust Agreement.
"Paying Agent": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Trust pursuant to Section
3.03 of the Indenture to pay the principal of, or interest on, any Notes on
behalf of the Trust, which agent, if not the Indenture Trustee, shall have
signed an instrument agreeing to be bound by the terms of the Indenture
applicable to such Paying Agent.
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"Percentage Interest": With respect to a Note of any Class, the portion
evidenced by such Note, expressed as a percentage rounded to four decimal
places, equal to a fraction the numerator of which is the denomination
represented by original principal balance of such Note and the denominator of
which is the Original Note Principal Balance of such Class. With respect to a
Trust Certificate, the portion evidenced thereby as stated on the face of such
Trust Certificate.
"Periodic Advance": The aggregate of the advances required to be made
by the Servicer on any Servicer Distribution Date pursuant to Section 5.18 of
the Sale and Servicing Agreement, the amount of any such advances being equal to
the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Servicer Distribution Date, the product of (i) the
Principal Balance of such Mortgage Loan and (ii) one-twelfth of the
Mortgage Interest Rate for such Mortgage Loan net of the Servicing Fee,
and
(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net proceeds from the REO Property transferred to
the Distribution Account for such Distribution Date;
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
"Permitted Investments": As used herein, Permitted Investments shall
include the following:
(a) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(b) repurchase agreements on obligations specified in clause
(a) maturing not more than three months from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated in one of the two
highest rating categories by the Rating Agencies;
(c) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States or any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
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(d) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated in the highest short-term rating category by the Rating
Agencies;
(e) the VISTA U.S. Government Money Market Fund, the VISTA
Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as
any such fund is rated in the highest rating category by Moody's or
S&P;
provided, that no instrument described hereunder shall evidence either the right
to receive (x) only interest with respect to the obligations underlying such
instrument or (y) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": A pension or benefit plan or individual retirement arrangement
that is subject to ERISA or Section 4975 of the Code.
"Pool": Pool I or Pool II, as the case may be.
"Pool I": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-1 Notes, as reflected on the Mortgage Loan Schedule.
"Pool I Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool I, substantially in the form of Exhibit A to the
Trust Agreement.
"Pool II": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-2 Notes, as reflected on the Mortgage Loan Schedule.
"Pool II Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool II, substantially in the form of Exhibit A to the
Trust Agreement.
"Predecessor Notes": With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.07 of the Indenture in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note.
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"Preference Amount": Any amounts distributed in respect of the Notes
which are recovered from any Holder of a Note as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code or other similar law in
accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Holder.
"Preference Claim": As defined in Section 8.03(f) of the Indenture.
"Pre-Funding Account": Each of the Pre-Funding Accounts established in
accordance with Section 8.01(b) of the Indenture and maintained by the Indenture
Trustee.
"Pre-Funding Amount": With respect to either Pool and any date of
determination, the amount on deposit in the related Pre-Funding Account.
"Pre-Funding Earnings": With respect to either Pool and any date of
determination, the actual investment earnings realized on amounts deposited in
the related Pre-Funding Account.
"Pre-Funding Period": With respect to either Pre-Funding Account, the
period commencing on the Closing Date and ending on the earliest to occur of (i)
the date on which the amount on deposit in such Pre-Funding Account (exclusive
of any investment earnings) is less than $100,000, (ii) the date on which any
Event of Default or Servicer Event Default occurs and (iii) the close of
business on April 30, 1999.
"Premium Amount": The product of the Premium Percentage and the
aggregate outstanding Note Principal Balance for the related Class on the
related Distribution Date, but prior to any distributions on such Distribution
Date.
"Premium Percentage": The rate at which the "Premium" is determined, as
described in the letter dated March 30, 1999 between the Servicer and the Note
Insurer.
"Premium Supplement Event": Means any Event of Default, Servicer Event
of Default or an "Event of Default" as defined in the Insurance Agreement.
"Prepayment Assumption": A constant prepayment rate of 25% HEP, used
solely for determining the accrual of original issue discount and market
discount on the Notes for federal income tax purposes.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was the subject during the related Due Period of a
Principal Prepayment, an amount equal to the excess, if any, of (a) 30 days'
interest on the Principal Balance of such Mortgage Loan at a per annum rate
equal to (i) the Mortgage Interest Rate (or at such lower rate as may be in
effect for such Mortgage Loan pursuant to application of the Civil Relief Act,
any Deficient Valuation and/or any Debt Service Reduction) minus (ii) the
Servicing Fee Rate over (b) the amount of interest actually
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remitted by the Mortgagor in connection with such Principal Prepayment less the
Servicing Fee for such Mortgage Loan in such month.
"Principal Balance": As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to prepayments received prior to
the end of the related Due Period and Deficient Valuations incurred prior to
such date of determination. The Principal Balance of a Mortgage Loan which
becomes a Liquidated Mortgage Loan on or prior to such date of determination
shall be zero.
"Principal Distribution Amount": For any Distribution Date and any Pool
of Mortgage Loans will be the lesser of:
(a) the excess of (i) the sum, as of such Distribution Date,
of (A) the Available Funds for such Pool and (B) any Insured Payment
with respect to the related Class of Notes plus, if the Note Insurer
shall so elect in its sole discretion, an amount of principal
(including Liquidated Loan Losses) that would have been payable
pursuant to clauses (b)(i) through (ix) below if sufficient funds were
made available to the Indenture Trustee, in accordance with the terms
of the Note Insurance Policy, over (ii) the sum of (w) the Interest
Distribution Amount for such Pool, (x) the Indenture Trustee Fee
allocable to such Pool and (y) the amount due the Note Insurer on such
Distribution Date pursuant to Section 8.02(ii) of the Indenture in
respect to the related Class of Notes; and
(b) the sum, without duplication, of:
(i) all principal in respect of the Mortgage Loans in
such Pool actually collected during the related Due Period;
(ii) the principal balance of each Mortgage Loan that
either was repurchased by the Unaffiliated Seller or purchased
by the Servicer on the related Servicer Distribution Date from
such Pool, to the extent such principal balance is actually
received by the Indenture Trustee;
(iii) any Substitution Adjustments delivered by the
Unaffiliated Seller on the related Servicer Distribution Date
in connection with a substitution of a Mortgage Loan in such
Pool, to the extent such Substitution Adjustments are actually
received by the Indenture Trustee;
(iv) the Net Liquidation Proceeds actually collected
by the Servicer with respect to Mortgage Loans in such Pool
during the related Due Period (to the extent such Net
Liquidation Proceeds relate to principal);
(v) with respect to the April 1999 or May 1999
Distribution Dates, moneys released from the related
Pre-Funding Account, if any;
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(vi) the proceeds received by the Indenture Trustee
upon the exercise by the Servicer of the optional redemption
of the related Class of Notes pursuant to Section 10.01 of the
Indenture (to the extent such proceeds relate to principal);
(vii) the amount of any Over-collateralization
Deficit with respect to such Pool for such Distribution Date;
(viii) the proceeds received by the Indenture Trustee
on any termination of the Trust pursuant to Section 10.01 of
the Indenture (to the extent such proceeds relate to
principal) allocable to such Pool;
(ix) the amount of any Over-collateralization
Increase Amount with respect to such Pool for such
Distribution Date, to the extent of any Remaining Excess
Cashflow for such Pool available for such purpose;
(x) if the Note Insurer shall so elect in its sole
discretion, an amount of principal (including Liquidated Loan
Losses) that would have been payable pursuant to clauses (i)
through (ix) above if sufficient funds were made available to
the Indenture Trustee in accordance with the terms of the Note
Insurance Policy;
minus
(xi) the amount of any Over-collateralization
Reduction Amount for such Pool for such Distribution Date.
In no event will the Principal Distribution Amount for a Pool with
respect to any Distribution Date be (x) less than zero or (y) greater than the
then aggregate outstanding Note Principal Balance of the related Class of Notes.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Prospectus Supplement": The Prospectus Supplement dated March 24, 1999
relating to the Notes filed with the Commission in connection with the
Registration Statement heretofore filed or to be filed with the Commission
pursuant to Rule 424(b)(2) or 424(b)(5).
"Qualified Appraiser": An appraiser, duly appointed by the Unaffiliated
Seller, who had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Federal Institutions Reform,
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Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated.
"Qualified Substitute Mortgage Loan": A mortgage loan or mortgage loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.06(b) or 4.02(b)
of the Sale and Servicing Agreement, which (a) has or have an interest rate at
least equal to those applicable to the Deleted Mortgage Loan, (b) relates or
relate to a detached one-family residence or to the same type of Residential
Dwelling or Business Purpose Property, or any combination thereof, as the
Deleted Mortgage Loan and in each case has or have the same or a better lien
priority as the Deleted Mortgage Loan and has or have the same occupancy status
as the Deleted Mortgage Loan or is or are Owner-Occupied Mortgaged
Property(ies), (c) matures or mature no later than (and not more than one year
earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio
or Loan-to-Value Ratios at the time of such substitution no higher than the
Loan-to-Value of the Deleted Mortgage Loan, (e) has or have a Combined
Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such
substitution no higher than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan, (f) has or have a Principal Balance or Principal Balances (after
application of all payments received on or prior to the date of substitution)
not substantially less and not more than the Principal Balance of the Deleted
Mortgage Loan as of such date, and (g) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01
and 3.02 of the Unaffiliated Seller's Agreement.
"Rating Agency": S&P or Moody's.
"Rating Agency Condition": Means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
ten (10) days (or such shorter period as is acceptable to each Rating Agency)
prior notice thereof and that each of the Rating Agencies shall have notified
the Indenture Trustee, the Servicer, the Depositor, the Note Insurer and the
Trust in writing that such action will not result in a reduction or withdrawal
of the then current "implied" rating of the Notes that it maintains without
taking into account the Note Insurance Policy.
"Record Date": With respect to the Notes, the last Business Day of the
month immediately preceding a month in which a Distribution Date occurs.
"Redemption Price": The Termination Price or the Note Termination
Price, as applicable.
"Redemption Date": The Distribution Date, if any, on which (i) the
Indenture is terminated and all of the Notes are redeemed pursuant to Article X
of the Indenture, which date may occur on or after the Clean-Up Call Date, or
(ii) a Class of Notes is redeemed pursuant to Article X of the Indenture, which
date may occur on or after the related Note Clean-Up Call Date.
"Reimbursement Amount": With respect to any Distribution Date and any
Pool of Mortgage Loans, equals the sum of (a)(i) all Insured Payments previously
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received by the Indenture Trustee and all Preference Amounts previously paid by
the Note Insurer and in each case not previously repaid to the Note Insurer
pursuant to Section 8.02(ii) of the Indenture, plus (ii) interest accrued on
each such Insured Payment and Preference Amounts not previously repaid
calculated at the Late Payment Rate from the date the Indenture Trustee received
the related Insured Payment or Preference Amounts paid by the Note Insurer, and
(b)(i) any amounts then due and owing to the Note Insurer under the Insurance
Agreement (excluding the Premium Amount due on such Distribution Date), as
certified to the Indenture Trustee by the Note Insurer plus (ii) interest on
such amounts at the rate specified in the Insurance Agreement. The Note Insurer
shall notify the Indenture Trustee and the Servicer of the amount of any
Reimbursement Amount.
"Remaining Excess Cashflow": For a Distribution Date and a Pool of
Mortgage Loans, the Net Monthly Excess Cashflow with respect to such Pool
remaining, if any, after payment of (i) any Net Mortgage Loan Interest Shortfall
Amounts for such Pool and such Distribution Date, and (ii) the Shortfall Amount
with respect to the other Pool of Mortgage Loans.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REO Disposition": The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
"REO Mortgage Loan": Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust.
"REO Proceeds": Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
"REO Property": A Mortgaged Property acquired by the Servicer in the
name of the Indenture Trustee on behalf of the Noteholders through foreclosure
or deed-in-lieu of foreclosure.
"Request for Release": A request for release in substantially the form
attached as Exhibit F of the Sale and Servicing Agreement.
"Reserve Payment Amount": With respect to any Distribution Date and any
Class of Notes, the amount necessary for the funds on deposit in the related
Cross-collateralization Reserve Account to equal the Specified Reserve Amount.
"Residential Dwelling": A one- to four-family dwelling, a unit in a
planned unit development, a unit in a condominium development or a townhouse.
"Responsible Officer": When used with respect to the Indenture Trustee
or the Owner Trustee, any officer assigned to the Corporate Trust Division (or
any
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successor thereto), including any Vice President, Second Vice President, Senior
Trust Officer, Trust Officer, Assistant Trust Officer, any Assistant Secretary,
any trust officer or any other officer of the Indenture Trustee or the Owner
Trustee customarily performing functions similar to those performed by any of
the above designated officers and to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject. When used with respect to the Unaffiliated Seller
or the Servicer, the president or any vice president, assistant vice president,
or any secretary or assistant secretary.
"Rolling Six Month Delinquency Rate": For any Distribution Date, the
fraction, expressed as a percentage, equal to the average of the Delinquency
Ratio for each of the six (1, 2, 3, 4 or 5 in the case of the first six (6)
Distribution Dates, as the case may be) immediately preceding Due Periods.
"Sale": The meaning specified in Section 5.17 of the Indenture.
"Sale and Servicing Agreement": The Sale and Servicing Agreement, dated
as of March 1, 1999, among the Trust, the Servicer, the Depositor, the
Collateral Agent and the Indenture Trustee, providing for, among other things,
the sale of the Mortgage Loans from the Depositor to the Trust and the servicing
of the Mortgage Loans.
"Securities Act": Means the Securities Act of 1933, as amended.
"Servicer": American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.
"Servicer Distribution Date": With respect to any Distribution Date,
the 20th day of the month in which such Distribution Date occurs, or if such
20th day is not a Business Day, the Business Day preceding such 20th day.
"Servicer Event of Default": As defined in Section 7.01 of the Sale and
Servicing Agreement.
"Servicer Extension Notice": Has the meaning set forth in Section 8.04
of the Sale and Servicing Agreement.
"Servicer Remittance Amount": With respect to any Servicer Distribution
Date, an amount equal to the sum of (i) all collections of principal and
interest on the Mortgage Loans (including Principal Prepayments, Net REO
Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during
the related Due Period, (ii) all Periodic Advances made by the Servicer with
respect to interest payments due to be received on the Mortgage Loans on the
related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to the Sale and Servicing Agreement
but excluding the following:
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(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously
made an unreimbursed Periodic Advance;
(b) amounts received on a particular Mortgage Loan with
respect to which the Servicer has previously made an unreimbursed
Servicing Advance, to the extent of such unreimbursed Servicing
Advance;
(c) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(d) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee;
(e) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(f) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
(g) certain other amounts which are reimbursable to the
Servicer, as provided in this Sale and Servicing Agreement; and
(h) Net Foreclosure Profits.
"Servicer Remittance Report": The monthly report prepared by the
Servicer and delivered to the parties specified in Section 5.16(a) of the Sale
and Servicing Agreement.
"Servicing Advances": All reasonable and customary "out-of-pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and liquidation
of the REO Property, including reasonable fees paid to any independent
contractor in connection therewith, (d) compliance with the obligations under
Section 5.06 of the Sale and Servicing Agreement, all of which reasonable and
customary out-of-pocket costs and expenses are reimbursable to the Servicer to
the extent provided in Sections 5.03 and 5.06 of the Sale and Servicing
Agreement.
"Servicing Compensation": The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 5.08 of the Sale and Servicing
Agreement.
"Servicing Fee": As to each Mortgage Loan, the annual fee payable to
the Servicer, which is calculated as an amount equal to the product of (a)
Servicing Fee Rate, and (b) the Principal Balance thereof. Such fee shall be
calculated and payable monthly only from the amounts received in respect of
interest on such Mortgage Loan and shall be
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computed on the basis of the same Principal Balance and for the period
respecting which any related interest payment on a Mortgage Loan is computed.
The Servicing Fee includes any servicing fees owed or payable to any
Subservicer.
"Servicing Fee Rate": 0.50% per annum
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee, the Collateral Agent and the Note Insurer by the
Servicer, as such list may from time to time be amended.
"Shortfall Amount": With respect to any Distribution Date and any Class
of Notes, an amount, not less than zero, equal to the excess, if any, of (A) the
sum of (x) the amounts specified in clause (a)(ii) of the definition of the
Principal Distribution Amount for such Class and (y) the amount specified in
clause (b)(vii) of the definition of the Principal Distribution Amount for such
Class and (z) any shortfall in the amount distributed to the Holders of such
Class in respect of the Net Mortgage Loan Interest Shortfall Amount for such
Class and such Distribution Date over (B) the Available Funds for such Class and
such Distribution Date, without taking into effect any Insured Payment or
Shortfall Amount and prior to the application of the amounts described in
Section 8.02 of the Indenture.
"Special Advance": As defined in Section 5.18(b) of the Sale and
Servicing Agreement.
"Specified Over-collateralized Amount": Means with respect to any
Distribution Date and any Pool:
(a) With respect to a Distribution Date occurring on or prior
to the Stepdown Date and after the Stepdown Date, if the Unaffiliated
Seller has given five days written notice of its election not to "step
down" as described in clause (b) below to the Indenture Trustee and the
Note Insurer, the amount which is equal to 5.00% of the Maximum
Collateral Amount for such Pool;
(b) With respect to a Distribution Date after the Stepdown
Date unless the Unaffiliated Seller has given five (5) days written
notice of its election not to "step down" as described in this clause
to the Indenture Trustee and the Note Insurer, (i) if the Stepdown
Requirement is satisfied, the lesser of (x) the amount equal to 5.00%
of the Maximum Collateral Amount for such Pool and (y) the greater of
(A) the amount equal to 10.00% of the then outstanding aggregate
Principal Balance of the Mortgage Loans in the related Pool of Mortgage
Loans or (B) 0.50% of the Maximum Collateral Amount for such Pool or
(ii) if the Stepdown Requirement is not satisfied, the amount which is
equal to 5.00% of the Maximum Collateral Amount for such Pool;
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<PAGE>
provided, however, that if on any Distribution Date, the Mortgage Portfolio
Performance Test is not satisfied, then the Specified Over-collateralized Amount
will be unlimited during the period that such Mortgage Portfolio Performance
Test is not satisfied.
"Specified Reserve Amount": Means, with respect to any Pool and any
Distribution Date, the excess, if any, of (x) the Specified Over-collateralized
Amount for such Pool and such Distribution Date, over (y) the
Over-collateralized Amount for such Pool and such Distribution Date.
"Standard & Poor's" or "S&P": Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
statistical rating organization designated by the Note Insurer.
"Startup Day": The day designated as such pursuant to Section 2.07(a)
of the Trust Agreement.
"Step Down Date": The Distribution Date occurring in September 2001.
"Step Down Requirement": The Stepdown Requirement is satisfied for any
date of determination thereof if as of such date of determination either (i) (x)
the Rolling Six Month Delinquency Rate is less than 9.75%, (y) the Cumulative
Loss Test is satisfied and (z) the Twelve Month Loss Amount is not greater than
or equal to 0.75% of the Pool Principal Balance as of the first day of the
twelfth preceding calendar month or (ii) the Note Insurer, by notice to each of
the parties hereto in accordance with Section 10.06 of the Sale and Servicing
Agreement, expressly waives in writing compliance with the foregoing tests for
such Distribution Date.
"Subsequent Cut-Off Date": With respect to any Subsequent Mortgage
Loans, the close of business on the last day of the calendar month preceding the
month in which the Subsequent Transfer Date for such Subsequent Mortgage Loans
occurred.
"Subsequent Contribution Agreement": Any Subsequent Contribution
Agreement, between the Depositor and the Trust, in the form of Exhibit G to the
Sale and Servicing Agreement, relating to the contribution to the Trust of
Subsequent Mortgage Loans.
"Subsequent Mortgage Loans": The Mortgage Loans hereafter purchased by
the Trust and pledged to the Indenture Trustee with funds on deposit in either
Pre-Funding Account pursuant to Section 2.14 of the Indenture.
"Subsequent Pledge Agreement": Any Subsequent Pledge Agreement, between
the Trust and the Indenture Trustee, in the form of Exhibit B to the Indenture,
relating to the pledge to the Indenture Trustee, on behalf of the Noteholders
and the Note Insurer, of Subsequent Mortgage Loans.
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"Subsequent Transfer": The purchase by the Trust and pledge to the
Indenture Trustee of the Subsequent Mortgage Loans.
"Subsequent Transfer Agreement": Any Subsequent Transfer Agreement,
among the Originators, the Unaffiliated Seller and the Depositor, in the form of
the Exhibit A to the Unaffiliated Seller's Agreement, relating to the transfer
to the Depositor of any Subsequent Mortgage Loans.
"Subsequent Transfer Date": The date on which Subsequent Mortgage Loans
are purchased by the Trust with funds in either Pre-Funding Account, such date
occurring before the end of either Pre-Funding Period.
"Subservicers": HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a
Pennsylvania corporation, or its successor in interest and New Jersey Mortgage
and Investment Corp., a New Jersey corporation, or its successor in interest.
"Subservicing Agreement": The agreement between the Servicer and the
Subservicers relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 5.13 of the Sale and Servicing Agreement, a copy of
which shall be delivered, along with any modifications thereto, to the Indenture
Trustee and the Note Insurer.
"Substitution Adjustment": As to any date on which a substitution
occurs pursuant to Sections 2.06(b) or 4.02(b) of the Sale and Servicing
Agreement, the amount (if any) by which the aggregate principal balances (after
application of principal payments received on or before the date of
substitution) of any Qualified Substitute Mortgage Loans as of the date of
substitution, are less than the aggregate of the Principal Balances of the
related Deleted Mortgage Loans together with 30-days' interest thereon at the
Mortgage Interest Rate.
"Termination Price": The sum of (i) 100% of the Aggregate Principal
Balance of each outstanding Mortgage Loan and (ii) the greater of (A) the
aggregate amount of accrued and unpaid interest on the Mortgage Loans through
the related Due Period and (B) thirty (30) days' interest thereon, computed at a
rate equal to the related Mortgage Interest Rate, in each case net of the
Servicing Fee, and (iii) any unpaid amount due the Note Insurer.
"Trust": ABFS Mortgage Loan Trust 1999-1, a Delaware statutory business
trust.
"Trust Agreement": The Trust Agreement, dated as of March 1, 1999,
among the Unaffiliated Seller, the Depositor and the Owner Trustee, relating to
the establishment of the Trust.
"Trust Certificate": Any one of the Pool I Trust Certificates or the
Pool II Trust Certificates.
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"Trust Certificateholder" or "Holder": A Person in whose name a Trust
Certificate is registered.
"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of the Indenture, for the benefit of the
Noteholders and the Note Insurer, as of any particular time, including, without
limitation, all property and interests, including all proceeds thereof, Granted
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, pursuant to the Granting Clauses of the Indenture. The Trust Estate
shall consist of two separate sub-trusts comprised of Pool I and Pool II.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it
may be amended from time to time.
"Trust Order" and "Trust Request": A written order or request of the
Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, at the direction of the related Majority Certificateholders and
delivered to the Indenture Trustee or the Authenticating Agent, as applicable.
"Twelve Month Loss Amount": With respect to any Distribution Date, an
amount equal to the aggregate of all Liquidated Loan Losses on the Mortgage
Loans which became Liquidated Mortgage Loans during the twelve (12) preceding
Due Periods.
"Unaffiliated Seller": ABFS 1999-1, Inc., a Delaware corporation.
"Unaffiliated Seller's Agreement": The Unaffiliated Seller's Agreement,
dated as of March 1, 1999, among the Unaffiliated Seller, the Originators and
the Depositor relating to the sale of the Mortgage Loans from the Originators to
the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor.
"Underwriter": Prudential Securities Incorporated.
"Underwriting Guidelines": The underwriting guidelines of the
Originators as approved by the Note Insurer and the Depositor.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or a
trust if a court within the United States can exercise primary jurisdiction over
its administration and at least one United States fiduciary has the authority to
control all substantial decisions of the trust.
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Exhibit 4.2
UNAFFILIATED SELLER'S AGREEMENT
dated as of March 1, 1999
by and among
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as Depositor,
ABFS 1999-1, INC.,
as Unaffiliated Seller
and
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
NEW JERSEY MORTGAGE AND INVESTMENT CORP.,
as Originators
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ..................................................... 1
Section 1.01. Definitions ............................................ 1
ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS ................ 3
Section 2.01. Agreement to Purchase the Initial Mortgage
Loans................................................... 3
Section 2.02. Agreement to Purchase the Subsequent Mortgage Loans .... 3
Section 2.03. Purchase Price ......................................... 4
Section 2.04. Conveyance of Mortgage Loans; Possession of
Mortgage Files ......................................... 4
Section 2.05. Delivery of Mortgage Loan Documents .................... 5
Section 2.06. Acceptance of Mortgage Loans ........................... 6
Section 2.07. Transfer of Mortgage Loans; Assignment of
Agreement .............................................. 7
Section 2.08. Examination of Mortgage Files .......................... 7
Section 2.09. Books and Records ...................................... 8
Section 2.10. Cost of Delivery and Recordation of Documents .......... 8
ARTICLE III REPRESENTATIONS AND WARRANTIES ................................ 8
Section 3.01. Representations and Warranties as to the
Originators ............................................ 8
Section 3.02. Representations and Warranties as to the
Unaffiliated Seller .................................... 11
Section 3.03. Representations and Warranties Relating to the
Mortgage Loans ......................................... 13
Section 3.04. Representations and Warranties of the Depositor ........ 23
Section 3.05. Repurchase Obligation for Defective Documentation
and for Breach of a Representation or Warranty ......... 24
ARTICLE IV THE UNAFFILIATED SELLER ........................................ 26
Section 4.01. Covenants of the Originators and the Unaffiliated
Seller ................................................. 26
Section 4.02. Merger or Consolidation ................................ 27
Section 4.03. Costs .................................................. 27
Section 4.04. Indemnification ........................................ 28
ARTICLE V CONDITIONS OF CLOSING ........................................... 30
Section 5.01. Conditions of Depositor's Obligations .................. 30
Section 5.02. Conditions of Unaffiliated Seller's Obligations ........ 32
Section 5.03. Termination of Depositor's Obligations ................. 33
ARTICLE VI MISCELLANEOUS .................................................. 33
Section 6.01. Notices ................................................ 33
Section 6.02. Severability of Provisions ............................. 34
<PAGE>
Section 6.03. Agreement of Unaffiliated Seller ....................... 34
Section 6.04. Survival ............................................... 34
Section 6.05. Effect of Headings and Table of Contents ............... 34
Section 6.06. Successors and Assigns ................................. 34
Section 6.07. Confirmation of Intent; Grant of Security Interest ..... 34
Section 6.08. Miscellaneous .......................................... 35
Section 6.09. Amendments ............................................. 35
Section 6.10. Third-Party Beneficiaries .............................. 36
Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL ................................... 36
Section 6.12. Execution in Counterparts .............................. 37
SCHEDULES AND EXHIBITS
Schedule I - Mortgage Loan Schedule
Exhibit A - Form of Subsequent Transfer Agreement
<PAGE>
This UNAFFILIATED SELLER'S AGREEMENT, dated as of March 1, 1999 (this
"Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
a Delaware corporation, (the "Depositor"), ABFS 1999-1, INC., a Delaware
corporation (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC., a
Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND
MORTGAGE, a Pennsylvania corporation ("Upland") and NEW JERSEY MORTGAGE AND
INVESTMENT CORP., a New Jersey corporation ("NJMIC", and together with ABC and
Upland, the "Originators").
W I T N E S S E T H:
WHEREAS, Schedule I attached hereto and made a part hereof lists
certain fixed rate business and consumer purpose first and second lien mortgage
loans (the "Mortgage Loans") owned by the Originators that the Originators
desire to sell to the Unaffiliated Seller, the Unaffiliated Seller desires to
sell to the Depositor and that the Depositor desires to purchase;
WHEREAS, it is the intention of the Originators, the Unaffiliated
Seller and the Depositor that simultaneously with the Originators' conveyance of
the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's
conveyance of the Mortgage Loans to the Depositor on the Closing Date, (a) the
Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust 1999-1,
a Delaware business trust (the "Trust") pursuant to a Sale and Servicing
Agreement to be dated as of March 1, 1999 (the "Sale and Servicing Agreement"),
to be entered into by and among the Depositor, as depositor, the Trust, as
issuer, ABC, as servicer (in such capacity, the "Servicer"), Chase Bank of
Texas, N.A., a national banking association, as collateral agent (the
"Collateral Agent"), and The Bank of New York, a New York banking corporation,
as indenture trustee (the "Indenture Trustee"), and (b) the Trust shall issue
its Mortgage Backed Notes (the "Notes"), pursuant to an Indenture, to be dated
as of March 1, 1999 (the "Indenture"), by and between the Trust and the
Indenture Trustee, which Notes will be secured by a pledge of the assets of the
Trust.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) Whenever used herein, the following
words and phrases, unless the context otherwise requires, shall have the
meanings specified in this Article I:
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Prospectus" means the Prospectus dated March 23, 1999 relating to the
offering by the Depositor from time to time of its Mortgage Backed Notes
(Issuable in Series) in the form in which it was or will be filed with the
Commission pursuant to Rule 424(b) under the Securities Act with respect to the
offer and sale of the Notes.
<PAGE>
"Prospectus Supplement" means the Prospectus Supplement dated March 24,
1999, relating to the offering of the Notes in the form in which it was or will
be filed with the Commission pursuant to Rule 424(b) under the Securities Act
with respect to the offer and sale of the Notes.
"Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 333-74859) relating to the offering by
the Depositor from time to time of its Mortgage Backed Notes (Issuable in
Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of the
following conditions:
(a) a stop order suspending the effectiveness of the
Registration Statement shall have been issued or a proceeding for that
purpose shall have been initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery of this
Agreement, a downgrading, or public notification of a possible change,
without indication of direction, shall have occurred in the rating
afforded any of the debt securities or claims paying ability of any
person providing any form of credit enhancement for any of the Notes,
by any "nationally recognized statistical rating organization," as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act; or
(c) subsequent to the execution and delivery of this
Agreement, there shall have occurred an adverse change in the
condition, financial or otherwise, earnings, affairs, regulatory
situation or business prospects of the Note Insurer or the Unaffiliated
Seller reasonably determined by the Depositor to be material; or
(d) subsequent to the date of this Agreement there shall have
occurred any of the following: (i) a suspension or material limitation
in trading in securities substantially similar to the Notes; (ii) a
general moratorium on commercial banking activities in the State of New
York declared by either Federal or New York State authorities; or (iii)
the engagement by the United States in hostilities, or the escalation
of such hostilities, or any calamity or crisis, if the effect of any
such event specified in this clause (iii) in the reasonable judgment of
the Depositor makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes on the terms and in the
manner contemplated in the Prospectus Supplement.
(b) Capitalized terms used herein that are not otherwise defined shall
have the respective meanings ascribed thereto in Appendix I to the Indenture.
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ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01 Agreement to Purchase the Initial Mortgage Loans. (a)
Subject to the terms and conditions of this Agreement, the Originators agree to
sell, and the Unaffiliated Seller agrees to purchase on the Closing Date and
immediately subsequent thereto, the Unaffiliated Seller agrees to sell, and the
Depositor agrees to purchase, the Mortgage Loans having the Cut-Off Date
Aggregate Principal Balance or, in accordance with Section 2.08 hereof, such
other balance as is evidenced by the actual Cut-Off Date Aggregate Principal
Balance of the Mortgage Loans accepted by the Depositor on the Closing Date and
listed in the Mortgage Loan Schedule.
(b) Subject to Section 2.08 hereof, the Depositor and the Unaffiliated
Seller have agreed upon which of the Unaffiliated Seller's Mortgage Loans are to
be purchased by the Depositor on the Closing Date pursuant to this Agreement,
and the Unaffiliated Seller has prepared a schedule describing the Mortgage
Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage Loans to
be purchased under this Agreement, which Mortgage Loan Schedule is attached
hereto as Schedule I. The Mortgage Loan Schedule shall conform to the
requirements of the Depositor and to the definition of "Mortgage Loan Schedule"
in Appendix I to the Indenture.
(c) The closing for the purchase and sale of the Mortgage Loans shall
take place at the offices of Dewey Ballantine LLP, New York, New York, at 10:00
a.m., New York time, on the Closing Date, or such other place and time as the
parties shall agree.
Section 2.02 Agreement to Purchase the Subsequent Mortgage Loans.
Subject to the satisfaction of the conditions set forth in Section 2.14(b) of
the Indenture, (i) in consideration of the Unaffiliated Seller's delivery on the
related Subsequent Transfer Dates to or upon the order of the Originators of all
or a portion of the balance of funds on deposit in the Pre-Funding Accounts, the
Originators shall on any Subsequent Transfer Date sell, transfer, assign, set
over and convey to the Unaffiliated Seller, without recourse, but subject to the
terms and provisions of this Agreement, all of the right, title and interest of
the Originators in and to the Subsequent Mortgage Loans, including all principal
of, and all interest due on, such Subsequent Mortgage Loans, and all other
assets included or to be included in the Trust Estate and (ii) in consideration
of the Depositor's delivery on the related Subsequent Transfer Dates to or upon
the order of the Unaffiliated Seller of all or a portion of the balance of funds
on deposit in the Pre-Funding Accounts, the Unaffiliated Seller shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey to the
Depositor, without recourse, but subject to the terms and provisions of this
Agreement, all of the right, title and interest of the Unaffiliated Seller in
and to the Subsequent Mortgage Loans, including all principal of, and all
interest due on, such Subsequent Mortgage Loans, and all other assets included
or to be included in the Trust Estate.
The amount released from a Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred
percent (100%) of the Aggregate Principal Balance of such Subsequent Mortgage
Loans so transferred, as of the related Subsequent Cut-Off Date.
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The obligation of the Depositor to purchase a Subsequent Mortgage Loan
on any Subsequent Transfer Date is subject to the satisfaction of the
requirements set forth in Section 2.14(b) of the Indenture.
Section 2.03 Purchase Price. (a) On the Closing Date, as consideration
for the Originators' sale of the Initial Mortgage Loans to the Unaffiliated
Seller, the Unaffiliated Seller will deliver to the Originators an amount in
cash equal to the sum of (A) 99.65%, and 99.65% of the Original Note Principal
Balance as of the Closing Date of the Class A-1 Notes and Class A-2 Notes,
respectively, plus (B) accrued interest on the Original Note Principal Balance
of the Class A-1 Notes and Class A-2 Notes at the rate of 6.545% per annum and
6.580% per annum, respectively, from (and including) March 1, 1999 to (but not
including) March 30, 1999, minus (C) the Original Pre-Funded Amount and the
Original Capitalized Interest Amount for each class of Notes, payable by wire
transfer of same day funds.
On the Closing Date, as full consideration for the Unaffiliated
Seller's sale of the Initial Mortgage Loans to the Depositor, the Depositor will
deliver to, or at the direction of, the Unaffiliated Seller (i) an amount in
cash equal to the sum of (A) 99.65 and 99.65% of the Original Note Principal
Balance as of the Closing Date of the Class A-1 Notes and Class A-2 Notes,
respectively, plus (B) accrued interest on the Original Note Principal Balance
of the Class A-1 Notes and Class A-2 Notes at the rate of 6.545% per annum and
6.580% per annum, respectively, from (and including) March 1, 1999 to (but not
including) March 30, 1999, minus (C) the Original Pre-Funded Amount and the
Original Capitalized Interest Amount for each class of Notes, payable by wire
transfer of same day funds, and (ii) the Trust Certificates to be issued
pursuant to the Trust Agreement.
(b) On each Subsequent Transfer Date, as full consideration for the
Originators' sale of the Subsequent Mortgage Loans to the Unaffiliated Seller
and the Unaffiliated Seller's sale of the Subsequent Mortgage Loans to the
Depositor, the Depositor will deliver to the Unaffiliated Seller and the
Unaffiliated Seller will deliver to the Originators an amount in cash equal to
the sum of 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans of the related Pool as of the related Subsequent Cut-Off Date.
Section 2.04 Conveyance of Mortgage Loans; Possession of Mortgage
Files. (a) On the Closing Date and on each Subsequent Transfer Date, the
Originators shall sell, transfer, assign, set over and convey to the
Unaffiliated Seller, without recourse, but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the related Cut-Off Date, the Insurance Policies relating to each such Mortgage
Loan and all right, title and interest in and to the proceeds of such Insurance
Policies and all of its rights under this Agreement with respect to the Mortgage
Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable, and the Unaffiliated Seller shall sell, transfer, assign, set over
and convey to the Depositor, without recourse, but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the related Cut-Off Date, the Insurance Policies relating to each such Mortgage
Loan, all right, title and interest in and to the proceeds of such Insurance
Policies and all of its rights under this Agreement with respect to the Mortgage
Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable. Upon payment of the purchase price for
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such Mortgage Loans as provided in Section 2.03 of this Agreement, the
Originators and the Unaffiliated Seller shall have hereby, and shall be deemed
to have, sold, transferred, assigned, set over and conveyed to the Depositor
such Mortgage Loans, the Insurance Policies relating to each such Mortgage Loan,
all right, title and interest in and to the proceeds of such Insurance Policies
and all of its rights under this Agreement with respect to the Mortgage Loans
from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable.
(b) Upon the sale of such Mortgage Loans, the ownership of each related
Mortgage Note, each related Mortgage and the contents of the related Mortgage
File shall immediately vest in the Depositor and the ownership of all related
records and documents with respect to each Mortgage Loan prepared by or which
come into the possession of the Originators or the Unaffiliated Seller shall
immediately vest in the Depositor. The contents of any Indenture Trustee's
Mortgage File in the possession of the Originators or the Unaffiliated Seller at
any time after such sale, and any principal collected and interest due on the
Mortgage Loans after the related Cut-Off Date and received by the Originators or
the Unaffiliated Seller, shall be held in trust by the Originators or the
Unaffiliated Seller for the benefit of the Depositor as the owner thereof, and
shall be promptly delivered by the Originators or the Unaffiliated Seller to or
upon the order of the Depositor.
(c) Pursuant to the Sale and Servicing Agreement, the Depositor shall,
on the Closing Date, assign all of its right, title and interest in and to the
Initial Mortgage Loans to the Trust. Pursuant to the Indenture, the Trust shall,
on the Closing Date, pledge all of its right, title and interest in and to the
Initial Mortgage Loans to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer.
Section 2.05 Delivery of Mortgage Loan Documents. (a) On or prior to
the Closing Date or Subsequent Transfer Date, as applicable, the related
Originator shall deliver to the Unaffiliated Seller, and the Unaffiliated Seller
shall deliver to the Collateral Agent, on behalf of the Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust being the assignee of
the Depositor pursuant to the Sale and Servicing Agreement), each of the
documents for each applicable Mortgage Loan in accordance with the provisions of
Section 2.05 of the Sale and Servicing Agreement.
(b) As promptly as practicable, but in any event within thirty (30)
days from the Closing Date or the Subsequent Transfer Date, as applicable, the
Unaffiliated Seller shall promptly submit, or cause to be submitted by the
related Originator, for recording in the appropriate public office for real
property records, each assignment referred to in Section 2.05(a)(iv) of the Sale
and Servicing Agreement. The Collateral Agent, on behalf of the Indenture
Trustee, shall be required to retain a copy of each assignment submitted for
recording. In the event that any such assignment is lost or returned unrecorded
because of a defect therein, the Unaffiliated Seller or such Originator shall
promptly prepare a substitute assignment or cure such defect, as the case may
be, and thereafter the Unaffiliated Seller or such Originator shall submit each
such assignment for recording.
(c) The Unaffiliated Seller or the related Originator shall, within
five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust
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being the assignee of the Depositor pursuant to the Sale and Servicing
Agreement): (i) the original recorded Mortgage and related power of attorney, if
any, in those instances where a copy thereof certified by the related Originator
was delivered to the Collateral Agent, on behalf of the Indenture Trustee,
pursuant to Section 2.05 of the Sale and Servicing Agreement; (ii) the original
recorded assignment of Mortgage from the related Originator to the Indenture
Trustee, which, together with any intervening assignments of Mortgage, evidences
a complete chain of assignment from the originator of the Mortgage Loan to the
Indenture Trustee in those instances where copies of such assignments certified
by the related Originator were delivered to the Collateral Agent, on behalf of
the Indenture Trustee, pursuant to Section 2.05 of the Sale and Servicing
Agreement; and (iii) the title insurance policy or title opinion required in
Section 2.05(a)(vi) of the Sale and Servicing Agreement.
Notwithstanding anything to the contrary contained in this Section
2.05, in those instances where the public recording office retains the original
Mortgage, power of attorney, if any, assignment or assignment of Mortgage after
it has been recorded or such original has been lost, the Unaffiliated Seller or
the related Originator shall be deemed to have satisfied its obligations
hereunder upon delivery to the Collateral Agent, on behalf of the Indenture
Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or
assignment of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.
From time to time the Unaffiliated Seller or the related Originator may
forward or cause to be forwarded to the Collateral Agent, on behalf of the
Indenture Trustee, additional original documents evidencing an assumption or
modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that are not
delivered to the Collateral Agent, on behalf of the Indenture Trustee, as
permitted by Section 2.05(a) hereof are and shall be held by the Servicer, the
Unaffiliated Seller or the related Originator in trust for the benefit of the
Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the
event that any such original document is required pursuant to the terms of this
Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document
shall be delivered promptly to the Collateral Agent, on behalf of the Indenture
Trustee. From and after the sale of the Mortgage Loans to the Depositor pursuant
hereto, to the extent that the Unaffiliated Seller or the related Originator
retains legal title of record to any Mortgage Loans prior to the vesting of
legal title in the Indenture Trustee, such title shall be retained in trust for
the Trust as the owner of the Mortgage Loans, as the Depositor's assignee, and
the Indenture Trustee, as the Trust's pledgee.
Section 2.06 Acceptance of Mortgage Loans. (a) To evidence the transfer
of the Mortgage Loans and related Mortgage Files to the Collateral Agent, on
behalf of the Indenture Trustee, the Collateral Agent shall deliver the
acknowledgement of receipt, the Initial Certification and the Final
Certification required to be delivered pursuant to Section 2.06(b) of the Sale
and Servicing Agreement.
(b) The Sale and Servicing Agreement provides that, if the Collateral
Agent during the process of reviewing the Indenture Trustee's Mortgage Files,
finds any document constituting a part of a Indenture Trustee's Mortgage File
which is not executed, has not been received, is unrelated to the Mortgage Loan
identified in the Mortgage Loan Schedule, or does
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not conform to the requirements of Section 2.05 of the Sale and Servicing
Agreement or the description thereof as set forth in the Mortgage Loan Schedule,
the Collateral Agent shall promptly so notify the Servicer, the Unaffiliated
Seller, the Indenture Trustee, the related Originator and the Note Insurer. The
Unaffiliated Seller and the Originators agrees that in performing any such
review, the Collateral Agent may conclusively rely on the Unaffiliated Seller
and the Originators as to the purported genuineness of any such document and any
signature thereon. Each of the Originators and the Unaffiliated Seller agrees to
use reasonable efforts to remedy a material defect in a document constituting
part of an Indenture Trustee's Mortgage File of which it is notified. If,
however, within sixty (60) days after such notice neither the Unaffiliated
Seller nor any Originator has remedied the defect and the defect materially and
adversely affects the interest of the Noteholders in the related Mortgage Loan
or the interests of the Note Insurer, then the Unaffiliated Seller and the
Originators shall be obligated to either substitute in lieu of such Mortgage
Loan a Qualified Substitute Mortgage Loan or purchase such Mortgage Loan in the
manner and subject to the conditions set forth in Section 3.05 hereof.
(c) The failure of the Collateral Agent, the Indenture Trustee or the
Note Insurer to give any notice contemplated herein within the time periods
specified above shall not affect or relieve the Unaffiliated Seller's or the
Originators obligation to repurchase for any Mortgage Loan pursuant to this
Section 2.06 or Section 3.05 of this Agreement.
Section 2.07 Transfer of Mortgage Loans; Assignment of Agreement. The
Originators and the Unaffiliated Seller each hereby acknowledges and agrees that
the Depositor or the Trust may assign its interest under this Agreement to the
Indenture Trustee as may be required to effect the purposes of the Indenture and
the Sale and Servicing Agreement, without further notice to, or consent of, the
Unaffiliated Seller or the Originators, and the Indenture Trustee shall succeed
to such of the rights and obligations of the Depositor and the Trust hereunder
as shall be so assigned. The Depositor shall, pursuant to the Sale and Servicing
Agreement, assign all of its right, title and interest in and to the Mortgage
Loans and its right to exercise the remedies created by Sections 2.06 and 3.05
hereof for breaches of the representations, warranties, agreements and covenants
of the Unaffiliated Seller or the Originators contained in Sections 2.05, 2.06,
3.02 and 3.03 hereof to the Trust, and the Trust shall, pursuant to the
Indenture, pledge such right, title and interest to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer. Each of the Originators and
the Unaffiliated Seller agrees that, upon such assignment to the Trust and
pledge to the Indenture Trustee, such representations, warranties, agreements
and covenants will run to and be for the benefit of the Indenture Trustee and
the Indenture Trustee may enforce, without joinder of the Depositor or the
Trust, the repurchase obligations of the Unaffiliated Seller and the Originators
set forth herein with respect to breaches of such representations, warranties,
agreements and covenants.
Section 2.08 Examination of Mortgage Files. Prior to the Closing Date
and each Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall
make the Mortgage Files available to the Depositor or its designee for
examination at the Unaffiliated Seller's offices or at such other place as the
Unaffiliated Seller shall reasonably specify. Such examination may be made by
the Depositor or its designee at any time on or before the Closing Date or
Subsequent Transfer Date, as the case may be. If the Depositor or its designee
makes such examination prior to the Closing Date or Subsequent Transfer Date, as
the case may be, and
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identifies any Mortgage Loans that do not conform to the requirements of the
Depositor as described in this Agreement, such Mortgage Loans shall be deleted
from the Mortgage Loan Schedule and may be replaced, prior to the Closing Date
or Subsequent Transfer Date, as the case may be, by substitute Mortgage Loans
acceptable to the Depositor. The Depositor may, at its option and without notice
to the Unaffiliated Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Depositor, the
Collateral Agent or the Indenture Trustee has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files shall not affect the
rights of the Depositor or the Indenture Trustee to demand repurchase or other
relief as provided in this Agreement.
Section 2.09 Books and Records. The transfer of each Mortgage Loan
shall be reflected on each of the Originators' and the Unaffiliated Seller's
accounting and other records, balance sheet and other financial statements as a
sale of assets by the Originators to the Unaffiliated Seller, by the
Unaffiliated Seller to the Depositor and by the Depositor to the Trust;
provided, that the Unaffiliated Seller's tax returns shall not reflect the
transfer from the Unaffiliated Seller to the Depositor and from the Depositor to
the Trust as a sale of the Mortgage Loans. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the Trust, and the
pledge of each Mortgage Loan by the Trust to the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer.
