-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C651b9BoyN2384dz4yi/DOBG4MiUCPLnfTHUUtBO8fS/1NHXSDmH3/HaZkz7bmoz Strh/DmU2TqEBl7+LuEQLw== 0000889812-99-001133.txt : 19990408 0000889812-99-001133.hdr.sgml : 19990408 ACCESSION NUMBER: 0000889812-99-001133 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19990330 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990407 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL SECURITIES SECURED FINANCING CORP CENTRAL INDEX KEY: 0000839849 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 562064715 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 033-84918 FILM NUMBER: 99588585 BUSINESS ADDRESS: STREET 1: ONE NEW YORK PLZ STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10292 BUSINESS PHONE: 2127781000 MAIL ADDRESS: STREET 1: ONE SEAPORT PLAZA STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10292 FORMER COMPANY: FORMER CONFORMED NAME: PB SECURED FINANCING CORP DATE OF NAME CHANGE: 19910819 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ---------------- Date of Report (Date of earliest event reported): March 30, 1999 PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION (Exact name of registrant as specified in its charter) Delaware 333-74859 13-3526694 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) One New York Plaza 10292 New York, New York (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: (212) 778-1000 No Change -------------------------------------------------------------- (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets Description of the Notes and the Mortgage Loans Prudential Securities Secured Financing Corporation registered issuances of up to $330,000,000 principal amount of Mortgage-Backed Notes on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"), by the Registration Statements on Form S-3 (Registration File No. 333-74859) (as amended, the "Registration Statement"). Pursuant to the Registration Statement, ABFS Mortgage Loan Trust 1999-1 (the "Trust") issued approximately $184,075,000 in aggregate principal amount of its Backed Notes Certificates (the "Notes"), on March 30, 1999. This Current Report on Form 8-K is being filed to satisfy an undertaking to file copies of certain agreements executed in connection with the issuance of the Certificates, the forms of which were filed as Exhibits to the Registration Statement. The Notes were issued pursuant to an Indenture (the "Indenture") attached hereto as Exhibit 4.1, dated as of March 1, 1999, between ABFS Mortgage Loan Trust 1999-1 (the "Trust") and The Bank of New York, in its capacity as indenture trustee (the "Indenture Trustee"). The Notes consist of two classes of senior notes, the Class A-1 Notes (the "Class A-1 Notes") and the Class A-2 Notes (the "Class A-2 Notes", and, collectively with the Class A-1 Notes, the "Class A Notes") and two class of Trust Certificates (the "Trust Certificates"). Only the Class A Notes were offered. The Notes initially evidenced, in the aggregate, 100% of the undivided beneficial ownership interests in the Trust. The assets of the Trust consist primarily of fixed-rate, closed-end, conventional, monthly pay, generally fully amortizing, business and consumer purpose residential home equity or commercial loans (the "Mortgage Loans") secured by first or second lien mortgages or deeds of trust (the "Mortgages") on real properties (the "Mortgage Properties"). The Mortgaged Properties securing the Mortgage Loans consist primarily of single family residences (which may be detached, part of a two-to four-family dwelling, a condominium unit or a unit in a planned unit development). Interest distributions on the Class A Certificates are based on the Notes Principal Balance thereof and the then applicable Mortgage-Backed Rate thereof. The Mortgage Rate for the Class A-1 Notes is 6.545% per annum. The Mortgage-Backed Rate for the Class A-2 Notes is 6.580%. The Class A-1 Notes and the Class A-2 Notes have original Note Principal Balances of $100,000,000 and $84,075,000 respectively. As of the Closing Date, the Mortgage Loans possessed the characteristics described in the Prospectus dated March 23, 1999 and the Prospectus Supplement dated March 24 filed pursuant to Rule 424(b) (5) of the Act on March 25,1999. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Not applicable (b) Not applicable 2 (c) Exhibits: 1.1 Underwriting Agreement, dated March 11, 1999, between Prudential Securities Secured Financing Corporation and Prudential Securities Incorporated. 1.2 Indemnification Agreement, dated as of March 24, 1999, among Prudential Securities Secured Financing Corporation, Prudential Securities Incorporated, American Business Credit, Inc., HomeAmerican Credit, Inc. d/b/a Upland Mortgage, New Jersey Mortgage and Investment Corp., ABFS 1999-1, Inc., and Financial Security Assurance Inc. 4.1 Indenture, dated as of March 1, 1999, between ABFS Mortgage Loan Trust 1999-1 and the Bank of New York, as indenture trustee. 4.2 Unaffiliated Seller's Agreement, dated as of March 1, 1999, among American Business Credit, Inc., Home American Credit, Inc. d/b/a/ Upland Mortgage, New Jersey Mortgage and Investment Corp., Prudential Securities Secured Financing Corporation, and ABFS 1999-1, Inc. 4.3 Sale and Servicing Agreement, dated as of March 1, 1999, among Prudential Securities Secured Financing Corporation, American Business Credit, Inc., ABFS Mortgage Loan Trust 1999-1, Chase Bank of Texas, N.A., and The Bank of New York. 8.1 Opinion of Dewey Ballantine LLP, Counsel to Prudential Securities Secured Corporation regarding certain tax matters. 10.1 Financial Guaranty Insurance Policy, dated March 1, 1999. 23.1 Consent of PricewaterhouseCoopers, L.L.P. regarding financial statements of the Financial Security Assurance Inc. and their report. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION As Depositor and on behalf of ABFS Mortgage Loan Trust 1999-1 Registrant By: /s/ Evan Mitnick ------------------------------- Name: Evan Mitnick Title: Vice President Dated: April 6, 1999 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 1.1 Underwriting Agreement, dated March 11, 1999, between Prudential Securities Secured Financing Corporation and Prudential Securities Incorporated. 1.2 Indemnification Agreement, dated March 24, 1999, among Prudential Securities Secured Financing Corporation, Prudential Securities Incorporated, American Business Credit, Inc., HomeAmerican Credit, Inc. d/b/a Upland Mortgage, New Jersey Mortgage and Investment Corp., ABFS 1999-1, Inc., and Financial Security Assurance Inc. 4.1 Indenture, dated as of March 1, 1999, between ABFS Mortgage Loan Trust 1999-1 and the Bank of New York, as indenture trustee. 4.2 Unaffiliated Seller's Agreement, dated as of March 1, 1999, among American Business Credit, Inc., Home American Credit, Inc. d/b/a/ Upland Mortgage, New Jersey Mortgage and Investment Corp., Prudential Securities Secured Financing Corporation, and ABFS 1999-1, Inc. 4.3 Sale and Servicing Agreement, dated as of March 1, 1999, among Prudential Securities Secured Financing Corporation, American Business Credit, Inc., ABFS Mortgage Loan Trust 1999-1, Chase Bank of Texas, N.A., and The Bank of New York. 8.1 Opinion of Dewey Ballantine LLP, Counsel to Prudential Securities Secured Corporation regarding certain tax matters. 10.1 Financial Guaranty Insurance Policy, dated March 1, 1999. 23.1 Consent of PricewaterhouseCoopers, L.L.P. regarding financial statements of the Financial Security Assurance Inc. and their report. EX-1.1 2 UNDERWRITING AGREEMENT Exhibit 1.1 ABFS MORTGAGE LOAN TRUST 1999-1 MORTGAGE LOAN BACKED NOTES SERIES 1999-1 UNDERWRITING AGREEMENT UNDERWRITING AGREEMENT PRUDENTIAL SECURITIES INCORPORATED One New York Plaza New York, New York 10292 March 11, 1999 Ladies and Gentlemen: Prudential Securities Secured Financing Corporation (the "Depositor") proposes, subject to the terms and conditions stated herein and in the attached Underwriting Agreement Standard Provisions, dated March 11, 1999 (the "Standard Provisions"), between the Depositor and Prudential Securities Incorporated, to issue and sell to you (the "Underwriter") the Securities specified in Schedule I hereto (the "Offered Securities"). The Depositor agrees that each of the provisions of the Standard Provisions is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Underwriting Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Underwriting Agreement. Each reference to the "Representative" herein and in the provisions of the Standard Provisions so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Standard Provisions are used herein as therein defined. The Prospectus Supplement and the accompanying Prospectus relating to the Offered Securities (together, the "Prospectus") are incorporated by reference herein. Subject to the terms and conditions set forth herein and in the Standard Provisions incorporated herein by reference, the Depositor agrees to issue and sell to the Underwriter, and the Underwriter agrees to purchase from the Depositor, at the time and place and at the purchase price to the Underwriter and in the manner set forth in Schedule I hereto, the entire original principal balance of the Offered Securities. [Remainder of Page Intentionally Left Blank] If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, and upon acceptance hereof by you, this letter and such acceptance hereof, including the provisions of the Standard Provisions incorporated herein by reference, shall constitute a binding agreement between the Underwriter and the Depositor. Yours truly, PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By: ________________________ Name: Title: Accepted as of the date hereof: PRUDENTIAL SECURITIES INCORPORATED By: _________________________ Name: Title: [Signature Page to Underwriting Agreement] SCHEDULE I Title of Offered Securities: ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class A-1 and Class A-2. Terms of Offered Securities: The Offered Securities shall have the terms set forth in the Prospectus and shall conform in all material respects to the descriptions thereof contained therein, and shall be issued pursuant to an Indenture, to be dated as of March 1, 1999, between the ABFS Mortgage Loan Trust 1999-1, as issuer, and The Bank of New York, as indenture trustee. Purchase Price: The purchase price for the Offered Securities shall be 99.65% and 99.65% of the aggregate note principal balance of the Class A-1 Notes and Class A-2 Notes, respectively, as of the Closing Date, plus accrued interest at the rate of 6.545% per annum and 6.580% per annum, on the aggregate note principal balance of the Class A-1 Notes and Class A-2 Notes, respectively, from, and including March 1, 1999 to, but not including the Closing Date. Specified funds for payment of Purchase Price: Federal Funds (immediately available funds). Required Ratings: Aaa by Moody's Investors Service, Inc. AAA by Standard & Poor's Ratings Services Closing Date: On or about March 30, 1999 at 10:00 A.M. eastern standard time or at such other time as the Depositor and the Underwriter shall agree. Closing Location: Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019. Name and address of Representative: Designated Representative: Prudential Securities Incorporated. Address for Notices, etc.: One New York Plaza New York, New York 10292 Attn: Joseph Donovan STANDARD PROVISIONS TO UNDERWRITING AGREEMENT March 11, 1999 From time to time, Prudential Securities Secured Financing Corporation, a Delaware corporation (the "Depositor") may enter into one or more underwriting agreements (each, an "Underwriting Agreement") that provide for the sale of designated securities to the several underwriters named therein (such underwriters constituting the "Underwriters" with respect to such Underwriting Agreement and the securities specified therein). The several underwriters named in an Underwriting Agreement will be represented by one or more representatives as named in such Underwriting Agreement (collectively, the "Representative"). The term "Representative" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative. The standard provisions set forth herein (the "Standard Provisions") may be incorporated by reference in any Underwriting Agreement. These Standard Provisions shall not be construed as an obligation of the Depositor to sell any securities or as an obligation of any of the Underwriters to purchase such securities. The obligation of the Depositor to sell any securities and the obligation of any of the Underwriters to purchase any of the securities shall be evidenced by the Underwriting Agreement with respect to the securities specified therein. An Underwriting Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of the communications transmitted. The obligations of the underwriters under these Standard Provisions and each Underwriting Agreement shall be several and not joint. Unless otherwise defined herein, the terms defined in the Underwriting Agreement are used herein as defined in the Prospectus referred to below. 1. The Offered Securities. The Depositor proposes to sell pursuant to the applicable Underwriting Agreement to the several Underwriters named therein home equity loan backed notes (the "Securities") representing indebtedness secured primarily by the property of a trust which consists of two pools of home equity loans (the "Mortgage Loans") and certain related property. The Securities will be issued pursuant to an Indenture (the "Indenture") by and between ABFS Mortgage Loan Trust 1999-1, as issuer (the "Issuer"), and The Bank of New York, as indenture trustee (the "Indenture Trustee"). The Mortgage Loans will be purchased by the Depositor pursuant to an Unaffiliated Seller's Agreement (the "Unaffiliated Seller's Agreement") by and among the Depositor, ABFS 1999-1, Inc. (the "Unaffiliated Seller"), American Business Credit, Inc. ("ABC"), HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland") and New Jersey Mortgage and Investment Corp ("NJMIC" and, collectively with ABC and Upland, the "Originators"). The Mortgage Loans will be sold by the Depositor to the Issuer pursuant to the terms of a Sale and Servicing Agreement (the "Sale and Servicing Agreement") among the Issuer, the Depositor, the Indenture Trustee, Chase Bank of Texas, N.A., as collateral agent (the "Collateral Agent"), and ABC, as servicer (in such capacity, the "Servicer"). The terms and rights of any particular issuance of Securities shall be as specified in the Underwriting Agreement relating thereto and in or pursuant to the Indenture identified in such Underwriting Agreement. The Securities which are the subject of any particular Underwriting Agreement into which these Standard Provisions are incorporated are herein referred to as the "Offered Securities." The Depositor has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-74859), including a prospectus relating to the Securities under the Securities Act of 1933, as amended (the "1933 Act"). The term "Registration Statement" means such registration statement as amended to the date of the Underwriting Agreement. The term "Base Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Base Prospectus together with the prospectus supplement specifically relating to the Offered Securities, as first filed with the Commission pursuant to Rule 424. The term "Preliminary Prospectus" means a preliminary prospectus supplement specifically relating to the Offered Securities together with the Base Prospectus. 2. Offering by the Underwriters. Upon the execution of the Underwriting Agreement applicable to any Offered Securities and the authorization by the Representative of the release of such Offered Securities, the several Underwriters propose to offer for sale to the public the Offered Securities at the prices and upon the terms set forth in the Prospectus. 3. Purchase, Sale and Delivery of the Offered Securities. Unless otherwise specified in the Underwriting Agreement, payment for the Offered Securities shall be made by certified or official bank check or checks payable to the order of the Depositor in immediately available or next day funds, at the time and place set forth in the Underwriting Agreement, upon delivery to the Representative for the respective accounts of the several Underwriters of the Offered Securities registered in definitive form and in such names and in such denominations as the Representative shall request in writing not less than five full business days prior to the date of delivery. The time and date of such payment and delivery with respect to the Offered Securities are herein referred to as the "Closing Date". 4. Conditions of the Underwriters' Obligations. The respective obligations of the several Underwriters pursuant to the Underwriting Agreement shall be subject, in the discretion of the Representative, to the accuracy in all material respects of the representations and warranties of the Depositor contained herein as of the date of the Underwriting Agreement and as of the Closing Date as if made on and as of the Closing Date, to the accuracy in all material respects of the statements of the officers of the Issuer, the Depositor and the Servicer made in any certificates pursuant to the provisions hereof and of the Underwriting Agreement, to the performance by the Depositor of its covenants and agreements contained herein and to the following additional conditions precedent: (a) All actions required to be taken and all filings required to be made by or on behalf of the Depositor under the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934 Act") prior to the sale of the Offered Securities shall have been duly taken or made. (b) (i) No stop order suspending the effectiveness of the Registration Statement shall be in effect; (ii) no proceedings for such purpose shall be pending before or threatened by the Commission, or by any authority administering any state securities or "Blue Sky" laws; (iii) any requests for additional information on the part of the Commission shall have been complied with to the Representative's reasonable satisfaction; (iv) since the respective dates as of which information is given in the Registration Statement and the Prospectus 2 except as otherwise stated therein, there shall have been no material adverse change in the condition, financial or otherwise, earnings, affairs, regulatory situation or business prospects of the Depositor; (v) there are no material actions, suits or proceedings pending before any court or governmental agency, authority or body or threatened, affecting the Depositor or the transactions contemplated by the Underwriting Agreement; (vi) the Depositor is not in violation of its charter or its by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or its properties may be bound, which violations or defaults separately or in the aggregate would have a material adverse effect on the Depositor; and (vii) the Representative shall have received, on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Depositor, to the foregoing effect. (c) Subsequent to the execution of the Underwriting Agreement, there shall not have occurred any of the following: (i) if at or prior to the Closing Date, trading in securities on the New York Stock Exchange shall have been suspended or any material limitation in trading in securities generally shall have been established on such exchange, or a banking moratorium shall have been declared by New York State or federal authorities; (ii) if at or prior to the Closing Date, there shall have been an outbreak or escalation of hostilities between the United States and any foreign power, or of any other insurrection or armed conflict involving the United States which results in the declaration of a national emergency or war, and, in the reasonable opinion of the Representative, makes it impracticable or inadvisable to offer or sell the Offered Securities; or (iii) if at or prior to the Closing Date, a general moratorium on commercial banking activities in the State of New York shall have been declared by either federal or New York State authorities. (d) The Representative shall have received, on the Closing Date, a certificate dated the Closing Date and signed by an executive officer of the Depositor to the effect that attached thereto is a true and correct copy of the letter from each nationally recognized statistical rating organization (as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act) that rated the Offered Securities and confirming that, unless otherwise specified in the Underwriting Agreement, the Offered Securities have been rated in the highest rating categories by each such organization and that each such rating has not been rescinded since the date of the applicable letter. (e) The Representative shall have received, on the Closing Date, an opinion of Dewey Ballantine LLP, special counsel for the Depositor, dated the Closing Date, in form and substance satisfactory to the Representative and containing opinions substantially to the effect set forth in Exhibit A hereto. (f) The Representative shall have received, on the Closing Date, an opinion of counsel for the Servicer, the Unaffiliated Seller and the Originators, dated the Closing Date, in form and substance satisfactory to the Representative and counsel for the Underwriters and containing opinions substantially to the effect set forth in Exhibit B hereto. (g) The Representative shall have received, on the Closing Date, an opinion of counsel for the Indenture Trustee, dated the Closing Date, in form and substance 3 satisfactory to the Representative and counsel for the Underwriters and containing opinions substantially to the effect set forth in Exhibit C hereto. (h) The Representative shall have received, on the Closing Date, an opinion of counsel for the Issuer and First Union Trust Company, National Association, as owner trustee (the "Owner Trustee"), dated the Closing Date, in form and substance satisfactory to the Representative and counsel for the Underwriters and containing opinions substantially to the effect set forth in Exhibit D hereto. (i) The Representative shall have received, on the Closing Date, an opinion of Dewey Ballantine LLP, special counsel for the Depositor, dated the Closing Date, with respect to the incorporation of the Depositor, the validity of the Offered Securities, the Registration Statement, the Prospectus and other related matters as the Underwriters may reasonably require, and the Depositor shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (j) The Representative shall have received, on or prior to the date of first use of the prospectus supplement relating to the Offered Securities, and on the Closing Date if requested by the Representative, letters of independent accountants of the Depositor in the form and reflecting the performance of the procedures previously requested by the Representative. (k) The Depositor shall have furnished or caused to be furnished to the Representative on the Closing Date a certificate of an executive officer of the Depositor satisfactory to the Representative as to the accuracy of the representations and warranties of the Depositor herein at and as of such Closing Date as if made as of such date, as to the performance by the Depositor of all of its obligations hereunder to be performed at or prior to such Closing Date, and as to such other matters as the Representative may reasonably request; (l) The Servicer shall have furnished or caused to be furnished to the Representative on the Closing Date a certificate of officers of such Servicer in form and substance reasonably satisfactory to the Representative; (m) The Note Insurance Policy shall have been duly executed and issued at or prior to the Closing Date and shall conform in all material respects to the description thereof in the Prospectus Supplement. (n) The Representative shall have received, on the Closing Date, an opinion of counsel to Financial Security Assurance Inc. (the "Note Insurer"), dated the Closing Date, in form and substance satisfactory to the Representative and counsel for the Underwriters and containing opinions as to such matters as the Representative may reasonably request. (o) On or prior to the Closing Date there shall not have occurred any downgrading, nor shall any notice have been given of (i) any intended or potential downgrading or (ii) any review or possible change in rating the direction of which has not been indicated, in the rating accorded the Note Insurer's claims paying ability by any 4 "nationally recognized statistical rating organization," as such term is defined for purposes of the 1933 Act. (p) There has not occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, since September 30, 1999, of the Note Insurer, that is in the Representative's judgment material and adverse and that makes it in the Representative's judgment impracticable to market the Offered Securities on the terms and in the manner contemplated in the Prospectus. (q) The Representative shall have been furnished such further information, certificates, documents and opinions as the Representative may reasonably request. 