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DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT
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DATED AS OF FEBRUARY 22, 2005
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BY AND AMONG
AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION,
CERTAIN OF ITS AFFILIATES,
AS DEBTORS AND DEBTORS-IN-POSSESSION,
THE LENDERS PARTY HERETO,
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
AS ADMINISTRATIVE AGENT AND CO-LEAD ARRANGER,
AND
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS SYNDICATION AGENT AND CO-LEAD ARRANGER
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<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS AND ACCOUNTING
MATTERS..............................2
1.01 CERTAIN DEFINED
TERMS...........................................2
1.02 ACCOUNTING TERMS AND
DETERMINATIONS............................36
1.03 UNIFORM COMMERCIAL
CODE........................................36
1.04
CONSTRUCTION...................................................36
SECTION 2. ADVANCES, EVIDENCE OF DEBT AND
PREPAYMENTS.....................37
2.01
ADVANCES.......................................................37
2.02 EVIDENCE OF
DEBT...............................................38
2.03 PROCEDURE FOR
BORROWING........................................39
2.04 LIMITATION ON TYPES OF ADVANCES;
ILLEGALITY....................41
2.05 REPAYMENT OF ADVANCES;
INTEREST................................42
2.06 MANDATORY
PREPAYMENT...........................................42
2.07 OPTIONAL
PREPAYMENTS...........................................46
2.08 REQUIREMENTS OF
LAW............................................47
2.09 PURPOSE OF
ADVANCES............................................48
SECTION 3. PAYMENTS; COMPUTATIONS;
TAXES..................................48
3.01
PAYMENTS.......................................................48
3.02 SHARING OF PAYMENTS,
ETC.......................................48
3.03 APPORTIONMENT OF
PAYMENTS......................................48
3.04
COMPUTATIONS...................................................50
3.05 JOINT AND SEVERAL LIABILITY OF
BORROWERS.......................50
3.06 U.S.
TAXES.....................................................51
3.07
FEES...........................................................52
SECTION 4. COLLATERAL SECURITY AND ADMINISTRATIVE
PRIORITY................53
4.01 COLLATERAL; SECURITY
INTEREST..................................53
4.02 ADMINISTRATIVE
PRIORITY........................................56
4.03 GRANTS, RIGHTS AND
REMEDIES....................................57
4.04 NO FILINGS
REQUIRED............................................57
4.05
SURVIVAL.......................................................57
4.06 CHANGES IN LOCATIONS, NAME,
ETC................................58
<PAGE>
4.07 AGENT'S APPOINTMENT AS
ATTORNEY-IN-FACT........................58
4.08 PERFORMANCE BY THE AGENT OF BORROWER'S
OBLIGATIONS.............59
4.09
PROCEEDS.......................................................59
4.10
REMEDIES.......................................................60
4.11 LIMITATION ON DUTIES REGARDING PRESERVATION OF
COLLATERAL......61
4.12 POWERS COUPLED WITH AN
INTEREST................................61
4.13 RELEASE OF SECURITY
INTEREST...................................61
SECTION 5. CONDITIONS
PRECEDENT...........................................62
5.01 CONDITIONS PRECEDENT TO INITIAL
ADVANCE........................62
5.02 CONDITIONS PRECEDENT TO INITIAL AND SUBSEQUENT
ADVANCES........65
5.03 CONDITIONS SUBSEQUENT TO INITIAL
ADVANCE.......................67
SECTION 6. REPRESENTATIONS AND
WARRANTIES.................................67
6.01
EXISTENCE......................................................67
6.02 FINANCIAL
CONDITION............................................67
6.03
LITIGATION.....................................................68
6.04 NO
BREACH......................................................68
6.05
ACTION.........................................................68
6.06
APPROVALS......................................................68
6.07 MARGIN
REGULATIONS.............................................69
6.08
TAXES..........................................................69
6.09 INVESTMENT COMPANY
ACT.........................................69
6.10 NO LEGAL
BAR...................................................69
6.11 NO
DEFAULT.....................................................69
6.12 COLLATERAL; COLLATERAL SECURITY; ADMINISTRATIVE
PRIORITY.......69
6.13 CHIEF EXECUTIVE/OPERATING
OFFICES..............................70
6.14 LOCATION OF BOOKS AND
RECORDS..................................70
6.15 TRUE AND COMPLETE
DISCLOSURE...................................70
6.16
ERISA..........................................................71
6.17 NO AGENT OR LENDER
LICENSES....................................71
6.18 APPROVED MORTGAGE ORIGINATORS
LICENSES.........................71
6.19 NO BURDENSOME
RESTRICTIONS.....................................71
6.20
SUBSIDIARIES...................................................71
6.21 ORIGINATION AND ACQUISITION OF MORTGAGE
LOANS..................72
(ii)
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6.22 NO ADVERSE
SELECTION...........................................72
6.23 FRAUDULENT
CONVEYANCE..........................................72
6.24
ORDERS.........................................................72
6.25 SERVICING REIMBURSEMENT
RIGHTS.................................72
6.26 COLLECTION ACCOUNTS AND ESCROW
ACCOUNTS........................72
6.27 WAREHOUSE TRUST TAX
STATUS.....................................72
SECTION 7. COVENANTS OF THE
BORROWERS..................................73
7.01 FINANCIAL STATEMENTS AND OTHER
INFORMATION.....................73
7.02
LITIGATION.....................................................75
7.03 EXISTENCE,
ETC.................................................75
7.04 PROHIBITION OF FUNDAMENTAL
CHANGES.............................76
7.05 BORROWING BASE
DEFICIENCY......................................76
7.06
LIQUIDITY......................................................76
7.07 SATISFACTION OF CONDITIONS PRECEDENT FOR THE FINAL
ORDER.......76
7.08 TRANSFER OF GREENWICH PRE-PETITION LOAN AGREEMENT
COLLATERAL...76
7.09
NOTICES........................................................76
7.10
SERVICING......................................................77
7.11 SERVICING REIMBURSEMENT
RIGHTS.................................77
7.12 UNDERWRITING
GUIDELINES........................................78
7.13 LINES OF
BUSINESS..............................................78
7.14 TRANSACTIONS WITH
AFFILIATES...................................78
7.15 USE OF
PROCEEDS................................................78
7.16 LIMITATION ON
LIENS............................................79
7.17 LIMITATION ON SALE OF
ASSETS...................................79
7.18 LIMITATION ON
DISTRIBUTIONS....................................79
7.19 RESTRICTED
PAYMENTS............................................79
7.20 LOANS, ADVANCES, INVESTMENTS,
ETC..............................79
7.21 ORDERS, ADMINISTRATIVE PRIORITY; LIEN PRIORITY;
PAYMENT OF
CLAIMS..............................................79
7.22 INFORMATION FROM APPROVED MORTGAGE ORIGINATORS AND
SERVICING
TRANSMISSION.........................................80
7.23 NO AMENDMENT OR
WAIVER.........................................80
7.24 MAINTENANCE OF PROPERTY;
INSURANCE.............................80
7.25 FURTHER IDENTIFICATION OF
COLLATERAL...........................81
(iii)
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7.26 MORTGAGE LOAN DETERMINED TO BE
DEFECTIVE.......................81
7.27 INTEREST RATE PROTECTION
AGREEMENTS............................81
7.28 CERTIFICATE OF A RESPONSIBLE OFFICER OF THE
BORROWERS..........81
7.29 ALTERNATIVE
COLLATERAL.........................................81
7.30
ERISA..........................................................81
7.31
HEDGING........................................................81
7.32 OTHER
INDEBTEDNESS.............................................81
7.33 POOLING AND SERVICING
AGREEMENTS...............................82
7.34 NO WAIVER OF SERVICING REIMBURSEMENT
RIGHTS....................82
7.35 CASH
FLOW......................................................82
7.36
OPINIONS.......................................................82
7.37 MORTGAGE LOAN ORIGINATIONS AND
COMMITMENTS.....................82
7.38 FUNDING OF COLLECTION ACCOUNTS AND ESCROW
ACCOUNTS.............82
SECTION 8. EVENTS OF
DEFAULT..............................................83
SECTION 9. REMEDIES UPON
DEFAULT..........................................87
SECTION 10.
AGENT..........................................................88
10.01
APPOINTMENT....................................................88
10.02 NATURE OF
DUTIES...............................................88
10.03 RIGHTS, EXCULPATION,
ETC.......................................90
10.04 RELIANCE 90
10.05
INDEMNIFICATION................................................91
10.06 AGENT
INDIVIDUALLY.............................................91
10.07 SUCCESSOR
AGENT................................................91
10.08 COLLATERAL
MATTERS.............................................92
10.09 SYNDICATION AGENT AND CO-LEAD
ARRANGERS........................93
SECTION 11.
MISCELLANEOUS..................................................93
11.01 AMENDMENTS,
ETC................................................93
11.02 WAIVER
......................................................94
11.03 NOTICES. 95
11.04 INDEMNIFICATION AND
EXPENSES...................................95
11.05 PAYMENT OF CLEARWING INDEMNIFICATION
LIABILITIES...............97
11.06
AMENDMENTS.....................................................97
11.07 SUCCESSORS AND
ASSIGNS.........................................97
(iv)
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11.08
SURVIVAL.......................................................97
11.09
CAPTIONS.......................................................98
11.10 COUNTERPARTS; TELEFACSIMILE
EXECUTION..........................98
11.11 LOAN AGREEMENT CONSTITUTES SECURITY AGREEMENT;
GOVERNING
LAW..................................................98
11.12 CERTAIN WAIVERS; WAIVER OF JURY
TRIAL..........................98
11.13
ACKNOWLEDGMENTS................................................99
11.14 NO PARTY DEEMED
DRAFTER........................................99
11.15 ABFS AS AGENT FOR
BORROWERS....................................99
11.16 HYPOTHECATION OR PLEDGE OF
COLLATERAL..........................99
11.17 ASSIGNMENTS;
PARTICIPATIONS...................................100
11.18
SERVICING.....................................................103
11.19 PERIODIC DUE DILIGENCE
REVIEW.................................104
11.20 SET-OFF
.....................................................105
11.21 ENTIRE
AGREEMENT..............................................105
11.22
RECORDS.......................................................105
11.23
CONFIDENTIALITY...............................................105
11.24 PUBLIC
ANNOUNCEMENTS..........................................105
11.25 RIGHT OF FIRST
OFFER..........................................106
11.26 MORTGAGE LOAN PURCHASE
COMMITMENT.............................106
SCHEDULES
SCHEDULE A Other Borrowers
SCHEDULE B Lenders and Commitments
SCHEDULE C Approved Underwriting Guidelines
SCHEDULE D IOS
SCHEDULE E Representations and Warranties re: Mortgage Loans
SCHEDULE F Senior Claims
SCHEDULE G Tranche D Borrowing Base Calculation
SCHEDULE H Budget
(v)
<PAGE>
SCHEDULE I Securitization Trusts
SCHEDULE 5.03 Conditions Subsequent
SCHEDULE 6.01 Jurisdictions of Organization
SCHEDULE 6.03 Litigation
SCHEDULE 6.13 Chief Operating Office
SCHEDULE 6.18 Licensing
SCHEDULE 6.20 Subsidiaries
SCHEDULE 7.01(D) Additional Reporting Requirements
SCHEDULE 7.16 Liens
SCHEDULE 7.20 Investments
SCHEDULE 7.32 Indebtedness
SCHEDULE 11.26 Mortgage Loan Purchase Commitment
EXHIBITS
EXHIBIT A Interim Order
EXHIBIT B Required Fields for Mortgage Loan Data
Transmission
EXHIBIT C-1 Notice of Borrowing and Pledge
EXHIBIT C-2 Notice of Borrowing
EXHIBIT D Required Fields for Servicing Transmission
EXHIBIT 11.17(C) Form of Confidentiality Agreement
(vi)
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DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT
THIS DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT (this
"LOAN
AGREEMENT"), dated as of February 22, 2005, by and among
American Business
Financial Services, Inc., as a debtor and a
debtor-in-possession, a Delaware
corporation ("ABFS" or the "COMPANY"), the affiliates of ABFS
listed on SCHEDULE
A hereto, each as a debtor and a debtor-in-possession (together
with ABFS,
individually a "BORROWER" and collectively, the "BORROWERS"),
the Lenders party
hereto and set forth on SCHEDULE B hereto (each individually a
"LENDER" and
collectively, the "LENDERS"), Greenwich Capital Financial
Products, Inc., a
Delaware corporation, as administrative agent for the Secured
Parties (as
defined herein) (in such capacity, the "AGENT"), The CIT
Group/Business Credit,
Inc., as syndication agent for the Lenders (in such capacity,
the "SYNDICATION
AGENT"), Greenwich Capital Financial Products, Inc. and The CIT
Group/Business
Credit, Inc., as co-lead arrangers for the Lenders (in such
capacity, the
"CO-LEAD ARRANGERS"), and the other Secured Parties (as defined
below).
RECITALS
On January 21, 2005, the Borrowers (other than ABFS
Consolidated) and,
on January 24, 2005, ABFS Consolidated commenced cases (the
"CHAPTER 11 CASES")
under Chapter 11 of Title 11 of the United States Code (the
"BANKRUPTCY CODE")
in the United States Bankruptcy Court for the District of
Delaware (the
"BANKRUPTCY Court"), and the Borrowers have retained possession
of their assets
and are authorized under the Bankruptcy Code to continue the
operation of their
businesses as debtors-in-possession.
The Bankruptcy Court has authorized the joint administration of
the
bankruptcy estate of each Borrower.
On January 26, 2005, ABC (the "SELLER") and Greenwich Capital
Financial
Products, Inc. ("GREENWICH") entered into a Repurchase Agreement
(the
"REPURCHASE AGREEMENT") pursuant to which ABC transferred to
Greenwich that
certain Class X Certificate, No. X-2 issued by ABFS Mortgage
Loan Trust 2002-4
against Greenwich's payment to the Seller of $6,830,000 that was
used as
follows: (a) $4,000,000 was used by the Seller solely to fund
payroll and other
compensation expenses of the Borrowers, (b) $2,330,000 was used
by the Seller to
prepay certain Clearwing Obligations (as hereinafter defined)
and (c) $500,000
was used to pay a non-refundable repurchase fee to Greenwich
(the "REPURCHASE
FEE").
The Borrowers, the Lenders and the Agent wish to enter into an
agreement
to provide a senior, secured, superpriority debtor-in-possession
financing
facility of up to $500,000,000 (the "FACILITY") (of which only
the amounts set
forth in SECTION 5.01(T) shall be available to the Borrowers
prior to entry of
the Final Order) to the Borrowers, consisting of (a) a revolving
credit facility
for the funding of newly-originated Mortgage Loans (the "TRANCHE
A FACILITY"),
(b) a revolving credit facility for the funding of
newly-originated Mortgage
Loans for which the Custodian has not yet received the required
documents (the
"TRANCHE B FACILITY"), (c) a revolving credit facility for
general corporate
purposes (the "TRANCHE C FACILITY"), (d) a term Servicing
Reimbursement Rights
facility (the "Tranche D Facility) and (e) a term facility for
the funding of
the repayment in part of the Clearwing Obligations (the "TRANCHE
E FACILITY").
<PAGE>
The Lenders have agreed, subject to the terms and conditions of
this
Loan Agreement, to provide such financing to the Borrowers, with
certain funds
of the Borrowers being used to repay any Advances made hereunder
as more
particularly described herein.
Accordingly, for good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following terms
shall
have the following meanings:
"90 DAY ELIGIBLE MORTGAGE LOANS" shall have the meaning set
forth in the
definition of the term "Sublimit Excess Loan."
"120 DAY ELIGIBLE MORTGAGE LOANS" shall have the meaning set
forth in
the definition of the term "Sublimit Excess Loan."
"2003-1 TRUST AGREEMENT" means that certain Trust Agreement,
dated as of
September 26, 2003, between ABFS Consolidated and the Approved
Mortgage
Originators, as depositors, Wilmington Trust Company, as owner
trustee, and the
Company, as indemnitor, whereby Trust 2003-1 was created, as
amended and
restated by the Amended and Restated Trust Agreement dated as of
October 14,
2003.
"2003-2 COLLECTION ACCOUNT" means the Collection Account (as
defined in
the Greenwich Pre-Petition Loan Agreement), such Collection
Account to be
subject to the 2003-2 Control Agreement upon payment in full of
the Greenwich
Pre-Petition Loan Agreement.
"2003-2 CONTROL AGREEMENT" shall mean that certain control
agreement
with respect to the 2003-2 Collection Account, in form and
substance
satisfactory to the Agent, executed and delivered by the
Borrowers, the Agent
and JPMorgan.
"ABC" means American Business Credit, Inc., a Pennsylvania
corporation
and a Borrower.
"ABFS" shall have the meaning set forth in the recitals
hereto.