Section 2.10 Cost of Delivery and Recordation of Documents. The costs
relating to the delivery and recordation of the documents in connection with the
Mortgage Loans as specified in this Article II and in Article II of the Sale and
Servicing Agreement shall be borne by the Unaffiliated Seller or the
Originators.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties as to the Originators. Each
of the Originators hereby represents and warrants to the Unaffiliated Seller and
the Depositor, as of the Closing Date, that:
(a) The Originator is a corporation duly organized, validly
existing and in good standing under the laws of (i) with respect to ABC
and Upland, the State of Pennsylvania, or (ii) with respect to NJMIC,
the State of New Jersey, and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the
laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Originator and to perform
its obligations as the Originator hereunder, and in any event the
Originator is in compliance with the laws of any such state to the
extent necessary to ensure the enforceability of the related Mortgage
Loan; the Originator has the full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered
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pursuant to this Agreement) by the Originator and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Originator; and all requisite corporate action has
been taken by the Originator to make this Agreement valid and binding
upon the Originator in accordance with its terms;
(b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Originator of, or compliance by the Originator
with, this Agreement or the sale of the Mortgage Loans pursuant to the
terms of this Agreement or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Originator or
the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, has or will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Originator's charter or by-laws or any legal
restriction or any agreement or instrument to which the Originator is
now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any
of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Originator or its
property is subject, or impair the ability of the Indenture Trustee (or
the Servicer as the agent of the Indenture Trustee) to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than the information under the caption
"Underwriting") nor any statement, report or other document prepared by
the Originator and furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby
contains any untrue statement or alleged untrue statement of any
material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Originator, threatened before a
court, administrative agency or government tribunal against the
Originator which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Originator, or in any
material impairment of the right or ability of the Originator to carry
on its business substantially as now conducted, or in any material
liability on the part of the Originator, or which would draw into
question the validity of this Agreement, the Mortgage Loans, or of any
action taken or to be taken in connection with the obligations of the
Originator contemplated herein, or which would impair materially the
ability of the Originator to perform under the terms of this Agreement
or that will prohibit its entering into this Agreement or the
consummation of any of the transactions contemplated hereby;
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(f) The Originator is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the
Originator and its performance of and compliance with the terms hereof
will not constitute a violation or default with respect to, any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which violation or
default might have consequences that would materially and adversely
affect the condition (financial or other) or operations of the
Originator or its properties or might have consequences that would
materially and adversely affect its performance hereunder or under any
subservicing agreement;
(g) Upon the receipt of each Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee)
will have good title to each related Mortgage Loan and such other items
comprising the corpus of the Trust Estate free and clear of any lien
created by the Originator (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and
the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Originator pursuant to this Agreement are not subject
to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Originator, the Originator acquired title to the Mortgage Loan in good
faith, without notice of any adverse claim;
(j) The Originator does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Originator is solvent and the
sale of the Mortgage Loans by the Originator pursuant to the terms of
this Agreement will not cause the Originator to become insolvent. The
sale of the Mortgage Loans by the Originator pursuant to the terms of
this Agreement was not undertaken with the intent to hinder, delay or
defraud any of the Originator's creditors;
(k) The Mortgage Loans are not intentionally selected in a
manner so as to affect adversely the interests of the Depositor or of
any transferee of the Depositor (including the Trust and the Indenture
Trustee);
(l) The Originator has determined that it will treat the
disposition of the Mortgage Loans pursuant to this Agreement as a sale
for accounting and tax purposes;
(m) The Originator has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans to the Depositor other
than to the Depositor or an affiliate thereof; and
(n) The consideration received by the Originator upon the sale
of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
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Section 3.02 Representations and Warranties as to the Unaffiliated
Seller. The Unaffiliated Seller hereby represents and warrants to the Depositor,
as of the Closing Date, that:
(a) The Unaffiliated Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Unaffiliated Seller and to perform its
obligations as the Unaffiliated Seller hereunder, and in any event the
Unaffiliated Seller is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related
Mortgage Loan; the Unaffiliated Seller has the full power and
authority, corporate and otherwise, to execute and deliver this
Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the
Unaffiliated Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of
the Unaffiliated Seller; and all requisite corporate action has been
taken by the Unaffiliated Seller to make this Agreement valid and
binding upon the Unaffiliated Seller in accordance with its terms;
(b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Unaffiliated Seller of or compliance by the
Unaffiliated Seller with this Agreement or the sale of the Mortgage
Loans pursuant to the terms of this Agreement or the consummation of
the transactions contemplated by this Agreement, or if required, such
approval has been obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Unaffiliated
Seller nor the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, has or
will conflict with or result in a breach of any of the terms,
conditions or provisions of the Unaffiliated Seller's charter or
by-laws or any legal restriction or any agreement or instrument to
which the Unaffiliated Seller is now a party or by which it is bound or
to which its property is subject, or constitute a default or result in
an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Unaffiliated Seller or its property is subject, or impair the ability
of the Indenture Trustee (or the Servicer as the agent of the Indenture
Trustee) to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than the information under the caption
"Underwriting") nor any statement, report or other document prepared by
the Unaffiliated Seller and furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement or alleged untrue statement of any
material fact or omits to state a material fact necessary to make the
statements contained
11
<PAGE>
herein or therein, in light of the circumstances under which they were
made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending nor, to the knowledge of the Unaffiliated Seller, threatened
before a court, administrative agency or government tribunal against
the Unaffiliated Seller which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Unaffiliated Seller, or in any material impairment of the right or
ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or in any material liability on the
part of the Unaffiliated Seller, or which would draw into question the
validity of this Agreement, the Mortgage Loans, or of any action taken
or to be taken in connection with the obligations of the Unaffiliated
Seller contemplated herein, or which would impair materially the
ability of the Unaffiliated Seller to perform under the terms of this
Agreement or that will prohibit its entering into this Agreement or the
consummation of any of the transactions contemplated hereby;
(f) The Unaffiliated Seller is not in violation of or in
default with respect to, and the execution and delivery of this
Agreement by the Unaffiliated Seller and its performance of and
compliance with the terms hereof will not constitute a violation or
default with respect to, any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Unaffiliated Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder or under any subservicing agreement;
(g) Upon the receipt of each Mortgage File by the Depositor
(or its assignee) under this Agreement, the Depositor (or its assignee)
will have good title to each related Mortgage Loan and such other items
comprising the corpus of the Trust Estate free and clear of any lien
created by the Unaffiliated Seller (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Unaffiliated
Seller, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Unaffiliated Seller pursuant to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Unaffiliated Seller, the Unaffiliated Seller acquired title to the
Mortgage Loan in good faith, without notice of any adverse claim;
(j) The Unaffiliated Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Unaffiliated Seller is
solvent and the sale of the Mortgage Loans by the Unaffiliated Seller
pursuant to the terms of this Agreement will not cause the Unaffiliated
12
<PAGE>
Seller to become insolvent. The sale of the Mortgage Loans by the
Unaffiliated Seller pursuant to the terms of this Agreement was not
undertaken with the intent to hinder, delay or defraud any of the
Unaffiliated Seller's creditors;
(k) The Mortgage Loans are not intentionally selected in a
manner so as to affect adversely the interests of the Depositor or of
any transferee of the Depositor (including the Trust and the Indenture
Trustee);
(l) The Unaffiliated Seller has determined that it will treat
the disposition of the Mortgage Loans pursuant to this Agreement as a
sale for accounting purposes;
(m) The Unaffiliated Seller has not dealt with any broker or
agent or anyone else that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans to the
Depositor other than to the Depositor or an affiliate thereof; and
(n) The consideration received by the Unaffiliated Seller upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Section 3.03 Representations and Warranties Relating to the Mortgage
Loans. The Originators represent and warrant to the Unaffiliated Seller and the
Unaffiliated Seller represents to the Depositor that, as of the Closing Date, as
to each Initial Mortgage Loan, and as of the Subsequent Transfer Date, as to
each Subsequent Mortgage Loan, immediately prior to the sale and transfer of
such Mortgage Loan by the Unaffiliated Seller to the Depositor:
(a) The information set forth in each Mortgage Loan Schedule
is complete, true and correct;
(b) The information to be provided by the Unaffiliated Seller
or the Originators, directly or indirectly, to the Depositor in
connection with a Subsequent Mortgage Loan will be true and correct in
all material respects at the date or dates respecting which such
information is furnished;
(c) Each Mortgage is a valid first or second lien on a fee
simple (or its equivalent under applicable state law) estate in the
real property securing the amount owed by the Mortgagor under the
Mortgage Note subject only to (i) the lien of current real property
taxes and assessments which are not delinquent, (ii) with respect to
any Mortgage Loan identified on the Mortgage Loan Schedule as secured
by a second lien, the related first mortgage loan, (iii) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained
in connection with the origination of the related Mortgage Loan
obtained by the Unaffiliated Seller and (iv) other matters to which
like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by such
Mortgage;
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<PAGE>
(d) Immediately prior to the transfer and assignment by the
related Originator to the Unaffiliated Seller and by the Unaffiliated
Seller to the Depositor, the Unaffiliated Seller or such Originator, as
applicable, had good title to, and was the sole owner of each Mortgage
Loan, free of any interest of any other Person, and the Unaffiliated
Seller or such Originator has transferred all right, title and interest
in each Mortgage Loan to the Depositor or the Unaffiliated Seller, as
applicable;
(e) As of the applicable Cut-Off Date, no payment of principal
or interest on or in respect of any Mortgage Loan remains unpaid for
thirty (30) or more days past the date the same was due in accordance
with the related Mortgage Note without regard to applicable grace
periods;
(f) As of the Initial Cut-Off Date, no Mortgage Loan has a
Mortgage Interest Rate less than 8.24% per annum in Pool I and 7.50%
per annum in Pool II and the weighted average Mortgage Interest Rate of
the Mortgage Loans is 11.04% in Pool I and 11.49% in Pool II;
(g) At origination, no Mortgage Loan in Pool I or Pool II had
an original term to maturity of greater than 360 months;
(h) As of the Initial Cut-Off Date, the weighted average
remaining term to maturity of the Mortgage Loans is 266 months for the
Mortgage Loans in Pool I and 244 months for the Mortgage Loans in Pool
II;
(i) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no mechanics' lien or claim for work,
labor or material (and no rights are outstanding that under law could
give rise to such lien) affecting the premises subject to any Mortgage
which is or may be a lien prior to, or equal or coordinate with, the
lien of such Mortgage, except those which are insured against by the
title insurance policy referred to in (ff) below;
(j) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no delinquent tax or assessment lien
against any Mortgaged Property;
(k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
including, without limitation, the obligation of the Mortgagor to pay
the unpaid principal of and interest on the Mortgage Note, are each not
subject to any right of rescission (or any such rescission right has
expired in accordance with applicable law), set-off, counterclaim, or
defense, including the defense of usury, nor will the operation of any
of the terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim, or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim, or
defense has been asserted with respect thereto;
(l) To the best knowledge of the Unaffiliated Seller and each
of the Originators, the Mortgaged Property is free of material damage
and is in good repair, and
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<PAGE>
there is no pending or threatened proceeding for the total or partial
condemnation of the Mortgaged Property;
(m) Neither the Originators nor the Unaffiliated Seller has
received a notice of default of any first mortgage loan secured by the
Mortgaged Property which has not been cured by a party other than the
Unaffiliated Seller;
(n) Each Mortgage Note and Mortgage are in substantially the
forms previously provided to the Depositor and the Indenture Trustee on
behalf of the Unaffiliated Seller;
(o) No Mortgage Loan had, at the date of origination, a CLTV
in excess of 100%, and the weighted average CLTV of all Mortgage
Loans as of the Initial Cut-Off Date is approximately 78.98% in Pool
I and 73.43% in Pool II;
(p) The Mortgage Loan was not originated in a program in which
the amount of documentation in the underwriting process was limited in
comparison to the originator's normal documentation requirements;
(q) No more than the following percentages of the Mortgage
Loans by Cut-Off Date Aggregate Principal Balance are secured by
Mortgaged Properties located in the following states:
Pool I
---------------------------------------------------------------------
Percentage of Cut-Off Date
Aggregate
State Principal Balance
------------------------------- ------------------------------
California 0.12%
Connecticut 1.62
Delaware 2.45
Florida 7.65
Georgia 7.49
Illinois 4.50
Indiana 0.05
Kentucky 0.16
Maine 0.05
Maryland 2.42
Michigan 0.02
Mississippi 0.52
New Jersey 29.78
New York 23.88
North Carolina 1.20
Ohio 1.80
Pennsylvania 14.10
South Carolina 0.17
Tennessee 0.24
Virginia 1.51
West Virginia 0.24
----------------------
100.00%
======================
15
<PAGE>
Pool II
---------------------------------------------------------------------
Percentage of Cut-Off Date
Aggregate
State Principal Balance
------------------------------- ------------------------------
Arizona 0.08
Colorado 0.09
Connecticut 2.45
Delaware 1.88
Florida 9.19
Georgia 10.37
Illinois 5.43
Indiana 0.47
Kentucky 0.41
Maryland 1.70
Michigan 0.13
Mississippi 0.80
Missouri 0.06
Nebraska 0.37
New Jersey 20.78
New York 17.73
North Carolina 1.75
Ohio 1.98
Pennsylvania 21.11
South Carolina 0.45
Tennessee 0.50
Vermont 0.07
Virginia 1.87
West Virginia 0.33
----------------------
100.00%
======================
(r) The Mortgage Loans were not selected by the Unaffiliated
Seller or the Originators for sale hereunder or inclusion in the Trust
Estate on any basis adverse to the Trust Estate relative to the
portfolio of similar mortgage loans of the Unaffiliated Seller or the
Originators;
(s) None of the Mortgage Loans constitutes a lien on leasehold
interests;
(t) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. To the best of the Unaffiliated Seller's and the
Originators' knowledge, there is no homestead or other exemption
available to the related Mortgagor which would materially interfere
with the right to sell the related Mortgaged Property at a trustee's
sale or the right to foreclose the related Mortgage. The Mortgage
contains customary and enforceable provisions for the acceleration of
the payment of the Principal Balance of such Mortgage Loan in the event
all or any part of the related Mortgaged Property is sold or otherwise
transferred without the prior written consent of the holder thereof;
(u) The proceeds of such Mortgage Loan have been fully
disbursed, including reserves set aside by the Unaffiliated Seller or
the Originators, there is no requirement for, and neither the
Unaffiliated Seller nor the Originators shall make any, future advances
thereunder. Any future advances made prior to the applicable Cut-Off
Date have been consolidated with the principal balance secured by the
Mortgage, and such
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<PAGE>
principal balance, as consolidated, bears a single interest rate and
single repayment term reflected on the applicable Mortgage Loan
Schedule. The Principal Balance as of the applicable Cut-Off Date does
not exceed the original principal amount of such Mortgage Loan. Except
with respect to no more than $150,000 of escrow funds, any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees, and expenses incurred in making, or recording
such Mortgage Loan have been paid;
(v) All Mortgage Loans were originated in compliance with the
Originators' Underwriting Guidelines;
(w) The terms of the Mortgage and the Mortgage Note have not
been impaired, waived, altered, or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Indenture Trustee and which has been delivered to
the Collateral Agent, on behalf of the Indenture Trustee. The substance
of any such alteration or modification is or as to Subsequent Mortgage
Loans will be reflected on the applicable Mortgage Loan Schedule and,
to the extent necessary, has been or will be approved by (i) the
insurer under the applicable mortgage title insurance policy, and (ii)
the insurer under any other insurance policy required hereunder for
such Mortgage Loan where such insurance policy requires approval and
the failure to procure approval would impair coverage under such
policy;
(x) No instrument of release, waiver, alteration, or
modification has been executed in connection with such Mortgage Loan,
and no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been approved by the
insurer under any insurance policy required hereunder for such Mortgage
Loan where such policy requires approval and the failure to procure
approval would impair coverage under such policy, and which is part of
the Mortgage File and has been delivered to the Collateral Agent, on
behalf of the Indenture Trustee, and the terms of which are reflected
in the applicable Mortgage Loan Schedule;
(y) Other than delinquencies described in clause (e) above,
there is no default, breach, violation, or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute such a default, breach, violation or
event of acceleration, and neither the Originators nor the Unaffiliated
Seller has waived any such default, breach, violation or event of
acceleration. All taxes, governmental assessments (including
assessments payable in future installments), insurance premiums, water,
sewer, and municipal charges, leaseholder payments, or ground rents
which previously became due and owing in respect of or affecting the
related Mortgaged Property have been paid. Neither the Originators nor
the Unaffiliated Seller has advanced funds, or induced, solicited, or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage or the Mortgage Note;
(z) All of the improvements which were included for the
purposes of determining the Appraised Value of the Mortgaged Property
were completed at the time
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<PAGE>
that such Mortgage Loan was originated and lie wholly within the
boundaries and building restriction lines of such Mortgaged Property.
Except for de minimis encroachments, no improvements on adjoining
properties encroach upon the Mortgaged Property. To the best of the
Unaffiliated Seller's and the Originators' knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of
any applicable zoning law or regulation. All inspections, licenses, and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property (including all such improvements
which were included for the purpose of determining such Appraised
Value) and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriters certificates, have been made or obtained from the
appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
(aa) To the best of the Unaffiliated Seller's and the
Originators' knowledge, there do not exist any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, or the Mortgagor's credit standing that can be reasonably
expected to cause such Mortgage Loan to become delinquent or adversely
affect the value or marketability of such Mortgage Loan, other than any
such circumstances or conditions permitted under the Originator's
Underwriting Guidelines;
(bb) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) (i)
in compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located and (ii)
(A) organized under the laws of such state, (B) qualified to do
business in such state, (C) federal savings and loan associations or
national banks having principal offices in such state, (D) not doing
business in such state, or (E) not required to qualify to do business
in such state;
(cc) The Mortgage Note and the Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium,
or other similar laws affecting the enforcement of creditors' rights
generally and except that the equitable remedy of specific performance
and other equitable remedies are subject to the discretion of the
courts. All parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and convey the
estate therein purported to be conveyed, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties or
pursuant to a valid power-of-attorney that has been recorded with the
Mortgage;
(dd) The transfer of the Mortgage Note and the Mortgage as and
in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Depositor all right, title, and interest of
the Unaffiliated Seller and the Originators thereto as note holder and
mortgagee or (ii) to grant to the Depositor the security interest
referred to in Section 6.07 hereof. The Mortgage has been duly assigned
and the Mortgage Note has been duly endorsed. The Assignment of
Mortgage delivered to the Collateral Agent, on behalf of the Indenture
Trustee, pursuant to Section 2.04(a)(iv) of the Sale and Servicing
18
<PAGE>
Agreement is in recordable form and is acceptable for recording under
the laws of the applicable jurisdiction. The endorsement of the
Mortgage Note, the delivery to the Collateral Agent, on behalf of the
Indenture Trustee, of the endorsed Mortgage Note, and such Assignment
of Mortgage, and the delivery of such Assignment of Mortgage for
recording to, and the due recording of such Assignment of Mortgage in,
the appropriate public recording office in the jurisdiction in which
the Mortgaged Property is located are sufficient to permit the
Indenture Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of
the Unaffiliated Seller and the Originators, and are sufficient to
prevent any other sale, transfer, assignment, pledge, or hypothecation
of the Mortgage Note and Mortgage by the Unaffiliated Seller or the
Originators from being enforceable;
(ee) Any and all requirements of any federal, state, or local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, or disclosure laws applicable to such Mortgage Loan have
been complied with, and the Servicer shall maintain in its possession,
available for the Indenture Trustee's inspection, and shall deliver to
the Indenture Trustee or its designee upon demand, evidence of
compliance with all such requirements. The consummation of the
transactions contemplated by this Agreement will not cause the
violation of any such laws;
(ff) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy or such other generally used and acceptable form of
policy, issued by and the valid and binding obligation of a title
insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Unaffiliated Seller, and
its successors and assigns, as to the first or second priority lien, as
applicable, of the Mortgage in the original principal amount of such
Mortgage Loan. The assignment to the Indenture Trustee of the
Unaffiliated Seller's interest in such mortgage title insurance policy
does not require the consent of or notification to the insurer. Such
mortgage title insurance policy is in full force and effect and will be
in full force and effect and inure to the benefit of the Indenture
Trustee upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such mortgage title insurance
policy and none of the Unaffiliated Seller, the Originators nor any
prior holder of the Mortgage has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy;
(gg) All improvements upon the Mortgaged Property are insured
against loss by fire, hazards of extended coverage, and such other
hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements
of Section 3.05 hereof. If the Mortgaged Property at origination was
located in an area identified on a flood hazard boundary map or flood
insurance rate map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available), such Mortgaged Property was covered by flood insurance at
origination. Each individual insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Indenture Trustee
upon the consummation of the transactions contemplated by this
Agreement, and contain a standard mortgage clause
19
<PAGE>
naming the originator of such Mortgage Loan, and its successors and
assigns, as mortgagee and loss payee. All premiums thereon have been
paid. The Mortgage obligates the Mortgagor to maintain all such
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, and none of the Unaffiliated
Seller, the related Originator or any prior holder of the Mortgage has
acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect, and enforceability
thereof;
(hh) If the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, as no
fees or expenses are or will become payable by the trustee or the
Noteholders to the Indenture Trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(ii) The Mortgaged Property consists of one or more parcels of
real property separately assessed for tax purposes. To the extent there
is erected thereon a detached or an attached one-family residence or a
detached two-to six-family dwelling, or an individual condominium unit
in a low-rise condominium, or an individual unit in a planned unit
development, or a commercial property, a mobile home, or a mixed use or
multiple purpose property, such residence, dwelling or unit is not (i)
a unit in a cooperative apartment, (ii) a property constituting part of
a syndication, (iii) a time share unit, (iv) a property held in trust,
(v) a manufactured dwelling, (vi) a log-constructed home, or (vii) a
recreational vehicle;
(jj) There exist no material deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made or which the
Unaffiliated Seller or the related Originator expects not to be cured,
and no escrow deposits or payments of other charges or payments due the
Unaffiliated Seller have been capitalized under the Mortgage or the
Mortgage Note;
(kk) Such Mortgage Loan was not originated at a below market
interest rate. Such Mortgage Loan does not have a shared appreciation
feature, or other contingent interest feature;
(ll) The origination and collection practices used by the
Unaffiliated Seller, the Originators or the Servicer with respect to
such Mortgage Loan have been in all respects legal, proper, prudent,
and customary in the mortgage origination and servicing business;
(mm) The Mortgagor has, to the extent required by applicable
law, executed a statement to the effect that the Mortgagor has received
all disclosure materials, if any, required by applicable law with
respect to the making of fixed-rate mortgage loans. The Servicer shall
maintain or cause to be maintained such statement in the Mortgage File;
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<PAGE>
(nn) All amounts received by the Unaffiliated Seller or the
Originators with respect to such Mortgage Loan after the applicable
Cut-Off Date and required to be deposited in the related Distribution
Account have been so deposited in the related Distribution Account and
are, as of the Closing Date, or will be as of the Subsequent Transfer
Date, as applicable, in the related Distribution Account;
(oo) The appraisal report with respect to the Mortgaged
Property contained in the Mortgage File was signed prior to the
approval of the application for such Mortgage Loan by a qualified
appraiser, duly appointed by the originator of such Mortgage Loan, who
had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof and whose compensation is not
affected by the approval or disapproval of such application;
(pp) When measured by the Cut-Off Date Aggregate Principal
Balance, the Mortgagors with respect to at least 93.20% of the Mortgage
Loans in Pool I and 86.76% of the Mortgage Loans in Pool II,
represented at the time of origination that the Mortgagor would occupy
the Mortgaged Property as the Mortgagor's primary residence;
(qq) Each of the Originators and the Unaffiliated Seller has
no knowledge with respect to the Mortgaged Property of any governmental
or regulatory action or third party claim made, instituted or
threatened in writing relating to a violation of any applicable
federal, state or local environmental law, statute, ordinance,
regulation, order, decree or standard;
(rr) [Reserved];
(ss) With respect to second lien Mortgage Loans:
(i) the Unaffiliated Seller and the Originators have
no knowledge that the Mortgagor has received notice from the
holder of the prior mortgage that such prior mortgage is in
default,
(ii) no consent from the holder of the prior mortgage
is needed for the creation of the second lien Mortgage or, if
required, has been obtained and is in the related Mortgage
File,
(iii) if the prior mortgage has a negative
amortization, the CLTV was determined using the maximum loan
amount of such prior mortgage,
(iv) the related first mortgage loan encumbering the
related Mortgaged Property does not have a mandatory future
advance provision, and
(v) the Mortgage Loans conform in all material
respects to the description thereof in the Prospectus
Supplement.
(tt) Each of the Originators and the Unaffiliated Seller
further represents and warrants to the Indenture Trustee, the Note
Insurer and the Noteholders that as of the Subsequent Cut-Off Date all
representations and warranties set forth in clauses (a)
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<PAGE>
through (ss) above will be correct in all material respects as to each
Subsequent Mortgage Loan, and the representations so made in this
subsection (tt) as to the following matters will be deemed to be
correct if: (i) each Subsequent Mortgage Loan may not be thirty (30) or
more days contractually delinquent as of the related Subsequent Cut-Off
Date; (ii) the original term to maturity of such Subsequent Mortgage
Loan may not exceed 360 months for Pool I and 360 months for Pool II;
(iii) such Subsequent Mortgage Loan must have a mortgage interest rate
of at least 7.75% for Pool I and 7.00% for Pool II; (iv) the purchase
of the Subsequent Mortgage Loans is consented to by the Note Insurer
and the Rating Agencies, notwithstanding the fact that the Subsequent
Mortgage Loans meet the parameters stated herein; (v) the principal
balance of any such Subsequent Mortgage Loan may not exceed $240,000.00
for Pool I and $340,000.00 for Pool II; (vi) no more than 13.50% for
Pool I and 30.00% for Pool II of the aggregate principal balance of
such Subsequent Mortgage Loans may be Second Liens; (vii) no such
Subsequent Mortgage Loan shall have a CLTV of more than (a) for
consumer purpose loans, 91.75% for Pool I and 90.25% for Pool II, and
(b) for business purpose loans, 75% for Pool I and 78% for Pool II;
(viii) no more than 40% for Pool I and 55% for Pool II of such
Subsequent Mortgage Loans may be Balloon Loans; (ix) no more than 6%
for Pool I and 13% for Pool II of such Subsequent Mortgage Loans may be
secured by mixed-use properties, commercial properties, or five or more
unit multifamily properties; and (x) following the purchase of such
Subsequent Mortgage Loans by the Trust, the Mortgage Loans (including
the Subsequent Mortgage Loans), (a) will have a weighted average
mortgage interest rate, (I) for consumer purpose loans, of at least
10.25% for Pool I and 10.50% for Pool II and (II) for business purpose
loans, of at least 15.75% for Pool I and 15.75% for Pool II; and (b)
will have a weighted average CLTV of not more than (I) for consumer
purpose loans, 80% for Pool I and 75% for Pool II, and (II) for
business purpose loans, 62% for Pool I and 62% for Pool II.
(uu) To the best of the Unaffiliated Seller's and the
Originators' knowledge, no error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan
has taken place on the part of any person, including without limitation
the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;
(vv) Each Mortgaged Property is in compliance with all
environmental laws, ordinances, rules, regulations and orders of
federal, state or governmental authorities relating thereto. No
hazardous material has been or is incorporated in, stored on or under,
released from, treated on, transported to or from, or disposed of on or
from, any Mortgaged Property such that, under applicable law (A) any
such hazardous material would be required to be eliminated before the
Mortgaged Property could be altered, renovated, demolished or
transferred, or (B) the owner of the Mortgaged Property, or the holder
of a security interest therein, could be subjected to liability for the
removal of such hazardous material or the elimination of the hazard
created thereby. Neither the Unaffiliated Seller nor any Mortgagor has
received notification from any federal, state or other governmental
authority relating to any hazardous materials on or affecting the
Mortgaged Property or to any potential or known liability under any
environmental law arising from the ownership or operation of the
Mortgaged Property. For the purposes of
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this subsection, the term "hazardous materials" shall include, without
limitation, gasoline, petroleum products, explosives, radioactive
materials, polychlorinated biphenyls or related or similar materials,
asbestos or any material containing asbestos, lead, lead-based paint
and any other substance or material as may be defined as a hazardous or
toxic substance by any federal, state or local environmental law,
ordinance, rule, regulation or order, including, without limitation,
CERCLA, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and any
regulations promulgated pursuant thereto; and
(ww) With respect to any business purpose loan, the related
Mortgage Note contains an acceleration clause, accelerating the
maturity date under the Mortgage Note to the date the individual
guarantying such loan becomes subject to any bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally.
Section 3.04 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Unaffiliated Seller,
as of the date of execution of this Agreement and the Closing Date, that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and perform, and to
enter into and consummate all the transactions contemplated by this
Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, and, assuming the due
authorization, execution and delivery hereof by the Unaffiliated Seller
and the Originators, constitutes the legal, valid and binding agreement
of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority
or court is required for the execution, delivery and performance of or
compliance by the Depositor with this Agreement or the consummation by
the Depositor of any of the transactions contemplated hereby, except
such as have been made on or prior to the Closing Date;
(e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with Rule
424(b) under the Securities Act; and
(f) None of the execution and delivery of this Agreement, the
purchase of the Mortgage Loans from the Unaffiliated Seller, the
consummation of the other transactions contemplated hereby, or the
fulfillment of or compliance with the terms and conditions of
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this Agreement, (i) conflicts or will conflict with the charter or
bylaws of the Depositor or conflicts or will conflict with or results
or will result in a breach of, or constitutes or will constitute a
default or results or will result in an acceleration under, any term,
condition or provision of any indenture, deed of trust, contract or
other agreement or other instrument to which the Depositor is a party
or by which it is bound and which is material to the Depositor, or (ii)
results or will result in a violation of any law, rule, regulation,
order, judgment or decree of any court or governmental authority having
jurisdiction over the Depositor.
Section 3.05 Repurchase Obligation for Defective Documentation and for
Breach of a Representation or Warranty. (a) Each of the representations and
warranties contained in Sections 3.01, 3.02 and 3.03 shall survive the purchase
by the Depositor of the Mortgage Loans, the subsequent transfer thereof by the
Depositor to the Trust and the subsequent pledge thereof by the Trust to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Sale and Servicing Agreement or the
Indenture.
(b) With respect to any representation or warranty contained in
Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the best
of the Unaffiliated Seller's knowledge, if it is discovered by the Servicer, any
Subservicer, the Indenture Trustee, the Collateral Agent, the Depositor, the
Note Insurer or any Noteholder that the substance of such representation and
warranty was inaccurate as of the Closing Date or the Subsequent Transfer Date,
as applicable, and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, then notwithstanding the Originators' or the
Unaffiliated Seller's lack of knowledge with respect to the inaccuracy at the
time the representation or warranty was made, such inaccuracy shall be deemed a
breach of the applicable representation or warranty. Upon discovery by the
Originators, the Unaffiliated Seller, the Servicer, any Subservicer, the
Indenture Trustee, the Collateral Agent, the Note Insurer, the Depositor or any
Noteholder of a breach of any of such representations and warranties which
materially and adversely affects the value of Mortgage Loans or the interest of
the Noteholders, or which materially and adversely affects the interests of the
Note Insurer or the Noteholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' or the Unaffiliated Seller's best knowledge), the party discovering
such breach shall give, pursuant to this Section 3.05(b) and pursuant to Section
4.02 of the Sale and Servicing Agreement, prompt written notice to the others.
Subject to the next to last paragraph of this Section 3.05(b), within sixty (60)
days of the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Unaffiliated Seller and the Originators shall
(a) promptly cure such breach in all material respects, or (b) purchase such
Mortgage Loan at a purchase price equal to the Loan Repurchase Price, or (c)
remove such Mortgage Loan from the Trust Estate (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans. Any such substitution shall be accompanied by payment by the Unaffiliated
Seller of the Substitution Adjustment, if any, to be deposited in the related
Distribution Account pursuant to the Sale and Servicing Agreement.
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The Originators shall cooperate with the Unaffiliated Seller to cure
any breach and shall reimburse the Unaffiliated Seller for the costs and
expenses related to any cure, substitution (including any Substitution
Adjustment) or repurchase incurred by the Unaffiliated Seller pursuant to this
Section 3.05.
(c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
or an Originator substitutes a Qualified Substitute Mortgage Loan or Loans, the
Unaffiliated Seller or such Originator shall effect such substitution by
delivering to the Indenture Trustee and the Collateral Agent, a certification in
the form attached to the Sale and Servicing Agreement as Exhibit H, executed by
a Servicing Officer and the documents described in Section 2.05(a) of the Sale
and Servicing Agreement for such Qualified Substitute Mortgage Loan or Loans.
Pursuant to the Sale and Servicing Agreement, upon receipt by the Indenture
Trustee and the Collateral Agent of a certification of a Servicing Officer of
such substitution or purchase and, in the case of a substitution, upon receipt
by the Collateral Agent, on behalf of the Indenture Trustee of the related
Mortgage File, and the deposit of certain amounts in the related Distribution
Account pursuant to Section 2.07(b) of the Sale and Servicing Agreement (which
certification shall be in the form of Exhibit H to the Sale and Servicing
Agreement), the Collateral Agent, on behalf of the Indenture Trustee, shall be
required to release to the Servicer for release to the Unaffiliated Seller the
related Indenture Trustee's Mortgage File and shall be required to execute,
without recourse, and deliver such instruments of transfer furnished by the
Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to the
Unaffiliated Seller or such Originator.
(d) Pursuant to the Sale and Servicing Agreement, the Servicer shall
deposit in the related Distribution Account all payments received in connection
with such Qualified Substitute Mortgage Loan or Loans after the date of such
substitution. Monthly Payments received with respect to Qualified Substitute
Mortgage Loans on or before the date of substitution will be retained by the
Unaffiliated Seller. The Trust will own all payments received on the Deleted
Mortgage Loan on or before the date of substitution, and the Unaffiliated Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Pursuant to the Sale and Servicing
Agreement, the Servicer shall be required to give written notice to the
Indenture Trustee, the Collateral Agent and the Note Insurer that such
substitution has taken place and shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of the Sale and
Servicing Agreement and the substitution of the Qualified Substitute Mortgage
Loan. The parties hereto agree to amend the Mortgage Loan Schedule accordingly.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
be subject to the terms of the Indenture, the Sale and Servicing Agreement and
this Agreement in all respects, and the Unaffiliated Seller shall be deemed to
have made with respect to such Qualified Substitute Mortgage Loan or Loans, as
of the date of substitution, the representations and warranties set forth in
Sections 3.02 and 3.03 herein. On the date of such substitution, the
Unaffiliated Seller will remit to the Servicer and, pursuant to the Sale and
Servicing Agreement, the Servicer will deposit into the related Distribution
Account, an amount equal to the Substitution Adjustment, if any.
(e) [Reserved];
(f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originator set forth in Section 2.06 and this
Section 3.05 to cure, purchase or substitute
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for a defective Mortgage Loan as provided in Section 2.06 and this Section 3.05
constitute the sole remedies of the Depositor, the Indenture Trustee, the Note
Insurer and the Noteholders respecting a breach of the foregoing representations
and warranties.
(g) The Unaffiliated Seller and the Originator shall be obligated to
indemnify the Indenture Trustee, the Trust, the Owner Trustee, the Collateral
Agent, the Noteholders and the Note Insurer (in their individual and trust
capacities) and their successors, assigns, agents and servants (collectively,
the "Indemnified Parties") from and against, any and all liabilities,
obligations, losses, damages, taxes, claims, actions and suits, and any and all
reasonable costs, expenses and disbursements (including reasonable legal fees
and expenses) of any kind and nature whatsoever (collectively, "Expenses") which
may at any time be imposed on, incurred by, or asserted against any Indemnified
Party in any way relating to or arising out of a breach of the Unaffiliated
Seller or the related Originator of the representations or warranties herein.
The indemnities contained in this Section 3.05 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement.
(h) Each of the Originators and the Unaffiliated Seller shall be
jointly and severally responsible for any repurchase, cure or substitution
obligation of any of the Originators or the Unaffiliated Seller under this
Agreement, the Indenture and the Sale and Servicing Agreement.
(i) Any cause of action against the Unaffiliated Seller or an
Originator relating to or arising out of the breach of any representations and
warranties or covenants made in Sections 2.06, 3.02 or 3.03 shall accrue as to
any Mortgage Loan upon (i) discovery of such breach by any party and notice
thereof to the Unaffiliated Seller or such Originator, (ii) failure by the
Unaffiliated Seller or such Originator to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Unaffiliated Seller or such Originator by the Indenture Trustee for all amounts
payable in respect of such Mortgage Loan.
ARTICLE IV
THE UNAFFILIATED SELLER
Section 4.01 Covenants of the Originators and the Unaffiliated Seller.
Each of the Originators and the Unaffiliated Seller covenants to the Depositor
as follows:
(a) The Originators and the Unaffiliated Seller shall
cooperate with the Depositor and the firm of independent certified
public accountants retained with respect to the issuance of the Notes
in making available all information and taking all steps reasonably
necessary to permit the accountants' letters required hereunder to be
delivered within the times set for delivery herein.
(b) The Unaffiliated Seller agrees to satisfy or cause to be
satisfied on or prior to the Closing Date, all of the conditions to the
Depositor's obligations set forth in Section 5.01 hereof that are
within the Unaffiliated Seller's (or its agents') control.
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(c) The Originators and the Unaffiliated Seller hereby agree to do all
acts, transactions, and things and to execute and deliver all agreements,
documents, instruments, and papers by and on behalf of the Originators or the
Unaffiliated Seller as the Depositor or its counsel may reasonably request in
order to consummate the transfer of the Mortgage Loans to the Depositor and the
subsequent transfer thereof to the Indenture Trustee, and the rating, issuance
and sale of the Notes.
Section 4.02 Merger or Consolidation. Each of the Originators and the
Unaffiliated Seller will keep in full effect its existence, rights and
franchises as a corporation and will obtain and preserve its qualification to do
business as a foreign corporation, in each jurisdiction necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement. Any Person into which any of the
Originators or the Unaffiliated Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Originators or the Unaffiliated Seller shall be a party, or any Person
succeeding to the business of the Originators or the Unaffiliated Seller, shall
be approved by the Note Insurer which approval shall not be unreasonably
withheld. If the approval of the Note Insurer is not required, the successor
shall be an established mortgage loan servicing institution that is a Permitted
Transferee and in all events shall be the successor of the Originators or the
Unaffiliated Seller without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Originators and the Unaffiliated Seller shall send notice
of any such merger or consolidation to the Indenture Trustee and the Note
Insurer.
Section 4.03 Costs. In connection with the transactions contemplated
under this Agreement, the Trust Agreement, the Indenture and the Sale and
Servicing Agreement, the Unaffiliated Seller shall promptly pay (or shall
promptly reimburse the Depositor to the extent that the Depositor shall have
paid or otherwise incurred): (a) the fees and disbursements of the Depositor's,
the Unaffiliated Seller's and the Originators' counsel; (b) the fees of S&P and
Moody's; (c) any of the fees of the Indenture Trustee and the fees and
disbursements of the Indenture Trustee's counsel; (d) any of the fees of the
Owner Trustee and the fees and disbursements of the Owner Trustee's counsel; (e)
expenses incurred in connection with printing the Prospectus, the Prospectus
Supplement, any amendment or supplement thereto, any preliminary prospectus and
the Notes; (f) fees and expenses relating to the filing of documents with the
Commission (including without limitation periodic reports under the Exchange
Act); (g) the shelf registration amortization fee of 0.04% of the Note Principal
Balance of the Notes on the Closing Date, paid in connection with the issuance
of Notes; (h) the fees and disbursements for Deloitte & Touche LLP, accountants
for the Originators; and (i) all of the initial expenses (not to exceed $75,000)
of the Note Insurer including, without limitation, legal fees and expenses,
accountant fees and expenses and expenses in connection with due diligence
conducted on the Mortgage Files but not including the initial premium paid to
the Note Insurer. For the avoidance of doubt, the parties hereto acknowledge
that it is the intention of the parties that the Depositor shall not pay any of
the Indenture Trustee's or Owner Trustee's fees and expenses in connection with
the transactions contemplated by this Agreement, the Trust Agreement, the
Indenture and the Sale and Servicing Agreement. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expenses.
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Section 4.04 Indemnification. (a) The Originators and the Unaffiliated
Seller, jointly and severally, agree
(i) to indemnify and hold harmless the Depositor, each of its
directors, each of its officers who have signed the Registration
Statement, and each of its directors and each person or entity who
controls the Depositor or any such person, within the meaning of
Section 15 of the Securities Act, against any and all losses, claims,
damages or liabilities, joint and several, to which the Depositor or
any such person or entity may become subject, under the Securities Act
or otherwise, and will reimburse the Depositor and each such
controlling person for any legal or other expenses incurred by the
Depositor or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement
or the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originators or the
Unaffiliated Seller, in light of the circumstances under which they
were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Prospectus Supplement
referred to in Section 3.01(d). This indemnity agreement will be in
addition to any liability which the Originators and the Unaffiliated
Seller may otherwise have; and
(ii) to indemnify and to hold the Depositor harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses
that the Depositor may sustain in any way related to the failure of any
of the Originators or the Unaffiliated Seller to perform its duties in
compliance with the terms of this Agreement. The Originators or the
Unaffiliated Seller shall immediately notify the Depositor if a claim
is made by a third party with respect to this Agreement, and the
Originators or the Unaffiliated Seller shall assume the defense of any
such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Depositor in
respect of such claim. Pursuant to the Indenture, the Indenture Trustee
shall reimburse the Unaffiliated Seller in accordance with the
Indenture for all amounts advanced by the Unaffiliated Seller pursuant
to the preceding sentence except when the claim relates directly to the
failure of the Unaffiliated Seller to perform its duties in compliance
with the terms of this Agreement.
(b) The Depositor agrees to indemnify and hold harmless each of the
Originators and the Unaffiliated Seller, each of their respective directors and
each person or entity who controls the Originators or the Unaffiliated Seller or
any such person, within the meaning of Section 15 of the Securities Act, against
any and all losses, claims, damages or liabilities, joint and several, to which
the Originators or the Unaffiliated Seller or any such person or entity may
become subject, under the Securities Act or otherwise, and will reimburse the
Originators and the Unaffiliated Seller and any such director or controlling
person for any
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legal or other expenses incurred by such party or any such director or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, the Prospectus Supplement, any
amendment or supplement to the Prospectus or the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission is other than a statement or omission relating to the information set
forth in subsection (a)(i) of this Section 4.04; provided, however, that in no
event shall the Depositor be liable to the Unaffiliated Seller under this
paragraph (b) in an amount in excess of the Depositor's resale profit or the
underwriting fee on the sale of the Notes. This indemnity agreement will be in
addition to any liability which the Depositor may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
4.04 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 4.04, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent such indemnifying party
has been prejudiced thereby. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party 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 indemnifying party to such indemnified
party of its election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 4.04 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 defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to the indemnifying party, 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. The indemnifying party shall not be
liable for the expenses of more than one separate counsel.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.04 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.04 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) subject to the limits set forth in subsection (a)
and subsection (b) of this Section 4.04; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall
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be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, there shall be considered the relative
benefits received by the Originators and the Unaffiliated Seller on the one
hand, and the Depositor on the other, the Originators', the Unaffiliated
Seller's and the Depositor's relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate in the circumstances. The Originators, the
Unaffiliated Seller and the Depositor agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation. For purposes of this Section 4.04, each director of the Depositor,
each officer of the Depositor who signed the Registration Statement, and each
person, if any who controls the Depositor within the meaning of Section 15 of
the Securities Act, shall have the same rights to contribution as the Depositor,
and each director of the Originators or the Unaffiliated Seller, and each
person, if any who controls the Originators or the Unaffiliated Seller within
the meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as the Originators and the Unaffiliated Seller.
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01 Conditions of Depositor's Obligations. The obligations of
the Depositor to purchase the Mortgage Loans will be subject to the satisfaction
on the Closing Date of the following conditions. Upon payment of the purchase
price for the Mortgage Loans, such conditions shall be deemed satisfied or
waived.
(a) Each of the obligations of the Unaffiliated Seller
required to be performed by it on or prior to the Closing Date pursuant
to the terms of this Agreement shall have been duly performed and
complied with and all of the representations and warranties of the
Unaffiliated Seller and the Originators under this Agreement shall be
true and correct as of the Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute a
default under this Agreement, and the Depositor shall have received a
certificate to the effect of the foregoing signed by an authorized
officer of the Unaffiliated Seller and the Originators.
(b) The Depositor shall have received a letter dated the date
of this Agreement, in form and substance acceptable to the Depositor
and its counsel, prepared by Deloitte & Touche LLP, independent
certified public accountants, regarding the numerical information
contained in the Prospectus Supplement including, but not limited to
the information under the captions "Prepayment and Yield
Considerations" and "The Mortgage Loan Pools" regarding any numerical
information in any marketing materials relating to the Notes and
regarding any other information as reasonably requested by the
Depositor.
(c) The Mortgage Loans will be acceptable to the Depositor, in
its sole reasonable discretion.
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(d) The Depositor shall have received the following additional
closing documents, in form and substance reasonably satisfactory to the
Depositor and its counsel:
(i) the Mortgage Loan Schedule;
(ii) this Agreement, the Sale and Servicing
Agreement, the Indenture, the Trust Agreement, and the
Underwriting Agreement dated as of March 11, 1999 between the
Depositor and Prudential Securities Incorporated and all
documents required thereunder, duly executed and delivered by
each of the parties thereto other than the Depositor;
(iii) officer's certificates of an officer of each of
the Originators and the Unaffiliated Seller, dated as of the
Closing Date, and attached thereto resolutions of the board of
directors and a copy of the charter and by-laws;
(iv) copy of each of the Originators and the
Unaffiliated Seller's charter and all amendments, revisions,
and supplements thereof, certified by a secretary of each
entity;
(v) an opinion of the counsel for the Originators and
the Unaffiliated Seller as to various corporate matters in a
form acceptable to the Depositor, its counsel, the Note
Insurer, S&P and Moody's (it being agreed that the opinion
shall expressly provide that the Indenture Trustee shall be
entitled to rely on the opinion);
(vi) opinions of counsel for the Unaffiliated Seller,
in forms acceptable to the Depositor, its counsel, the Note
Insurer, S&P and Moody's as to such matters as shall be
required for the assignment of a rating to the Notes of "AAA"
by S&P, and "Aaa" by Moody's (it being agreed that such
opinions shall expressly provide that the Indenture Trustee
shall be entitled to rely on such opinions);
(vii) a letter from Moody's that it has assigned a
rating of "Aaa" to the Notes;
(viii) a letter from S&P that it has assigned a
rating of "AAA" to the Notes;
(ix) an opinion of counsel for the Indenture Trustee
in form and substance acceptable to the Depositor, its
counsel, the Note Insurer, Moody's and S&P (it being agreed
that the opinion shall expressly provide that the Unaffiliated
Seller shall be entitled to rely on the opinion);
(x) an opinion of counsel for the Owner Trustee in
form and substance acceptable to the Depositor, its counsel,
the Note Insurer, Moody's and S&P (it being agreed that the
opinion shall expressly provide that the Unaffiliated Seller
shall be entitled to rely on the opinion);
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(xi) an opinion or opinions of counsel for the
Servicer, in form and substance acceptable to the Depositor,
its counsel, the Note Insurer, Moody's and S&P (it being
agreed that the opinion shall expressly provide that the
Unaffiliated Seller shall be entitled to rely on the opinion);
and
(xii) an opinion or opinions of counsel for the Note
Insurer, in each case in form and substance acceptable to the
Depositor, its counsel, Moody's and S&P (it being agreed that
the opinion shall expressly provide that the Unaffiliated
Seller shall be entitled to rely on the opinion).
(e) The Note Insurance Policy shall have been duly executed,
delivered and issued with respect to the Notes.
(f) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be satisfactory in form and substance to the Depositor and its counsel.
(g) The Unaffiliated Seller shall have furnished the Depositor
with such other certificates of its officers or others and such other
documents or opinions as the Depositor or its counsel may reasonably
request.
Section 5.02 Conditions of Unaffiliated Seller's Obligations. The
obligations of the Unaffiliated Seller under this Agreement shall be subject to
the satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor required to be
performed by it at or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed and complied with and
all of the representations and warranties of the Depositor contained in
this Agreement shall be true and correct as of the Closing Date and the
Unaffiliated Seller shall have received a certificate to that effect
signed by an authorized officer of the Depositor.
(b) The Unaffiliated Seller shall have received the following
additional documents:
(i) this Agreement and the Sale and Servicing
Agreement, and all documents required thereunder, in each case
executed by the Depositor as applicable; and
(ii) a copy of a letter from Moody's to the Depositor
to the effect that it has assigned a rating of "Aaa" to the
Notes and a copy of a letter from S&P to the Depositor to the
effect that it has assigned a rating of "AAA" to the Notes.
(iii) an opinion of counsel for the Indenture Trustee
in form and substance acceptable to the Unaffiliated Seller
and its counsel;
(iv) an opinion of counsel for the Owner Trustee in
form and substance acceptable to the Unaffiliated Seller and
its counsel;
32
<PAGE>
(v) an opinion of counsel for the Note Insurer in
form and substance acceptable to the Unaffiliated Seller and
its counsel;
(vi) an opinion of the counsel for the Depositor as
to securities and tax matters; and
(vii) an opinion of the counsel for the Depositor as
to true sale matters.
(c) The Depositor shall have furnished the Unaffiliated Seller
with such other certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in this
Agreement as the Unaffiliated Seller may reasonably request.
Section 5.03 Termination of Depositor's Obligations. The Depositor may
terminate its obligations hereunder by notice to the Unaffiliated Seller at any
time before delivery of and payment of the purchase price for the Mortgage Loans
if: (a) any of the conditions set forth in Section 5.01 are not satisfied when
and as provided therein; (b) there shall have been the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Unaffiliated Seller, or for the
winding up or liquidation of the affairs of the Unaffiliated Seller; (c) there
shall have been the consent by the Unaffiliated Seller to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Unaffiliated Seller or of or relating to substantially all of the property
of the Unaffiliated Seller; (d) any purchase and assumption agreement with
respect to the Unaffiliated Seller or the assets and properties of the
Unaffiliated Seller shall have been entered into; or (e) a Termination Event
shall have occurred. The termination of the Depositor's obligations hereunder
shall not terminate the Depositor's rights hereunder or its right to exercise
any remedy available to it at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by registered mail, postage prepaid, or transmitted by
telex or telegraph and confirmed by a similar mailed writing, if to the
Depositor, addressed to the Depositor at Prudential Securities Secured Financing
Corporation, One New York Plaza, 14th Floor, New York, New York 10292,
Attention: Managing Director - Asset Backed Finance Group, or to such other
address as the Depositor may designate in writing to the Unaffiliated Seller and
the Originators and if to the Unaffiliated Seller or an Originator, addressed to
the Unaffiliated Seller or such Originator at Balapointe Office Centre, 111
Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention:
Mr. Anthony Santilli, Jr., or to such other address as the Unaffiliated Seller
or such Originator may designate in writing to the Depositor.
33
<PAGE>
Section 6.02 Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
Section 6.03 Agreement of Unaffiliated Seller. The Unaffiliated Seller
agrees to execute and deliver such instruments and take such actions as the
Depositor may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement.
Section 6.04 Survival. The parties to this Agreement agree that the
representations, warranties and agreements made by each of them herein and in
any Note or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 6.06 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any party
hereto to a third party without the written consent of the other party to this
Agreement and the Note Insurer; provided, however, that the Depositor may assign
its rights hereunder without the consent of the Unaffiliated Seller.
Section 6.07 Confirmation of Intent; Grant of Security Interest. It is
the express intent of the parties hereto that the conveyance of the Mortgage
Loans by the Originators to the Unaffiliated Seller as contemplated by this
Unaffiliated Seller's Agreement be, and be treated for all purposes as, a sale
of the Mortgage Loans and that the conveyance of the Mortgage Loans by the
Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated
Seller's Agreement be, and be treated for accounting purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that any such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators or the Unaffiliated Seller, as the
case may be. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to continue to be property of the
Originators or the Unaffiliated Seller then (a) this Unaffiliated
34
<PAGE>
Seller's Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor of a security interest in all of such parties' right, title and
interest in and to the Mortgage Loans and all amounts payable on the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property; (c) the possession by the Depositor (or its assignee) of
Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the Uniform Commercial Code; and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor (or its assignee) for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Depositor pursuant to any provision hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Originators, the Unaffiliated Seller and the Depositor shall, to the
extent consistent with this Unaffiliated Seller's Agreement, take such actions
as may be necessary to ensure that, if this Unaffiliated Seller's Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement.
Section 6.08 Miscellaneous. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.
Section 6.09 Amendments. (a) This Agreement may be amended from time to
time by the Originators, the Unaffiliated Seller and the Depositor by written
agreement, upon the prior written consent of the Note Insurer, without notice to
or consent of the Noteholders to cure any ambiguity, to correct or supplement
any provisions herein, to comply with any changes in the Code, or to make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, at the expense of the party requesting the change, delivered to the
Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder; and provided, further, that no such amendment shall reduce in any
manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Note without the consent of
the Holder of such Note, or change the rights or obligations of any other party
hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the Originators,
the Unaffiliated Seller and the Depositor with the consent of the Note Insurer,
the Majority Noteholders and the Holders of the majority of the Percentage
Interest in the Trust Certificates for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders; provided, however, that
no such amendment shall reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Note
35
<PAGE>
without the consent of the Holder of such Note or reduce the percentage for each
Class the Holders of which are required to consent to any such amendment without
the consent of the Holders of 100% of each Class of Notes affected thereby.
(c) It shall not be necessary for the consent of Holders under this
Section 6.09 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.
Section 6.10 Third-Party Beneficiaries. The parties agree that each of
the Trust, the Owner Trustee, the Note Insurer and the Indenture Trustee is an
intended third-party beneficiary of this Agreement to the extent necessary to
enforce the rights and to obtain the benefit of the remedies of the Depositor
under this Agreement which are assigned to the Trust and then to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to
the Sale and Servicing Agreement and the Indenture, respectively, and to the
extent necessary to obtain the benefit of the enforcement of the obligations and
covenants of the Unaffiliated Seller under Section 4.01 and 4.04(a)(ii) of this
Agreement. The parties further agree that Prudential Securities Incorporated and
each of its directors and each person or entity who controls Prudential
Securities Incorporated or any such person, within the meaning of Section 15 of
the Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller with
respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement.
Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.
36
<PAGE>
(c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 6.12 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
[Remainder of Page Intentionally Left Blank]
37
<PAGE>
IN WITNESS WHEREOF, the parties to this Unaffiliated Seller's Agreement
have caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: ___________________________________
Name:
Title:
ABFS 1999-1, INC.
By: ___________________________________
Name:
Title:
AMERICAN BUSINESS CREDIT, INC.
By: ___________________________________
Name:
Title:
HOMEAMERICAN CREDIT, INC., D/B/A
UPLAND MORTGAGE
By: ___________________________________
Name:
Title:
NEW JERSEY MORTGAGE AND INVESTMENT CORP.