5. Covenants of the Depositor. In further consideration of the agreements of the Underwriters contained in the Underwriting Agreement, the Depositor covenants as follows: (a) To furnish the Representative, without charge, copies of the Registration Statement and any amendments thereto including exhibits and as many copies of the Prospectus and any supplements and amendments thereto as the Representative may from time to time reasonably request. (b) Immediately following the execution of the Underwriting Agreement, the Depositor will prepare a prospectus supplement setting forth the principal amount, notional amount or stated amount, as applicable, of Offered Securities covered thereby, the price at which the Offered Securities are to be purchased by the Underwriters from the Depositor, either the initial public offering price or prices or the method by which the price or prices at which the Offered Securities are to be sold will be determined, the selling concessions and reallowances, if any, any delayed delivery arrangements, and such other information as the Representative and the Depositor deem appropriate in connection with the offering of the Offered Securities, but the Depositor will not file any amendment to the Registration Statement or any supplement to the Prospectus of which the Representative shall not previously have been advised and furnished with a copy a reasonable time prior to the proposed filing or to which the Representative shall have reasonably objected. The Depositor will use its best efforts to cause any amendment to the Registration Statement to become effective as promptly as possible. During the time when a Prospectus is required to be delivered under the 1933 Act, the Depositor will comply so far as it is able with all requirements imposed upon it by the 1933 Act and the rules and regulations thereunder to the extent necessary to permit the continuance of sales or of dealings in the Offered Securities in accordance with the provisions hereof and of the Prospectus, and the Depositor will prepare and file with the Commission, promptly upon request by the Representative, any amendments to the Registration Statement or supplements to the Prospectus which may be necessary or advisable in connection with the distribution of the Offered Securities by the Underwriters, and will use its best efforts to cause the same to become effective as promptly as possible. The Depositor will advise the 5 Representative, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement or any amended Registration Statement has become effective or any supplement to the Prospectus or any amended Prospectus has been filed. The Depositor will advise the Representative, promptly after it receives notice or obtains knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any preliminary Prospectus or the Prospectus, or the suspension of the qualification of the Offered Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose, or of any request made by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information, and the Depositor will use its best efforts to prevent the issuance of any such stop order or any order suspending any such qualification, and if any such order is issued, to obtain the lifting thereof as promptly as possible. (c) If, at any time when a prospectus relating to the Offered Securities is required to be delivered under the 1933 Act, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact, or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary for any other reason to amend or supplement the Prospectus to comply with the 1933 Act, to promptly notify the Representative thereof and upon their request to prepare and file with the Commission, at the Depositor's own expense, an amendment or supplement which will correct such statement or omission or any amendment which will effect such compliance. (d) During the period when a prospectus is required by law to be delivered in connection with the sale of the Offered Securities pursuant to the Underwriting Agreement, the Depositor will file, on a timely and complete basis, all documents that are required to be filed by the Depositor with the Commission pursuant to Sections 13, 14, or 15(d) of the 1934 Act. (e) To qualify the Offered Securities for offer and sale under the securities or "Blue Sky" laws of such jurisdictions as the Representative shall reasonably request and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification of the eligibility of the Offered Securities for investment under the laws of such jurisdictions as the Representative may designate provided that in connection therewith the Depositor shall not be required to qualify to do business or to file a general consent to service of process in any jurisdiction. (f) To make generally available to the Depositor's security holders, as soon as practicable, but in any event not later than eighteen months after the date on which the filing of the Prospectus, as amended or supplemented, pursuant to Rule 424 under the 1933 Act first occurs, an earnings statement of the Depositor covering a twelve-month period beginning after the date of the Underwriting Agreement, which shall satisfy the provisions of Section 11(a) of the 1933 Act and the applicable rules and regulations of the Commission thereunder (including, at the option of the Depositor, Rule 158). (g) For so long as any of the Offered Securities remain outstanding, to furnish to the Representative upon request in writing copies of such financial statements and other periodic and special reports as the Depositor may from time to time distribute generally to 6 its creditors or the holders of the Offered Securities and to furnish to the Representative copies of each annual or other report the Depositor shall be required to file with the Commission. (h) For so long as any of the Offered Securities remain outstanding, the Depositor will, or will cause the Servicer to, furnish to the Representative, as soon as available, a copy of (i) the annual statement of compliance delivered by the Servicer to the Indenture Trustee under the applicable Sale and Servicing Agreement, (ii) the annual independent public accountants' servicing report furnished to the Indenture Trustee pursuant to the applicable Sale and Servicing Agreement, (iii) each report regarding the Offered Securities mailed to the holders of such Securities, and (iv) from time to time, such other information concerning such Securities as the Representative may reasonably request. 6. Representations and Warranties of the Depositor. The Depositor represents and warrants to, and agrees with, each Underwriter, as of the date of the Underwriting Agreement, as follows: (a) The Registration Statement including a prospectus relating to the Securities and the offering thereof from time to time in accordance with Rule 415 under the 1933 Act has been filed with the Commission and such Registration Statement, as amended to the date of the Underwriting Agreement, has become effective. No stop order suspending the effectiveness of such Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. A prospectus supplement specifically relating to the Offered Securities will be filed with the Commission pursuant to Rule 424 under the 1933 Act; provided, however, that a supplement to the Prospectus prepared pursuant to Section 5(b) hereof shall be deemed to have supplemented the base Prospectus only with respect to the Offered Securities to which it relates. The conditions to the use of a registration statement on Form S-3 under the 1933 Act, as set forth in the General Instructions on Form S-3, and the conditions of Rule 415 under the 1933 Act, have been satisfied with respect to the Depositor and the Registration Statement. There are no contracts or documents of the Depositor that are required to be filed as exhibits to the Registration Statement pursuant to the 1933 Act or the rules and regulations thereunder that have not been so filed. (b) On the effective date of the Registration Statement, the Registration Statement and the base Prospectus conformed in all material respects to the requirements of the 1933 Act and the rules and regulations thereunder, and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; on the date of the Underwriting Agreement and as of the Closing Date, the Registration Statement and the Prospectus conform, and as amended or supplemented, if applicable, will conform in all material respects to the requirements of the 1933 Act and the rules and regulations thereunder, and on the date of the Underwriting Agreement and as of the Closing Date, neither of such documents includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and neither of such documents as amended or supplemented, if applicable, will include any untrue statement of a material fact or omit to state any material fact required to be stated 7 therein or necessary to make the statements therein not misleading; provided, however, that the foregoing does not apply to statements or omissions in any of such documents based upon written information furnished to the Depositor by any Underwriter specifically for use therein. (c) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, there has been no material adverse change in the condition, financial or otherwise, earnings, affairs, regulatory situation or business prospects of the Depositor, whether or not arising in the ordinary course of the business of the Depositor. (d) The Depositor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware. (e) The Depositor has all requisite power and authority (corporate and other) and all requisite authorizations, approvals, orders, licenses, certificates and permits of and from all government or regulatory officials and bodies to own its properties, to conduct its business as described in the Registration Statement and the Prospectus and to execute, deliver and perform these Standard Provisions, the Underwriting Agreement, the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement, except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution by the Underwriter of the Offered Securities; all such authorizations, approvals, orders, licenses, certificates are in full force and effect and contain no unduly burdensome provisions; and, except as set forth or contemplated in the Registration Statement or the Prospectus, there are no legal or governmental proceedings pending or, to the best knowledge of the Depositor, threatened that would result in a material modification, suspension or revocation thereof. (f) The Offered Securities have been duly authorized, and when the Offered Securities are issued and delivered pursuant to the Underwriting Agreement, the Offered Securities will have been duly executed, issued and delivered and will be entitled to the benefits provided by the applicable Indenture, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting the rights of creditors generally, and to general principles of equity (regardless of whether the entitlement to such benefits is considered in a proceeding in equity or at law), and will conform in substance to the description thereof contained in the Registration Statement and the Prospectus, and will in all material respects be in the form contemplated by the Indenture. (g) The execution and delivery by the Depositor of these Standard Provisions, the Underwriting Agreement, the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement are within the corporate power of the Depositor and none of the execution and delivery by the Depositor of these Standard Provisions, the Underwriting Agreement, the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement, the consummation by the Depositor of the transactions therein contemplated, or the compliance by the Depositor with the provisions thereof, will conflict with or result in a breach of, or constitute a default under, the charter or the by-laws of the Depositor or any of the 8 provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Depositor or its properties, or any of the provisions of any indenture, mortgage, contract or other instrument to which the Depositor is a party or by which it is bound, or will result in the creation or imposition of a lien, charge or encumbrance upon any of its property pursuant to the terms of any such indenture, mortgage, contract or other instrument, except such as have been obtained under the 1933 Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Offered Securities by the Underwriters. (h) The Underwriting Agreement has been, and at the Closing Date the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement will have been, duly authorized, executed and delivered by the Depositor. (i) At the Closing Date, each of the Underwriting Agreement, the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement will constitute a legal, valid and binding obligation of the Depositor, enforceable against the Depositor, in accordance with its terms, subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting the rights of creditors generally, and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law). (j) No filing or registration with, notice to, or consent, approval, non-disapproval, authorization or order or other action of, any court or governmental authority or agency is required for the consummation by the Depositor of the transactions contemplated by the Underwriting Agreement, the Unaffiliated Seller's Agreement or the Sale and Servicing Agreement, except such as have been obtained and except such as may be required under the 1933 Act, the rules and regulations thereunder, or state securities or "Blue Sky" laws, in connection with the purchase and distribution of the Offered Securities by the Underwriters. (k) The Depositor owns or possesses or has obtained all material governmental licenses, permits, consents, orders, approvals and other authorizations necessary to lease, own or license, as the case may be, and to operate, its properties and to carry on its business as presently conducted and has received no notice of proceedings relating to the revocation of any such license, permit, consent, order or approval, which singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially adversely affect the conduct of the business, results of operations, net worth or condition (financial or otherwise) of the Depositor. (l) Other than as set forth or contemplated in the Prospectus, there are no legal or governmental proceedings pending to which the Depositor is a party or of which any property of the Depositor is the subject which, if determined adversely to the Depositor would individually or in the aggregate have a material adverse effect on the condition (financial or otherwise), earnings, affairs, or business or business prospects of the Depositor and, to the best of the Depositor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. 9 (m) Each of the Offered Securities will, when issued, be a "mortgage related security" as such term is defined in Section 3(a)(41) of the 1934 Act. (n) At the Closing Date or any Subsequent Transfer Date, as the case may be, each of the Mortgage Loans which is a subject of the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement and all such Mortgage Loans in the aggregate will meet the criteria for selection described in the Prospectus, and at the Closing Date or any Subsequent Transfer Date, as the case may be, the representations and warranties made by the Depositor both the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement will be true and correct as of such date. (o) At the time of execution and delivery of the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement and on any Subsequent Transfer Date, as the case may be, the Depositor will have good and marketable title to the Mortgage Loans being transferred to the Issuer pursuant to the Sale and Servicing Agreement, free and clear of any lien, mortgage, pledge, charge, encumbrance, adverse claim or other security interest (collectively, "Liens"), and will not have assigned to any person (other than the Issuer and the Indenture Trustee) any of its right, title or interest in such Mortgage Loans or in such Unaffiliated Seller's Agreement or such Sale and Servicing Agreement or the Offered Securities being issued pursuant thereto, the Depositor will have the power and authority to transfer such Mortgage Loans to the Issuer and to transfer the Offered Securities to each of the Underwriters, and upon execution and delivery to the Issuer of the Sale and Servicing Agreement and delivery to each of the Underwriters of the Offered Securities, and on any Subsequent Transfer Date, as the case may be, the Issuer will have good and marketable title to the Mortgage Loans and each of the Underwriters will have good and marketable title to the Offered Securities, in each case free and clear of any Liens. (p) Any taxes, fees and other governmental charges in connection with the execution, delivery and issuance of the Underwriting Agreement, these Standard Provisions, the Indenture, the Sale and Servicing Agreement and the Offered Securities have been or will be paid at or prior to the Closing Date. 7. Indemnification and Contribution. (a) The Depositor agrees to indemnify and hold harmless each Underwriter (including Prudential Securities Incorporated acting in its capacity as Representative and as one of the Underwriters), and each person, if any, who controls any Underwriter within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which such Underwriter or such controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter and each such controlling person for any legal or other expenses reasonably incurred by such Underwriter or such controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, 10 however, that the Depositor will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any preliminary Prospectus, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with (1) written information furnished to the Depositor by any Underwriter through the Representative specifically for use therein or (2) information regarding the Mortgage Loans except to the extent that the Depositor has been indemnified by the Servicer. This indemnity agreement will be in addition to any liability which the Depositor may otherwise have. (b) Each Underwriter will indemnify and hold harmless the Depositor, each of the Depositor's directors, each of the Depositor's officers who signed the Registration Statement and each person, if any, who controls the Depositor, within the meaning of the 1933 Act, against any losses, claims, damages or liabilities to which the Depositor, or any such director, officer or controlling person may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, or any other prospectus relating to the Offered Securities, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statements or alleged untrue statements or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Depositor by any Underwriter through the Representative specifically for use therein; and each Underwriter will reimburse any legal or other expenses reasonably incurred by the Depositor or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have. The Depositor acknowledges that the statements set forth under the caption "UNDERWRITING" in the Prospectus Supplement constitute the only information furnished to the Depositor by or on behalf of any Underwriter for use in the Registration Statement, any preliminary Prospectus or the Prospectus, and each of the several Underwriters represents and warrants that such statements are correct as to it. (c) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in the preceding parts of this Section 7 is for any reason held to be unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof); provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by the Depositor on the one hand, and the Underwriters on the other, from the offering of the Offered Securities (taking into account the portion of the proceeds of the offering realized by each), the Depositor's and the Underwriters' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate 11 in the circumstances. The Depositor and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose). No Underwriter or person controlling such Underwriter shall be obligated to make contribution hereunder which in the aggregate exceeds the total underwriting fee of the Offered Securities purchased by such Underwriter under the Underwriting Agreement, less the aggregate amount of any damages which such Underwriter and its controlling persons have otherwise been required to pay in respect of the same or any substantially similar claim. The Underwriters' obligation to contribute hereunder are several in proportion to their respective underwriting obligations and not joint. For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Underwriter, and each director of the Depositor, each officer of the Depositor who signed the Registration Statement, and each person, if any, who controls the Depositor within the meaning of Section 15 of the 1933 Act, shall have the same rights to contribution as the Depositor. (d) The parties hereto agree that the first sentence of Section 5 of the Indemnification Agreement (the "Indemnification Agreement") dated as of the Closing Date among the Note Insurer, the Servicer, the Originators, the Unaffiliated Seller, the Issuer, the Depositor and the Underwriter shall not be construed as limiting the Depositor's right to enforce its rights under Section 7 of these Standard Provisions. The parties further agree that, as between the parties hereto, to the extent that the provisions of Section 5 of the Indemnification Agreement conflict with Section 7 hereof, the provisions of Section 7 hereof shall govern. 8. Survival of Certain Representations and Obligations. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Depositor, its officers and the several Underwriters set forth in, or made pursuant to, the Underwriting Agreement shall remain in full force and effect, regardless of any investigation, or statement as to the result thereof, made by or on behalf of any Underwriter, the Depositor, or any of the officers or directors or any controlling person of any of the foregoing, and shall survive the delivery of and payment for the Offered Securities. 9. Termination. (a) The Underwriting Agreement may be terminated by the Depositor by notice to the Representative in the event that a stop order suspending the effectiveness of the Registration Statement shall have been issued or proceedings for that purpose shall have been instituted or threatened. (b) The Underwriting Agreement may be terminated by the Representative by notice to the Depositor in the event that the Depositor shall have failed, refused or been unable to perform all obligations and satisfy all conditions to be performed or satisfied hereunder by the Depositor at or prior to the Closing Date. (c) Termination of the Underwriting Agreement pursuant to this Section 9 shall be without liability of any party to any other party other than as provided in Sections 7 and 11 hereof. 12 10. Default of Underwriters. If any Underwriter or Underwriters defaults or default in their obligation to purchase Offered Securities which it or they have agreed to purchase under the Underwriting Agreement and the aggregate principal amount of the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent (10%) or less of the aggregate principal amount, notional amount or stated amount, as applicable, of the Offered Securities to be sold under the Underwriting Agreement, as the case may be, the other Underwriters shall be obligated severally in proportion to their respective commitments under the Underwriting Agreement to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so defaults or default and the aggregate principal amount of the Offered Securities with respect to which such default or defaults occurs or occur is more than ten percent (10%) of the aggregate principal amount, notional amount or stated amount, as applicable, of Offered Securities to be sold under the Underwriting agreement, as the case may be, and arrangements satisfactory to the Representative and the Depositor for the purchase of such Offered Securities by other persons (who may include one or more of the non-defaulting Underwriters including the Representative) are not made within 36 hours after any such default, the Underwriting Agreement will terminate without liability on the part of any non-defaulting Underwriters or the Depositor except for the expenses to be paid or reimbursed by the Depositor pursuant to Section 11 hereof. As used in the Underwriting Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section 10. Nothing herein shall relieve a defaulting Underwriter from liability for its default. 11. Expenses. The Depositor agrees with the several Underwriters that: (a) whether or not the transactions contemplated in the Underwriting Agreement are consummated or the Underwriting Agreement is terminated, the Depositor will pay all fees and expenses incident to the performance of its obligations under the Underwriting Agreement, including, but not limited to, (i) the Commission's registration fee, (ii) the expenses of printing and distributing the Underwriting Agreement and any related underwriting documents, the Registration Statement, any preliminary Prospectus, the Prospectus, any amendments or supplements to the Registration Statement or the Prospectus, and any Blue Sky memorandum or legal investment survey and any supplements thereto, (iii) fees and expenses of rating agencies, accountants and counsel for the Depositor, (iv) the expenses referred to in Section 5(e) hereof, and (v) all miscellaneous expenses referred to in Item 30 of the Registration Statement; (b) all out-of-pocket expenses, including counsel fees, disbursements and expenses, reasonably incurred by the Underwriters in connection with investigating, preparing to market and marketing the Offered Securities and proposing to purchase and purchasing the Offered Securities under the Underwriting Agreement will be borne and paid by the Depositor if the Underwriting Agreement is terminated by the Depositor pursuant to Section 9(a) hereof or by the Representative on account of the failure, refusal or inability on the part of the Depositor to perform all obligations and satisfy all conditions on the part of the Depositor to be performed or satisfied hereunder; and (c) the Depositor will pay the cost of preparing the certificates for the Offered Securities. 13 Except as otherwise provided in this Section 11, the Underwriters agree to pay all of their expenses in connection with investigating, preparing to market and marketing the Offered Securities and proposing to purchase and purchasing the Offered Securities under the Underwriting Agreement, including the fees and expenses of their counsel and any advertising expenses incurred by them in making offers and sales of the Offered Securities. 12. Notices. All communications under the Underwriting Agreement shall be in writing and, if sent to the Underwriters, shall be mailed, delivered or telegraphed and confirmed to the Representative at the address and to the attention of the person specified in the Underwriting Agreement, and, if sent to the Depositor, shall be mailed, delivered or telegraphed and confirmed to Prudential Securities Secured Financing Corporation, One New York Plaza, New York, New York 10292, Attention: Managing Director-Asset Backed Finance Group; provided, however, that any notice to any Underwriter pursuant to the Underwriting Agreement shall be mailed, delivered or telegraphed and confirmed to such Underwriter at the address furnished by it. 13. Representative of Underwriters. Any Representative identified in the Underwriting Agreement will act for the Underwriters of the Offered Securities and any action taken by the Representative under the Underwriting Agreement will be binding upon all of such Underwriters. 14. Successors. The Underwriting Agreement shall inure to the benefit of and shall be binding upon the several Underwriters and the Depositor and their respective successors and legal representatives, and nothing expressed or mentioned herein or in the Underwriting Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of the Underwriting Agreement, or any provisions herein contained, the Underwriting Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the representations and warranties of the Depositor contained herein or in the Underwriting Agreement shall also be for the benefit of any person or persons who controls or control any Underwriter within the meaning of Section 15 of the 1933 Act, and (ii) the indemnities by the several Underwriters shall also be for the benefit of the directors of the Depositor, the officers of the Depositor who have signed the Registration Statement and any person or persons who control the Depositor within the meaning of Section 15 of the 1933 Act. No purchaser of the Offered Securities from any Underwriter shall be deemed a successor because of such purchase. These Standard Provisions and each Underwriting Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15. Time of the Essence. Time shall be of the essence of each Underwriting Agreement. 16. Governing Law. These Standard Provisions and each Underwriting Agreement shall be governed by and construed in accordance with the laws of the State of New York. [Signature Page Follows] 14 If the foregoing is in accordance with your understanding, please sign and return two counterparts hereof. Yours truly, PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By: _______________________ Name: Title: Accepted as of the date hereof: PRUDENTIAL SECURITIES INCORPORATED By: _________________________________ Name: Title: [Signature Page to Underwriting Agreement Standard Provisions] Exhibit A Opinions of Dewey Ballantine LLP, special counsel for the Depositor --------------------------------- (1) Each of the Unaffiliated Seller's Agreement, the Sale and Servicing Agreement, the Underwriting Agreement and the Standard Provisions (collectively, with the Indenture and the Indemnification Agreement, the "Documents") constitutes the valid, legal and binding agreement of the Depositor, and is enforceable against the Depositor in accordance with its terms. (2) The Notes, assuming the due execution by the Issuer and due authentication by the Indenture Trustee and payment therefor pursuant to the Underwriting Agreement, are validly issued and outstanding and are entitled to the benefits of the Indenture. (3) No consent, approval, authorization or order of, registration or filing with, or notice to, any governmental authority or court is required under federal laws or the laws of the State of New York for the execution, delivery and performance of the Documents or the offer, issuance, sale or delivery of the Notes or the consummation of any other transaction contemplated thereby by the Depositor, except such which have been obtained. (4) The Registration Statement and the Prospectus (other than the financial and statistical data included therein, as to which we are not called upon to express any opinion), at the time the Registration Statement became effective, as of the date of execution of the Underwriting Agreement and as of the date hereof comply as to form in all material respects with the requirements of the 1933 Act and the rules and regulations thereunder, and the Exchange Act and the rules and regulations thereunder, and we do not know of any amendment to the Registration Statement required to be filed, or of any contracts, indentures or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be described in the Registration Statement or the Prospectus, which has not been filed or described as required. (5) The registration of the Trust Estate created by the Indenture under the Investment Company Act of 1940 is not required. (6) The statements in the Prospectus Supplement set forth under the caption "DESCRIPTION OF THE NOTES," to the extent such statements purport to summarize certain provisions of the Notes or of the Indenture, or of the Sale and Servicing Agreement or of the Unaffiliated Seller's Agreement, are fair and accurate in all material respects. Exhibit B Opinions of Counsel to the Servicer ---------------------- (1) The Servicer has been duly organized and is validly existing as a corporation in good standing under the federal laws of the United States and is duly qualified to transact business in the State of Pennsylvania. (2) The Servicer has the requisite power and authority to execute and deliver, engage in the transactions contemplated by, and perform and observe the conditions of, each of the Documents to which it is a party. (3) Each of the Documents to which the Servicer is a party have been duly and validly authorized, executed and delivered by the Servicer, all requisite corporate action having been taken with respect thereto, and each constitutes the valid, legal and binding agreement of the Servicer, and are enforceable against the Servicer in accordance with their respective terms. (4) Neither the transfer of the Mortgage Loans to the Unaffiliated Seller, nor the execution, delivery or performance by the Servicer of the each of the Documents to which it is a party (A) conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default under or violates or will violate, (i) any term or provision of the charter or by-laws of the Servicer; (ii) any term or provision of any material agreement, contract, instrument or indenture, to which the Servicer or any of its subsidiaries is a party or is bound; or (iii) any order, judgment, writ, injunction or decree of any court or governmental agency or body or other tribunal having jurisdiction over the Servicer or any of its properties; or (B) results in, or will result in the creation or imposition of any lien, charge or encumbrance upon the Trust Estate or upon the Notes, except as otherwise contemplated by the Indenture. (5) The endorsement and delivery of each Mortgage Note, and the preparation, delivery and recording of an Assignment of Mortgage with respect to each Mortgage is sufficient fully to transfer to the Unaffiliated Seller and its assignees all right, title and interest of the Servicer in the Mortgage Note and Mortgage, as noteholder and mortgagee or assignee thereof. (6) No consent, approval, authorization or order of, registration or qualification of or with or notice to, any court, governmental agency or body or other tribunal is required under the laws of the State of New York or the Commonwealth of Pennsylvania, for the execution, delivery and performance of each of the Documents to which it is a party or the consummation of any other transaction contemplated thereby by the Servicer, except such which have been obtained. (7) There are no legal or governmental suits, proceedings or investigations pending or, to such counsel's knowledge, threatened against the Servicer before any court, governmental agency or body or other tribunal (A) which, if determined adversely to the Servicer, would individually or in the aggregate have a material adverse effect on (i) the consolidated financial position, business prospects, stockholders' equity or results of operations of the Servicer; (ii) the Servicer's ability to perform its obligations under, or the validity or enforceability of, each of the Documents to which it is a party; (iii) any Mortgage Note or Mortgaged Property, or the title of any Mortgagor to any Mortgaged Property; or (B) which have not otherwise been disclosed in the Registration Statement and to the best of such counsel's knowledge, no such proceedings or investigations are threatened or contemplated by governmental authorities or threatened by others. Exhibit C Opinions of Counsel to the Indenture Trustee ---------------------- (1) The Indenture Trustee is a New York banking corporation duly organized, validly existing and in good standing under the laws of the New York and has the power and authority to enter into and to take all actions required of it under the Indenture. (2) Each of the Documents to which the Indenture Trustee is a party have been duly authorized, executed and delivered by the Indenture Trustee and each such Document constitutes the legal, valid and binding obligation of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with its terms, except as enforceability thereof may be limited by (A) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally, as such laws would apply in the event of a bankruptcy, insolvency or reorganization or similar occurrence affecting the Indenture Trustee, and (B) general principles of equity regardless of whether such enforcement is sought in a proceeding at law or in equity. (3) No consent, approval, authorization or other action by any governmental agency or body or other tribunal is required on the part of the Indenture Trustee in connection with its execution and delivery of each of the Documents to which it is a party or the performance of its obligations thereunder. (4) The Notes have been duly authenticated and delivered by the Indenture Trustee. (5) The execution and delivery of, and performance by the Indenture Trustee of its obligations under, each of the Documents to which it is a party do not conflict with or result in a violation of any statute or regulation applicable to the Indenture Trustee, or the charter or bylaws of the Indenture Trustee, or to the best knowledge of such counsel, any governmental authority having jurisdiction over the Indenture Trustee or the terms of any indenture or other agreement or instrument to which the Indenture Trustee is a party or by which it is bound. Exhibit D Opinions of Counsel to the Issuer ---------------------- (1) The Issuer is a Delaware business trust duly organized, validly existing and in good standing under the laws of the State of Delaware and has the power and authority to enter into and to take all actions required of it under the each of the Documents to which it is a party. (2) Each of the Documents to which the Issuer is a party have been duly authorized, executed and delivered by the Issuer and each such Document constitutes the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as enforceability thereof may be limited by (A) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally, as such laws would apply in the event of a bankruptcy, insolvency or reorganization or similar occurrence affecting the Issuer, and (B) general principles of equity regardless of whether such enforcement is sought in a proceeding at law or in equity. (3) No consent, approval, authorization or other action by any governmental agency or body or other tribunal is required on the part of the Issuer in connection with its execution and delivery of the Documents to which it is a party or the performance of its obligations thereunder. (4) The Notes have been duly executed and delivered by the Issuer. (5) The execution and delivery of, and performance by the Issuer of its obligations under each of the Documents to which it is a party do not conflict with or result in a violation of any statute or regulation applicable to the Issuer, or the certificate of trust of the Issuer, or to the best knowledge of such counsel, any governmental authority having jurisdiction over the Issuer or the terms of any indenture or other agreement or instrument to which the Issuer is a party or by which it is bound. EX-1.2 3 INDEMNIFICATION AGREEMENT Exhibit 1.2 INDEMNIFICATION AGREEMENT among FINANCIAL SECURITY ASSURANCE INC., ABFS 1999-1, INC. AMERICAN BUSINESS CREDIT, INC. HOME AMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE NEW JERSEY MORTGAGE AND INVESTMENT CORP. PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION ABFS MORTGAGE LOAN TRUST 1999-1 and PRUDENTIAL SECURITIES INCORPORATED Dated as of March 24, 1999 ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes Series 1999-1 $184,075,000 Class A-1 and Class A-2 Notes TABLE OF CONTENTS Page ---- Section 1. Definitions.........................................................1 Section 2. Representations, Warranties and Agreements of Financial Security....3 Section 3. Representations, Warranties and Agreements of the Underwriter.......5 Section 4. Indemnification.....................................................6 Section 5. Indemnification Procedures..........................................6 Section 6. Contribution........................................................7 Section 7. Miscellaneous.......................................................8 EXHIBIT Exhibit A.........Opinion of General Counsel -1- INDEMNIFICATION AGREEMENT ------------------------- INDEMNIFICATION AGREEMENT dated as of March 24, 1999, among FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION (the "Depositor"), AMERICAN BUSINESS CREDIT, INC. (the "Company"), ABFS 1999-1, INC. (the "Seller"), HOME AMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP. ("NJMIC" and together with Upland, the "Originators"), ABFS MORTGAGE LOAN TRUST 1999-1 (the "Issuer") and PRUDENTIAL SECURITIES INCORPORATED (the "Underwriter"): Section 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings provided below: "Agreement" means this Indemnification Agreement, as amended from time to time. "Company Party" means any of the Company, its parent, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Depositor Party" means any of the Depositor, its parent, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Financial Security Agreements" means this Agreement and the Insurance Agreement. "Financial Security Information" has the meaning provided in Section 2(g) hereof. "Financial Security Party" means any of Financial Security, its parent, subsidiaries and affiliates, and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Indemnified Party" means any party entitled to any indemnification pursuant to Section 4 hereof. "Indemnifying Party" means any party required to provide indemnification pursuant to Section 4 hereof. "Indenture" means the Indenture, dated as of March 1, 1999, between the Issuer and the Indenture Trustee. "Indenture Trustee" means The Bank of New York. "Insurance Agreement" means the Insurance and Indemnity Agreement, dated as of March 1, 1999, by and among Financial Security, the Depositor, the Company, the Originators, the Issuer and the Seller. "Issuer Party" means any of the Issuer, its parent, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Losses" means (a) any actual out-of-pocket damages incurred by the party entitled to indemnification or contribution hereunder, (b) any actual out-of-pocket costs or actual expenses reasonably incurred by such party, including reasonable fees or expenses of its counsel and other expenses incurred in connection with investigating or defending any claim, action or other proceeding which entitle such party to be indemnified hereunder (subject to the limitations set forth in Section 5 hereof), to the extent not paid, satisfied or reimbursed from funds provided by any other Person other than an affiliate of such party (provided that the foregoing shall not create or imply any obligation to pursue recourse against any such other Person), plus (c) interest on the amount paid by the party entitled to indemnification or contribution from the date of such payment to the date of payment by the party who is obligated to indemnify or contribute hereunder at the statutory rate applicable to judgments for breach of contract. "Notes" means the $184,075,000 of the ABFS Mortgage Backed Notes, Series 1999-1, Class A-1 Notes and Class A-2 Notes, issued by the Issuer pursuant to the Indenture. "Offering Circular" means the Prospectus dated March 23, 1999, including the Prospectus Supplement thereto dated March 24, 1999, relating to the Notes. "Offering Document" means the Offering Circular and any amendments or supplements thereto and any other material or documents delivered by the Underwriter to any Person in connection with the offer or sale of the Notes. "Originator Party" means any of the Originators, their parents, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Person" means any individual, partnership, joint venture, corporation, trust, unincorporated organization or other organization or entity (whether governmental or private). "Policy" means the financial guaranty insurance policy delivered by Financial Security with respect to the Notes. -3- "Securities Act" means the Securities Act of 1933, as amended from time to time. "Seller Party" means any of the Seller, its parent, subsidiaries and affiliates, and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. "Underwriting Agreement" means the Underwriting Agreement dated as of March 24, 1999, between the Depositor and the Underwriter in respect of the Notes. "Underwriter Information" has the meaning provided in Section 3(c) hereof. "Underwriter Party" means any of the Underwriter, its parent, subsidiaries and affiliates and any shareholder, director, officer, employee, agent or "controlling person" (as such term is used in the Securities Act) of any of the foregoing. Section 2. Representations, Warranties and Agreements of Financial Security. Financial Security represents, warrants and agrees, as of the date hereof and as of the Closing Date, as follows: (a) Organization, Etc. Financial Security is a stock insurance company duly organized, validly existing and authorized to transact financial guaranty insurance business under the laws of the State of New York. (b) Authorization, Etc. The Policy and the Financial Security