"ABFS CONSOLIDATED" means ABFS Consolidated Holdings, Inc., a
Delaware
corporation and a Borrower.
"ABFS MASTER SWEEP ACCOUNT" means that certain account number
103386976
of the Company maintained with JPMorgan.
"ABFS MORTGAGE LOAN TRUST 2003-1" means that certain trust named
ABFS
Mortgage Loan Trust 2003-1 pursuant to the Pooling and Servicing
Agreement dated
as of March 1, 2003 (as amended) governing ABFS Mortgage Loan
Trust 2003-1.
2
<PAGE>
"ABMS" means American Business Mortgage Services, Inc. fka New
Jersey
Mortgage and Investment Corp., a New Jersey corporation and a
Borrower.
"ACCEPTED SERVICING PRACTICES" means, with respect to any
Mortgage Loan,
accepted and prudent mortgage servicing practices (including
practices regarding
reconciliation of bank accounts, processing of mortgage
payments, processing of
disbursements for tax and insurance payments, maintenance of
mortgage loan
records, performance of collection efforts including disposition
of delinquent
loans, foreclosure activities and disposition of real estate
owned and
performance of investor accounting and reporting processes) of
prudent mortgage
lending institutions which service mortgage loans of the same
type as such
Mortgage Loan in the jurisdiction where the related Mortgaged
Property is
located and in a manner at least equal in quality to the
servicing that ABC,
ABMS or HAC provided from the period of July 1, 2004 through
December 31, 2004
to mortgage loans which it owned in its own respective servicing
portfolio
during such period.
"ADMINISTRATIVE BORROWER" shall have the meaning set forth in
SECTION
11.15 hereof.
"ADVANCE" means a Tranche A Advance, Tranche B Advance, Tranche
C
Advance, Tranche D Advance or Tranche E Advance.
"ADVANCE ACCOUNT" means, with respect to Tranche A Advances and
Tranche
B Advances, the Advance Account (as defined in the Custodial
Agreement) and,
with respect to Tranche C Advances, Tranche D Advances and
Tranche E Advances,
that certain account number 103386976 of ABFS maintained with
JPMorgan.
"AFFILIATE" means, with respect to any Person, any other Person
which
(i) directly or indirectly, controls, is controlled by, or is
under common
control with, such Person, or (ii) is a depositor or indemnitor
of such Person
(if such Person is a trust). For purposes of this definition,
"control"
(together with the correlative meanings of "controlled by" and
"under common
control with") means possession, directly or indirectly, of the
power (a) to
vote 10% or more of the securities (on a fully diluted basis)
having ordinary
voting power for the directors or managing general partners (or
their
equivalent) of such Person, or (b) to direct or cause the
direction of the
management or policies of such Person, whether through the
ownership of voting
securities, by contract, or otherwise.
"AGED ADVANCE RATE" means (a) with respect to 90 Day Eligible
Mortgage
Loans, 87.63% and (b) with respect to 120 Day Eligible Mortgage
Loans, 72.16%.
"AGENT" shall have the meaning set forth in the preamble
hereto.
"AGENT ADVANCES" shall have the meaning set forth in SECTION
10.08
hereof.
"ALLOCATED AMOUNT" means $150,000,000 LESS, for each month after
the
Closing Date, the lesser of (i) amounts paid by the Borrowers
during such month
pursuant to clauses (D)(I), (D)(II), (D)(III), (D)(VI),
(D)(VII)(A) and (H)(I)
through (H)(VI) of SECTION 2.06 and (ii) the amount that the
Allocated Amount
would need to be reduced in order to have a Collateral
3
<PAGE>
Coverage Ratio (as defined and calculated in accordance with the
Orders), after
giving effect to such reduction, of not less than 1.5 to
1.0.
"ALTA" means the American Land Title Association.
"ANCILLARY FEES" means "Late Fees," "NSF Fees" and other
ancillary
servicing fees to which any Borrower is entitled to
reimbursement or collection
under the related Securitization Trust documents.
"APPLICABLE COLLATERAL PERCENTAGE" means, with respect to an
Eligible
Mortgage Loan, the following percentages of the unpaid principal
balance
thereof, in each case reduced by any applicable Delinquency
Adjustment:
(a) if the loan has a FICO score of 640 or greater, 97%;
(b) if the loan has a FICO score greater than 599 but less
than 640, 95%;
(c) if the loan has a FICO score greater than 549 but less
than 600, 93%;
(d) if the loan has a FICO score greater than 519 but less
than 550, 89%; and
(e) if the loan has a FICO score less than 520 or no FICO
score, 0%.
For example, the Applicable Collateral Percentage for a Mortgage
Loan
(1) with a FICO score of 550, and (2) that is 60 days delinquent
(delinquent
with respect to a Monthly Payment on the date of the second
scheduled related
Monthly Payment becoming due) and therefore subject to a
Delinquency Adjustment,
shall be 73% (and such Mortgage Loan shall cease to be an
Eligible Mortgage Loan
if it remains delinquent for another two months).
"APPLICABLE MARGIN" means (a) with respect to Tranche A
Advances, 4.00%
per annum, (b) with respect to Tranche B Advances, 6.00% per
annum, (c) with
respect to Tranche C Advances, 8.50% per annum, (d) with respect
to Tranche D
Advances, 8.50% per annum and (e) with respect to Tranche E
Advances, 7.00% per
annum.
"APPRAISED VALUE" means the value set forth in an appraisal made
in
connection with the origination of the related Mortgage Loan as
the value of the
Mortgaged Property.
"APPROVED MORTGAGE ORIGINATORS" means Participating Banks and
mortgage
loan origination companies that are Borrowers and that are
reasonably approved
by the Agent in writing from time to time. The initial Approved
Mortgage
Originators are ABC, ABMS, HAC and the Participating Banks.
"APPROVED MORTGAGE PURCHASERS" means purchasers of mortgage
loans that
are Borrowers and that are reasonably approved by the Agent in
writing from time
to time. The initial Approved Mortgage Purchasers are ABC, ABMS
and HAC.
4
<PAGE>
"APPROVED PURCHASE AGREEMENTS" means those agreements
reasonably
approved in writing by the Agent as an "Approved Purchase
Agreement" hereunder.
"APPROVED PURCHASE PROGRAM" means the Bank Alliance Program,
the
Approved Third Party Purchase Program and such other programs as
may hereafter
be reasonably approved in writing by the Agent as an "Approved
Purchase Program"
hereunder.
"APPROVED THIRD PARTY PURCHASE PROGRAM" means any program
pursuant to
which an Approved Mortgage Purchaser purchases Mortgage Loans so
long as the
loans subject to such program (a) meet Approved Underwriting
Guidelines, (b) are
processed and underwritten by an Approved Mortgage Originator
which is acting as
agent on behalf of a lender approved by the Agent in its
reasonable discretion,
(c) are funded by such lender in anticipation of a post-closing
sale to an
Approved Mortgage Purchaser, and (d) are purchased from such
lender within 2
weeks of closing such loan.
"APPROVED UNDERWRITING GUIDELINES" means the underwriting
guidelines of
(a) Approved Mortgage Purchasers, or (b) Approved Mortgage
Originators, in each
case as reasonably approved in writing by the Agent. The
underwriting guidelines
attached as SCHEDULE C hereto have been approved by the
Agent.
"ASSIGNMENT OF MORTGAGE" means, with respect to any Mortgage,
an
assignment of the Mortgage, notice of transfer or equivalent
instrument in
recordable form, sufficient under the laws of the jurisdiction
wherein the
related Mortgaged Property is located to reflect the assignment
and pledge of
the Mortgage.
"ATTORNEY BAILEE LETTER" shall have the meaning assigned to such
term in
the Custodial Agreement.
"AVAILABILITY" means, as of any date of determination, the
amount that
the Borrowers are entitled to borrow as Advances hereunder
(after giving effect
to all then outstanding Advances, interest thereon, fees, and
expenses and all
sublimits and reserves then applicable hereunder).
"AVOIDANCE ACTIONS" means actions available to the bankruptcy
estate of
the Borrowers in the Chapter 11 Cases pursuant to Sections 544,
545, 547, 548,
549, 550, 551, 553(b) or 724(a) of the Bankruptcy Code and the
proceeds thereof.
"BACK-UP SERVICER" means Countrywide Home Loans Servicing LP or
any
other Person who is (a) party to the Servicing Agreement as a
Back-Up Servicer
and (b) approved by the Agent as a Back-Up Servicer.
"BANK ALLIANCE PROGRAM" means the Company's "Bank Alliance
Program" so
long as the loans subject to such program (a) meet the Approved
Underwriting
Guidelines, (b) are processed and underwritten by an Approved
Mortgage
Originator which is acting as agent on behalf of a Participating
Bank, (c) are
funded by a Participating Bank in anticipation of a post-closing
sale to an
Approved Mortgage Originator, and (d) are purchased from a
Participating Bank
within 2 weeks of closing such loan.
5
<PAGE>
"BANKRUPTCY CODE" shall have the meaning set forth in the
recitals
hereto.
"BANKRUPTCY COURT" shall have the meaning set forth in the
recitals
hereto.
"BEST'S" means Best's Key Rating Guide, as the same shall be
amended
from time to time.
"BORROWER" shall have the meaning set forth in the preamble
hereto.
"BORROWING BASE" shall mean the sum of the Tranche A Borrowing
Base, the
Tranche B Borrowing Base, the Tranche C Borrowing Base, the
Tranche D Borrowing
Base and the Tranche E Borrowing Base.
"BORROWING BASE DEFICIENCY" shall have the meaning set forth in
SECTION
2.06(A) hereof.
"BUDGET" means the Borrowers' budget attached as SCHEDULE H
hereto.
"BUSINESS DAY" means any day other than (i) a Saturday or
Sunday, (ii) a
day on which the New York Stock Exchange, the Federal Reserve
Bank of New York,
the Custodian or banking and savings and loan institutions in
the State of New
York, Connecticut or California or the City of New York or the
city or state in
which the Custodian's offices are located are closed, or (iii) a
day on which
trading in securities on the New York Stock Exchange or any
other major
securities exchange in the United States is not conducted.
"CAPITAL LEASE OBLIGATIONS" means, for any Person, all
obligations of
such Person to pay rent or other amounts under a lease of (or
other agreement
conveying the right to use) Property to the extent such
obligations are required
to be classified and accounted for as a capital lease on a
balance sheet of such
Person under GAAP, and, for purposes of this Loan Agreement, the
amount of such
obligations shall be the capitalized amount thereof, determined
in accordance
with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is
a
corporation, any and all shares, securities, interests,
participations or other
equivalents (however designated and whether or not voting) of
corporate stock
and (ii) with respect to any Person that is not a corporation,
any and all
partnership, limited liability company membership or other
equity interests of
such Person.
"CARVE-OUT" means (a) amounts payable pursuant to 28 U.S.C.
ss.
1930(a)(6), and (b) allowed fees and expenses of attorneys,
accountants and
other professionals retained by formal application in the
Chapter 11 Cases
(other than ordinary course professionals in connection with the
enforcement and
collection of Mortgage Loans) pursuant to Sections 327 and 1103
of the
Bankruptcy Code, but the amount entitled to priority under this
clause (b)
("PRIORITY PROFESSIONAL EXPENSES") shall not exceed $1,500,000
outstanding and
unpaid in the aggregate at any time (inclusive of any holdbacks
required by the
Bankruptcy Court and any amounts unbilled for services performed
prior to a
Priority Triggering Event) (the "PROFESSIONAL EXPENSE CAP")
regardless of
whether the fees or expenses are allowed and unpaid at the time
of a Priority
Triggering Event or are incurred before or after such event;
PROVIDED, HOWEVER,
THAT (A)
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<PAGE>
after the Agent has provided (by hand or facsimile) written
notice to the
Administrative Borrower of the occurrence of an Event of Default
hereunder or a
default (and expiration of any applicable cure period) by the
Borrowers in any
of their obligations under the Orders (a "PRIORITY TRIGGERING
EVENT"), any
payments actually made to such professionals after the
occurrence and during the
continuance of such Event of Default or default, under Sections
330 and 331 of
the Bankruptcy Code or otherwise, shall reduce the Professional
Expense Cap on a
dollar-for-dollar basis and (B) for the avoidance of doubt, any
payment actually
made to such professionals prior to the notice described in
subclause (A) above
may be retained by such professionals and not reduce the
Professional Expense
Cap; and PROVIDED, FURTHER, THAT no portion of the Carve-Out
shall be used to
challenge this Loan Agreement and the other Loan Documents
(including the Liens
securing this Loan Agreement); PROVIDED, HOWEVER, that the
foregoing proviso
shall not prevent any portion of the Carve-Out from being used
to investigate
the Greenwich Pre-Petition Loan Agreement (including the Liens
securing the
Greenwich Pre-Petition Loan Agreement) as may be permitted by
the Bankruptcy
Code. The Professional Expense Cap shall not be reduced by the
amount of any
unapplied retainers provided to professionals of the
Borrowers.
"CASH EQUIVALENTS" means (a) securities with maturities of 90
days or
less from the date of acquisition issued or fully guaranteed or
insured by the
United States Government or any agency thereof, (b) certificates
of deposit and
eurodollar time deposits with maturities of 90 days or less from
the date of
acquisition and overnight bank deposits of any commercial bank
having capital
and surplus in excess of $500,000,000, (c) repurchase
obligations of any
commercial bank satisfying the requirements of clause (b) of
this definition,
having a term of not more than seven days with respect to
securities issued or
fully guaranteed or insured by the United States Government, (d)
commercial
paper of a domestic issuer rated at least A-1 or the equivalent
thereof by
Standard and Poor's Ratings Group ("S&P") or P-1 or the
equivalent thereof by
Moody's Investors Service, Inc. ("MOODY'S") and in either case
maturing within
90 days after the day of acquisition, (e) securities with
maturities of 90 days
or less from the date of acquisition backed by standby letters
of credit issued
by any commercial bank satisfying the requirements of clause (b)
of this
definition, or (f) shares of money market mutual or similar
funds which invest
exclusively in assets satisfying the requirements of clauses (a)
through (e) of
this definition.
"CHANGE OF CONTROL" means any one or more of the following: (a)
the IOS
(other than the IOS pledged pursuant to the Non-Debtor Pledge
Agreement) cease
to be 100% owned by the Borrowers, (b) any "person" or "group"
(within the
meaning of SECTIONS 13(D) and 14(D) of the Securities Exchange
Act of 1934),
other than the Permitted Holder, becomes the beneficial owner
(as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly,
of 10%, or more, of the outstanding Capital Stock of the Company
having the
right to vote for the election of members of a board of
directors, (c) the
Permitted Holder fails to own at least 20% of the outstanding
Capital Stock of
the Company or (d) the Company fails to own, directly or
indirectly, 100% of the
outstanding Capital Stock of the other Borrowers.
"CHAPTER 11 CASES" shall have the meaning set forth in the
recitals
hereto.
"CHRYSALIS LOAN AGREEMENT" means that certain Master Loan and
Security
Agreement, dated as of October 14, 2004, by and between Trust
2003-2 and
Chrysalis Warehouse Funding, LLC, as amended prior to the date
hereof.
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"CIT" means The CIT Group/Business Credit, Inc.
"CIT CREDIT" means $500,000.
"CLEARING ACCOUNT RESERVE" means $919,282 as such amount may be
reduced
from time to time by the Agent in its discretion.
"CLEARWING" means Clearwing Capital, LLC, a Delaware limited
liability
company.
"CLEARWING CURRENT-PAY EXPENSE CAP" means, for any month, the
lesser of
(a)(i) $100,000 PLUS (ii) the number of complete months that
have elapsed since
February 1, 2005 TIMES $50,000 and (b) $500,000.
"CLEARWING DEFERRED PAYOFF OBLIGATIONS" means the Clearwing
Deferred
Payoff Obligations (as defined in the Clearwing Payoff
Letter).
"CLEARWING INDEMNIFICATION CLAIM LIABILITIES" shall have the
meaning set
forth in SECTION 11.05 hereof.
"CLEARWING INDEMNIFICATION EXPENSE LIABILITIES" shall have the
meaning
set forth in SECTION 11.05 hereof.
"CLEARWING INDEMNIFICATION LIABILITIES" shall have the meaning
set forth
in SECTION 11.05 hereof.
"CLEARWING INDEMNIFIED PARTIES" means Clearwing, Chrysalis
Warehouse
Funding LLC and their respective lenders, members, Affiliates,
sponsors,
managing directors, directors, together with their respective
lenders, officers,
employees, agents, advisors, attorneys, and other
representatives.
"CLEARWING OBLIGATIONS" means Obligations (as defined in the
Clearwing
Pledge and Security Agreement).
"CLEARWING PAYOFF LETTER" means that certain letter regarding
the
repayment of the Clearwing Obligations.