By: ___________________________________
Name:
Title:
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
10307 WILLIAM J. SOEDER JR. $200,000 $199,462.48 1
10309 STEPHEN S. SCHILDE $20,000 $19,963.48 1
10326 H. & M. TOOL AND MACHINE $150,000 $150,000.00 1
10330 CLASSIC MARINE, INC. $20,000 $19,990.66 1
10334 CHERYL L. PAGE $90,000 $90,000.00 1
10336 SW AUTO REPAIR CORP. $92,000 $91,630.15 1
10339 FREEWAY TAVERN, INC $100,000 $100,000.00 1
10342 WILLIAM C. MEHAFFEY $110,000 $109,997.51 1
10349 PAUL J. EGBERT $85,000 $84,620.52 1
10350 CLINTON AVENUE BEAUTY SUP $13,000 $12,959.11 1
10355 CHARLES ROBERT WALLS $195,000 $194,419.69 1
10373 MILLENNIUM INTERNATIONAL $112,000 $112,000.00 1
10377 REGAL PUBLISHING CORP. $93,000 $93,000.00 1
10379 BRANDYWINE INN, INC. $16,000 $16,000.00 1
10383 HARVEY'S DELIVERY SERVICE $100,000 $100,000.00 1
10397 ROBERT G. MELLINGER $80,000 $80,000.00 1
10410 FREDERICK D. SAMS $80,000 $80,000.00 1
10411 IMPERIAL PROPERTIES OF SA $120,000 $120,000.00 1
10413 JERALD A. SIMON $95,000 $95,000.00 1
10415 JAMES L. THOMPSON $120,000 $120,000.00 1
10419 WILLIAMS FUNERAL HOME P.A $143,000 $143,000.00 1
10422 JIM CHAMBERS POWER EQUIPM $120,000 $120,000.00 1
10425 CHARLES L. ROBINSON SR. $120,000 $120,000.00 1
10426 ROSSIE LACEY $10,000 $10,000.00 1
8882106 WORLD FAMOUS RESTAURANT, $203,000 $202,976.75 1
8882109 PAUL HOWIESON $12,000 $11,754.06 1
8882113 RAJENDRA PAUL $15,000 $14,983.41 1
8882117 MARYAM SHAMOON $142,000 $142,000.00 1
8882129 EL RUBI, INC. $110,000 $110,000.00 1
8882131 REGINALD TONEY $106,000 $106,000.00 1
8882134 PAUL G. JONES $90,000 $90,000.00 1
8882138 JESSE WILSON $14,000 $14,000.00 1
8882141 JOSHUA'S CLASSROOM, INC. $17,000 $17,000.00 1
8882145 JOSEPH P. PAYTAS $222,000 $222,000.00 1
10097 OFF THE TOP HAIRCUTTERS, $12,000 $11,794.15 1
10431 DAVID A. DEGENERO $14,000 $14,000.00 1
8882137 NELSON D. SHER $131,000 $131,000.00 1
1038173 RUSSELL ALDEN MULKINS $92,750 $92,729.54 1
1041008 KENNETH GRIZZLE, JR. $88,800 $88,248.76 1
1041186 GERALDA SOTOLONGO $118,800 $118,800.00 1
1041697 TRACY D. PIERCE $123,700 $123,229.01 1
1041940 LEONARD CHIARELLO $183,000 $183,000.00 1
1042082 RUDRAKANT S. JOSHI $147,600 $147,598.52 1
1043420 ROY W. DORSEY SR. $100,800 $100,660.28 1
1043489 GEORGE A. RODRIGUEZ $121,500 $121,500.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1043829 GARY WELDEN $114,300 $114,300.00 1
1043894 DARLENE H. BRADSHAW $91,800 $91,800.00 1
1044035 ANGUS DAVIS $12,400 $12,325.32 1
1044097 DARRELL BULLOCH $82,800 $82,800.00 1
1044241 CHARLES DEVER $81,480 $81,480.00 1
1044796 COSBERT L. WORRELL SR. $100,000 $99,926.21 1
1044802 JOHN P. MASTELENIS $15,500 $15,339.32 1
1044950 JAMES E. JOHNSON $229,500 $229,500.00 1
1044998 WILLIAM D. CARMICHAEL $103,500 $103,500.00 1
1045243 JEFFERY PHILLIPS $86,400 $86,175.80 1
1045451 ARMAND BRUNO $94,500 $94,431.33 1
1045484 MARY TATE $81,000 $80,989.93 1
1045582 MICKEY L. TURNER $90,000 $88,922.58 1
1045765 WASHINGTON A. SOTO $88,000 $87,940.81 1
1045868 WILLIAM F. PRECOURT JR. $102,150 $101,834.38 1
1045873 THERESA L. MIMS $116,550 $116,550.00 1
1045973 TIMOTHY A. MCCLEERY $94,500 $94,500.00 1
1046041 DANIEL J. MINKUS $18,375 $18,375.00 1
1046050 BILLY C. SHEPPARD $85,600 $85,471.55 1
1046062 PAUL M. RISSER $112,500 $112,179.56 1
1046278 JAMES ADAIR JR. $153,000 $152,926.13 1
1046337 BESSIE M. WARD $162,000 $161,970.56 1
1046346 LONNIE D. STOVER $87,550 $87,550.00 1
1046367 BUDDY CHARBONNET $190,000 $189,645.27 1
1046379 SUE LINDA ANDERSON $20,000 $19,914.79 1
1046434 JOSEPH M. GIRINI $89,100 $89,100.00 1
1046450 BARBARA A. CORDERRE $110,500 $110,500.00 1
1046506 PAMELA GREEN $15,000 $14,850.65 1
1046521 LEONARD ROLA $134,640 $134,622.74 1
1046594 IMOGENE V. SAUNDERS $144,000 $143,998.56 1
1046609 THOMAS W. BROTHERTON $112,000 $111,420.18 1
1046618 TOM WILCOX $80,000 $79,731.09 1
1046620 THOMAS F. SHELLEY $117,000 $116,957.46 1
1046659 ALEANE B. WHITE $103,500 $103,500.00 1
1046677 VINCENT M. BOZZUTO $135,000 $134,851.52 1
1046695 AJODHIA PRASAD RAMPRASHAD $170,000 $169,905.24 1
1046707 BARBARA S. KROLIK $207,500 $207,500.00 1
1046771 JOSEPH P. YOUNG $185,120 $185,120.00 1
1046794 SHARON D. COLEMAN $148,000 $147,727.12 1
1046813 RICHARD BYRD $150,000 $149,253.06 1
1046825 DANIEL C. HANCOTTE JR. $17,200 $17,161.36 1
1046840 CHERYL HEDGES $117,000 $117,000.00 1
1046903 KEITH A. KEATING $234,500 $234,071.23 1
1046906 GEORGE LINDER $91,000 $91,000.00 1
1046915 SANDRA COLLYMORE $98,600 $98,493.44 1
1046940 FRED T. CONSOLAZIO $14,000 $14,000.00 1
1046951 CONNIE A. DAY $184,450 $184,250.32 1
1046980 DENNYS ROSA $103,500 $103,385.64 1
1046999 ARTHUR J. EVANS $99,000 $98,670.62 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1047024 JOSE L. ROMERO $180,000 $179,850.50 1
1047045 GERALD A. SMITH JR. $94,500 $94,378.82 1
1047062 DOROTHY ANNE BORGES $89,100 $89,100.00 1
1047070 GLENDA PATTERSON $100,000 $99,916.09 1
1047107 ROBERT L. MERCER SR. $100,000 $100,000.00 1
1047111 THOMAS REGANATO $225,000 $225,000.00 1
1047122 THOMAS J. GEISHEIMER $148,500 $148,205.74 1
1047209 JUANA E. SALAS $95,400 $94,957.95 1
1047211 WILLIAM SCOTT RAGSDALE $96,000 $95,973.76 1
1047216 OLIVIA H. JACKSON $82,800 $82,710.12 1
1047217 MARIE PERRY HUME $90,000 $90,000.00 1
1047221 HAYWOOD CLYDE SR. $90,500 $90,371.16 1
1047258 GARY E. EILER $180,000 $179,579.44 1
1047311 ANGEL AYALA $83,725 $83,708.37 1
1047322 MARIA A. OJEDA $151,200 $151,197.32 1
1047325 CROSSETTE N. NESBITT $110,400 $110,096.72 1
1047341 D. WAYNE DAVIS $84,000 $84,000.00 1
1047351 HERMAN STEVENSON $87,300 $87,284.13 1
1047383 MICHAEL GLASS $212,500 $212,500.00 1
1047395 KRISTI A. CHITWOOD $18,000 $17,901.30 1
1047415 SAMIR RAIS $134,910 $134,573.94 1
1047449 FREDERICK A. JOE SR. $82,800 $82,800.00 1
1047502 MARIA TRINIDAD $196,000 $196,000.00 1
1047571 BRENDA TERRY $87,000 $87,000.00 1
1047609 LEROY MICHAEL ROYER $80,000 $79,933.78 1
1047664 CARRIE MAE STONE $94,500 $94,369.00 1
1047669 VERONICA PATTERSON $84,600 $84,600.00 1
1047698 KEVIN GRAY $200,000 $200,000.00 1
1047704 EUGENIA GREENE $134,000 $133,863.95 1
1047720 DANIEL M. JOHNSON $16,540 $16,446.24 1
1047726 JEFFREY H. KAZANOW $200,000 $200,000.00 1
1047760 WILLIAM D. EVANS $12,300 $12,188.60 1
1047804 THOMAS V. HUTTON $10,000 $9,936.73 1
1047806 ANTONETTA E. ALBERTI $121,750 $121,750.00 1
1047925 LARRY E. GUNTER $108,000 $107,769.03 1
1047950 PATRICK J. QUINN $17,000 $17,000.00 1
1047964 JOHN LASEK $80,000 $79,775.90 1
1047975 ROBERT M. FULLER JR. $99,900 $99,896.82 1
1047978 PAUL L. WARE $162,377 $162,257.09 1
1047991 MICHAEL B. KYLE $132,000 $131,927.50 1
1048072 STANLEY M.J. BAKER $90,000 $90,000.00 1
1048102 MICHELLE FISCHER $117,000 $116,672.07 1
1048232 EDWARD L. SPRUILL JR. $90,000 $90,000.00 1
1048238 STEPHANIE A. SCOTT $116,550 $116,488.35 1
1048307 JOSPEH QUIROLI $10,000 $9,927.84 1
1048340 EDWARD YARUSI $80,000 $79,469.12 1
1048354 LONNIE P. ALLEN $130,500 $130,199.04 1
1048374 JAMES H. OSHERHOSKI $85,000 $85,000.00 1
1048388 ROY F. BURKETT JR. $86,400 $86,357.69 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1048393 JERRY L. COOLEY $16,750 $16,729.15 1
1048413 DAVID FRIEDMAN $10,000 $9,953.12 1
1048418 JEFFREY HOUSE $11,200 $11,200.00 1
1048460 JAMES BEAVER $96,000 $95,731.43 1
1048487 THOMAS E. GOLDRICK $137,900 $137,814.80 1
1048489 KIMBERLY A. WILLOUGHBY $86,670 $86,569.91 1
1048492 BERNICE VIOLA ANDREWS $15,000 $14,902.56 1
1048495 HIEU TRAN VAN $16,500 $16,340.61 1
1048627 GAIL HOLLOWAY $107,450 $107,005.02 1
1048630 JOHN PFEIFER $136,850 $136,850.00 1
1048664 KELLY ELISE SALONE $18,900 $18,899.01 1
1048670 BARRY ZAJDZINSKI $96,000 $95,912.85 1
1048684 MARGARET MARSH $92,000 $92,000.00 1
1048693 SUSAN L. MURNANE $100,000 $100,000.00 1
1048700 TUNA OZDEN $138,740 $138,740.00 1
1048732 JOSE JUSINO $16,500 $16,500.00 1
1048734 FRANCIS J. DALTON $145,500 $145,500.00 1
1048737 JENNIFER E. STEVENS $13,600 $13,595.82 1
1048738 RAYMOND P. YANCY $79,200 $79,200.00 1
1048747 KAREN E. KLAES $14,000 $14,000.00 1
1048759 BRYANT O'NEILL ROSBY $12,000 $11,943.13 1
1048791 ELIZABETH BILLINGS $18,000 $18,000.00 1
1048836 ANN ROCCO $18,000 $18,000.00 1
1048882 LUCILLE FORREST $10,000 $9,902.41 1
1048917 TRACY A. KROPCHAK $103,200 $103,200.00 1
1049018 KEVIN C RAY MCCONNELL $112,000 $111,856.60 1
1049061 LOUIS CAPORASO $15,000 $15,000.00 1
1049105 EDNA RICHARD $160,200 $159,350.87 1
1049119 LEE J. BETHUNE $81,600 $81,600.00 1
1049134 CHRISTOPHER T. CIFONE $130,500 $130,276.69 1
1049148 MICHAEL WASHINGTON $134,300 $133,997.31 1
1049158 ELIGAH GARY $135,000 $135,000.00 1
1049213 BRIAN D. WHITLEY $162,000 $162,000.00 1
1049222 JEANNIE H. STARRS $133,600 $133,600.00 1
1049231 DOREEN PAOLELLA $20,000 $19,943.56 1
1049272 KENNETH RAY HENDERSON $100,000 $100,000.00 1
1049280 BOBBY G. SMITH $20,000 $19,822.56 1
1049329 RAY E. PRUDEN $157,500 $157,380.53 1
1049344 FRED P. GRANT $93,750 $93,669.31 1
1049359 ANTHONY P. CAVALUZZO $12,500 $12,419.14 1
1049407 RICARDO MEJIA $112,000 $112,000.00 1
1049448 LEROY SOMERS $121,505 $121,368.80 1
1049451 SHIRLEY M. BELLAMY $82,800 $82,759.55 1
1049485 WILLIAM E. SMITH $87,500 $86,868.98 1
1049529 RICHARD A. WOJCIAK $118,900 $118,900.00 1
1049531 FRANK PASHEL $86,250 $86,250.00 1
1049532 GEORGE A. SCHMIDT $168,000 $167,918.88 1
1049534 DORA M. PARKER $18,850 $18,850.00 1
1049538 DAWN M. OLIVER $10,000 $9,934.04 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1049656 SEAN C. SECOR $100,000 $99,883.80 1
1049657 MARTIN D. MURPHY $112,500 $112,436.44 1
1049663 RUDOLPH JARRET $193,000 $193,000.00 1
1049710 ROY L. CLOSE $130,500 $130,500.00 1
1049735 CALANTHIA CARTER $84,500 $84,500.00 1
1049743 EVONNE L. WRIGHT $96,000 $96,000.00 1
1049777 MICHAEL J. LANCELLA $94,000 $93,931.84 1
1049824 ARTHUR CULPEPPER $161,300 $161,300.00 1
1049870 RONALD R. TAYLOR JR. $106,200 $106,200.00 1
1050070 FRANK S. LAW $119,000 $119,000.00 1
1050096 EDWARD KENNY $193,000 $192,945.24 1
1050123 LARRY D. CARNES $112,000 $111,927.19 1
1050162 MICHAEL L. HURD $194,000 $194,000.00 1
1050246 ANTHONY JOHNSON $141,750 $141,750.00 1
1050251 MINETTE WILLIAMS $10,000 $9,942.01 1
1050286 MICHAEL MIELE SR. $153,000 $153,000.00 1
1050311 MATTHEW W. DONOVAN $104,000 $104,000.00 1
1050362 CAROLYN PATTERSON $13,300 $13,288.03 1
1050401 MARY C. PO $13,950 $13,950.00 1
1050486 LLOYD FIELDS $130,500 $130,500.00 1
1050505 JOSEPH CAGGIANO $121,500 $121,297.89 1
1050513 TERRY M. GARDNER $104,400 $104,400.00 1
1050522 DELMA HOLDER $102,500 $102,500.00 1
1050549 ALMA J. KELLY $15,600 $15,600.00 1
1050559 RICHARD CENATIEMPO $120,700 $120,387.32 1
1050646 ALIX AUGUSTIN $83,700 $83,700.00 1
1050697 DIANE WILLIAMS $95,400 $95,400.00 1
1050752 JUNE VARAS $152,000 $151,923.57 1
1050764 NICOLE R. DARBY $86,400 $86,400.00 1
1050810 BARBARA PIROG $14,295 $14,295.00 1
1050819 LUIS CORNEJO $85,000 $84,860.49 1
1050845 LEROY SIMMONS $93,500 $93,500.00 1
1050846 HAZEL MAPP $168,800 $168,566.01 1
1050884 DUANE MILLS $90,000 $90,000.00 1
1050904 TROY A. VELLIQUETTE $10,000 $9,934.74 1
1050948 JOSELITO C. VELASQUEZ $20,000 $19,873.30 1
1050989 ANATOLY GRINBERG $132,500 $132,500.00 1
1051003 ROCCO S. CRESCENZI $82,100 $82,100.00 1
1051038 EDDY JEAN-BAPTISTE $110,000 $110,000.00 1
1051053 MARIO MARESCA $13,500 $13,500.00 1
1051125 DARRYL O'HANNON $97,600 $97,600.00 1
1051138 DARRELL R. WILBUR $120,000 $120,000.00 1
1051140 MARK WEISS $89,500 $89,500.00 1
1051143 DINDIAL SOOGRIM $150,300 $150,300.00 1
1051171 JAMMIE J. FYLER $100,000 $100,000.00 1
1051173 ROBERT A. CRAWFORD JR. $85,500 $85,500.00 1
1051180 WILLIAM J. BOXLER $86,400 $86,400.00 1
1051243 JERALD W. MORRIS $115,000 $115,000.00 1
1051280 ROBIN C. BROWN $10,000 $10,000.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1051285 QUINCY J. BONNETT $225,000 $225,000.00 1
1051287 PATRICIA TROTMAN $80,000 $80,000.00 1
1051288 JAMES POSTERINO $85,500 $85,500.00 1
1051307 CYNTHIA W. BROWN $92,000 $92,000.00 1
1051330 SHARON PORTER $99,000 $99,000.00 1
1051431 JAMES MICHAEL JUDKINS $156,600 $156,189.14 1
1051440 LARRY L. RAYMER $15,500 $15,500.00 1
1051460 SUSAN J. MATYAS $111,300 $111,300.00 1
1051487 STEVEN R. RICHTER $123,400 $123,400.00 1
1051500 MARCY SCHER $100,400 $100,400.00 1
1051527 TRENT SEXTON JR. $88,000 $88,000.00 1
1051608 MICHELLE KUPFERSCHMID $15,500 $15,406.09 1
1051609 BARBARA J. GROSS $160,000 $160,000.00 1
1051613 KENNETH LEACH $93,500 $93,500.00 1
1051614 DANA M. LANG $120,000 $120,000.00 1
1051632 JAMES L. HANNIGAN $103,000 $103,000.00 1
1051727 MILTON EDWARDS $86,400 $86,400.00 1
1051768 JOSEPH DECINQUE JR. $148,500 $148,500.00 1
1051813 ANTHONY MARINI $12,900 $12,900.00 1
1051818 ROMAN MICHAEL GURTLER $105,000 $105,000.00 1
1051823 SHEILA BROWN $143,000 $143,000.00 1
1051837 JOHN T. CANNON $88,825 $88,825.00 1
1051874 JOYCE L. FRANZ-KIN $213,000 $213,000.00 1
1051889 IRWIN L. GORSKY $90,000 $90,000.00 1
1051903 BENJAMIN VEGA $83,000 $83,000.00 1
1051911 PAULETTE S. PERRY $100,000 $100,000.00 1
1051916 THOMAS H. QUINN $88,800 $88,800.00 1
1051983 LATANYA M. JUNIOR $15,500 $15,500.00 1
1052012 JOSEPH A. MIROBALLI $83,400 $83,400.00 1
1052035 ROBERT KEITH ELLINGTON $80,000 $80,000.00 1
1052132 CHRISTINE CHEN $18,000 $18,000.00 1
1052141 DOUGLAS GREEN $88,000 $88,000.00 1
1052178 RANJINI CHANDRA SEKHAR $225,000 $225,000.00 1
1052180 NICOLA STRANIERI $100,000 $100,000.00 1
1052185 KELLY KEITH $18,000 $18,000.00 1
1052194 JOANN PERRINO $184,500 $184,500.00 1
1052246 STEPHEN S. GRANDE $104,400 $104,400.00 1
1052248 JEFFREY T. SHAW $13,073 $13,073.00 1
1052278 JOHN VITERITTI $80,000 $80,000.00 1
1052280 RICHARD L. TARDIFF $80,000 $80,000.00 1
1052368 PAUL CHRISTY $88,000 $88,000.00 1
1052370 ELLEN GIBBS $16,000 $16,000.00 1
1052407 JOHN GARDNER $132,000 $132,000.00 1
1052409 MAREK A. MISZKURKA $120,000 $120,000.00 1
1052427 JAMES H. TILL $108,000 $108,000.00 1
1052440 DAVID O. BLEVINS $108,000 $108,000.00 1
1052445 AUDIE W. DELP $106,000 $106,000.00 1
1052448 CHARLMOUS OFERRALL $90,000 $90,000.00 1
1052477 CARL S. RAPHAEL $161,600 $161,600.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1052506 JOHN E. HENKES $172,800 $172,800.00 1
1052507 DAVID SKIFF $154,000 $154,000.00 1
1052510 IRENE G. KEYSER $131,400 $131,400.00 1
1052517 MARTHA CORDOVI $17,000 $17,000.00 1
1052518 GREG0RY L. WOOTEN $15,000 $15,000.00 1
1052664 MARK JOHNS $159,000 $159,000.00 1
1052714 KHEESHA M. WALLS $93,321 $93,321.00 1
1052744 JACQUELYN Y. TOLLIVER $185,400 $185,400.00 1
1052766 BRUCE N. WILLMAN $16,000 $16,000.00 1
1052807 FERNANDO CLAVERIA $153,000 $153,000.00 1
1052841 RAYMOND L. MORGAN $15,000 $15,000.00 1
1052865 ELMERE CHARLES $93,750 $93,750.00 1
1052872 ELMORE CHARLES $93,750 $93,750.00 1
1052874 PATRICK CLOSE $136,000 $136,000.00 1
1052920 PATRICK J. O'DONNELL $107,000 $107,000.00 1
1052976 KATHLEEN B. WICKUM $15,000 $15,000.00 1
1052984 DONALD BATES $84,575 $84,575.00 1
1053014 ALICE N. T. REID $101,600 $101,600.00 1
1053094 JEREMY PACK $18,750 $18,750.00 1
1053119 ISSAC JOHNSON $84,000 $84,000.00 1
1053235 LAVERN CLARK $20,320 $20,320.00 1
1053328 JAMIE B SIMS N/K/A JAMIE $165,000 $165,000.00 1
1053337 JAMIE B. SIMS N/K/A JAMIE $105,700 $105,700.00 1
1053361 GREGORY SWEET $89,500 $89,500.00 1
1053363 ANTHONY SPADARO $189,000 $189,000.00 1
1053367 MERLE A. BARTHEL $95,000 $95,000.00 1
1053394 BRUCE HIGGINS $80,000 $80,000.00 1
1053426 MARIA J. LAMAS GRANDA $202,500 $202,500.00 1
1053542 KIMBERLY ABATE $106,250 $106,250.00 1
1053543 JOSEPH F. RUMMLER $166,500 $166,500.00 1
1053549 JENNIFER L. JANSEN $140,000 $140,000.00 1
1053551 BARBARA TREGLOWD $148,500 $148,500.00 1
1053651 RICHARD D. KENNEDY $136,000 $136,000.00 1
1053710 MARY L. PHILLIPS $85,500 $85,500.00 1
1053718 RUBEN GARCIA $99,000 $99,000.00 1
1053768 HENRY VANDER MALLIE III $84,000 $84,000.00 1
1053776 JOAN G. RACE $140,200 $140,200.00 1
1053780 JOHN J. MAHONEY $15,000 $15,000.00 1
1053785 DAVID CAPE $88,000 $88,000.00 1
1053890 KATRINA CALLAWAY $145,600 $145,600.00 1
1053824 WILLIAM C. KERSHAW $110,700 $110,700.00 1
1053963 THOMAS J. SARNO $20,200 $20,200.00 1
1054014 DONNA MILLS $94,500 $94,500.00 1
1054115 LAGUANDA C. LYMAS $105,300 $105,300.00 1
1054122 ANTOINETTE BOYKIN $181,800 $181,800.00 1
1054171 STEVEN J. KOMINSKY $87,630 $87,630.00 1
1054173 BRUCE A. HENSCHEN $115,000 $115,000.00 1
1054198 LEE A. COUCH $179,350 $179,350.00 1
1054199 SUZANNE YAWGER $133,000 $133,000.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1054203 RONALD THOMAS $108,000 $108,000.00 1
1054204 WILLIAM F. WICKWIRE $11,000 $11,000.00 1
1054209 MARSHALL C. WOLLMAN $90,000 $90,000.00 1
1054369 MICHAEL E. SCHOETTLER $87,500 $87,500.00 1
1054374 EDWARD MILLS $160,000 $160,000.00 1
1054389 ROY SIEVERS $85,000 $85,000.00 1
1054404 RONALD GOYDEN $13,000 $13,000.00 1
1054566 DAYAWATI BISHUNAUTH $189,000 $189,000.00 1
1054846 JAMES W. CLEGG II $13,000 $13,000.00 1
1054866 DOUGLAS J. WELCH $106,600 $106,600.00 1
1054956 WICLIFF REID $180,000 $180,000.00 1
1055028 HELEN KANN $184,875 $184,875.00 1
1055038 DOROTHY PIERCE $165,000 $165,000.00 1
1055043 DWIGHT SANDS $86,100 $86,100.00 1
9013079 THOMAS P. SCRIVO $20,300 $20,200.23 1
9013122 DONALD A. WEBSTER $17,000 $16,949.36 1
9013232 DUANE H. HALLOCK SR. $20,000 $19,777.23 1
9013381 LEROY W. KAUFMAN $79,800 $79,799.19 1
9013383 CARL A. ADAMOLI $10,100 $9,792.27 1
9013384 JAMES J. COUGHLIN JR. $110,600 $110,212.46 1
9013389 GIACOMA GINA BUFFA $20,000 $19,515.60 1
9013406 DAWN M. MANSFIELD $20,000 $19,767.42 1
9013441 THOMAS F. MCLAUGHLIN $110,500 $110,500.00 1
9013458 DENNIS GAHR $20,244 $20,137.27 1
9013490 ABIGAIN MERCADO VELEZ $20,400 $20,323.43 1
9013506 CLIFFORD H. BEIDLER JR. $141,000 $140,047.74 1
9013510 WILLIAM M. SHANK $19,500 $19,353.78 1
9013536 WILLIAM E. PHILLIPS $14,000 $13,986.50 1
9013549 MICHAEL B. O'MEARA $14,750 $14,333.10 1
9013550 KENNETH C. KIME SR. $158,300 $156,233.82 1
9013561 WILLIAM T. BLANCHARD $110,000 $109,395.76 1
9013578 ELIZABETH HANLON $20,000 $19,854.48 1
9013599 ALAN B. LEVINE $140,000 $139,855.64 1
9013608 VIRGINIA SZUMSKI $11,000 $11,000.00 1
9013614 VICTORIA W. YANCEY $116,000 $115,483.23 1
9013620 HELEN ANN ALMEIDA $103,000 $103,000.00 1
9013626 ALBERT T. TOTH SR. $12,500 $12,448.61 1
9013627 KATHLEEN MCCLOSKEY $100,000 $99,020.07 1
9013638 JEFFREY J. FREIRICH $17,500 $17,500.00 1
9013639 ALFRED ATANDA $80,000 $79,903.13 1
9013642 BARBARA A. MCCURRY $96,000 $95,584.80 1
9013648 KENNETH C. KIME SR. $19,900 $19,740.26 1
9013649 DANIEL J. KENNEDY $16,402 $16,402.43 1
9013697 KRISTY E. REES $19,450 $19,341.70 1
9013707 CARLA M. HOOKS $15,000 $15,000.00 1
9013710 JEAN WROBEL $15,000 $14,874.15 1
9013713 RITA ANN MATTHEWS $16,500 $16,500.00 1
9013716 BERNADETTE LOVE $13,500 $13,500.00 1
9013730 JOSEPH J. ZARECZKY $97,775 $97,775.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
9013733 DOUGLAS BERENGER $86,000 $86,000.00 1
9013762 GAIL L. WURSTER $85,000 $85,000.00 1
9013784 ANTHONY CELESTE $106,200 $106,200.00 1
9013794 MARY WERTS $10,000 $10,000.00 1
9013796 DORIS D. HOLADAY, TRUSTEE $165,000 $165,000.00 1
9013812 MYRON POPOWYCH $100,000 $100,000.00 1
9013822 JULIA V. RIOS $17,000 $17,000.00 1
3100000938 DEBORAH FATOURAS $240,000 $240,000.00 1
3000000184 BARBARA R. BOWERS $182,000 $181,966.64 1
3000000188 JOSEPH ANDREWS $114,750 $114,431.87 1
3000000202 BEVERLY DESTEFANO $82,500 $82,288.72 1
3000000206 LEROY A. BARNES $193,500 $193,500.00 1
3000000215 HARRY ACETI $81,000 $81,000.00 1
3000000216 STEPHEN SARDINO $162,900 $162,900.00 1
3000000224 RAYMOND E. BURNS $85,000 $85,000.00 1
3000000226 CARMEN COLLAZO $92,000 $92,000.00 1
3000000229 THOMAS DOS SANTOS $166,500 $166,500.00 1
3000000236 GARY A. PARIS $112,200 $112,200.00 1
3019800662 HERNAN SARRIA $188,700 $188,700.00 1
3019800733 DARIO GARAY $87,000 $86,903.53 1
3019800794 JESSICA KUCHINOV $91,000 $90,792.54 1
3019800830 CARIDAD CASTILLO $85,000 $85,000.00 1
3019804806 ROBERT V. HENRY, JR. $83,250 $83,236.85 1
3019806393 DAVID HARDING COLES SR. $83,720 $83,720.00 1
3019806733 JESSE L WILLIAMS $84,000 $84,000.00 1
3019806750 JAMES PALADINO $90,000 $89,650.76 1
3019806812 ROBERT BACCELLO $112,500 $112,500.00 1
3019806868 NANCY L. BAIRD $93,000 $93,000.00 1
3019806910 FREDERICK C. KNIESLER, JR $200,000 $200,000.00 1
3019806915 VIOLET C. SHAUBERGER $19,000 $18,990.82 1
3019806918 JAMES J. BURKE $163,200 $163,177.69 1
3019807024 JERRY STEFANOWICZ $95,200 $95,068.04 1
3019836060 ERROL HENRY $138,000 $137,997.01 1
3019838491 JOANNE MEARS $19,600 $19,569.30 1
3019838811 STEVEN FREEDMAN $107,250 $107,101.33 1
3019839632 TADEUSZ MAJCHRZAK $221,000 $221,000.00 1
3019840403 DANIEL VALENTINO $93,600 $93,600.00 1
3019840467 LEONARD WHEELER $102,400 $102,400.00 1
3019841082 JOSEPH COGDELL $104,000 $104,000.00 1
3019841221 BERNICE LONDON $107,000 $106,733.28 1
3019841355 DAVID L. MONACO $91,800 $91,753.88 1
3019841359 CLAYTON TURNER $108,800 $108,727.68 1
3019841384 JOANNIE ROSE $118,400 $118,366.80 1
3019841410 JOAN SANTOS $83,000 $82,937.27 1
3019841425 MICHAEL RICKETTS $131,750 $131,750.00 1
3019841434 ALEX ZUNIGA $140,000 $140,000.00 1
3019841435 ALEX HERNANDEZ $86,250 $86,250.00 1
3019841534 ARTHUR H. CLARK III $119,000 $118,871.40 1
3019841605 JANET SIRIGNANO $138,000 $137,752.40 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019841609 VERNEY BENDER $119,000 $118,700.88 1
3019841610 MIGUEL DEJESUS $97,750 $97,708.58 1
3019841628 ANDRE SEAN DAVIS $89,600 $89,600.00 1
3019841631 CHERRY FRANCIS $221,859 $221,859.00 1
3019841691 FREDERICA GRAYSON ENSLEY $100,000 $99,994.01 1
3019841711 WILLAIM V. VOGT, JR. $118,400 $118,200.23 1
3019841786 GLENNA CARAMBA-COKER $156,000 $156,000.00 1
3019841847 DOROTHY EDWARDS $112,200 $112,074.23 1
3019841860 OMAR TOWNES $105,600 $105,600.00 1
3019841872 THOMAS J. REIDY $160,000 $160,000.00 1
3019841962 VALERIE MOORE BIERA $88,000 $87,991.12 1
3019841965 JOYCE ROUGHGARDEN $116,600 $116,405.72 1
3019841986 JUDITH VIEIRA $116,000 $116,000.00 1
3019841990 ERNEST RODRIGUEZ $109,350 $109,194.06 1
3019892339 VINCENT I. COLLINS $108,000 $108,000.00 1
3019892348 JAMES E. HALL, JR. $152,915 $152,915.00 1
3019892409 FRANKLIN A. BOWLES $94,710 $94,475.75 1
3019892522 ROBERT B. KEYES JR. $89,250 $89,250.00 1
3019892526 MORRIS ALEXANDER MURRAY $131,750 $131,750.00 1
3019900831 NANCY LORIA $104,400 $104,400.00 1
3019900838 LUIS R. SUAREZ $152,000 $152,000.00 1
3019904704 THEODORE C KELLER $172,700 $172,700.00 1
3019904741 WILLIE F. DAVIS $136,000 $136,000.00 1
3019904912 WILLIAM H. CLARK $118,800 $118,800.00 1
3019906972 TONIE LOVE $12,000 $12,000.00 1
3019907017 NANCY GAYMON $120,000 $120,000.00 1
3019907099 LARRY H. WERKHEISER $90,000 $90,000.00 1
3019907131 JOSEPH L. DEMARCO $135,000 $135,000.00 1
3019907155 MILDRED ELWOOD $107,950 $107,950.00 1
3019907168 MARCIA WILLIAMS $175,100 $175,100.00 1
3019907193 TONY W FEIMSTER $95,200 $95,200.00 1
3019907198 SCOTT A. NAGY $92,000 $92,000.00 1
3019907337 VANESSA DYKES MUHAMMAD $148,500 $148,500.00 1
3019940346 SANDRA DIGGS $18,000 $17,807.12 1
3019941765 BRYON D. MILLHAM $98,175 $98,175.00 1
3019941871 YASMINE DAVIS $212,000 $212,000.00 1
3019941894 GERARD DROGE $145,000 $145,000.00 1
3019941959 LINDA SHERIDA BANNERMAN M $12,600 $12,600.00 1
3019941961 STEPHANIE CABONARGI $161,100 $161,100.00 1
3019941985 RAYMOND A.PIZZO $180,000 $180,000.00 1
3019942043 PHILOGENE MEDACIER $148,750 $148,750.00 1
3019942050 INDIRA BARON $119,000 $119,000.00 1
3019942116 OMAR BETANCOURTH $130,500 $130,500.00 1
3019942155 CHRISTOPHER RIVERA $120,000 $120,000.00 1
3019942188 JOSEPH COGDELL $112,500 $112,500.00 1
3019942201 DENNIS P O'ROURKE $95,200 $95,200.00 1
3019942231 THOMAS BOJNOSKI $104,800 $104,800.00 1
3019942269 BAYO OKPAKU $183,750 $183,750.00 1
3019942293 MONICA ADDISON $103,700 $103,700.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019942369 DENISE L. WHEELER $136,000 $136,000.00 1
3019942388 ALEX MANSARAY $104,000 $104,000.00 1
3019942460 ELAINE M. ROBERTS $193,000 $193,000.00 1
3019942469 LOREN LEVENSTEIN $180,000 $180,000.00 1
3019992448 GAIL A. CHRISTIAN $120,000 $120,000.00 1
3019992474 BERNICE J. BRACEY $92,450 $92,450.00 1
3019992527 RAYMOND K. SPARKS $116,500 $116,500.00 1
3019992568 KRYSTAL A. JOHNSTON $147,000 $147,000.00 1
3039904851 JEFFREY P. ANDREWS $11,668 $11,668.00 1
3039907300 MARK A. BOLINSKY $14,736 $14,736.00 1
3039941783 ROSALIE A. MONDELLO $14,881 $14,881.00 1
3039942083 ROBERT BERG $91,250 $91,250.00 1
3100000215 MANUEL DIAZ $113,900 $113,660.25 1
3100003231 MICHAEL J. CIRCELLI $136,350 $136,350.00 1
3100003282 DOUGLAS A. SANCHEZ $93,000 $92,440.58 1
3100003289 BILLY D. MCMILLION $101,700 $101,413.49 1
3100003310 DAVID K. THAANUM $142,500 $142,500.00 1
3100003351 GLEN C. ALDRICH $82,500 $82,251.51 1
3100003399 VERNA SMITH $15,000 $14,897.34 1
3100003435 BRADLEY ROSENAU $12,950 $12,865.59 1
3100003474 WANDA MCDANIELS $80,000 $79,888.65 1
3100003515 PATRICIA L. DARDEN $15,000 $15,000.00 1
3100003563 DANIEL L. BOSCH $16,400 $16,400.00 1
3100003569 DENNIS CALIZ $155,000 $155,000.00 1
3100003579 JANNIE L. FULTON $132,000 $132,000.00 1
3100003597 ROBIN S. HOLLINGSHEAD $121,300 $121,277.95 1
3100003632 LESLIE I. MARSHALL $167,090 $167,090.00 1
3100003644 GLADYS V. LUTHER $10,000 $9,988.50 1
3100003691 JODIE ANN COGAR $100,000 $99,725.29 1
3100003705 SHARON M. NELSON $89,600 $89,390.68 1
3100003781 ROBERT L. REYNOLDS $12,000 $12,000.00 1
3100003793 CHARLES W. MANGIN JR. $225,000 $224,620.38 1
3100003794 LARRY L. PARKS $15,000 $15,000.00 1
3100003851 NAOMI LAUGHTON $230,400 $230,400.00 1
3100003874 TINA F. ROBINSON $17,829 $17,829.00 1
3100003894 GRADY ROGERS $119,000 $119,000.00 1
3100003900 DAWN A. THOMAS $90,000 $90,000.00 1
3100003902 MICHAEL R. LAURIA JR. $109,055 $108,750.08 1
3100003953 MARY C. GALEA $17,700 $17,700.00 1
3100004018 ALFRED J. ROTOLI $96,000 $96,000.00 1
3100004038 JOHN J. NIEMIEC $103,500 $103,500.00 1
3100004128 IRIS CAROL FENSTER $119,000 $119,000.00 1
3100004134 VINCENT S. DRAMIS $152,800 $152,800.00 1
3100004158 WILLIAM R. JENSEN $163,200 $163,200.00 1
3100004161 ILA WILLIAMS $144,000 $144,000.00 1
3100004184 PATRICIA FAIRCHILD $110,500 $110,500.00 1
3100004251 RONALD S. ROMANCHIK $230,000 $230,000.00 1
10125 DENNIS SANSONI $72,000 $72,000.00 2
10276 GALLANT CONSTRUCTION INC. $50,000 $49,776.78 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
10317 MICHAEL WHITE $60,000 $59,705.49 2
10319 SHAWN M. ZERBE $39,000 $38,912.50 2
10320 NATILI NURSERY, INC. $60,000 $59,892.04 2
10321 WILLIE FRED WHEELER $22,000 $22,000.00 2
10322 NATHAN BOOKMAN $31,000 $30,834.06 2
10324 ELMER L. GOODWIN JR. $25,000 $25,000.00 2
10325 KELLY'S SHEET METAL, INC. $75,000 $75,000.00 2
10327 MARIA L. MENTZER $38,000 $38,000.00 2
10332 MORGAN/PATTERSON CONSTRUC $30,000 $29,946.85 2
10335 BERLIN MOTOR CARS L.L.C. $20,000 $20,000.00 2
10338 CHIPPEWA WINDOW AND DOOR $20,000 $20,000.00 2
10340 BYONG YEON CHOI $130,000 $130,000.00 2
10341 GERALD R. JACOBS $65,000 $64,883.04 2
10343 HAGEPANOS & WALTERS, INC. $40,000 $39,999.09 2
10344 TRADITION, L.L.C. $61,000 $60,510.92 2
10346 MIGUEL PANTOJA $30,000 $30,000.00 2
10348 DITOMA CONTRACTING, INC. $50,600 $50,374.10 2
10351 D. & S. IMPROVEMENT, INC. $35,000 $34,952.55 2
10352 ANTHONY F. SANTA MARIA JR $20,000 $20,000.00 2
10353 PATRICK B. PIERCE $21,000 $20,878.95 2
10354 FOWLKES AND SONS, INC. $45,000 $44,938.61 2
10357 GEORGE D. MORSE $45,000 $44,939.01 2
10360 BARRY DEVLIEGHER $31,000 $30,875.59 2
10362 KOFI BARRY $43,000 $43,000.00 2
10364 HERMAN SCIULLI $33,000 $33,000.00 2
10366 JOSEPH M. FOREMAN $60,000 $60,000.00 2
10370 WAYNE FORTE $68,000 $68,000.00 2
10374 SWEET BRIER BED AND BREAK $55,000 $54,583.45 2
10376 MARY L. YOUNKER $30,000 $30,000.00 2
10378 JOSEPH KARBOW $44,000 $43,432.24 2
10380 JOHN P. SHLATZ $30,000 $30,000.00 2
10381 STEPHEN F. STOLTZFUS $23,000 $23,000.00 2
10386 ELENI ATHANASIOU $70,000 $70,000.00 2
10388 EDWARD W. RAUSCH $70,000 $70,000.00 2
10390 GRIGORE DANCIU $35,000 $35,000.00 2
10392 KOENEMUND ENTERPRISES, IN $45,000 $45,000.00 2
10393 MICHELE R. HOWARD $29,000 $29,000.00 2
10394 LINCOLN JAMES $40,000 $40,000.00 2
10396 THOMAS VELEZ $20,000 $20,000.00 2
10398 MID-ISLAND REAL ESTATE, I $45,000 $44,599.22 2
10399 DICK ROBERTS & SON AUTO S $40,000 $40,000.00 2
10401 JOHNNY B. BLACKSHEAR JR. $125,000 $125,000.00 2
10404 LOGAN CLEANING, INC. $20,000 $20,000.00 2
10405 RONALD SCARLETT $56,000 $56,000.00 2
10409 CARL J. PODJED $37,000 $37,000.00 2
10416 GLEN ROCK TAVERN, INC. $69,000 $69,000.00 2
10424 JOSEPH E. MILLER $28,000 $28,000.00 2
8882111 PAUL D. ALFIERI JR. $55,000 $54,949.89 2
8882112 THE REAL MCCOY HERB SHOP, $25,000 $24,988.33 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
8882114 UNIVERSAL TOOL REPAIRS, I $30,000 $30,000.00 2
8882120 LULA L. KING $40,000 $39,910.25 2
8882121 ENTECH PARTNERSHIP $42,000 $42,000.00 2
8882122 356 7TH STREET CORP. $129,000 $128,412.24 2
8882123 JEAN E. WILSON $45,000 $44,898.65 2
8882132 ARCHITECTURAL WOOD PRODUC $53,500 $53,500.00 2
8882136 STEVEN G. GENTRY $22,000 $22,000.00 2
8882140 JOSE LOPEZ $55,000 $55,000.00 2
8882142 HOUCK BUSINESS FORMS, INC $55,000 $55,000.00 2
8882143 OMEGA'S FASHIONS, INC. $24,000 $24,000.00 2
8882144 LE LOOK OPTICAL, INC. $35,000 $35,000.00 2
8882146 R & T RENTALS, INC. $65,000 $65,000.00 2
8775 J W PARKS HOME IMPROVEMEN $43,000 $42,559.71 2
10433 SAMANTHA CHU-CHENG $35,000 $35,000.00 2
8882149 LALER REALTY, INC. $78,000 $78,000.00 2
10434 MICHAEL E. ORTIZ $28,000 $28,000.00 2
10435 ROBERT R. VOYTON $20,000 $20,000.00 2
8882153 DOROTHY E. ENRIQUEZ $30,000 $30,000.00 2
10294 VILLA REGINA CATERERS, IN $40,000 $39,519.39 2
10298 DANIEL LAWRENCE $250,000 $250,000.00 2
10318 DAVE'S REPAIR SHOP, INC. $260,000 $259,618.21 2
10329 GREATER BALTIMORE RECORD $350,000 $350,000.00 2
10363 ZENON CHRISTOFOROU $275,000 $275,000.00 2
10369 MAN-NAN 878 CORP. $250,000 $250,000.00 2
10400 STEVE'S DEEPWATER MARINA, $250,000 $250,000.00 2
10421 THOMAS M. KINNEY SR. $32,000 $32,000.00 2
8882118 WE-KILL PEST CONTROL, INC $80,000 $79,962.65 2
8882101 PATRICIA KNIGHT, INC. $63,000 $63,000.00 2
10268 NIGHT LIFE BAR & GRILLE, $300,000 $300,000.00 2
1042110 IRANOR FALDOR $54,500 $54,389.15 2
1042715 LINDA JUSTIN $65,250 $65,138.56 2
1043181 JOHN G. DAVIS $63,000 $63,000.00 2
1043407 RICHARD RAY LEE $37,125 $37,125.00 2
1043724 MARK E. GEORGE $21,150 $21,150.00 2
1043757 HORACE LOWE $37,000 $37,000.00 2
1043758 CHAUNCEY SULLIVAN $24,750 $24,750.00 2
1044072 LOFTON HULL $49,500 $49,431.75 2
1044094 VERA JORDAN $74,000 $73,832.40 2
1044113 ELEANOR JACKSON $33,000 $33,000.00 2
1044609 BENJAMIN WILLIAMS $36,000 $36,000.00 2
1044689 CELIA B VARGAS $124,500 $124,500.00 2
1044743 KEITH J. CALDWELL $42,000 $41,992.83 2
1044878 ROSE MARIE MCGEARY $31,500 $31,447.26 2
1045069 JESSE ESPARZA $30,000 $29,842.87 2
1045084 JAIME BELLO $70,000 $69,959.69 2
1045094 DEBORAH HOLMES $51,000 $50,910.03 2
1045111 ANTHONY KOSIENSKI JR. $250,000 $250,000.00 2
1045146 JANET R. MOURADIAN $35,000 $34,958.51 2
1045228 PATRICIA MONROE $37,500 $37,500.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1045435 JOHN R. SCUELLO $282,000 $280,765.55 2
1045488 STEPHEN M. ABIUSO $72,600 $72,600.00 2
1045692 CHARLES B. STEWARD $64,000 $63,929.60 2
1045695 MARINE MARTIN $45,000 $45,000.00 2
1045711 ANDREA LORETTA DACOSTA $48,000 $47,736.65 2
1045755 RAYBURN EUGENE ADAMS II $59,850 $59,850.00 2
1045771 NELSON G. ANCRUM $49,600 $49,600.00 2
1045787 JOSEPH RODIA $37,500 $37,429.13 2
1045917 CHARLES T. WIMPY JR. $74,000 $74,000.00 2
1045947 JOHN S. LESSER $22,000 $21,856.42 2
1046078 CATHARINE A TAYLOR BY HER $61,200 $61,200.00 2
1046163 JEFFREY SMITH $60,000 $59,980.23 2
1046187 WILLIAM M. TINGLER $37,800 $37,800.00 2
1046190 ANNA CIRRONE $47,000 $46,947.70 2
1046248 MILDRED V. BIBBS $25,000 $24,993.87 2
1046250 RICK E. DAVID $67,200 $67,200.00 2
1046268 CATHERINE A. O'BRIEN $249,500 $249,442.46 2
1046284 MARY D. BOYD $63,000 $62,884.07 2
1046295 DWAYNE LOCKMAN SR. $39,000 $39,000.00 2
1046300 NOEL A. STRAW $72,000 $71,974.43 2
1046303 ARTHUR W. JOHNSON $78,000 $77,974.30 2
1046306 MATTHEW SHEFFIELD $40,000 $39,970.50 2
1046329 JOHN LEACH $62,400 $62,400.00 2
1046364 JULIA ARNOLD $64,000 $64,000.00 2
1046376 MARTIN R. COHEN $38,665 $38,545.86 2
1046383 DARYL G. DEW $68,000 $67,557.67 2
1046476 JOHN THOMAS STROUP $48,000 $48,000.00 2
1046489 FIRAS RIMAWI $35,500 $35,500.00 2
1046500 ANGELA V. JAY $25,000 $24,922.36 2
1046591 ERROL SUBARAN $35,000 $35,000.00 2
1046661 GARY D. FREULER SR. $22,500 $22,500.00 2
1046667 RONALD J. RICHARDS $76,500 $76,461.77 2
1046705 CHRISTINE R. CANTER $53,100 $53,100.00 2
1046713 WILLIAM RIVERA $72,000 $72,000.00 2
1046740 HAROLD JOHNSON $43,200 $43,200.00 2
1046746 SARAH OLIVIA WILLIAMS SHO $68,000 $67,998.94 2
1046778 MARY JO SEWELL $47,600 $47,565.37 2
1046795 MARVIN ULYSSES BATEMAN $57,100 $57,100.00 2
1046812 PAUL A. HENRY $72,000 $72,000.00 2
1046833 SHERMAN POYTHRESS $40,000 $40,000.00 2
1046848 LINDA GRAVES MANGUM $67,500 $67,327.95 2
1046859 THEODORE L. PACK JR. $35,000 $35,000.00 2
1046867 JOAN THERESA SCOTT CLARK $32,000 $31,982.16 2
1046877 GEORGE W. LOFLAND $77,400 $77,400.00 2
1046902 DIANE L. KING $27,200 $27,200.00 2
1046909 PAMELA J. PERRY $71,550 $71,550.00 2
1046919 VICENTE A. DELACRUZ $73,800 $73,800.00 2
1046935 BRENDA GREENE $66,427 $66,376.44 2
1047000 DARRELL D. WINN $61,300 $61,233.57 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1047065 SAMUEL TEEL $25,000 $24,903.57 2
1047075 LAMAR WATKINS $56,000 $56,000.00 2
1047081 ADELINA MARIE P. KUHL $40,000 $40,000.00 2
1047087 RETHA PERRY $45,000 $44,850.40 2
1047094 JAMES P. MITCHELL $53,700 $53,673.48 2
1047101 KRISTINA HNYDA $61,750 $61,750.00 2
1047138 BRIAN S. RUSSELL $64,350 $64,350.00 2
1047166 DEBRA LONDON SHAPIRO $29,272 $29,272.00 2
1047171 JUDITH H. EDLIN $54,500 $54,385.57 2
1047183 JAY CEE CHAMPION $40,000 $39,997.09 2
1047212 MILDRED UPSHAW $21,600 $21,600.00 2
1047233 WILLIAM JANOS III $45,000 $44,980.41 2
1047245 VICTORIANO RIVERA $30,000 $29,732.53 2
1047271 ANA SHOUMATOFF $125,000 $124,792.18 2
1047273 BRIAN E. DEWITT $50,000 $49,917.76 2
1047276 FLORENCE SHORE $36,100 $36,100.00 2
1047290 DEAN EVERETTE LAIL $42,500 $41,918.75 2
1047301 MARY LYNN FLANIGAN $40,000 $39,798.93 2
1047305 KEITH G. KEENER $75,150 $74,965.37 2
1047310 ROBERT J. SMITH $56,100 $55,921.05 2
1047315 WINIFRED D. DIXON $39,100 $39,056.64 2
1047339 ANTHONY SCAFIRO JR. $65,700 $65,250.17 2
1047354 DEWITT CARTHAN JR. $37,750 $37,695.80 2
1047394 MARLON THOMPSON $127,500 $127,498.36 2
1047398 ANTHONY D. JARRELL $60,350 $60,226.12 2
1047399 DAVID A. CALVANO $70,000 $70,000.00 2
1047402 ALLAN S. PALAIS $71,200 $70,891.82 2
1047439 EDWARD MEYER $62,720 $62,424.65 2
1047445 DARYL H. BLACK $77,000 $76,961.11 2
1047467 ETHEL MAE CARTER $72,500 $72,341.54 2
1047497 RICHARD A. DALTON $43,350 $43,264.83 2
1047524 LOUEDA M. KENNEDY $48,150 $48,146.91 2
1047549 RONNIE C. MCLEAN $127,500 $127,358.55 2
1047572 GERARDO I. SOLARTE $69,700 $69,644.49 2
1047618 TRISTAN COOLEY $65,700 $65,700.00 2
1047629 ROBERT E. MCCORMACK $34,000 $33,889.92 2
1047647 JAMES T. BROADWATER $48,000 $47,780.61 2
1047699 SPENCER BAUCOM $48,400 $48,400.00 2
1047763 WALTER J. TOMES $66,000 $65,959.63 2
1047773 PHILIP E. WALKLET $40,500 $40,296.58 2
1047782 WILMER GILYARD JR. $58,500 $58,500.00 2
1047802 SHIRLEY BURTS $64,800 $64,786.79 2
1047811 DIANA M. KECK $39,500 $39,444.68 2
1047842 ELAINE T VAUGHN $65,500 $65,369.96 2
1047850 MARIA D. FERNANDEZ $70,000 $69,696.93 2
1047881 MATTHEW L. SETTING $33,000 $33,000.00 2
1047891 KINGSEL MCKENZIE $22,900 $22,884.51 2
1047932 RYAN KEITH WILLIAMS $129,600 $129,600.00 2
1047943 GLORIA T. FRATONI $76,000 $75,822.08 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1047956 MICHAEL D' AMELIO $41,000 $40,861.20 2
1047973 ROLLEN E. FISHER SR. $45,000 $44,938.14 2
1047996 MATTHEW J. SPAHIC $35,000 $34,905.60 2
1048000 DORIS PAIGE $20,000 $20,000.00 2
1048002 RAQUEL RAELENE SCIBETTA $63,000 $62,954.05 2
1048018 CLAUDIO BRIANTE $20,000 $20,000.00 2
1048033 GEORGE CLARY $51,000 $50,798.91 2
1048035 SUSAN K. KENDIG $26,000 $25,848.01 2
1048038 WALTER D. KINCAID $28,000 $28,000.00 2
1048075 JOSEPH M. BASILE $52,000 $52,000.00 2
1048082 CHRISTOPHER R. GEDNEY $33,480 $33,329.04 2
1048083 JOAN K. LEFF $35,000 $35,000.00 2
1048095 WARREN LIGHT $100,000 $99,990.83 2
1048107 KYLE HOLMBECK $55,000 $54,918.76 2
1048111 GEORGE L. KINIMONTH $245,000 $245,000.00 2
1048116 MARTIN R. COHEN $38,500 $38,500.00 2
1048144 FRANK RUSSO $50,000 $49,816.52 2
1048153 MICHAEL P. BUTLER $127,500 $127,500.00 2
1048159 JACQUELINE MALASZECKI $21,000 $20,983.37 2
1048176 MARTHA ROBERTS $45,000 $44,652.29 2
1048191 ROBERT NOACK $32,645 $32,645.00 2
1048197 CHARLES F. HUSTED $45,000 $45,000.00 2
1048198 SEAN M. DEEGAN $43,000 $43,000.00 2
1048206 BETTY MCEWEN $35,000 $34,880.89 2
1048231 MARY A. CELIS $37,000 $36,905.77 2
1048252 VINCENZO SCHIANO- DI-COLA $30,000 $29,803.20 2
1048262 RONALD W. MILLSPAUGH $66,300 $66,089.27 2
1048269 WILLIAM A. MATTHEWS $75,000 $74,773.97 2
1048275 JEAN A. DAVIS $76,500 $76,477.88 2
1048287 STEVE L. GRAY $62,800 $62,746.74 2
1048293 THELMA GRAY $48,000 $47,962.36 2
1048303 MARY E. HARMON $22,000 $22,000.00 2
1048311 RODNEY ROLLE $33,600 $33,555.63 2
1048321 KATHLEEN NISTOCK $45,000 $44,878.33 2
1048330 LOUISE T. WILLIAMS $55,540 $55,512.57 2
1048342 STEVEN W. DUNBAR $52,000 $51,900.23 2
1048344 BARBARA ANNE CLUCAS $56,000 $55,894.74 2
1048366 BARBARA H. MORGAN $20,359 $20,359.00 2
1048377 JODIE T. COLELLA $129,000 $128,681.29 2
1048390 PAM VANGROUW $25,000 $24,665.74 2
1048396 JEFFREY R. HECHT $25,000 $25,000.00 2
1048403 FRANK GIORDIANO $20,000 $20,000.00 2
1048411 MARLENE DUVIVIER $40,000 $40,000.00 2
1048417 KENNETH V. BRONSON $38,500 $38,404.21 2
1048427 JAMES J. DOUGHERTY $52,000 $51,754.43 2
1048428 NELSON G. ANCRUM $26,250 $26,250.00 2
1048432 VIET THANH NGUYEN $51,082 $51,082.00 2
1048448 CATHERINE M. PALUMBO $72,000 $71,870.32 2
1048454 ALEXANDER WILLIAM DUNLOP $68,000 $68,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1048462 BETTY L. DUNLEAVY $33,000 $32,819.65 2
1048464 MARION WILLIAMS $59,600 $59,600.00 2
1048478 CHARLES F. HUSTED $37,600 $37,600.00 2