Agreements have been duly authorized, executed and delivered by Financial Security. (c) Validity, Etc. The Policy and the Financial Security Agreements constitute valid and binding obligations of Financial Security, enforceable against Financial Security in accordance with their terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the enforceability of creditors' rights generally applicable in the event of the bankruptcy or insolvency of Financial Security and to the application of general principles of equity and subject, in the case of this Agreement, to principles of public policy limiting the right to enforce the indemnification provisions contained herein. (d) Exemption From Registration. The Policy is exempt from registration under the Securities Act. (e) No Conflicts. Neither the execution or delivery by Financial Security of the Policy or the Financial Security Agreements, nor the performance by Financial Security of its obligations thereunder, will conflict with any provision of the certificate of incorporation or the bylaws of Financial Security or result in a breach of, or constitute a default under, any material agreement or other instrument to which Financial Security is a party or by which any of its property is bound nor violate any judgment, order or decree applicable to Financial Security of any governmental or regulatory body, administrative agency, court or arbitrator having jurisdiction over Financial Security (except that, in the published opinion of the Securities and Exchange Commission, the indemnification provisions of this Agreement, insofar as they relate to indemnification for liabilities arising under the Securities Act, are against public policy as expressed in the Securities Act and are therefore unenforceable). (f) Financial Information. The consolidated balance sheets of Financial Security as of December 31, 1997 and the related consolidated statements of income, changes in shareholder's equity and cash flows for the fiscal year then ended, furnished by Financial Security for use in the Offering Circular, fairly present in all material respects the financial condition of Financial Security as of such dates and for such periods in accordance with generally accepted accounting principles consistently applied (subject as to interim statements to normal year-end adjustments) and since the date of the most current interim consolidated balance sheet referred to above there has been no change in the financial condition of Financial Security which would materially and adversely affect its ability to perform its obligations under the Policy. (g) Financial Security Information. The information in the Offering Circular set forth under the caption "The Note Insurer" (as revised from time to time in accordance with the provisions hereof, the "Financial Security Information") is limited and does not purport to provide the scope of disclosure required to be included in a prospectus with respect to a registrant in connection with the offer and sale of securities of such registrant registered under the Securities Act. Within such limited scope of disclosure, however, as of the date of the Offering Circular and as of the date hereof, the Financial Security Information does not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. (h) Additional Information. Financial Security will furnish to the Underwriter, the Company, the Seller, the Issuer or the Depositor, upon request of the Underwriter, the Company, the Seller, the Issuer or the Depositor, as the case may be, copies of Financial Security's most recent financial statements (annual or interim, as the case may be) which fairly present in all material respects the financial condition of Financial Security as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied except as noted therein (subject, as to interim statements, to normal year-end adjustments); provided, however, that, if the Underwriter, the Company, the Seller, the Issuer or the Depositor shall require a manually signed report or consent of Financial Security's auditors in connection with such financial statements, such report or consent shall be at the expense of the Underwriter, the Company, the Seller, the Issuer or the Depositor, as the case may be. In addition, if the delivery of an Offering Circular relating to the Notes is required at any time prior to the expiration of nine months after the time of issue of the Offering Circular in connection with the offering or sale of the Notes, the Depositor or the Underwriter will notify Financial Security of such requirement to deliver an Offering Circular and Financial Security will promptly provide the Underwriter and the Depositor with any revisions to the Financial Security Information that are in the judgment of Financial Security -5- necessary to prepare an amended Offering Circular or a supplement to the Offering Circular which will correct such statement or omission. (i) Opinion of Counsel. Financial Security will furnish to the Seller, the Originators, the Depositor, the Underwriter, the Issuer and the Company on the closing date for the sale of the Notes an opinion of its Associate General Counsel, to the effect set forth in Exhibit A attached hereto, dated such closing date and addressed to the Seller, the Originators, the Depositor, the Underwriter, the Issuer and the Company. (j) Consents and Reports of Independent Accountants. Financial Security will furnish to the Underwriter, the Company, the Issuer and the Depositor, upon request, as comfort from its independent accountants in respect of its financial condition, (i) at the expense of the Person specified in the Insurance Agreement, a copy of the Offering Circular, including either a manually signed consent or a manually signed report of Financial Security's independent accountants and (ii) the quarterly review letter by Financial Security's independent accountants in respect of the most recent interim financial statements of Financial Security. Nothing in this Agreement shall be construed as a representation or warranty by Financial Security concerning the rating of its insurance financial strength by Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies Inc., or of its insurer financial strength by Moody's Investors Service, Inc. or any other rating agency (collectively, the "Rating Agencies"). The Rating Agencies, in assigning such ratings, take into account facts and assumptions not described in the Offering Circular and the facts and assumptions which are considered by the Rating Agencies, and the ratings issued thereby, are subject to change over time. Section 3. Representations, Warranties and Agreements of the Underwriter. The Underwriter represents, warrants and agrees, as of the date hereof and as of the Closing Date, as follows: (a) Compliance With Laws. The Underwriter will comply in all material respects with all legal requirements in connection with offers and sales of the Notes and make such offers and sales in the manner provided in the Offering Circular. (b) Offering Document. The Underwriter will not use, or distribute to other broker-dealers for use, any Offering Document in connection with the offer and sale of the Notes unless such Offering Document includes such information as has been furnished by Financial Security for inclusion therein and the information therein concerning Financial Security has been approved by Financial Security in writing. Financial Security hereby consents to the information in respect of Financial Security included in the Offering Circular. Each Offering Document will include the following statement: "The Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law". (c) Underwriting Information. The following information constitutes the only information furnished by the Underwriter (the "Underwriter Information"): (i) the statements set forth in the last two paragraphs on the front cover page of the Offering Circular regarding market making; (ii) the statements set forth under the heading "Underwriting"; and (iii) the statements set forth in materials delivered by the Underwriter to the Depositor within the meaning of the no-action letter dated May 20, 1994 issued by the Division of Corporation Finance of the Securities Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset Corporation and the no-action letter dated May 27, 1994 issued by the Division of Corporation Finance of the Commission to the Public Securities Association and filed by the Sponsor with the Commission in the Current Report or Reports on Form 8-K (the "Form 8-K"). The Underwriter confirms that such statements (to such extent) are correct. Section 4. Indemnification. (a) Financial Security agrees, upon the terms and subject to the conditions provided herein, to indemnify, defend and hold harmless each Depositor Party, each Company Party, each Seller Party, each Originator Party, each Issuer Party and each Underwriter Party against (i) any and all Losses incurred by them with respect to the offer and sale of the Notes and resulting from Financial Security's breach of any of its representations, warranties or agreements set forth in Section 2 hereof and (ii) any and all Losses to which any Depositor Party, Company Party, Seller Party, Originator Party, Issuer Party or Underwriter Party may become subject, under the Securities Act or otherwise, insofar as such Losses arise out of or result from an untrue statement of a material fact contained in any Offering Document or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission was made in the Financial Security Information included therein in accordance with the provisions hereof. (b) The Underwriter agrees, upon the terms and subject to the conditions provided herein, to indemnify, defend and hold harmless each Financial Security Party against (i) any and all Losses incurred by them with respect to the offer and sale of the Notes and resulting from the Underwriter's breach of any of its representations, warranties or agreements set forth in Section 3 hereof and (ii) any and all Losses to which any Financial Security Party may become subject, under the Securities Act or otherwise, insofar as such Losses arise out of or result from an untrue statement of a material fact contained in any Offering Document or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission was made in the Underwriter Information included therein. (c) Upon the incurrence of any Losses for which a party is entitled to indemnification hereunder, the Indemnifying Party shall reimburse the Indemnified Party promptly upon establishment by the Indemnified Party to the Indemnifying Party of the Losses incurred. Section 5. Indemnification Procedures. Except as provided below in Section 6 with respect to contribution or in Section 7(e), the indemnification provided herein -7- by an Indemnifying Party shall be the exclusive remedy of any and all Indemnified Parties for the breach of a representation, warranty or agreement hereunder by an Indemnifying Party; provided, however, that each Indemnified Party shall be entitled to pursue any other remedy at law or in equity for any such breach so long as the damages sought to be recovered shall not exceed the Losses incurred thereby resulting from such breach. In the event that any action or regulatory proceeding shall be commenced or claim asserted which may entitle an Indemnified Party to be indemnified under this Agreement, such party shall give the Indemnifying Party written or telegraphic notice of such action or claim reasonably promptly after receipt of written notice thereof. The Indemnifying Party shall be entitled to participate in and, upon notice to the Indemnified Party, assume the defense of any such action or claim in reasonable cooperation with, and with the reasonable cooperation of, the Indemnified Party. The Indemnified Party will have the right to employ its own counsel in any such action in addition to the counsel of the Indemnifying Party, but the fees and expenses of such counsel will be at the expense of such Indemnified Party, unless (a) the employment of counsel by the Indemnified Party at its expense has been authorized in writing by the Indemnifying Party, (b) the Indemnifying Party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (c) the named parties to any such action or proceeding (including any impleaded parties) include both the Indemnifying Party and one or more Indemnified Parties, and the Indemnified Parties shall have been advised by counsel that there may be one or more legal defenses available to them which are different from or additional to those available to the Indemnifying Party (it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for all Depositor Parties, one such firm for all Underwriter Parties, one such firm for Company Parties, one such firm for all Seller Parties, one such firm for all Originator Parties, one such firm for all Issuer Parties and one such firm for all Financial Security Parties, as the case may be, which firm shall be designated in writing by the Depositor in respect of the Depositor Parties, by the Underwriter in respect of the Underwriter Parties, by the Company in respect of the Company Parties, by the Seller in respect of the Seller Parties, by the Originators in respect of the Originator Parties, by the Issuer in respect of the Issuer Parties and by Financial Security in respect of the Financial Security Parties), in each of which cases the fees and expenses of counsel will be at the expense of the Indemnifying Party and all such fees and expenses will be reimbursed promptly as they are incurred. The Indemnifying Party shall not be liable for any settlement of any such claim or action unless the Indemnifying Party shall have consented thereto or be in default in its obligations hereunder. Any failure by an Indemnified Party to comply with the provisions of this Section shall relieve the Indemnifying Party of liability only if such failure is prejudicial to the position of the Indemnifying Party and then only to the extent of such prejudice. Section 6. Contribution. (a) To provide for just and equitable contribution if the indemnification provided by any Indemnifying Party is determined to be unavailable for any Indemnified Party (other than due to application of this Section), each Indemnifying Party shall contribute to the Losses arising from any breach of any of its representations, warranties or agreements contained in this Agreement in such proportion as is appropriate to reflect (i) the benefits received by such Indemnifying Party relative to the benefits received by the Indemnified Party or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other in connection with such Loss; provided, however, that an Indemnifying Party shall in no event be required to contribute to all Indemnified Parties an aggregate amount in excess of the Losses incurred by such Indemnified Parties resulting from the breach of representations, warranties or agreements contained in this Agreement. (b) The relative fault of each Indemnifying Party, on the one hand, and of each Indemnified Party, on the other, shall be determined by reference to, among other things, whether the breach of, or alleged breach of, any representations, warranties or agreements contained in this Agreement relates to information supplied by, or action within the control of, the Indemnifying Party or the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such breach. (c) The parties agree that Financial Security shall be solely responsible for the Financial Security Information, the Underwriter shall be solely responsible for the Underwriter Information and that, as and to the extent provided in the Insurance Agreement, the balance of the Offering Document shall be the responsibility of the Company, the Originators, the Seller, the Issuer and the Depositor. (d) Notwithstanding anything in this Section 6 to the contrary, the Underwriter shall not be required to contribute an amount greater than the excess, if any, of (x) the purchase prices paid by investors to the Underwriter for the Notes over (y) the purchase price paid by the Underwriter for the Notes. (e) No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) Upon the incurrence of any Losses entitled to contribution hereunder, the contributor shall reimburse the party entitled to contribution promptly upon establishment by the party entitled to contribution to the contributor of the Losses incurred. (g) The provisions relating to contribution set forth in this Section 6 do not limit the rights of any party to indemnification under Section 4. Section 7. Miscellaneous. (a) Notices. All notices and other communications provided for under this Agreement shall be delivered to the address set forth below or to such other address as shall be designated by the recipient in a written notice to the other party or parties hereto. -9- If to Financial Security: Financial Security Assurance Inc. 350 Park Avenue New York, NY 10022 Attention: Surveillance Department Re: ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes, Series 1999-1 If to the Depositor: Prudential Securities Secured Financing Corporation One New York Plaza New York, New York 10292 Attention: Managing Director, Asset-Backed Finance Group If to the Company: American Business Credit, Inc. BalaPointe Office Centre 111 Presidential Boulevard Suite 127 Bala Cynwyd, PA 19004 Attention: Jeffrey Ruben, Esq. If to the Underwriter: Prudential Securities Incorporated One New York Plaza New York, New York 10292 Attention: Managing Director, Asset-Backed Finance Group If to the Seller: ABFS 1999-1, Inc. BalaPointe Office Centre 111 Presidential Boulevard Suite 127 Bala Cynwyd, PA 19004 Attention: Jeffrey Ruben, Esq. If to the Issuer: ABFS Mortgage Loan Trust 1999-1 c/o First Union Trust Company, National Association One Rodney Square 920 King Street, Suite 102 Wilmington, DE 19801 Att: Corporate Trust Administration If to the Originators: Home American Credit, Inc. D/B/A Upland Mortgage BalaPointe Office Centre 111 Presidential Boulevard Suite 127 Bala Cynwyd, PA 19004 Attention: Jeffrey Ruben, Esq. New Jersey Mortgage and Investment Corp. BalaPointe Office Centre 111 Presidential Boulevard Suite 127 Bala Cynwyd, PA 19004 Attention: Jeffrey Ruben, Esq. (b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (c) Assignments. This Agreement may not be assigned by any party without the express written consent of each other party. Any assignment made in violation of this Agreement shall be null and void. (d) Amendments. Amendments to this Agreement shall be in writing signed by each party hereto. (e) Survival, Etc. The indemnity and contribution agreements contained in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnifying Party, (ii) the issuance of the Notes or (iii) any termination of this Agreement or the Policy. The indemnification provided in this Agreement will be in addition to any liability which the parties may otherwise have and shall in no way limit any obligations of the Company, the Depositor, the Seller, the Originators, the Issuer or the Underwriter under the Underwriting Agreement or the Insurance Agreement, as applicable. (f) Counterparts. This Agreement may be executed in counterparts by the parties hereto, and all such counterparts shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written. FINANCIAL SECURITY ASSURANCE INC. By Name: Title: ABFS 1999-1, INC. By Name: Title: AMERICAN BUSINESS CREDIT, INC. By Name: Title: HOME AMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE By Name: Title: NEW JERSEY MORTGAGE AND INVESTMENT CORP. By Name: Title: PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By Name: Title: PRUDENTIAL SECURITIES INCORPORATED By Name: Title: ABFS MORTGAGE LOAN TRUST 1999-1 By FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION not in its individual capacity but solely as Owner Trustee under the Trust Agreement By: Title: EXHIBIT A OPINION OF GENERAL COUNSEL Based upon the foregoing, I am of the opinion that: 1. Financial Security is a stock insurance company duly organized, validly existing and authorized to transact financial guaranty insurance business under the laws of the State of New York. 2. The Policy and the Agreements have been duly authorized, executed and delivered by Financial Security. 3. The Policy and the Agreements constitute valid and binding obligations of Financial Security, enforceable against Financial Security in accordance with their terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the enforceability of creditors' rights generally applicable in the event of the bankruptcy or insolvency of Financial Security and to the application of general principles of equity and subject, in the case of the Indemnification Agreement, to principles of public policy limiting the right to enforce the indemnification provisions contained therein insofar as they relate to indemnification for liabilities arising under applicable securities laws. 4. The Policy is exempt from registration under the Securities Act of 1933, as amended (the "Act"). 