"CLEARWING PLEDGE AND SECURITY AGREEMENT" means the Pledge and
Security
Agreement, dated as of October 14, 2003, between Trust 2003-1
and Clearwing, as
amended prior to the date hereof.
"CLEARWING TRANSACTION DOCUMENTS" means (a) the Chrysalis Loan
Agreement
and the Loan Documents as defined therein; (b) that certain
Trust Agreement,
dated as of October 14, 2003, by and among Wilmington Trust
Company as trustee
for ABFS Warehouse Trust 2003-2, a Delaware statutory trust, and
the Depositors
party thereto; (c) the 2003-1 Trust Agreement and the Basic
Documents (as
defined in the 2003-1 Trust Agreement); (d) that certain ABFS
Warehouse Trust
2003-1 Trust Certificate No. P-1; and (e) that certain Fee
Letter, dated as
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<PAGE>
of October 14, 2003, by and among Trust 2003-1 and Clearwing, as
amended from
time to time thereafter.
"CLOSING DATE" means the date on which the Agent sends the
Administrative Borrower a written notice that each of the
conditions precedent
set forth in SECTION 5.01 either has been satisfied or has been
waived.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to
time.
"CO-LEAD ARRANGERS" shall have the meaning set forth in the
preamble
hereto.
"COLLATERAL" means, subject to the limitations set forth in the
Orders
(including, without limitation, paragraphs d.i, d.ii and d.iii,
paragraph XIII,
paragraphs 17.a.v through 17.a.vii and paragraphs 51.b and 51.c
of the Interim
Order), all of each Borrower's now owned or hereafter acquired
right, title and
interest in and to each of the following (including, without
limitation, all
Property of the estate of each Borrower (within the meaning of
the Bankruptcy
Code) other than Avoidance Actions and the Excluded Collateral
(as defined in
the Security Agreement)):
(a) Accounts;
(b) Books;
(c) Chattel Paper (whether tangible or electronic);
(d) Commercial Tort Claims;
(e) Deposit Accounts (including the IOS Account, the
Mortgage
Collection Account, the Servicing Reimbursement Account and the
other Control
Accounts);
(f) Documents;
(g) Equipment;
(h) Fixtures;
(i) General Intangibles and Payment Intangibles (including
all
Servicing Reimbursement Rights, the Servicing Rights, all causes
of action under
the Bankruptcy Code or otherwise, other than Avoidance Actions,
and all rights
of the Borrowers under any Servicing Agreement, the Custodial
Agreement or any
other document);
(j) Goods;
(k) Instruments;
(l) all Interest Rate Protection Agreements;
(m) Intellectual Property;
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<PAGE>
(n) Inventory;
(o) Investment Property;
(p) Letter-of-Credit Rights;
(q) all Mortgage Loans;
(r) all Mortgage Loan Documents, including without limitation
all
promissory notes, and all Servicing Records (as defined in
SECTION 11.18(B)
hereof), and any other collateral pledged or otherwise relating
to such Mortgage
Loans, together with all files, material documents, instruments,
surveys (if
available), certificates, correspondence, appraisals, computer
records, computer
storage media, Mortgage Loan accounting records and other books
and records
relating thereto;
(s) all mortgage guaranties and insurance (issued by
governmental
agencies or otherwise) and any mortgage insurance certificate or
other document
evidencing such mortgage guaranties or insurance relating to any
Mortgage Loans
and all claims and payments thereunder;
(t) all other insurance policies and Insurance Proceeds relating
to
any Mortgage Loans or the related Mortgaged Property;
(u) Negotiable Collateral;
(v) all IOS;
(w) Supporting Obligations;
(x) money or other assets of each such Borrower that now or
hereafter come into the possession, custody, or control of any
Lender;
(y) all interests in real property owned by any Borrower or
collateralizing any Mortgage Loan;
(z) all other Personal Property of the Borrowers, wherever
located
and whether now or hereafter existing, and whether now owned or
hereafter
acquired, of every kind and description, whether tangible or
intangible; and
Proceeds, products, rents and profits, whether tangible or
intangible,
of any of the foregoing, including proceeds of insurance
covering any or all of
the foregoing, and any and all tangible or intangible property
resulting from
the sale, exchange, collection, or other disposition of any of
the foregoing, or
any portion thereof or interest therein, and the Proceeds
thereof.
"COLLATERALIZED SUB-DEBT INDENTURES" means the indentures
entered into
as of December 31, 2003 and as of June 30, 2004, by and between
the Company and
U.S. Bank National Association, a national banking association,
as trustee.
10
<PAGE>
"COLLATERALIZED SUB-DEBT SHARED COLLATERAL" means the IOS.
"COLLATERAL VALUE" means with respect to each Eligible Mortgage
Loan,
the lesser of:
(a) the greater of (i) the whole loan resale market price
thereof
(as reasonably determined by the Agent based upon recent sales
after the Filing
Date to third parties of comparable Mortgage Loans under market
conditions
reasonably equivalent to prevailing market conditions) LESS 6%
of the unpaid
principal balance thereof (but in any event not to exceed 97% of
the unpaid
principal balance thereof) and (ii) the Applicable Collateral
Percentage
multiplied by the unpaid principal balance thereof; and
(b) (i) the Market Value of such Eligible Mortgage Loan, LESS
(ii)
an amount equal to the unpaid principal balance of such loan
MULTIPLIED BY 3.0%;
MULTIPLIED BY, if applicable, the Aged Advance Rate; PROVIDED,
THAT, the
Collateral Value shall be deemed to be zero with respect to each
Mortgage Loan
that either is not an Eligible Mortgage Loan or:
(1) which has been released from the possession of the
Custodian
under SECTION 5(A) of the Custodial Agreement to a Borrower
or
its bailee for a period in excess of ten (10) calendar days
(or
if such tenth day is not a Business Day, the next succeeding
Business Day);
(2) which has been released from the possession of the Custodian
(i)
under SECTION 5(B) of the Custodial Agreement under any
Transmittal Letter in excess of the time period stated in
such
Transmittal Letter for release, or (ii) under SECTION 5(C)
of
the Custodial Agreement under an Attorney Bailee Letter,
from
and after the date such Attorney's Bailee Letter is
terminated
or ceases to be in full force and effect;
(3) in respect of which the related Mortgagor is the subject of
a
bankruptcy proceeding;
(4) if the Mortgagor has not made its first Monthly Payment on
the
related Mortgage Loan prior to the next succeeding Monthly
Payment coming due;
(5) which is an REO Property;
(6) which is greater than 120 days delinquent;
(7) which is delinquent at the time the applicable Mortgage Loan
is
first funded under this Loan Agreement; or
(8) which was not originated by an Approved Mortgage Originator
in
accordance with the Approved Underwriting Guidelines or
acquired
by an
11
<PAGE>
Approved Mortgage Purchaser pursuant to an Approved Purchase
Program.
The Lenders will cooperate with the Borrowers to identify
Eligible
Mortgage Loan subcategories which the Borrowers consistently
sell at prices
above 103% of the par loan amount and have favorable
underwriting and
performance characteristics with the intention of increasing the
advance rate
for such Eligible Mortgage Loans by 1%.
In addition, if the Borrowers consistently sell Eligible
Mortgage Loans
of all major subcategories (originated post-petition) at prices
not materially
less than the pre-petition prices obtained from third party
purchasers of
similar Eligible Mortgage Loans, the Lenders will in good faith
consider an
increase in the advance rate for Eligible Mortgage Loans by
1%.
"COMBINED LTV OR CLTV" means with respect to any Mortgage Loan,
the
ratio of (i) the original outstanding principal amount of such
Mortgage Loan and
any other senior mortgage loan which is secured by a lien on the
related
Mortgaged Property to (ii) the lesser of (a) the Appraised Value
of the
Mortgaged Property at origination or (b) if the Mortgaged
Property was purchased
within 6 months of the origination of the Mortgage Loan, the
purchase price of
the Mortgaged Property PLUS any documented capital improvements
made during such
6 month period.
"COMMITMENT" means a Tranche A Commitment, Tranche B Commitment,
Tranche
C Commitment, Tranche D Commitment or Tranche E Commitment.
"COMMITTEE" means the Official Committee of Unsecured Creditors
for the
Borrowers appointed on February 2, 2005 pursuant to Section
1102(a) of the
Bankruptcy Code by the United States Trustee, as the membership
of such
committee is from time to time constituted and
reconstituted.
"COMPANY" shall have the meaning set forth in the recitals
hereto.
"CONSENT LETTERS" means, collectively, (a) those certain
Consent
Agreements among each Specified Monoline, the Agent on behalf of
the Lenders and
the Borrowers, each of which shall be in the form of Exhibit C
to the Interim
Order and (b) that certain Consent Agreement among Radian Asset
Assurance Inc.,
the Agent on behalf of the Lenders and the Borrowers, in the
form of Exhibit C-1
to the Interim Order.
"CONTRACTUAL OBLIGATION" means as to any Person, any material
provision
of any agreement, instrument or other undertaking to which such
Person is a
party or by which it or any of its property is bound or any
material provision
of any security issued by such Person.
"CONTROL ACCOUNT" means (a) an account subject to a Control
Agreement or
(b) the IOS Account.
"CONTROL ACCOUNT PARTY" means the applicable securities
intermediary
with respect to a securities account or bank with respect to a
deposit account.
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<PAGE>
"CONTROL AGREEMENTS" means, as applicable, the 2003-2 Control
Agreement
(upon execution thereof), the Mortgage Collection Account
Control Agreement, the
Servicing Reimbursement Account Control Agreement and any other
control
agreement, in form and substance reasonably satisfactory to the
Agent, executed
and delivered by a Borrower, the Agent and the Control Account
Party in
accordance with the terms hereof.
"CUSTODIAL AGREEMENT" means the Custodial Agreement, dated as of
the
date hereof, among the Borrowers, the Custodian, the Servicer
and the Agent, in
form and substance satisfactory to the Agent.
"CUSTODIAN" means J.P. Morgan Trust Company, N.A., a national
banking
association, and its successors and permitted assigns.
"CUSTODIAN LOAN TRANSMISSION" shall have the meaning set forth
in the
Custodial Agreement.
"DEFAULT" means an Event of Default or an event that with notice
or
lapse of time or both would become an Event of Default.
"DELINQUENCY ADJUSTMENT" means,
(i) for a Mortgage Loan that is 30 or more, but less than 60,
days
delinquent, 10% (ten percentage points);
(ii) for a Mortgage Loan that is 60 or more, but less than 90,
days
delinquent, 20% (twenty percentage points); and
(iii) for a Mortgage Loan that is 90 or more, but less than 120,
days
delinquent, 25% (twenty-five percentage points).
"DISPOSITION" means any transaction, or series of related
transactions,
pursuant to which any Borrower or any of its Subsidiaries sells,
assigns,
transfers or otherwise disposes of any Property or assets
(whether now owned or
hereafter acquired) to any other Person, in each case whether or
not the
consideration therefor consists of cash, securities or other
assets owned by the
acquiring Person.
"DOLLARS" and "$" means lawful money of the United States of
America.
"DUE DATE" means the day of the month on which the Monthly
Payment is
due on a Mortgage Loan, exclusive of any grace period.
"ELECTRONIC AGENT" means MERSCORP, INC., a corporation organized
and
existing under the laws of the State of Delaware.
"ELIGIBLE MORTGAGE LOAN" means a Mortgage Loan owned by a
Borrower and
either originated by an Approved Mortgage Originator in
accordance with Approved
Underwriting Guidelines or acquired by an Approved Mortgage
Purchaser pursuant
to an Approved Purchase Program and acquired pursuant to an
Approved Purchase
Agreement, which
13
<PAGE>
is reasonably deemed eligible for inclusion by the Agent in the
calculation of
the Tranche A Borrowing Base. Without limiting the foregoing, no
Mortgage Loan
shall be an Eligible Mortgage Loan unless it meets each of the
criteria set
forth in the immediately preceding sentence and, in addition,
each of the
following criteria:
(i) the Mortgage Loan is secured by a first or second
mortgage lien (as reflected on the Mortgage Loan Data
Transmission) on a
one- to four-family residential property;
(ii) the Mortgage Loan, when combined with all other
Eligible
Mortgage Loans and Wet-Ink Mortgage Loans, is not a Sublimit
Excess
Loan;
(iii) the Mortgage Loan complies with each of the
representations and warranties respecting Mortgage Loans made in
SECTION
6.12, SECTION 6.21, SCHEDULE E or any other section, schedule,
or
exhibit of this Loan Agreement, and in the other Loan
Documents;
(iv) the Mortgage Loan was originated or acquired by an
Approved Mortgage Originator or acquired under an Approved
Purchase
Program on or after the Closing Date in accordance with
Approved
Underwriting Guidelines;
(v) it is a Mortgage Loan for which the Agent or its
designee or the Custodian is in possession of all required
Mortgage Loan
Documents without Exceptions unless otherwise waived in writing
by the
Agent;
(vi) the Mortgage Loan is less than 120 days delinquent;
(vii) the Mortgage Loan is not a "high cost," "covered," or
"business purpose" loan, except as specifically approved by the
Agent
from time to time;
(viii) the Mortgage Loan has not been selected for
conveyance
to a borrower in a manner adverse to a Borrower, the Agent or
any
Lender;
(ix) the Mortgage Loan is eligible for sale by an Approved
Mortgage Originator to an unaffiliated third party pursuant to
an
established whole loan purchase agreement;
(x) the Mortgage Loan is not delinquent at the time the
applicable Mortgage Loan becomes subject to this Loan Agreement;
and
(xi) the applicable Borrower owns such Mortgage Loan and has
authority to pledge such Mortgage Loan to the Agent.
"ELIGIBLE MORTGAGE PERMITTED LIENS" means (i) the lien of
current real
property taxes and assessments which are not due and payable,
(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
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<PAGE>
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, 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, or materially impact the value or
utility of any
Mortgaged Property.
"ERISA" means the Employee Retirement Income Security Act of
1974, as
amended from time to time.
"ERISA AFFILIATE" means any corporation or trade or business
that is a
member of any group of organizations (i) described in SECTION
414(B) or (C) of
the Code of which any Borrower is a member and (ii) solely for
purposes of
potential liability under SECTION 302(C)(11) of ERISA and
SECTION 412(C)(11) of
the Code and the lien created under SECTION 302(F) of ERISA and
SECTION 412(N)
of the Code, described in SECTION 414(M) or (O) of the Code of
which any
Borrower is a member.
"ESCROW ACCOUNT" means the "Escrow Account" as that term is
defined in
the Servicing Agreement.
"EVENT OF DEFAULT" shall have the meaning set forth in SECTION 8
hereof.
"EXCEPTION" shall have the meaning set forth in the Custodial
Agreement.
"EXCEPTION REPORT" means the exception report prepared by the
Custodian
pursuant to the Custodial Agreement.
"EXCLUDED TAXES" means, with respect to the Agent, a Lender,
a
Participant and its Tax Related Persons, only the following
Taxes: (a) income,
franchise Taxes (imposed in lieu of net income Taxes) or similar
Taxes imposed
on (or measured by) the net income of such Person by the
jurisdiction under the
laws of which such Person is organized, in which its principal
or applicable
lending office is located or in which it is otherwise doing
business (other than
a jurisdiction in which such Person is treated as doing business
as a result of
its execution, delivery of any Loan Document or its exercise of
its rights or
performance of its obligations thereunder or otherwise as a
result of its
participation (or the participation of an entity in which it
owns a beneficial
interest) in the transactions contemplated by this Loan
Agreement); (b)
withholding Taxes imposed by the United States of America on
payments to such
Person, other than as a result of a change in applicable law
occurring after (i)
the date that such Person became a party to this Agreement, or
(ii) with respect
to an assignment, participation, acquisition, designation of a
new applicable
lending office or the appointment of a successor Agent, the
effective date of
such assignment, participation, acquisition, designation or
appointment, except,
in each case, to the extent and at the rate that such Person's
predecessor was
entitled to such amounts (or in the case of a designation of a
new applicable
lending office, to the extent such Person was entitled to such
amounts with
respect to its prior applicable lending office); and (c) Taxes
that would not
have been imposed but for and solely as a result of the failure
of such Person
to comply with its obligations under SECTION 3.06(e).
"FACILITY FEE" shall have the meaning set forth in SECTION
3.07(A).
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<PAGE>
"FAMILY MEMBER" means, with respect to any individual, any
other
individual having a relationship by blood (to the second degree
of
consanguinity), marriage, or adoption to such individual.
"FANNIE MAE" means Fannie Mae, or any successor thereto.
"FEDERAL FUNDS RATE" means, for any day, the weighted average of
the
rates on overnight federal funds transactions with members of
the Federal
Reserve System arranged by federal funds brokers, as published
on the next
succeeding Business Day by the Federal Reserve Bank of New York,
or, if such
rate is not so published for any day which is a Business Day,
the average of the
quotations for the day of such transactions received by the
Agent from three
primary dealers (other than an affiliate of the Agent).