1048558 GLORIA THOMAS $36,000 $35,950.69 2
1048572 MARA GOMOLKA $21,300 $21,195.20 2
1048639 JAMES T. DUNMEYER $38,000 $37,884.44 2
1048641 MELVIN T. AUGHTMAN $31,300 $30,974.80 2
1048646 BRIAN D. SNOOK $21,000 $20,868.31 2
1048652 JENNIE L. FENTOS $50,000 $49,810.25 2
1048680 DAMION L. BARBER $40,000 $39,822.00 2
1048682 RODRINA Y. AARON $55,250 $55,222.25 2
1048687 WILTON R. MASSENGILL JR. $250,000 $250,000.00 2
1048704 ELLIS L. VIRGLE $55,180 $55,180.00 2
1048740 NEAL J. HUGHES $20,000 $20,000.00 2
1048745 JAMES E. WHITE $54,900 $54,875.20 2
1048753 ETHELL TAYLOR $30,600 $30,600.00 2
1048806 GARY MULE $57,900 $57,900.00 2
1048840 DONNA L. DAVIS $40,000 $39,836.15 2
1048844 ALVIN LEVINE $68,000 $68,000.00 2
1048871 DIANA V. JACKOWSKI $50,500 $50,421.33 2
1048934 STEVEN M. HINKLE $25,000 $24,896.44 2
1048942 EMMALINE DODSON MCNEAL $62,000 $61,914.41 2
1048944 QUEEN E. BROWN $22,000 $22,000.00 2
1048946 JOHN KLEBAUR $58,000 $58,000.00 2
1048968 SHEILA B. GILLIAM $67,500 $67,177.78 2
1048971 BERNICE JORDAN $72,500 $72,497.86 2
1048974 EMMA JEAN R. RATLIFF $40,800 $40,800.00 2
1048980 FRANK EVERETT THOMPSON $60,000 $60,000.00 2
1048992 RONALD B. HAWCROFT $34,500 $34,500.00 2
1048999 JOHN E. FARNUM $21,100 $21,050.35 2
1049000 RAYMOND A. MINUTOLO $27,000 $26,914.44 2
1049006 CARLOS GEORGE SR. $40,000 $40,000.00 2
1049007 JAMES FREY $52,000 $52,000.00 2
1049032 ROBERT E. CLEVELAND $44,000 $44,000.00 2
1049059 SALLY HAYES MACKAY $30,000 $29,987.28 2
1049074 PHILOMENA M. FEDELE $70,000 $69,884.75 2
1049080 KAZI A. HOSSAIN $29,700 $29,675.29 2
1049096 THOMAS TENNIS JR. $32,000 $32,000.00 2
1049097 JANET D. CORNETT $53,550 $53,550.00 2
1049131 PRISCILLA A. JONES A/K/A $60,300 $60,300.00 2
1049140 WALTER I. AARON $61,750 $61,750.00 2
1049144 CYRIL VILLAFANA $65,000 $64,876.10 2
1049146 NANCY CARLISLE SCHUMACHER $63,750 $63,741.28 2
1049152 TIMOTHY PRICE $38,700 $38,700.00 2
1049160 MILLICENT PIERCE $48,750 $48,556.15 2
1049195 JEANETTE C. MOON $25,000 $24,975.94 2
1049225 JOANNE WOMBLE $72,000 $72,000.00 2
1049237 DAVID GROSS $25,000 $25,000.00 2
1049238 TERENCE SIKORYAK $25,000 $25,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1049282 ROB MARION $56,250 $56,250.00 2
1049321 BRUNO P. SIMONELLI $130,000 $130,000.00 2
1049394 JACQUELINE P. VALENTINE $70,000 $70,000.00 2
1049396 WALTER F. DEGROOT $20,000 $20,000.00 2
1049413 GARY PFAUTZ $33,300 $33,228.71 2
1049432 RICHARD BURGESS $43,650 $43,650.00 2
1049452 ANN NOLAN $27,500 $27,290.91 2
1049453 STEPHEN G. CAVALLO $28,000 $28,000.00 2
1049454 JOAN DOLORES BENNIS-SALLE $55,800 $55,516.00 2
1049491 ANNE Y. THROWER $31,000 $31,000.00 2
1049493 JOHN P. BROWN $20,000 $20,000.00 2
1049500 JAMES GEORGE HYDRO $30,400 $30,400.00 2
1049533 BARBARA ELIZABETH DOMRASE $60,000 $60,000.00 2
1049535 PAUL CHRISTIAN $65,700 $65,606.50 2
1049539 FRANK PASHEL $67,500 $67,500.00 2
1049563 DONALD R. BLY $41,500 $41,500.00 2
1049573 FRED MITCHELL $52,800 $52,800.00 2
1049574 BRENDA DILLARD $62,850 $62,821.14 2
1049577 BARBARA S. THIGPEN $30,000 $29,904.27 2
1049630 LAWRENCE H. MORINI $35,000 $35,000.00 2
1049659 DONNA M. BROWN-BURROUGH $30,000 $30,000.00 2
1049722 JOE C. WORKMAN $57,500 $57,339.23 2
1049726 PATRICIA A. LAFFERTY $68,000 $67,987.01 2
1049733 ALLAN H. ROSENBERG $45,900 $45,900.00 2
1049752 LAURENCE HIRSHON $48,000 $48,000.00 2
1049763 WILLIAM J. VANORE II $28,400 $28,357.18 2
1049767 ERIC TUSHAWN BURDEN $78,200 $78,200.00 2
1049768 ROBERT JOE AMOO $40,950 $40,950.00 2
1049778 JOHNNIE MAE THOMAS $54,000 $54,000.00 2
1049806 KAREN M. BAILEY $45,000 $44,886.92 2
1049858 VALERIE J. DUNN $78,200 $77,961.35 2
1049860 MARJORIE A. JONES $39,200 $38,895.79 2
1049905 CHARLES YACKLON $34,500 $34,500.00 2
1049938 RUZANNA BOGATI $74,760 $74,760.00 2
1049944 NANCY WOLINSKY $275,000 $275,000.00 2
1049981 NELSON WINGFIELD $30,000 $29,885.51 2
1049990 JOYCE GASKIN $50,000 $49,758.61 2
1049997 TERRY K. WHITE $56,800 $56,800.00 2
1050041 VALLIE GAPAC $56,500 $56,494.39 2
1050052 DONALD L. HAYES $36,550 $36,549.11 2
1050079 CLIFFORD BRYANT $46,000 $45,936.55 2
1050097 EMMETT COX $74,800 $74,673.79 2
1050100 LARRY D. CARNES $68,000 $67,998.79 2
1050152 SUSAN M. JOHNSON $55,000 $55,000.00 2
1050157 LINWOOD JOHNSON JR. $52,000 $52,000.00 2
1050160 GLADYS COLLAZO $28,000 $27,709.80 2
1050216 SILVIA VERHEECK $35,000 $34,886.54 2
1050220 ROY R. HOWARD $54,000 $54,000.00 2
1050234 ANTHONY J. MELE JR. $27,000 $26,921.66 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1050256 PETROLINE REID $29,000 $29,000.00 2
1050258 BERNICE HEATH $50,000 $50,000.00 2
1050272 P.DAVID HENRY $52,000 $52,000.00 2
1050353 RICHARD RIMMER $31,000 $30,874.37 2
1050437 SOLOMON EDWARDS $54,000 $53,713.77 2
1050500 WANDA SUE RICHARDS $76,086 $76,086.00 2
1050508 WILLIAM KISH $61,000 $61,000.00 2
1050527 JOEL ALANIZ $50,000 $49,880.26 2
1050553 BRIAN J. DAVEY $24,200 $24,071.93 2
1050555 THOMAS W. BANKS $33,800 $33,800.00 2
1050557 ADRIANE PARKS $25,500 $25,500.00 2
1050563 THOMAS ROSOLUK $27,500 $27,500.00 2
1050625 PETER IANNUCCI $30,000 $30,000.00 2
1050647 JAMES MIKE HERRIOTT $63,000 $63,000.00 2
1050652 WILLIAM DAVID CARDELL $30,000 $29,893.80 2
1050661 NANCY RYAN $49,000 $49,000.00 2
1050672 JOHN G. DYER $36,000 $35,846.29 2
1050745 EDWARD K. LOWERY $33,600 $33,600.00 2
1050749 ALTON SAWYER $54,000 $54,000.00 2
1050776 DEBORAH SIMMONS-BROWN $60,000 $59,866.99 2
1050805 MICHAEL A. BRUMMELL $51,000 $50,792.01 2
1050824 TERRENCE LEE HEWITT $64,000 $63,828.40 2
1050840 MOISES RODRIGUEZ $68,000 $68,000.00 2
1050868 TERESA M. ROBINSON $46,800 $46,595.69 2
1050869 THOMAS ALAN FAIR $69,300 $69,180.48 2
1050894 ADA SCOTT ITF AHNNA R. SC $45,000 $44,862.12 2
1050926 SHEILA HARRIS $58,500 $58,500.00 2
1050936 SHEILA HARRIS $49,500 $49,500.00 2
1051024 LUZ RIVAS $20,000 $20,000.00 2
1051026 PAMELA M. CHAVIS $57,600 $57,600.00 2
1051045 HAROLD E. LANE $57,000 $57,000.00 2
1051047 JAMES EVANS $27,000 $27,000.00 2
1051098 MELODY A. MILLEDGE $71,250 $71,150.11 2
1051103 LARRY HOWARD BROWDY $31,000 $30,873.57 2
1051114 DUANE E. COON $63,750 $63,750.00 2
1051118 HELEN D. DIVERS $42,400 $42,400.00 2
1051119 KATHY HALLOCK $61,200 $61,200.00 2
1051129 SAMUEL LESTER $25,000 $25,000.00 2
1051137 SARAH RILEY $25,000 $24,927.59 2
1051142 CARLA HUNTER $51,600 $51,600.00 2
1051242 SUSAN ZIZZA $45,000 $45,000.00 2
1051261 TAYLOR TULIP $28,800 $28,800.00 2
1051271 WARREN MC NEILL $26,000 $26,000.00 2
1051273 BENEDICTO TAVERAS $20,000 $20,000.00 2
1051281 BILLY JOE YOUNG $77,400 $77,400.00 2
1051283 BARBARA STRAND $43,200 $43,200.00 2
1051295 TRAVIS MCADOO $69,300 $69,247.51 2
1051301 JEFFREY CRAIG $48,250 $48,250.00 2
1051309 DAVID E. IRICK $35,000 $35,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1051312 LUCILLE S. HINE N/K/A LUC $61,600 $61,600.00 2
1051314 EDWARD WATTS $48,000 $48,000.00 2
1051326 EUGENE CASH $35,000 $35,000.00 2
1051355 JAMES I. MACPHERSON $39,000 $39,000.00 2
1051356 MARILYN STEERS $60,300 $60,300.00 2
1051361 HASENE SAMRIOGLU $69,175 $68,791.96 2
1051410 JANETTE SAMPSON $61,200 $61,200.00 2
1051469 LAURIE L. HUMES $32,500 $32,500.00 2
1051471 RANDY PAUL LEE $75,000 $75,000.00 2
1051480 DAVID SERRANO $43,500 $43,226.98 2
1051492 HENRY A P ELDON $57,600 $57,600.00 2
1051494 MANUEL LOUREIRO $126,500 $126,500.00 2
1051512 JOSEPH MAZZONE $65,000 $65,000.00 2
1051551 LOUIS BRICENO $21,500 $21,500.00 2
1051569 LEE SHERMAN $33,000 $33,000.00 2
1051586 MANUEL DELEON $52,500 $52,269.14 2
1051605 JOHN KUBICEK $62,100 $62,100.00 2
1051639 DAVID M. FITZPATRICK $45,000 $45,000.00 2
1051665 MITCHELL H. WARREN $45,500 $45,500.00 2
1051666 HENRY W. MCNUTT $57,000 $57,000.00 2
1051670 RITA GAINOR $56,800 $56,800.00 2
1051687 JUANITA LEE $26,250 $26,250.00 2
1051706 CHRISTINE A. CARSON COMER $70,000 $70,000.00 2
1051712 MICHAEL E. MILLER $45,000 $45,000.00 2
1051730 CALVERT W. THOMASON $36,000 $36,000.00 2
1051744 JOANN A. LEWIS GAINES $52,000 $52,000.00 2
1051765 DAVID M. SMART $55,000 $55,000.00 2
1051807 LORA D. BRACEY $128,700 $128,700.00 2
1051810 ESTHER M. WOJNO $39,000 $38,707.72 2
1051822 MAUREEN SOLOMON $30,000 $30,000.00 2
1051831 MICHAEL H. VELASCO $318,750 $318,750.00 2
1051834 EUGENE W. HARRIS $23,400 $23,400.00 2
1051859 SHARON Y. LONG $61,500 $61,500.00 2
1051875 STEPHEN M. GERHART $68,500 $68,500.00 2
1051886 ELIZABETH ARMFIELD $25,000 $25,000.00 2
1051912 BESSIE L. AUTRY $46,750 $46,750.00 2
1051918 ELLEN GIBBS $73,500 $73,500.00 2
1051998 JARET THOMPSON $50,000 $50,000.00 2
1052001 DIANE D. LUCAS $62,000 $62,000.00 2
1052013 CHRISTOPHER A. ROANE $41,000 $41,000.00 2
1052015 TOM WISE $79,000 $79,000.00 2
1052030 DANIEL J. CUGLER $65,700 $65,700.00 2
1052071 THOMAS F. WESTON $37,500 $37,500.00 2
1052079 ANTHONY HENDLEY $30,750 $30,750.00 2
1052096 ELEANOR D. FRANCK $76,300 $76,300.00 2
1052099 JOHN L. MULDOON $55,000 $55,000.00 2
1052117 LARRY R. SMITH $49,300 $49,300.00 2
1052128 LAVOYD THOMAS BASS $30,000 $30,000.00 2
1052184 JAMIE BULGER $246,500 $246,500.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1052197 ETHEL V. LITTLE TRUSTEE O $56,500 $56,500.00 2
1052205 FRED R. PARRY $20,000 $20,000.00 2
1052209 OWEN HOLLOWAY $40,000 $40,000.00 2
1052247 PATRICK HOBAN $40,500 $40,500.00 2
1052251 ANDREW KAYE $34,000 $34,000.00 2
1052256 BARBARA COTTER $40,000 $40,000.00 2
1052265 JOHN M. ZANNI $50,000 $50,000.00 2
1052286 TERRY MICHAEL SPRATLING $78,300 $78,300.00 2
1052306 PEARLIE M. KING $20,000 $20,000.00 2
1052310 COREEN YOUNG $30,000 $30,000.00 2
1052322 ADEN COLEMAN $40,000 $40,000.00 2
1052326 WALTER I. AARON $37,500 $37,500.00 2
1052337 BETSY A. FAIRLEY $46,000 $46,000.00 2
1052347 ELMARSERECIA NELOMS $59,500 $59,500.00 2
1052372 ELLEN GIBBS $62,100 $62,100.00 2
1052380 RONNIE WILLIAMS $56,361 $56,361.00 2
1052396 BARBARA ANN DAIGNAULT $39,600 $39,600.00 2
1052408 MICHAEL S. KORNHAUSER $50,001 $50,001.00 2
1052412 PATRICIA RIDGWAY $32,200 $32,200.00 2
1052418 ANNA LASOTA $30,000 $30,000.00 2
1052420 ANGELIA F. TILLMAN $55,250 $55,250.00 2
1052421 STANLEY H. CIESLAK JR. $129,000 $129,000.00 2
1052423 MICHAEL PERRY $35,000 $35,000.00 2
1052430 SARAH D. HENRY $55,800 $55,800.00 2
1052432 BOBBY MITCHELL SMITH $45,000 $45,000.00 2
1052446 JOSEPH BRUNI $27,500 $27,500.00 2
1052502 ROBERTO VELEZ JR. $30,000 $30,000.00 2
1052508 TRACY K. COWARD $25,000 $25,000.00 2
1052521 JOSEPH P. LARDINELLI $65,000 $65,000.00 2
1052523 PETER HONERKAMP $78,800 $78,800.00 2
1052571 JOY LYNN MURRAY $72,000 $72,000.00 2
1052575 RONALD M. BERRY $41,600 $41,600.00 2
1052627 THOMAS HOLLOWAY $60,000 $60,000.00 2
1052662 JOHN MEZZINA $25,000 $25,000.00 2
1052679 KEITH R. WITTENRICH $40,000 $40,000.00 2
1052682 PAMALA AMOS $45,000 $45,000.00 2
1052686 PATRICIA W. MIXON $78,300 $78,300.00 2
1052695 MARIA VAN DER KLEUT $42,000 $42,000.00 2
1052735 DAVID R. WILLIAMS $55,800 $55,800.00 2
1052740 BRENDA L. COX $62,780 $62,780.00 2
1052749 MARGITA KUNDID-RUDOVICH $40,000 $40,000.00 2
1052800 PETER GRAHAM $75,000 $75,000.00 2
1052824 MARY B. CHESTER $55,800 $55,800.00 2
1052825 ROBERT P. MCDONALD $43,200 $43,200.00 2
1052864 SONYA REED CATO $59,400 $59,400.00 2
1052868 MARION E. THOMAS $29,700 $29,700.00 2
1052885 SHERRIE L. WALL BOHANON $77,400 $77,400.00 2
1052889 RAY K. GROVE $70,000 $70,000.00 2
1052894 KARL BRITTELL $27,000 $27,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1052896 HERMAN RAY BURNS $31,500 $31,500.00 2
1052913 JOHN D. CRESTA SR. $25,000 $25,000.00 2
1052919 JAMES MALAQUIAS $40,000 $40,000.00 2
1052937 MARLIESE R. MARTIN $39,400 $39,400.00 2
1052963 RICHARD A. BAUGH $63,750 $63,750.00 2
1052969 THOMAS BECKVERMIT $30,000 $30,000.00 2
1052978 GARY W. PATTESON $30,000 $30,000.00 2
1052986 GERALD PROVOST $258,000 $258,000.00 2
1053009 CASSANDRA SHAW $31,200 $31,200.00 2
1053011 CASSANDRA SHAW $32,000 $32,000.00 2
1053049 JODI MICHELLE BURKE $52,650 $52,650.00 2
1053060 DENISE R. COUBAROUS $62,500 $62,500.00 2
1053061 STUART M. PEPOSE $25,000 $25,000.00 2
1053065 MITCHELL BENNETT $64,500 $64,500.00 2
1053121 PHILOMENA MILLER $60,000 $60,000.00 2
1053130 ARTHUR MAE, TRUSTEE OF AR $70,200 $70,200.00 2
1053179 JOHN T. GASPARAITIS $30,300 $30,300.00 2
1053184 FRANK L. MELLOR $42,500 $42,500.00 2
1053195 WALTER F. BUCKLEY JR. $30,000 $30,000.00 2
1053205 LAWRENCE E. MAYO III $22,000 $22,000.00 2
1053224 BETTY R. DEAN $30,000 $30,000.00 2
1053254 ROZELLA R. HILL $55,200 $55,200.00 2
1053259 PHILIP WHITE $54,600 $54,600.00 2
1053360 JESSIE TOMPKINS $37,000 $37,000.00 2
1053419 VINCENT DIBERARDO $25,000 $25,000.00 2
1053428 GARY ALLEN LINK $70,200 $70,200.00 2
1053442 TRISTAN F. COOLEY $68,000 $68,000.00 2
1053474 WILFREDO E. MEDINA $73,700 $73,700.00 2
1053520 LEOLA L. GIVINS $76,000 $76,000.00 2
1053545 DEBORAH A. TESMER $45,500 $45,500.00 2
1053547 ROGELIO MARTINEZ $74,000 $74,000.00 2
1053559 SHARON R. ESTES $241,740 $241,740.00 2
1053564 VIVIAN MCBRIDE $36,000 $36,000.00 2
1053566 STEVEN P. PENNY $21,000 $21,000.00 2
1053568 GEORGE A. BINNS $25,000 $25,000.00 2
1053585 WAYNE HACKETT $51,300 $51,300.00 2
1053636 HORACIO TENDERIO $42,000 $42,000.00 2
1053642 CATHERINE ROMAN $25,000 $25,000.00 2
1053673 RONALD J. BARRETT $85,380 $85,380.00 2
1053701 LYNDA C. TAYLOR $55,000 $55,000.00 2
1053709 PAUL B. HALL $25,500 $25,500.00 2
1053719 ROBERT L. BRITTON III $30,000 $30,000.00 2
1053734 THERESE HIMAIA $34,000 $34,000.00 2
1053757 TIMOTHY M. RODGERS $65,000 $65,000.00 2
1053791 DAVE R. BANASZYNSKI $30,000 $30,000.00 2
1053815 ROBERT J. FOX $24,400 $24,400.00 2
1053893 GEORGE SWALLOW $68,800 $68,800.00 2
1053926 RICHARD FORTUNA $20,000 $20,000.00 2
1053942 DEAN A. CATIGNANI $245,000 $245,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1054011 MARK A. NOCE $55,250 $55,250.00 2
1054017 HILARY NIXON $25,000 $25,000.00 2
1054019 BRENDA MCCOY $35,000 $35,000.00 2
1054036 IRENE SIBLEY $79,000 $79,000.00 2
1054066 JOSEPHINE M. ROBINSON $62,100 $62,100.00 2
1054120 BENITO NATIVIDAD $40,000 $40,000.00 2
1054124 THOMAS BABIARZ $27,500 $27,500.00 2
1054166 SOPHIA SMITH $26,400 $26,400.00 2
1054201 JOHN M. ADAMS $40,000 $40,000.00 2
1054254 ROGER E. MORGAN $58,500 $58,500.00 2
1054262 VERNIDA HAMILTON $57,300 $57,300.00 2
1054285 THOMAS A. GIGLIOTTI $124,000 $124,000.00 2
1054317 MARCEL R. LAMBRECHT $128,000 $128,000.00 2
1054358 JEAN L. WAKEFIELD $67,500 $67,500.00 2
1054426 BARBARA A. TREGLOWN $71,500 $71,500.00 2
1054478 JOHN E. VETERI $29,300 $29,300.00 2
1054518 PATSY E. DAVIS $75,000 $75,000.00 2
1054559 BRENDA J. HUGHES $40,500 $40,500.00 2
1054562 JULIA B. TODD $51,000 $51,000.00 2
1054564 JULIA BELL TODD $66,600 $66,600.00 2
1054571 MARVIN A. ROTH $33,800 $33,800.00 2
1054591 ALAN D. SILVERMAN $22,000 $22,000.00 2
1054676 SHIRLEY G. LIPSCOMB NKA S $42,000 $42,000.00 2
1054729 EDWARD E. CHARLIER JR. $24,600 $24,600.00 2
1054733 SIMON WILSON $67,000 $67,000.00 2
1054756 JOSEPH E. HAMNER $49,300 $49,300.00 2
1054808 WEYMAN B. WHEELER $32,500 $32,500.00 2
1054932 MARYANN MCFADDEN $38,476 $38,476.00 2
1054961 BODO FOITZIK $73,150 $73,150.00 2
1055031 SANDY RAPAGLIA $30,500 $30,500.00 2
1055153 WEYMAN B. WHEELER $37,700 $37,700.00 2
1055154 WEYMAN B. WHEELER $65,000 $65,000.00 2
2021730 MARK W. WILLIS $35,600 $35,260.50 2
9013166 ARTHUR OLSEN $49,000 $48,723.80 2
9013242 JEANNOT R. HANKINS JR. $30,000 $29,870.50 2
9013250 JOHN R. SOPKO $36,000 $36,000.00 2
9013261 CHERYL DAVIS $45,600 $45,600.00 2
9013396 LOUIS A. PATERNOSTRO $50,000 $49,552.75 2
9013404 TERRANCE E. BRUNNER $41,000 $41,000.00 2
9013409 DOUGLAS W. POPPALARDO $30,000 $29,882.71 2
9013413 HELEN O. CAMERON $28,000 $27,926.40 2
9013428 CYNTHIA R. STEVENS $32,000 $31,903.58 2
9013431 DONNA M. ABBEY $27,500 $27,500.00 2
9013436 NELSON CAPOTE $26,400 $25,980.45 2
9013461 WILLIAM F. PALMIERI $96,600 $96,574.98 2
9013462 GABRIEL T. OBESTER $129,500 $128,494.11 2
9013467 CATHERINE C. JAMES $36,000 $35,742.42 2
9013474 PATRICIA L. WEYGAND $35,000 $34,818.47 2
9013476 BETTY J. BRADDOCK $54,000 $53,733.81 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
9013479 WILLIAM HOLDERNESS JR. $51,450 $51,053.43 2
9013493 FREDERICK C. HEILBRON $35,000 $34,976.54 2
9013497 SHADIFF MC KAMIE $36,985 $36,562.64 2
9013501 DONALD L. HEILMAN $44,000 $43,993.05 2
9013502 PAUL E. STEINMETZ $68,383 $68,383.00 2
9013504 MARY TAYLOR $33,000 $32,949.17 2
9013509 WILLIAM V. ROACHE $126,000 $125,863.86 2
9013513 SPARKLE GABRIELLE $48,000 $47,822.28 2
9013514 ANGELA CUNNINGHAM $42,300 $42,300.00 2
9013515 JESSIE L. COLES $42,250 $42,211.18 2
9013519 EDWARD F. MALLOY $45,000 $44,787.61 2
9013521 COLIN CAMPBELL $35,000 $34,961.84 2
9013527 WILLIAM RAZZANO $30,000 $29,992.80 2
9013528 HERMAN A. MEYER $30,000 $29,959.46 2
9013535 DAVID J. CUTMAN $24,500 $24,500.00 2
9013554 CALVIN H. KNOWLTON $74,800 $74,800.00 2
9013555 ANN MARIE GILMARTIN $59,000 $58,845.37 2
9013556 EILEEN CHIULLI $28,400 $28,045.03 2
9013558 THOMAS E. POPE $38,250 $38,011.67 2
9013577 VINCENTINA M. RUGGERI $21,500 $21,477.48 2
9013592 BRIAN D. CLARK $26,500 $26,437.37 2
9013594 JAMES R. KNAPP $45,000 $44,663.49 2
9013606 GARY L. LAUBSCHER $31,000 $30,925.75 2
9013616 SANDRA L. PANAGOS $42,000 $41,771.47 2
9013619 MARY ANN POLK-UMANSKY $29,700 $29,416.38 2
9013637 FRANK JOHN TALLARICO JR. $60,000 $59,804.91 2
9013645 FRANCIS T. ROBBINS $22,000 $21,803.05 2
9013652 MICHAEL J. GARMAN $20,600 $20,502.42 2
9013658 PETE P. BONACCI $24,477 $24,477.00 2
9013660 JEFFREY J. SLODYSKO $44,800 $44,800.00 2
9013662 ROBERT E. LANNAN $20,000 $20,000.00 2
9013663 ELIZABETH GONZALEZ $29,800 $29,800.00 2
9013668 LEONARD R. WINOGORA $26,000 $26,000.00 2
9013671 EDWARD P. OSMOND $75,000 $75,000.00 2
9013685 JOSEPH J. CIOCCO $40,306 $40,291.42 2
9013692 EDA SOLE $26,100 $26,053.21 2
9013714 WILLARD GROVER VANEGAS $21,500 $21,476.59 2
9013725 MARLENE AZZUOLO $58,000 $57,937.32 2
9013729 LORRAINE FRITH $60,000 $60,000.00 2
9013741 LINDA M. WILLIAMS $45,300 $45,300.00 2
9013770 ANGELINE K. KRAMER $37,000 $37,000.00 2
9013777 WILLIAM J. STADELMAN $24,000 $24,000.00 2
9013783 EUGENE MILARSKY $50,000 $50,000.00 2
9013793 ROBERTA PHOENIX $50,000 $50,000.00 2
9013797 PAUL C. BROWN $31,500 $31,500.00 2
9013798 JAMES HULICK $40,000 $40,000.00 2
9013806 MARLIN PAUL $35,000 $35,000.00 2
9013810 SALLY A. EARLY $20,000 $20,000.00 2
9013813 JAMES A. SONNER $35,592 $35,592.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
9013821 SANDRA L. SEVER $72,000 $72,000.00 2
9013828 RICHARD H. RAUER $69,000 $69,000.00 2
9013830 CHRIS HONORE $26,000 $26,000.00 2
9013848 JAMES J. CAPRIO $37,500 $37,500.00 2
9013852 JESSE K. WITMER $58,800 $58,800.00 2
9013869 BRUCE T. DAUDELIN $21,500 $21,500.00 2
9013878 CHARLES J. KREGLOW $128,000 $128,000.00 2
3000000185 ADRIENNE MCWILLIAMS $310,000 $310,000.00 2
3019841476 BEDROS BAHARYAN $236,000 $236,000.00 2
3019841840 SPIROS KATSONOPOULOS $284,750 $284,750.00 2
3019941621 JOHN W. CORDRAY $350,000 $350,000.00 2
3019941994 MICHELE STEPHENSON $242,250 $242,250.00 2
3039806984 FREDERICK C. KNIESLER, JR $200,000 $200,000.00 2
3039837699 BEVERLY CRIFASI $40,000 $40,000.00 2
3039841458 IRWIN E. BILLMAN $200,000 $199,252.21 2
3039942077 DAVID DENNISON $85,000 $85,000.00 2
3039942213 LAWRENCE LEFCORT $174,166 $174,166.00 2
3039942445 DERMOTT CLANCY $259,400 $259,400.00 2
3000000100 NICHOLAS J. GONNELLA $41,000 $41,000.00 2
3000000182 RICHARD B. MCPHERSON $42,250 $42,040.18 2
3000000196 TERRI L. GABRIEL $45,000 $44,966.15 2
3000000199 DERERK W. COPELAND SR. $27,000 $27,000.00 2
3019800777 FRANK VALDES $60,000 $60,000.00 2
3019800811 MARIANNE R. CASPER $25,000 $24,981.19 2
3019804609 EARL SPAHLINGER $63,750 $63,710.62 2
3019804724 ROGER A. HORONETZ $33,000 $32,934.70 2
3019804818 TERESA STOTT $37,050 $36,848.90 2
3019804822 BRYAN S. MADDOX $32,250 $32,136.11 2
3019804839 DAVID BARTHEL $22,400 $22,357.62 2
3019806479 HAROLD E. CONNOR $38,400 $38,400.00 2
3019806642 HENRIETTA McLEAN $24,200 $24,200.00 2
3019806651 LAKESHIA THOMAS $28,000 $28,000.00 2
3019806697 CHARLES D. TOBLER $66,400 $66,400.00 2
3019806764 EDWIN ROMAN $30,600 $30,595.44 2
3019806834 MARY M. EYER $73,100 $72,998.66 2
3019806885 RONALD L. SIMMONS $42,000 $41,856.54 2
3019806978 RUSSELL D. FINNEY $42,000 $41,966.92 2
3019807005 PEDRO A. MALDONADO $55,000 $54,994.46 2
3019807040 RICHARD JOHNS $66,725 $66,704.26 2
3019807098 MARTHA J. BURLSON $43,575 $43,416.12 2
3019837578 LYNN LYMON $29,250 $29,250.00 2
3019840255 ROBERT A. ENGLISH $76,000 $75,839.04 2
3019841563 JOSEPH G. WERNOCK $70,000 $69,993.40 2
3019841578 SYLVIA ANN ROWLAND $68,600 $68,388.93 2
3019841599 GERALD WILLAIDOM $123,750 $123,579.31 2
3019841612 CHARLOTTE R. AIKEN $31,500 $31,458.13 2
3019841657 SALVATORE F SACINO $50,000 $49,907.87 2
3019841697 TIMOTHY J. ECKENRODE $50,000 $49,857.74 2
3019841759 LUCEA REID $30,000 $29,929.66 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019841812 PRICE D. BENNETT, JR. $39,200 $39,200.00 2
3019841837 THOMAS WARD $65,000 $64,966.13 2
3019841982 SHEENA C BALLARD $72,100 $71,893.16 2
3019842016 EARL HINSON $127,500 $127,500.00 2
3019891934 WILLIAM T HANDY SR $35,275 $35,226.36 2
3019892280 JEROME A. ATKINS $63,375 $63,375.00 2
3019892535 GINGER L. VARTULI $60,000 $60,000.00 2
3019904764 CHRISTOPHER J. MARTIN $48,160 $48,160.00 2
3019904809 KEVIN M. SINGLETON $57,750 $57,750.00 2
3019904819 ERMA J. CAMPBELL $68,400 $68,400.00 2
3019904823 STANLEY E. WYATT $70,000 $70,000.00 2
3019904825 DAVID WILLIAMS $62,625 $62,625.00 2
3019904836 DAVID WILLIAMS $58,175 $58,175.00 2
3019904866 EDWARD L LAWLER $40,800 $40,800.00 2
3019904901 WALTER A. ALFORD $56,100 $56,100.00 2
3019904913 WILLIAM K. JONES $52,500 $52,500.00 2
3019904922 PATRICK F. BARRETT $39,000 $39,000.00 2
3019906829 EMMETT M. WRIGHT $64,000 $64,000.00 2
3019906960 DAVID M SERENY $26,250 $26,250.00 2
3019906975 DONALD A. THOMAS $45,000 $45,000.00 2
3019907049 ALBERT L. HAMMOCK $66,400 $66,400.00 2
3019907059 GEORGE T. ANTONIOU $125,000 $125,000.00 2
3019907060 LISA G. DAVIS $44,800 $44,640.42 2
3019907104 SCOTT A. SARGENT $68,800 $68,800.00 2
3019907147 RICHARD TOKAR $63,750 $63,750.00 2
3019907152 FRANK S.J. GROSSI $48,000 $48,000.00 2
3019907182 KIM L. GRANTHAM $65,900 $65,900.00 2
3019907184 DAVID M SERENY $24,000 $24,000.00 2
3019907201 ANTONI X. PULLIAM $66,400 $66,400.00 2
3019907255 JAMES D. HAMLET $32,000 $32,000.00 2
3019907270 TONIE LOVE $50,250 $50,250.00 2
3019907286 BRYAN E. SMITH $37,200 $37,200.00 2
3019907342 JUANITA DRYDEN $56,100 $56,100.00 2
3019907389 GUADALUPE BALLESTER $45,120 $45,120.00 2
3019907394 MARY ELLEN T. LEOTTA $64,000 $64,000.00 2
3019930694 WILLIAM J. ECKENRODE $34,500 $34,500.00 2
3019939785 GAMAL PRESTON $47,250 $47,250.00 2
3019940950 FAMI JOYCE $28,500 $28,500.00 2
3019941692 BRUCE ASHLINE $32,000 $32,000.00 2
3019941940 GEORGE MICHAELS $23,100 $23,100.00 2
3019942024 VIBERT BAPISTE $124,000 $124,000.00 2
3019942219 KENNETH JOHNSON $38,500 $38,500.00 2
3019942222 DION HOUSER $52,000 $52,000.00 2
3019942226 KENNETH JOHNSON $38,500 $38,500.00 2
3019942240 FRANK N. GERCARELLI $25,000 $24,887.39 2
3019942253 VICTOR RIVERA $26,250 $26,082.22 2
3019992421 I. HIWOTT $23,375 $23,231.82 2
3019992465 WILLIE E. HILL $67,150 $67,150.00 2
3019992483 MARVA ELIZABETH TYLGHMAN $76,000 $76,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019992519 JERRY W. MCGINNIS, SR. $42,000 $42,000.00 2
3019992569 BEAULAH D ZABEL $64,800 $64,800.00 2
3019992626 PARKE R. BROWN $63,750 $63,750.00 2
3039840888 EDWARD RADEMAKER $49,770 $49,693.98 2
3039841203 DENNIS B GARDNER $23,888 $23,853.93 2
3039841573 JUSTIN R. TUPIK $25,000 $25,000.00 2
3039841670 MILTON WILLS $47,530 $47,506.13 2
3039841863 MARK H. DALALIAN $42,345 $42,250.00 2
3039841903 JOHN LOTITO, JR. $64,000 $63,878.68 2
3039841958 RICHARD PASINER $63,000 $63,000.00 2
3039842047 IDA M. RADVANSKY $48,000 $48,000.00 2
3039906946 SHEILA BROWN CORA $60,000 $60,000.00 2
3039942176 FRANCISA S. MIER $23,083 $23,083.00 2
3039942489 WAYNE H. SAPP $43,500 $43,500.00 2
3100001283 PETER P. NERI $27,000 $26,836.53 2
3100001323 THOMAS LAWRENCE SUMMEY $78,000 $77,721.17 2
3100001775 NORMAN C. GARRISON $76,500 $76,111.25 2
3100002123 GARY W. WHITESELL $30,400 $30,400.00 2
3100002696 RAY M. GAMIDO $65,000 $64,808.02 2
3100003078 DOUG E. COTTER $46,875 $46,875.00 2
3100003082 DAVID A. MATAGIESE $31,000 $31,000.00 2
3100003136 RANDY L. HATCHETTE $25,000 $24,898.67 2
3100003342 ZANNIE LEE WILLIAMS $42,500 $42,381.70 2
3100003346 TANCY BERT UTLEY $20,000 $20,000.00 2
3100003370 SHARON R. JORDAN $55,250 $55,250.00 2
3100003418 GREGORY G. REAGAN $48,000 $47,891.26 2
3100003426 EZEKIEL JOHNSON $44,200 $44,200.00 2
3100003437 BERNARD SHANNON $27,000 $26,937.22 2
3100003462 JAY C. ISRAEL $72,250 $72,250.00 2
3100003492 KEITH DELAPORTE $50,063 $49,988.87 2
3100003507 ROBERT D. ROBERTS $54,400 $54,400.00 2
3100003523 TEGWEN H. HAURIN $29,000 $28,888.01 2
3100003566 JERRY CAPORALE $30,700 $30,306.03 2
3100003567 PATRICIA R. DICKMAN $52,500 $52,322.87 2
3100003570 WAYNE P. HAMMER $24,000 $23,915.24 2
3100003621 JOHN B. PACANOWSKI $55,250 $55,250.00 2
3100003622 EARLENE L. MILLER $23,000 $23,000.00 2
3100003643 EMMETT E. REID $20,000 $20,000.00 2
3100003650 BARBARA C. JOHNSON $59,500 $59,500.00 2
3100003673 GEORGE D. MORSE $31,200 $31,200.00 2
3100003694 KALWATTI MAHARAJ $20,000 $20,000.00 2
3100003724 JUDITH A. LANDER $58,000 $58,000.00 2
3100003725 BERNICE PRICE $44,000 $43,750.10 2
3100003731 RICARDO R. RIVERA $20,000 $20,000.00 2
3100003739 DOMINICK A. CIMINO $22,400 $22,400.00 2
3100003784 J0HNNY JONES III $72,000 $72,000.00 2
3100003826 TODD A. BAYLOCK $51,000 $51,000.00 2
3100003847 MICHELE GADSON $25,000 $25,000.00 2
3100003852 MELVIN D. MARIETTA $68,000 $68,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3100003856 GLORIA HUDSON $54,000 $54,000.00 2
3100003864 HELEN GILL $55,750 $55,750.00 2
3100003892 MARY GOODEN $24,000 $24,000.00 2
3100003911 RICHARD A. SHEKELL $32,400 $32,400.00 2
3100003913 MARY P. ASHLEY $22,166 $22,166.00 2
3100003914 ROGER D. EVANS $22,500 $22,500.00 2
3100003944 CYNTHIA A. CURETON $60,775 $60,775.00 2
3100003958 SAUNDRA L. WOODS $30,000 $30,000.00 2
3100003982 TANZY BRASWELL $29,250 $29,250.00 2
3100003983 RODGER L. HANNAH $44,000 $44,000.00 2
3100004028 RUSSEL N. BUSBY $68,000 $68,000.00 2
3100004055 ROSEMARY SEDALIS $74,000 $74,000.00 2
3100004176 LARNELL JONES $30,250 $30,250.00 2
3100004271 NATALE AMMIRATI $21,000 $21,000.00 2
10408 STAAT'S HEROLD TOURS, INC $150,000 $150,000.00 1
10436 RICHARD A. DIDIO JR. $25,000 $25,000.00 1
10438 F. EARL REED JR. $20,000 $19,901.83 1
10441 MICHELE MAFFEI $23,000 $23,000.00 1
10442 MARYLAND MASONRY CORPORAT $200,000 $200,000.00 1
10445 AKILLE, INC, $80,000 $80,000.00 1
10450 A. & C. PRECISION, INC. $150,000 $150,000.00 1
10451 FIVE STARS TRANSMISSION S $85,000 $85,000.00 1
10460 ROME RECORDING, INC. $88,000 $88,000.00 1
10464 Z.J.H., INC. $211,000 $211,000.00 1
10465 CAROLYNN SCHAFFT $25,000 $25,000.00 1
10471 RHYMER & RHYMER REALTY CO $200,000 $200,000.00 1
10474 ALEXANDER HERRERO $23,000 $23,000.00 1
10476 CAFFE AURORA $100,000 $100,000.00 1
10477 ABDUL BILAL $100,000 $100,000.00 1
10482 BURGETTSTOWN AREA DAY CAR $80,000 $80,000.00 1
10484 MELVIN DURANT $20,000 $20,000.00 1
8882155 SHERRY L. ALLEN $25,000 $25,000.00 1
8882157 THE OUTDOOR EXPERIENCE, L $30,000 $29,639.54 1
8882158 THOMAS H. COLTON JR. $20,000 $20,000.00 1
8882160 JUNG I. HA $108,000 $108,000.00 1
8882164 EDUARDO GONZALEZ $17,000 $17,000.00 1
8882165 LORI STONE $180,000 $180,000.00 1
10492 THOMAS ADAMS $200,000 $200,000.00 1
10495 AXIOCOM, INC. $150,000 $150,000.00 1
1044879 DORIS KLEIN $20,000 $20,000.00 1
1045359 MUHAMMAD SHARIF $80,000 $80,000.00 1
1046366 RILEY W. TRAVERS JR. $86,275 $86,275.00 1
1047560 BEATRICE TAMAY $144,000 $144,000.00 1
1047608 CECILIA SOTO $144,000 $144,000.00 1
1047631 PASTOR M. BONILLA $148,500 $148,497.30 1
1048370 KYWONG MCINTYRE $104,000 $104,000.00 1
1048551 NIDIA DEJESUS TAVERAS $148,500 $148,458.11 1
1048965 MARY E. HARMON $28,400 $28,400.00 1
1048978 JOSEPH B. WALSH $120,500 $120,500.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1049164 WILLIAM M. GAINES JR. $81,500 $81,500.00 1
1049301 DARRYL JONES $148,500 $148,245.92 1
1049401 JUDY BISCOTTI LEWIS $22,000 $22,000.00 1
1049742 MARY E. BROWN $22,400 $22,400.00 1
1050063 BENNIE WILKINS $144,000 $144,000.00 1
1050879 PATRICK J. VOLINO $19,000 $18,940.98 1
1051345 RONNIE CLARK $162,000 $162,000.00 1
1051447 DAVID NORRIS $84,065 $84,065.00 1
1051465 RICHARD R. SULLIVAN $110,500 $110,500.00 1
1051814 WILLIAM C. WALKER $13,000 $12,782.29 1
1051884 HENRY MARTIN $148,500 $148,092.07 1
1051913 SCOTT ERICK HUGHES $112,500 $112,500.00 1
1051940 CLINTON GEORGE ROWE $162,000 $162,000.00 1
1052019 MARK RYAN $29,250 $29,250.00 1
1052220 KATHLEEN M. VANCE $28,000 $28,000.00 1
1052543 GLORIA D. RICKETTS $195,000 $195,000.00 1
1052583 MICHAEL T. REIS $204,000 $204,000.00 1
1052774 BERNABE GONZALES $171,000 $171,000.00 1
1052893 DANNY H. CLAXTON $87,750 $87,750.00 1
1052994 WILLIAM SLAUGHTER $81,900 $81,588.45 1
1053098 BEDFORD E. HAWKINS $157,500 $157,500.00 1
1053227 CAROL W. QUINN $23,000 $22,884.51 1
1053299 JERRY HOOVER JR. $92,000 $92,000.00 1
1053689 MICHEAL S. BEAVER $24,000 $24,000.00 1
1053781 CLAUDETTE DUNSTON $28,000 $27,929.93 1
1053782 GEORGE T. MUNLEY $22,545 $22,545.00 1
1053792 JAMES LABRIOLA $14,900 $14,900.00 1
1053795 KATHLEEN K. MARTIN $85,000 $84,794.19 1
1053816 STEVEN J. CORMIER $20,000 $20,000.00 1
1053932 GENEVIEVE RUDERSON RORIE $29,000 $29,000.00 1
1053968 MARY ELIZABETH EVANS $106,642 $106,642.00 1
1054056 PATRICIA M. BOUDER $103,000 $103,000.00 1
1054068 NAOMI SNEED $121,550 $121,550.00 1
1054076 GLENN W. DAVIS $116,500 $116,194.72 1
1054140 DEAN K. SHIMABUKURO $152,100 $152,100.00 1
1054158 SHIRLEY HALL $91,800 $91,800.00 1
1054250 LEONILDA RODRIGUEZ $113,900 $113,900.00 1
1054270 FANNIE MAE RENFRO $93,000 $93,000.00 1
1054316 WILLIE L. COOPER $85,500 $85,359.12 1
1054373 LOIS F. BELL $88,000 $88,000.00 1
1054410 HENRY A. GARCIA $97,750 $97,750.00 1
1054414 ELLA HILL CORDERY $20,000 $20,000.00 1
1054430 JEFFIE HILL $184,500 $183,874.17 1
1054453 VALARIE PAVILISH $108,500 $108,500.00 1
1054493 WILLIAM FOY BY HIS ATTORN $157,500 $157,500.00 1
1054521 MOHAMED SAMAD FARROUQ $20,000 $20,000.00 1
1054587 DALE W. HEPPER $88,000 $88,000.00 1
1054652 KEVIN STONE $25,000 $25,000.00 1
1054654 FELICIA STEWART $92,500 $92,500.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1054693 ROBERT SMITH $15,000 $15,000.00 1
1054752 JANET B. BLAKE $107,200 $107,200.00 1
1054755 JOHN L. HUGHES $25,550 $25,550.00 1
1054785 ACQUANETTA SHEPPARD N/K/A $25,000 $25,000.00 1
1054790 PATRICIA A. GASIOROWSKI $15,000 $15,000.00 1
1054805 ALBERT HARRIS $90,000 $90,000.00 1
1054818 JOSEPH L. AHEARN $106,000 $106,000.00 1
1054826 TODD G. TARVER $155,000 $155,000.00 1
1054902 MORRIS LARK $150,500 $150,500.00 1
1054921 SUSAN STYLES MAPP $26,400 $26,400.00 1
1054926 LUTHER T. NEELY JR. $20,000 $19,898.87 1
1054936 JOSEPH SALERNO $26,000 $26,000.00 1
1054943 KATHY P. HARDING $15,220 $15,220.00 1
1054978 MICHAEL R. VETETO $93,100 $93,100.00 1
1055007 NATHANIEL HILL $25,000 $25,000.00 1
1055050 ARTHUR RUSSELL $115,000 $115,000.00 1
1055091 PENNY J.C MENSCH $104,000 $103,714.31 1
1055097 CATHERINE B. SUTTON $112,500 $112,500.00 1
1055105 ZOLLIE EUGENE ALLMOND $109,000 $109,000.00 1
1055189 BRONSON G. OSTEK $26,000 $26,000.00 1
1055225 CHRISTOPHER M. LOUDON $15,000 $15,000.00 1
1055229 ROBERT T. LOMAN $149,600 $149,600.00 1
1055277 TIMOTHY A. PERRY $108,000 $108,000.00 1
1055318 CARLOS M. RAMOS $169,000 $169,000.00 1
1055371 HORACE WALTON $15,000 $15,000.00 1
1055384 TYRONE E. INGRAM $85,000 $85,000.00 1
1055430 W. LEE HALL JR. $80,700 $80,700.00 1
1055432 ROBERT L. CLYBURN $120,000 $120,000.00 1
1055457 EDWARD D. WOOLRIDGE $232,000 $232,000.00 1
1055477 TIMOTHY J. LLOYD $24,000 $24,000.00 1
1055505 ROBERT L. SMALE $102,150 $102,150.00 1
1055515 NORMAN ROBINSON $25,000 $25,000.00 1
1055520 WILLIAM GONZALES NKA WILL $15,000 $15,000.00 1
1055593 ALLAN V. THOMAS $99,450 $99,157.79 1
1055609 JAMES P. PRENDERGAST JR. $21,500 $21,500.00 1
1055617 JOHN H. VANDELINDE $21,275 $21,275.00 1
1055635 CHARLES M. VANARELLI JR. $99,000 $99,000.00 1
1055641 THOMAS A. SAVARESE $17,000 $17,000.00 1
1055702 MICHAEL J. CALLAN SR. $201,000 $201,000.00 1
1055744 ROGER J. MARASCO $28,000 $28,000.00 1
1055746 TROY C. SUPPLEE $25,740 $25,740.00 1
1055748 MURRAY PERLOFF $193,500 $193,500.00 1
1055766 JOHN T. KELCHNER $82,800 $82,800.00 1
1055783 CARRIE GRIFFIN $108,000 $108,000.00 1
1055810 JOAN A. AARONSON N.K.A. J $16,700 $16,700.00 1
1055825 GLENN CLARK $22,500 $22,500.00 1
1055879 THOMAS CASTIGLIONE $161,500 $161,500.00 1
1055912 JOHN P. LAGANA $108,000 $108,000.00 1
1055923 JANET HAMILTON $85,500 $85,500.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1055925 GEORGE T. STILL $28,000 $28,000.00 1
1055931 PERCY DAVIS $115,000 $114,472.05 1
1055934 DANA M. FOSBURGH $26,000 $26,000.00 1
1055942 STREADICK MORGAN $153,000 $153,000.00 1
1056003 DONALD E. OSTER $20,000 $20,000.00 1
1056055 NEIL A. KUNTZ $14,000 $14,000.00 1
1056074 PHILIP J. POLIZZOTTO $197,100 $197,100.00 1
1056079 PETER B. MARIOTTI $227,000 $227,000.00 1
1056083 SAMUEL ANGULO $112,500 $112,500.00 1
1056117 ALEX LLARENA $100,000 $100,000.00 1
1056121 FRANK SIERRA $13,500 $13,500.00 1
1056147 JOANNE ELAINE KOSTICK $25,000 $25,000.00 1
1056154 DANIEL PURE $25,000 $25,000.00 1
1056171 VENESSA S. EDWARDS $20,000 $20,000.00 1
1056216 TERRY PRICE $23,650 $23,650.00 1
1056218 NICOLE CASCONE, UX $84,250 $84,250.00 1
1056238 ELIZABETH LEMING $144,000 $144,000.00 1
1056311 RICHARD NUNEZ $17,000 $17,000.00 1
1056423 WILLIAM O. GERLING $23,500 $23,500.00 1
1056431 LAWRENCE J. IACOFANO $115,600 $115,600.00 1
1056532 LORETA DERUBEIS $103,000 $103,000.00 1
1056692 JAMES LEE COWANS III $93,000 $93,000.00 1
1056727 BERYL E. FULLER $90,000 $90,000.00 1
1056755 JOYCE P. ELLIS $184,500 $184,500.00 1
1056860 JUDY MARSHALL $115,000 $115,000.00 1
1056897 STEPHEN R. MERRILL $20,500 $20,500.00 1
1056914 MICHAEL H. MATHIS $110,000 $110,000.00 1
1057176 LEWIS CROMER $95,400 $95,400.00 1
1057207 AMOS L. BROKENBOROUGH SR. $25,000 $25,000.00 1
1057245 GERALD W. SMITH $113,000 $113,000.00 1
1057258 STEVEN D. CYR $169,200 $169,200.00 1
1057343 DENNIS R. FINCH $80,000 $80,000.00 1
1057365 VIVIAN R. DRISCOL $107,100 $107,100.00 1
1057395 ROBYN L. BALCAITIS $88,400 $88,400.00 1
1057412 SCOTT HALL $113,000 $113,000.00 1
1057446 ALFRED H. GLEGHORN JR. $23,000 $23,000.00 1
1057501 JAMES SHORT $100,000 $100,000.00 1
1057527 DOROTHY VANDER WEY NKA DO $88,000 $88,000.00 1
1057555 H. KEITH PIERCE $113,600 $113,600.00 1
1057576 MICHAEL J. ADKINS $187,200 $187,200.00 1
1057685 ELVIS BOYD $12,000 $12,000.00 1
1057702 VINCENZO PILLITTERI $108,000 $108,000.00 1
1057711 JOSEPH L. CALHOUN III $108,000 $108,000.00 1
1057818 EMMITT Y. SMITH JR. $28,000 $28,000.00 1
1057872 GOLOVER WOODFORD $28,000 $28,000.00 1
1058072 LEE NELMS $91,800 $91,800.00 1
1058542 JEFFREY S. STANLEY $19,500 $19,500.00 1
2020717 DONALD L. SHAFFER $29,300 $29,300.00 1
2021537 HOSIE L. BRYANT JR. $27,000 $26,940.16 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
9013842 JOSEPH L. BACKER $91,750 $91,750.00 1
9013862 COLWOOD DUNKLEY $15,200 $15,200.00 1
9013900 DOROTHY CONOWAL $24,000 $23,950.21 1
9013903 HENRY SIMMONS SR. $21,500 $21,500.00 1
9013904 DENNIS A. OAKLEY $25,889 $25,889.00 1
9013932 ROBERT E. HESSER $25,000 $25,000.00 1
9013941 STEPHEN R. SIMONE $100,800 $100,800.00 1
9013955 DAVID P. MEZZATESTA $26,000 $25,821.79 1
9013969 FRANCIS P. O'BRIEN $13,000 $13,000.00 1
9013983 TIMOTHY GYVES $24,200 $24,200.00 1
9013986 ROBERT W. CROAK $28,000 $28,000.00 1
9013997 MARIE A. HAGNER $82,000 $81,266.68 1
9014013 GARY H. ROOD $10,000 $10,000.00 1
9014025 MICHAEL A. WALTHER $18,640 $18,640.00 1
9014064 STEVEN J. BAKER $26,942 $26,942.00 1
9014104 CATHERINE G. HOOK $80,000 $80,000.00 1
9014129 JUAN E. ROJAS $25,400 $25,400.00 1
1052240 STEVEN T. NADOLNY $110,800 $110,800.00 1
1052828 ERMA J. CRONCE $20,500 $20,500.00 1
1053588 EDDLON D. KNOX JR. $87,300 $87,300.00 1
1054243 TIFFANY F. HOWELL $90,000 $90,000.00 1
1054311 KERRY B. WILSON $92,000 $92,000.00 1
1054795 WILLIAM D. VASSEN JR. $21,750 $21,750.00 1
1054895 GARY M. GRIST $164,000 $164,000.00 1
1055637 CHARLES D. COLEMAN $26,700 $26,700.00 1
1055659 ROBERT E. SMITH $115,000 $115,000.00 1
1056220 STEPHEN ALAN DEWEES $88,000 $88,000.00 1
1056286 RICHARD FOLEY $20,180 $20,180.00 1
1056362 ROGELIO F. TRUJILLO $95,200 $95,200.00 1
1056659 SCOTT KUNZ $25,000 $25,000.00 1
1056673 FRANCES E. COX $88,000 $88,000.00 1
1056769 VICTOR A. RIVERA $22,500 $22,500.00 1
1056864 DAVID FIGUEROA $94,500 $94,500.00 1
1056875 DOUGLAS C. KRAMER $229,500 $229,500.00 1
1056882 JACOB APPLEBAUM $120,000 $120,000.00 1
1057173 RAFAEL TORRES $100,000 $100,000.00 1
1057198 JAMES MCKALE $117,000 $117,000.00 1
1057298 BRENDA BATEMAN LINTON $145,350 $145,350.00 1
1057330 JEFFREY I. GRENTZ $29,575 $29,575.00 1
1057393 JAYAMON JACOB $85,600 $85,600.00 1
1057410 IVEL WALTERS $10,000 $10,000.00 1
1057519 JOEL C. STEPHENS $94,500 $94,500.00 1
1057575 CHARLES P. SIMONCELLI $17,000 $17,000.00 1
1057667 HOWELL M. YOUNG $13,400 $13,400.00 1
1057693 JAMES DORAN $25,000 $25,000.00 1
1057808 KURTIS W. REINER $216,000 $216,000.00 1
1057893 MAREK A. MISZKURKA $18,000 $18,000.00 1
1058050 BRUCE A. PARTIN $211,000 $211,000.00 1
1058051 YOLANDA BORGES $176,400 $176,400.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1058122 MITCHELL L. VALENTINE A/K $25,000 $25,000.00 1
1058226 DIANA L. LYONS $153,900 $153,900.00 1
1058380 MOHAMMAD R. ISLAM $193,600 $193,600.00 1
1058459 LEON JAMISON JR. $92,000 $92,000.00 1
1058590 PAUL CASE $10,000 $10,000.00 1
1058614 RONALD K. LEWIS $167,227 $167,227.20 1
9014080 FRANCIS D. SAMUELS $110,500 $110,500.00 1
1054182 ALMOND $105,000 $105,000.00 1
1055195 FISHER $25,000 $25,000.00 1
1056061 ESTEP $92,000 $92,000.00 1
1056386 BENNETT $102,500 $102,500.00 1
1056945 CAPPS $220,000 $220,000.00 1
1057212 BUTLER $121,500 $121,500.00 1
1057362 HELMER $105,000 $105,000.00 1
1057564 BATTAGLIA $15,600 $15,600.00 1
1057618 UNDERWOOD $118,400 $118,400.00 1
1057631 FLOWERS $158,900 $158,900.00 1