5. Neither the execution or delivery by Financial Security of the Policy or the Agreements, nor the performance by Financial Security of its obligations thereunder, will conflict with any provision of the certificate of incorporation or the by-laws of Financial Security or, to the best of my knowledge, result in a breach of, or constitute a default under, any agreement or other instrument to which Financial Security is a party or by which it or any of its property is bound or, to the best of my knowledge, violate any judgment, order or decree applicable to Financial Security of any governmental or regulatory body, administrative agency, court or arbitrator having jurisdiction over Financial Security (except that in the published opinion of the Securities and Exchange Commission the indemnification provisions of the Indemnification Agreement, insofar as they relate to indemnification for liabilities arising under the Act, are against public policy as expressed in the Act and are therefore unenforceable). In addition, please be advised that I have reviewed the description of Financial Security under the caption "The Note Insurer" in the Prospectus Supplement dated March 24, 1999 (the "Offering Document") of the Depositor with respect to the Notes. The information provided in the Offering Document with respect to Financial Security is limited and does not purport to provide the scope of disclosure required to be included in a prospectus with respect to a registrant under the Act in connection with a public offering and sale of securities of such registrant. Within such limited scope of disclosure, however, there has not come to my attention any information which would cause me to believe that the description of Financial Security referred to above, as of the date of the Offering Document or as of the date of this opinion, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that I express no opinion with respect to any financial statements or other financial information contained or referred to therein). Error! No table of contents entries found. EX-4.1 4 INDENTURE Exhibit 4.1 This INDENTURE, dated as of March 1, 1999 (as amended or supplemented from time to time as permitted hereby, this "Indenture"), is between ABFS MORTGAGE LOAN TRUST 1999-1, a Delaware business trust (together with its permitted successors and assigns, the "Trust"), and THE BANK OF NEW YORK, a New York banking corporation, as indenture trustee (together with its permitted successors in the trusts hereunder, the "Indenture Trustee"). Preliminary Statement The Trust has duly authorized the execution and delivery of this Indenture to provide for its Mortgage Backed Notes, Series 1999-1 (the "Notes"), issuable as provided in this Indenture. All covenants and agreements made by the Trust herein are for the benefit and security of the Holders of the Notes and the Note Insurer. The Trust is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. All things necessary to make this Indenture a valid agreement of the Trust in accordance with its terms have been done. Granting Clause The Trust hereby Grants to the Indenture Trustee, for the exclusive benefit of the Holders of the Notes and the Note Insurer, all of the Trust's right, title and interest in and to (a) the Mortgage Loans in both Pool I and Pool II listed in the Mortgage Loan Schedule attached as Schedule I to this Indenture (including property that secures a Mortgage Loan that becomes an REO Property), including the related Mortgage Files delivered or to be delivered to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to the Sale and Servicing Agreement, including all payments of principal received, collected or otherwise recovered after the Cut-Off Date for each Mortgage Loan, all payments of interest due on each Mortgage Loan after the Cut-Off Date therefor whenever received and all other proceeds received in respect of such Mortgage Loans, any Subsequent Mortgage Loans and any Qualified Substitute Mortgage Loan, (b) the Unaffiliated Seller's Agreement and the Sale and Servicing Agreement, (c) the Insurance Policies, (d) all cash, instruments or other property held or required to be deposited in the Collection Account, the Distribution Accounts, the Note Insurance Payment Account, the Pre-Funding Accounts, the Capitalized Interest Accounts and the Cross-collateralization Reserve Accounts, including all investments made with funds in such Accounts (but not including any income on funds deposited in, or investments made with funds deposited in, such Accounts other than the Pre-Funding Accounts, which income shall belong to and be for the account of the Servicer), and (e) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all insurance proceeds and condemnation awards. Such Grants are made, however, in trust, to secure the Notes equally and ratably without prejudice, priority or distinction between any Note and any other Note by reason of difference in time of issuance or otherwise, and for the benefit of the Note Insurer to secure (x) the payment of all amounts due on the Notes in accordance with their terms, (y) the payment of all other sums payable under this Indenture and (z) compliance with the provisions of this Indenture, all as provided in this Indenture. All terms used in the foregoing granting clauses that are defined in Appendix I are used with the meanings given in said Appendix I. The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions of this Indenture and agrees to perform the duties herein required to the end that the interests of the Holders of the Notes may be adequately and effectively protected. The Indenture Trustee agrees that it will hold the Note Insurance Policy in trust and that it will hold any proceeds of any claim upon the Note Insurance Policy, solely for the use and benefit of the Noteholders in accordance with the terms hereof and the Note Insurance Policy. In addition, the Indenture Trustee agrees that it will acknowledge the Grant on each Subsequent Transfer Date of the related Subsequent Mortgage Loans pursuant to the terms of the related Subsequent Pledge Agreement, provided that the conditions precedent to the pledge of such Subsequent Mortgage Loans contained in this Indenture and in the Sale and Servicing Agreement are satisfied on or prior to such Subsequent Transfer Date. ARTICLE I DEFINITIONS Section 1.01. General Definitions. Except as otherwise specified or as the context may otherwise require, the following terms have the respective meanings set forth in Appendix I for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine genders of such terms. Whenever reference is made herein to an Event of Default or a Default known to the Indenture Trustee or of which the Indenture Trustee has notice or knowledge, such reference shall be construed to refer only to an Event of Default or Default of which the Indenture Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms used herein that are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein. ARTICLE II THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS Section 2.01. Forms Generally. The Notes shall be substantially in the form set forth as Exhibit A attached hereto. Each Note may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on which the Notes may be listed, or as may, consistently herewith, be determined by the Trust, as evidenced by its execution thereof. Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate reference on the face of the Note. The Definitive Notes may be produced in any manner determined by the Trust, as evidenced by its execution thereof. Section 2.02. Form of Certificate of Authentication. The form of the Authenticating Agent's certificate of authentication is as set forth on the signature page of the form of the Note attached hereto as Exhibit A. 2 Section 2.03. General Provisions With Respect to Principal and Interest Payment. The Notes shall be designated generally as the "ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1". The Notes shall be issued in the form specified in Section 2.01 hereof. The Notes shall be issued in two Classes, the Class A-1 Notes and the Class A-2 Notes. The aggregate Original Note Principal Balance of Notes that may be authenticated and delivered under the Indenture is limited to $100,000,000 of Class A-1 Notes and $84,075,000 of Class A-2 Notes, except for the Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture. Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02(a) of this Indenture, the principal of each Class of Notes shall be payable in installments ending no later than the related Final Stated Maturity Date, unless the unpaid principal of such Notes become due and payable at an earlier date by declaration of acceleration or call for redemption or otherwise. All payments made with respect to any Note shall be applied first to the interest then due and payable on such Note and then to the principal thereof. All computations of interest accrued on any Note shall be made on the basis of a year of 360 days and twelve 30-day months. Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and annulled, then payments of principal of and interest on the Notes shall be made in accordance with Section 5.07 hereof. Section 2.04. Denominations. The Notes shall be issuable only as registered Notes in the denominations equal to the Authorized Denominations. Section 2.05. Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Trust by an Authorized Officer of the Owner Trustee. The signature of such Authorized Officer of the Owner Trustee on the Notes may be manual or by facsimile. Notes bearing the manual or facsimile signature of an individual who was at any time an Authorized Officer of the Owner Trustee shall bind the Trust, notwithstanding that such individual has ceased to be an Authorized Officer of the Owner Trustee prior to the authentication and delivery of such Notes or was not an Authorized Officer of the Owner Trustee at the date of such Notes. At any time and from time to time after the execution and delivery of this Indenture, the Trust may deliver Notes executed on behalf of the Trust to the Authenticating Agent for authentication, and the Authenticating Agent shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. Each Note authenticated on the Closing Date shall be dated the Closing Date. All other Notes that are authenticated after the Closing Date for any other purpose hereunder shall be dated the date of their authentication. 3 No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for in Section 2.02 hereof, executed by the Authenticating Agent by the manual signature of one of its Authorized Officers or employees, and such certificate of authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. Section 2.06. Registration, Registration of Transfer and Exchange. The Trust shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Trust shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. The Indenture Trustee shall remain the Note Registrar throughout the term hereof. Upon any resignation of the Indenture Trustee, the Servicer, on behalf of the Trust, shall promptly appoint a successor, with the approval of the Note Insurer, or, in the absence of such appointment, the Servicer, on behalf of the Trust, shall assume the duties of Note Registrar. Upon surrender for registration of transfer of any Note at the office or agency of the Trust to be maintained as provided in Section 3.02 hereof, the Owner Trustee on behalf of the Trust, shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate initial Note Principal Balance. At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations, and of a like aggregate Note Principal Balance, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Owner Trustee shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making the exchange is entitled to receive. All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Trust, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in the form included in Exhibit A attached hereto, duly executed by the Holder thereof or its attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Notes, but the Note Registrar, on behalf of the Trust, may require payment of a sum sufficient to cover any tax or other governmental charge as may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.07 hereof not involving any transfer or any exchange made by the Note Insurer. No transfer of a Note shall be made to the Unaffiliated Seller or, to the actual knowledge of a Responsible Officer of the Indenture Trustee, to any of the Unaffiliated Seller's Affiliates, successors or assigns. 4 The Note Registrar shall not register the transfer of a Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not, and is not acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or arrangement that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the acquisition and holding of the Note by the transferee qualifies for exemptive relief under a Department of Labor Prohibited Transaction Class Exemption. Each Beneficial Owner of a Note which is a Book-Entry Note shall be deemed to make one of the foregoing representations. Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered to the Note Registrar such security or indemnity as may be required by the Note Registrar to save each of the Trust, the Note Insurer and the Note Registrar harmless, then, in the absence of notice to the Note Registrar that such Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute and upon its request the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the same tenor and aggregate initial principal amount bearing a number not contemporaneously outstanding. If, after the delivery of such new Note, a bona fide purchaser of the original Note in lieu of which such new Note was issued presents for payment such original Note, the Note Registrar, shall be entitled to recover such new Note from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Trust or the Note Registrar in connection therewith. If any such mutilated, destroyed, lost or stolen Note shall have become or shall be about to become due and payable, or shall have become subject to redemption in full, instead of issuing a new Note, the Trust may pay such Note without surrender thereof, except that any mutilated Note shall be surrendered. Upon the issuance of any new Note under this Section 2.07, the Note Registrar, may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trust, the Indenture Trustee or the Note Registrar) connected therewith. Every new Note issued pursuant to this Section 2.07 in lieu of any destroyed, lost or stolen Note shall constitute an original contractual obligation of the Trust, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. Section 2.08. Payments of Principal and Interest. (a) Payments on Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any installment of interest or principal payable on any Definitive Notes 5 that is punctually paid or duly provided for by the Trust on the applicable Distribution Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Class of Notes and such Distribution Date by either (i) check mailed to such Person's address as it appears in the Note Register on such Record Date, or (ii) by wire transfer of immediately available funds to the account of a Noteholder, if such Noteholder (A) is the registered holder of Definitive Notes having an initial principal amount of at least $1,000,000 and (B) has provided the Indenture Trustee with wiring instructions in writing by five (5) Business Days prior to the related Record Date or has provided the Indenture Trustee with such instructions for any previous Distribution Date, except for the final installment of principal payable with respect to such Note (or the Redemption Price for any Note called for redemption, if such redemption will result in payment of the then entire unpaid Note Principal Balance of such Note), which shall be payable as provided in subsection (b) of this Section 2.08. A fee may be charged by the Indenture Trustee to a Holder of Definitive Notes for any payment made by wire transfer. Any installment of interest or principal not punctually paid or duly provided for shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07 applies, pursuant to Section 5.07. (b) All reductions in the Note Principal Balance of a Note (or one or more Predecessor Notes) effected by payments of installments of principal made on any Distribution Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note. The final installment of principal of each Note (including the Redemption Price of any Note called for optional redemption, if such optional redemption will result in payment of the entire unpaid Note Principal Balance of such Note) shall be payable only upon presentation and surrender thereof on or after the Distribution Date therefor at the Corporate Trust Office of the Indenture Trustee located within the United States of America pursuant to Section 3.02. Whenever the Indenture Trustee expects that the entire unpaid Note Principal Balance of any Note will become due and payable on the next Distribution Date, other than pursuant to a redemption pursuant to Article X, it shall, no later than two (2) Business Days prior to such Distribution Date, telecopy or hand deliver to each Person in whose name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a notice to the effect that: (i) the Indenture Trustee expects that funds sufficient to pay such final installment will be available in the related Distribution Account on such Distribution Date; and (ii) if such funds are available, (A) such final installment will be payable on such Distribution Date, but only upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice) and (B) no interest shall accrue on such Note after such Distribution Date. A copy of such form of notice shall be sent to the Note Insurer by the Indenture Trustee. 6 Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with Section 10.02 hereof. (c) Subject to the foregoing provisions of this Section 2.08, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid principal and interest that were carried by such other Note. Any checks mailed pursuant to subsection (a) of this Section 2.08 and returned undelivered shall be held in accordance with Section 3.03 hereof. (d) Each (i) Indenture Trustee's Remittance Report, prepared by the Indenture Trustee, based solely on the Servicer Remittance Report delivered to the Indenture Trustee pursuant to the Sale and Servicing Agreement, and (ii) each report regarding the Mortgage Loans delivered to the Indenture Trustee by the Servicer pursuant to Section 5.16(b) of the Sale and Servicing Agreement, shall be delivered by the Indenture Trustee to the Note Insurer, the Rating Agencies, the Servicer, the Owner Trustee, the Depositor and each Noteholder as the statements required pursuant to Section 8.06 hereof. Neither the Indenture Trustee nor the Collateral Agent shall have any responsibility to recalculate, verify or recompute information contained in any such tape, electronic data file or disk or any such Servicer Remittance Report except to the extent necessary to satisfy all obligations under this Section 2.08(d). Within ninety (90) days after the end of each calendar year, the Indenture Trustee will be required to furnish to each Person who at any time during the calendar year was a Noteholder, if requested in writing by such person, a statement containing the information set forth in subclauses (a), (b) and (c) in the definition of "Indenture Trustee's Remittance Report," aggregated for such calendar year or the applicable portion thereof during which such person was a Noteholder. Such obligation will be deemed to have been satisfied to the extent that substantially comparable information is provided pursuant to any requirements of the Code as are from time to time in force. From time to time (but no more than once per calendar month), upon the written request of the Depositor, the Servicer or the Note Insurer, the Indenture Trustee shall report to the Depositor, the Servicer and the Note Insurer the amount then held in each Account (including investment earnings accrued) held by the Indenture Trustee and the identity of the investments included therein. From time to time, at the request of the Note Insurer, the Indenture Trustee shall report to the Note Insurer with respect to the actual knowledge of a Responsible Officer, without independent investigation, of any breach of any of the representations or warranties relating to individual Mortgage Loans set forth in Section 3.03 of the Unaffiliated Seller's Agreement. The Indenture Trustee shall also provide the Note Insurer such other information within its control as may be reasonably requested by it. Section 2.09. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Note, any agent on behalf of the Trust including but not limited to the Indenture Trustee, or the Note Insurer, may treat the Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date for the purpose of receiving payments of the principal of and interest on such Note and (b) on any other date for all other purposes whatsoever, and none of the Trust, the Indenture Trustee or any other agent of the Trust, or the Note Insurer shall be affected by notice to the contrary. 7 Section 2.10. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust, may at any time deliver to the Note Registrar for cancellation any Note previously authenticated and delivered hereunder which the Owner Trustee, on behalf of the Trust may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 2.10, except as expressly permitted by this Indenture. All cancelled Notes held by the Note Registrar shall be held by the Note Registrar in accordance with its standard retention policy, unless the Owner Trustee, on behalf of the Trust shall direct by a Trust Order that they be destroyed or returned to it. Section 2.11. Authentication and Delivery of Notes. The Notes shall be executed by an Authorized Officer of the Owner Trustee, on behalf of the Trust, and delivered to the Authenticating Agent for authentication, and thereupon the same shall be authenticated and delivered by the Authenticating Agent, upon a Trust Request and upon receipt by the Authenticating Agent of all of the following: (a) A Trust Order authorizing the execution, authentication and delivery of the Notes and specifying the Note Principal Balance and the Percentage Interest of such Notes to be authenticated and delivered. (b) A Trust Order authorizing the execution and delivery of this Indenture and the Sale and Servicing Agreement. (c) One or more Opinions of Counsel (which opinion shall not be at the expense of the Indenture Trustee or the Trust) addressed to the Authenticating Agent and the Note Insurer or upon which the Authenticating Agent and the Note Insurer are expressly permitted to rely, complying with the requirements of Section 11.01, reasonably satisfactory in form and substance to the Authenticating Agent and the Note Insurer. In rendering the opinions set forth above, such counsel may rely upon Officer's Certificates of the Trust, the Owner Trustee, the Unaffiliated Seller, the Originators, the Depositor, the Servicer and the Indenture Trustee, without independent confirmation or verification with respect to factual matters relevant to such opinions. In rendering the opinions set forth above, such counsel need express no opinion as to (A) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests that arise by operation of law and that do not require any filing or similar action in order to take priority over a perfected security interest or (B) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of the United States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title IV of ERISA). The acceptability to the Note Insurer of the Opinion of Counsel delivered to the Authenticating Agent and the Note Insurer at the Closing Date shall be conclusively evidenced by the delivery on the Closing Date of the Note Insurance Policy. 