"FICO SCORE" means a statistical credit score published by Fair
Isaac
Corporation (or any comparable company that is acceptable to the
Agent) obtained
by a mortgage lender in connection with a loan application to
help assess a
prospective borrower's creditworthiness as of the time the score
is obtained.
"FILING DATE" means January 21, 2005 or, with respect to
ABFS
Consolidated, January 24, 2005.
"FINAL ORDER" means the order of the Bankruptcy Court in
substantially
the form of the Interim Order (with only such modifications
thereto as are
satisfactory in form and substance to the Agent), as the same
may be amended,
modified or supplemented from time to time with the express
written joinder or
consent of the Agent, the Lenders and the Borrowers, approving
the Advances made
and to be made to the Borrowers in accordance with this Loan
Agreement and
granting the Liens contemplated hereby.
"FINAL SERVICING TRANSFER" means a transfer by the Borrowers of
all
servicing, other than with respect to ABFS Mortgage Loan Trust
2003-1, to a
Successor Servicer (as defined in the Consent Letters) on or
before May 1, 2005
in accordance with the Consent Letters.
"FREDDIE MAC" means Freddie Mac, or any successor thereto.
"FUNDING DATE" means the date on which an Advance is made
hereunder.
"GAAP" means generally accepted accounting principles as in
effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or
other political subdivision, agency or instrumentality thereof,
any entity
exercising executive, legislative, judicial, regulatory, taxing
or
administrative functions of or pertaining to government and any
court or
arbitrator having jurisdiction over any Borrower or any of its
Subsidiaries or
properties.
"GREENWICH" means Greenwich Capital Financial Products, Inc., a
Delaware
corporation.
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<PAGE>
"GREENWICH PRE-PETITION LOAN AGREEMENT" means the Chrysalis
Loan
Agreement, as amended by that certain Standstill Agreement and
Amendment to the
Master Loan and Security Agreement, dated as of the date
hereof.
"GREENWICH PRE-PETITION SERVICING AGREEMENT" means the
Servicing
Agreement (as defined in the Greenwich Pre-Petition Loan
Agreement).
"GUARANTEE" means, as to any Person, any obligation of such
Person
directly or indirectly guaranteeing any Indebtedness of any
other Person or in
any manner providing for the payment of any Indebtedness of any
other Person or
otherwise protecting the holder of such Indebtedness against
loss (whether by
virtue of partnership arrangements, by agreement to keep-well,
to purchase
assets, goods, securities or services, or to take-or-pay or
otherwise), provided
that the term "Guarantee" shall not include (i) endorsements for
collection or
deposit in the ordinary course of business, or (ii) obligations
to make
servicing advances for delinquent taxes and insurance, or other
obligations in
respect of any mortgaged property, to the extent acceptable to
the Agent. The
amount of any Guarantee of a Person shall be deemed to be an
amount equal to the
stated or determinable amount of the primary obligation in
respect of which such
Guarantee is made or, if not stated or determinable, the maximum
reasonably
anticipated liability in respect thereof as determined by such
Person in good
faith. The terms "GUARANTEE" and "GUARANTEED" used as verbs
shall have
correlative meanings.
"HAC" means HomeAmerican Credit, Inc., a Pennsylvania
corporation and a
Borrower.
"INDEBTEDNESS" means, for any Person: (a) obligations created,
issued or
incurred by such Person for borrowed money (whether by loan, the
issuance and
sale of debt securities or the sale of Property to another
Person subject to an
understanding or agreement, contingent or otherwise, to
repurchase such Property
from such Person); (b) obligations of such Person to pay the
deferred purchase
or acquisition price of Property or services, other than trade
accounts payable
(other than for borrowed money) arising, and accrued expenses
incurred, in the
ordinary course of business so long as such trade accounts
payable are payable
within 90 days of the date the respective goods are delivered or
the respective
services are rendered; (c) indebtedness of others secured by a
Lien on the
Property of such Person, whether or not the respective
indebtedness so secured
has been assumed by such Person; (d) obligations (contingent or
otherwise) of
such Person in respect of letters of credit or similar
instruments issued or
accepted by banks and other financial institutions for account
of such Person;
(e) Capital Lease Obligations of such Person; (f) obligations of
such Person
under repurchase agreements or like arrangements; (g)
indebtedness of others
Guaranteed by such Person; (h) all obligations of such Person
incurred in
connection with the acquisition or carrying of fixed assets by
such Person; (i)
indebtedness of general partnerships of which such Person is a
general partner;
and (j) any other indebtedness of such Person authorized by a
note, bond,
debenture or similar instrument.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION
11.04.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION
11.04.
"INDEMNIFIED TAXES" means all Taxes other than Excluded
Taxes.
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"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any
Person under any provision of the Bankruptcy Code or under any
other state or
federal bankruptcy or insolvency law, assignments for the
benefit of creditors,
formal or informal moratoria, compositions, extensions generally
with creditors,
or proceedings seeking reorganization, arrangement, or other
similar relief.
"INSURANCE PROCEEDS" means with respect to each Mortgage Loan,
proceeds
of insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
"INTEREST PERIOD" means, with respect to any Advance, (i)
initially, the
period commencing on the Funding Date with respect to such
Advance and ending on
the calendar day prior to the next succeeding Payment Date, and
(ii) thereafter,
each period commencing on the Payment Date of a month and ending
on the calendar
day prior to the Payment Date of the next succeeding month.
Notwithstanding the
foregoing, no Interest Period may end after the Termination
Date.
"INTEREST RATE PROTECTION AGREEMENT" means with respect to any
or all of
the Mortgage Loans or Advances, any interest rate swap, cap or
collar agreement
or any other applicable hedging arrangements providing for
protection against
fluctuations in interest rates or the exchange of nominal
interest obligations,
either generally or under specific contingencies relating to the
Mortgage Loans
or Advances.
"INTEREST RATE PROTECTION STRATEGY" means the applicable
Person's
strategy for entering into Interest Rate Protection Agreements,
which strategy
and the financial institutions party to the Interest Rate
Protection Agreements
are acceptable to the Agent.
"INTERIM ORDER" means the order of the Bankruptcy Court, in the
form of
EXHIBIT A hereto, as the same may be amended, modified or
supplemented from time
to time with the express written joinder or consent of the
Agent, the Lenders
and the Borrowers, approving the Advances made and to be made to
the Borrowers
in accordance with this Loan Agreement and granting the Liens
contemplated
hereby.
"IOS" means the "interest only strips" and other assets listed
on
SCHEDULE D hereto and all rights and interests related
thereto.
"IOS ACCOUNT" means that certain account of the Agent maintained
with
JPMorgan.
"JPMORGAN" means JPMorgan Chase Bank, N.A., a national
banking
association.
"LENDER" shall have the meaning set forth in the preamble
hereto.
"LENDER EXPENSES" means all (a) costs or expenses (including
taxes, and
insurance premiums) required to be paid by any Borrower under
any of the Loan
Documents that are paid, advanced, or incurred by the Agent, any
Lender or any
Lender-Related Party, (b) reasonable fees or charges paid or
incurred by any
Lender-Related Party in connection with the Agent's or any
Lender's transactions
with the Borrowers under the Loan Documents, including, fees or
charges for
photocopying, notarization, couriers and messengers,
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telecommunication, public record searches (including tax lien,
litigation, and
Uniform Commercial Code searches and including searches with the
patent and
trademark office, the copyright office, or the department of
motor vehicles),
filing, recording, publication, appraisal (including periodic
collateral
appraisals or business valuations to the extent of the fees and
charges (and up
to the amount of any limitation) contained in this Loan
Agreement), real estate
surveys, real estate title policies and endorsements, and
environmental audits,
(c) out-of-pocket costs and expenses incurred by the Agent or
any Lender in the
disbursement of funds to the Borrowers (by wire transfer or
otherwise), (d)
out-of-pocket charges paid or incurred by any Lender-Related
Party resulting
from the dishonor of checks payable by or to any Borrower, (e)
reasonable
out-of-pocket costs and expenses paid or incurred by any
Lender-Related Party to
correct any default or enforce any provision of the Loan
Documents, or in
monitoring, gaining possession of, maintaining, handling,
preserving, storing,
shipping, selling, preparing for sale, or advertising to sell
the Collateral, or
any portion thereof, irrespective of whether a sale is
consummated, (f)
reasonable audit fees and expenses of Lender-Related Parties
related to audit
examinations of the Collateral, (g) reasonable out-of-pocket
costs and expenses
of third party claims or any other suit paid or incurred by any
Lender-Related
Party in enforcing or defending the Loan Documents or in
connection with the
transactions contemplated by the Loan Documents or the Agent or
any Lender's
relationship with any Borrower or any of its Affiliates, (h)
reasonable
out-of-pocket costs and expenses (including attorneys fees)
incurred by the
Lender-Related Parties in advising, structuring, drafting,
documenting,
executing, reviewing, administering, syndicating, or amending
the Loan
Documents, and (i) reasonable costs and expenses (including
attorneys,
accountants, consultants, and other advisors fees and expenses)
incurred in
terminating, enforcing (including attorneys, accountants,
consultants, and other
advisors fees and expenses incurred in connection with a
"workout," a
"restructuring," or an Insolvency Proceeding concerning any
Borrower or any of
its Subsidiaries or in exercising rights or remedies under the
Loan Documents),
or defending the Loan Documents, irrespective of whether suit is
brought, or in
taking or exercising any remedies concerning the Collateral.
"LENDER-RELATED PARTY" means the Agent, the Lenders and each of
the
Agent's or any Lender's lenders, members, Affiliates, sponsors,
managing
directors, directors, together with its lenders, officers,
employees, agents,
advisors, attorneys, and other representatives.
"LENDING VALUE" means, with respect to the IOS, the value
determined by
the Agent reasonably and in good faith for purposes of
collateralizing a loan
and assumes all of the IOS are sold to a single buyer under
circumstances in
which the seller is in default under a collateralized loan
agreement, the buyer
is not able to conduct customary levels of due diligence and the
servicing of
the underlying mortgage loans will be moved to a third party
servicer without an
economic interest in the IOS. The Agent's determination of
Lending Value does
not purport to be and shall not be deemed to be a determination
of fair market
value.
"LIBO BASE RATE" means with respect to each day an Advance
is
outstanding (or if such day is not a Business Day, the next
succeeding Business
Day), the rate per annum equal to the rate published by
Bloomberg or if such
rate is not available, the rate appearing at page 3750 of the
Telerate Screen as
one-month LIBOR on such date, and if such rate shall not be so
quoted, the rate
per annum at which the Agent is offered Dollar deposits at or
about 11:00 A.M.,
eastern time, on such date by prime banks in the interbank
eurodollar market
where the eurodollar and foreign currency and exchange
operations in respect of
its Advances are then
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being conducted for delivery on such day for a period of one
month and in an
amount comparable to the amount of the Advances to be
outstanding on such day.
"LIBO RATE" means with respect to each Interest Period
pertaining to an
Advance, a rate per annum (reset on a monthly basis) determined
by the Agent in
its sole discretion in accordance with the following formula
(rounded upwards to
the nearest l/100th of one percent), which rate as determined by
the Agent shall
be conclusive absent manifest error by the Agent:
LIBO Base Rate
-------------------------------------------
1.00 - LIBO Reserve Requirements
The LIBO Rate shall be calculated each Funding Date and Payment
Date
commencing with the first Funding Date.
"LIBO RESERVE REQUIREMENTS" means for any Interest Period for
any
Advance, the aggregate (without duplication) of the rates
(expressed as a
decimal fraction) of any reserve requirements applicable to any
Lender or any
Lender-Related Party in effect on such day (including, without
limitation,
basic, supplemental, marginal and emergency reserves under any
regulations of
the Board of Governors of the Federal Reserve System or other
Governmental
Authority having jurisdiction with respect thereto), dealing
with reserve
requirements prescribed for eurocurrency funding (currently
referred to as
"Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member
bank of such Governmental Authority. As of the Closing Date, the
LIBO Reserve
Requirements shall be deemed to be zero.
"LIEN" means any mortgage, lien, pledge, charge, security
interest or
similar encumbrance.
"LOAN ACCOUNT" means the account on the Lender's books in the
name of
the Borrower.
"LOAN DOCUMENTS" means, collectively, the Consent Letters, the
Control
Agreements, the Custodial Agreement, this Loan Agreement, the
Orders, the
Participating Bank Letter Agreement, the Pledge Agreement, the
Security
Agreement, the Servicing Agreement, any note or notes executed
by the Borrowers
in connection with this Loan Agreement and payable to any
Lender, and any other
agreement entered into, now or in the future, by any Borrower
and the Agent or
any Lender in connection with this Loan Agreement.
"LOAN SALE OBLIGATIONS" means all obligations of the Borrowers
arising
with respect to Mortgage Loans sold by the Borrowers to any
Lender-Related Party
pursuant to SECTION 11.26 hereof.
"LOAN-TO-VALUE RATIO" or "LTV" means with respect to any
Mortgage Loan,
the ratio of the original principal amount of the Mortgage Loan
to the lesser of
(a) the Appraised Value of the Mortgaged Property at origination
and (b) if the
Mortgaged Property was purchased within 6 months of the
origination of the
Mortgage Loan, the purchase price of the Mortgaged Property PLUS
any documented
capital improvements made during such 6 month period.
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<PAGE>
"MAJORITY TRANCHE A LENDERS" means Tranche A Lenders whose Pro
Rata
Shares, taken in the aggregate, represent at least 51% of the
Tranche A
Commitments.
"MAJORITY TRANCHE B LENDERS" means Tranche B Lenders whose Pro
Rata
Shares, taken in the aggregate, represent at least 51% of the
Tranche B
Commitments.
"MAJORITY TRANCHE C LENDERS" means Tranche C Lenders whose Pro
Rata
Shares, taken in the aggregate, represent at least 51% of the
Tranche C
Commitments.
"MAJORITY TRANCHE D LENDERS" means Tranche D Lenders whose Pro
Rata
Shares, taken in the aggregate, represent at least 51% of the
Tranche D
Commitments.
"MAJORITY TRANCHE E LENDERS" means Tranche E Lenders whose Pro
Rata
Shares, taken in the aggregate, represent at least 51% of the
Tranche E
Commitments.
"MANAGEMENT CHANGE" means either Jeffrey Ruben or Milton Riseman
shall
no longer be an executive officer of ABFS unless a replacement
satisfactory to
the Agent has been found within sixty (60) days.
"MARKET VALUE" means, with respect to an Eligible Mortgage Loan
or a
Wet-Ink Mortgage Loan, the fair market value thereof as
determined in good faith
by the Agent taking into account customary loan characteristics
used in valuing
such loans and applicable market conditions. The Agent's
determination of Market
Value shall be conclusive upon the parties, absent manifest
error on the part of
the Agent. The Agent shall have the right to mark to market the
Mortgage Loans
on a daily basis, which Market Value with respect to one or more
of the Mortgage
Loans may be determined to be zero. The Borrowers acknowledge
that the Agent's
determination of Market Value is for the limited purpose of
determining
Collateral Value and Wet-Ink Collateral Value for lending
purposes hereunder
without the ability to perform customary purchaser's due
diligence and is not
necessarily equivalent to a determination of the fair market
value of the
Mortgage Loans achieved by obtaining competing bids in an
orderly market.
"MATERIAL ADVERSE CHANGE" means an event, fact, circumstance,
change in,
or effect on the business of any Borrower, any Servicer or any
Subservicer,
which individually or in the aggregate or on a cumulative basis
with any other
events, facts, circumstances, changes in, or effects on, the
Borrowers, taken as
a whole, any Borrower, any Servicer or Subservicer, could
reasonably be expected
to have a Material Adverse Effect; PROVIDED, HOWEVER, that
Material Adverse
Change shall not include and shall not be deemed to occur solely
as a result of
the Final Servicing Transfer or the transfer of servicing with
respect to ABFS
Mortgage Loan Trust 2003-1 pursuant to the Succession Approval
Order.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the
property, business, operations, financial condition or prospects
of the
Borrowers, taken as a whole, or any Borrower, any Servicer or
any Subservicer
(b) the ability of any Borrower to perform in all material
respects its
respective obligations under any of the Loan Documents to which
it is a party,
(c) the validity or enforceability in all material respects of
any of the Loan
Documents, (d) the rights and remedies of the Agent or any
Lender under any of
the Loan Documents, (e) the Collateral, or (f) financial,
banking or capital
market conditions; PROVIDED, HOWEVER, that
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<PAGE>
Material Adverse Effect shall not include and shall not be
deemed to occur
solely as a result of the Final Servicing Transfer or the
transfer of servicing
with respect to ABFS Mortgage Loan Trust 2003-1 pursuant to the
Succession
Approval Order.