1057819 MESSINA $86,500 $86,500.00 1
1057850 LEE $104,000 $104,000.00 1
1057863 DOLORES FALLON $20,170 $20,170.00 1
1057930 RODRIGUEZ $101,000 $101,000.00 1
1058087 MONCRIEFFE $115,000 $115,000.00 1
1058158 ROCCO $100,000 $100,000.00 1
1058200 LYONS $12,500 $12,500.00 1
1058230 FANTINO $84,200 $84,200.00 1
1058257 DOZIER $200,000 $200,000.00 1
1058333 PLUMLEY $25,000 $25,000.00 1
1058359 CHERE $13,500 $13,500.00 1
1058362 RODRIQUEZ $110,000 $110,000.00 1
1058568 LOWRIE $11,200 $11,200.00 1
1058577 CAMPBELL $93,600 $93,600.00 1
1058705 DE MONACO $150,000 $150,000.00 1
1058722 STAFFIERI $19,750 $19,750.00 1
1058873 BAKSH $166,000 $166,000.00 1
1059035 MUMCUOGLU $229,500 $229,500.00 1
1059501 GOBA $95,000 $95,000.00 1
9013121 STALEY $22,200 $22,200.00 1
9013892 QUIETI $22,500 $22,500.00 1
9013907 MCGEE $83,000 $83,000.00 1
9014024 O'NEILL $18,776 $18,776.00 1
9014029 GUIDICE $25,000 $25,000.00 1
9014042 SPAID $26,400 $26,400.00 1
9014069 BATTAGLIA $28,000 $28,000.00 1
9014183 RYAN $26,550 $26,550.00 1
3000000240 EDWARD CHANDLER $100,000 $100,000.00 1
3000000253 CARLTON JONES $110,500 $110,500.00 1
3000000261 CHARLIE TRAWICK $83,200 $83,200.00 1
3000000268 MARIO PENA $85,000 $85,000.00 1
3000000269 DAVID M. BAUER $20,000 $20,000.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3000000281 OLGA A. FIELDS $204,000 $204,000.00 1
3000000293 VERNA E. GRIFFITH RUDDER $148,750 $148,750.00 1
3000000294 JOSEPH BAIR $90,400 $90,400.00 1
3000000300 DALE R. STACKHOUSE $92,000 $92,000.00 1
3000000303 GWENDOLYN LEVATTE $86,250 $86,250.00 1
3000000317 FELISHA T. STOKLEY $116,250 $116,250.00 1
3000000321 LEMIAH COLLINS $98,000 $98,000.00 1
3000000323 MARY CLEMONS $195,250 $195,250.00 1
3000000324 FRANK T. DI FILIPPI $153,000 $153,000.00 1
3000000335 STEPHEN MORGENSTERN $200,000 $200,000.00 1
3000000337 DONALD A. LEON $189,000 $189,000.00 1
3000000338 MARIA E. CAROLONZA $204,000 $204,000.00 1
3000000345 FRANK BAIRD $24,612 $24,612.00 1
3000000352 JAMES A. MACANA $157,600 $157,600.00 1
3000000360 ANTHONY DEMARCO $93,500 $93,500.00 1
3000000372 VITO P. MATTURRO $5,000 $5,000.00 1
3000000378 GAIL LYTE $178,500 $178,500.00 1
3000000383 JACOB DOLLISON $148,750 $148,750.00 1
3000000388 LINDON T. SINCLAIR $144,900 $144,900.00 1
3000000396 FRANCISCO VERA $153,000 $153,000.00 1
3000000402 WILLIAM ROSS $225,000 $225,000.00 1
3000000424 THOMAS S. BARNES $111,000 $111,000.00 1
3019804617 JOHN MCGREGOR $19,500 $19,493.07 1
3019806603 ROSE MARIA GALLO $81,900 $81,727.33 1
3019807034 ROBERT JOHNS $98,100 $98,097.98 1
3019834065 SAMUEL RODRIGUEZ JR $212,391 $211,816.01 1
3019840611 ANTHONY PALMA $144,000 $143,684.20 1
3019840899 JOSE A. LOPEZ $166,500 $166,500.00 1
3019840936 PAUL P. COPPOLA, JR $162,000 $160,780.65 1
3019840979 JOSE M. SANTIAGO $111,350 $111,203.96 1
3019841117 KEITH J. HANSEN $123,250 $122,806.08 1
3019841457 SILVESTRE LUNA $80,000 $79,951.45 1
3019841794 STEVEN GRECO $210,000 $209,955.44 1
3019841844 MARLENE HARRIS $89,100 $89,100.00 1
3019841893 FRANCIS X. TAGUE $152,000 $151,675.95 1
3019841964 ANNINA GENCARELLI $153,750 $153,401.35 1
3019892403 LYNN R. TOMLIN $156,000 $155,797.19 1
3019900870 OMAR FLORES $117,300 $117,300.00 1
3019904048 MICHAEL J. DELBONO $28,500 $28,500.00 1
3019904687 MICHAEL P. ELSEG $84,800 $84,800.00 1
3019904824 YVONNE COLEMAN $16,800 $16,745.62 1
3019904884 CHARLES M. LAVERTY $27,950 $27,864.02 1
3019904945 JOHN SMITH $24,800 $24,690.32 1
3019905051 DAVID A. BIRCH $91,200 $90,882.12 1
3019906879 ANGELA V. PAYNE $19,200 $19,200.00 1
3019907132 MARLOWE S. LEE $100,200 $100,200.00 1
3019907236 JAMES N. PESTER $112,800 $112,800.00 1
3019907245 SAMUEL HINSON $121,050 $121,050.00 1
3019907246 LOUIS H. PAOLINA $116,000 $116,000.00 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019907253 CATHERINE D. MCCARTHY $90,400 $90,193.03 1
3019907274 FREEMAN SMITH $25,200 $25,130.81 1
3019907276 GERALD A. COLESON $116,000 $116,000.00 1
3019907328 W. ROBERT SHORT, JR. $224,910 $224,910.00 1
3019907347 BRENDA GRACE $25,000 $24,807.59 1
3019907412 ALEXANDER ADDUCI $140,250 $140,250.00 1
3019907420 MARY LOU WAGNER $97,750 $97,614.63 1
3019907431 HAYDEN KLINGLER $86,400 $86,400.00 1
3019907527 JEFFREY W. BAIRD $81,000 $81,000.00 1
3019907597 QUEEN E. GRIFFIN-BOWEN $17,500 $17,500.00 1
3019907608 ERIC ROBINSON $189,929 $189,929.00 1
3019907635 DAVID J. GARD $93,500 $93,500.00 1
3019907641 ROBERT J. BENNETT $85,000 $85,000.00 1
3019936894 SHIRLEY DUNN $96,000 $96,000.00 1
3019938872 CHAMAINE SUDLER $26,400 $26,379.30 1
3019940055 DENNIS G HEYMAN $210,000 $210,000.00 1
3019941238 ARTHUR HALL $196,875 $196,875.00 1
3019941253 DANIEL E. COURTMAN $92,000 $92,000.00 1
3019941561 STEPHEN J. ANDERSON $98,000 $97,819.29 1
3019941693 KENRICK MARSHALL $150,000 $150,000.00 1
3019941777 QUIENTON JOHNSON $169,600 $169,236.27 1
3019942081 GERARD YEARWOOD $80,000 $80,000.00 1
3019942105 HILLARY LAWRENCE $161,500 $161,277.35 1
3019942130 JOSEPH P. ABINANTI $218,450 $218,450.00 1
3019942150 ANN HENRY WILLIAMS $112,000 $112,000.00 1
3019942205 KENDRA HAVEN $211,500 $211,500.00 1
3019942235 CHRISTOPHER JAKUBOWSKI $105,000 $105,000.00 1
3019942263 ALBERT O. KASSIM $124,290 $122,790.72 1
3019942304 WILLIAM URQUIJO $120,000 $119,942.06 1
3019942315 LAWRENCE DiGIACOMO $144,000 $143,801.10 1
3019942339 CARMEN MARIA VARGAS $151,300 $150,398.14 1
3019942384 JOHN H. GEIGER $110,000 $110,000.00 1
3019942421 LUIS A. LEON $148,500 $148,500.00 1
3019942422 FRANCIS K. OYENUGA $108,180 $108,180.00 1
3019942444 VINCENT VOGT $90,100 $90,100.00 1
3019942458 SARAI LEWIS $188,250 $188,250.00 1
3019942472 SOPHIA ROBERTS $22,100 $22,100.00 1
3019942495 WILLIAM ALFRED $157,590 $157,134.31 1
3019992560 JESUS DELGADO $89,250 $89,250.00 1
3019992656 GREGORY T. RICKARDS $96,750 $96,490.46 1
3019992677 GARY L RADER $116,250 $115,898.84 1
3019992764 RONALD L. BLIZZARD $119,000 $119,000.00 1
3039840859 GREGORY YFANTIS $23,000 $22,838.59 1
3039891838 JOSEPH R. STANGER $14,800 $14,738.80 1
3039907293 MARGARET B. CATALFAMO $17,650 $17,650.00 1
3039907464 ERNEST A CRANFORD $18,487 $18,487.00 1
3100000318 NICOLE MCCUTCHEON $112,500 $112,344.05 1
3100000599 FRANK TORRES $21,248 $20,422.19 1
3100003080 KYLE K. MCCORMICK $90,000 $89,441.08 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3100003237 DEE A. ANDREU $11,500 $11,361.66 1
3100003470 GEORGE BRADFORD $20,800 $20,770.78 1
3100003641 BRUCE MORRISON $142,000 $141,248.32 1
3100003810 RALPH M. BUMP $23,000 $22,924.40 1
3100003899 FREDRIC BOLTON $100,000 $99,974.43 1
3100003909 SANVONIA DIANNE BELL $22,000 $21,665.56 1
3100003952 RICHARD E. ALLEN $29,000 $29,000.00 1
3100003986 STELLA P. JACOBI $89,100 $88,570.74 1
3100004042 PATRICIA DAWN VENA KOTALA $155,000 $155,000.00 1
3100004089 ILA BURTON $144,000 $143,801.50 1
3100004103 ROBERT NIEVES $213,350 $212,871.57 1
3100004111 CYNTHIA CROMARTIE $15,000 $15,000.00 1
3100004113 FLORENCE YOUNG $23,000 $22,930.84 1
3100004168 GUSTAVO C. MERINO $148,500 $148,295.28 1
3100004198 ANTHONY TROCCHIA $185,000 $184,697.48 1
3100004202 THERESA WILLIAMS $28,000 $28,000.00 1
3100004320 RICKY T. WILLIAMS $84,000 $84,000.00 1
3100004324 DAVID MARAINO $17,066 $16,940.92 1
3100004359 PATRICK F. LEWIS JR. $12,000 $12,000.00 1
3100004361 HEYWARD HEMMINGWAY JR. $18,000 $18,000.00 1
3100004365 VIRGINIA E. CAGER $17,000 $16,866.40 1
3100004368 EVODIO J. MATA $21,575 $21,575.00 1
3100004388 EILEEN A. MATHEWS $93,000 $93,000.00 1
3100004452 JOHN W. BERGER $27,000 $26,026.08 1
3100004456 MARIANNE MIZENIS $81,250 $81,250.00 1
3100004491 CAROL WEBBER $19,000 $19,000.00 1
3100004496 CHERI J. BUFFINGTON $27,000 $26,812.08 1
3100004538 ANTHONY RODRIGUEZ $112,000 $112,000.00 1
3100004592 THOMAS DONOVAN $11,000 $11,000.00 1
3100004740 CLAIRE A. BRINK $110,000 $110,000.00 1
3100004758 SCOTT ANNITTI $115,500 $115,500.00 1
3100004766 MIGUEL MORALES $10,000 $10,000.00 1
3100004890 KERRY S. JOHNSON $18,000 $18,000.00 1
3100004911 DEAN NICHOLAS $15,500 $15,500.00 1
10427 LONG ISLAND FITNESS TRAIN $45,000 $45,000.00 2
10437 THE BEER JOINT, INC. $50,000 $50,000.00 2
10439 PAMELA RUFF $68,000 $68,000.00 2
10446 HARVEY ROBINSON, INC. $45,000 $45,000.00 2
10453 MICHAEL LOPEZ $57,500 $57,500.00 2
10454 MARY DEPRIMO $80,000 $78,433.38 2
10455 DERRICK STRAHORN $38,000 $38,000.00 2
10457 XI HUI WU $40,000 $40,000.00 2
10461 GABBY, INC. $30,000 $30,000.00 2
10462 CHUN SUP LEE $51,000 $51,000.00 2
10463 DOUGLAS VICKERS $32,500 $32,500.00 2
10467 FERNANDO T. TOMAS $32,000 $32,000.00 2
10475 JOHN H. HILBURT JR. $58,000 $58,000.00 2
10481 GEORGE KREIER COMPANY, I $42,000 $42,000.00 2
8882133 ASRB, INC. $36,000 $36,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
8882152 STERLING L. LOCKETT $52,000 $52,000.00 2
8882156 ANNA TERRANOVA $50,000 $50,000.00 2
8882163 TITAN DEVELOPMENT, L.L.C $65,000 $65,000.00 2
8882166 DIGIORGIO HOLDING CORPORA $35,000 $35,000.00 2
10178 ROBERT O. TATE JR. $50,000 $50,000.00 2
10395 BILLIE H. ENGLAND $47,000 $46,852.80 2
10485 RICHARD F. REICHART SR. $55,000 $55,000.00 2
10486 SHELLEY R. BARTLETT $50,000 $50,000.00 2
10487 CLUB 17, INC. $48,000 $48,000.00 2
10488 THERA-CON MEDICAL CORP. I $50,000 $50,000.00 2
10489 ROXANNA BENNETT $60,000 $60,000.00 2
10498 ALICE A. BAKER, INC. $130,000 $130,000.00 2
10440 SIMINS FALOTICO GROUP, IN $250,000 $250,000.00 2
10443 ALEX M. ALEXIADES $325,000 $325,000.00 2
10447 GEORGE WAKE, INC. $350,000 $350,000.00 2
10448 GEORGE T. WAKE $250,000 $250,000.00 2
10449 GEORGE T. WAKE $250,000 $250,000.00 2
10470 FELIPE LUNA $60,000 $60,000.00 2
10473 R. C. DELLS, INC. $350,000 $350,000.00 2
8882159 JOHN ALLERT $135,000 $135,000.00 2
10466 LENNY'S SPIRITS, INC. $205,000 $205,000.00 2
10490 ORANGE CENTER CONVENIENCE $90,000 $90,000.00 2
1041334 MARK ALLEN SHOOK $74,700 $74,700.00 2
1047278 CARL BECKETT $65,000 $64,587.23 2
1048486 ARTEMIO APONTE $133,200 $133,200.00 2
1049128 SUSIE MALONE $38,400 $38,400.00 2
1049189 CORNELIUS V. GRAY $55,250 $55,250.00 2
1050490 ORGILIO A. ALFONSO $72,250 $72,250.00 2
1050981 MICHAEL SPIEGEL $63,900 $63,900.00 2
1051270 KATHY VANCE $30,100 $30,100.00 2
1051417 CARMEN J. CARTIGLIA $150,000 $150,000.00 2
1051733 VERLON D. HILL $58,500 $58,500.00 2
1052127 MILDRED H. MATES $60,000 $60,000.00 2
1052145 MARK ALLEN NELSON $58,500 $58,500.00 2
1052212 BOBBY CROZIER $36,000 $36,000.00 2
1052230 KATHLEEN M. VANCE $31,500 $31,500.00 2
1052321 ROSELYN P. SIMMONS $42,800 $42,800.00 2
1052340 ROBERT M. HAND $76,500 $76,201.21 2
1052363 JEAN LADOUCEUR $72,000 $72,000.00 2
1052398 LEE DOROTHY SMITH $58,650 $58,650.00 2
1052605 WILLIAM MCGARRAH JR. $50,850 $50,850.00 2
1052610 LORI LYN HUFF $52,000 $52,000.00 2
1052644 RUFUS RIVERS $59,200 $59,200.00 2
1052665 VERNON A. OGLETREE JR. $67,122 $67,122.00 2
1052850 FERNANDO L. GENSOLLEN $57,000 $57,000.00 2
1052883 LENOX R. GRANDERSON $62,500 $62,092.57 2
1052897 WINSTON HAUGHTON $126,000 $126,000.00 2
1052995 TAMMY C. REESE $55,250 $55,250.00 2
1053115 ZUFER DERVISEVIC $70,850 $70,850.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1053170 ESSIE E. DANIELS $52,000 $51,901.10 2
1053171 JEFF SCHULZ $40,000 $39,776.41 2
1053177 JOHN B. HENRY JR. $56,250 $56,250.00 2
1053274 HARVEY MERKERSON $55,200 $55,200.00 2
1053385 JAMES WILLIAM CONNOR $30,000 $30,000.00 2
1053690 NEIL W. MANSUR $37,517 $37,517.00 2
1053753 PATRICIA ANN DILLON $58,500 $58,500.00 2
1053806 LINDA SMITH $72,000 $72,000.00 2
1053811 BARRINGTON WILLIAMS $30,000 $30,000.00 2
1053852 CHARLES KENT $72,500 $72,074.99 2
1053877 GREGG S. RITTENHOUSE $32,500 $32,500.00 2
1053921 RUSSELL J. GRANDCHAMP JR. $140,000 $140,000.00 2
1053973 MARTIN KILSTEIN $60,000 $60,000.00 2
1054018 BRYAN E. WOODARDS $135,000 $135,000.00 2
1054025 MUSA SPENCER $56,000 $56,000.00 2
1054062 CATHERINE C. PIZZO $50,000 $49,636.19 2
1054117 PATRICK YOUNGKIN $135,000 $135,000.00 2
1054123 PAMELA BLACKMAN $75,000 $75,000.00 2
1054157 LEE CASH $316,000 $316,000.00 2
1054244 GELSOMINA ROSIELLO $129,000 $129,000.00 2
1054301 WILLIAM R. SHULER $60,000 $59,853.30 2
1054305 GWENEVER YOUNG $34,000 $34,000.00 2
1054309 GWENEVER L. YOUNG $40,000 $40,000.00 2
1054330 KENNETH M.W. DAY II $30,000 $30,000.00 2
1054361 ROBERT WILLIAMS $128,000 $128,000.00 2
1054368 SHIRLEY M. SHORES $35,000 $35,000.00 2
1054496 JAMES E. FINNEGAN $35,000 $34,819.64 2
1054502 ROBERT K. MASON JR. $73,600 $73,600.00 2
1054567 JOHNNY R. RICE $66,000 $66,000.00 2
1054597 CARLOS THOMAS $249,500 $249,500.00 2
1054649 SUSSANE DE PRE A/K/A SUSS $60,000 $60,000.00 2
1054718 CARRIE F. DOVE MOORE $71,250 $71,250.00 2
1054764 JOAN R. CACCIUTTI $138,600 $138,600.00 2
1054774 DERRICK V. REIFF $69,500 $69,500.00 2
1054848 PRATHRON HENRY $72,000 $72,000.00 2
1054851 DONNA M. MCGRATH $41,500 $41,500.00 2
1054873 SARAH K. WOODS $61,200 $61,200.00 2
1054878 WILLIAM FAAS $43,000 $42,893.64 2
1054890 DONALD E. GLOS $137,700 $137,700.00 2
1054897 ANNIE D. MCNEIL $62,000 $62,000.00 2
1054915 JOSEPH PATRICK SCOTT $38,500 $38,371.64 2
1054918 RAYMOND F. BRACHER $67,200 $67,200.00 2
1054923 RONALD C. PALMER $100,000 $100,000.00 2
1054971 LETTIE WAY-SLOCUM $30,450 $30,450.00 2
1054995 JESSE LOUIS PATTERSON $63,000 $63,000.00 2
1055000 THELMA HAWES $60,480 $60,480.00 2
1055044 PAULA POOLE $130,000 $129,271.29 2
1055147 JACK A. BARNES JR. $42,000 $42,000.00 2
1055161 LARRY H. ZELLER $36,000 $35,771.01 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1055162 RUTH BERRIOS $58,500 $58,500.00 2
1055164 GEORGE B. SHOTWELL $132,000 $132,000.00 2
1055188 JOANN SANTALUCIA $42,700 $42,700.00 2
1055197 DONNA ANN BRADNEY $40,000 $40,000.00 2
1055233 PETER FOUDY $30,000 $30,000.00 2
1055236 LINDA J. UNDERWOOD $133,000 $133,000.00 2
1055259 OLGA ARANA $65,000 $65,000.00 2
1055264 JOHN RIGGINS $52,200 $52,200.00 2
1055326 SHIRLEY E. CHANCE $56,000 $56,000.00 2
1055335 MARY ANNE BURNS WINK $72,000 $72,000.00 2
1055339 MATTHEW BROWN $77,000 $77,000.00 2
1055377 JERRY RHETT III $36,000 $36,000.00 2
1055388 ELANA A. ACOX $60,000 $60,000.00 2
1055393 WILLIAM R. JONES $37,800 $37,800.00 2
1055398 LOIS FERGUSON $40,000 $40,000.00 2
1055408 GABRIEL I. ENRIQUEZ $39,000 $39,000.00 2
1055429 ROBERT N. LINDHOLM $180,000 $180,000.00 2
1055453 LAURA REED $60,000 $60,000.00 2
1055463 STEVEN GEORGE DALTON $37,000 $37,000.00 2
1055470 JEFFERY LOVE $43,200 $43,200.00 2
1055516 GERALD V. FERRANTE $21,000 $21,000.00 2
1055535 DEBBIE DYESS $73,750 $73,750.00 2
1055586 EZEQUIEL HOLGUIN $50,000 $50,000.00 2
1055592 NANCY BAXTER $42,000 $42,000.00 2
1055618 NICOLE JOHNSON $67,500 $67,500.00 2
1055619 TERESA M. CROCKETT $34,400 $34,400.00 2
1055650 STEPHEN A. BUDHU $135,000 $135,000.00 2
1055670 EDWINA T. NAGGLES $60,800 $60,800.00 2
1055692 JERRY RHETT III $32,000 $32,000.00 2
1055697 STEPHEN G. PELLEGRINI $30,000 $29,799.19 2
1055704 CHARLES B. HUBBARD $67,500 $67,500.00 2
1055750 JEAN L. QUINTAVALLE $30,000 $30,000.00 2
1055767 GLENN A. DERRICOTT $45,900 $45,900.00 2
1055780 PATRICIA A. LEECH $56,700 $56,700.00 2
1055802 LONNIE H. LOREDO $72,250 $72,250.00 2
1055804 RUTH T. HERON $69,000 $69,000.00 2
1055805 WILFORD C. JAMES $76,500 $76,500.00 2
1055816 MACHIKO RAINEY $130,500 $129,829.45 2
1055848 ALMA BURNETT $66,500 $66,500.00 2
1055851 LULA SWEENEY $71,550 $71,550.00 2
1055882 RUTHANN LLOYD $35,900 $35,900.00 2
1055886 NATHANIEL BAILEY $140,000 $140,000.00 2
1055927 RONALD RICHARDSON $64,000 $64,000.00 2
1055930 SHARON M. BAKER $67,700 $67,700.00 2
1055932 LOUIS D. LOPEZ $50,000 $50,000.00 2
1055950 ERLA ARTHUR $40,000 $40,000.00 2
1056006 DONALD E. OSTER $39,600 $39,600.00 2
1056118 CARMEN D NIXON BELCARIE $68,000 $68,000.00 2
1056164 JOHN F. HUGHES $50,000 $50,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1056221 DOMINICO EMILIANI $75,500 $75,500.00 2
1056287 EDITH ARROWSMITH $48,800 $48,800.00 2
1056289 SAMUEL E. TUCKER $30,000 $30,000.00 2
1056314 KELVIN P ASHE BY HIS ATTO $48,600 $48,600.00 2
1056475 PATRICIA MORROW $71,400 $71,400.00 2
1056494 DARLENE MOBLEY $62,100 $62,100.00 2
1056533 MORRIS W. GREEN $133,200 $133,200.00 2
1056537 MICHELE RENE SHAFFER $46,000 $46,000.00 2
1056607 LARRY L. SPRANKLE $37,600 $37,600.00 2
1056647 JOAN TRIMBLE $43,000 $42,950.31 2
1056683 LENORA ODOM $45,000 $45,000.00 2
1056761 DOYLE WINSTON INGRAM $35,000 $35,000.00 2
1056766 IDA M. ATHANS $248,427 $248,427.00 2
1056789 MICHAEL VAIANO $50,000 $50,000.00 2
1056837 RALPH DAVIS $58,000 $58,000.00 2
1056865 THOMAS BELL $45,000 $45,000.00 2
1056963 RICHARD L. BUDELMAN $46,000 $46,000.00 2
1056974 JAMES F. HUGHES $130,000 $130,000.00 2
1057119 BENJAMIN MCCURDY $32,000 $32,000.00 2
1057140 NEIL ANDREW GRIFFIN $32,725 $32,725.00 2
1057209 GLENN A. BLACKBURN $60,000 $60,000.00 2
1057233 WILLIAM F. LEASURE $70,200 $70,200.00 2
1057297 C. JEFF BURNS $43,827 $43,827.00 2
1057367 CHARLES DONELY FINKBEINER $57,000 $57,000.00 2
1057369 DARLENE BROOKS $53,910 $53,910.00 2
1057382 DOROTHY PIERCE $71,200 $71,200.00 2
1057401 AARON HASIUK $269,000 $269,000.00 2
1057422 IDA MANCINI $40,000 $40,000.00 2
1057433 PEDRO CORDOBA $57,000 $57,000.00 2
1057459 CHARLOTTE A. FRANKOWSKI $71,400 $71,400.00 2
1057484 QUEEN ESTER BELTON $55,800 $55,800.00 2
1057500 MARTIN T. WALSH JR. $48,000 $48,000.00 2
1057514 GREGORY CRISWELL $135,000 $135,000.00 2
1057529 DIANE P. TIERI $48,000 $48,000.00 2
1057557 VICTORIA E. BARNY-NEGRON $56,800 $56,800.00 2
1057574 DAVID R. TURNER $30,000 $30,000.00 2
1057611 YVONNE S. MILLER $72,000 $72,000.00 2
1057646 ALAN J. PIKEY $264,000 $264,000.00 2
1057662 RICHARD CHAKEJIAN SR. $35,000 $35,000.00 2
1057924 CHARLES C. HAM $76,500 $76,500.00 2
1057935 V SCOTT REIDLING $33,000 $33,000.00 2
1057941 ELFRIEDE E. WERNER $243,900 $243,900.00 2
1058039 WILBERT CLARK SR. $36,000 $36,000.00 2
1058101 LISA SWEAT $45,000 $45,000.00 2
1058231 LARRY D. CROWDER $45,050 $45,050.00 2
1058392 KESHA VENNING $54,000 $54,000.00 2
1058496 MARY A. SHEPPARD $38,000 $38,000.00 2
1058571 DAVID BOOTH $42,500 $42,500.00 2
1058644 SHERI L. WEST $76,500 $76,500.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
9013630 ALFRED CAVALLARO JR. $40,500 $40,500.00 2
9013680 HAN K. CHANG $57,600 $57,309.06 2
9013693 LOUISE C. WHITE $40,500 $40,500.00 2
9013785 PHILOMENA D'AGOSTINO $46,700 $46,700.00 2
9013801 GEORGE M. CIARAMELLA $50,400 $50,312.45 2
9013829 JOSEPH A. CAPONE $70,000 $69,880.27 2
9013843 SANDRA D. MARTIN $40,500 $40,500.00 2
9013935 JOSEPH F. CARL $60,800 $60,510.30 2
9013950 MATTHEW FORD $55,250 $55,250.00 2
9013976 ANTHONY L. CUCCHI $40,000 $40,000.00 2
9013979 PIETRO PAOLUCCI $46,800 $46,800.00 2
9013980 RICHARD THORNE $40,000 $40,000.00 2
9013989 MARIE R. ZUCK $75,200 $75,200.00 2
9013990 STEVEN J. CULLEN $42,000 $42,000.00 2
9014016 PETER D. WYNKOOP $92,645 $92,645.00 2
9014033 PELMA G. WHITE $37,000 $37,000.00 2
9014036 ANTONIO ROSADO $75,000 $75,000.00 2
1045779 GARY ALLEN SCALES $73,650 $73,650.00 2
1051181 THEODORE W. BYRD $135,000 $135,000.00 2
1051324 HUEY SMITH $38,000 $38,000.00 2
1051531 EDNA L. SMITH $76,500 $76,500.00 2
1052274 RONALD J. HALL $46,200 $46,200.00 2
1052328 SUSAN MAGAR $137,500 $137,500.00 2
1053178 DENNIS BURPOE $59,500 $59,500.00 2
1053318 AGNES BROOKS $76,000 $76,000.00 2
1054163 SIDNEI E. VALENTIM $69,600 $69,600.00 2
1054575 ERROL V. H. GILBERT $75,500 $75,500.00 2
1054651 MIKE C. ROBB $69,600 $69,600.00 2
1055353 DEBORAH N. VICKS $63,000 $63,000.00 2
1055574 VICTOR GRIFFIN $35,700 $35,700.00 2
1055715 OSCAR L. WIMBUSH $50,000 $50,000.00 2
1055898 DAVID BRICKETT $44,000 $44,000.00 2
1056085 DANIEL JODEXNIS $57,000 $57,000.00 2
1056168 JOHN R. TERRACCIANO $60,000 $60,000.00 2
1056180 SHIRLEY ANDERSON $50,400 $50,400.00 2
1056182 FOREST PRIMER $46,750 $46,750.00 2
1056731 JOSEPH L. CHILLEMI $50,000 $50,000.00 2
1056918 FREDERICK SHELTON $38,165 $38,165.00 2
1056948 CARLTON L. BUTLER JR. $131,000 $131,000.00 2
1056995 ESSIE MIMS $36,000 $36,000.00 2
1057210 MAURICE C. VANDERVALL $51,300 $51,300.00 2
1057281 BOBBY G. AMERSON $47,580 $47,580.00 2
1057414 CHERYL A. CANNON $45,000 $45,000.00 2
1057508 RICHARD J. CHEESMAN $73,600 $73,600.00 2
1057601 ROSE CHERY $41,500 $41,500.00 2
1057682 FRANCIS A. FLORES BY HIS $46,800 $46,800.00 2
1057695 KENNETH V. MILLER $69,650 $69,650.00 2
1057718 PHILIP FORAND $67,500 $67,500.00 2
1057822 CHRISTOPHER MELLEVOLD $323,000 $323,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1057864 ESSICK A. MAYS $74,800 $74,800.00 2
1057890 KEVIN W. HEINE $33,000 $33,000.00 2
1057929 ELVIRA MASTRIANI $47,700 $47,700.00 2
1058019 ADAM SIMON $44,500 $44,500.00 2
1058032 ANNIE P. MCSWAIN $49,000 $49,000.00 2
1058052 ANGELA C. AIKENS $60,000 $60,000.00 2
1058055 WILLIAM R. MCKEON III $68,000 $68,000.00 2
1058164 CAROL BAKER $40,000 $40,000.00 2
1058209 RICHARD H. BYRD $32,190 $32,190.00 2
1058215 SHIRLEY J. MARTIN $32,000 $32,000.00 2
1058387 CECIL D. CORNETTE $126,000 $126,000.00 2
1058419 KATHERINE YAMICH $45,000 $45,000.00 2
1058955 KEITH CIRLINCIONE $44,000 $44,000.00 2
9013838 JOYCE A. RIGHTER $30,000 $30,000.00 2
9013912 GREGORY A. RUTHERFORD $288,000 $288,000.00 2
9014003 LAVINIA L. IMES $37,000 $37,000.00 2
9014015 DEBORAH DEMING $35,250 $35,250.00 2
1049549 JOHNSON $50,360 $50,360.00 2
1051111 ALLEN $337,000 $337,000.00 2
1053285 PALMIERI $63,000 $63,000.00 2
1054743 BARNES $41,400 $41,400.00 2
1054884 BATTIATO $36,270 $36,270.00 2
1055423 WILLIAMS $71,000 $71,000.00 2
1055433 O'BRIEN $75,500 $75,500.00 2
1056084 HUTTO $43,200 $43,200.00 2
1056255 MCGRATH $74,400 $74,400.00 2
1056457 HAWKINS $43,200 $43,200.00 2
1056522 BURRELL $38,633 $38,632.53 2
1056559 MAURER $44,000 $44,000.00 2
1056672 JONES $67,400 $67,400.00 2
1056729 LA DUCA $30,000 $30,000.00 2
1056820 DUNSCOMBE $64,800 $64,800.00 2
1057216 WILKINSON $40,000 $40,000.00 2
1057274 HANDLE $77,000 $77,000.00 2
1057506 COOSEY $61,000 $61,000.00 2
1057528 TAYLOR $39,100 $39,100.00 2
1057638 LOHMEYER $76,500 $76,500.00 2
1057684 WARBURTON $51,525 $51,525.00 2
1057739 REED $38,000 $38,000.00 2
1057813 SMITH $57,400 $57,400.00 2
1058146 MILLER $77,400 $77,400.00 2
1058232 BRYANT $48,000 $48,000.00 2
1058236 BEATTY $40,500 $40,500.00 2
1058244 BECKER $48,000 $48,000.00 2
1058324 CASALINO $126,000 $126,000.00 2
1058499 WORRELLS $52,000 $52,000.00 2
1058582 MORRISSEY $35,000 $35,000.00 2
1058675 STANSKY $69,300 $69,300.00 2
1058706 ANTON $50,000 $50,000.00 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
1058813 CARTER $54,400 $54,400.00 2
1058885 DE GROAT $135,000 $135,000.00 2
1059016 ECKNA $60,000 $60,000.00 2
1059036 GIORDANO $57,750 $57,750.00 2
1059190 BOWMAN $64,600 $64,600.00 2
1059506 GRAHAM $127,500 $127,500.00 2
9013675 CURLEY $56,900 $56,900.00 2
9013881 LOPEZ $45,000 $45,000.00 2
9013944 RYAN $120,000 $120,000.00 2
9013949 SHEERIN $38,000 $38,000.00 2
9014040 DEPAZZA $79,000 $79,000.00 2
9014052 LUCKEY $43,200 $43,200.00 2
9014065 ROSATI $30,000 $30,000.00 2
9014068 DOWNEY $70,000 $70,000.00 2
9014081 BRODZIK $49,000 $49,000.00 2
9014082 SELOVER $44,500 $44,500.00 2
9014085 FINKELSTEIN $125,800 $125,800.00 2
9014099 ALVES $60,000 $60,000.00 2
9014119 DE BLANCO $74,250 $74,250.00 2
3000000225 YVONNE D. BURKHALTER $130,000 $126,871.20 2
3000000270 LEONARD L. DARRELL JR. $33,750 $33,480.70 2
3000000287 FABIOLA SANTOS GAERLAN $93,057 $93,057.00 2
3000000292 THOMAS OPDYKE $125,000 $125,000.00 2
3000000302 AVE CRAIGG $67,500 $67,425.42 2
3000000306 SOPHIE GEORGOKAS $55,000 $55,000.00 2
3000000326 JAMES F. TRAINER SR. $74,000 $74,000.00 2
3000000336 LINDA PEOPLES $44,000 $44,000.00 2
3000000339 PATRICIA NORTON $155,000 $155,000.00 2
3000000350 MICHAEL J. SARANCHAK $68,000 $68,000.00 2
3000000368 ERWIN O. HALLEY $63,250 $63,250.00 2
3000000375 ELVIN ALVAREZ $140,000 $140,000.00 2
3000000390 NANET HAMLIN $66,500 $66,500.00 2
3000000394 WILLIAM F. RYAN $35,000 $35,000.00 2
3000000421 SALVATORE M. AMORELLO $128,000 $128,000.00 2
3010199800 IRA M SCHWARTZ $90,005 $64,362.99 2
3019806661 STEPHEN E. WING $60,000 $60,000.00 2
3019806830 SELINA THOMAS $50,400 $50,296.22 2
3019840048 PASQUALE DOMICOLO $137,600 $137,600.00 2
3019840094 SALVATORE MOTTO $266,250 $265,497.17 2
3019840297 MICHAEL J. PRETOLA, JR. $46,750 $46,636.92 2
3019840710 DONALD SMITH $32,300 $32,300.00 2
3019840929 LEONA H. TAYLOR $32,000 $31,911.94 2
3019840978 CHARLES E WALTERS $129,600 $129,600.00 2
3019841259 GUSTINE ROYSTER $49,300 $49,269.71 2
3019841429 RALPH R. SCOTT $65,700 $65,273.43 2
3019841517 JESSIE R. HORTON $64,800 $64,669.15 2
3019892056 W. CEDRIC WILSON $46,400 $46,400.00 2
3019892223 GLADYS L. PERSON $64,800 $64,791.19 2
3019900812 CHARLES F. KRAUSE $140,000 $139,344.04 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019900866 MALEK ETMINAN-RAD $393,250 $393,250.00 2
3019904678 THERESA GRACE $75,200 $75,200.00 2
3019904728 BOBBY CAMPBELL $32,500 $32,500.00 2
3019904948 KAREN J. BROWN $76,500 $75,949.29 2
3019904981 EARL R. FAULKERSON $39,000 $39,000.00 2
3019905027 DIANA PUGH $36,000 $36,000.00 2
3019905031 MARILYN J. BEAN $48,000 $48,000.00 2
3019905033 JOHNNY B. BURKEEN $33,750 $33,750.00 2
3019905058 TIMOTHY HERRING $34,300 $34,300.00 2
3019905085 JUDY BAILEY $77,400 $77,400.00 2
3019906624 KEVIN L. IMPINK $76,000 $75,856.98 2
3019906979 MICHELLE R. BANNISTER $62,250 $62,250.00 2
3019907029 PATRICIA A. SPINDEN $62,400 $62,400.00 2
3019907070 CAROLYN G. STOKES $67,500 $67,447.11 2
3019907112 JAMES LUONGO $64,000 $64,000.00 2
3019907125 JOHN W. BERRY $58,410 $58,410.00 2
3019907141 SHIRLEY A. SHERMAN $34,200 $34,200.00 2
3019907143 GERALD C. FISHER $50,150 $50,150.00 2
3019907209 KATIE REINHARDT BRACEY $60,800 $60,734.31 2
3019907308 CHARLES W. ANDERSON $73,600 $73,600.00 2
3019907331 ANDREW AVELLINO $127,500 $127,360.56 2
3019907339 WILLIAM ALEXANDER $59,250 $59,250.00 2
3019907419 EDWARD J. SHILKOSKI $61,400 $61,188.51 2
3019907421 VICTOR M. KORNASKI $49,600 $49,600.00 2
3019907432 MARTHA ANN TATE $62,100 $62,100.00 2
3019907468 JOHN FRANCIS STALLARD $53,500 $53,500.00 2
3019907476 LEONARD A. HARRISON $63,750 $63,750.00 2
3019907477 MICHAEL P. GRECO $65,700 $65,700.00 2
3019907485 ANGELA D. HUDSON $53,400 $53,400.00 2
3019907496 WANDA BARNER $48,750 $48,488.51 2
3019907497 DENVER D. ACORD,JR. $54,000 $54,000.00 2
3019907505 KEVIN WRIGHT $74,240 $74,240.00 2
3019907520 PAUL A. TAYLOR $131,750 $131,750.00 2
3019907625 HENRY GLENN $31,200 $31,200.00 2
3019907706 KELLY RONETTE LARGENT $52,200 $52,200.00 2
3019907762 MYRNA STERLING $33,600 $33,600.00 2
3019941077 EVANGILEAN JONES $39,000 $39,000.00 2
3019941160 RONALD H. AGABABIAN $315,000 $315,000.00 2
3019941255 JOSEPH W. DONAHUE, JR $309,000 $308,735.20 2
3019941634 DON P. MELIA $68,250 $68,250.00 2
3019941793 JAMES H. LENNOX $52,000 $51,796.96 2
3019942096 THOMAS TYRONE SCOTT $74,800 $74,800.00 2
3019942124 GERTRUDE BEASLEY $76,500 $76,471.09 2
3019942245 JIMMY E. THOMAS $132,000 $132,000.00 2
3019942250 LATISHA S. SMITH $78,750 $78,750.00 2
3019942307 PATRICK CARO $65,000 $65,000.00 2
3019942309 ELWOOD H. KERNS $66,400 $66,400.00 2
3019942328 MARGARET G. MARTIN $35,000 $35,000.00 2
3019942375 MARIA JUSTE $130,500 $130,319.11 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL CURRENT
Loan ID Name BALANCE BALANCE POOL
- ------- ---- -------- ------- ----
<S> <C> <C> <C>
3019942377 VICTOR ESPINAL $131,750 $131,750.00 2
3019942379 MIRIAM M. WAGNER $59,150 $59,150.00 2
3019942394 THOMAS A. JOHNSON $51,000 $51,000.00 2
3019942400 ETIE MERMERSTEIN $346,500 $346,021.05 2
3019942437 SAMUEL I. DODEK $289,000 $289,000.00 2
3019942506 ANTONIO TAPIA $129,200 $129,200.00 2
3019942712 JOHN W. CORDRAY $291,349 $291,349.00 2
3019992557 ORAS V. FREEMAN $46,000 $45,759.65 2
3019992559 IKE PEELE $46,800 $46,800.00 2
3019992580 KENNETH W. WILLIAMS $40,500 $40,500.00 2
3019992662 HENRY R. RUFUS $78,375 $78,375.00 2
3019992667 WILLIE MAE SAVAGE $49,500 $49,500.00 2
3019992684 JACKIE L. JOHNSON $31,875 $31,875.00 2
3019992842 HOBART D. CAYWOOD $48,750 $48,750.00 2
3039907174 GLORIA P. LEWIS $30,433 $30,356.52 2
3039942404 STEPHEN JACKSON $74,216 $74,216.00 2
3039942639 RONA MADRI $108,000 $108,000.00 2
3039992680 WILLIAM A. JAMES $46,550 $46,550.00 2
3100000455 PETER R. WALL $43,897 $43,722.02 2
3100003325 JAFREY S. LIU $50,120 $50,035.93 2
3100003332 LAURA C. KYDD $59,500 $59,500.00 2
3100003374 HAMLET MALKHASSIAN $247,500 $247,359.57 2
3100003489 PAULINE HEFFREN $65,000 $64,844.85 2
3100003511 ANDRE ABMA $40,300 $40,207.18 2
3100003520 MARCY JACK $56,500 $56,500.00 2
3100003526 PATRICIA E. AARON $57,600 $57,600.00 2
3100003740 RUSSELL E. CREWS $55,875 $55,749.65 2
3100003750 LORRAINE VAUGHAN $42,400 $42,400.00 2
3100004045 WILLIAM C. SMITH $75,500 $75,500.00 2
3100004138 EVAN SILVERSTEIN $35,000 $34,834.90 2
3100004152 CLARENCE W. BIVENS $60,000 $60,000.00 2
3100004235 HELEN CASTRO $72,000 $72,000.00 2
3100004239 JAMES VINCENT CLINE $32,584 $32,472.99 2
3100004248 RUSSELL B. GREENLIEF $44,000 $43,888.79 2
3100004258 ROY E. PARRAN $50,700 $50,700.00 2
3100004291 EDWARD R. SMALL JR. $30,000 $30,000.00 2
3100004347 DARRYL JAMES $138,750 $138,307.01 2
3100004396 TRACEY THEA GORDON $60,000 $59,749.67 2
3100004397 JANE MEYERSON $40,000 $40,000.00 2
3100004398 ANASTACIO B. CUBERO $30,000 $30,000.00 2
3100004423 SUSAN J. KADIN $45,000 $45,000.00 2
3100004425 ROY MONROE JR. $45,500 $45,500.00 2
3100004494 JOSEPH M. OUGE $68,000 $68,000.00 2
3100004541 MICHAEL J. ELLIOTT $44,000 $44,000.00 2
3100004599 CAROLE A. LUNAPIENA $56,000 $56,000.00 2
3100004675 LORRAINE M. RAGNONE $40,000 $40,000.00 2
3100004705 GEORGE CHICHESTER $137,600 $137,600.00 2
3100005110 THOMAS M. DRAKE $76,800 $76,800.00 2
</TABLE>
<PAGE>
EXHIBIT A
FORM OF SUBSEQUENT
TRANSFER AGREEMENT
This SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, 1999 (the
"Subsequent Transfer Date"), is entered into by and among ABFS 1999-1, INC., as
unaffiliated seller (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC.,
as an originator ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an
originator ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP., as an
originator ("NJMIC") (ABC, Upland and NJMIC are collectively referred to herein
as the "Originators"), and PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as depositor (the "Depositor").
W I T N E S S E T H:
Reference is hereby made to (x) that certain Unaffiliated Seller's
Agreement, dated as of March 1, 1999 (the "Unaffiliated Seller's Agreement"), by
and among the Unaffiliated Seller, the Originators and the Depositor, and (y)
that certain Indenture, dated as of March 1, 1999 (the "Indenture"), by and
between the ABFS Mortgage Loan Trust 1999-1 (the "Trust") and The Bank of New
York, as indenture trustee (the "Indenture Trustee"). Pursuant to the
Unaffiliated Seller's Agreement, the Originators have agreed to sell, assign and
transfer, and the Unaffiliated Seller has agreed to accept, from time to time,
Subsequent Mortgage Loans (as defined below), and the Unaffiliated Seller has
agreed to sell, assign and transfer, and the Depositor has agreed to accept,
from time to time, such Subsequent Mortgage Loans. The Unaffiliated Seller's
Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced
by the execution and delivery of a Subsequent Transfer Agreement such as this
Subsequent Transfer Agreement.
The assets sold to the Unaffiliated Seller, and then sold to the
Depositor pursuant to this Subsequent Transfer Agreement consist of (a) the
Subsequent Mortgage Loans in Pool I and Pool II listed in the Mortgage Loan
Schedule attached hereto (including property that secures a Subsequent Mortgage
Loan that becomes an REO Property), including the related Mortgage Files
delivered or to be delivered to the Collateral Agent, on behalf of the Indenture
Trustee, including all payments of principal received, collected or otherwise
recovered after the Subsequent Cut-Off Date for each Subsequent Mortgage Loan,
all payments of interest due on each Subsequent Mortgage Loan after the
Subsequent Cut-Off Date therefor whenever received and all other proceeds
received in respect of such Subsequent Mortgage Loans, (b) the Insurance
Policies relating to the Subsequent Mortgage Loans, and (c) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid assets, including, without limitation, all insurance proceeds and
condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
Subsequent Mortgage
<PAGE>
Loans as of the Subsequent Cut-Off Date is $__________ in Pool I and $__________
in Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Subsequent Transfer
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.
Section 2. Sale, Assignment and Transfer. In consideration of the
receipt of $__________ (such amount being approximately 100% of the Aggregate
Principal Balance of the Subsequent Mortgage Loans) from the Unaffiliated
Seller, each of the Originators hereby sells, assigns and transfers to the
Unaffiliated Seller, without recourse, all of their respective right, title and
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.
In consideration of receipt of $__________ (such amount being
approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans) from the Depositor, the Unaffiliated Seller hereby sells, assigns and
transfers to the Depositor, without recourse, all of its right, title and
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.
In connection with each such sale, assignment and transfer, the
Originators and the Unaffiliated Seller shall satisfy the document delivery
requirements set forth in Section 2.05 of the Sale and Servicing Agreement with
respect to each Subsequent Mortgage Loan.
Section 3. Representations and Warranties of the Originators and the
Unaffiliated Seller. With respect to each Subsequent Mortgage Loan, each of the
Originators and the Unaffiliated Seller hereby remake each of the
representations, warranties and covenants made by the Originators and the
Unaffiliated Seller in Section 3.03 of the Unaffiliated Seller's Agreement, on
which the Depositor relies in accepting the Subsequent Mortgage Loans. Such
representations and warranties speak as of the Subsequent Transfer Date unless
otherwise indicated, and shall survive each sale, assignment, transfer and
conveyance of the Subsequent Mortgage Loans to the Depositor.
Each of the Originators and the Unaffiliated Seller hereby acknowledge
that the Depositor is transferring the Subsequent Mortgage Loans to the Trust,
and that the Trust is pledging the Subsequent Mortgage Loans to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, on the date
hereof. Each of the Originators and the Unaffiliated Seller hereby acknowledge
and agree that the Depositor may assign to the Trust, and the Trust may assign
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, its interest in the representations and warranties set forth in this
Section 3. Each of the Originators and the Unaffiliated Seller agrees that,
2
<PAGE>
upon such assignment to the Trust and pledge to the Indenture Trustee, such
representations, warranties, agreements and covenants will run to and be for the
benefit of the Indenture Trustee and the Indenture Trustee may enforce, without
joinder of the Depositor or the Trust, the repurchase and indemnification
obligations of the Unaffiliated Seller and the Originators set forth herein with
respect to breaches of such representations, warranties, agreements and
covenants.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer on behalf of the Trust, the Note Insurer or any Noteholder
of a breach of any of the representations and warranties made by the Originators
and the Unaffiliated Seller pursuant to Section 3.03 of the Unaffiliated
Seller's Agreement or this Section 3, the party discovering such breach shall
give prompt written notice to each other Person; provided, that the Indenture
Trustee shall have no duty to inquire or to investigate the breach of any such
representations and warranties. The Originators and the Unaffiliated Seller will
be obligated to repurchase a Subsequent Mortgage Loan which breaches a
representation or warranty in accordance with the provisions of Section 4.02 of
the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g)
of the Unaffiliated Seller's Agreement. Such repurchase and indemnification
obligation of the Originators and the Unaffiliated Seller shall constitute the
sole remedy against the Originators and the Unaffiliated Seller, and the Trust
for such breach available to the Servicer, the Trust, the Depositor, the
Indenture Trustee, the Note Insurer and the Noteholders.
Section 5. Amendment. This Subsequent Transfer Agreement may be amended
from time to time by the Originators, the Unaffiliated Seller and the Depositor
only with the prior written consent of the Note Insurer (or, in the event of a
Note Insurer Default, the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT
TRANSFER AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT TRANSFER
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
Section 7. Counterparts. This Subsequent Transfer Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Transfer Agreement will inure to the benefit of and be binding upon the parties
hereto, the Note Insurer, the Trust, the Noteholders, and their respective
successors and permitted assigns.
3
<PAGE>
Section 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Transfer Agreement and are
incorporated into this Subsequent Transfer Agreement for all purposes.
Section 11. Intent of the Parties; Security Agreement. The Originators,
the Unaffiliated Seller and the Depositor intend that the conveyance of all
right, title and interest in and to the Subsequent Mortgage Loans and related
assets described above by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor pursuant to this Subsequent Transfer
Agreement shall be, and be construed as, a sale of the Subsequent Mortgage Loans
from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller
to the Depositor.
It is, further, not intended that such conveyances be deemed to be
pledges of the Subsequent Mortgage Loans by the Originators to the Unaffiliated
Seller and by the Unaffiliated Seller to the Depositor to secure a debt or other
obligation of the Originators or of the Unaffiliated Seller, as the case may be.
