<PAGE>
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DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT
------------------------
DATED AS OF FEBRUARY 22, 2005
------------------------
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)
<PAGE>
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)
<PAGE>
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)
<PAGE>
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)
<PAGE>
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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<PAGE>
"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
8
<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
14
<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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"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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"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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<PAGE>
"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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<PAGE>
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
25
<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;
44
<PAGE>
(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 Borr