"MATERIAL CONTRACT" means all agreements and contracts
evidencing the
IOS, the Mortgage Loans and the Sub-debt Indentures.
"MAXIMUM CREDIT" means $500,000,000.
"MERS" means Mortgage Electronic Registration System, Inc.,
a
corporation organized and existing under the laws of the State
of Delaware.
"MERS AGREEMENT" means Electronic Tracking Agreement, dated as
of the
Closing Date, by and among the Borrowers, the Servicer, the
Custodian, MERS and
the Electronic Agent.
"MERS ASSIGNMENT OF MORTGAGE" means, with respect to any MERS
Mortgage
Loan, an assignment of the MERS Mortgage Loan, notice of
transfer or equivalent
instrument, executed in blank and in recordable form, sufficient
under the laws
of the jurisdiction wherein the related mortgaged property is
located to effect
the assignment of such MERS Mortgage Loan upon recordation.
"MERS MORTGAGE LOAN" means any Mortgage Loan registered with
MERS on the
MERS System.
"MERS PROCEDURES MANUAL" means the MERS Procedures Manual, as it
may be
amended, supplemented or otherwise modified from time to time,
in accordance
with the MERS Agreement.
"MERS SYSTEM" means MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
"MIN" means the mortgage identification number for any MERS
Mortgage
Loan.
"MOM LOAN" means any Mortgage Loan as to which MERS is acting
as
original mortgagee of record, solely as nominee.
"MONTHLY FEE PAYMENT DATE" means the first Payment Date with
respect to
Tranche C Advances of each month beginning March 17, 2005.
"MONTHLY PAYMENT" means the scheduled monthly payment of
principal and
interest on a Mortgage Loan as adjusted in accordance with
changes in the
Mortgage Interest Rate pursuant to the provisions of the
Mortgage Note for an
adjustable rate Mortgage Loan.
"MORTGAGE" means with respect to a Mortgage Loan, the mortgage,
deed of
trust or other instrument, which creates, as indicated on the
Mortgage Loan Data
Transmission, a valid and perfected first priority or valid and
perfected second
priority Lien on the fee simple or a leasehold estate in such
real property.
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<PAGE>
"MORTGAGE COLLECTION ACCOUNT" means that certain account
number
10221878.1 named "American Business Credit, Inc. Mortgage
Collection Account in
trust for American Business Mortgage Services, Inc. and
HomeAmerican Credit,
Inc." of the Borrowers maintained with JPMorgan.
"MORTGAGE COLLECTION ACCOUNT CONTROL AGREEMENT" shall mean that
certain
control agreement with respect to the Mortgage Collection
Account, in form and
substance satisfactory to the Agent, executed and delivered by
the Borrowers,
the Agent, JPMorgan and the Servicer.
"MORTGAGE FILE" shall have the meaning set forth in the
Custodial
Agreement.
"MORTGAGE INTEREST RATE" means the annual rate of interest borne
on a
Mortgage Note, which shall be adjusted from time to time with
respect to
adjustable rate Mortgage Loans.
"MORTGAGE LOAN" means a mortgage loan which the Custodian has
been or
will be instructed to hold for the Agent pursuant to the
Custodial Agreement,
and which Mortgage Loan includes, without limitation, (i) a
Mortgage Note, the
related Mortgage and all other Mortgage Loan Documents and (ii)
all right, title
and interest in and to the Mortgaged Property covered by such
Mortgage.
"MORTGAGE LOAN DATA TRANSMISSION" means a computer-readable
magnetic or
other electronic format incorporating the fields identified on
EXHIBIT B.
"MORTGAGE LOAN DOCUMENTS" means, with respect to a Mortgage
Loan, the
documents comprising the Mortgage File for such Mortgage
Loan.
"MORTGAGE LOAN LIST" means the hard copy report provided by or
on behalf
of the Borrowers which shall include with respect to each
Mortgage Loan to be
included as Collateral: (i) the Mortgage Loan number, (ii) the
Mortgagor's name,
(iii) the original principal amount of the Mortgage Loan and
(iv) the current
principal balance of the Mortgage Loan.
"MORTGAGE LOAN SCHEDULE" means SCHEDULE I to the Notice of
Borrowing and
Pledge.
"MORTGAGE NOTE" means the original executed promissory note or
other
evidence of the indebtedness of a mortgagor/borrower with
respect to a Mortgage
Loan.
"MORTGAGED PROPERTY" means the real property (including all
improvements, buildings, fixtures, building equipment and
personal property
thereon and all additions, alterations and replacements made at
any time with
respect to the foregoing) and all other collateral securing
repayment of the
debt evidenced by a Mortgage Note.
"MORTGAGOR" means the obligor on a Mortgage Note.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such
in
SECTION 3(37) of ERISA to which contributions have been or are
required to be
made by any Borrower or any ERISA Affiliate and that is covered
by Title IV of
ERISA.
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<PAGE>
"NET CASH PROCEEDS" means, with respect to any Disposition by
any
Person, the amount of cash received (directly or indirectly)
from time to time
(whether as initial consideration or through the payment of
deferred
consideration) by or on behalf of such Person or any of its
Subsidiaries, in
connection therewith after deducting therefrom only (A) the
principal amount of
any Indebtedness secured by any Permitted Lien on any asset
(other than
Indebtedness assumed by the purchaser of such asset) and
interest, fees and
expenses in respect thereof which is (x) required to be, and is,
repaid in
connection with such Disposition (other than Indebtedness under
this Loan
Agreement) or (y) in escrow in connection with such Person
contesting such
Indebtedness or the Lien securing such Indebtedness in
connection with such
Disposition, (B) reasonable costs, fees and expenses related to
such Disposition
reasonably incurred by such Person in connection therewith and
paid in cash, and
(C) transfer or other taxes paid by such Person in connection
therewith, to the
extent approved (to the extent such approval is required) by the
Bankruptcy
Court.
"NON-DEBTOR PLEDGE AGREEMENT" means the Pledge Agreement, dated
as of
the date hereof, executed by ABFS Warehouse Trust 2004-1 in
favor of the Agent
for the benefit of the Secured Parties.
"NON-USAGE FEE" shall have the meaning given to it in SECTION
3.07(B).
"NOTE" means each promissory note executed by the Borrowers in
favor of
a Lender evidencing such Lender's Advances.
"NOTICE OF BORROWING" means, with respect to Tranche A Advances
and
Tranche B Advances, the certificate prepared by the
Administrative Borrower
substantially in the form of EXHIBIT C-1, attached hereto, and,
with respect to
Tranche C Advances, Tranche D Advances and Tranche E Advances,
the certificate
prepared by the Administrative Borrower substantially in the
form of EXHIBIT
C-2, attached hereto.
"OBLIGATIONS" means all loans, Advances, debts, principal,
interest,
contingent reimbursement obligations with respect to any of the
Loan Documents,
premiums, liabilities (including all amounts charged to the Loan
Account
pursuant hereto), obligations (including indemnification
obligations), fees
(including the fees provided for in SECTION 3.07 hereof),
charges, costs, Agent
Advances, Lender Expenses, guaranties, covenants, and duties of
any kind and
description owing by any Borrower or any of its Subsidiaries to
the Agent, any
Lender or any Lender-Related Party pursuant to or evidenced by
the Loan
Documents, any Clearwing Deferred Payoff Obligations, any
Patriot Deferred
Payoff Obligations, any Clearwing Indemnification Liabilities
and any Loan Sale
Obligations, in each case irrespective of whether for the
payment of money,
whether direct or indirect, absolute or contingent, due or to
become due, now
existing or hereafter arising. Any reference in this Loan
Agreement or in the
Loan Documents to the Obligations shall include all extensions,
modifications,
renewals or alterations thereof.
"ORDERS" means the Interim Order and the Final Order.
"OTHER TAXES" means any and all present or future stamp,
registration,
transfer or documentary Taxes or any excise or property Taxes,
charges or
similar levies arising from any
24
<PAGE>
payment made hereunder or from the execution, delivery or
enforcement of, or
otherwise with respect to or in connection with, the Loan
Documents.
"PARTICIPANT" shall have the meaning set forth in SECTION
11.17(B).
"PARTICIPATING BANK" means (a) the participating banks listed on
the
Participating Bank Letter Agreement, and (b) any other
commercial bank or lender
with consumer lending operations which is approved in writing by
the Agent as a
"participating bank."
"PARTICIPATING BANK LETTER AGREEMENT" means that certain
letter
agreement, dated as of the date hereof, executed by the
Borrowers in favor of
the Agent.
"PATRIOT" means The Patriot Group, LLC.
"PATRIOT DEFERRED PAYOFF OBLIGATIONS" means Patriot Deferred
Payoff
Obligations (as defined in the Patriot Payoff Letter).
"PATRIOT PAYOFF LETTER" means that certain letter regarding
the
repayment of the obligations owed to Patriot pursuant to the
Patriot Repurchase
Agreement.
"PATRIOT REPURCHASE AGREEMENT" means that certain Amended and
Restated
Master Repurchase Agreement, dated as of November 15, 2004 and
amended and
restated as of December 21, 2004, among ABFS Warehouse Trust
2004-2, as Seller,
ABFS, ABFS Consolidated, ABC and Patriot, as amended by that
certain Amendment
No. 1 to Master Repurchase Agreement, dated as of January 14,
2005.
"PAYMENT DATE" means (a) with respect to Tranche A Advances and
Tranche
B Advances, the meaning set forth in the Servicing Agreement,
(b) with respect
to Tranche C Advances, two Business Days following the
distribution of proceeds
relating to the IOS scheduled for the 15th and 25th calendar
days of each month
beginning March 2005, (c) with respect to Tranche D Advances,
the last Business
Day of each week and (d) with respect to Tranche E Advances, the
meaning set
forth in the Greenwich Pre-Petition Servicing Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity
succeeding to any or all of its functions under ERISA.
"P CERTIFICATE" means the certificate representing the
Preferred
Percentage Interest (as defined in the 2003-1 Trust Agreement)
of Trust 2003-1.
"PERIODIC ADVANCES" means monthly out-of-pocket advances of
delinquent
interest which are outstanding and unreimbursed and to which any
Borrower, as
servicer, is entitled to reimbursement or collection under the
related
Securitization Trust documents (other than with respect to ABFS
Mortgage Loan
Trust 2003-1).
"PERMITTED DISPOSITION" means, subject to compliance with
SECTION 2.06
hereof, so long as no Default or Event of Default shall have
occurred, (i) any
Disposition of mortgage loan Collateral in the ordinary course
of business on
ordinary business terms (so long as such disposition does not
create a Default
or Event of Default) and (ii) any Disposition of Servicing
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<PAGE>
Rights on terms and conditions satisfactory to the Agent
(including, without
limitation, the Final Servicing Transfer and the Succession
Approval Order).
"PERMITTED HOLDER" means Anthony J. Santilli and his Family
Members.
"PERMITTED LIENS" means Liens permitted under SECTION 7.16
hereof.
"PERSON" means any individual, corporation, company,
voluntary
association, partnership, joint venture, limited liability
company, trust,
unincorporated association or government (or any agency,
instrumentality or
political subdivision thereof).
"PLAN" means an employee benefit or other plan established or
maintained
by either any Borrower or any ERISA Affiliate and that is
covered by Title IV of
ERISA, other than a Multiemployer Plan.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the
date
hereof, executed by the Borrowers in favor of the Agent for the
benefit of the
Secured Parties.
"PMI POLICY" or "PRIMARY INSURANCE POLICY" means a policy of
primary
mortgage guaranty insurance issued by a Qualified Insurer.
"POST-DEFAULT RATE" means, in respect of any principal of any
Advance or
any other amount under this Loan Agreement or any other Loan
Document that is
not paid when due to the Agent or any Lender (whether at stated
maturity, by
acceleration or mandatory prepayment or otherwise), a rate per
annum during the
period from and including the due date to but excluding the date
on which such
amount is paid in full equal to (a) 3.00% per annum PLUS (b)(i)
the interest
rate otherwise applicable to such Advance or other amount, or
(ii) if no
interest rate is otherwise applicable, the LIBO Rate plus the
Applicable Margin
for Tranche C Advances.
"PREPAYMENT PENALTIES" means fees for early loan prepayment to
which any
Borrower, as owner of the prepayment penalty, is entitled to
reimbursement or
collection.
"PRE-PETITION PAYMENT" means a payment (by way of adequate
protection or
otherwise) of principal or interest or otherwise on account of
any pre-petition
Indebtedness or trade payables or other pre-petition claims
against any
Borrower.
"PRIORITY PROFESSIONAL EXPENSES" shall have the meaning set
forth in the
definition of the term "Carve-Out."
"PRIORITY TRIGGERING EVENT" shall have the meaning set forth in
the
definition of the term "Carve-Out."
"PROFESSIONAL EXPENSE CAP" shall have the meaning set forth in
the
definition of the term "Carve-Out."
"PROPERTY" means any right or interest in or to property of any
kind
whatsoever, whether real, personal or mixed and whether tangible
or intangible.
26
<PAGE>
"PRO RATA SHARE" means, with respect to any Tranche Total
Commitment,
the percentage obtained by dividing (i) such Lender's Tranche
Commitment by (ii)
such Tranche Total Commitment, provided, that, if such Tranche
Total Commitment
has been reduced to zero, the numerator shall be the aggregate
unpaid principal
amount of such Lender's Tranche Advances (including Agent
Advances) and the
denominator shall be the aggregate unpaid principal amount of
all of the
applicable Tranche Advances (including Agent Advances).
"PURCHASED ASSET" means the Purchased Asset (as defined in
the
Repurchase Agreement).
"QUALIFIED CASH" means, as of any date of determination, the
amount of
unrestricted cash and Cash Equivalents of the Borrowers
maintained by a branch
office of a bank located within the United States and that are
in Control
Accounts or the ABFS Master Sweep Account.
"QUALIFIED INSURER" means an insurance company (a) duly
qualified as
such under the laws of the states in which the Mortgaged
Property is located,
(b) duly authorized and licensed in such states to transact the
applicable
insurance business and to write the insurance provided in
accordance with the
Approved Underwriting Guidelines, (c) approved as an insurer by
Fannie Mae and
Freddie Mac or by the Agent, and (d) whose claims paying ability
is rated in the
two highest rating categories by any of the rating agencies with
respect to
primary mortgage insurance and in the two highest rating
categories by Best's
with respect to hazard and flood insurance.
"REFERENCE RATE" means the rate of interest publicly announced
by
JPMorgan, its successors or any other commercial bank designated
by the Agent to
the Borrowers from time to time, in New York, New York from time
to time as its
prime rate or base rate. The prime rate or base rate is
determined from time to
time by such bank as a means of pricing some loans to its
borrowers and neither
is tied to any external rate of interest or index nor
necessarily reflects the
lowest rate of interest actually charged by such bank to any
particular class or
category of customers. Each change in the Reference Rate shall
be effective from
and including the date such change is publicly announced as
being effective.
"REGISTER" shall have the meaning set forth in the SECTION
11.17(B)(II).
"REGULATIONS T, U AND X" means Regulations T, U and X of the
Board of
Governors of the Federal Reserve System (or any successor), as
the same may be
modified and supplemented and in effect from time to time.
"REO PROPERTY" means mortgaged property acquired by the
Servicer
pursuant to the Servicing Agreement as a result of the
liquidation of a Mortgage
Loan.
"REPURCHASE AGREEMENT" shall have the meaning set forth in the
recitals
hereto.
"REQUIRED LENDERS" means (a) so long as the Pro Rata Shares of
Greenwich
and CIT, taken in the aggregate, represent at least 51% of the
Commitments,
Greenwich and CIT (even if the Pro Rata Share of Greenwich alone
represents at
least 51% of the Commitments) and (b) in all other cases,
Lenders whose Pro Rata
Shares, taken in the aggregate, represent at least
27
<PAGE>
51% of the Commitments; PROVIDED, HOWEVER, that, if at any time
there are two or
more Lenders, then Required Lenders must comprise at least two
Lenders.
"REQUIREMENT OF LAW" means as to any Person, (a) the certificate
of
incorporation and by-laws or other organizational or governing
documents of such
Person, (b) all laws (including consumer regulatory laws),
treaties, rules or
regulations, and (c) all determinations of an arbitrator or a
court or other
Governmental Authority, in each case applicable to or binding
upon such Person
or any of its property or to which such Person or any of its
property is
subject.
"REQUIRED DOCUMENTS" means those documents identified in SECTION
2(I) of
the Custodial Agreement.
"RESPONSIBLE OFFICER" means, as to any Person, the chief
executive
officer or, with respect to financial matters, the chief
financial officer of
such Person; provided, that in the event any such officer is
unavailable at any
time he or she is required to take any action hereunder,
Responsible Officer
means any officer authorized to act on such officer's behalf as
demonstrated by
a certificate of corporate resolution.