However, in the event that the Subsequent Mortgage Loans are held to be property
of the Originators or the Unaffiliated Seller, or if for any reason this
Subsequent Transfer Agreement is held or deemed to create a security interest in
the Subsequent Mortgage Loans, then it is intended that: (a) this Subsequent
Transfer Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this Subsequent
Transfer Agreement shall be deemed to be a grant by the Originators to the
Unaffiliated Seller and by the Unaffiliated Seller to the Depositor of a
security interest in all of the Originators' and the Unaffiliated Seller's
respective right, title and interest, whether now owned or hereafter acquired,
in and to the Subsequent Mortgage Loans and related assets described above. The
Originators and the Unaffiliated Seller, as applicable, shall, to the extent
consistent with this Subsequent Transfer Agreement, take such reasonable actions
as may be necessary to ensure that, if this Subsequent Transfer Agreement were
deemed to create a security interest in the Subsequent Mortgage Loans and the
other property described above, such interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Subsequent Transfer Agreement.
[Remainder of Page Intentionally Left Blank]
4
<PAGE>
IN WITNESS WHEREOF, the Originators, the Unaffiliated Seller and the Depositor
have caused this Subsequent Transfer Agreement to be duly executed by their
respective officers as of the day and year first above written.
AMERICAN BUSINESS CREDIT, INC.
By: _________________________________
Name:
Title:
HOMEAMERICAN CREDIT, INC. D/B/A
UPLAND MORTGAGE
By: _________________________________
Name:
Title:
NEW JERSEY MORTGAGE AND INVESTMENT, INC.
By: _________________________________
Name:
Title:
ABFS 1999-1, INC.
By: _________________________________
Name:
Title:
PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION
By: _________________________________
Name:
Title:
[Signature Page to Subsequent Transfer Agreement]
<PAGE>
Exhibit 4.3
SALE AND SERVICING AGREEMENT
dated as of March 1, 1999
by and among
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as Depositor,
ABFS MORTGAGE LOAN TRUST 1999-1,
as Issuer,
AMERICAN BUSINESS CREDIT, INC.,
as Servicer,
CHASE BANK OF TEXAS, N.A.,
as Collateral Agent,
and
THE BANK OF NEW YORK,
as Indenture Trustee
<PAGE>
SALE AND SERVICING AGREEMENT, dated as of March 1, 1999 (this
"Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
a Delaware corporation, as depositor (the "Depositor"), ABFS MORTGAGE LOAN TRUST
1999-1, a Delaware business trust, as issuer (the "Trust"), AMERICAN BUSINESS
CREDIT, INC., a Pennsylvania corporation, as servicer (the "Servicer"), CHASE
BANK OF TEXAS, N.A., a national banking association, as collateral agent (the
"Collateral Agent"), and THE BANK OF NEW YORK, a New York banking corporation,
as indenture trustee (the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the Depositor desires to sell to the Trust, and the Trust
desires to purchase from the Depositor, the mortgage loans (the "Mortgage
Loans") listed on Schedule I to this Agreement;
WHEREAS, immediately after such purchase, the Trust will pledge such
Mortgage Loans to the Indenture Trustee pursuant to the terms of an Indenture,
dated as of March 1, 1999 (the "Indenture"), between the Trust and the Indenture
Trustee, and issue the ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes
(the "Notes");
WHEREAS, the Servicer has agreed to service the Mortgage Loans, which
constitute the principal assets of the Trust;
WHEREAS, the Collateral Agent will hold, on behalf of the Indenture
Trustee, the Mortgage Loans and certain other assets pledged to the Indenture
Trustee pursuant to the Indenture; and
WHEREAS, Financial Security Assurance Inc. (the "Note Insurer") is
intended to be a third-party beneficiary of this Agreement, and is hereby
recognized by the parties hereto to as a third-party beneficiary of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Trust, the Depositor, the Servicer, the
Collateral Agent and the Indenture Trustee hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Certain Defined Terms. Capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in Appendix I
attached hereto.
Section 1.02 Provisions of General Application. (a) All accounting
terms not specifically defined herein shall be construed in accordance with
GAAP.
(b) The terms defined herein and in Appendix I to the Indenture include
the plural as well as the singular.
<PAGE>
(c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.
(d) Any reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to which
reference is made and all regulations promulgated pursuant to such statutes.
(e) All calculations of interest with respect to the Notes provided for
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All calculations of interest with respect to any Mortgage Loan provided
for herein shall be made in accordance with the terms of the related Mortgage
Note and Mortgage or, if such documents do not specify the basis upon which
interest accrues thereon, on the basis of a 360-day year consisting of twelve
30-day months, to the extent permitted by applicable law.
(f) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Servicer; provided, however, that, for
purposes of calculating distributions on the Notes, prepayments with respect to
any Mortgage Loan are deemed to be received on the date they are applied in
accordance with Accepted Servicing Practices consistent with the terms of the
related Mortgage Note and Mortgage to reduce the outstanding Principal Balance
of such Mortgage Loan on which interest accrues.
Section 1.03 Business Day Certificate. On the Closing Date (with
respect to the calendar years 1999 and 2000) and thereafter, within fifteen (15)
days prior to the end of each calendar year while this Agreement remains in
effect (with respect to the succeeding calendar years), the Servicer shall
provide to the Indenture Trustee and the Collateral Agent a certificate of a
Servicing Officer specifying the days on which banking institutions in the
Commonwealth of Pennsylvania are authorized or obligated by law, executive order
or governmental decree to be closed.
ARTICLE II.
SALE AND CONVEYANCE OF THE MORTGAGE LOANS
Section 2.01 Purchase and Sale of Initial Mortgage Loans. The Depositor
does hereby sell, transfer, assign, set over and convey to the Trust, without
recourse, but subject to the terms and provisions of this Agreement, all of the
right, title and interest of the Depositor in and to the Initial Mortgage Loans,
including the outstanding principal of, and interest due on, such Initial
Mortgage Loans listed on Schedule I attached hereto, and all other assets
included or to be included in the Trust Estate. In connection with such transfer
and assignment, and pursuant to Section 2.07 of the Unaffiliated Seller's
Agreement, the Depositor does hereby also irrevocably transfer, assign, set over
and otherwise convey to the Trust all of its rights under the Unaffiliated
Seller's Agreement, including, without limitation, its right to exercise the
remedies created by Sections 2.06 and 3.05 of the Unaffiliated Seller's
Agreement for defective documentation and for breaches of representations and
warranties, agreements and covenants of the Unaffiliated Seller and the
Originators contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated
Seller's Agreement.
2
<PAGE>
Section 2.02 Purchase and Sale of Subsequent Mortgage Loans. (a)
Subject to the satisfaction of the conditions set forth in Section 2.14(b) of
the Indenture, in consideration of the Trust's delivery on the related
Subsequent Transfer Dates to or upon the order of the Depositor of all or a
portion of the balance of funds in the related Pre-Funding Account, the
Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over
and convey to the Trust without recourse, but subject to terms and provisions of
this Agreement, all of the right, title and interest of the Depositor in and to
the Subsequent Mortgage Loans in the related Pool, including the outstanding
principal of, and interest due on, such Subsequent Mortgage Loans, and all other
assets included or to be included in the Trust Estate. In connection with such
transfer and assignment, and pursuant to Section 2.07 of the Unaffiliated
Seller's Agreement, the Depositor will also irrevocably transfer, assign, set
over and otherwise convey to the Trust all of its rights under the Unaffiliated
Seller's Agreement and the related Subsequent Transfer Agreement, including,
without limitation, its right to exercise the remedies created by Sections 2.06
and 3.05 of the Unaffiliated Seller's Agreement for defective documentation and
for breaches of representations and warranties, agreements and covenants of the
Unaffiliated Seller and the Originators contained in Sections 3.01, 3.02 and
3.03 of the Unaffiliated Seller's Agreement.
The amount released from a Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred
percent (100%) of the Aggregate Principal Balances of the Subsequent Mortgage
Loans so transferred, as of the related Subsequent Cut-Off Date.
(b) In connection with the transfer and assignment of the Subsequent
Mortgage Loans to the Trust, the Depositor shall cause the Unaffiliated Seller
to satisfy the document delivery requirements set forth in Section 2.05 hereof.
(c) For any Subsequent Mortgage Loan that has a first Due Date that
occurs later than the last day of the Due Period following the Due Period in
which the Subsequent Mortgage Loan was sold to the Trust, on each applicable
Servicer Distribution Date, the Servicer will deposit into the Distribution
Account 30 days' interest at the related Mortgage Interest Rate, net of the
Servicing Fee, for each month after the month in which the Subsequent Transfer
occurs until, but not including, the month in which such first Due Date occurs.
Section 2.03 Purchase Price. On the Closing Date, as full consideration
for the Depositor's sale of the Initial Mortgage Loans to the Trust, the
Underwriter, on behalf of the Trust, will deliver to, or at the direction of,
the Depositor (i) an amount in cash equal to the sum of (A) 99.65% and 99.65% of
the Original Note Principal Balance as of the Closing Date of the Class A-1
Notes and the Class A-2 Notes, respectively, plus (B) accrued interest on the
Original Note Principal Balance of the Class A-1 Notes and the Class A-2 Notes
at the rate of 6.545% per annum and 6.580% per annum, respectively, from (and
including) March 1, 1999 to (but not including) the Closing Date, minus (C) the
Original Pre-Funded Amount and the Original Capitalized Interest Amount for each
class of Notes, payable by wire transfer of same day funds, and (ii) the Trust
Certificates to be issued pursuant to the Trust Agreement.
Section 2.04 Possession of Mortgage Files; Access to Mortgage Files.
(a) Upon the receipt by the Depositor, or its designee, of the purchase price
for the Initial
3
<PAGE>
Mortgage Loans set forth in Section 2.03 hereof and the issuance of the Notes
pursuant to the Indenture, the ownership of each Mortgage Note, each Mortgage
and the contents of the Mortgage File related to each Initial Mortgage Loan will
be vested in the Trust, and will be pledged to the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer.
(b) Pursuant to Section 2.05 hereof and Section 2.05 of the
Unaffiliated Seller's Agreement, the Unaffiliated Seller has delivered or caused
to be delivered the Indenture Trustee's Mortgage File related to each Initial
Mortgage Loan to the Collateral Agent, on behalf of the Indenture Trustee.
(c) The Collateral Agent will be the custodian, on behalf of the
Indenture Trustee, to hold the Indenture Trustee's Mortgage Files in trust for
the benefit of all present and future Noteholders and the Note Insurer. In the
event the Collateral Agent resigns or is removed, the Indenture Trustee shall
either (x) hold the Indenture Trustee's Mortgage Files, or (y) appoint a
successor Collateral Agent to hold the Indenture Trustee's Mortgage Files as set
forth in Section 9.08 hereof.
(d) The Collateral Agent shall afford the Depositor, the Trust, the
Note Insurer and the Servicer reasonable access to all records and documentation
regarding the Mortgage Loans relating to this Agreement, such access being
afforded at customary charges, upon reasonable prior written request and during
normal business hours at the offices of the Collateral Agent.
Section 2.05 Delivery of Mortgage Loan Documents. (a) In connection
with the transfer and assignment of the Mortgage Loans, the Depositor shall on
or before the Closing Date, with respect to the Initial Mortgage Loans, and
shall on or before the Subsequent Transfer Date with respect to Subsequent
Mortgage Loans, deliver, or cause the Unaffiliated Seller to deliver, to the
Collateral Agent, on behalf of the Indenture Trustee (as pledgee of the Trust
pursuant to the Indenture), the following documents or instruments with respect
to each Mortgage Loan so transferred or assigned:
(i) the original Mortgage Note, endorsed without recourse in
blank by the related Originator, including all intervening endorsements
showing a complete chain of endorsement;
(ii) the related original Mortgage with evidence of recording
indicated thereon or a copy thereof certified by the applicable
recording office;
(iii) the recorded mortgage assignment, or copy thereof
certified by the applicable recording office, if any, showing a
complete chain of assignment from the originator of the related
Mortgage Loan to the related Originator (which assignment may, at such
Originator's option, be combined with the assignment referred to in
subpart (iv) hereof, in which case it must be in recordable form, but
need not have been previously recorded);
(iv) a mortgage assignment in recordable form (which, if
acceptable for recording in the relevant jurisdiction, may be included
in a blanket assignment or assignments) of each Mortgage from the
related Originator to the Indenture Trustee;
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(v) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a
Mortgage or Mortgage Note have been modified or such Mortgage or
Mortgage Note has been assumed; and
(vi) an original title insurance policy (or (A) a copy of the
title insurance policy, or (B) a binder thereof or copy of such binder
together with a certificate from the related Originator that the
original Mortgage has been delivered to the title insurance company
that issued such binder for recordation).
In instances where the original recorded Mortgage and a completed
assignment thereof in recordable form cannot be delivered by the related
Originator to the Unaffiliated Seller, and by the Unaffiliated Seller to the
Collateral Agent, on behalf of the Indenture Trustee prior to or concurrently
with the execution and delivery of this Agreement (or, with respect to
Subsequent Mortgage Loans, prior to or on the related Subsequent Transfer Date),
due to a delay in connection with recording, the related Originator may:
(x) in lieu of delivering such original recorded Mortgage,
deliver to the Collateral Agent, on behalf of the Indenture Trustee, a
copy thereof; provided, that the related Originator certifies that the
original Mortgage has been delivered to a title insurance company for
recordation after receipt of its policy of title insurance or binder
therefor; and
(y) in lieu of delivering the completed assignment in
recordable form, deliver to the Collateral Agent, on behalf of the
Indenture Trustee, the assignment in recordable form, otherwise
complete except for recording information.
The Collateral Agent, on behalf of the Indenture Trustee, shall
promptly upon receipt thereof, with respect to each Mortgage Note described in
Section 2.05(a)(i) hereof and each assignment described in Section 2.05(a)(iv)
hereof, endorse such Mortgage Note and assignment as follows: "The Bank of New
York, as Indenture Trustee under the Indenture dated as of March 1, 1999, ABFS
Mortgage Loan Trust 1999-1."
(b) As promptly as practicable, but in any event within thirty (30)
days from the Closing Date or the Subsequent Transfer Date, as applicable, the
Unaffiliated Seller shall promptly submit, or cause to be submitted by the
related Originator, for recording in the appropriate public office for real
property records, each assignment referred to in Section 2.05(a)(iv). The
Collateral Agent, on behalf of the Indenture Trustee, shall retain a copy of
each assignment submitted for recording. In the event that any such assignment
is lost or returned unrecorded because of a defect therein, the Unaffiliated
Seller or such Originator shall promptly prepare a substitute assignment or cure
such defect, as the case may be, and thereafter the Unaffiliated Seller or such
Originator shall submit each such assignment for recording. The costs relating
to the delivery and recordation of the documents in connection with the Mortgage
Loans as specified in this Article II shall be borne by the Unaffiliated Seller.
(c) The Unaffiliated Seller or the related Originator shall, within
five (5) Business Days after the receipt thereof, deliver, or cause to be
delivered, to the Collateral Agent, on behalf of the Indenture Trustee: (i) the
original recorded Mortgage and related power of
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attorney, if any, in those instances where a copy thereof certified by the
related Originator was delivered to the Collateral Agent, on behalf of the
Indenture Trustee; (ii) the original recorded assignment of Mortgage from the
related Originator to the Indenture Trustee, which, together with any
intervening assignments of Mortgage, evidences a complete chain of assignment
from the originator of the Mortgage Loan to the Indenture Trustee, in those
instances where copies of such assignments certified by the related Originator
were delivered to the Collateral Agent, on behalf of the Indenture Trustee, and
(iii) the title insurance policy or title opinion required in Section
2.05(a)(vi). The Collateral Agent shall review the recorded assignment to
confirm the information contained therein. The Collateral Agent shall notify
Indenture Trustee, the Note Insurer and the Servicer, of any defect in such
assignment based on such review. The Servicer shall have a period of sixty (60)
days following such notice to correct or cure such defect. In the event that the
Servicer fails to record an assignment of a Mortgage as provided herein, the
Collateral Agent shall, at the Servicer's expense, use reasonable efforts to
prepare and, if required hereunder, file such assignments for recordation in the
appropriate real property or other records and the Servicer hereby appoints the
Collateral Agent as its attorney-in-fact with full power and authority acting in
its stead for the purpose of such preparation, execution and filing.
Notwithstanding anything to the contrary contained in this Section
2.05, in those instances where the public recording office retains the original
Mortgage, power of attorney, if any, assignment or assignment of Mortgage after
it has been recorded or such original has been lost, the Unaffiliated Seller or
the related Originator shall be deemed to have satisfied its obligations
hereunder upon delivery to the Collateral Agent, on behalf of the Indenture
Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or
assignment of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.
From time to time the Unaffiliated Seller or the related Originator may
forward, or cause to be forwarded, to the Collateral Agent, on behalf of the
Indenture Trustee, additional original documents evidencing any assumption or
modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that are not
delivered to the Collateral Agent, on behalf of the Indenture Trustee, as
permitted by Section 2.05(a) hereof are, and shall be, held by the Servicer, the
Unaffiliated Seller or the related Originator, as the case may be, in trust for
the benefit of the Indenture Trustee, on behalf of the Noteholders and the Note
Insurer. In the event that any such original document is required pursuant to
the terms of this Section 2.05 to be a part of an Indenture Trustee's Mortgage
File, such document shall be delivered promptly to the Collateral Agent, on
behalf of the Indenture Trustee. From and after the sale of the Mortgage Loans
to the Trust pursuant hereto, to the extent that the Unaffiliated Seller or the
related Originator retains legal title of record to any Mortgage Loans prior to
the vesting of legal title in the Trust, such title shall be retained in trust
for the Trust as the owner of the Mortgage Loans, and the Indenture Trustee, as
the pledgee of the Trust under the Indenture. In acting as custodian of any
original document which is part of the Indenture Trustee's Mortgage Files, the
Servicer agrees further that it does not and will not have or assert any
beneficial ownership interest in the related Mortgage Loans or the Mortgage
Files. Promptly upon the Servicer's receipt of any such original document, the
Servicer, on behalf of the Trust, shall mark conspicuously each such original
document, and its master data processing records with a legend evidencing that
the Trust has purchased the related Mortgage Loan and all right and title
thereto and interest therein, and pledged such Mortgage Loan and all
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right and title thereto and interest therein to the Indenture Trustee, on behalf
of the Noteholders and the Note Insurer.
Section 2.06 Acceptance of the Trust Estate; Certain Substitutions;
Certification by the Collateral Agent. (a) The Indenture Trustee agrees to
execute and deliver to the Depositor, the Note Insurer, the Collateral Agent and
the Servicer on or prior to the Closing Date an acknowledgement of receipt of
the Note Insurance Policy in the form attached as Exhibit B hereto.
(b) The Collateral Agent, on behalf of the Indenture Trustee, agrees
to:
(i) execute and deliver to the Depositor, the Note Insurer,
the Indenture Trustee, the Servicer and the Unaffiliated Seller, on or
prior to the Closing Date or any Subsequent Transfer Date, as
applicable, with respect to each Mortgage Loan transferred on such
date, an acknowledgement of receipt of the Mortgage File containing the
original Mortgage Note (with any exceptions noted), in the form
attached as Exhibit C hereto, and declares that it will hold such
documents and any amendments, replacements or supplements thereto, as
well as any other assets included in the definition of Trust Estate and
delivered to the Collateral Agent, on behalf of the Indenture Trustee,
in trust upon and subject to the conditions set forth herein, for the
benefit of the Noteholders and the Note Insurer.
(ii) to review (or cause to be reviewed) each Indenture
Trustee's Mortgage File within thirty (30) days after the Closing Date
or any Subsequent Transfer Date, as applicable (or, with respect to any
Qualified Substitute Mortgage Loans, within thirty (30) days after the
receipt by the Collateral Agent, on behalf of the Indenture Trustee,
thereof), and to deliver to the Unaffiliated Seller, the Servicer, the
Depositor, the Indenture Trustee and the Note Insurer a certification,
in the form attached hereto as Exhibit D, to the effect that, except as
otherwise noted, as to each Mortgage Loan listed in the related
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
any Mortgage Loan specifically identified in such certification as not
covered by such certification), (i) all documents required to be
delivered to it pursuant to Section 2.05 are in its possession, (ii)
each such document has been reviewed by it and has not been mutilated,
damaged, torn or otherwise physically altered (handwritten additions,
changes or corrections shall not constitute physical alteration if they
reasonably appear to have been initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan, and (iii) based
on its examination and only as to the foregoing documents, the
information set forth on the Mortgage Loan Schedule as to the
information set forth in (i), (ii), (v) and (vi) of the definition of
"Mortgage Loan Schedule" accurately reflects the information set forth
in the Indenture Trustee's Mortgage File delivered on such date.
(iii) to review (or cause to be reviewed) each Indenture
Trustee's Mortgage File within ninety (90) days after the Closing
Date or any Subsequent Transfer Date, as applicable (or, with respect
to any Qualified Substitute Mortgage Loans, within ninety (90) days
after the receipt by the Collateral Agent, on behalf of the Indenture
Trustee, thereof), and to deliver to the Unaffiliated Seller, the
Servicer, the Depositor, the Indenture Trustee, the Rating Agencies
and the Note Insurer a certification in the form
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attached hereto as Exhibit E to the effect that, except as otherwise
noted, as to each Mortgage Loan listed in the related Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage
Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it
pursuant to Section 2.05 are in its possession, (ii) each such document
has been reviewed by it and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if they reasonably
appear to be initialed by the Mortgagor), appears regular on its face
and relates to such Mortgage Loan, and (iii) based on its examination
and only as to the foregoing documents, the information set forth in
the definition of "Mortgage Loan Schedule" accurately reflects the
information set forth in the Indenture Trustee's Mortgage File
delivered on such date.
In performing any such review, the Collateral Agent may conclusively
rely on the Unaffiliated Seller as to the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Collateral Agent's review of the Indenture Trustee's Mortgage Files is limited
solely to confirming that the documents listed in Section 2.05 have been
executed and received and relate to the Indenture Trustee's Mortgage Files
identified in the related Mortgage Loan Schedule. The Collateral Agent shall be
under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face.
(c) If the Collateral Agent during the process of reviewing the
Indenture Trustee's Mortgage Files finds any document constituting a part of a
Indenture Trustee's Mortgage File which is not executed, has not been received,
is unrelated to the Mortgage Loan identified in the related Mortgage Loan
Schedule, or does not conform to the requirements of Section 2.05 or the
description thereof as set forth in the related Mortgage Loan Schedule, the
Collateral Agent shall promptly so notify the Servicer, the Unaffiliated Seller,
the Originators, the Note Insurer and the Indenture Trustee. Pursuant to Section
2.06(b) of the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the
Originators have agreed to use reasonable efforts to cause to be remedied a
material defect in a document constituting part of an Indenture Trustee's
Mortgage File of which it is so notified by the Collateral Agent. If, however,
within sixty (60) days after the Collateral Agent's notice to it respecting such
defect the Unaffiliated Seller or the Originators have not caused to be remedied
the defect and the defect materially and adversely affects the interest of the
Noteholders and the Note Insurer in the related Mortgage Loan, the Unaffiliated
Seller and the Originators will be obligated, pursuant to Section 3.05 of the
Unaffiliated Seller's Agreement, to either (i) substitute in lieu of such
Mortgage Loan a Qualified Substitute Mortgage Loan in the manner and subject to
the conditions set forth in Section 3.05 of the Unaffiliated Seller's Agreement
or (ii) purchase such Mortgage Loan at a purchase price equal to the Loan
Repurchase Price. Upon receipt by the Collateral Agent and the Indenture Trustee
of a certification, in the form attached hereto as Exhibit F, of a Servicing
Officer of such substitution or purchase and, in the case of a substitution,
upon receipt by the Collateral Agent, on behalf of the Indenture Trustee, of the
related Indenture Trustee's Mortgage File, and the deposit of the amounts
described above in the Collection Account, the Collateral Agent shall release to
the Servicer for release to the Unaffiliated Seller the related Indenture
Trustee's Mortgage File and the Indenture Trustee shall execute, without
recourse, and deliver
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such instruments of transfer furnished by the Unaffiliated Seller as may be
necessary to transfer such Mortgage Loan to the Unaffiliated Seller. The
Collateral Agent shall notify the Indenture Trustee, who shall notify the Note
Insurer if the Unaffiliated Seller fails to repurchase or substitute for a
Mortgage Loan in accordance with the foregoing.
Section 2.07 Grant of Security Interest. (a) It is intended that the
conveyance of the Mortgage Loans and other property by the Depositor to the
Trust as provided in this Article II be, and be construed as, a sale of the
Mortgage Loans and such other property by the Depositor to the Trust. It is,
further, not intended that such conveyance be deemed a pledge of the Mortgage
Loans or such other property by the Depositor to the Trust to secure a debt or
other obligation of the Depositor. However, in the event that the Mortgage Loans
or any of such other property are held to be property of the Depositor, or if
for any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans or any of such other property, then it is intended that: (i)
this Agreement shall also be deemed to be a security agreement within the
meaning of the Uniform Commercial Code; (ii) the conveyance provided for in this
Article II shall be deemed to be a grant by the Depositor to the Trust of a
security interest in all of the Depositor's right, title and interest in and to
the Mortgage Loans and such other property and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including, without limitation,
all amounts from time to time held or invested in the Distribution Account,
whether in the form of cash, instruments, securities or other property; (iii)
the possession by the Collateral Agent, on behalf of the Indenture Trustee, of
the Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to the Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from financial intermediaries, bailees or agents, as applicable,
of the Indenture Trustee for the purpose of perfecting such security interest
under applicable law. The Depositor, the Servicer, on behalf of the Trust, the
Collateral Agent and the Indenture Trustee, shall, to the extent consistent with
this Agreement, take such actions as may be reasonably necessary to ensure that,
if this Agreement were deemed to create a security interest in the Mortgage
Loans or any of such other property, such security interest would be deemed to
be a perfected security interest of first priority under applicable law and will
be maintained as such throughout the term of this Agreement.
(b) The Unaffiliated Seller, the Depositor and the Servicer shall take
no action inconsistent with the Trust's ownership of the Trust Estate and each
shall indicate or shall cause to be indicated in its records and records held on
its behalf that ownership of each Mortgage Loan and the other assets in the
Trust Estate are held by the Collateral Agent, on behalf of the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer. In addition,
the Unaffiliated Seller, the Depositor and the Servicer shall respond to any
inquiries from third parties with respect to ownership of a Mortgage Loan or any
other asset in the Trust Estate by stating that it is not the owner of such
asset and that the Trust is the owner of such Mortgage Loan or other asset in
the Trust Estate, which is held by the Collateral Agent, on behalf of the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.
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Section 2.08 Further Action Evidencing Assignments. (a) The Servicer
agrees that, from time to time, at its expense, it shall cause the Unaffiliated
Seller to (and the Depositor on behalf of itself also agrees that it shall),
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or appropriate, or that the Servicer, the
Indenture Trustee or the Collateral Agent may reasonably request, in order to
perfect, protect or more fully evidence the transfer of ownership of the
Mortgage Loans and other assets in the Trust Estate or to enable the Collateral
Agent, on behalf of the Indenture Trustee, to exercise or enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the Servicer
and the Depositor will, upon the request of the Servicer, the Indenture Trustee
or the Collateral Agent execute and file (or cause to be executed and filed)
such real estate filings, financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate.
(b) The Depositor hereby grants to the Servicer, the Indenture Trustee
and the Collateral Agent powers of attorney to execute all documents on its
behalf under this Agreement and the Unaffiliated Seller's Agreement as may be
necessary or desirable to effectuate the foregoing.
Section 2.09 Assignment of Agreement. The Depositor hereby acknowledges
and agrees that the Trust may assign its interest under this Agreement to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, as
may be required to effect the purposes of the Indenture, without further notice
to, or consent of, the Depositor, and the Indenture Trustee shall succeed to
such of the rights and obligations of the Trust hereunder as shall be so
assigned. The Trust shall, pursuant to the Indenture, assign all of its right,
title and interest in and to the Mortgage Loans and its right to exercise the
remedies created by Section 2.06 and 3.05 of the Unaffiliated Seller's Agreement
for breaches of the representations, warranties, agreements and covenants of the
Unaffiliated Seller or the Originators contained in Sections 2.05, 2.06, 3.02
and 3.03 of the Unaffiliated Seller's Agreement, assign such right, title and
interest to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer. The Depositor agrees that, upon such assignment to the Indenture
Trustee, such representations, warranties, agreements and covenants will run to
and be for the benefit of the Indenture Trustee and the Indenture Trustee may
enforce, without joinder of the Depositor or the Trust, the repurchase
obligations of the Unaffiliated Seller and the Originators set forth herein with
respect to breaches of such representations, warranties, agreements and
covenants.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer. The Servicer hereby
represents and warrants to the Indenture Trustee, the Depositor, the Collateral
Agent, the Trust, the Note Insurer and the Noteholders as of the Closing Date
and during the term of this Agreement that:
(a) Each of the Servicer and the Subservicers is duly
organized, validly existing and in good standing under the laws of
their respective states of incorporation and has the power to own its
assets and to transact the business in which it is currently engaged.
Each of the Servicer and the Subservicers is duly qualified to do
business as a
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foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties
owned or leased by it or the performance of its obligations hereunder
requires such qualification and in which the failure so to qualify
could reasonably be expected to have a material adverse effect on the
business, properties, assets, or condition (financial or other) of the
Servicer or the Subservicers or the performance of their respective
obligations hereunder;
(b) The Servicer has the power and authority to make, execute,
deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement, and assuming the due authorization, execution and
delivery hereof by the other parties hereto constitutes, or will
constitute, the legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(c) The Servicer is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency which consent already has not been obtained in connection with
the execution, delivery, performance, validity or enforceability of
this Agreement, except such as have been obtained prior to the Closing
Date;
(d) The execution, delivery and performance of this Agreement
by the Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court or the charter or bylaws
of the Servicer, or constitute a breach of any mortgage, indenture,
contract or other Agreement to which the Servicer is a party or by
which it may be bound;
(e) There is no action, suit, proceeding or investigation
pending or threatened against the Servicer or the Subservicers which,
either in any one instance or in the aggregate, is, in the Servicer's
judgment, likely to result in any material adverse change in the
business, operations, financial condition, properties, or assets of the
Servicer or the Subservicers, or in any material impairment of the
right or ability of any of them to carry on its business substantially
as now conducted, or in any material liability on the part of any of
them, or which would draw into question the validity of this Agreement,
the Notes, or the Mortgage Loans or of any action taken or to be taken
in connection with the obligations of the Servicer or the Subservicers
contemplated herein or therein, or which would be likely to impair
materially the ability of the Servicer or the Subservicers to perform
their respective obligations hereunder;
(f) Neither this Agreement nor any statement, report, or other
document furnished by the Servicer or the Subservicers pursuant to this
Agreement or in connection with the transactions contemplated hereby,
including, without limitation, the sale or placement of the Notes,
contains any untrue statement of fact provided by or on behalf of
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the Servicer or omits to state a fact necessary to make the statements
provided by or on behalf of the Servicer contained herein or therein
not misleading:
(g) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement; and
(h) None of the Servicer or the Subservicers is an "investment
company" or a company "controlled by an investment company," within the
meaning of the Investment Company Act of 1940, as amended.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.01 shall survive the delivery of the
respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf
of the Indenture Trustee or to another custodian, as the case may be, and inure
to the benefit of the Indenture Trustee.
Section 3.02 Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Indenture Trustee, the Trust, the Collateral Agent and the Servicer that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey the Mortgage Loans and to execute, deliver and perform, and to
enter into and consummate transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate action
having been taken, and, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes or will
constitute the legal, valid and binding agreement of the Depositor,
enforceable against the Depositor in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority
or court is required for the execution, delivery and performance of or
compliance by the Depositor with this Agreement or the consummation by
the Depositor of any of the transactions contemplated hereby, except as
have been made on or prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this
Agreement, (i) conflicts or will conflict with or results or will
result in a breach of, or constitutes or will constitute a default or
results or will result in an acceleration under (A) the charter or
bylaws of the Depositor, or (B) of
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any term, condition or provision of any material indenture, deed of
trust, contract or other agreement or instrument to which the Depositor
or any of its subsidiaries is a party or by which it or any of its
subsidiaries is bound; (ii) results or will result in a violation of
any law, rule, regulation, order, judgment or decree applicable to the
Depositor of any court or governmental authority having jurisdiction
over the Depositor or its subsidiaries; or (iii) results in the
creation or imposition of any lien, charge or encumbrance which would
have a material adverse effect upon the Mortgage Loans or any documents
or instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the
knowledge of the Depositor, threatened, before any court,
administrative agency or other tribunal, and no notice of any such
action, which, in the Depositor's reasonable judgment, might materially
and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of
this Agreement; and
(g) The Depositor is not in default with respect to any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency that may materially
and adversely affect its performance hereunder.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.02 shall survive delivery of the
respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf
of the Indenture Trustee or to another custodian, as the case may be, and shall
inure to the benefit of the Indenture Trustee.
Section 3.03 Representations, Warranties and Covenants of the
Collateral Agent. The Collateral Agent hereby represents, warrants and covenants
to the Indenture Trustee, the Trust, the Servicer and the Depositor that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Collateral Agent is a national banking association
duly organized, validly existing and in good standing under the laws of
the United States of America;
(b) The Collateral Agent has the corporate power and authority
to execute, deliver and perform, and to enter into and consummate
transactions contemplated by this Agreement; and
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Collateral Agent, all requisite corporate
action having been taken, and, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
or will constitute the legal, valid and binding agreement of the
Collateral Agent, enforceable against the Collateral Agent in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
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It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.03 shall survive delivery of the
respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf
of the Indenture Trustee or to another custodian, as the case may be, and shall
inure to the benefit of the Indenture Trustee.
Section 3.04 Representations, Warranties and Covenants of the Indenture
Trustee. The Indenture Trustee hereby represents, warrants and covenants to the
Collateral Agent, the Trust, the Servicer and the Depositor that as of the date
of this Agreement or as of such date specifically provided herein:
(a) The Indenture Trustee is a banking corporation duly
organized, validly existing and in good standing under the laws of the
State of New York;
(b) The Indenture Trustee has the corporate power and
authority to execute, deliver and perform, and to enter into and
consummate transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Indenture Trustee, all requisite
corporate action having been taken, and, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes or will constitute the legal, valid and binding
agreement of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors
generally, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.04 shall survive delivery of the
respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf
of the Indenture Trustee or to another custodian, as the case may be.
ARTICLE IV.
THE MORTGAGE LOANS
Section 4.01 Representations and Warranties Concerning the Mortgage
Loans. With respect to each Mortgage Loan, the Depositor hereby assigns to the
Trust, pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the
representations, warranties and covenants of the Unaffiliated Seller and the
Originators set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated
Seller's Agreement. Such representations, warranties and covenants are made or
deemed to be made (x) with respect to the Initial Mortgage Loans, as of the
Initial Cut-Off Date and (y) with respect to the Subsequent Mortgage Loans, as
of the related Subsequent Cut-Off Date.
Section 4.02 Purchase and Substitution. (a) It is understood and agreed
that the representations and warranties set forth in Sections 3.01, 3.02 and
3.03 of the Unaffiliated
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Seller's Agreement shall survive the purchase by the Depositor of the Mortgage
Loans, the subsequent transfer thereof by the Depositor to the Trust, the
subsequent pledge thereof by the Trust to the Indenture Trustee, for the benefit
of the Noteholders and the Notes Insurer, and the delivery of the Notes to the
Noteholders, and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement or the Unaffiliated Seller's Agreement.
(b) Upon discovery by the Unaffiliated Seller, the Depositor, the
Servicer, any Subservicer, the Indenture Trustee, the Collateral Agent, the Note
Insurer or a Noteholder of a breach of any of the representations and warranties
in Sections 3.01, 3.02 or 3.03 of the Unaffiliated Seller's Agreement which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Noteholders or the Note Insurer, or which materially and adversely
affects the interests of the Note Insurer or the Noteholders in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (notwithstanding that such representation and warranty
was made to the Unaffiliated Seller's or the Originator's best knowledge), the
party discovering such breach or failure shall promptly (and in any event within
five (5) days of the discovery) give written notice thereof to the others.
Within sixty (60) days of the earlier of its discovery or its receipt of notice
of any breach of a representation or warranty, the Servicer shall, or shall
cause the Unaffiliated Seller or an Originator to, (a) promptly cure such breach
in all material respects, (b) purchase such Mortgage Loan on the next succeeding
Servicer Distribution Date, in the manner and at the price specified in Section
2.06(b) and this Section 4.02, or (c) remove such Mortgage Loan from the Trust
Estate (in which case it shall become a Deleted Mortgage Loan) and substitute
one or more Qualified Substitute Mortgage Loans in the manner specified in
Section 2.06(b) and this Section 4.02. The Collateral Agent shall give prompt
written notice to the Indenture Trustee, who shall deliver such notice to the
Note Insurer and the Rating Agencies of any repurchase or substitution made
pursuant to this Section 4.02 or Section 2.06(b).
(c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
cause the Unaffiliated Seller or an Originator, as applicable, to effect such
substitution by delivering to the Indenture Trustee a certification, in the form
attached hereto as Exhibit F, executed by a Servicing Officer, and the documents
described in Sections 2.05(a)(i)-(vi) for such Qualified Substitute Mortgage
Loan or Loans.
(d) The Servicer shall deposit in the Distribution Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Mortgage Loan or Loans on or before the date of
substitution will be retained by the Unaffiliated Seller. The Trust will own all
payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Unaffiliated Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Servicer shall give written notice to the Indenture Trustee, the Collateral
Agent and the Note Insurer that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the
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Qualified Substitute Mortgage Loan or Loans. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects.
(e) [Reserved];
(f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originators set forth in Sections 2.06 and 3.05 of
the Unaffiliated Seller's Agreement to, and the Servicer's obligation set forth
in this Section 4.02 to cause the Unaffiliated Seller and the Originators to,
cure, purchase or substitute for a defective Mortgage Loan, or to indemnify as
described in Section 3.05(g) of the Unaffiliated Seller's Agreement, constitute
the sole remedies of the Indenture Trustee, the Collateral Agent, the Note
Insurer and the Noteholders respecting a breach of the representations and
warranties of the Unaffiliated Seller and the Originators set forth in Sections
3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement.
(g) Pursuant to Section 3.05(g) of the Unaffiliated Seller's Agreement,
the Unaffiliated Seller and the Originators shall be obligated to indemnify the
Indenture Trustee, the Trust, the Owner Trustee, the Collateral Agent, the
Noteholders and the Note Insurer for any third party claims arising out of a
breach by the Unaffiliated Seller or the related Originator of representations
or warranties regarding the Mortgage Loans.
(h) Pursuant to Section 3.05(h) of the Unaffiliated Seller's Agreement,
the Unaffiliated Seller and each of the Originators shall be jointly and
severally responsible for any repurchase, cure or substitution obligation of the
Unaffiliated Seller or any of the Originators under this Agreement, the
Unaffiliated Seller's Agreement or the Indenture.
ARTICLE V.
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 The Servicer. The Servicer shall service and administer
the Mortgage Loans in accordance with the Accepted Servicing Practices and shall
have full power and authority to do any and all things not inconsistent
therewith in connection with such servicing and administration which it may deem
necessary or desirable subject to the limitations set forth in this Agreement.
The Indenture Trustee shall furnish the Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Without limiting the generality
of the foregoing, the Servicer shall continue, and is hereby authorized and
empowered by the Indenture Trustee, to execute and deliver, on behalf of itself,
the Noteholders and the Indenture Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, and to effect such
modifications, waivers, indulgences and other like matters as are in its
judgment necessary or desirable, with respect to the Mortgage Loans and the
Mortgaged Properties and the servicing and administration thereof. The Servicer
shall notify the Indenture Trustee of any such waiver, release, discharge,
modification, indulgence or other such matter by delivering to the Indenture
Trustee an Officer's Certificate certifying that such agreement is in compliance
with this Section 5.01 together with the original copy of any written agreement
or other document executed in connection therewith, all of which written
agreements or documents shall, for all purposes, be considered a part of the
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related Indenture Trustee's Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. Notwithstanding anything
in this Agreement to the contrary, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would decrease the Mortgage
Interest Rate, reduce or increase the principal balance, decrease the lien
priority, or change the final maturity date on or of such Mortgage Loan unless
(i) the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Servicer, imminent and (ii) the Note Insurer
consents to such modifications in writing; provided, however, that the Servicer
shall be permitted to extend the final maturity date on a Mortgage Loan by 180
days or less without the consent of the Note Insurer.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Indenture Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
Section 5.02 Collection of Certain Mortgage Loan Payments; Collection
Account. (a) The Servicer shall make its reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow Accepted Servicing Practices. Consistent with the foregoing, the Servicer
may in its discretion waive any assumption fees or other fees which may be
collected in the ordinary course of servicing such Mortgage Loans.
(b) The Servicer shall establish and maintain, in the name of the
Indenture Trustee, the Collection Account, in trust for the benefit of the
Noteholders and the Note Insurer. The Collection Account shall be established
and maintained as an Eligible Account.
(c) The Servicer shall deposit in the Collection Account any amounts
representing Monthly Payments on the Mortgage Loans due or to be applied as of a
date after the Cut-Off Date, and thereafter, on each Business Day (except as
otherwise permitted herein), the following payments and collections received or
made by it (other than in respect of principal collected and interest due on the
Mortgage Loans on or before the Cut-Off Date):
(i) payments of interest on the Mortgage Loans;
(ii) payments of principal of the Mortgage Loans;
(iii) the Loan Repurchase Price of Mortgage Loans repurchased
pursuant to Sections 2.06, 4.02 or 5.05;
(iv) the Substitution Adjustment received in connection with
Mortgage Loans for which Qualified Substitute Mortgage Loans are
received pursuant to Sections 2.06, 4.02 and 3.03;
(v) all Liquidation Proceeds; and
(vi) all Insurance Proceeds (including, for this purpose, any
amounts required to be deposited by the Servicer pursuant to Section
5.04 hereof).
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It is understood that the Servicer need not deposit amounts
representing fees, prepayment premiums, late payment charges or extension or
other administrative charges payable by Mortgagors, or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items.
(d) The Indenture Trustee shall invest any funds in the Collection
Account in Permitted Investments as directed by the Servicer, which shall mature
not later than the Business Day next preceding the Servicer Distribution Date
next following the date of such investment (except that any investment held by
the Indenture Trustee may mature on such Servicer Distribution Date) and shall
not be sold or disposed of prior to its maturity. All net income and gain
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to its withdrawal or order on a Servicer Distribution Date. The
Servicer shall deposit from its own funds the amount of any loss, to the extent
not offset by investment income or earnings, in the Collection Account upon the
realization of such loss.
Section 5.03 Permitted Withdrawals from the Collection Account. The
Servicer may make withdrawals from the Collection Account, on or prior to any
Servicer Distribution Date, for the following purposes:
(a) to reimburse the Servicer for Liquidation Expenses
theretofore incurred in respect of any Mortgage Loan in an amount not
to exceed the amount of the sum of the related Insurance Proceeds and
Liquidation Proceeds deposited in the Collection Account pursuant to
Section 5.02(c)(v)-(vi);
(b) to reimburse the Servicer for amounts expended by it
pursuant to Section 5.04 in good faith in connection with the
restoration of damaged property, in an amount not to exceed the amount
of the related Insurance Proceeds and Liquidation Proceeds (net of
withdrawals pursuant to Section 5.03(a)) and amounts representing
proceeds of other insurance policies covering the property subject to
the related Mortgage deposited in the Collection Account pursuant to
Section 5.02(c)(v)-(vi);
(c) to pay to the Unaffiliated Seller amounts received in
respect of any Defective Mortgage Loan purchased or substituted for by
the Unaffiliated Seller to the extent that the distribution of any such
amounts on the Servicer Distribution Date upon which the proceeds of
such purchase are distributed would make the total amount distributed
in respect of any such Mortgage Loan on such Servicer Distribution Date
greater than the Loan Repurchase Price or the Substitution Adjustment
therefor;
(d) to reimburse the Servicer for unreimbursed Servicing
Advances, without interest, with respect to the Mortgage Loans for
which it has made a Servicing Advance, from subsequent collections with
respect to interest on such Mortgage Loans and from Liquidation
Proceeds, Insurance Proceeds and/or the Loan Repurchase Price or
Substitution Adjustment of or relating to such Mortgage Loans;
(e) to reimburse the Servicer for any Periodic Advances
determined in good faith to have become Nonrecoverable Advances, such
reimbursement to be made from any funds in the Collection Account;
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(f) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance
with a final, nonappealable order of a court having competent
jurisdiction;
(g) to withdraw any funds deposited in the Collection Account
that were not required to be deposited therein; and
(h) to pay the Servicer the Servicing Compensation pursuant to
Section 5.08 hereof to the extent not retained or paid.
The Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of accounting for withdrawals from the Collection
Account pursuant to this Section 5.03.
Section 5.04 Hazard Insurance Policies; Property Protection Expenses.
(a) The Servicer shall cause to be maintained for each Mortgage Loan a hazard
insurance policy with extended coverage which contains a standard mortgagee's
clause with an appropriate endorsement in an amount equal to the lesser of (x)
the maximum insurable value of the related Mortgaged Property or (y) the sum of
the Principal Balance of such Mortgage Loan plus the outstanding balance of any
mortgage loan senior to such Mortgage Loan, but in no event shall such amount be
less than is necessary to prevent the Mortgagor from becoming a coinsurer
thereunder. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the sum of the Principal Balance of such Mortgage Loan and the
principal balance of any mortgage loan senior to such Mortgage Loan at the time
of such foreclosure plus accrued interest and the good-faith estimate of the
Servicer of related Liquidation Expenses to be incurred in connection therewith.
Amounts collected by the Servicer under any such policies shall be deposited in
the Collection Account to the extent that they constitute Liquidation Proceeds
or Insurance Proceeds. Each hazard insurance policy shall contain a standard
mortgage clause naming the Originator, its successors and assigns, as mortgagee.
The Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or flood or other additional insurance and shall be under no
obligation itself to maintain any such additional insurance on property acquired
in respect of a Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance.
(b) If the Servicer shall obtain and maintain a blanket policy issued
by an insurer acceptable to the Rating Agencies and the Note Insurer insuring
against hazard losses on all of the Mortgage Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 5.04(a), it
being understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
5.04(a), and there shall have been a loss which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable under
the blanket policy because of such deductible clause.
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(c) If the Mortgaged Property or REO Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area (and if the flood insurance policy referenced herein has been made
available), the Servicer will cause to be maintained flood insurance in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the sum of the Principal Balance of the related Mortgage Loan and the principal
balance of the related first lien, if any, (ii) the maximum insurable value of
the related Mortgaged Property, and (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
Section 5.05 Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall exercise its right to accelerate the maturity of the related
Mortgage Loan and require that the Principal Balance thereof be paid in full on
or prior to such conveyance by the Mortgagor under any "due-on-sale" clause
applicable thereto. If such "due-on-sale" clause, by its terms, is not operable
or the Servicer is prevented, as provided in the last paragraph of this Section
5.05, from enforcing any such clause, the Servicer is authorized, subject to the
consent of the Note Insurer, to take or enter into an assumption and
modification agreement from or with the Person to whom such property has been or
is about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and the Mortgagor remains liable thereon or, if the Servicer in
its reasonable judgment finds it appropriate, is released from liability
thereon. The Servicer shall notify the Indenture Trustee and the Collateral
Agent that any assumption and modification agreement has been completed by
delivering to the Indenture Trustee, the Collateral Agent and the Note Insurer
an Officer's Certificate certifying that such agreement is in compliance with
this Section 5.05 together with the original copy of such assumption and
modification agreement. Any such assumption and modification agreement shall,
for all purposes, be considered a part of the related Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. In
connection with any such agreement, the then current Mortgage Interest Rate
thereon shall not be increased or decreased. Any fee collected by the Servicer
for entering into any such agreement will be retained by the Servicer as
additional servicing compensation. At its sole election, the Servicer may
purchase from the Trust any Mortgage Loan that has been assumed in accordance
with this Section 5.05 within one month after the date of such assumption at a
price equal to the greater of (i) the fair market value of such Mortgage Loan
(as determined by the Servicer in its good faith judgment) and (ii) the Loan
Repurchase Price. Such amount, if any, shall be deposited into the Collection
Account in the Due Period in which such repurchase is made.
Notwithstanding the foregoing paragraph of this Section 5.05 or any
other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan, or transfer of any Mortgaged Property without
the assumption thereof, by operation of law or any assumption or transfer which
the Servicer reasonably believes it may be restricted by law from preventing for
any reason whatsoever.
Section 5.06 Realization Upon Defaulted Mortgage Loans. (a) The
Servicer shall foreclose upon or otherwise comparably convert to ownership
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no
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satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 5.02(a). Prior to conducting any sale in a foreclosure
proceeding or accepting a deed-in-lieu of foreclosure with respect to any
Mortgaged Property, the Servicer shall cause an environmental review to be
performed, in accordance with Accepted Servicing Practices on the Mortgaged
Property by a company such as Equifax, Inc. or Toxicheck. If such review reveals
that the Mortgaged Property has on it, under it or is near hazardous or toxic
material or waste or reveals any other environmental problem, the Servicer shall
not foreclose or accept a deed-in-lieu of foreclosure, without the prior written
consent of the Note Insurer. In connection with such foreclosure or other
conversion, the Servicer shall follow such practices (including, in the case of
any default on a related senior mortgage loan, the advancing of funds to correct
such default) and procedures which are consistent with Accepted Servicing
Practices as it shall deem necessary or advisable and as shall be normal and
usual in its general first and second mortgage loan servicing activities. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the
correction of any default on a related senior mortgage loan or restoration of
any property unless, in the reasonable judgment of the Servicer, such expenses
will be recoverable from Liquidation Proceeds.
(b) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, or to its nominee, on behalf of
Noteholders and the Note Insurer.
(c) Any Insurance Proceeds or Liquidation Proceeds received with
respect to a Mortgage Loan or REO Property (other than received in connection
with a purchase by the Trust Certificateholders of all the Mortgage Loans and
REO Properties in the Trust Estate pursuant to Section 10.01 of the Indenture)
will be applied in the following order of priority, in each case to the extent
of Available Funds: first, to pay the Servicer any accrued and unpaid Servicing
Fees relating to such Mortgage Loan; second, to reimburse the Servicer or any
Subservicer for any related unreimbursed Servicing Advances, and any related
unreimbursed Periodic Advances theretofore funded by the Servicer or any
Subservicer from its own funds, in each case, with respect to the related
Mortgage Loan; third, to accrued and unpaid interest on the Mortgage Loan, at
the Mortgage Interest Rate (or at such lesser rate as may be in effect for such
Mortgage Loan pursuant to application of the Civil Relief Act) on the Principal
Balance of such Mortgage Loan, to the date such Mortgage Loan is determined to
be a Liquidated Mortgage Loan if it is a Liquidated Mortgage Loan, or to the Due
Date in the Due Period prior to the Distribution Date on which such amounts are
to be distributed if such determination has not yet been made, minus any unpaid
Servicing Fees with respect to such Mortgage Loan; fourth, to the extent of the
Principal Balance of the Mortgage Loan outstanding immediately prior to the
receipt of such proceeds, as a recovery of principal of the related Mortgage
Loan; and fifth, to any prepayment or late payment charges or penalty interest
payable in connection with the receipt of such proceeds and to all other fees
and charges due and payable with respect to such Mortgage Loan. The amount of
any gross Insurance Proceeds and Liquidation Proceeds received with respect to
any Mortgage Loan or REO Property minus the amount of any unreimbursed Servicing
Advances, unreimbursed Periodic Advances or unpaid Servicing Fees, in each case,
with respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with
respect to such Mortgage Loan or REO Property.
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Section 5.07 Indenture Trustee to Cooperate. Upon the payment in full
of the Principal Balance of any Mortgage Loan, the Servicer will notify the
Indenture Trustee and the Collateral Agent by a certification (which
certification shall include a statement to the effect that all amounts received
in connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 5.02 have been so deposited) of a
Servicing Officer. Upon any such payment in full, the Servicer is authorized to
execute, pursuant to the authorization contained in Section 5.01, an instrument
of satisfaction regarding the related Mortgage, which instrument of satisfaction
shall be recorded by the Servicer if required by applicable law and be delivered
to the Person entitled thereto, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction shall be reimbursed
from the Collection Account. From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, the Collateral Agent shall, upon
request of the Servicer and delivery to the Collateral Agent of a Request for
Release signed by a Servicing Officer, release the related Mortgage File to the
Servicer and shall execute such documents as shall be necessary for the
prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return the Indenture Trustee's Mortgage File to the Collateral Agent
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Request for Release shall be
released by the Collateral Agent to the Servicer.