"RESTRICTED PAYMENTS" means with respect to any Person,
collectively,
all dividends or other distributions of any nature (cash,
securities, assets or
otherwise), and all payments, by virtue of redemption or
otherwise, on any class
of equity securities (including, without limitation, warrants,
options or rights
therefor) issued by such Person, whether such securities are now
or may
hereafter be authorized or outstanding and any distribution in
respect of any of
the foregoing, whether directly or indirectly.
"SECOND LIEN" means with respect to each Mortgaged Property, the
lien of
the mortgage, deed of trust or other instrument securing a
mortgage note which
creates a second lien on the Mortgaged Property.
"SECOND LIEN MORTGAGE LOAN" means an Eligible Mortgage Loan
secured by
the lien on the Mortgaged Property, subject to one prior lien on
such Mortgaged
Property securing financing obtained by the related
Mortgagor.
"SECURED PARTIES" means the Agent, the Lenders, Patriot and
the
Clearwing Indemnified Parties.
"SECURITIZATION TRUSTS" means the securitizations underlying the
IOS,
each as listed in SCHEDULE I hereto.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
the date
hereof, executed by the Borrowers in favor of the Agent for the
benefit of the
Secured Parties.
"SENIOR CLAIMS" means all valid, perfected, non-avoidable
secured claims
existing on the Filing Date and listed in SCHEDULE F hereto.
"SERVICER" means ABC.
28
<PAGE>
"SERVICING ADVANCES" means "Servicing Advances," "Property
Preservation
Expenses" and "Liquidation Expenses" which are outstanding and
unreimbursed and
to which any Borrower is entitled to reimbursement or collection
under the
related documents of the Securitization Trusts (other than ABFS
Mortgage Loan
Trust 2003-1).
"SERVICING AGREEMENT" means a servicing agreement relating to
the
servicing of Mortgage Loans executed by and between a Borrower,
the Servicer,
the Back-up Servicer, and the Agent, the form and substance of
which is
reasonably satisfactory to the Agent.
"SERVICING FILE" means with respect to each Mortgage Loan, the
file
retained by the Servicer consisting of originals of all material
documents in
the Mortgage File which are not delivered to a Custodian and
copies of the
Mortgage Loan Documents set forth in SECTION 2 of the Custodial
Agreement.
"SERVICING RECORDS" shall have the meaning set forth in SECTION
11.18(B)
hereof.
"SERVICING REIMBURSEMENT ACCOUNT" means that certain account
number
113418413 of the Servicer maintained with JPMorgan.
"SERVICING REIMBURSEMENT ACCOUNT CONTROL AGREEMENT" means that
certain
control agreement with respect to the Servicing Reimbursement
Account in form
and substance satisfactory to the Agent, executed and delivered
by the
Borrowers, JPMorgan and the Agent.
"SERVICING REIMBURSEMENT RIGHTS" means the right of
reimbursement by the
servicer of any Securitization Trust (other than ABFS Mortgage
Loan Trust
2003-1) with respect to Servicing Advances, Periodic Advances,
Ancillary Fees
and Prepayment Penalties, subject to the terms of the Consent
Letters and the
Orders.
"SERVICING RIGHTS" means Securitization Trust servicing rights
(other
than with respect to ABFS Mortgage Loan Trust 2003-1) and
Servicing
Reimbursement Rights, subject to the terms of the Consent
Letters and the
Orders.
"SERVICING TRANSMISSION" means a computer-readable magnetic or
other
electronic format acceptable to the parties containing the
information
identified on EXHIBIT D.
"SPECIFIED MONOLINE" means a Securitization Insurer (as defined
in the
Orders).
"SUBLIMIT EXCESS LOAN" means, as of any date of determination,
a
Mortgage Loan contained in any one or more of the categories set
forth below
which, when added to all other Eligible Mortgage Loans and
Wet-Ink Mortgage
Loans which are pledged to the Lenders under this Loan
Agreement, exceed the
percentages (each expressed as a percentage of the outstanding
Tranche A
Advances and Tranche B Advances) or dollar amounts indicated
below and as may be
identified as such by the Agent (which selection may be
arbitrary) in order that
the aggregate unpaid principal balances of the Eligible Mortgage
Loans and
Wet-Ink Mortgage Loans in such categories as of such date do not
exceed such
percentages (each expressed as a percentage of the outstanding
Tranche A
Advances and Tranche B Advances as of such date) or dollar
amounts.
29
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Mortgage Loan Category Maximum Sublimit
---------------------- ----------------
Percentage
----------
FICO Score 540-580 $110,000,000
FICO Score 520-539 $55,000,000
Combined: FICO Scores less than 580 $165,000,000
Greater than 30 days delinquent 5%
Greater than 60 days delinquent 3% (exclusive of 30 day
delinquency
sublimit)
Originated or purchased by an Approved Mortgage Originator 90 or
more days 15% (inclusive of all other aging
prior to any date of determination ("90 DAY ELIGIBLE MORTGAGE
LOANS") sublimits)
Originated or purchased by an Approved Mortgage Originator 120
or more days 10%
prior to any date of determination ("120 DAY ELIGIBLE MORTGAGE
LOANS")
Originated or purchased by an Approved Mortgage Originator 150
or more days 0%
prior to any date of determination
Second Lien the greater of (a) the lesser of
(i) $30,000,000 and (ii) 25% and
(b) 15%
CLTV greater than 80% the greater of (a) the lesser of
(i) $130,000,000 and (ii) 75% and
(b) 65%, inclusive of all other CLTV
sublimits below
CLTV greater than 85% the greater of (a) the lesser of
(i) $80,000,000 and (ii) 50% and
(b) 40%, inclusive of all other CLTV
sublimits below
CLTV greater than 90% the greater of (a) the lesser of
(i) $40,000,000 and (ii) 25% and
(b) 20%, inclusive of CLTV sublimit
greater than or equal to 95%
CLTV greater than 95% the greater of (a) the lesser of
(i) $26,000,000 and (ii) 18% and
(b) 13%
CLTV greater than 100% 0%
</TABLE>
"SUBSERVICER" means ABMS or HAC.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation,
partnership or other entity of which at least a majority of the
securities or
other ownership interests having by the terms thereof ordinary
voting power to
elect a majority of the board of directors or other persons
performing similar
functions of such corporation, partnership or other entity
(irrespective of
whether or not at the time securities or other ownership
interests of any other
class or classes of such corporation, partnership or other
entity shall have or
might have voting power by reason of the happening of any
contingency) is at the
time directly or indirectly owned or controlled by
30
<PAGE>
such Person or one or more Subsidiaries of such Person or by
such Person and one
or more Subsidiaries of such Person, or (b) if such Person is a
trust, the
depositor of such trust, excluding the Securitization
Trusts.
"SUCCESSION APPROVAL ORDER" means that certain order of the
Bankruptcy
Court entered on February 16, 2005, authorizing and directing,
INTER ALIA, the
transfer of servicing with respect to ABFS Mortgage Loan Trust
2003-1.
"SYNDICATION AGENT" shall have the meaning set forth in the
preamble
hereto.
"TARGETED SERVICING BID" means a Qualified Bid (as defined in
the
Orders) in the amount of at least $20,000,000 for all or a
portion of the
Servicing Rights (a) subject only to Bankruptcy Court approval
and (b) with
servicing transfer to occur on or before May 1, 2005.
"TAXES" means any and all present or future taxes, levies,
imposts,
duties, deductions, charges or withholdings imposed by any
Governmental
Authority, and shall include all interest, penalties, additions
to Tax related
thereto.
"TAX RELATED PERSON" means any Person (including, without
limitation, a
beneficial owner of an interest in a pass-through entity) whose
income is
realized through or determined by reference to the Agent, a
Lender or
Participant or any Tax Related Person of any of the
foregoing.
"TAX RETURN" means any report, filing, return, information
return,
document, election, including amendments to any of the
foregoing, filed or
furnished or required to be filed or furnished with respect to
Taxes.
"TERMINATION DATE" means the date which is the earliest of (a)
the
effective date of a plan of reorganization in the Chapter 11
Cases that has been
confirmed by an order of the Bankruptcy Court, (b) 364 days
after the Closing
Date, (c) the sale of a material part of any Borrower's assets
(excluding
Permitted Dispositions), whether under Section 363 of the
Bankruptcy Code, a
confirmed plan of reorganization or otherwise; (d) the date of
the conversion of
any of the Chapter 11 Cases to a case under Chapter 7 of the
Bankruptcy Code;
(e) the date of the dismissal of any of the Chapter 11 Cases;
(f) March 9, 2005,
if the Final Order has not been entered by the Bankruptcy Court
on or prior to
such date, and (g) such earlier date on which either (A) all
Advances shall
become due and payable, in whole, in accordance with the terms
of this Loan
Agreement and the other Loan Documents or (B) all Advances and
all other
Obligations for the payment of money shall be paid in full and
the Commitments
and this Loan Agreement are terminated.
"TOTAL COMMITMENT" means, at any time, the sum of the
Commitments.
"TRANCHE A ADVANCE" shall have the meaning set forth in SECTION
2.01(A)
hereto.
31
<PAGE>
"TRANCHE A BORROWING BASE" means the aggregate Collateral Value
of all
Eligible Mortgage Loans that have been, and remain, pledged to
the Agent
hereunder.
"TRANCHE A COMMITMENT" means the commitment of a Tranche A
Lender to
make Tranche A Advances hereunder in the amount set forth
opposite its name on
SCHEDULE B hereto or as may subsequently be set forth in the
Register from time
to time, as the case may be.
"TRANCHE ADVANCE" means a Tranche A Advance, a Tranche B
Advance, a
Tranche C Advance, a Tranche D Advance or a Tranche E Advance,
as applicable.
"TRANCHE A FACILITY" shall have the meaning set forth in the
recitals
hereto.
"TRANCHE A LENDER" means each Lender that has a Tranche A
Commitment or
that makes Tranche A Advances.
"TRANCHE A SUBLIMIT" means the Maximum Credit LESS the sum of
(a) the
outstanding Obligations (as defined in the Greenwich
Pre-Petition Loan
Agreement), (b) the outstanding Tranche B Advances, (c) the
outstanding Tranche
C Advances, (d) the outstanding Tranche D Advances and (e) the
outstanding
Tranche E Advances.
"TRANCHE B ADVANCE" shall have the meaning set forth in SECTION
2.01(B)
hereto.
"TRANCHE B BORROWING BASE" means the aggregate Wet-Ink
Collateral Value
of all Wet-Ink Mortgage Loans that have been, and remain,
pledged to the Agent
hereunder.
"TRANCHE B COMMITMENT" means the commitment of a Tranche B
Lender to
make Tranche B Advances hereunder in the amount set forth
opposite its name on
SCHEDULE B hereto or as may subsequently be set forth in the
Register from time
to time, as the case may be
"TRANCHE B FACILITY" shall have the meaning set forth in the
recitals
hereto.
"TRANCHE B LENDER" means each Lender that has a Tranche B
Commitment or
that makes Tranche B Advances.
"TRANCHE B SUBLIMIT" means the lesser of (a) the greater of
(i)
$40,000,000 and (ii) 15% of outstanding Tranche A Advances and
(b) $60,000,000.
The Lenders will consider in good faith an increase in the
Tranche B Sublimit
upon (x) demonstration by the Borrowers of sound systems and
controls for wet
funding for a minimum of two end-of-month wet funding cycles;
(y) confirmation
by the Lenders of consistent mortgage loan underwriting quality;
and (z)
demonstrated capacity need following reasonable efforts by the
Borrowers to
decrease wet-to-dry processing time and increase wet funding
efficiencies.
"TRANCHE C ADVANCE" shall have the meaning set forth in SECTION
2.01(C)
hereto.
"TRANCHE C APPLICABLE COLLATERAL PERCENTAGE" means (1) for
purposes of
determining whether an Event of Default has occurred, (a) 65%
MINUS (b) the
lesser of (i)(x) the number of complete months that have elapsed
since February
1, 2005 DIVIDED BY (y) 100, expressed as a percentage, and (ii)
5%, and (2) for
all other purposes, (A) 60% MINUS (B) the lesser of (I)(X) the
number of
complete months that have elapsed since February 1, 2005 DIVIDED
BY (Y) 100,
expressed as a percentage, and (II) 5%.
32
<PAGE>
"TRANCHE C BORROWING BASE" means (a) the Tranche C Applicable
Collateral
Percentage MULTIPLIED BY the Lending Value of the IOS, as
determined by the
Agent, LESS (b) the Professional Expense Cap LESS (c) the
Clearing Account
Reserve.
"TRANCHE C COMMITMENT" means the commitment of a Tranche C
Lender to
make Tranche C Advances hereunder in the amount set forth
opposite its name on
SCHEDULE B hereto or as may subsequently be set forth in the
Register from time
to time, as the case may be.
"TRANCHE C FACILITY" shall have the meaning set forth in the
recitals
hereto.
"TRANCHE C LENDER" means each Lender that has a Tranche C
Commitment or
that makes Tranche C Advances.
"TRANCHE C SUBLIMIT" means the lesser of (a) $55,000,000 and
(b)
$65,000,000 LESS the outstanding Tranche D Advances.
"TRANCHE COMMITMENT" means a Lender's Tranche A Commitment,
Tranche B
Commitment, Tranche C Commitment, Tranche D Commitment or
Tranche E Commitment,
as applicable.
"TRANCHE D ADVANCE" shall have the meaning set forth in SECTION
2.01(D)
hereto.
"TRANCHE D BORROWING BASE" means the sum of (a) 75% of
outstanding
Periodic Advances and (b) 50% of outstanding Servicing Advances,
in each case to
the extent that such Periodic Advances and Servicing Advances
are owing pursuant
to the terms of the documents governing the Securitization
Trusts (subject to
the Consent Letters and the Orders), are unreimbursed and have
not been waived
by the Borrowers. Set forth on SCHEDULE G hereto is the amount
of Periodic
Advances and Servicing Advances included in the Tranche D
Borrowing Base as of
the Closing Date with respect to each Securitization Trust and
the maximum
amount of Periodic Advances and Servicing Advances that may be
included in the
Tranche D Borrowing Base with respect to each Securitization
Trust at any time.
"TRANCHE D COMMITMENT" means the commitment of a Tranche D
Lender to
make Tranche D Advances hereunder in the amount set forth
opposite its name on
SCHEDULE B hereto or as may subsequently be set forth in the
Register from time
to time, as the case may be.
"TRANCHE D FACILITY" shall have the meaning set forth in the
recitals
hereto.
"TRANCHE D LENDER" means each Lender that has a Tranche D
Commitment or
that makes Tranche D Advances.
"TRANCHE D SUBLIMIT" means the lesser of (a) $10,000,000;
PROVIDED, THAT
if the Borrowers receive a Targeted Servicing Bid by March 31,
2005, such amount
shall be increased to $15,000,000 and (b) $65,000,000 LESS the
outstanding
Tranche C Advances.
"TRANCHE D TERMINATION EVENT" means (i) the occurrence of a
Servicing
Transfer Default (as defined in the Orders) or (ii) the failure
of the Final
Servicing Transfer to occur on or prior to May 1, 2005 in
accordance with
Section XVI of the Orders.
33
<PAGE>
"TRANCHE E ADVANCE" shall have the meaning set forth in SECTION
2.01(E)
hereto.
"TRANCHE E BORROWING BASE" means the lesser of (a) 10% of
the
outstanding Obligations (as defined in the Chrysalis Loan
Agreement) as of the
Closing Date and (b)(i) the lesser of (x) 95% of the Market
Value (as defined in
the Greenwich Pre-Petition Loan Agreement) of the Eligible
Mortgage Loans (as
defined in the Greenwich Pre-Petition Loan Agreement), as
reasonably determined
by the Agent, and (y) 97% of the unpaid principal balance of
such Eligible
Mortgage Loans (as defined in the Greenwich Pre-Petition Loan
Agreement) MINUS
(ii) the outstanding Obligations (as defined in the Greenwich
Pre-Petition Loan
Agreement).
"TRANCHE E COMMITMENT" means the commitment of a Tranche E
Lender to
make Tranche E Advances hereunder in the amount set forth
opposite its name on
SCHEDULE B hereto or as may subsequently be set forth in the
Register from time
to time, as the case may be.
"TRANCHE E FACILITY" shall have the meaning set forth in the
recitals
hereto.
"TRANCHE E LENDER" means each Lender that has a Tranche E
Commitment or
that makes Tranche E Advances.
"TRANCHE E SUBLIMIT" means $18,000,000.
"TRANCHE LENDERS" means the Tranche A Lenders (but not the
other
Lenders), the Tranche B Lenders (but not the other Lenders), the
Tranche C
Lenders (but not the other Lenders), the Tranche D Lenders (but
not the other
Lenders) or the Tranche E Lenders (but not the other Lenders),
as applicable.
"TRANCHE TOTAL COMMITMENT" means, at any time, the sum of the
applicable
Tranche Commitments.
"TRANSMITTAL LETTER" shall have the meaning ascribed thereto in
the
Custodial Agreement.
"TRUST RECEIPT" shall have the meaning set forth in the
Custodial
Agreement.
"TRUST 2003-1" means that certain Delaware statutory trust named
ABFS
Warehouse Trust 2003-1 created by the 2003-1 Trust
Agreement.
"TRUST 2003-2" means that certain Delaware statutory trust named
ABFS
Warehouse Trust 2003-2.
"TRUST 2004-1" means that certain Delaware statutory trust named
ABFS
Warehouse Trust 2004-1.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as
in effect
on the date hereof in the State of New York; PROVIDED THAT if by
reason of
mandatory provisions of law, the perfection or the effect of
perfection or
non-perfection of the security interest in any Collateral is
governed by the
Uniform Commercial Code as in effect in a jurisdiction other
than
34
<PAGE>
New York, "Uniform Commercial Code" means the Uniform Commercial
Code as in
effect in such other jurisdiction for purposes of the provisions
hereof relating
to such perfection or effect of perfection or
non-perfection.
"UNRESTRICTED CASH" means cash of the Borrowers other than cash
receipts
that are pending transfer to the trustee of a Securitization
Trust.
"WEEKLY FEE PAYMENT DATE" shall have the meaning set forth in
SECTION
3.07(A)(II) hereof.
"WET-INK APPLICABLE COLLATERAL PERCENTAGE" means, with respect
to a
Wet-Ink Mortgage Loan, the following percentages of the unpaid
principal balance
thereof:
(a) if the loan has a FICO score of 640 or greater, 92%;
(b) if the loan has a FICO score greater than 599 but less
than 640, 90%;
(c) if the loan has a FICO score greater than 549 but less
than 600, 88%;
(d) if the loan has a FICO score greater than 519 but less
than 550, 84%; and
(e) if the loan has a FICO score less than 520 or no FICO
score, 0%.
"WET-INK COLLATERAL VALUE" means, with respect to each Wet-Ink
Mortgage
Loan, the Wet-Ink Applicable Collateral Percentage multiplied by
the unpaid
principal balance thereof.
"WET-INK MORTGAGE LOAN" means a Mortgage Loan originated by an
Approved
Mortgage Originator:
(a) that has been closed by a title agency or closing
attorney,
funded and would qualify without exception as an Eligible
Mortgage Loan except
that some or all of its Mortgage Loan Documents required under
clause (v) of the
definition of Eligible Mortgage Loan are in transit to, but have
not yet been
received by, the Agent or its designee;
(b) for which the Mortgage Loan Documents will be received by
the
Agent or its designee within five (5) Business Days following
the closing date
of such Mortgage Loan;
(c) for which the applicable Approved Mortgage Originator
has
delivered to the Custodian a Mortgage Loan Schedule on or before
the funding
date of such Mortgage Loan, submission of which to the Custodian
shall
constitute such Approved Mortgage Originator's certification to
the Custodian
that a complete Mortgage File as to such Mortgage Loan exists
and that such
Mortgage File is in the possession of either the title agent or
closing attorney
that closed such Mortgage Loan, the applicable Approved Mortgage
Originator or
such Approved Mortgage Originator's Servicer for such Mortgage
Loan, or that
such Mortgage File has been shipped to the Agent or its
designee;
35
<PAGE>
(d) in respect of which the related Mortgagor is not the subject
of
a bankruptcy proceeding; and
(e) which was originated by an Approved Mortgage Originator
in
accordance with the Approved Underwriting Guidelines or was
purchased by an
Approved Mortgage Purchaser pursuant to an Approved Purchase
Program.
A Mortgage Loan will cease to be a Wet-Ink Mortgage Loan when,
within
five (5) Business Days following the closing date of such
Mortgage Loan, the
applicable Approved Mortgage Originator shall have delivered or
caused to be
delivered to the Agent or its designee, on behalf of the Agent
and the Lenders,
the Mortgage File documents.
1.02 ACCOUNTING TERMS AND DETERMINATIONS. Except as
otherwise
expressly provided herein, all accounting terms used herein
shall be
interpreted, and all financial statements and certificates and
reports as to
financial matters required to be delivered to the Lender
hereunder shall be
prepared, in accordance with GAAP.
1.03 UNIFORM COMMERCIAL CODE. Any terms used in this Agreement
that
are defined in the Uniform Commercial Code shall be construed
and defined as set
forth in the Uniform Commercial Code unless otherwise defined
herein.
1.04 CONSTRUCTION. Unless the context of this Agreement or any
other
Loan Document clearly requires otherwise, references to the
plural include the
singular, references to the singular include the plural, the
term "including" is
not limiting, and the term "or" has, except where otherwise
indicated, the
inclusive meaning represented by the phrase "and/or." The words
"hereof,"
"herein," "hereby," "hereunder," and similar terms in this
Agreement or any
other Loan Document refer to this Agreement or such other Loan
Document, as the
case may be, as a whole and not to any particular provision of
this Agreement or
such other Loan Document, as the case may be. Section,
subsection, clause,
schedule, and exhibit references herein are to this Agreement
unless otherwise
specified. Any reference in this Agreement or in the other Loan
Documents to any
agreement, instrument, or document shall include all
alterations, amendments,
changes, extensions, modifications, renewals, replacements,
substitutions,
joinders, and supplements, thereto and thereof, as applicable
(subject to any
restrictions on such alterations, amendments, changes,
extensions,
modifications, renewals, replacements, substitutions, joinders,
and supplements
set forth herein). Any reference herein to any Person shall be
construed to
include such Person's successors and assigns. Any requirement of
a writing
contained herein or in the other Loan Documents shall be
satisfied by the
transmission of a record and any record transmitted shall
constitute a
representation and warranty as to the accuracy and completeness
of the
information contained therein.
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SECTION 2. ADVANCES, EVIDENCE OF DEBT AND PREPAYMENTS.
2.01 ADVANCES.
(a) TRANCHE A ADVANCES. Subject to fulfillment of the
conditions
precedent set forth in SECTIONS 5.01 and 5.02 hereof, and
provided that no
Default or Event of Default shall have occurred and be
continuing hereunder,
each Tranche A Lender hereby severally agrees, from time to
time, on the terms
and conditions of this Loan Agreement and the other Loan
Documents, to make
loans (individually, a "TRANCHE A ADVANCE"; collectively, the
"TRANCHE A
ADVANCES") to the Borrowers in Dollars, on any Business Day (but
not more
frequently than once daily) from and including the Closing Date
to but excluding
the Termination Date in an aggregate principal amount at any one
time
outstanding not to exceed such Tranche A Lender's Pro Rata Share
of the Tranche
A Borrowing Base as in effect from time to time; PROVIDED, THAT,
in no event
shall (i) the aggregate principal amount of Tranche A Advances
outstanding at
any time exceed the Tranche A Sublimit or (ii) the aggregate
principal amount of
Tranche A Advances outstanding at any time exceed the Tranche A
Borrowing Base.
(b) TRANCHE B ADVANCES. Subject to fulfillment of the
conditions
precedent set forth in SECTIONS 5.01 and 5.02 hereof, and
provided that no
Default or Event of Default shall have occurred and be
continuing hereunder,
each Tranche B Lender hereby severally agrees, from time to
time, on the terms
and conditions of this Loan Agreement and the other Loan
Documents, to make
loans (individually, a "TRANCHE B ADVANCE"; collectively, the
"TRANCHE B
ADVANCES") to the Borrowers in Dollars, on any Business Day (but
not more
frequently than twice daily) from and including the Closing Date
to but
excluding the Termination Date in an aggregate principal amount
at any one time
outstanding not to exceed such Tranche B Lender's Pro Rata Share
of the Tranche
B Borrowing Base as in effect from time to time; PROVIDED, THAT,
in no event
shall (i) the aggregate principal amount of Tranche B Advances
outstanding at
any time exceed the Tranche B Sublimit or (ii) the aggregate
principal amount of
Tranche B Advances outstanding at any time exceed the Tranche B
Borrowing Base.
(c) TRANCHE C ADVANCES. Subject to fulfillment of the
conditions
precedent set forth in SECTIONS 5.01 and 5.02 hereof, and
provided that no
Default or Event of Default shall have occurred and be
continuing hereunder,
each Tranche C Lender hereby severally agrees, on (x) the
Closing Date so long
as the aggregate principal amount of outstanding Tranche C
Advances does not
exceed the Tranche C Borrowing Base and (y) from time to time
thereafter so long
as (1) the Allocated Amount is at least $95,000,000 and (2) the
outstanding
Tranche C Advances are less than or equal to 55% MULTIPLIED BY
the Lending Value
of the IOS, as determined by the Agent, in each case on the
terms and conditions
of this Loan Agreement and the other Loan Documents, to make
loans
(individually, a "TRANCHE C ADVANCE"; collectively, the "TRANCHE
C ADVANCES") to
the Borrowers in Dollars, on any Business Day (but not more
frequently than four
times monthly) from and including the Closing Date to but
excluding the
Termination Date in an aggregate principal amount at any one
time outstanding
not to exceed such Tranche C Lender's Pro Rata Share of the
Tranche C Borrowing
Base as in effect from time to time; provided, that, in no event
shall (i) the
aggregate principal amount of Tranche C Advances outstanding at
any time exceed
the Tranche C Sublimit or (ii) the aggregate principal amount of
Tranche C
Advances outstanding at any time exceed the Tranche C Borrowing
Base. On the
Closing Date, in addition to any other Tranche C Advances made
by the Lenders to
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the Borrowers on the Closing Date, the Borrowers shall be deemed
to have
borrowed Tranche C Advances in the amount required to pay the
Repurchase Price
(as defined in the Repurchase Agreement), upon such deemed
borrowing the
Repurchase Price shall be deemed paid in full and the Purchased
Asset shall be
deemed to be Collateral securing the Obligations.
(d) TRANCHE D ADVANCES. Subject to fulfillment of the
conditions
precedent set forth in SECTIONS 5.01 and 5.02 hereof, and
provided that no
Default or Event of Default shall have occurred and be
continuing hereunder and
so long as no Tranche D Termination Event has occurred, each
Tranche D Lender
hereby severally agrees (i) on the Closing Date, (ii) on one
other Business Day
selected by the Borrowers prior to the Termination Date and
(iii) on two other
Business Days selected by the Borrowers prior to the Termination
Date but
following the delivery of a Targeted Servicing Bid to the Agent,
in each case on
the terms and conditions of this Loan Agreement and the other
Loan Documents, to
make loans (individually, a "TRANCHE D ADVANCE"; collectively,
the "TRANCHE D
ADVANCES") to the Borrowers in Dollars, in an aggregate
principal amount at any
one time outstanding not to exceed such Tranche D Lender's Pro
Rata Share of the
Tranche D Borrowing Base as in effect from time to time;
PROVIDED, THAT, in no
event shall (i) the aggregate principal amount of Tranche D
Advances outstanding
at any time exceed the Tranche D Sublimit or (ii) the aggregate
principal amount
of Tranche D Advances outstanding at any time exceed the Tranche
D Borrowing
Base.
(e) TRANCHE E ADVANCES. Subject to fulfillment of the
conditions
precedent set forth in SECTIONS 5.01 and 5.02 hereof, and
provided that no
Default or Event of Default shall have occurred and be
continuing hereunder,
each Tranche E Lender hereby severally agrees, on the terms and
conditions of
this Loan Agreement and the other Loan Documents, to make loans
(individually, a
"TRANCHE E ADVANCE"; collectively, the "TRANCHE E ADVANCES") to
the Borrowers in
Dollars, on the Closing Date, in an aggregate principal amount
at any one time
outstanding not to exceed such Tranche E Lender's Pro Rata Share
of the Tranche
E Borrowing Base as in effect from time to time; PROVIDED, THAT,
in no event
shall (i) the aggregate principal amount of Tranche E Advances
outstanding at
any time exceed the Tranche E Sublimit or (ii) the aggregate
principal amount of
Tranche E Advances outstanding at any time exceed the Tranche E
Borrowing Base.
(f) Subject to the terms and conditions of this Loan
Agreement,
during such period the Borrowers may (i) borrow, repay and
reborrow Tranche A
Advances, Tranche B Advances and Tranche C Advances hereunder
and (ii) borrow
and repay Tranche D Advances and Tranche E Advances hereunder.
Once repaid, the
Borrowers may not reborrow Tranche D Advances or Tranche E
Advances.
(g) In no event shall the Lenders be obligated to make an
Advance
when any Default or Event of Default has occurred and is
continuing, and in no
event shall the aggregate principal amount of all Advances
outstanding at any
time exceed the Maximum Credit.
2.02 EVIDENCE OF DEBT.
(a) The Agent shall maintain an account or accounts evidencing
the
indebtedness of the Borrowers to each Lender resulting from each
Advance made by
such Lender, including the amounts of principal and interest
payable and paid to
the Lender from time to time hereunder.
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(b) The entries made in the accounts maintained pursuant to
paragraph (a) of this Section shall be PRIMA FACIE evidence of
the existence and
amounts of the obligations recorded therein; PROVIDED that the
failure of the
Agent to maintain such accounts or any error therein shall not
in any manner
affect the obligation of the Borrowers to repay the Advances in
accordance with
the terms of this Loan Agreement.
(c) Any Lender may request that the Advances be evidenced by
a
promissory note or notes. In such event, the Borrowers shall
prepare, execute
and deliver to such Lender a promissory note or notes payable to
the order of
such Lender (or, if requested by such Lender, to such Lender and
its assigns)
and in a form approved by such Lender. Thereafter, the Advances
evidenced by
such promissory note and interest thereon shall at all times be
represented by
one or more promissory notes in such form payable to the payee
named therein or
its registered assigns.
2.03 PROCEDURE FOR BORROWING.
(a) BORROWING PROCEDURE FOR REQUESTING AN ADVANCE. The
Administrative Borrower may request a borrowing, on any Business
Day during the
period from and including the Closing Date to the Termination
Date to the extent
set forth above for any Tranche Advance, by delivering to the
Agent, with a copy
to the Lenders, an irrevocable Notice of Borrowing,
appropriately completed and
with all required supporting documentation, which Notice of
Borrowing must be
received (A) with respect to Tranche A Advances and Tranche B
Advances, no later
than the times set forth in the Custodial Agreement with respect
to the
requested Funding Date and (B) with respect to Tranche C
Advances, Tranche D
Advances and Tranche E Advances, no later than 12:00 noon
(eastern time) two (2)
Business Days prior to the requested Funding Date (except that
the Notice of
Borrowing for the initial funding on the Closing Date may be
delivered on the
Closing Date prior to 4:00 p.m. (eastern time)). Such Notice of
Borrowing shall
be irrevocable and shall specify (i) the principal amount of the
proposed
Tranche Advances, (ii) the use of the proceeds of such proposed
Tranche Advances
and (iii) the proposed borrowing date, which must be a Business
Day. The Agent
and the Lenders may act without liability upon the basis of
written, telecopied
or telephonic notice believed by the Agent in good faith to be
from the
Administrative Borrower (or from any Authorized Officer thereof
designated in
writing purportedly from the Administrative Borrower to the
Agent). The
Borrowers hereby waive the right to dispute the Agent's record
of the terms of
any such Notice of Borrowing. The Agent and each Lender shall be
entitled to
rely conclusively on any Authorized Officer's authority to
request Advances on
behalf of the Borrowers until the Agent receives written notice
to the contrary.
The Agent and the Lenders shall have no duty to verify the
authenticity of the
signature appearing on any Notice of Borrowing. Except as
otherwise provided in
this SECTION 2.03, Advances shall be made ratably in accordance
with each
Lender's Pro Rata Share.
(b) Each Notice of Borrowing pursuant to this SECTION 2.03 shall
be
irrevocable and the Borrowers shall be bound to make a borrowing
in accordance
therewith. Each Tranche C Advance, Tranche D Advance and Tranche
E Advance shall
be made in a minimum amount of $1,000,000 and shall be in an
integral multiple
of $500,000.
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(c) MECHANICS OF ADVANCES.
(i) Except as otherwise provided in this SECTION 2.03(C),
all Advances under this Agreement shall be made by the
Lenders
simultaneously and proportionately to their Pro Rata Shares, it
being
understood that no Lender shall be responsible for any default
by any
other Lender in that other Lender's obligations to make an
Advance
requested hereunder, nor shall the Commitment of any Lender be
increased
or decreased as a result of the default by any other Lender in
that
other Lender's obligation to make an Advance requested
hereunder, and
each Lender shall be obligated to make the Advances required to
be made
by it by the terms of this Loan Agreement regardless of the
failure of
any other Lender to do so.