Section 5.08 Servicing Compensation; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall be entitled to receive,
and the Indenture Trustee shall pay, out of collections on the Mortgage Loans
for the Due Period, as servicing compensation for such Due Period, an amount
(the "Monthly Servicing Fee") equal to the product of one-twelfth of the
Servicing Fee Rate and the aggregate outstanding Principal Balance of each Pool
of Mortgage Loans as of the beginning of such Due Period. Additional servicing
compensation in the form of assumption fees, late payment charges or extension
and other administrative charges shall be retained by the Servicer. The Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder (including payment of all fees and expenses of the
Subservicer, payment of the Indenture Trustee Fee and payment of the Collateral
Agent Fee to the extent that monies in the Collection Account are insufficient
therefor, as provided in Section 6.16 of the Indenture and Section 9.05 hereof,
and all other fees and expenses not expressly stated hereunder to be payable by
or from another source) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section 5.09 Annual Statement as to Compliance. The Servicer will
deliver to the Indenture Trustee, the Collateral Agent, the Rating Agencies, the
Note Insurer and each Noteholder, on or before April 30 of each year, beginning
April 30, 2000, an Officer's Certificate of the Servicer stating that (a) a
review of the activities of the Servicer during the preceding calendar year and
of its performance under this Agreement has been made under such officer's
supervision and (b) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its material obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
Section 5.10 Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning April 30, 2000, the Servicer at
its expense shall cause a
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firm of independent public accountants that is a member of the American
Institute of Certified Public Accountants (who may also render other services to
the Servicer) to furnish a report to the Indenture Trustee, the Collateral
Agent, the Rating Agencies and each Noteholder to the effect that such firm has
examined certain documents and records relating to the servicing of mortgage
loans under servicing agreements (including this Agreement) substantially
similar to this Agreement, and that such examination, which has been conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers (to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in such agreements), has
disclosed no items of noncompliance with the provisions of this Agreement which,
in the opinion of such firm, are material, except for such items of
noncompliance as shall be set forth in such report.
Section 5.11 Access to Certain Documentation. The Servicer shall permit
the designated agents or representatives of each Noteholder, the Note Insurer,
the Collateral Agent and the Indenture Trustee (i) to examine and make copies of
and abstracts from all books, records and documents (including computer tapes
and disks) in the possession or under the control of the Servicer relating to
the Mortgage Loans and (ii) to visit the offices and properties of the Servicer
for the purpose of examining such materials and to discuss matters relating to
the Mortgage Loans and the Servicer's performance under this Agreement with any
of the officers or employees of the Servicer having knowledge thereof and with
the independent public accountants of the Servicer (and by this provision the
Servicer authorizes its accountants to discuss their respective finances and
affairs), all at such reasonable times, as often as may be reasonably requested
and without charge to such Noteholder, the Note Insurer, the Collateral Agent or
the Indenture Trustee.
Section 5.12 Maintenance of Fidelity Bond. The Servicer shall during
the term of its service as Servicer maintain in force a fidelity bond and errors
and omissions insurance in respect of its officers, employees or agents. Such
bond and insurance shall comply with the requirements from time to time of the
FNMA for Persons performing servicing for mortgage loans purchased by such
association.
Section 5.13 The Subservicers. The parties acknowledge that the
Servicer intends to appoint the Subservicers as the Servicer's agents for the
purpose of servicing on the Servicer's behalf such of the Mortgage Loans as were
originated in the States of New Jersey, Pennsylvania and New York. The Servicer
agrees to cause the Subservicers to service such Mortgage Loans in a manner
consistent with the Accepted Servicing Practices set forth in this Agreement,
and agrees that receipt by the Subservicers of any and all amounts which by the
terms hereof are required to be deposited in the Collection Account shall
constitute receipt thereof by the Servicer for all purposes hereof as of the
date so received by the Subservicers. Notwithstanding such designation of the
Subservicers, the Servicer agrees that it is, and it shall remain, fully
obligated under the terms hereof as Servicer with respect to all such Mortgage
Loans, and nothing herein shall relieve or release the Servicer from its
obligations to the other parties hereto to service such Mortgage Loans in the
manner provided in this Agreement.
Section 5.14 Reports to the Indenture Trustee; Collection Account
Statements. Not later than fifteen (15) days after each Distribution Date, the
Servicer shall provide to the Indenture Trustee, the Collateral Agent and the
Note Insurer a statement, certified by a Servicing
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Officer, setting forth the status of the Collection Account as of the close of
business on the related Distribution Date, stating that all distributions
required by this Agreement to be made by the Servicer on behalf of the Indenture
Trustee have been made (or if any required distribution has not been made by the
Servicer, specifying the nature and status thereof) and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Collection Account for each category of deposit specified in Section 5.02
and each category of withdrawal specified in Section 5.03 and the aggregate of
deposits into the Collection Account as specified in Section 6.01. Such
statement shall also state the aggregate unpaid principal balance of all the
Mortgage Loans as of the close of business on the last day of the month
preceding the month in which such Distribution Date occurs. Copies of such
statement shall be provided by the Indenture Trustee to any Noteholder upon
request.
Section 5.15 Optional Purchase of Defaulted Mortgage Loans. (a) Subject
to Section 5.15(b), the Unaffiliated Seller or any Affiliate of the Unaffiliated
Seller, in its sole discretion, shall have the right to elect (by written notice
sent to the Servicer, the Indenture Trustee and the Note Insurer), but shall not
be obligated, to purchase for its own account from the Trust any Mortgage Loan
which is ninety (90) days or more Delinquent in the manner and at the Loan
Purchase Price (except that the amount described in clause (ii) of the
definition of Loan Purchase Price shall in no case be net of the Servicing Fee).
The purchase price for any Mortgage Loan purchased hereunder shall be deposited
in the Collection Account and the Collateral Agent, upon the Indenture Trustee's
receipt of such deposit, shall release or cause to be released to the purchaser
of such Mortgage Loan the related Indenture Trustee's Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Indenture Trustee's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Indenture Trustee, the Collateral Agent, the Note
Insurer or the Noteholders with respect thereto.
(b) After the Unaffiliated Seller or an Affiliate of the Unaffiliated
Seller has repurchased defaulted Mortgage Loans in a Aggregate Principal Balance
equal to 1% of the Maximum Collateral Amount, then notwithstanding the
foregoing, unless the Note Insurer consents, any such Unaffiliated Seller or
Affiliate of the Unaffiliated Seller may only exercise its option pursuant to
this Section 5.15 with respect to the Mortgage Loan or Mortgage Loans that have
been Delinquent for the longest period at the time of such repurchase. Any
request by the Unaffiliated Seller or Affiliate to the Note Insurer for consent
to repurchase Mortgage Loans that are not the most Delinquent shall be
accompanied by a description of the Mortgage Loans that have been Delinquent
longer than the Mortgage Loan or Mortgage Loans the Unaffiliated Seller or such
Affiliate proposes to repurchase. If the Note Insurer fails to respond to such
request within ten (10) Business Days after receipt thereof, the Unaffiliated
Seller or such Affiliate may repurchase the Mortgage Loan or Mortgage Loans
proposed to be repurchased without the consent of, or any further action by, the
Note Insurer. Notice to the Note Insurer shall be delivered in accordance with
the terms of the Insurance and Indemnity Agreement.
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Section 5.16 Reports to be Provided by the Servicers. (a) Two (2)
Business Days prior to each Servicer Distribution Date, the Servicer shall
deliver to the Indenture Trustee a Servicer Remittance Report for such
Distribution Date, setting forth the information required in the definition of
"Indenture Trustee's Remittance Report."
(b) On each Servicer Distribution Date, the Servicer shall deliver to
the Indenture Trustee and the Note Insurer (via E-mail at [email protected]) the
following information with respect to all Mortgage Loans as well as a break out
as to (x) consumer purpose and business purpose Mortgage Loans and (y) each
Mortgage Loan Group, in each case, as of the close of business on the last
Business Day of the prior calendar month (except as otherwise provided in clause
(v) below):
(i) the total number of Mortgage Loans and the Aggregate
Principal Balances thereof, together with the number, Aggregate
principal balances of such Mortgage Loans and the percentage (based on
the Aggregate Principal Balances of the Mortgage Loans) of the
Aggregate Principal Balances of such Mortgage Loans to the Aggregate
Principal Balance of all Mortgage Loans (A) 31-59 days Delinquent, (B)
60-89 days Delinquent and (C) 90 or more days Delinquent;
(ii) the number, Aggregate Principal Balances of all Mortgage
Loans and percentage (based on the Aggregate Principal Balances of the
Mortgage Loans) of the Aggregate Principal Balances of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans in
foreclosure proceedings and the number, Aggregate Principal Balances of
all Mortgage Loans and percentage (based on the Aggregate Principal
Balances of the Mortgage Loans) of any such Mortgage Loans also
included in any of the statistics described in the foregoing clause
(i);
(iii) the number, Aggregate Principal Balances of all Mortgage
Loans and percentage (based on the Aggregate Principal Balances of the
Mortgage Loans) of the Aggregate Principal Balances of such Mortgage
Loans to the Aggregate Principal Balance of all Mortgage Loans relating
to Mortgagors in bankruptcy proceedings and the number, Aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
Aggregate Principal Balances of the Mortgage Loans) of any such
Mortgage Loans also included in any of the statistics described in the
foregoing clause (i);
(iv) the number, Aggregate Principal Balances of all Mortgage
Loans and percentage (based on the Aggregate Principal Balances of the
Mortgage Loans) of the Aggregate Principal Balances of such Mortgage
Loans to the Aggregate Principal Balance of all Mortgage Loans relating
to REO Properties and the number, Aggregate Principal Balances of all
Mortgage Loans and percentage (based on the Aggregate Principal
Balances of the Mortgage Loans) of any such Mortgage Loans also
included in any of the statistics described in the foregoing clause
(i);
(v) the weighted average Mortgage Interest Rate as of the Due
Date occurring in the Due Period related to such Distribution Date;
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(vi) the weighted average remaining term to stated maturity of
all Mortgage Loans;
(vii) the book value of any REO Property;
(viii) the Cumulative Loan Losses and the aggregate Cumulative
Loan Losses since the Closing Date; and
(ix) the total number of Mortgage Loans and the Pool Principal
Balance.
(c) In connection with the transfer of the Notes, the Indenture Trustee
on behalf of any Noteholder may request that the Servicer make available to any
prospective Noteholder annual audited financial statements of the Servicer for
one or more of the most recently completed five (5) fiscal years for which such
statements are publicly available, which request shall not be unreasonably
denied or unreasonably delayed. Such annual audited financial statements also
shall be made available to the Note Insurer upon request.
(d) The Servicer also agrees to make available on a reasonable basis to
the Note Insurer or any prospective Noteholder a knowledgeable financial or
accounting officer for the purpose of answering reasonable questions respecting
recent developments affecting the Servicer or the financial statements of the
Servicer and to permit the Note Insurer or any prospective Noteholder to inspect
the Servicer's servicing facilities during normal business hours for the purpose
of satisfying the Note Insurer or such prospective Noteholder that the Servicer
has the ability to service the Mortgage Loans in accordance with this Agreement.
Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid
Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be entitled to
receive with respect to each Mortgage Loan and each Distribution Date shall be
offset on such Distribution Date by an amount equal to the Prepayment Interest
Shortfall with respect to such Mortgage Loan to the extent that it is the
subject of Principal Prepayments during the month preceding the month of such
Distribution Date. The amount of any offset against the Monthly Servicing Fee
with respect to any Distribution Date under this Section 5.17 shall be limited
to the Monthly Servicing Fee otherwise payable to the Servicer (without
adjustment on account of Prepayment Interest Shortfalls) with respect to such
Mortgage Loan, and the rights of the Noteholders to the offset of the aggregate
Prepayment Interest Shortfalls against the Monthly Servicing Fee shall not be
cumulative.
Section 5.18 Periodic Advances; Special Advance. (a) If, on any
Servicer Distribution Date, the Servicer determines that any Monthly Payments
due on the Due Date immediately preceding such Servicer Distribution Date have
not been received as of the end of the related Due Period, the Servicer shall
determine the amount of any Periodic Advance required to be made with respect to
the related Distribution Date. The Servicer shall, one (1) Business Day after
such Servicer Distribution Date, deliver a magnetic tape or diskette to the
Indenture Trustee indicating the payment status of each Mortgage Loan as of such
Servicer Distribution Date. The Servicer shall include in the amount to be
deposited in the Collection Account on such Servicer Distribution Date an amount
equal to the Periodic Advance, if any, which deposit may be made in whole or in
part from funds in the Collection Account being held for future distribution or
withdrawal on or in connection with Distribution Dates in subsequent months. Any
funds being held
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for future distribution to Noteholders and so used shall be replaced by the
Servicer from its own funds by deposit in the Collection Account on or before
the Business Day preceding any such future Servicer Distribution Date to the
extent that funds in the Collection Account on such Servicer Distribution Date
shall be less than payments to Noteholders required to be made on such date.
The Servicer shall designate on its records the specific Mortgage Loans
and related installments (or portions thereof) as to which such Periodic Advance
shall be deemed to have been made, such determination being conclusive for
purposes of withdrawals from the Collection Account pursuant to Section 5.03
hereof.
(b) In addition to the Periodic Advances the Servicer shall make
special advances ("Special Advances") on the Servicer Distribution Date
occurring in April 1999, of $140,507.43, with respect to interest on Mortgage
Loans in Pool I not having their first payment due until after March 1999 and
$139,098.50 with respect to interest on Mortgage Loans in Pool II not having
their first payment due until after March 1999. In addition to the Periodic
Advances, the Servicer shall make a Special Advance on the Servicer Distribution
Date occurring in May 1999, of $1,893.23, with respect to interest on Mortgage
Loans in Pool I not having their first payment due until after April 1999. The
Special Advances shall be made without regard to recoverability, and shall not
be reimbursable. In no event shall the Indenture Trustee, as successor Servicer,
be liable for the payment of the Special Advances.
On each Subsequent Transfer Date, the Servicer will make the Special
Advance set forth in the related subsequent Pledge Agreement.
Section 5.19 Indemnification; Third Party Claims. (a) The Servicer
agrees to indemnify and to hold each of the Trust, the Owner Trustee, the
Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller,
the Note Insurer and each Noteholder harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, fees and expenses that the Trust, the Owner Trustee, the
Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller,
the Note Insurer and any Noteholder may sustain in any way related to the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement and the other Basic Document. Each
indemnified party and the Servicer shall immediately notify the other
indemnified parties if a claim is made by a third party with respect to this
Agreement and the other Basic Documents, and the Servicer shall assume the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Trust, the Owner Trustee,
the Depositor, the Servicer, the Indenture Trustee, the Collateral Agent, the
Unaffiliated Seller, the Note Insurer and/or a Noteholder in respect of such
claim. The Indenture Trustee shall reimburse the Servicer in accordance with
Section 5.08 hereof, out of collections on the Mortgage Loans for the Due
Period, for all amounts advanced by it pursuant to the preceding sentence except
to the extent that the claim relates directly to the failure of the Servicer to
service and administer the Mortgages in compliance with the terms of this
Agreement; provided, that the Servicer's indemnity hereunder shall not be in any
manner conditioned on the availability of funds for such reimbursement. The
obligations of the Servicer under this Section 5.19 arising
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prior to any resignation or termination of the Servicer hereunder shall survive
the resignation or termination of the Servicer
(b) The Indenture Trustee may, if necessary, reimburse the Servicer
from amounts otherwise distributable on the related Trust Certificates for all
amounts advanced by it pursuant to Section 4.04(a)(ii) of the Unaffiliated
Seller's Agreement, except to the extent that the claim relates directly to the
failure of the Servicer, if it is the Unaffiliated Seller, or is an Affiliate of
the Unaffiliated Seller, to perform its obligations to service and administer
the Mortgages in compliance with the terms of the Unaffiliated Seller's
Agreement and this Agreement, or the failure of the Unaffiliated Seller to
perform its duties in compliance with the terms of this Agreement.
(c) The Indenture Trustee shall reimburse the Unaffiliated Seller from
amounts otherwise distributable on the related Trust Certificates for all
amounts advanced by the Unaffiliated Seller pursuant to the second sentence of
Section 4.04(a)(ii) of the Unaffiliated Seller's Agreement except when the
relevant claim relates directly to the failure of the Unaffiliated Seller to
perform its duties in compliance with the terms of the Unaffiliated Seller's
Agreement.
Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or
Consolidation of the Servicer. (a) The Servicer will keep in full effect its
existence, rights and franchises as a corporation, will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement and will
otherwise operate its business so as to cause the representations and warranties
under Section 3.01 to be true and correct at all times under this Agreement.
(b) Any Person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, or any Person succeeding to the business of
the Servicer, shall be an established mortgage loan servicing institution that
has a net worth of at least $15,000,000 and is a Permitted Transferee, and in
all events shall be the successor of the Servicer without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Servicer shall send notice
of any such merger or consolidation to the Owner Trustee, the Indenture Trustee,
the Collateral Agent and the Note Insurer.
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to
Resign. The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Trust, the Depositor, the Servicer, the Unaffiliated Seller, the Note Insurer,
the Collateral Agent and the Indenture Trustee or upon the determination that
the Servicer's duties hereunder are no longer permissible under applicable law
and that such incapacity cannot be cured by the Servicer without incurring, in
the reasonable judgment of the Note Insurer, unreasonable expense. Any such
determination that the Servicer's duties hereunder are no longer permissible
under applicable law permitting the resignation of the Servicer shall be
evidenced by a written Opinion of Counsel (who may be counsel for the Servicer)
to such effect delivered to the Indenture Trustee, the Collateral Agent, the
Unaffiliated Seller, the Trust, the Depositor and the Note Insurer. No such
resignation shall become effective
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until the Indenture Trustee or a successor appointed in accordance with the
terms of this Agreement has assumed the Servicer's responsibilities and
obligations hereunder in accordance with Section 7.02. The Servicer shall
provide the Indenture Trustee, the Collateral Agent, the Rating Agencies and the
Note Insurer with 30 days' prior written notice of its intention to resign
pursuant to this Section 5.21.
Section 5.22 Periodic Filings with the Securities and Exchange
Commission; Additional Information. The Indenture Trustee shall prepare or cause
to be prepared for filing with the Commission (other than the initial Current
Report on Form 8-K to be filed by the Depositor in connection with the issuance
of the Notes) any and all reports, statements and information respecting the
Trust and/or the Notes required to be filed, and shall solicit any and all
proxies of the Noteholders whenever such proxies are required to be solicited,
pursuant to the Securities Exchange Act of 1934, as amended. The Depositor shall
promptly file, and exercise its reasonable best efforts to obtain a favorable
response to, no-action requests with, or other appropriate exemptive relief
from, the Commission seeking the usual and customary exemption from such
reporting requirements granted to issuers of securities similar to the Notes.
Fees and expenses incurred by the Indenture Trustee in connection with the
foregoing shall be reimbursed pursuant to Section 6.16 of the Indenture and
shall not be paid by the Trust.
The Servicer and the Depositor each agree to promptly furnish to the
Indenture Trustee, from time to time upon request, such further information,
reports and financial statements as the Indenture Trustee deems appropriate to
prepare and file all necessary reports with the Commission.
ARTICLE VI.
APPLICATION OF FUNDS
Section 6.01 Deposits to the Distribution Account. On each Servicer
Distribution Date, the Servicer shall cause to be deposited in the Distribution
Account, from funds on deposit in the Collection Account, (a) an amount equal to
the Servicer Remittance Amount and (b) Net Foreclosure Profits, if any with
respect to the related Distribution Date, minus any portion thereof payable to
the Servicer pursuant to Section 5.03. On each Servicer Distribution Date, the
Servicer shall also deposit into the Distribution Account any Periodic Advances
with respect to the related Distribution Date calculated in accordance with
Section 5.18 and any amounts required to be deposited in connection with a
Subsequent Mortgage Loan pursuant to Section 2.14(b) of the Indenture; on the
Servicer Distribution Date occurring in April 1999, the Servicer also will
deposit the related Special Advance pursuant to Section 5.18(b).
Section 6.02 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Indenture Trustee
pursuant to this Agreement, including (a) all payments due on the Mortgage Loans
in accordance with the respective terms and conditions of such Mortgage Loans
and required to be paid over to the Indenture Trustee by the Servicer or by any
Subservicer and (b) Insured Payments. The Indenture Trustee shall hold all such
money and property received by it, as part of the Trust Estate and shall apply
it as provided in the Indenture.
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Section 6.03 Application of Principal and Interest. In the event that
Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the
Principal Balance of the related Mortgage Loan plus accrued interest thereon, or
any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage
Loan, such Net Liquidation Proceeds or partial payment shall be applied to
payment of the related Mortgage Note as provided therein, and if not so
provided, first to interest accrued at the Mortgage Interest Rate and then to
principal.
Section 6.04 Information Concerning the Mortgage Loans. No later than
12:00 noon Pennsylvania time on the fourth Business Day preceding each
Distribution Date, the Servicer shall deliver to the Indenture Trustee a report
in computer-readable form containing such information as to each Mortgage Loan
and as to each Mortgage Loan Pool as of such Distribution Date and such other
information as the Indenture Trustee shall reasonably require.
Section 6.05 Compensating Interest. Not later than the close of
business on the third Business Day prior to the Distribution Date, the Servicer
shall remit to the Indenture Trustee (without right to reimbursement therefor)
for deposit into the related Distribution Account, an amount equal to, for each
Mortgage Loan, the lesser of (a) the Prepayment Interest Shortfall for such
Mortgage Loan for the related Distribution Date resulting from Principal
Prepayments during the related Due Period and (b) its Monthly Servicing Fees
with respect to such Mortgage Loan received in the related Due Period and shall
not have the right to reimbursement therefor (the "Compensating Interest").
Section 6.06 Effect of Payments by the Note Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on the Notes which is made with moneys received
pursuant to the terms of the Note Insurance Policy shall not be considered
payment of the Notes from the Trust Estate. The Depositor, the Servicer, the
Trust, the Collateral Agent and the Indenture Trustee acknowledge and agree,
that without the need for any further action on the part of the Note Insurer,
the Depositor, the Servicer, the Trust, the Collateral Agent, the Indenture
Trustee or the Note Registrar (a) to the extent the Note Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Holders of such Notes, the Note Insurer will be fully subrogated to, and
each Noteholder, the Servicer, the Depositor, the Trust, the Collateral Agent
and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the
fullest extent permitted by law, the rights of such Holders to receive such
principal and interest from the Trust Estate, including, without limitation, any
amounts due to the Noteholders in respect of securities law violations arising
from the offer and sale of the Notes, and (b) the Note Insurer shall be paid
such amounts from the sources and in the manner provided herein for the payment
of such amounts and as provided in the Insurance Agreement. The Indenture
Trustee, the Collateral Agent and the Servicer shall cooperate in all respects
with any reasonable request by the Note Insurer for action to preserve or
enforce the Note Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.
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ARTICLE VII.
SERVICER DEFAULT
Section 7.01 Servicer Events of Default. (a) The following events shall
each constitute a "Servicer Event of Default" hereunder:
(i) any failure by the Servicer to remit to the Indenture
Trustee any payment required to be made by the Servicer under the terms
of this Agreement (other than Servicing Advances covered by clause (ii)
below), which continues unremedied for one (1) Business Day after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer and the Note Insurer
by the Indenture Trustee or to the Servicer and the Indenture Trustee
by the Note Insurer or Noteholders of Notes evidencing Percentage
Interests of at least 25%;
(ii) the failure by the Servicer to make any required
Servicing Advance, which failure continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Indenture Trustee or to the Servicer and the
Indenture Trustee by any Noteholder or the Note Insurer;
(iii) any failure on the part of the Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in this Agreement, or
the failure of any representation and warranty made pursuant to Section
3.01(a) hereof to be true and correct which continues unremedied for a
period of thirty (30) days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Indenture Trustee or to the Servicer and the
Indenture Trustee by any Noteholder or the Note Insurer;
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or for
the appointment of a conservator or receiver or liquidation in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree
or order shall have remained in force, undischarged or unstayed for a
period of sixty (60) days;
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property;
(vi) the Servicer shall admit in writing its inability
generally to pay its debts as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations;
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(vii) the Note Insurer shall notify the Indenture Trustee of
any "event of default" under the Insurance Agreement;
(viii) if on any Distribution Date the Rolling Six Month
Delinquency Rate exceeds 12.75% of the aggregate outstanding Principal
Balance for the Mortgage Loans;
(ix) if on any Distribution Date, commencing in March 2000,
the Twelve Month Loss Amount exceeds 1.75% of the aggregate outstanding
Principal Balance for the Mortgage Loans, as of the close of business
on the first day of the twelfth preceding calendar month;
(x) if (a) on any Distribution Date occurring before March 1,
2000, the aggregate Cumulative Loan Losses since the Initial Cut-Off
Date exceed 1.00% of the Original Pool Principal Balance, (b) on any
Distribution Date on or after March 1, 2000 and before March 1, 2001,
the aggregate Cumulative Loan Losses since the Initial Cut-Off Date
exceed 1.50% of the Original Pool Principal Balance, (c) on any
Distribution Date on or after March 1, 2001 and before March 1, 2002,
the aggregate Cumulative Loan Losses since the Initial Cut-Off Date
exceed 2.25% of the Original Pool Principal Balance, (d) on any
Distribution Date on or after March 1, 2002 and before December 1,
2003, the aggregate Cumulative Loan Losses since the Initial Cut-Off
Date exceed 3.00% of the Original Pool Principal Balance, or (e) on any
Distribution Date on or after March 1, 2003, the aggregate Cumulative
Loan Losses since the Initial Cut-Off Date exceed 3.75% of the Original
Pool Principal Balance;
(xi) the occurrence of an Event of Default under the
Indenture; or
(xii) a Servicer Extension Notice shall not have been
delivered as set forth in Section 8.04 hereof.
(b) So long as a Servicer Event of Default shall have occurred and not
have been remedied: (x) with respect solely to Section 7.01(a)(i), if such
payment is in respect of Periodic Advances or Compensating Interest owing by the
Servicer and such payment is not made by 12:00 noon New York time on the second
Business Day prior to the applicable Distribution Date, the Indenture Trustee,
upon receipt of written notice or discovery by a Responsible Officer of such
failure, shall give immediate telephonic and facsimile notice of such failure to
a Servicing Officer of the Servicer and to the Note Insurer and the Indenture
Trustee shall, with the consent of the Note Insurer, terminate all of the rights
and obligations of the Servicer under this Agreement and the Indenture Trustee,
or a successor Servicer appointed in accordance with Section 7.02, shall
immediately make such Periodic Advance or payment of Compensating Interest and
assume, pursuant to Section 7.02 hereof, the duties of a successor Servicer; (y)
with respect to that portion of Section 7.01(a)(i) not referred to in the
preceding clause (x) and with respect to clauses (ii), (iii), (iv), (v), (vi)
and (vii) of Section 7.01, the Indenture Trustee shall, but only at the
direction of the Note Insurer or the Majority Noteholders, by notice in writing
to the Servicer and a Responsible Officer of the Indenture Trustee and subject
to the prior written consent of the Note Insurer, in the case of any removal at
the direction of the Majority Noteholders, and in addition to whatever rights
such Noteholders may have at law or equity to damages, including injunctive
relief and specific performance, terminate
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all the rights and obligations of the Servicer under this Agreement and in and
to the Mortgage Loans and the proceeds thereof, as servicer; and (z) with
respect to clauses (viii)-(x) of Section 7.01(a), the Indenture Trustee shall,
but only at the direction of the Note Insurer, after notice in writing to the
Servicer and a Responsible Officer of the Indenture Trustee, terminate all the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, as Servicer. Upon receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.02, pass to and be vested in the Indenture Trustee, or its
designee approved by the Note Insurer, and the Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, at the expense of the Servicer, any and all
documents and other instruments and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Mortgage Loans and related documents. The Servicer agrees to
cooperate (and pay any related costs and expenses) with the Indenture Trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Indenture Trustee,
or its designee, for administration by it of all amounts which shall at the time
be credited by the Servicer to the Collection Account or thereafter received
with respect to the Mortgage Loans. The Indenture Trustee shall promptly notify
the Note Insurer and the Rating Agencies of the occurrence of a Servicer Event
of Default.
Section 7.02 Indenture Trustee to Act; Appointment of Successor. (a) On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.01 or fails to receive a Servicer Extension Notice pursuant to Section
8.04, or the Indenture Trustee receives the resignation of the Servicer
evidenced by an Opinion of Counsel pursuant to Section 5.21, or the Servicer is
removed as Servicer pursuant to this Article VII, in which event the Indenture
Trustee shall promptly notify the Rating Agencies, except as otherwise provided
in Section 7.01, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof arising on or after the date of succession;
provided, however, that the Indenture Trustee shall not be liable for any
actions or the representations and warranties of any Servicer prior to it and
including, without limitation, the obligations of the Servicer set forth in
Sections 2.06 and 4.02 hereof. The Indenture Trustee, as successor Servicer,
shall be obligated to pay Compensating Interest pursuant to Section 6.05 in any
event and to make advances pursuant to Section 5.18 unless, and only to the
extent the Indenture Trustee determines reasonably and in good faith that such
advances would not be recoverable pursuant to Section 5.04, such determination
to be evidenced by a certification of a Responsible Officer of the Indenture
Trustee delivered to the Note Insurer.
(b) Notwithstanding the above, the Indenture Trustee may, if it shall
be unwilling to so act, or shall, if it is unable to so act or if the Majority
Noteholders with the consent of the Note Insurer or the Note Insurer so requests
in writing to the Indenture Trustee, appoint, pursuant to such direction of the
Majority Noteholders and Note Insurer or the Note Insurer, or if no such
direction is provided to the Indenture Trustee, pursuant to the provisions set
forth in Section 7.02(c), or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution acceptable to the
Note Insurer that has a net worth of not less
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than $15,000,000 as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder.
(c) In the event the Indenture Trustee is the successor Servicer, it
shall be entitled to the same Servicing Compensation (including the Servicing
Fee as adjusted pursuant to the definition thereof) and other funds pursuant to
Section 5.08 hereof as the Servicer if the Servicer had continued to act as
servicer hereunder. In the event the Indenture Trustee is unable or unwilling to
act as successor Servicer, the Indenture Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions meeting the qualifications set forth above. Such
public announcement shall specify that the successor servicer shall be entitled
to the full amount of the aggregate Servicing Fees hereunder as servicing
compensation, together with the other Servicing Compensation. Within thirty (30)
days after any such public announcement, the Indenture Trustee shall negotiate
and effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Indenture Trustee shall deduct from any sum received by the
Indenture Trustee from the successor to the Servicer in respect of such sale,
transfer and assignment all costs and expenses of any public announcement and of
any sale, transfer and assignment of the servicing rights and responsibilities
hereunder and the amount of any unreimbursed Servicing Advances and Periodic
Advances owed to the Indenture Trustee. After such deductions, the remainder of
such sum shall be paid by the Indenture Trustee to the Servicer at the time of
such sale, transfer and assignment to the Servicer's successor.
(d) The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicer agrees to cooperate with the Indenture Trustee and any
successor Servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Indenture
Trustee or such successor Servicer, as applicable, at the Servicer's cost and
expense, all documents and records reasonably requested by it to enable it to
assume the Servicer's functions hereunder and shall promptly also transfer to
the Indenture Trustee or such successor servicer, as applicable, all amounts
that then have been or should have been deposited in the Collection Account by
the Servicer or that are thereafter received with respect to the Mortgage Loans.
Any collections received by the Servicer after such removal or resignation shall
be endorsed by it to the Indenture Trustee and remitted directly to the
Indenture Trustee or, at the direction of the Indenture Trustee, to the
successor Servicer. Neither the Indenture Trustee nor any other successor
Servicer shall be held liable by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer hereunder. Notwithstanding anything to the
contrary herein, no appointment of a successor Servicer under this Agreement
shall be effective until the Indenture Trustee and the Note Insurer shall have
consented thereto, and written notice of such proposed appointment shall have
been provided by the Indenture Trustee to the Note Insurer and to each
Noteholder. The Indenture Trustee shall not resign as Servicer until a successor
Servicer reasonably acceptable to the Note Insurer has been appointed. The Note
Insurer shall have the right to remove the Indenture Trustee as successor
Servicer under this Section 7.02 without cause, and the Indenture Trustee shall
appoint such other successor Servicer as directed by the Note Insurer.
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(e) Pending appointment of a successor Servicer hereunder, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Indenture Trustee may make
such arrangements for the compensation of such successor Servicer out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer pursuant to Section 5.08, together with other Servicing Compensation.
The Servicer, the Indenture Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
Section 7.03 Waiver of Defaults. The Majority Noteholders may, on
behalf of all Noteholders, and subject to the consent of the Note Insurer, waive
any events permitting removal of the Servicer as servicer pursuant to this
Article VII; provided, however, that the Majority Noteholders may not waive a
default in making a required distribution on a Note without the consent of the
Holder of such Note. Upon any waiver of a past default, such default shall cease
to exist, and any Servicer Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Indenture Trustee to the Rating Agencies and the Note Insurer.
Section 7.04 Rights of the Note Insurer to Exercise Rights of the
Noteholders. By accepting its Note, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall be deemed to be the Noteholders
for all purposes (other than with respect to the receipt of payment on the
Notes) and shall have the right to exercise all rights of the Noteholders under
this Agreement and under the Notes without any further consent of the
Noteholders, including, without limitation:
(a) the right to require the Unaffiliated Seller to repurchase
Mortgage Loans pursuant to Sections 2.06 and 4.02 hereof to the extent
set forth therein;
(b) the right to give notices of breach or to terminate the
rights and obligations of the Servicer as servicer pursuant to Section
7.01 hereof and to consent to or direct waivers of Servicer defaults
pursuant to Section 7.03 hereof;
(c) the right to direct the actions of the Indenture Trustee
during the continuance of a Servicer Event of Default pursuant to
Sections 7.01 and 7.02 hereof;
(d) the right to institute proceedings against the Servicer
pursuant to Section 7.01 hereof;
(e) the right to remove the Indenture Trustee pursuant to
Section 6.09 of the Indenture;
(f) the right to direct foreclosures upon the failure of the
Servicer to do so in accordance with the provisions of Section 5.06 of
this Agreement; and
(g) any rights or remedies expressly given the Majority
Noteholders.
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In addition, each Noteholder agrees that, subject to Section 10.02,
unless a Note Insurer Default exists, the rights specifically enumerated above
may only be exercised by the Noteholders with the prior written consent of the
Note Insurer.
Section 7.05 Indenture Trustee To Act Solely with Consent of the Note
Insurer. Unless a Note Insurer Default exists, the Indenture Trustee shall not,
without the Note Insurer's consent or unless directed by the Note Insurer:
(a) terminate the rights and obligations of the Servicer as
Servicer pursuant to Section 7.01 hereof;
(b) agree to any amendment pursuant to Section 10.03 hereof;
or
(c) undertake any litigation.
The Note Insurer may, in writing and in its sole discretion renounce
all or any of its rights under Sections 7.04, 7.05 or 7.06 or any requirement
for the Note Insurer's consent for any period of time.
Section 7.06 Mortgage Loans, Trust Estate and Accounts Held for Benefit
of the Note Insurer. (a) The Indenture Trustee shall hold the Trust Estate and
the Indenture Trustee's Mortgage Files, for the benefit of the Noteholders and
the Note Insurer, and all references in this Agreement and in the Notes to the
benefit of Noteholders shall be deemed to include the Note Insurer. The
Indenture Trustee shall cooperate in all reasonable respects with any reasonable
request by the Note Insurer for action to preserve or enforce the Note Insurer's
rights or interests under this Agreement and the Notes unless, as stated in an
Opinion of Counsel addressed to the Indenture Trustee and the Note Insurer, such
action is adverse to the interests of the Noteholders or diminishes the rights
of the Noteholders or imposes additional burdens or restrictions on the
Noteholders.
(b) The Servicer hereby acknowledges and agrees that it shall service
the Mortgage Loans for the benefit of the Noteholders and for the benefit of the
Note Insurer, and all references in this Agreement to the benefit of or actions
on behalf of the Noteholders shall be deemed to include the Note Insurer.
Section 7.07 Note Insurer Default. Notwithstanding anything elsewhere
in this Agreement or in the Notes to the contrary, if a Note Insurer Default
exists, or if and to the extent the Note Insurer has delivered its written
renunciation of all of its rights under this Agreement, the provisions of this
Article VII and all other provisions of this Agreement which (a) permit the Note
Insurer to exercise rights of the Noteholders, (b) restrict the ability of the
Noteholders, the Servicer, the Collateral Agent or the Indenture Trustee to act
without the consent or approval of the Note Insurer, (c) provide that a
particular act or thing must be acceptable to the Note Insurer, (d) permit the
Note Insurer to direct (or otherwise to require) the actions of the Indenture
Trustee, the Collateral Agent, the Servicer or the Noteholders, (e) provide that
any action or omission taken with the consent, approval or authorization of the
Note Insurer shall be authorized hereunder or shall not subject the party taking
or omitting to take such action to any liability hereunder or (f) which have a
similar effect, shall be of no further force and effect and the Indenture
Trustee shall administer the Trust Estate and perform its obligations hereunder
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solely for the benefit of the Holders of the Notes. Nothing in the foregoing
sentence, nor any action taken pursuant thereto or in compliance therewith,
shall be deemed to have released the Note Insurer from any obligation or
liability it may have to any party or to the Noteholders hereunder, under any
other agreement, instrument or document (including, without limitation, the Note
Insurance Policy) or under applicable law.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination. (a) Subject to Section 8.02, this Agreement
shall terminate upon notice to the Indenture Trustee of either: (i) the
disposition of all funds with respect to the last Mortgage Loan and the
remittance of all funds due hereunder and the payment of all amounts due and
payable to the Note Insurer and the Indenture Trustee or (ii) mutual consent of
the Trust, the Indenture Trustee, the Collateral Agent, the Servicer, the Note
Insurer and all Noteholders in writing.
(b) In addition, subject to Section 8.02, the Servicer may, at its
option and at its sole cost and expense, call the Class A-1 Notes or the Class
A-2 Notes or terminate the Trust in accordance with the terms of Section 10.01
of the Indenture.
(c) If on any Distribution Date, the Servicer determines that there are
no outstanding Mortgage Loans and no other funds or assets in the Trust Estate
other than funds in the Distribution Account, the Servicer shall send a final
distribution notice promptly to each Noteholder in accordance with Section
8.01(d).
(d) Notice of any termination, specifying the Distribution Date upon
which the Trust will terminate and the Noteholders shall surrender their Notes
to the Indenture Trustee for payment of the final distribution and cancellation,
shall be given promptly by the Servicer by letter to Noteholders mailed during
the month of such final distribution before the Servicer Distribution Date in
such month, specifying (i) the Distribution Date upon which final payment of the
Notes will be made upon presentation and surrender of Notes at the office of the
Indenture Trustee therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of the
Notes at the office of the Indenture Trustee therein specified. The Servicer
shall give such notice to the Indenture Trustee therein specified at the time
such notice is given to Noteholders. The obligations of the Note Insurer
hereunder shall terminate upon the deposit by the Servicer with the Indenture
Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO
Properties as set forth in Section 10.01 of the Indenture or when the Note
Principal Balance of the Notes has been reduced to zero.
(e) In the event that all of the Noteholders do not surrender their
Notes for cancellation within six (6) months after the time specified in the
above-mentioned written notice, the Servicer shall give a second written notice
to the remaining Noteholders to surrender their Notes for cancellation and
receive the final distribution with respect thereto. If within six (6) months
after the second notice, all of the Notes shall not have been surrendered for
cancellation, the Indenture Trustee may take appropriate steps, or may appoint
an agent to take appropriate
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steps, to contact the remaining Noteholders concerning surrender of their Notes
and the cost thereof shall be paid out of the funds and other assets which
remain subject hereto. If within nine (9) months after the second notice all the
Notes shall not have been surrendered for cancellation, the related Trust
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto and the Indenture Trustee upon transfer of such
funds shall be discharged of any responsibility for such funds and the
Noteholders shall look only to the related Trust Certificateholders for payment
and not to the Note Insurer. Such funds shall remain uninvested.
Section 8.02 Additional Termination Requirements. By their acceptance
of the Notes, the Holders thereof hereby agree to appoint the Servicer as their
attorney in fact to: (i) adopt such a plan of complete liquidation (and the
Noteholders hereby appoint the Indenture Trustee as their attorney in fact to
sign such plan) as appropriate or upon the written request of the Note Insurer
and (ii) to take such other action in connection therewith as may be reasonably
required to carry out such plan of complete liquidation all in accordance with
the terms hereof.
Section 8.03 Accounting Upon Termination of Servicer. Upon termination
of the Servicer, the Servicer shall, at its expense:
(a) deliver to the successor Servicer or, if none shall yet
have been appointed, to the Indenture Trustee, the funds in any
Account;
(b) deliver to the successor Servicer or, if none shall yet
have been appointed, to the Indenture Trustee all Indenture Trustee's
Mortgage Files and related documents and statements held by it
hereunder and a Mortgage Loan portfolio computer tape;
(c) deliver to the successor Servicer or, if none shall yet
have been appointed, to the Indenture Trustee and, upon request, to the
Noteholders a full accounting of all funds, including a statement
showing the Monthly Payments collected by it and a statement of monies
held in trust by it for the payments or charges with respect to the
Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient
transfer of servicing of the Mortgage Loans to the successor Servicer
and to more fully and definitively vest in such successor all rights,
powers, duties, responsibilities, obligations and liabilities of the
Servicer under this Agreement.
Section 8.04 Retention and Termination of the Servicer. The Servicer
hereby covenants and agrees to act as Servicer under this Agreement for an
initial term commencing on the Closing Date and expiring on June 30, 1999 (the
"Initial Term"). Thereafter, the Initial Term shall be extendible in the sole
discretion of the Note Insurer by written notice (each, a "Servicer Extension
Notice") of the Note Insurer (or the Indenture Trustee if revocable written
standing instructions of the Note Insurer have been previously delivered to the
Indenture Trustee), for any specified number of three (3) month terms to the
Servicer. Each such Servicer Extension Notice, if any, shall be delivered by the
Note Insurer (or the Indenture Trustee, as applicable,) to the other parties to
this Agreement. The Servicer hereby agrees that, as of the date hereof and upon
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its receipt of any Servicer Extension Notice, the Servicer shall be bound for
the duration of the Initial Term and the term covered by any such Servicer
Extension Notice to act as the Servicer, subject to and in accordance with the
other provisions of this Agreement. The Servicer agrees that if, as of the
fifteenth day prior to the last day of any such servicing term, the Servicer
shall not have received a Servicer Extension Notice from the Note Insurer or
Indenture Trustee, as applicable, the Servicer shall, within five (5) days
thereafter, give written notice of such non-receipt to the Note Insurer and the
Indenture Trustee. The failure of the Note Insurer or the Indenture Trustee, as
applicable, to deliver a Servicer Extension Notice by the end of any such
three-month term shall result in the automatic termination of the Servicer.
ARTICLE IX.
THE COLLATERAL AGENT
Section 9.01 Duties of the Collateral Agent. (a) The Collateral Agent,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If an Event of
Default has occurred and has not been cured or waived, the Collateral Agent
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Collateral Agent, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Collateral Agent which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that the Collateral Agent shall not be responsible
for the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by any Person hereunder.
If any such instrument is found not to conform on its face to the requirements
of this Agreement, the Collateral Agent shall note it as such on the Initial
Certification or Final Certification delivered pursuant to Section 2.06(b).
(c) No provision of this Agreement shall be construed to relieve the
Collateral Agent from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default which may have occurred, the
duties and obligations of the Collateral Agent shall be determined
solely by the express provisions of this Agreement, the Collateral
Agent shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Collateral Agent and, in the absence of bad faith on the part of the
Collateral Agent, the Collateral Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Collateral
Agent and conforming to the requirements of this Agreement;
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(ii) the Collateral Agent shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer or
other officers of the Collateral Agent, unless it shall be proved that
the Collateral Agent was negligent in ascertaining the pertinent facts;
(iii) the Collateral Agent shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Note Insurer or the
Indenture Trustee or with the consent of the Note Insurer or the
Indenture Trustee;
(iv) the Collateral Agent shall not be required to expend or
risk its own funds or otherwise incur financial liability for the
performance of any of its duties hereunder or the exercise of any of
its rights or powers if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it and none of the provisions
contained in this Agreement shall in any event require the Collateral
Agent to perform, or be responsible for the manner of performance of,
any of the obligations of the Servicer or the Indenture Trustee under
this Agreement; and
(v) subject to the other provisions of this Agreement and
without limiting the generality of this Section 9.01, the Collateral
Agent shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance, (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust, the Trust Estate, the
Noteholders or the Mortgage Loans, (D) to confirm or verify the
contents of any reports or certificates of any Person delivered to the
Collateral Agent pursuant to this Agreement believed by the Collateral
Agent to be genuine and to have been signed or presented by the proper
party or parties.
Section 9.02 Certain Matters Affecting the Collateral Agent. Except as
otherwise provided in Section 9.01 hereof:
(a) the Collateral Agent may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, Opinion of Counsel, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(b) the Collateral Agent may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
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(c) the Collateral Agent shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend by litigation hereunder or in relation
hereto at the request, order or direction of the Note Insurer or any of
the Noteholders, pursuant to the provisions of this Agreement, unless
such Noteholders or the Note Insurer, as applicable, shall have offered
to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein by the
Collateral Agent or thereby; nothing contained herein shall, however,
relieve the Collateral Agent of the obligation, upon the occurrence of
an Event of Default (which has not been cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's
own affairs;
(d) the Collateral Agent shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(e) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, the
Collateral Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by the Note Insurer or Holders of Class A Notes evidencing Percentage
Interests aggregating not less than 25%; provided, however, that if the
payment within a reasonable time to the Collateral Agent of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Collateral Agent, not
reasonably assured to the Collateral Agent by the security afforded to
it by the terms of this Agreement, the Collateral Agent may require
reasonable indemnity against such expense or liability as a condition
to taking any such action. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Collateral
Agent, shall be repaid by the Servicer upon demand from the Servicer's
own funds;
(f) the right of the Collateral Agent to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Collateral Agent shall not be answerable for
anything other than its negligence or willful misconduct in the
performance of such act;
(g) the Collateral Agent may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys.
Section 9.03 Collateral Agent Not Liable for Notes or Mortgage Loans.
(a) The recitals contained herein shall be taken as the statements of the Trust
and the Servicer, as the case may be, and the Collateral Agent assumes no
responsibility for their correctness. The Collateral Agent makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document. The Collateral Agent shall not be accountable
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Collateral Agent
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shall not be responsible for the legality or validity of the Agreement or the
validity, priority, perfection or sufficiency of the security for the Notes
issued or intended to be issued under the Indenture.
Section 9.04 Collateral Agent May Own Notes. (a) The Collateral Agent
in its individual or any other capacity may become the owner or pledgor of Notes
with the same rights it would have if it were not Collateral Agent, and may
otherwise deal with the parties hereto.
Section 9.05 Collateral Agent's Fees and Expenses; Indemnity. (a) The
Collateral Agent acknowledges that in consideration of the performance of its
duties hereunder it is entitled to receive its fees and expenses from the
Servicer, as separately agreed between the Servicer and the Collateral Agent.
The Trust, the Depositor, the Indenture Trustee and the Note Insurer shall not
pay any of the Collateral Agent fees and expenses in connection with this
transaction. The Collateral Agent shall not be entitled to compensation for any
expense, disbursement or advance as may arise from its negligence or bad faith,
and the Collateral Agent shall have no lien on the Trust Estate for the payment
of its fees and expenses.
(b) The Collateral Agent and any director, officer, employee or agent
of the Collateral Agent shall be indemnified by the Servicer and held harmless
against any loss, liability, claim, damage or expense arising out of, or imposed
upon the Trust Estate or the Collateral Agent through the Servicer's acts or
omissions in violation of this Agreement, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Collateral Agent in the performance of its duties hereunder or by reason of
the Collateral Agent 's reckless disregard of obligations and duties hereunder.
The obligations of the Servicer under this Section 9.05 arising prior to any
resignation or termination of the Servicer hereunder shall survive termination
of the Servicer and payment of the Notes.
Section 9.06 Eligibility Requirements for Collateral Agent. (a) The
Collateral Agent hereunder shall at all times be a banking entity (a) organized
and doing business under the laws of any state or the United States of America
subject to supervision or examination by federal or state authority, (b)
authorized under such laws to exercise corporate trust powers, including taking
title to the Trust Estate on behalf of the Indenture Trustee, for the benefit of
the Noteholders and the Note Insurer, (c) having a combined capital and surplus
of at least $50,000,000, (d) whose long-term deposits, if any, shall be rated at
least BBB- by S&P and Baa3 by Moody's (except as provided herein) or such lower
long-term deposit rating as may be approved in writing by the Note Insurer, and
(e) reasonably acceptable to the Note Insurer as evidenced in writing. If such
banking entity publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purposes of determining an entity's combined capital and surplus for
clause (c) of this Section 9.06, the amount set forth in its most recent report
of condition so published shall be deemed to be its combined capital and
surplus. In case at any time the Collateral Agent shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Collateral Agent shall
resign immediately in the manner and with the effect specified in Section 9.07.
Section 9.07 Resignation and Removal of the Collateral Agent. (a) The
Collateral Agent may at any time resign and be discharged from the trusts hereby
created by
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giving thirty (30) days' written notice thereof to the Indenture Trustee, the
Servicer, and the Note Insurer.
(b) If at any time the Collateral Agent shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Indenture Trustee, the Servicer or the Note
Insurer, or if at any time the Collateral Agent shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Collateral Agent or of its property shall be appointed, or any public officer
shall take charge or control of the Collateral Agent or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Indenture Trustee or the Servicer, with the consent of the Note Insurer, or the
Note Insurer may remove the Collateral Agent.
(c) If the Collateral Agent fails to perform in accordance with the
terms of this Agreement, the Indenture Trustee, the Servicer or the Majority
Noteholders, with the consent of the Note Insurer, or the Note Insurer may
remove the Collateral Agent.
(d) Upon removal or receipt of notice of resignation of the Collateral
Agent, the Indenture Trustee shall either (i) take possession of the Indenture
Trustee's Mortgage Files and assume the duties of the Collateral Agent hereunder
or (ii) appoint a successor Collateral Agent pursuant to Section 9.08. If the
Indenture Trustee shall assume the duties of the Collateral Agent hereunder, it
shall notify the Trust, the Depositor, the Servicer and Note Insurer in writing.
Section 9.08 Successor Collateral Agent. Upon the resignation or
removal of the Collateral Agent, the Indenture Trustee may appoint a successor
Collateral Agent, with the written approval of the Note Insurer; provided,
however, that the successor Collateral Agent so appointed shall in no event be
the Unaffiliated Seller, the Depositor or the Servicer or any Person known to a
Responsible Officer of the Indenture Trustee to be an Affiliate of the
Unaffiliated Seller, the Depositor or the Servicer and shall be approved by the
Note Insurer. The Indenture Trustee or such custodian, as the case may be, shall
assume the duties of the Collateral Agent hereunder. Any successor Collateral
Agent appointed as provided in this Section 9.08 shall execute, acknowledge and
deliver to the Trust, the Depositor, the Note Insurer, the Servicer, the
Indenture Trustee and to its predecessor Collateral Agent an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Collateral Agent shall become effective and such successor
Collateral Agent, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Collateral
Agent herein. The predecessor Collateral Agent shall deliver to the successor
Collateral Agent all Indenture Trustee's Mortgage Files and related documents
and statements held by it hereunder, and the Servicer and the predecessor
Collateral Agent shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor Collateral Agent all such rights, powers, duties and
obligations. The cost of any such transfer to the successor Collateral Agent
shall be for the account of the Collateral Agent in the event of the resignation
of the Collateral Agent, and shall be for the account of the Servicer in the
event of the removal of the Collateral Agent. No successor Collateral Agent
shall accept appointment as provided in this Section 9.08 unless at the time of
such acceptance such successor Collateral Agent shall be eligible under the
provisions of Section 9.06. Upon acceptance of appointment by a successor
Collateral Agent as provided in this
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Section 9.08, the Servicer shall mail notice of the succession of such
Collateral Agent hereunder to all Noteholders at their addresses as shown in the
Note Register and to the Rating Agencies. If the Servicer fails to mail such
notice within ten (10) days after acceptance of appointment by the successor
Collateral Agent, the successor Collateral Agent shall cause such notice to be
mailed at the expense of the Servicer.
Section 9.09 Merger or Consolidation of Collateral Agent. Any Person
into which the Collateral Agent may be merged or converted or with which it may
be consolidated or any corporation or national banking association resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation or national banking association succeeding to the
business of the Collateral Agent, shall be the successor of the Collateral Agent
hereunder; provided, that such corporation or national banking association shall
be eligible under the provisions of Section 9.06, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Limitation on Liability. None of the Trust, the Owner
Trustee, the Depositor, the Servicer, the Collateral Agent, the Indenture
Trustee or any of the directors, officers, employees or agents of such Persons
shall be under any liability to the Trust, the Noteholders or the Note Insurer
for any action taken, or for refraining from the taking of any action, in good
faith pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Trust, the Owner Trustee, the
Depositor, the Servicer, the Collateral Agent, the Indenture Trustee or any such
Person against any breach of warranties or representations made herein, or
against any specific liability imposed on each such party pursuant to this
Agreement or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations or duties hereunder. The
Trust, the Owner Trustee, the Depositor, the Servicer, the Collateral Agent, the
Indenture Trustee and any director, officer, employee or agent of such Person
may rely in good faith on any document of any kind which, prima facie, is
properly executed and submitted by any appropriate Person respecting any matters
arising hereunder.
Section 10.02 Acts of Noteholders. (a) Except as otherwise specifically
provided herein, whenever Noteholder action, consent or approval is required
under this Agreement, such action, consent or approval shall be deemed to have
been taken or given on behalf of, and shall be binding upon, all Noteholders if
the Majority Noteholders or the Note Insurer agrees to take such action or give
such consent or approval.