(ii) Notwithstanding any other provision of this Loan
Agreement, and in order to reduce the number of fund transfers
among the
parties hereto, the Borrowers, the Agent and the Lenders agree
that the
Agent may (but shall not be obligated to), and the Borrowers and
the
Lenders hereby irrevocably authorize the Agent to, fund, on
behalf of
the Lenders, Advances pursuant to SECTION 2.01; PROVIDED,
HOWEVER, THAT
the Agent shall in no event fund such Advances if the Agent
shall have
received written notice from the Required Lenders prior to the
funding
of the proposed Advance that one or more of the conditions
precedent
contained in SECTION 5.01 or SECTION 5.02 will not be satisfied
on the
day of the proposed Advance. If the Administrative Borrower
gives a
Notice of Borrowing requesting an Advance and the Agent elects
not to
fund such Advance on behalf of the Lenders, then promptly after
receipt
of the Notice of Borrowing requesting such Advance, the Agent
shall
notify each applicable Lender of the specifics of the requested
Advance
and that it will not fund the requested Advance on behalf of
the
Lenders. If the Agent notifies the Lenders that it will not fund
a
requested Advance on behalf of the Lenders, each applicable
Lender shall
make its Pro Rata Share of the Advance available to the Agent,
in
immediately available funds, no later than 2:00 p.m. (eastern
time)
(provided that the Agent requests payment from such Lender not
later
than 5:00 p.m. (eastern time) on the prior Business Day) on the
date of
the proposed Advance. The Agent will make the proceeds of such
Advances
available to the Borrowers on the day of the proposed Advance by
causing
an amount, in immediately available funds, equal to the proceeds
of all
such Advances received by the Agent or the amount funded by the
Agent on
behalf of the Lenders to be deposited in the Advance
Account.
(iii) If the Agent has notified the Lenders that the Agent,
on
behalf of the Lenders, will fund a particular Advance pursuant
to
SECTION 2.03(C)(II), the Agent may assume that such Lender has
made such
amount available to the Agent on such day and the Agent, in its
sole
discretion, may, but shall not be obligated to, cause a
corresponding
amount to be made available to the Borrowers on such day. If the
Agent
makes such corresponding amount available to the Borrowers and
such
corresponding amount is not in fact made available to the Agent
by such
Lender, the Agent shall be entitled to recover such
corresponding amount
on demand from such Lender together with interest thereon, for
each day
from the date such payment was due until the date such amount is
paid to
the Agent, at the Federal Funds Rate for three Business Days
and
thereafter at the Reference Rate plus the Applicable Margin.
During the
period in which such Lender has not paid such corresponding
amount to
the Agent, notwithstanding anything to the contrary
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contained in this Loan Agreement or any other Loan Document, the
amount
so advanced by the Agent to the Borrowers shall, for all
purposes
hereof, be an Advance made by the Agent for its own account.
Upon any
such failure by a Lender to pay the Agent, the Agent shall
promptly
thereafter notify the Administrative Borrower of such failure
and the
Borrowers shall immediately pay such corresponding amount to the
Agent
for its own account.
(iv) Nothing in this SECTION 2.03(C) shall be deemed to
relieve any Lender from its obligations to fulfill its
Commitment
hereunder or to prejudice any rights that the Agent or the
Borrowers may
have against any Lender as a result of any default by such
Lender
hereunder.
(d) Upon the Borrowers' request for a borrowing pursuant to
SECTION 2.03(A) above and subject to SECTION 2.03(C) above, each
Lender shall,
assuming all conditions precedent set forth in this SECTION 2.03
and in SECTIONS
5.01 and 5.02 have been met, and provided no Default shall have
occurred and be
continuing (in accordance with SECTION 2.01), (A) with respect
to Tranche A
Advances and Tranche B Advances, not later than the time set
forth in the
Custodial Agreement on the requested Funding Date, and (B) with
respect to
Tranche C Advances, Tranche D Advances and Tranche E Advances,
not later than
3:00 p.m. (eastern time) on the requested Funding Date, make an
Advance
(determined by the Agent) in an amount equal to such Lender's
Pro Rata Share and
which would not cause the aggregate amount of Advances then
outstanding to
exceed the lesser of (x) the Maximum Credit or (y) the Borrowing
Base shown on
the latest calculation of the Borrowing Base provided to the
Agent and the
Lenders. Subject to the foregoing, such borrowing will be made
available to the
Borrowers in accordance with SECTION 2.03(C) via wire transfer
to the applicable
Advance Account in funds immediately available to the
Borrowers.
2.04 LIMITATION ON TYPES OF ADVANCES; ILLEGALITY. Anything
herein to the contrary notwithstanding, if, on or prior to the
determination of
any LIBO Base Rate:
(a) any Lender determines, which determination shall be
conclusive, that quotations of interest rates for the relevant
deposits referred
to in the definition of "LIBO Base Rate" in SECTION 1.01 hereof
are not being
provided in the relevant amounts or for the relevant maturities
for purposes of
determining rates of interest for Advances as provided herein;
or
(b) any Lender determines, which determination shall be
conclusive, that the Applicable Margin plus the relevant rate of
interest
referred to in the definition of "LIBO Base Rate" in SECTION
1.01 hereof upon
the basis of which the rate of interest for Advances is to be
determined is not
likely adequately to cover the cost to such Lender of making or
maintaining
Advances; or
(c) it becomes unlawful for such Lender to make or maintain
Advances hereunder using a LIBO Rate;
then such Lender shall give the Agent and the Administrative
Borrower prompt
notice thereof and, so long as such condition remains in effect,
the Lenders
shall not make additional Advances, and the Borrowers shall, at
their option,
either prepay such Advances or pay interest on such
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Advances at a rate per annum as determined by such Lender taking
into account
the increased cost to such Lender of making and maintaining the
Advances.
2.05 REPAYMENT OF ADVANCES; INTEREST.
(a) Each Borrower hereby unconditionally promises to pay in
full on the Termination Date the then aggregate outstanding
principal amount of
the Advances and all other Obligations due under this Loan
Agreement and the
other Loan Documents.
(b) The Borrowers shall pay to the Agent for the account of
the Lenders interest on the unpaid principal amount of each
Advance for the
period from and including the date of such Advance to but
excluding the date
such Advance shall be paid in full, at a rate per annum equal to
the LIBO Rate
plus the Applicable Margin. Notwithstanding the foregoing, the
Borrowers shall
pay to the Agent for the account of the Lenders interest at the
applicable
Post-Default Rate on any principal of any Advance and on any
other amount
payable by the Borrowers hereunder, that shall not be paid in
full when due
(whether at stated maturity, by acceleration or by mandatory
prepayment or
otherwise), for the period from and including the due date
thereof to but
excluding the date the same is paid in full. Accrued interest on
each Advance as
calculated in SECTION 2.05(B) above shall be payable on each
applicable Payment
Date and on the Termination Date, except that interest payable
at the
Post-Default Rate shall accrue daily and shall be payable
promptly upon receipt
of invoice. Promptly after the determination of any interest
rate provided for
herein or any change therein, the Lender shall give written
notice thereof to
the Borrower.
2.06 MANDATORY PREPAYMENT.
(a) The Agent shall, on the Business Day prior to each
applicable Payment Date (and may on any other Business Day),
deliver to the
Administrative Borrower a calculation of the Tranche A Borrowing
Base, Tranche B
Borrowing Base, Tranche C Borrowing Base, Tranche D Borrowing
Base and Tranche E
Borrowing Base. Such information shall be ascertained from the
Servicing
Transmission which shall be delivered or caused to be delivered
by the Borrowers
in accordance with SECTION 7.22 and such other information as
the Agent shall
determine. In the event that such calculations indicate or if at
any time (i)
the aggregate outstanding principal amount of Tranche A Advances
exceeds the
Tranche A Borrowing Base, (ii) the aggregate outstanding
principal amount of
Tranche B Advances exceeds the Tranche B Borrowing Base, (iii)
the aggregate
outstanding principal amount of Tranche C Advances exceeds the
Tranche C
Borrowing Base, (iv) the aggregate outstanding principal amount
of Tranche D
Advances exceeds the Tranche D Borrowing Base or (v) the
aggregate outstanding
principal amount of Tranche E Advances exceeds the Tranche E
Borrowing Base
(each, a "BORROWING BASE Deficiency"), as determined by the
Agent and notified
to the Administrative Borrower on any Business Day, the
Borrowers shall no later
than two (2) Business Days after receipt of such written notice
by the
Administrative Borrower, prepay the Advances in part or in
whole, such that
after giving effect to such prepayment a Borrowing Base
Deficiency no longer
exists. To the extent that there are Borrowing Base Deficiencies
with respect to
more than one Tranche Advance, funds on deposit in the Control
Accounts shall be
applied as follows: (A) funds on deposit in the Mortgage
Collection Account
shall be applied FIRST to cure any Borrowing Base Deficiency
with respect to
Tranche A Advances and Tranche B Advances, SECOND to cure
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any Borrowing Base Deficiency with respect to Tranche C
Advances, THIRD to cure
any Borrowing Base Deficiency with respect to Tranche D Advances
and FOURTH to
cure any Borrowing Base Deficiency with respect to Tranche E
Advances; (B) funds
on deposit in the IOS Account in respect of the IOS shall be
applied as set
forth in SECTION 2.06(D) or SECTION 2.06(H), as applicable; (C)
funds on deposit
in the Servicing Reimbursement Account shall be applied as set
forth in SECTION
2.06(F); provided, THAT, with respect to the proceeds of any
sale or sales of
the Servicing Rights or Servicing Reimbursement Rights by any
Borrower, the
proceeds thereof shall be applied in accordance with SECTION
2.06(E) hereof and
(D) following payment in full of the Greenwich Pre-Petition Loan
Agreement,
funds on deposit in the 2003-2 Collection Account shall be
applied FIRST to cure
any Borrowing Base Deficiency with respect to Tranche E Advances
and SECOND to
cure any other Borrowing Base Deficiency. Notwithstanding the
forgoing, to the
extent that the Tranche A Borrowing Base exceeds the outstanding
Tranche A
Advances, the Tranche B Borrowing Base exceeds the outstanding
Tranche B
Advances and / or the Tranche C Borrowing Base exceeds the
outstanding Tranche C
Advances (such excess, a "BORROWING BASE SURPLUS"), then, to the
extent that and
for so long as such Borrowing Base Surplus exceeds the aggregate
amount of the
Borrowing Base Deficiency with respect to the Tranche A
Facility, the Tranche B
Facility and / or the Tranche C Facility, as applicable, then
such deficiency
with respect to the Tranche A Facility, the Tranche B Facility
and/or the
Tranche C Facility, as applicable, shall not be deemed to be a
Borrowing Base
Deficiency hereunder.
(b) CASH SWEEP. Not later than the second Business Day
following notice by the Agent (such notice to be provided no
more than three
times during any month), the Borrowers shall prepay the
Advances, as determined
by the Agent, in an amount equal to the aggregate amount of
Unrestricted Cash
and Cash Equivalents of the Borrowers in excess of $15,000,000;
PROVIDED, THAT,
such amounts shall not be applied to the prepayment of the
Tranche D Advances or
the Tranche E Advances unless there are no outstanding Tranche A
Advances,
Tranche B Advances or Tranche C Advances.
(c) ASSET DISPOSITIONS. Immediately upon any Disposition
(subject to compliance with SECTION 2.06(A), (E) and (F), other
than any
Permitted Disposition) by any Borrower, the Borrowers shall
prepay the
outstanding principal of the Advances, as determined by the
Agent, together with
accrued and unpaid interest thereon, in an amount equal to 100%
of the Net Cash
Proceeds received by any Borrower in connection with any such
event.
(d) PROCEEDS UP TO $75,000,000 RECEIVED IN RESPECT OF IOS.
Upon each Payment Date with respect to Tranche C Advances, with
respect to the
first $75,000,000 in the aggregate of such proceeds and amounts,
the proceeds
received by the Borrowers in respect of the IOS, if any,
together with any
amounts on deposit in the IOS Account in respect of the IOS,
shall prepay the
Obligations and be allocated to the Borrowers in the following
order of
priority:
(i) to the extent not paid pursuant to any other provision
of this SECTION 2.06, to pay accrued and unpaid fees and
expenses of the
Agent and the Lenders;
(ii) to pay accrued interest on the Tranche C Advances and
the Tranche D Advances and, to the extent not paid pursuant to
any other
provision of this SECTION 2.06, accrued interest on the Tranche
A
Advances, the Tranche B Advances and the Tranche E Advances;
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(iii) to prepay outstanding Tranche C Advances in an amount
equal to the greater of (A) the amount necessary to reduce
the
outstanding Tranche C Advances to the Tranche C Borrowing Base
and (B)
$3,000,000 (the parties expect that approximately $2,000,000
will be
applied from the distributions on the IOS occurring on the 15th
of each
month and approximately $1,000,000 will be applied from the
distributions on the IOS occurring on the 25th of each
month);
(iv) to pay outstanding Clearwing Indemnification Expense
Liabilities in an aggregate amount during any month not to
exceed the
Clearwing Current-Pay Expense Cap for such month;
(v) to the Borrowers, an amount equal to (A) the IOS cash
flow set forth in the Budget to be used for working capital for
such
month PLUS (B) such amounts expended by the Borrowers,
consistent with
past practices and approved by the Agent, to repurchase loans or
REO (as
defined in the Custodial Agreement) from the Securitization
Trusts or
for other loss mitigation activities (such as forbearances or
deferrals)
to allow such trusts to release cash to the IOS holder LESS (C)
any
amounts paid under CLAUSE (IV) of this SECTION 2.06(D) during
such
month;
(vi) to the extent necessary, to prepay Tranche C Advances
to
55% of the Tranche C Borrowing Base value for the IOS; and
(vii) all remaining cash proceeds shall be allocated (A) 55%
to the Lenders to prepay FIRST, Tranche C Advances until the
Tranche C
Advances are paid in full, SECOND, Tranche A Advances and
Tranche B
Advances until the Tranche A Advances and Tranche B Advances are
paid in
full, and THIRD Tranche D Advances and Tranche E Advances, as
determined
by the Agent, and (B) 45% FIRST, to pay any outstanding
Clearwing
Indemnification Expense Liabilities, and SECOND, to the
Borrowers for
general corporate purposes in accordance with the Budget.
(e) SALE OF SERVICING RIGHTS OR SERVICING REIMBURSEMENT
RIGHTS. Immediately upon any sale or sales (any such date, a
"SALE DATE") of the
Servicing Rights or Servicing Reimbursement Rights by any
Borrower, the proceeds
shall be used by the Borrowers to prepay the outstanding
principal of the
Advances, together with accrued and unpaid interest thereon, and
be allocated to
the Borrowers in the following order of priority:
(i) to pay any outstanding fees or expenses of the Specified
Monolines (other than Radian Asset Assurance Inc.) in an
aggregate
amount not to exceed $1,000,000 for all such payments under this
Section
2.06(e)(i);
(ii) to pay any fees or expenses of the Agent or the Lenders
then due and payable hereunder;
(iii) to cure any Borrowing Base Deficiency;
(iv) to prepay the Tranche D Advances until the Tranche D
Advances are paid in full;
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(v) to prepay the Tranche C Advances in an amount equal to
$2,000,000;
(vi) to the Borrowers, $7,000,000 for general corporate
purposes in accordance with the Budget;
(vii) to prepay the Tranche C Advances in an amount equal to
the amount paid pursuant to SECTION 2.06(E)(I);
(viii) up to $2,000,000 in proceeds shall be applied 50% to
prepay the Tranche C Advances and 50% to the Borrowers for
general
corporate purposes in accordance with the Budget; and
(ix) all remaining proceeds shall be applied 67% to prepay
the Tranche C Advances and 33% to the Borrowers for general
corporate
purposes in accordance with the Budget.
(f) SERVICING REIMBURSEMENT ACCOUNT. Upon each Payment Date
with respect to Tranche D Advances, to the extent not subject to
SECTION
2.06(E), the proceeds received by the Borrowers in respect of
the Servicing
Reimbursement Rights, if any, together with any amounts on
deposit in the
Servicing Reimbursement Account shall prepay the Obligations and
be allocated to
the Borrowers in the following order of priority:
(i) to pay any fees or expenses of the Agent or the Lenders
then due and payable hereunder;
(ii) to pay accrued interest on the Tranche E Advances;
(iii) to cure any Borrowing Base Deficiency; and
(iv) all remaining amounts shall be provided to the
Borrowers
to be used in accordance with the Budget.
(g) TRANCHE E PREPAYMENTS. After payment in full of the
Greenwich Pre-Petition Loan Agreement, immediately upon receipt
of proceeds of
Collateral included in the Tranche E Borrowing Base, the
Borrowers shall prepay
the Tranche E Advances in an amount equal to such proceeds.
Subject to
compliance with SECTION 2.06(A), any proceeds of Collateral
included in the
Tranche E Borrowing Base after payment in full of the Tranche E
Advances shall
be remitted to the Borrowers for general corporate purposes.
(h) PR
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