(b) The death or incapacity of any Noteholder shall not operate to
terminate this Agreement or the Trust, nor entitle such Noteholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
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(c) No Noteholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Notes, be construed
so as to constitute the Noteholders from time to time as partners or members of
an association; nor shall any Noteholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
Section 10.03 Amendment. (a) This Agreement may be amended from time to
time by the Owner Trustee, on behalf of the Trust, the Servicer, the Depositor,
the Collateral Agent and the Indenture Trustee by written agreement, upon the
prior written consent of the Note Insurer, without notice to or consent of the
Noteholders to cure any ambiguity, to correct or supplement any provisions
herein, to comply with any changes in the Code, or to make any other provisions
with respect to matters or questions arising under this Agreement which shall
not be inconsistent with the provisions of this Agreement; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel, at the
expense of the party requesting the change, delivered to the Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder; and
provided further, that no such amendment shall reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Note without the consent of such Noteholder,
or change the rights or obligations of any other party hereto without the
consent of such party. The Indenture Trustee shall give prompt written notice to
the Rating Agencies of any amendment made pursuant to this Section 10.03.
(b) This Agreement may be amended from time to time by the Owner
Trustee, on behalf of the Trust, the Servicer, the Depositor, the Collateral
Agent and the Indenture Trustee, with the consent of the Note Insurer, the
Majority Noteholders and the Holders of the majority of the Percentage Interest
in the Trust Certificates, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided, however,
that no such amendment shall reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans which are required to be
distributed on any Class of Notes without the consent of the Holders of such
Class of Notes or reduce the percentage for the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of such
Class of Notes affected thereby.
(c) It shall not be necessary for the consent of Holders under this
Section 10.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.
Section 10.04 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at the Noteholders' expense on direction and at
the expense of Majority Noteholders requesting such recordation, but only when
accompanied by an Opinion of Counsel
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to the effect that such recordation materially and beneficially affects the
interests of the Noteholders or is necessary for the administration or servicing
of the Mortgage Loans.
Section 10.05 Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 10.06 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Servicer, the Subservicers, the Originators
or the Unaffiliated Seller, addressed to such Person, c/o American Business
Financial Services, Inc., Balapointe Office Centre, 111 Presidential Boulevard,
Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: General Counsel; (ii) in
the case of the Trust, ABFS Mortgage Loan Trust 1999-1, c/o the Owner Trustee at
its Corporate Trust Office, Attention: Corporate Trust Administration; (iii) in
the case of the Collateral Agent, Chase Bank of Texas, N.A., at its Corporate
Trust Office, Attention: Document Custody Manager; (iv) in the case of the
Indenture Trustee, The Bank of New York, at its Corporate Trust Office,
Attention: ABFS Mortgage Loan Trust 1999-1; (v) in the case of the Depositor or
the Underwriter, Prudential Securities Secured Financing Corporation or
Prudential Securities Incorporated, One New York Plaza, New York, New York
10292, Attention: Managing Director- Asset Backed Finance Group; (vi) in the
case of the Note Insurer, Financial Security Assurance Inc., 350 Park Avenue,
New York, New York 10022 Attention: Surveillance Department (in each case in
which notice or other communication to the Note Insurer refers to an Event of
Default, a Servicer Event of Default or a claim on the Note Insurance Policy or
with respect to which failure on the part of the Note Insurer to respond shall
be deemed to constitute consent or acceptance, then a copy of such notice or
other communication should also be sent to the attention of each of the General
Counsel and the Head- Financial Guaranty Group, and shall be marked to indicate
"URGENT MATERIAL ENCLOSED"); (vii) in the case of Standard & Poor's Rating
Services, 26 Broadway, New York, New York 10004 Attention: Residential Mortgage
Surveillance Group; (viii) in the case of Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007 Attention: Home Equity Monitoring Group;
and (ix) in the case of the Noteholders, as set forth in the Note Register. Any
such notices shall be deemed to be effective with respect to any party hereto
upon the receipt of such notice by such party, except that notices to the
Noteholders shall be effective upon mailing or personal delivery.
Section 10.07 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement.
Section 10.08 No Partnership. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Noteholders.
Section 10.09 Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so
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executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
Section 10.10 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Trust, the Servicer, the Depositor, the
Indenture Trustee, the Collateral Agent and the Noteholders and their respective
successors and permitted assigns.
Section 10.11 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 10.12 The Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default
exists. At such time as the Notes are no longer outstanding hereunder, and no
amounts owed to the Note Insurer hereunder remain unpaid, the Note Insurer's
rights hereunder shall terminate.
Section 10.13 Third Party Beneficiary. The parties agree that each of
the Owner Trustee, the Unaffiliated Seller and the Note Insurer is intended and
shall have all rights of a third-party beneficiary of this Agreement.
Section 10.14 Intent of the Parties. It is the intent of the parties
hereto and Noteholders that, for federal income taxes, state and local income or
franchise taxes and other taxes imposed on or measured by income, the Notes be
treated as debt. The parties to this Agreement and the Holder of each Note, by
acceptance of its Note, and each Beneficial Owner thereof, agree to treat, and
to take no action inconsistent with the treatment of, the related Notes in
accordance with the preceding sentence for purposes of federal income taxes,
state and local income and franchise taxes and other taxes imposed on or
measured by income.
Section 10.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE TRUST, THE SERVICER, THE DEPOSITOR, THE COLLATERAL AGENT AND
THE INDENTURE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN
THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 10.06
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND THE INDENTURE
TRUSTEE EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
47
<PAGE>
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 10.15 SHALL AFFECT THE RIGHT
OF THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT OR THE INDENTURE
TRUSTEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
ANY OF THEIR RIGHTS TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.
(c) THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND
THE INDENTURE TRUSTEE EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
[Remainder of Page Intentionally Left Blank]
48
<PAGE>
IN WITNESS WHEREOF, the Servicer, the Trust, the Indenture Trustee, the
Collateral Agent and the Depositor have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION, as Depositor
By: __________________________________
Name:
Title:
ABFS MORTGAGE LOAN TRUST 1999-1
By: FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner
Trustee under the Trust Agreement
By: __________________________________
Name:
Title:
AMERICAN BUSINESS CREDIT, INC., as
Servicer
By: __________________________________
Name:
Title:
THE BANK OF NEW YORK, as Indenture
Trustee
By: __________________________________
Name:
Title:
CHASE BANK OF TEXAS, N.A., as Collateral
Agent
By: __________________________________
Name:
Title:
[Signature Page to Sale and Servicing Agreement]
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS .................................................... 1
Section 1.01 Certain Defined Terms ................................... 1
Section 1.02 Provisions of General Application ....................... 1
Section 1.03 Business Day Certificate ................................ 2
ARTICLE II. SALE AND CONVEYANCE OF THE MORTGAGE LOANS ..................... 2
Section 2.01 Purchase and Sale of Initial Mortgage Loans ............. 2
Section 2.02 Purchase and Sale of Subsequent Mortgage Loans .......... 3
Section 2.03 Purchase Price .......................................... 3
Section 2.04 Possession of Mortgage Files; Access to Mortgage
Files ................................................... 3
Section 2.05 Delivery of Mortgage Loan Documents ..................... 4
Section 2.06 Acceptance of the Trust Estate; Certain Substitutions;
Certification by the Collateral Agent ................... 7
Section 2.07 Grant of Security Interest .............................. 9
Section 2.08 Further Action Evidencing Assignments ................... 10
Section 2.09 Assignment of Agreement ................................. 10
ARTICLE III. REPRESENTATIONS AND WARRANTIES ............................... 10
Section 3.01 Representations of the Servicer ......................... 10
Section 3.02 Representations, Warranties and Covenants of the
Depositor ............................................... 12
Section 3.03 Representations, Warranties and Covenants of the
Collateral Agent ........................................ 13
Section 3.04 Representations, Warranties and Covenants of the
Indenture Trustee ....................................... 14
ARTICLE IV. THE MORTGAGE LOANS ............................................ 14
Section 4.01 Representations and Warranties Concerning the Mortgage
Loans ................................................... 14
Section 4.02 Purchase and Substitution ............................... 14
ARTICLE V. ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS ............. 16
Section 5.01 The Servicer ............................................ 16
Section 5.02 Collection of Certain Mortgage Loan Payments;
Collection Account ...................................... 17
Section 5.03 Permitted Withdrawals from the Collection Account ....... 18
Section 5.04 Hazard Insurance Policies; Property Protection
Expenses ................................................ 19
Section 5.05 Assumption and Modification Agreements .................. 20
Section 5.06 Realization Upon Defaulted Mortgage Loans ............... 20
Section 5.07 Indenture Trustee to Cooperate .......................... 22
Section 5.08 Servicing Compensation; Payment of Certain Expenses
by Servicer ............................................. 22
Section 5.09 Annual Statement as to Compliance ....................... 22
Section 5.10 Annual Independent Public Accountants' Servicing
Report .................................................. 22
Section 5.11 Access to Certain Documentation ......................... 23
Section 5.12 Maintenance of Fidelity Bond ............................ 23
Section 5.13 The Subservicers ........................................ 23
Section 5.14 Reports to the Indenture Trustee; Collection Account
Statements .............................................. 23
i
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Section 5.15 Optional Purchase of Defaulted Mortgage Loans ........... 24
Section 5.16 Reports to be Provided by the Servicer .................. 25
Section 5.17 Adjustment of Servicing Compensation in Respect of
Prepaid Mortgage Loans .................................. 26
Section 5.18 Periodic Advances; Special Advance ...................... 26
Section 5.19 Indemnification; Third Party Claims ..................... 27
Section 5.20 Maintenance of Corporate Existence and Licenses;
Merger or Consolidation of the Servicer ................. 28
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to
Resign .................................................. 28
Section 5.22 Periodic Filings with the Securities and Exchange
Commission; Additional Information ...................... 29
ARTICLE VI. APPLICATION OF FUNDS .......................................... 29
Section 6.01 Deposits to the Distribution Account .................... 29
Section 6.02 Collection of Money ..................................... 29
Section 6.03 Application of Principal and Interest ................... 30
Section 6.04 Information Concerning the Mortgage Loans ............... 30
Section 6.05 Compensating Interest ................................... 30
Section 6.06 Effect of Payments by the Note Insurer; Subrogation ..... 30
ARTICLE VII. SERVICER DEFAULT ............................................. 31
Section 7.01 Servicer Events of Default .............................. 31
Section 7.02 Indenture Trustee to Act; Appointment of Successor ...... 33
Section 7.03 Waiver of Defaults ...................................... 35
Section 7.04 Rights of the Note Insurer to Exercise Rights of
the Noteholders ......................................... 35
Section 7.05 Indenture Trustee To Act Solely with Consent of the
Note Insurer ............................................ 36
Section 7.06 Mortgage Loans, Trust Estate and Accounts Held for
Benefit of the Note Insurer ............................. 36
Section 7.07 Note Insurer Default .................................... 36
ARTICLE VIII. TERMINATION ................................................. 37
Section 8.01 Termination ............................................. 37
Section 8.02 Additional Termination Requirements ..................... 38
Section 8.03 Accounting Upon Termination of Servicer ................. 38
Section 8.04 Retention and Termination of the Servicer ............... 38
ARTICLE IX. THE COLLATERAL AGENT .......................................... 39
Section 9.01 Duties of the Collateral Agent .......................... 39
Section 9.02 Certain Matters Affecting the Collateral Agent .......... 40
Section 9.03 Collateral Agent Not Liable for Notes or Mortgage
Loans ................................................... 41
Section 9.04 Collateral Agent May Own Notes .......................... 42
Section 9.05 Collateral Agent's Fees and Expenses; Indemnity ......... 42
Section 9.06 Eligibility Requirements for Collateral Agent ........... 42
Section 9.07 Resignation and Removal of the Collateral Agent ......... 42
Section 9.08 Successor Collateral Agent .............................. 43
ii
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Section 9.09 Merger or Consolidation of Collateral Agent ............. 44
ARTICLE X. MISCELLANEOUS PROVISIONS ....................................... 44
Section 10.01 Limitation on Liability ................................. 44
Section 10.02 Acts of Noteholders ..................................... 44
Section 10.03 Amendment ............................................... 45
Section 10.04 Recordation of Agreement ................................ 45
Section 10.05 Duration of Agreement ................................... 46
Section 10.06 Notices ................................................. 46
Section 10.07 Severability of Provisions .............................. 46
Section 10.08 No Partnership .......................................... 46
Section 10.09 Counterparts ............................................ 46
Section 10.10 Successors and Assigns .................................. 47
Section 10.11 Headings ................................................ 47
Section 10.12 The Note Insurer Default ................................ 47
Section 10.13 Third Party Beneficiary ................................. 47
Section 10.14 Intent of the Parties ................................... 47
Section 10.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL .............................................. 47
EXHIBITS
EXHIBIT A Contents of the Mortgage File
EXHIBIT B Indenture Trustee's Acknowledgement of Receipt
EXHIBIT C Collateral Agent's Acknowledgement of Receipt
EXHIBIT D Initial Certification of Collateral Agent
EXHIBIT E Final Certification of Collateral Agent
EXHIBIT F Request for Release of Documents
EXHIBIT G Form of Subsequent Contribution Agreement
SCHEDULES
SCHEDULE I Mortgage Loan Schedule
<PAGE>
Exhibit 4.3Ex
EXHIBITS TO SALE AND SERVICING AGREEMENT
<PAGE>
EXHIBIT A
CONTENTS OF THE MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items (copies to the extent the originals have been
delivered to the Collateral Agent, on behalf of the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer, pursuant to Section 2.05 of the
Sale and Servicing Agreement), all of which shall be available for inspection by
the Noteholders, to the extent required by applicable laws:
1. The original Mortgage Note, with all prior and intervening
endorsements showing a complete chain of endorsements from the
originator of the Mortgage Loan to the Person so endorsing the
Mortgage Loan to the Trustee, endorsed by such Person "Pay to
the order of ________________ without recourse" and signed, by
facsimile or manual signature, in the name of the Unaffiliated
Seller by a Responsible Officer.
2. Either: (i) the original Mortgage, and related power of
attorney, if any, with evidence of recording thereon, or (ii)
a copy of the Mortgage and related power of attorney, if any,
certified as a true copy of the original Mortgage or power of
attorney by a Responsible Officer of the Unaffiliated Seller
on the face of such copy substantially as follows: "certified
true and correct copy of original which has been transmitted
for recordation."
3. Either: (i) The original Assignment of Mortgage in recordable
form in blank or (ii) a copy of the Assignment of Mortgage
certified as a true copy of the original Assignment of
Mortgage by a Responsible Officer of the Unaffiliated Seller
on the face of such copy substantially as follows: "certified
true and correct copy of original which has been transmitted
for recordation." Any such Assignments of Mortgage may be made
by blanket assignments for Mortgage Loans secured by the
Mortgaged Properties located in the same county, if permitted
by applicable law.
4. The original lender's policy of title insurance or a true copy
thereof, or if such original lender's title insurance policy
has been lost, a copy thereof certified by the appropriate
title insurer to be true and complete, or if such lender's
title insurance policy has not been issued as of the Closing
Date, a marked up commitment (binder) to issue such policy.
5. All original intervening assignments, if any, showing a
complete chain of assignments from the originator to the
related Originator, including any recorded warehousing
assignments, with evidence of recording thereon, certified by
a Responsible Officer of the related Originator by facsimile
or manual signature as a true copy of the original of such
intervening assignments.
6. Originals of all assumption, written assurance, substitution
and modification agreements, if any.
A-1
<PAGE>
EXHIBIT B
INDENTURE TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
March 30, 1999
Prudential Securities Secured American Business Credit, Inc.
Financing Corporation BalaPointe Office Centre
One New York Plaza 111 Presidential Boulevard, Suite 127
New York, New York 10292 Bala Cynwyd, Pennsylvania 19004
Chase Bank of Texas, N.A., Financial Security Assurance Inc.
as Collateral Agent 350 Park Avenue
801 West Green Road, Suite 200 New York, New York 10022
Houston, TX 77067
Re: Sale and Servicing Agreement, dated as of March 1, 1999 among
Prudential Securities Secured Financing Corporation, as
Depositor, ABFS Mortgage Loan Trust 1999-1, American Business
Credit, Inc., as Servicer, The Bank of New York, as Indenture
Trustee, and Chase Bank of Texas, N.A., as Collateral Agent
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.06 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Indenture Trustee, hereby acknowledges
receipt by it in good faith without notice of adverse claims, of (x) the
Original Pre-Funded Amount and the Original Capitalized Interest Amount for both
Pool I and Pool II and (y) the Note Insurance Policy, and declares that it holds
and will hold such Accounts and the Note Insurance Policy in trust for the
exclusive use and benefit of all present and future Noteholders.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in Appendix I to the Indenture, dated as of March 1,
1999, by and between ABFS Mortgage Loan Trust 1999-1 and the Indenture Trustee.
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------
Name:
Title:
B-1
<PAGE>
EXHIBIT C
COLLATERAL AGENT'S ACKNOWLEDGEMENT OF RECEIPT
March 30, 1999
Prudential Securities Secured American Business Credit, Inc.
Financing Corporation BalaPointe Office Centre
One New York Plaza 111 Presidential Boulevard, Suite 127
New York, New York 10292 Bala Cynwyd, Pennsylvania 19004
The Bank of New York, Financial Security Assurance Inc.
as Indenture Trustee 350 Park Avenue
101 Barclay Street New York, New York 10022
New York, New York 10286
Re: Sale and Servicing Agreement, dated as of March 1, 1999 among
Prudential Securities Secured Financing Corporation, as Depositor,
ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc.,
as Servicer, The Bank of New York, as Indenture Trustee, and Chase
Bank of Texas, N.A., as Collateral Agent
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.06 of the above-captioned Sale and
Servicing Agreement, the undersigned, as Collateral Agent, hereby acknowledges
receipt by it in good faith without notice of adverse claims, subject to the
provisions of Sections 2.04 and 2.05 of the Sale and Servicing Agreement (as
such provisions relate to the Initial Mortgage Loans), of, with respect to each
of the Initial Mortgage Loans, the Mortgage File containing the original
Mortgage Note, except with respect to the list of exceptions attached hereto,
and based on its examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule accurately reflects information set forth in
the Mortgage Note, and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Indenture Trustee's
Mortgage Files, and that it holds or will hold all such assets and such other
assets included in the definition of "Trust Estate" that are delivered to it, on
behalf of the Indenture Trustee, in trust for the exclusive use and benefit of
all present and future Noteholders and the Note Insurer.
The Collateral Agent has made no independent examination of any such
documents beyond the review specifically required in the above-referenced Sale
and Servicing Agreement. The Collateral Agent makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
such documents or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
The Schedule of Mortgage Loans is attached to this Receipt.
C-1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in Appendix I to the Indenture, dated as of March 1,
1999, by and between ABFS Mortgage Loan Trust 1999-1 and the Indenture Trustee.
CHASE BANK OF TEXAS, N.A.,
as Collateral Agent
By:
----------------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT D
INITIAL CERTIFICATION OF COLLATERAL AGENT
______________, 1999
Prudential Securities Secured American Business Credit, Inc.
Financing Corporation BalaPointe Office Centre
One New York Plaza 111 Presidential Boulevard, Suite 127
New York, New York 10292 Bala Cynwyd, Pennsylvania 19004
The Bank of New York, Financial Security Assurance Inc.
as Indenture Trustee 350 Park Avenue
101 Barclay Street New York, New York 10022
New York, New York 10286
Re: Sale and Servicing Agreement, dated as of March 1, 1999 among
Prudential Securities Secured Financing Corporation, as
Depositor, ABFS Mortgage Loan Trust 1999-1, American Business
Credit, Inc., as Servicer, The Bank of New York, as Indenture
Trustee, and Chase Bank of Texas, N.A., as Collateral Agent
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 2.06 of the
above-referenced Sale and Servicing Agreement, the undersigned, as Collateral
Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
listed on the attachment hereto), it has reviewed the documents delivered to it
pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined
that (i) all documents required to be delivered to it pursuant to Section 2.05
of the above-referenced Sale and Servicing Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
have not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections do not constitute physical
alteration if they reasonably appear to have been initialed by the Mortgagor)
appears regular on its face and relates to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing documents, the information set
forth in the Mortgage Loan Schedule as to the information in clauses (i), (ii),
(v) and (vi) of the definition of "Mortgage Loan Schedule" respecting such
Mortgage Loan accurately reflects the information set forth in Indenture
Trustee's Mortgage File. The Collateral Agent has made no independent
examination of such documents beyond the review specifically required in the
above-referenced Sale and Servicing Agreement. The Collateral Agent makes no
representations as to: (x) the validity, legality, enforceability or genuineness
of any such documents contained in each or any of the Mortgage Loans identified
on the Mortgage Loan Schedule, or (y) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.
D-1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
CHASE BANK OF TEXAS, N.A.,
as Collateral Agent
By:
----------------------------------
Name:
Title:
D-2
<PAGE>
EXHIBIT E
FINAL CERTIFICATION OF COLLATERAL AGENT
________________, 1999
Prudential Securities Secured American Business Credit, Inc.
Financing Corporation BalaPointe Office Centre
One New York Plaza 111 Presidential Boulevard, Suite 127
New York, New York 10292 Bala Cynwyd, Pennsylvania 19004
The Bank of New York, Financial Security Assurance Inc.
as Indenture Trustee 350 Park Avenue
101 Barclay Street New York, New York 10022
New York, New York 10286
Re: Sale and Servicing Agreement, dated as of March 1, 1999 among
Prudential Securities Secured Financing Corporation, as Depositor,
ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as
Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank
of Texas, N.A., as Collateral Agent
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 2.06 of the
above-referenced Sale and Servicing Agreement, the undersigned, as Collateral
Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
listed on the attachment hereto), it has reviewed the documents delivered to it
pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined
that (i) all documents required to be delivered to it pursuant to Section 2.05
of the above-referenced Sale and Servicing Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
have not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections do not constitute physical
alteration if they reasonably appear to have been initialed by the Mortgagor)
appears regular on its face and relates to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing documents, the information set
forth in the Mortgage Loan Schedule respecting such Mortgage Loan accurately
reflects the information set forth in the Indenture Trustee's Mortgage File. The
Collateral Agent has made no independent examination of such documents beyond
the review specifically required in the above-referenced Sale and Servicing
Agreement. The Collateral Agent makes no representations as to: (x) the
validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (y) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Sale and Servicing Agreement.
E-1
<PAGE>
CHASE BANK OF TEXAS, N.A.,
as Collateral Agent
By:
----------------------------------
Name:
Title:
E-2
<PAGE>
EXHIBIT F
REQUEST FOR RELEASE OF DOCUMENTS
----------------,
Chase Bank of Texas, N.A.,
as Collateral Agent
801 West Greens Road, Suite 200
Houston, Texas 77067
The Bank of New York,
as Indenture Trustee
101 Barclay Street
New York, New York 10286
Re: Sale and Servicing Agreement, dated as of March 1, 1999 among
Prudential Securities Secured Financing Corporation, as Depositor,
ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as
Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank
of Texas, N.A., as Collateral Agent
--------------------------------------------------------------------
In connection with the administration of the pool of Mortgage Loans
held by Chase Bank of Texas, N.A., as Collateral Agent, on behalf of The Bank of
New York, as Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, we request the release, and acknowledge receipt, of the (Indenture
Trustee's Mortgage File/[specify document]) for the Mortgage Loan described
below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
- ------------------------------------
Mortgage Loan Number:
- --------------------
Reason for Requesting Documents (check one)
____ 1. Mortgage Loan Paid in Full
(Servicer hereby certifies that all amounts
received in connection therewith have been
credited to the Collection Account.)
____ 2. Mortgage Loan Liquidated
(Servicer hereby certifies that all proceeds of
foreclosure, insurance or other liquidation have
been finally received and credited to the
Collection Account.)
F-1
<PAGE>
____ 3. Mortgage Loan in Foreclosure
____ 4. Mortgage Loan Repurchased Pursuant to Section 5.18 of the Pooling and
Servicing Agreement.
____ 5. Mortgage Loan Repurchased or Substituted pursuant to Article II or
III of the Sale and Servicing Agreement (Servicer hereby certifies
that the repurchase price or Substitution Adjustment has been
credited to the related Distribution Account and that the substituted
mortgage loan is a Qualified Substitute Mortgage Loan.)
____ 6. Other (explain)____________________________________________________
If box 1 or 2 above is checked, and if all or part of the Indenture
Trustee's Mortgage File was previously released to us, please release to us our
previous receipt on file with you, as well as any additional documents in your
possession relating to the above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the
above documents to the Collateral Agent, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
AMERICAN BUSINESS CREDIT, INC.,
as Servicer
By:
----------------------------------
Name:
Title:
Documents returned to Collateral Agent:
CHASE BANK OF TEXAS, N.A.,
as Collateral Agent
By:
------------------------------------
Name:
Title:
Date:
F-2
<PAGE>
EXHIBIT G
FORM OF SUBSEQUENT CONTRIBUTION AGREEMENT
This SUBSEQUENT CONTRIBUTION AGREEMENT, dated as of ________, 1999
(the "Subsequent Transfer Date"), is entered into by and between PRUDENTIAL
SECURITIES SECURED FINANCING CORPORATION, as depositor (the "Depositor"), and
the ABFS MORTGAGE LOAN TRUST 1999-1 (the "Trust").
W I T N E S S E T H:
Reference is hereby made to (x) that certain Sale and Servicing
Agreement, dated as of March 1, 1999 (the "Sale and Servicing Agreement"), by
and among the Depositor and the Trust, and (y) that certain Indenture, dated as
of March 1, 1999 (the "Indenture"), by and between the Trust and The Bank of New
York, as indenture trustee (the "Indenture Trustee"). Pursuant to the Sale and
Servicing Agreement, the Depositor has agreed to sell, assign and transfer, and
the Trust has agreed to accept, from time to time, Subsequent Mortgage Loans (as
defined below). The Sale and Servicing Agreement provides that each such sale of
Subsequent Mortgage Loans be evidenced by the execution and delivery of a
Subsequent Contribution Agreement such as this Subsequent Contribution
Agreement.
The assets sold to the Trust pursuant to this Subsequent Contribution
Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool II
listed in the Mortgage Loan Schedule attached hereto (including property that
secures a Subsequent Mortgage Loan that becomes an REO Property), including the
related Mortgage Files delivered or to be delivered to the Collateral Agent, on
behalf of the Indenture Trustee, including all payments of principal received,
collected or otherwise recovered after the Subsequent Cut-Off Date for each
Subsequent Mortgage Loan, all payments of interest accruing on each Subsequent
Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and
all other proceeds received in respect of such Subsequent Mortgage Loans, (b)
the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
Subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I and $__________ in Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1.Definitions. For the purposes of this Subsequent
Contribution Agreement, capitalized terms used herein but not otherwise defined
shall have the respective meanings assigned to such terms in Appendix I to the
Indenture.
G-1
<PAGE>
Section 2.Sale, Assignment and Transfer. In consideration of the
receipt of $_________ (such amount being approximately 100% of the Aggregate
Principal Balance of the Subsequent Mortgage Loans) from the Trust, the
Depositor hereby sells, assigns and transfers to the Trust, without recourse,
all of its right, title and interest in, to, and under the Subsequent Mortgage
Loans and related assets described above, whether now existing or hereafter
arising.
In connection with such sale, assignment and transfer, the
Originators and the Unaffiliated Seller shall satisfy the document delivery
requirements set forth in Section 2.05 of the Sale and Servicing Agreement with
respect to each Subsequent Mortgage Loan.
Section 3. Representations and Warranties of Concerning the
Subsequent Mortgage Loans. With respect to each Subsequent Mortgage Loan, the
Depositor hereby assigns each of the representations and warranties made by the
Originators and the Unaffiliated Seller in Section 3 of the Subsequent Transfer
Agreement, on which the Trust relies in accepting the pledge of the Subsequent
Mortgage Loans. Such representations and warranties speak as of the Subsequent
Transfer Date unless otherwise indicated, and shall survive each sale,
assignment, transfer and conveyance of the respective Subsequent Mortgage Loans
to the Trust.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any
Noteholder of a breach of any of the representations and warranties made by the
Originators and the Unaffiliated Seller pursuant to Section 3.03 of the
Unaffiliated Seller's Agreement or this Section 3, the party discovering such
breach shall give prompt written notice to such other Person; provided, that the
Indenture Trustee shall have no duty to inquire or to investigate the breach of
any such representations and warranties. The Originators and the Unaffiliated
Seller will be obligated to repurchase a Subsequent Mortgage Loan which breaches
a representation or warranty in accordance with the provisions of Section 4.02
of the Sale and Servicing Agreement or to indemnify as described in Section
3.05(g) of the Unaffiliated Seller's Agreement. Such repurchase and
indemnification obligation of the Originators and the Unaffiliated Seller shall
constitute the sole remedy against the Originators and the Unaffiliated Seller,
and the Trust for such breach available to the Servicer, the Trust, the
Indenture Trustee, the Note Insurer and the Noteholders.
Section 5. Amendment. This Subsequent Contribution Agreement may be
amended from time to time by the Depositor and the Trust only with the prior
written consent of the Note Insurer (or, in the event of a Note Insurer Default,
the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT
CONTRIBUTION AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT CONTRIBUTION
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
G-2
<PAGE>
Section 7. Counterparts. This Subsequent Contribution Agreement may
be executed in counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which shall
constitute one and the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Contribution Agreement will inure to the benefit of and be binding upon the
parties hereto, the Note Insurer, the Noteholders, and their respective
successors and permitted assigns.
Section 9. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred
to herein shall constitute a part of this Subsequent Contribution Agreement and
are incorporated into this Subsequent Contribution Agreement for all purposes.
Section 11. Intent of the Parties; Security Agreement. The Depositor
and the Trust intend that the conveyance of all right, title and interest in and
to the Subsequent Mortgage Loans and related assets described above by the
Depositor to the Trust pursuant to this Subsequent Contribution Agreement shall
be, and be construed as, a sale of the Subsequent Mortgage Loans from the
Depositor to the Trust. It is, further, not intended that such conveyances be
deemed to be pledges of the Subsequent Mortgage Loans by the Depositor to the
Trust to secure a debt or other obligation of the Depositor. However, in the
event that the Subsequent Mortgage Loans are held to be property of the
Depositor, or if for any reason this Subsequent Contribution Agreement is held
or deemed to create a security interest in the Subsequent Mortgage Loans, then
it is intended that: (a) this Subsequent Contribution Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code of any other applicable jurisdiction; (b) the conveyance
provided for in this Subsequent Contribution Agreement shall be deemed to be a
grant by the Depositor to the Trust of a security interest in all of the
Depositor's right, title and interest, whether now owned or hereafter acquired,
in and to the Subsequent Mortgage Loans and related assets described above. The
Depositor shall, to the extent consistent with this Subsequent Contribution
Agreement, take such reasonable actions as may be necessary to ensure that, if
this Subsequent Contribution Agreement were deemed to create a security interest
in the Subsequent Mortgage Loans and the other property described above, such
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Subsequent Contribution Agreement.
[Remainder of Page Intentionally Left Blank]
G-3
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trust have caused this
Subsequent Contribution Agreement to be duly executed by their respective
officers as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST 1999-1
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in
its individual capacity, but
solely as Owner Trustee
By:
---------------------------------
Name:
Title:
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
---------------------------------
Name:
Title:
G-4
<PAGE>
Exhibit 8.1
-----------
March 30, 1999
The Addressees Listed
on Schedule I Hereto
Re: ABFS Mortgage Loan Trust 1999-1,
Mortgage Backed Notes, Series 1999-1
------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the issuance
and delivery of (x) certain mortgage backed notes denominated as ABFS Mortgage
Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class A-1 (the "Class
A-1 Notes") and Class A-2 (the "Class A-2 Notes" and, together with the Class
A-1 Notes, the "Notes"), pursuant to an Indenture, dated as of March 1, 1999
(the "Indenture"), by and between the ABFS Mortgage Loan Trust 1999-1 (the
"Trust") and The Bank of New York, as indenture trustee (the "Indenture
Trustee"), and (y) two classes of trust certificates (the "Trust Certificates"),
pursuant to a Trust Agreement, dated as of March 1, 1999 (the "Trust
Agreement"), by and among First Union Trust Company, National Association, as
owner trustee (the "Owner Trustee"), Prudential Securities Secured Financing
Corporation, and ABFS 1999-1, Inc., as unaffiliated seller (the "Unaffiliated
Seller").
Each class of Notes will be secured by a pledge of a separate portion
of the assets of the Trust. The assets of the Trust (the "Trust Estate") will
consist primarily of two pools of fixed-rate, closed-end, monthly-pay, business
and consumer purpose home equity loans secured by first- or second-lien
mortgages or deeds of trust on residential or commercial real properties (the
"Mortgage Loans"). The Class A-1 Notes will be secured by the Mortgage Loans in
the first pool ("Pool I") and the Class A-2 Notes will be secured by the
Mortgage Loans in the second pool ("Pool II"). Each pool will constitute a
separate sub-trust of the Trust. Each class of Trust Certificates evidences the
entire beneficial ownership interest in the sub-trust of the Trust consisting of
the related pool of Mortgage Loans.
As special tax counsel, we have examined such documents as we deemed
appropriate for the purposes of rendering the opinions set forth below,
including the following: (a) a Prospectus, dated March 23, 1999, and a
Prospectus Supplement, dated March 24, 1999 (together the "Prospectus"), with
respect to the Notes, (b) an executed copy of the Indenture and the exhibits
attached thereto, and (c) an executed copy of the Trust Agreement and the
exhibits attached thereto. Terms capitalized herein and not otherwise defined
herein shall have their respective meanings as set forth in Appendix I to the
Indenture.
We have examined the question of whether the Notes issued under the
Indenture will be treated as indebtedness for federal income tax purposes. Our
analysis is based on the
<PAGE>
The Addressees Listed
on Schedule I Hereto;
March 30, 1999;
Page 2
provisions of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder as in effect on the date hereof and on
existing judicial and administrative interpretations thereof. These authorities
are subject to change and to differing interpretations, which could apply
retroactively. The opinion of special tax counsel is not binding on the courts
or the Internal Revenue Service (the "IRS").
In general, whether a transaction constitutes the issuance of
indebtedness for federal income tax purposes is a question of fact, the
resolution of which is based primarily upon the economic substance of the
instruments and the transaction pursuant to which they are issued rather than
the form of the transaction or the manner in which the instruments are labeled.
The IRS and the courts have set forth various factors to be taken into account
in determining whether or not a transaction constitutes the issuance of
indebtedness for federal income tax purposes, which we have reviewed as they
apply to this transaction.
Based upon the foregoing and upon the assumptions set forth below, we
are of the opinion that for federal income tax purposes:
1. The Notes will be treated as indebtedness because (a) the
characteristics of the Notes strongly indicate that in economic
substance the Notes are a form of indebtedness and (b) the parties have
stated unambiguously their intention to treat the Notes as indebtedness
for tax purposes.
2. The statements under the caption "CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS" in the Prospectus are accurate and complete in all
material respects.
3. Neither the sub-trust of the Trust consisting of the Pool I
Mortgage Loans nor the sub-trust of the Trust consisting of the Pool II
Mortgage Loans will be characterized as an association (or a publicly
traded partnership) taxable as a corporation or a taxable mortgage
pool.
This opinion is furnished by us as counsel in connection with the
conveyance of the Mortgage Loans to the Trust as of the date hereof. We express
no opinion on any matter not discussed in this letter and we undertake no
obligation to update this letter or the opinions contained herein after the date
hereof. This opinion letter is rendered as of the Closing Date, at the request
of the addressees hereof, for the sole benefit of each addressee, and no other
person or entity is entitled to rely hereon without our prior written consent.
Copies of this opinion letter may not be furnished to any other person or
entity, nor may any portion of this opinion letter be quoted, circulated or
referred to in any other document, without our prior written consent.
Very truly yours,
<PAGE>
SCHEDULE I
<TABLE>
<S> <C>
Financial Security Assurance Inc. Prudential Securities Incorporated
350 Park Avenue One New York Plaza
New York, New York 10022 New York, New York 10292
Chase Bank of Texas, N.A., Prudential Securities Secured Financing Corporation
as Collateral Agent One New York Plaza
801 West Greens Road New York, New York 10292
Suite 200
Houston, Texas 77067
Standard & Poor's Ratings Services Moody's Investors Service, Inc.
25 Broadway 99 Church Street
New York, New York 10004 New York, New York 10007
American Business Credit, Inc. The Bank of New York,
BalaPointe Office Centre as Indenture Trustee
111 Presidential Boulevard, Suite 127 101 Barclay Street
Bala Cynwyd, PA 19004 New York, New 10286
ABFS Mortgage Loan Trust 1999-1 First Union Trust Company, National Association, as Owner
c/o First Union Trust Company, National Association, as Trustee
Owner Trustee One Rodney Square
One Rodney Square 920 King Street, Suite 102
920 King Street, Suite 102 Wilmington, Delaware 19801
Wilmington, Delaware 19801
</TABLE>
<PAGE>
Exhibit 10.1
FINANCIAL FINANCIAL GUARANTY
SECURITY INSURANCE POLICY
ASSURANCE(Registered)
Obligor: As described in Endorsement No. 1 Policy No.: 50792-N
Obligations: $184,075,000 ABFS Mortgage Loan Trust Date of Issuance: 3/30/99
1999-1, Mortgage Backed Notes,
Series 1999-1, Class A-1 and Class A-2
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for
consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY GUARANTEES to
each Holder, subject only to the terms of this Policy (which includes each
endorsement hereto), the full and complete payment by the Obligor of Scheduled
Payments of principal of, and interest on, the Obligations.
For the further protection of each Holder, Financial Security
irrevocably and unconditionally guarantees:
(a) payment of the amount of any distribution of principal of,
or interest on, the Obligations made during the Term of this Policy to
such Holder that is subsequently avoided in whole or in part as a
preference payment under applicable law (such payment to be made by
Financial Security in accordance with Endorsement No. 1 hereto).
(b) payment of any amount required to be paid under this
Policy by Financial Security following Financial Security's receipt of
notice as described in Endorsement No. 1 hereto.
Financial Security shall be subrogated to the rights of each Holder to
receive payments under the Obligations to the extent of any payment by Financial
Security hereunder.
Except to the extent expressly modified by an endorsement hereto, the
following terms shall have the meanings specified for all purposes of this
Policy. "Holder" means the registered owner of any Obligation as indicated on
the registration books maintained by or on behalf of the Obligor for such
purpose or, if the Obligation is in bearer form, the holder of the Obligation.
Scheduled Payments" means payments which are scheduled to be made during the
Term of this Policy in accordance with the original terms of the Obligations
when issued and without regard to any amendment or modification of such
Obligations thereafter; payments which become due on an accelerated basis as a
result of (a) a default by the Obligor, (b) an election by the Obligor to pay
principal on an accelerated basis or (c) any other cause, shall not constitute
"Scheduled Payments" unless Financial Security shall elect, in its sole
discretion, to pay such principal due upon such acceleration together with any
accrued interest to the date of
<PAGE>
acceleration. "Term of this Policy" shall have the meaning set forth in
Endorsement No. 1 hereto.
This Policy sets forth in full the undertaking of Financial Security,
and shall not be modified, altered or affected by any other agreement or
instrument, including any modification or amendment thereto, or by the merger,
consolidation or dissolution of the Obligor. Except to the extent expressly
modified by an endorsement hereto, the premiums paid in respect of this Policy
are nonrefundable for any reason whatsoever, including payment, or provision
being made for payment, of the Obligations prior to maturity. This Policy may
not be canceled or revoked during the Term of this Policy. THIS POLICY IS NOT
COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76
OF THE NEW YORK INSURANCE LAW.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this
Policy to be executed on its behalf by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By:
------------------------------
AUTHORIZED OFFICER
A subsidiary of Financial Security Assurance
Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022 (212) 826-0100
Form 100NY (5/89)
<PAGE>
ENDORSEMENT NO. 1 TO
FINANCIAL GUARANTY INSURANCE POLICY
FINANCIAL SECURITY ASSURANCE INC.
OBLIGOR: ABFS MORTGAGE LOAN TRUST 1999-1
OBLIGATIONS: $184,075,000 ABFS Mortgage Loan Trust 1999-1 Mortgage Backed
Notes, Series 1999-1, Class A-1 and Class A-2
POLICY NO. 50792-N
DATE OF ISSUANCE: March 30, 1999
1. Definitions. For all purposes of this Policy, the terms specified
below shall have the meanings or constructions provided below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings provided in
the Indenture unless the context shall otherwise require.
"Business Day" means any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking institutions in New York are authorized or obligated
by law or executive order to be closed.
"Holder" shall not include the Obligor or any affiliates or successors
thereof in the event the Obligor, or any such affiliate or successor, is a
registered or beneficial owner of the Obligation.
"Indenture" means the Indenture, dated as of March 1, 1999, between
ABFS Mortgage Loan Trust 1999-1 as Issuer and the Indenture Trustee, as amended
from time to time with the consent of Financial Security.
"Indenture Trustee" means The Bank of New York, in its capacity as
Indenture Trustee under the Indenture and the Sale and Servicing Agreement and
any successor in such capacity.
"Policy" means this Financial Guaranty Insurance Policy and includes
each endorsement thereto.
"Receipt" and "Received" mean actual delivery to Financial Security and
to the Fiscal Agency (as defined below), if any, at or prior to 12:00 noon, New
York City time, on a Business Day; delivery either on a day that is not a
Business Day, or after 12:00 noon, New York City time, shall be deemed to be
Received on the next succeeding Business Day. If any notice or
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
certificate given hereunder by the Indenture Trustee is not in proper form or is
not properly completed, executed or delivered, it shall be deemed not to have
been Received, and Financial Security or its Fiscal Agent shall promptly so
advise the Indenture Trustee and the Indenture Trustee may submit an amended
notice.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of March 1, 1999, among ABFS Mortgage Loan Trust 1999-1 as Issuer,
American Business Credit, Inc. as Servicer, Chase Bank of Texas, N.A. as
Collateral Agent, Prudential Securities Secured Financing Corporation as
Depositor and the Indenture Trustee, as amended from time to time with the
consent of Financial Security.
"Scheduled Payments" means, with respect to any Payment Date and the
Obligations, the Insured Payments, without regard to any amendment or
modification of the Notes, the Indenture or the Sale and Servicing Agreement,
except such amendments or modifications to which Financial Security has given
its prior written consent. Scheduled Payments shall not include any amounts due
in respect of the Obligations attributable to any increase in interest rate,
penalty or other sum payable by the Obligor by reason of any default or event of
default in respect of the Obligations, or by reason of any deterioration of the
creditworthiness of the Obligor, nor shall Scheduled Payments include, nor shall
coverage be provided under this Policy in respect of, any taxes, withholding or
other charge imposed by any governmental authority due in connection with the
payment of any Scheduled Payment to a Holder.
"Term of This Policy" means the period from and including the Date of
Issuance to and including the date on which (i) all Scheduled Payments have been
paid that have been required to be paid by the Obligor within the meaning of
Section 4.01 of the Indenture, (ii) any period during which any Scheduled
Payment could have been avoided in whole or in part as a preference payment
under applicable bankruptcy, insolvency, receivership or similar law has
expired, and (iii) if any proceedings requisite to avoidance as a preference
payment have been commenced prior to the occurrence of (i) and (ii), a final and
non-appealable order in resolution of each such proceeding has been entered.
2. Notices and Conditions to Payment in Respect of Scheduled Payments.
Following Receipt by Financial Security of a notice and certificate from the
Indenture Trustee in the form attached as Exhibit A to this Endorsement,
Financial Security will pay any amount payable hereunder in respect of Scheduled
Payments out of the funds of Financial Security on the later to occur of (a)
12:00 noon, New York City time, on the second Business Day following such
Receipt; and (b) 12:00 noon, New York City time, on the Payment Date to which
such claim relates. Payments due hereunder in respect of Scheduled Payments will
be disbursed by wire transfer of immediately available funds to the Policy
Payments Account established pursuant to the Sale and Servicing Agreement or, if
no such Policy Payments Account has been established, to the Indenture Trustee.
Financial Security shall be entitled to pay any amount hereunder in
respect of Scheduled Payments on the Obligations, including any amounts due on
the Obligations on an accelerated basis, whether or not any notice and
certificate shall have been Received by
A-2
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
Financial Security as provided above; provided, however, that by acceptance of
this Policy the Indenture Trustee agrees to provide upon request to Financial
Security a notice and certificate in respect of any such payments made by
Financial Security. Financial Security shall be entitled to pay hereunder any
amount due on the Obligations on an accelerated basis at any time or from time
to time, in whole or in part, prior to the scheduled date of payment thereof.
Scheduled Payments insured hereunder shall not include interest, in respect of
principal paid hereunder on an accelerated basis, accruing from after the date
of such payment of principal. Financial Security's obligations hereunder in
respect of Scheduled Payments shall be discharged to the extent such amounts are
paid by the Issuer in accordance with the Indenture or disbursed by Financial
Security as provided herein whether or not such funds are properly applied by
the Indenture Trustee except as otherwise proved in paragraph 3 of this
Endorsement.
3. Notices and Conditions to Payment in Respect of Scheduled Payments
Avoided as Preference Payments. If any Scheduled Payment is avoided as a
preference payment under applicable bankruptcy, insolvency, receivership or
similar law, Financial Security will pay such amount out of the funds of
Financial Security on the later of (a) the date when due to be paid pursuant to
the Order referred to below or (b) the first to occur of (i) the fourth Business
Day following Receipt by Financial Security from the Indenture Trustee of (A) a
certified copy of the order of the court or other governmental body which
exercised jurisdiction to the effect that the relevant Holder is required to
return principal or interest distributed with respect to the Obligations during
the Term of this Policy because such distributions were avoidable as preference
payments under applicable bankruptcy law (the "Order"), (B) a certificate of the
relevant Holder that the Order has been entered and is not subject to any stay
and (C) an assignment duly executed and delivered by the relevant Holder, in
such form as is reasonably required by Financial Security and provided to the
relevant Holder by Financial Security, irrevocably assigning to Financial
Security all rights and claims of the relevant Holder relating to or arising
under the Obligations against the estate of the Obligor or otherwise with
respect to such preference payment or (ii) the date of Receipt by Financial
Security from the Indenture Trustee of the items referred to in clauses (A), (B)
and (C) above if, at least four Business Days prior to such date of Receipt,
Financial Security shall have Received written notice from the Indenture Trustee
that such items were to be delivered on such date and such date was specified in
such notice. Such payment shall be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order and not to the
Indenture Trustee or any Holder directly (unless a Holder has previously paid
such amount to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order, in which case such payment shall be disbursed to
the Indenture Trustee for distribution to such Holder upon proof of such payment
reasonably satisfactory to Financial Security). In connection with the
foregoing, Financial Security shall have the rights provided pursuant to Section
6.06 of the Sale and Servicing Agreement and Section 8.03(f) of the Indenture.
4. Governing Law. This Policy shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
5. Fiscal Agent. At any time during the Term of this Policy, Financial
Security may appoint a fiscal agent (the "Fiscal Agent") for purposes of this
Policy by written
A-3
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
notice to the Indenture Trustee at the notice address specified in the Indenture
specifying the name and notice address of the Fiscal Agent. From and after the
date of receipt of such notice by the Indenture Trustee, (i) copies of all
notices and documents required to be delivered to Financial Security pursuant to
this Policy shall be simultaneously delivered to the Fiscal Agent and to
Financial Security and shall not be deemed Received until Received by both and
(ii) all payments required to be made by Financial Security under this Policy
may be made directly by Financial Security or by the Fiscal Agent on behalf of
Financial Security. The Fiscal Agent is the agent of Financial Security only and
the Fiscal Agent shall in no event be liable to any Owner for any acts of the
Fiscal Agent or any failure of Financial Security to deposit, or cause to be
deposited, sufficient funds to make payments due under this Policy.
6. Waiver of Defenses. To the fullest extent permitted by applicable
law, Financial Security agrees not to assert, and hereby waives, for the benefit
of each Owner, all rights (whether by counterclaim, setoff or otherwise) and
defenses (including, without limitation, the defense of fraud), whether acquired
by subrogation, assignment or otherwise, to the extent that such rights and
defenses may be available to Financial Security to avoid payment of its
obligations under this Policy in accordance with the express provisions of this
Policy.
7. Notices. All notices to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to Financial Security as
follows:
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President - Surveillance Department
Re: ABFS Mortgage Loan Trust 1999-1
Telecopy No.: (212) 339-3518
Confirmation: (212) 826-0100
Financial Security may specify a different address or addresses by
writing mailed or delivered to the Indenture Trustee.
8. Priorities. In the event any term or provision of the face of this
Policy is inconsistent with the provisions of this Endorsement, the provisions
of this Endorsement shall take precedence and shall be binding.
9. Exclusions From Insurance Guaranty Funds. This Policy is not covered
by the Property/Casualty Insurance Security Fund specified in Article 76 of the
New York Insurance Law. This Policy is not covered by the Florida Insurance
Guaranty Association created under Part II of Chapter 631 of the Florida
Insurance Code. In the event Financial Security were to become insolvent, any
claims arising under this Policy are excluded from coverage by the California
Insurance Guaranty Association, established pursuant to Article 14.2 of Chapter
1 of Part 2 of Division 1 of the California Insurance Code.
A-4
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
10. Surrender of Policy. The Indenture Trustee shall surrender this
Policy to Financial Security for cancellation upon expiration of the Term of
this Policy.
IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused this
Endorsement No. 1 to be executed by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By:
------------------------------
Authorized Officer
A-5
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
Exhibit A
To Endorsement 1
NOTICE OF CLAIM AND CERTIFICATE
-------------------------------
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
The undersigned, a duly authorized officer of The Bank of New York (the
"Indenture Trustee"), hereby certifies to Financial Security Assurance Inc.
("Financial Security"), with reference to Financial Guaranty Insurance Policy
No. 50792-N, dated March 30, 1999 (the "Policy"), issued by Financial Security
in respect of ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series
1999-1:
(i) The Indenture Trustee is the Indenture Trustee under the
Indenture for the Holders.
(ii) The sum of all amounts on deposit or scheduled to be on
deposit) in the Note Account and available for distribution to
the Holders pursuant to the Indenture and the Sale and
Servicing Agreement will be $_______________ (the "Shortfall")
less than the aggregate amount of Scheduled Payments due on
_______________.
(iii) The Trustee is making a claim under the Policy for the
Shortfall to be applied to the payment of Scheduled Payments.
(iv) The Indenture Trustee agrees that, following receipt of funds
from Financial Security, it shall (a) hold such amounts in
trust and apply the same directly to the payment of Scheduled
Payments on the Obligations when due; (b) not apply such funds
for any other purpose; (c) not commingle such funds with other
funds held by the Indenture Trustee and (d) maintain an
accurate record of such payments with respect to each
Obligation the corresponding claim on the Policy and proceeds
thereof and, if the Obligation is required to be surrendered
for such payment, shall stamp on each such Obligation the
legend "$[insert applicable amount] paid by Financial Security
and the balance hereof has been cancelled and reissued" and
then shall deliver such Obligation to Financial Security.
(v) The Indenture Trustee, on behalf of the Holders, hereby
assigns to Financial Security the rights of the Holders with
respect to the Trust Estate to the extent of any payments
under the Policy, including, without limitation, any amounts
due to the Holders in respect of securities law violations
arising from the offer and sale
A-1
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
of the Obligations. The foregoing assignment is in addition
to, and not in limitation of, rights of subrogation otherwise
available to Financial Security in respect of such payments.
The Indenture Trustee shall take such action and deliver such
instruments as may be reasonably requested or required by
Financial Security to effectuate the purpose or provisions of
this clause (v).
(vi) The Indenture Trustee, on its behalf and on behalf of the
Holders, hereby appoints Financial Security as agent and
attorney-in-fact for the Indenture Trustee and each such
Holder in any legal proceeding with respect to the
Obligations. The Indenture Trustee hereby agrees that
Financial Security may at any time during the continuation of
any proceeding by or against the Seller under the United
States Bankruptcy Code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an
"Insolvency Proceeding") direct all matters relating to such
Insolvency Proceeding, including without limitation, (A) all
matters relating to any claim in connection with an Insolvency
Proceeding seeking the avoidance as a preferential transfer of
any payment with respect to the Obligations (a "Preference
Claim"), (B) the direction of any appeal of any order relating
to any Preference Claim at the expense of Financial Security
but subject to reimbursement as provided in the Insurance
Agreement and (C) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition, the
Indenture Trustee hereby agrees that Financial Security shall
be subrogated to, and the Indenture Trustee on its behalf and
on behalf of each Holder, hereby delegates, and assigns, to
the fullest extent permitted by law, the rights of the
Indenture Trustee and each Holder in the conduct of any
Insolvency Proceeding, including, without limitation, all
rights of any party to an adversary proceeding or action with
respect to any court order issued in connection with any such
Insolvency Proceeding.
(vii) Payment should be made by wire transfer directed to the
[SPECIFY INSURANCE ACCOUNT].
Unless the context otherwise requires, capitalized terms used in this
Notice of Claim and Certificate and not defined herein shall have the meanings
provided in the Policy.
A-2
<PAGE>
Policy No.: 50792-N Date of Issuance: March 30, 1999
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered
this Notice of Claim and Certificate as of the ____ day of ___________________,
_____.
THE BANK OF NEW YORK
as Indenture Trustee
By:
------------------------
Title:
---------------------
- --------------------------------------------------------------------------------
For Financial Security or Fiscal Agent Use Only
Wire transfer sent _______________ by ____________________________
Confirmation Number ______________________________
A-3
<PAGE>
Exhibit 23.1
[PricewaterhouseCoopers LLP Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
-------------
We consent to the incorporation by reference in the Prospectus Supplement of
ABFS 1999-1, Inc. relating to the ABFS Mortgage Loan Trust 1999-1 of our report
dated January 26, 1998 on our audits of the consolidated financial statements of
Financial Security Assurance Inc. and Subsidiaries as of December 31, 1997 and
1996, and for each of the three years in the period ended December 31, 1997. We
also consent to the reference to our Firm under the caption "Experts".
PricewaterhouseCoopers LLP
March 24, 1999