8 (d) An Officer's Certificate of the Trust complying with the requirements of Section 11.01 and stating that: (i) the Trust is not in Default under this Indenture and the issuance of the Notes will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Trust's Certificate of Trust or any indenture, mortgage, deed of trust or other agreement or instrument to which the Trust is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Trust is a party or by which it may be bound or to which it may be subject, and that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes have been complied with; (ii) the Trust is the owner of each Mortgage Loan, free and clear of any lien, security interest or charge, has not assigned any interest or participation in any such Mortgage Loan (or, if any such interest or participation has been assigned, it has been released) and has the right to Grant each such Mortgage Loan to the Indenture Trustee; (iii) the information set forth in the Mortgage Loan Schedule attached as Schedule I to this Indenture is correct; (iv) the Trust has Granted to the Indenture Trustee all of its right, title and interest in each Mortgage Loan; and (v) as of the Closing Date, no lien in favor of the United States described in Section 6321 of the Code, or lien in favor of the Pension Benefit Guaranty Corporation described in Section 4068(a) of the ERISA, has been filed as described in subsections 6323(f) and 6323(g) of the Code upon any property belonging to the Trust. (e) An executed counterpart of the Sale and Servicing Agreement. (f) An executed counterpart of the Unaffiliated Seller's Agreement. (g) An executed counterpart of the Trust Agreement. (h) An executed copy of the Insurance Agreement. (i) An original executed copy of the Note Insurance Policy. (j) A copy of a letter from Moody's that is has assigned a rating of "Aaa" to the Notes and a copy of a letter from S&P that it has assigned a rating of "AAA" to the Notes. Section 2.12. Book-Entry Note. The Notes will be issued initially as one or more certificates in the name of Cede & Co., as nominee for the Clearing Agency maintaining book-entry records with respect to ownership and transfer of such Notes, and registration of the 9 Notes may not be transferred by the Note Registrar except upon Book-Entry Termination. In such case, the Note Registrar shall deal with the Clearing Agency as representative of the Beneficial Owners of such Notes for purposes of exercising the rights of Noteholders hereunder. Each payment of principal of and interest on a Book-Entry Note shall be paid to the Clearing Agency, which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance with its normal procedures. Each Clearing Agency Participant shall be responsible for disbursing such payments to the Beneficial Owners of the Book-Entry Notes that it represents and to each indirect participating brokerage firm (a "brokerage firm" or "indirect participating firm") for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Beneficial Owners of the Book-Entry Notes that it represents. All such credits and disbursements are to be made by the Clearing Agency and the Clearing Agency Participants in accordance with the provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if any, the Trust or the Note Insurer shall have any responsibility therefor except as otherwise provided by applicable law. Requests and directions from, and votes of, such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners. Section 2.13. Termination of Book Entry System. (a) The book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated upon the happening of any of the following: (i) The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able to discharge properly its responsibilities as nominee and depositary with respect to the Notes and the Indenture Trustee is unable to locate a qualified successor Clearing Agency satisfactory to the Servicer, on behalf of the Trust; (ii) The Majority Certificateholders, on behalf of the Trust, in their sole discretion, elects to terminate the book-entry system by notice to the Clearing Agency and the Indenture Trustee; or (iii) After the occurrence of an Event of Default (at which time the Indenture Trustee shall use all reasonable efforts to promptly notify each Beneficial Owner through the Clearing Agency of such Event of Default), the Beneficial Owners of no less than 51% of the Note Principal Balance of the Book-Entry Notes advise the Indenture Trustee in writing, through the related Clearing Agency Participants and the Clearing Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any Definitive Notes being issued to any person other than the Clearing Agency or its nominee is no longer in the best interests of the Beneficial Owners. (b) Upon the occurrence of any event described in subsection (a) of this Section 2.13, the Indenture Trustee shall use all reasonable efforts to notify all Beneficial Owners, through the Clearing Agency, of the occurrence of such event and of the availability of Definitive Notes to Beneficial Owners requesting the same, in an aggregate outstanding Note Principal Balance representing the interest of each, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous calls for redemption. Definitive Notes shall be issued only upon surrender to the Indenture Trustee of the global Note 10 by the Clearing Agency, accompanied by registration instructions for the Definitive Notes. Neither the Trust nor the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon issuance of the Definitive Notes, all references herein to obligations imposed upon or to be performed by the Clearing Agency shall cease to be applicable and the provisions relating to Definitive Notes shall be applicable. Section 2.14. Pledge of Subsequent Mortgage Loans. (a) Subject to the satisfaction of the conditions set forth in paragraph (b) of this Section 2.14, in consideration of the Indenture Trustee's delivery on the related Subsequent Transfer Dates to or upon the order of the Servicer, on behalf of the Trust, of all or a portion of the balance of funds in either Pre-Funding Account, the Trust shall on any Subsequent Transfer Date pledge, without recourse, to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, all right, title and interest of the Trust in and to the related Subsequent Mortgage Loans, including the outstanding principal of, and interest due on, such Subsequent Mortgage Loans, and all other assets in the Trust Estate relating to the Subsequent Mortgage Loans. In connection with such pledge, and pursuant to Section 2.07 of the Unaffiliated Seller's Agreement and Section 2.09 of the Sale and Servicing Agreement, the Trust does hereby also irrevocably pledge to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, all of its rights under the Sale and Servicing Agreement, the Unaffiliated Seller's Agreement, the related Subsequent Contribution Agreement and the related Subsequent Transfer Agreement, including, without limitation, its right to exercise the remedies created by Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for defective documentation and for breaches of representations and warranties, agreement and covenants of the Unaffiliated seller contained in Section 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. The amount released from either Pre-Funding Account with respect to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of the Aggregate Principal Balances of the Subsequent Mortgage Loans so pledged, as of the related Subsequent Cut-Off Date. (b) The Subsequent Mortgage Loans and the other property and rights related thereto described in paragraph (a) of this Section 2.14 shall be pledged by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, only upon the satisfaction of each of the following conditions on or prior to the related Subsequent Transfer Date: (i) the Unaffiliated Seller shall have provided the Trust, the Depositor, the Indenture Trustee, the Collateral Agent, the Rating Agencies and the Note Insurer with an Addition Notice at least two (2) Business Days prior to the Subsequent Transfer Date, which shall include a Mortgage Loan Schedule listing the Subsequent Mortgage Loans, and shall have provided any other information reasonably requested by any of the foregoing parties with respect to the Subsequent Mortgage Loans; (ii) the Unaffiliated Seller shall have caused the Servicer to deposit in the Collection Account all collections of (x) principal in respect of the Subsequent Mortgage 11 Loans received after the related Subsequent Cut-Off Date and (y) interest due on the Subsequent Mortgage Loans after the related Subsequent Cut-Off Date; (iii) as of each Subsequent Transfer Date, neither the Unaffiliated Seller nor the Depositor shall be insolvent, neither shall be made insolvent by such transfer and neither shall be aware of any pending insolvency; (iv) such Subsequent Transfer shall not result in a material adverse tax consequence to the Trust or the Holders of the Notes; (v) the related Pre-Funding Period shall not have terminated; (vi) the Unaffiliated Seller shall have delivered to the Indenture Trustee an Officer's Certificate confirming the satisfaction of each condition precedent specified in this paragraph (b) and each complies with the terms of the Unaffiliated Seller's Agreement, including each of the representations and warranties made with respect thereto in Section 3.03 of the Unaffiliated Seller's Agreement; provided, that each representation in Section 3.03(tt) (other than clause (v)) may be waived or modified with the prior written consent of the Note Insurer; (vii) there shall have been delivered to the Note Insurer, the Trust, the Collateral Agent, the Rating Agencies and the Indenture Trustee, Independent Opinions of Counsel with respect to the transfer of the Subsequent Mortgage Loans substantially in the form of the Opinions of Counsel delivered to the Depositor, the Note Insurer, the Trust, the Collateral Agent, the Rating Agencies and the Indenture Trustee on the Closing Date (i.e. bankruptcy, corporate and tax opinions); (viii) the Indenture Trustee shall have received a written consent from the Note Insurer in the form of Exhibit C hereto; (ix) the Originators, the Unaffiliated Seller and the Depositor shall have delivered to the Indenture Trustee an executed copy of a Subsequent Transfer Agreement, substantially in the form of Exhibit A to the Unaffiliated Seller's Agreement; (x) the Depositor and the Trust shall have delivered to the Indenture Trustee an executed copy of a Subsequent Contribution Agreement, substantially in the form of Exhibit G to the Sale and Servicing Agreement, and (xi) the Trust and the Indenture Trustee shall have executed a Subsequent Pledge Agreement, substantially in the form of Exhibit B hereto. (c) In connection with the transfer, assignment and pledge of the Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the document delivery requirements set forth in Section 2.05 of the Sale and Servicing Agreement. (d) On each Subsequent Transfer Date upon written instruction from the Unaffiliated Seller, the Indenture Trustee shall withdraw from the related Capitalized Interest Account and pay to the Unaffiliated Seller on such Subsequent Transfer Date the Overfunded 12 Interest Amount for such Subsequent Transfer Date, as calculated by the Indenture Trustee with the cooperation of the Unaffiliated Seller and subject to the approval of the Note Insurer. ARTICLE III COVENANTS Section 3.01. Payment of Notes. The Trust will pay or cause to be duly and punctually paid the principal of, and interest on, the Notes in accordance with the terms of the Notes and this Indenture. The Notes shall be non-recourse obligations of the Trust and shall be limited in right of payment to amounts available from the Trust Estate as provided in this Indenture and the Trust shall not otherwise be liable for payments on the Notes. No person shall be personally liable for any amounts payable under the Notes. If any other provision of this Indenture conflicts or is deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control. Section 3.02. Maintenance of Office or Agency. The Owner Trustee, at the direction of the Majority Certificateholder, on behalf of the Trust, will cause the Note Registrar to maintain its corporate trust office at a location in the United States of America where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Trust in respect of the Notes and this Indenture may be served. Such location shall be the Corporate Trust Office of the Indenture Trustee. The Owner Trustee, at the direction of the Majority Certificateholder, on behalf of the Trust may also from time to time, at its own expense, designate one or more other offices or agencies within the United States of America where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, any designation of an office or agency for payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at the direction of the Majority Certificateholder, on behalf of the Trust will give prompt written notice to the Indenture Trustee and the Note Insurer of any such designation or rescission and of any change in the location of any such other office or agency. Section 3.03. Money for Note Payments to Be Held In Trust. All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the related Distribution Account pursuant to Sections 8.02(a) or 5.07 hereof shall be made on behalf of the Trust by the Indenture Trustee, and no amounts so withdrawn from the related Distribution Account for payments on the Notes shall be paid over to the Trust under any circumstances except as provided in this Section 3.03 or in Sections 5.07 or 8.02 hereof. With respect to Definitive Notes, if the Trust shall have a Note Registrar that is not also the Indenture Trustee, such Note Registrar shall furnish, no later than the fifth (5th) calendar day after each Record Date, a list, in such form as such Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes and of the number of Individual Notes held by each such Holder. 13 Whenever the Trust shall have a Paying Agent other than the Indenture Trustee, the Servicer, on behalf of the Trust, will, on or before the Business Day next preceding each Distribution Date, direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the related Distribution Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any moneys deposited with a Paying Agent in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Trust Order, be paid over by such Paying Agent to the Indenture Trustee for application in accordance with Article VIII hereof. Subject to the prior written consent of the Note Insurer, any Paying Agent other than the Indenture Trustee may be appointed by Trust Order and at the expense of the Trust. The Trust shall not appoint any Paying Agent (other than the Indenture Trustee) that is not, at the time of such appointment, a depository institution or trust company whose obligations would be Permitted Investments pursuant to clause (b) of the definition of the term "Permitted Investments". The Servicer, on behalf of the Trust, will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee and the Owner Trustee, on behalf of the Trust, an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will: (a) allocate all sums received for payment to the Holders of Notes on each Distribution Date among such Holders in the proportion specified in the applicable Indenture Trustee's Remittance Report, in each case to the extent permitted by applicable law; (b) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; (c) if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time the Paying Agent ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment; (d) if such Paying Agent is not the Indenture Trustee, give the Indenture Trustee notice of any Default by the Trust (or any other obligor upon the Notes) in the making of any payment required to be made with respect to any Notes for which it is acting as Paying Agent; (e) if such Paying Agent is not the Indenture Trustee, at any time during the continuance of any such Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; and (f) comply with all requirements of the Code, and all regulations thereunder, with respect to withholding from any payments made by it on any Notes of any applicable 14 withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on any of the Notes, the Servicer, on behalf of the Trust, has provided the calculations pertaining thereto to the Indenture Trustee and the Paying Agent. The Trust may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or any other purpose, by Trust Order direct any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two and one-half years after such amount has become due and payable to the Holder of such Note (or if earlier, three months before the date on which such amount would escheat to a governmental entity under applicable law) shall be discharged from such trust and paid to the Trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Trust for payment thereof (but only to the extent of the amounts so paid to the Trust), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Indenture Trustee may adopt and employ, at the expense of the Trust, any reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or any Paying Agent, at the last address of record for each such Holder). Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c) of this Section 3.04, the Trust will keep in full effect its existence, rights and franchises as a business trust under the laws of the State of Delaware or under the laws of any other state of the United States of America, and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the other Basic Documents. (b) Subject to Section 3.09(g) hereof, and with the prior written consent of the Note Insurer, any entity into which the Trust may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which the Trust shall be a party, shall be the successor issuer under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto, anything in any agreement relating to such merger or consolidation, by which any such Trust may seek to retain certain powers, rights and privileges therefore obtaining for any period of time following such merger or consolidation to the contrary notwithstanding (other than Section 3.09(g)). (c) Upon any consolidation or merger of or other succession to the Trust in accordance with this Section 3.04, the Person formed by or surviving such consolidation or 15 merger (if other than the Trust) may exercise every right and power of, and shall have all of the obligations of, the Trust under this Indenture with the same effect as if such Person had been named as the issuer herein. Section 3.05. Protection of Trust Estate. (a) The Trust will, from time to time, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or advisable to: (i) Grant more effectively all or any portion of the Trust Estate as made by this Indenture; (ii) maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof; (iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; (iv) enforce any of the Mortgage Loans, the Sale and Servicing Agreement, or the Unaffiliated Seller's Agreement; or (v) preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, the Noteholders and the Note Insurer in the Mortgage Loans and the other property held as part of the Trust Estate against the claims of all Persons and parties. (b) The Indenture Trustee shall not, and shall not permit the Collateral Agent to, remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the Closing Date or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of book-entry securities to be recorded on the books of a Person located in a different jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions. Section 3.06. Opinions as to the Trust Estate. On or before April 30th in each calendar year, beginning in 2000, the Servicer, on behalf of the Trust, shall furnish to the Indenture Trustee and the Note Insurer an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee and the Note Insurer either stating that, in the opinion of such counsel, such action has been taken as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe all such action, if any, that will, in the opinion of such counsel, be required to be taken to maintain the lien and security interest of this Indenture with respect to the Trust Estate until May 1st in the following calendar year. 16 Section 3.07. Performance of Obligations. (a) The Trust shall punctually perform and observe all of its obligations under this Indenture and the other Basic Documents. (b) The Trust shall not take any action and will use its Best Efforts not to permit any action to be taken by others that would release any Person from any of such Person's covenants or obligations under any of the Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the other Basic Documents or such document included in the Mortgage File or other instrument or unless such action will not adversely affect the interests of the Noteholders and the Note Insurer. (c) If the Servicer or the Owner Trustee, on behalf of the Trust, shall have knowledge of the occurrence of a default under the Sale and Servicing Agreement or the Unaffiliated Seller's Agreement, the Servicer or the Owner Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note Insurer and the Rating Agencies thereof, and, in the case of the Servicer, shall specify in such notice the action, if any, the Servicer is taking with respect to such default. (d) Upon any termination of the Servicer's rights and powers pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify the Note Insurer and the Rating Agencies. As soon as any successor Servicer is appointed, the Indenture Trustee shall notify the Note Insurer and the Rating Agencies, specifying in such notice the name and address of such successor Servicer. Section 3.08. Investment Company Act. The Trust shall at all times conduct its operations so as not to be subject to, or shall comply with, the requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder. Section 3.09. Negative Covenants. The Trust shall not: (a) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate, except as expressly permitted by this Indenture and the other Basic Documents; (b) claim any credit on, or make any deduction from, the principal of, or interest on, any of the Notes by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate; (c) engage in any business or activity other than as permitted by the Trust Agreement or other than in connection with, or relating to, the issuance of the Notes pursuant to this Indenture, or amend the Trust Agreement, as in effect on the Closing Date, other than in accordance with Section 11.01 of the Trust Agreement; (d) incur, issue, assume or otherwise become liable for an indebtedness other than the Notes; 17 (e) incur, assume, guaranty or agree to indemnify any Person with respect to any indebtedness of any Person, except for such indebtedness as may be incurred by the Trust in connection with the issuance of the Notes pursuant to this Indenture; (f) subject to Article IX of the Trust Agreement, dissolve or liquidate in whole or in part (until the Notes are paid in full); (g) (i) permit the validity or effectiveness of this Indenture or any Grant to be impaired, or permit the lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture, except as may be expressly permitted hereby, (ii) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof, or (iii) permit the lien of this Indenture not to constitute a valid perfected first priority security interest in the Trust Estate; or (h) take any other action that should reasonably be expected to, or fail to take any action if such failure should reasonably be expected to, cause the Trust to be taxable as (x) an association pursuant to Section 7701 of the Code or (y) a taxable mortgage pool pursuant to Section 7701(i) of the Code. Section 3.10. Annual Statement as to Compliance. On or before April 30, 2000, and each April 30 thereafter, the Servicer, on behalf of the Trust, shall deliver to the Indenture Trustee, the Note Insurer and the Depositor a written statement, signed by an Authorized Officer of the Servicer, on behalf of the Trust, stating that: (a) a review of the fulfillment by the Trust during such year of its obligations under this Indenture has been made under such Authorized Officer's supervision; and (b) to the best of such Authorized Officer's knowledge, based on such review, the Trust has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a Default in the fulfillment of any such covenant or condition, specifying each such Default known to such Authorized Officer and the nature and status thereof. Section 3.11. Restricted Payments. The Trust shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust or otherwise with respect to any ownership or equity interest or security in or of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Trust may make, or cause to be made, distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the Certificateholders as contemplated by, and to the extent funds are available for such purpose under this Indenture and the other Basic Documents and the Trust will not, directly or 18 indirectly, make or cause to be made payments to or distributions from any Distribution Account except in accordance with this Indenture. Section 3.12. Treatment of Notes as Debt for Tax Purposes. For purposes of federal, state and local income, franchise and any other income taxes, the Trust will treat the Notes as indebtedness, and hereby instructs the Indenture Trustee, Payee Agent and the Servicer, on behalf of the Trust to treat the Notes as indebtedness for all applicable tax reporting purposes. Section 3.13. Notice of Events of Default. The Servicer, on behalf of the Trust, shall give the Indenture Trustee, the Note Insurer, the Rating Agencies and the Depositor prompt written notice of each Event of Default hereunder, each default on the part of the Servicer of its obligations under the Sale and Servicing Agreement and each default on the part of the Unaffiliated Seller of its obligations under the Unaffiliated Seller's Agreement. Section 3.14. Further Instruments and Acts. Upon written request of the Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the Trust, will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. ARTICLE IV SATISFACTION AND DISCHARGE Section 4.01. Satisfaction and Discharge of Indenture. Whenever the following conditions shall have been satisfied: (a) either (i) all Notes theretofore authenticated and delivered (other than (x) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.07 hereof, and (y) Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Trust, as provided in Section 3.03 hereof) have been delivered to the Note Registrar for cancellation; or (ii) all Notes not theretofore delivered to the Note Registrar for cancellation, (A) have become due and payable, or (B) will become due and payable at the Final Stated Maturity Date within one (1) year, or (C) are to be called for redemption pursuant to Section 10.01 hereof within one (1) year under irrevocable arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Servicer, 19 and the Servicer, in the case of clauses (ii)(A), (ii)(B) or (ii)(C) above, has irrevocably deposited or caused to be deposited with the Indenture Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire unpaid Note Principal Balance such Notes not theretofore delivered to the Indenture Trustee for cancellation, for principal and interest to the Final Stated Maturity Date or to the applicable Redemption Date, as the case may be, and in the case of Notes that were not paid at the Final Stated Maturity Date of their entire unpaid Note Principal Balance, for all overdue principal and all interest payable on such Notes to the next succeeding Distribution Date therefor; (b) the Servicer, on behalf of the Trust, has paid or caused to be paid all other sums payable hereunder by the Trust (including, without limitation, amounts due the Note Insurer); and (c) the Servicer, on behalf of the Trust, has delivered to the Indenture Trustee and the Note Insurer an Officers' Certificate and an Opinion of Counsel satisfactory in form and substance to the Indenture Trustee and the Note Insurer each stating that all conditions precedent herein providing for the satisfaction and discharge of this Indenture have been complied with; then, upon a Trust Request, this Indenture and the lien, rights and interests created hereby and thereby shall cease to be of further effect, and the Indenture Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the Trust (or of the Servicer in the case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and shall pay, or assign or transfer and deliver, to the Trust or upon Trust Order all cash, securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in clauses (a) and (b) above. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Indenture Trustee and any Paying Agent to the Trust and the Holders of Notes under Section 3.03 hereof, the obligations of the Indenture Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes, registration of transfers of Notes and rights to receive payments of principal of and interest on the Notes shall survive. Section 4.02. Application of Trust Money. All money deposited with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Indenture Trustee. 20 ARTICLE V DEFAULTS AND REMEDIES Section 5.01. Event of Default. "Event of Default", wherever used herein, means, with respect to Notes issued hereunder, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) if the Trust shall fail to distribute or cause to be distributed to the Indenture Trustee, for the benefit of the holders of the Notes, on any Distribution Date, all or part of any Interest Distribution Amount and any Net Mortgage Loan Interest Shortfalls due on the Notes on such Distribution Date; (b) if the Trust shall fail to distribute or cause to be distributed to the Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Distribution Date, an amount equal to the Principal Distribution Amount due on the Notes on such Distribution Date, to the extent that sufficient funds are on deposit in the Collection Account or (y) on the Final Stated Maturity Date for any Class of Notes, the aggregate outstanding Note Principal Balance of such Class of Notes; (c) if the Trust shall breach or default in the due observance of any one or more of the covenants set forth in clauses (a) through (h) of Section 3.09 hereof; (d) if the Trust shall consent to the appointment of a custodian, receiver, trustee or liquidator (or other similar official) of itself, or of a substantial part of its property, or shall admit in writing its inability to pay its debts generally as they come due, or a court of competent jurisdiction shall determine that the Trust is generally not paying its debts as they come due, or the Trust shall make a general assignment for the benefit of creditors; (e) if the Trust shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization in a proceeding under any bankruptcy laws (as now or hereafter in effect) or an answer admitting the material allegation of a petition filed against the Trust in any such proceeding, or the Trust shall, by voluntary petition, answer or consent, seek relief under the provisions of any now existing or future bankruptcy or other similar law providing for the reorganization or winding-up of debtors, or providing for an agreement, composition, extension or adjustment with its creditors; (f) if an order, judgment or decree shall be entered in any proceeding by any court of competent jurisdiction appointing, without the consent (express or legally implied) of the Trust, a custodian, receiver, trustee or liquidator (or other similar official) of the Trust or any substantial part of its property, or sequestering any substantial part of its respective property, and any such order, judgment or decree or appointment or sequestration shall remain in force undismissed, unstayed or unvacated for a period of ninety (90) days after the date of entry thereof; or 21 (g) if a petition against the Trust in a proceeding under applicable bankruptcy laws or other insolvency laws, as now or hereafter in effect, shall be filed and shall not be stayed, withdrawn or dismissed within ninety (90) days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of debtors which may apply to the Trust, any court of competent jurisdiction shall assume jurisdiction, custody or control of the Trust or any substantial part of its property, and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or unterminated for a period of ninety (90) days. Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then and in every such case, but with the consent of the Note Insurer in the absence of a Note Insurer Default, the Indenture Trustee may, and on request of the Note Insurer, in the absence of a Note Insurer Default, or, with the prior written consent of the Note Insurer, the Holders of Notes representing not less than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, shall, declare all the Notes to be immediately due and payable by a notice in writing to the Trust (and to the Indenture Trustee if given by Noteholders), and upon any such declaration such Notes, in an amount equal to the entire unpaid Note Principal Balance of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration, shall become immediately due and payable, all subject to the prior written consent of the Note Insurer in the absence of a Note Insurer Default. At any time after such a declaration of acceleration of maturity of the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Note Insurer, in the absence of a Note Insurer Default, or the Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, with the prior written consent of the Note Insurer, by written notice to the Trust and the Indenture Trustee, may rescind and annul such declaration and its consequences if: (a) the Trust has paid or deposited with the Indenture Trustee a sum sufficient to pay: (i) all payments of principal of, and interest on, all Outstanding Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and (ii) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel; and (b) all Events of Default, other than the nonpayment of the principal of Notes that have become due solely by such acceleration, have been cured or waived as provided in Section 5.14 hereof. No such rescission shall affect any subsequent Default or impair any right consequent thereon. 22 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the following sentence, if an Event of Default occurs and is continuing, the Indenture Trustee may, with the prior written consent of the Note Insurer, proceed to protect and enforce its rights and the rights of the Noteholders and the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or enforce any other proper remedy. Any Proceedings brought by the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, or any Noteholder against the Trust shall be limited to the preservation, enforcement and foreclosure of the liens, assignments, rights and security interests under the Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any assets, properties or funds of the Trust, other than the Trust Estate relative to the Notes in respect of which such Event of Default has occurred. If there is a foreclosure of any such liens, assignments, rights and security interests under this Indenture, by private power of sale or otherwise, no judgment for any deficiency upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any Noteholder against the Trust. The Indenture Trustee shall be entitled to recover the costs and expenses expended by it pursuant to this Article V including reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel. Section 5.04. Remedies. If an Event of Default shall have occurred and be continuing and the Notes been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof, to the extent applicable) may, for the benefit of the Noteholders and the Note Insurer, do one or more of the following: (a) institute Proceedings for the collection of all amounts then payable on the Notes, or under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Trust moneys adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03 hereof; (b) in accordance with Section 5.17 hereof, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private Sales called and conducted in any manner permitted by law; (c) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; (d) exercise any remedies of a secured party under the Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Holders of the Notes and the Note Insurer hereunder; and (e) refrain from selling the Trust Estate and apply all funds on deposit in each of the Accounts pursuant to Section 5.07 hereof. Section 5.05. Indenture Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, 23 composition or other judicial Proceeding relative to the Trust or any other obligor upon any of the Notes or the property of the Trust or of such other obligor or their creditors, the Indenture Trustee (irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Trust for the payment of any overdue principal or interest) shall, with the prior written consent of the Note Insurer, be entitled and empowered, by intervention in such Proceeding or otherwise to: (a) file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Notes and file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel), the Noteholders and the Note Insurer allowed in such Proceeding, and (b) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each Noteholder and the Note Insurer to make such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of such payments directly to the Noteholders and the Note Insurer, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel. Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder or the Note Insurer any plan of reorganization, arrangement, adjustment or composition affecting any of the Notes or the rights of any Holder thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder or the Note Insurer in any such Proceeding. Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or any of the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture Trustee, at the direction of the Note Insurer, shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the Notes and the Note Insurer in respect of which such judgment has been recovered after payment of amounts required to be paid pursuant to clause (a) of Section 5.07 hereof. Section 5.07. Application of Money Collected. If the Notes have been declared due and payable following an Event of Default and such declaration and its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee with respect to each Class of Notes pursuant to this Article V or otherwise and any other monies that may then be held or thereafter received by the Indenture Trustee as security for such Class of Notes shall be applied in the following order, at the date or dates fixed by the Indenture Trustee and, in case of the payment of the entire amount due on account of principal of, and interest on, such Class of Notes, upon presentation and surrender thereof: 24 (a) first, to the Indenture Trustee, any unpaid Indenture Trustee Fees with respect to such Class then due and any other amounts payable and due to the Indenture Trustee with respect to such Class under this Indenture, including any costs or expenses incurred by it in connection with the enforcement of the remedies provided for in this Article V; (b) second, to the Servicer, any amounts required to pay the Servicer for any unpaid Servicing Fees with respect to such Class then due and to reimburse the Servicer for Periodic Advances with respect to such Class previously made by, and not previously reimbursed to or retained by, the Servicer and, upon the final liquidation of the related Mortgage Loan or the final liquidation of the Trust Estate, Servicing Advances with respect to such Class previously made by, and not previously reimbursed to or retained by, the Servicer; (c) third, to the payment of Interest Distribution Amounts then due and unpaid upon the Outstanding Notes of such Class through the day preceding the date on which such payment is made; (d) fourth, to the payment of the Note Principal Balance of each of the Outstanding Notes of such Class, up to the amount of their respective unpaid Note Principal Balance, ratably, without preference or priority of any kind; (e) fifth, to the Note Insurer, as subrogee to the rights of the Noteholders, (x) the aggregate amount necessary to reimburse the Note Insurer for any unreimbursed Reimbursement Amounts for such Class paid by the Note Insurer on prior Distribution Dates, together with interest thereon at the "Late Payment Rate" specified in the Insurance Agreement from the date such Reimbursement Amounts were due to the Note Insurer to such Distribution Date, (y) the amount of any unpaid Premium Amount for such Class then due, together with interest thereon at the "Late Payment Rate" specified in the Insurance Agreement from the date such amounts were due to such Distribution Date and (z) any other amounts due and owing to the Note Insurer for such Class under the Insurance Agreement; (f) sixth, to the payment of any Net Mortgage Loan Interest Shortfalls of such Class through the day preceding the date on which such payment is made; (g) seventh, for payment in respect of the other Class of Notes, in the priority set forth in this Section 5.07, to the extent of any shortfall in the payment of the amounts described in clauses (a) through (f) with respect to such other Class; (h) eighth, the remainder to the Holder of Trust Certificate relating to such Class. Section 5.08. Limitation on Suits. No Holder of a Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder has previously given written notice to the Indenture Trustee and the Note Insurer of a continuing Event of Default; 25 (b) the Holders of Notes representing not less than 25% of the Note Principal Balance of the Outstanding Notes of both Classes shall have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder; (c) such Holder or Holders have offered to the Indenture Trustee indemnity in full against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Indenture Trustee, for sixty (60) days after its receipt of such notice, request and offer of indemnity, has failed to institute any such Proceeding; (e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes; and (f) the consent of the Note Insurer shall have been obtained; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Notes. In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than 50% of the Note Principal Balances of the Outstanding Notes of both Classes, the Indenture Trustee shall take the action prescribed by the group representing a greater percentage of the Note Principal Balances of the Outstanding Notes of both Classes. Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest. Subject to the provisions in this Indenture (including Sections 3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to recovery from amounts in the portion of the Trust Estate relating to such Note, the Holder of any Note shall have the right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment of each installment of interest on such Note on the respective Distribution Date for such installments of interest, to receive payment of each installment of principal of such Note when due (or, in the case of any Note called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Section 5.10. Restoration of Rights and Remedies. If the Indenture Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined to be adverse to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in every such case the Indenture Trustee, the Note Insurer and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and 26 respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted. Section 5.11. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.12. Delay or Omission Not Waiver. No delay or omission of the Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with the prior consent of the Note Insurer, as the case may be. Section 5.13. Control by Noteholders. The Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes on the applicable Record Date shall, with the consent of the Note Insurer, have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that: (a) such direction shall not be in conflict with any rule of law or with this Indenture; (b) any direction to the Indenture Trustee to undertake a Sale of the Trust Estate shall be by the Holders of Notes representing the percentage of the Note Principal Balance of the Outstanding Notes specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is applicable; and (c) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.01 hereof, the Indenture Trustee need not take any action that it determines might involve it in liability or be unjustly prejudicial to the Noteholders not consenting. Section 5.14. Waiver of Past Defaults. The Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes on the applicable Record Date may on behalf of the Holders of all the Notes, and with the consent of the Note Insurer, waive any past Default hereunder and its consequences, except a Default: (a) in the payment of principal or any installment of interest on any Note; or 27 (b) in respect of a covenant or provision hereof that under Section 9.02 hereof cannot be modified or amended without the consent of the Holder of each Outstanding Note affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 5.15. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Indenture Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate Notes representing more than 10% of the Note Principal Balance of the Outstanding Notes of both Classes, or to any suit instituted by any Noteholder for the enforcement of the payment of any Interest Distribution Amount or Principal Distribution Amount on any Note on or after the related Distribution Date or for the enforcement of the payment of principal of any Note on or after the Final Stated Maturity Date (or, in the case of any Note called for redemption, on or after the applicable Redemption Date). Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension of law wherever enacted, now or at any time hereafter in force, that may affect the covenants in, or the performance of, this Indenture; and the Trust (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a "Sale") of any portion of the Trust Estate pursuant to Section 5.04 hereof shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid. The Indenture Trustee may from time to time postpone any public Sale by public announcement made at the time and place of such Sale. 28 (b) To the extent permitted by law, the Indenture Trustee shall not in any private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless: (i) the Holders of Notes representing not less than 50% of the Note Principal Balance of the Notes of both Classes then Outstanding consent to or direct the Indenture Trustee to make such Sale; or (ii) the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders of the Notes, in full payment thereof in accordance with Section 5.07 hereof, on the Distribution Date next succeeding the date of such Sale. The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof for purposes of this Section 5.17(b). In the absence of a Note Insurer Default, no Sale hereunder shall be effective without the consent of the Note Insurer. (c) Unless the Holders of all Outstanding Notes have otherwise consented or directed the Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (ii) of subsection (b) of this Section 5.17 has not been established by the Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee, acting in its capacity as Indenture Trustee (i) on behalf of the Noteholders and the Note Insurer, shall prevent such Sale and bid an amount (which shall include the Indenture Trustee's right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders and the Note Insurer. (d) In connection with a Sale of all or any portion of the Trust Estate: (i) any Holder or Holders of Notes may bid for and purchase the property offered for Sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash up to the amount that shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment; (ii) the Indenture Trustee may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting the gross Sale price against the sum of (A) the amount that would be payable to the Holders of the Notes as a result of such Sale in accordance with Section 5.07 hereof on the Distribution Date next succeeding the date of such Sale and (B) the expenses of the Sale and of any Proceedings in connection therewith which are reimbursable to it, without being required to produce the Notes in order to complete any such Sale or in order for the net Sale price to be credited against such Notes, and any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture; 29 (iii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale thereof, (iv) the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Trust to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and (v) no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. Section 5.18. Action on Notes. The Indenture Trustee's right to seek and recover judgment under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee, the Note Insurer or the Holders of Notes shall be impaired by the recovery of any judgment by the Indenture Trustee against the Trust or by the levy of any execution under such judgment upon any portion of the Trust Estate. Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust. The Trust Estate Granted to the Indenture Trustee as security for the Notes serves as security only for the Notes. Holders of the Notes shall have no recourse against the trust estate granted as security for any other series of Notes issued by the Trust, and no judgment against the Trust for any amount due with respect to the Notes may be enforced against either the trust estate securing any other series or any other assets of the Trust, nor may any prejudgment lien or other attachment be sought against any such other trust estate or any other assets of the Trust. The Noteholders shall have no recourse against the Owner Trustee, the Indenture Trustee, Note Registrar, Authenticating Agent, Collateral Agent, the Depositor, the Unaffiliated Seller, the Servicer or any of their respective Affiliates, or to the assets of any of the foregoing entities. Section 5.20. Application of the Trust Indenture Act. Pursuant to Section 316(a) of the TIA, all provisions automatically provided for in Section 316(a) are hereby expressly excluded. Section 5.21. Note Insurer Default. Notwithstanding anything elsewhere in this Indenture or in the Notes to the contrary, if a Note Insurer Default exists, the provisions of this Article V and all other provisions of this Indenture which (a) permit the Note Insurer to exercise rights of the Noteholders, (b) restrict the ability of the Noteholders or the Indenture Trustee to act without the consent or approval of the Note Insurer, (c) provide that a particular act or thing must be acceptable to the Note Insurer, (d) permit the Note Insurer to direct (or otherwise to require) the actions of the Indenture Trustee or the Noteholders, (e) provide that any action or omission taken with the consent, approval or authorization of the Note Insurer shall be authorized hereunder or shall not subject the party taking or omitting to take such action to any liability hereunder or (f) which have a similar effect, shall be of no further force and effect and the Indenture Trustee shall administer the Trust Estate and perform its obligations hereunder solely for the benefit of the Holders of the Notes. Nothing in the foregoing sentence, nor any action 30 taken pursuant thereto or in compliance therewith, shall be deemed to have released the Note Insurer from any obligation or liability it may have to any party or to the Noteholders hereunder, under any other agreement, instrument or document (including, without limitation, the Note Insurance Policy) or under applicable law. ARTICLE VI THE INDENTURE TRUSTEE Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (i) the Indenture Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and (ii) in the absence of bad faith on its part, the Indenture Trustee may request and conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture. The Indenture Trustee shall, however, examine such certificates and opinions to determine whether they conform on their face to the requirements of this Indenture. (c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of subsection (b) of this Section 6.01; (ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and (iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 5.13 or 5.17 hereof or exercising any trust or power or remedy conferred upon the Indenture Trustee under this Indenture. (d) Except with respect to duties of the Indenture Trustee prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Sections 5.01(e) or 5.01(f) hereof or any Default described in Sections 5.01(c) or 31 5.01(d) hereof or of any event described in Section 3.05 hereof unless a Responsible Officer assigned to and working in the Indenture Trustee's corporate trust department and having direct responsibility for this Indenture has actual knowledge thereof or unless written notice of any event that is in fact such an Event of Default or Default is received by the Indenture Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Trust, the Trust Estate or this Indenture. (e) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under this Indenture or the other Basic Documents. (f) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the provisions of this Section 6.01. (g) Notwithstanding any extinguishment of all right, title and interest of the Trust in and to the Trust Estate following an Event of Default and a consequent declaration of acceleration of the maturity of the Notes, whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the rights, powers and duties of the Indenture Trustee with respect to the Trust Estate (or the proceeds thereof), the Noteholders and the Note Insurer and the rights of Noteholders and the Note Insurer shall continue to be governed by the terms of this Indenture. (h) The Indenture Trustee, the Collateral Agent or any successor Collateral Agent appointed pursuant to Section 9.08 of the Sale and Servicing Agreement shall at all times retain possession of the Indenture Trustee's Mortgage Files in the State of Delaware or the State of New York (or, with respect to the Chase Bank of Texas, N.A., as initial Collateral Agent, in the State of Texas), except for those Indenture Trustee's Mortgage Files or portions thereof released to the Servicer or the Note Insurer pursuant to this Indenture, the Unaffiliated Seller's Agreement or the Sale and Servicing Agreement. (i) Subject to the other provisions of this Indenture and without limiting the generality of this Section 6.01, the Indenture Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate from funds available in the Distribution Accounts or (D) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Indenture Trustee pursuant to this Indenture believed by the Indenture Trustee to be genuine and to have been signed or presented by the proper party or parties. Section 6.02. Notice of Default. Immediately after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee shall transmit by mail to the Note 32 Insurer and the Depositor notice of each such Default and, within ninety (90) days after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived; provided, however, that in no event shall the Indenture Trustee provide notice, or fail to provide notice of a Default known to the Indenture Trustee in a manner contrary to the requirements of the Trust Indenture Act. Concurrently with the mailing of any such notice to the Holders of the Notes, the Indenture Trustee shall transmit by mail a copy of such notice to the Rating Agencies. Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be protected in acting or refraining to act upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not investigate any fact or matter stated in any such document. (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on any such Officer's Certificate or Opinion of Counsel. (c) With the consent of the Note Insurer, which consent shall not be unreasonably withheld, the Indenture Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. (e) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders or the Note Insurer, pursuant to the provisions of this Indenture, unless such Noteholders or the Note Insurer shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. (f) The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Noteholders or the Note Insurer; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may require reasonable indemnity against such cost, expense or liability as a condition to taking any such action. (g) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not 33 be answerable for anything other than its negligence or willful misconduct in the performance of such act. Section 6.04. Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, except, with respect to the Indenture Trustee, the certificates of authentication on the Notes, shall be taken as the statements of the Trust, and the Owner Trustee, the Indenture Trustee and the Authenticating Agent assume no responsibility for their correctness. The Owner Trustee and Indenture Trustee make no representations with respect to the Trust Estate or as to the validity or sufficiency of this Indenture or of the Notes. Neither the Indenture Trustee nor the Owner Trustee shall be accountable for the use or application by the Trust of the Notes or the proceeds thereof or any money paid to the Trust or upon a Trust Order pursuant to the provisions hereof. Section 6.05. May Hold Notes. The Indenture Trustee, any Agent, or any other agent of the Trust, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13 hereof, may otherwise deal with the Trust or any Affiliate of the Trust with the same rights it would have if it were not Indenture Trustee, Agent or such other agent. Section 6.06. Money Held in Trust. Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds except to the extent required by this Indenture or by law. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Trust and except to the extent of income or other gain on investments that are obligations of the Indenture Trustee, in its commercial capacity, and income or other gain actually received by the Indenture Trustee on investments, which are obligations of others. Section 6.07. Eligibility, Disqualification. Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have an indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always have a combined capital and surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject to TIA Section 310(b). Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture Trustee shall at all times (a)(i) have a combined capital and surplus of at least $50,000,000, or (ii) be a member of a bank holding company system, the aggregate combined capital and surplus of which is at least $100,000,000 and (b) be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by Moody's; provided, however, that the Indenture Trustee's separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(1), its combined capital and surplus for purposes of this Section 6.08 shall be as set forth in the latest such report. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI. Section 6.09. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture 34 Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Indenture Trustee under Section 6.10 hereof. (b) The Indenture Trustee may resign at any time by giving written notice thereof to the Trust, the Note Insurer and each Rating Agency. If an instrument of acceptance by a successor Indenture Trustee shall not have been delivered to the Indenture Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. (c) The Indenture Trustee may be removed at any time by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, by written notice delivered to the Indenture Trustee and to the Trust. (d) If at any time: (i) the Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 hereof and shall fail to resign or eliminate such conflicting interest in accordance with Section 6.07 hereof after written request therefor by the Trust or by any Noteholder; or (ii) the Indenture Trustee shall cease to be eligible under Section 6.08 hereof or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a Trust Order, with the consent of the Note Insurer, may remove the Indenture Trustee, and the Owner Trustee, on behalf of the Trust by a Trust Order, shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a successor Indenture Trustee acceptable to the Note Insurer and to vest in such successor Indenture Trustee any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Indenture; provided, however, if the Owner Trustee, on behalf of the Trust and the Note Insurer do not join in such appointment within fifteen (15) days after the receipt by it of a request to do so, or in case an Event of Default has occurred and is continuing, the Indenture Trustee may petition a court of competent jurisdiction to make such appointment, or (y) subject to Section 5.15 hereof, and, in the case of a conflicting interest as described in clause (i) above, unless the Indenture Trustee's duty to resign has been stayed as provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at least six (6) months may, on behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. (e) If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a Trust Order shall promptly appoint a successor Indenture 35 Trustee acceptable to the Note Insurer. If within one (1) year after such resignation, removal or incapability or the occurrence of such vacancy a successor Indenture Trustee shall be appointed by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes delivered to the Trust and the retiring Indenture Trustee, the successor Indenture Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Indenture Trustee and supersede the predecessor Indenture Trustee appointed by the Trust. If no successor Indenture Trustee shall have been so appointed by the Trust, the Note Insurer or Noteholders and shall have accepted appointment in the manner hereinafter provided, any Noteholder who has been a bona fide Holder of a Note for at least six (6) months may, on behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. (f) The Servicer, on behalf of the Trust, shall give notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee to the Holders of Notes and the Note Insurer. Each notice shall include the name of the successor Indenture Trustee and the address of its Corporate Trust Office. Section 6.10. Acceptance of Appointment by Successor Indenture Trustee. Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Trust, the Note Insurer and the retiring Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee. Notwithstanding the foregoing, on request of the Owner Trustee, on behalf of the Trust, or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder. Upon request of any such successor Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall, with the written consent of the Note Insurer, execute and deliver any and all instruments for more fully and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts. No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such successor Indenture Trustee shall be qualified and eligible under this Article VI. Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee. Any corporation or banking association into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, conversion or consolidation to which the Indenture Trustee shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder; provided, that such corporation or banking association shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes have been 36 authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Indenture Trustee had authenticated such Notes. Section 6.12. Preferential Collection of Claims Against Trust. The Indenture Trustee (and any co-trustee or separate trustee) shall be subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At any time or times, for the purpose of meeting the legal requirements of the TIA or of any jurisdiction in which any of the Trust Estate may at the time be located, the Indenture Trustee shall have power to appoint, and, upon the written request of the Indenture Trustee, the Note Insurer or of the Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes with respect to which a co-trustee or separate trustee is being appointed, with the written consent of the Note Insurer, the Owner Trustee, on behalf of the Trust, shall for such purpose join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Indenture Trustee either to act as co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section 6.13. If the Owner Trustee, on behalf of the Trust, does not join in such appointment within fifteen (15) days after the receipt by it of a request to do so, or in case an Event of Default has occurred and is continuing, the Indenture Trustee alone shall have power to make such appointment. All fees and expenses of any co-trustee or separate trustee shall be payable by the Trust. Should any written instrument from the Trust be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Owner Trustee, on behalf of the Trust, with the written consent of the Note Insurer. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms: (a) The Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder, shall be exercised, solely by the Indenture Trustee. (b) The rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Indenture Trustee or by the 37 Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. (c) The Indenture Trustee at any time, by an instrument in writing, executed by it, with the concurrence of the Owner Trustee, on behalf of the Trust, evidenced by a Trust Order, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 6.13, and, in case an Event of Default has occurred and is continuing, the Indenture Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Trust, but upon the written request of the Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section 6.13. (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Indenture Trustee, or any other such trustee hereunder. (e) Any Act of Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. Section 6.14. Authenticating Agents. The Owner Trustee, acting at the direction of the Majority Certificateholders, shall appoint an Authenticating Agent with power to act on the Trust's behalf and subject to the direction of the Majority Certificateholders in the authentication and delivery of the Notes designated for such authentication and, containing provisions therein for such authentication (or with respect to which the Owner Trustee acting at the direction of the Majority Certificateholders, has made other arrangements, satisfactory to the Indenture Trustee and such Authenticating Agent, for notation on the Notes of the authority of an Authenticating Agent appointed after the initial authentication and delivery of such Notes) in connection with transfers and exchanges under Section 2.06 hereof, as fully to all intents and purposes as though the Authenticating Agent had been expressly authorized by Section 2.06 hereof to authenticate and deliver Notes. For all purposes of this Indenture (other than in connection with the authentication and delivery of Notes pursuant to Sections 2.05 and 2.11 hereof in connection with their initial issuance), the authentication and delivery of Notes by the Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication and delivery of Notes "by the Indenture Trustee." Such Authenticating Agent shall at all times be a Person that both meets the requirements of Section 6.07 hereof for the Indenture Trustee hereunder and has an office for presentation of Notes in the United States of America. The Indenture Trustee shall initially be the Authenticating Agent and shall be the Note Registrar as provided in Section 2.06 hereof. The office from which the Indenture Trustee shall perform its duties as Note Registrar and Authenticating Agent shall be its Corporate Trust Office. Any Authenticating Agent appointed pursuant to the terms of this Section 6.14 or pursuant to the 38 terms of any supplemental indenture shall deliver to the Indenture Trustee as a condition precedent to the effectiveness of such appointment an instrument accepting the trusts, duties and responsibilities of Authenticating Agent and of Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee for and holding the Indenture Trustee harmless against, any loss, liability or expense (including reasonable attorneys' fees) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance, administration of the trust or exercise of authority by such Authenticating Agent, Note Registrar or co-Note Registrar. Any corporation or banking association into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation or banking association succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section 6.14, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation or banking association. Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trust. The Owner Trustee, acting at the direction of the Majority Certificateholders, may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Indenture Trustee. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section 6.14, the Owner Trustee, acting at the direction of the Majority Certificateholders, shall promptly appoint a successor Authenticating Agent, shall give written notice of such appointment to the Indenture Trustee, and shall mail notice of such appointment to all Holders of Notes. The Indenture Trustee agrees, subject to Section 6.01(e) hereof, to pay to any Authenticating Agent from time to time reasonable compensation for its services and the Indenture Trustee shall be entitled to be reimbursed for such payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04 and 6.05 hereof shall be applicable to any Authenticating Agent. Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee shall, on or prior to the Closing Date, execute and deliver the acknowledgement of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale and Servicing Agreement. (b) The Indenture Trustee shall cause the Collateral Agent to (i) on or prior to the Closing Date, execute and deliver the acknowledgement of receipt of the Mortgage Loans required by Section 2.06(b)(i) of the Sale and Servicing Agreement, (ii) on or prior to thirty (30) days following the Closing Date, execute and deliver the Initial Certificate required by Section 2.06(b)(ii) of the Sale and Servicing Agreement, and (iii) on or prior to ninety (90) days following the Closing Date, execute and deliver the Final Certification required by Section 2.06(b)(iii) of the Sale and Servicing Agreement. (c) In giving each of the acknowledgements, the Initial Certification and the Final Certification referred to in clauses (a) and (b) of this Section 6.15, neither the Indenture Trustee 39 nor the Collateral Agent shall be under any duty or obligation (i) to inspect, review or examine any such documents, instruments, securities or other papers to determine that they or the signatures thereto are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face or (ii) to determine whether any Mortgage File should include a flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement. (d) In the event that the Mortgage Loans are required to be recorded in accordance with the provisions of Article II of the Sale and Servicing Agreement, no later than the fifth Business Day of each third month, commencing in June 1999, the Indenture Trustee shall cause the Collateral Agent to deliver to the Servicer and the Note Insurer a recordation report dated as of the first day of such month, identifying those Mortgage Loans for which it has not yet received (i) an original recorded Mortgage or a copy thereof certified to be true and correct by the public recording office in possession of such Mortgage or (ii) an original recorded Assignment of Mortgage to the Indenture Trustee and any required intervening Assignments of Mortgage or a copy thereof certified to be a true and correct copy by the public recording office in possession of such Assignment of Mortgage. Section 6.16. Indenture Trustee Fees and Expenses. The Indenture Trustee shall be entitled to receive the Indenture Trustee Fee on each Distribution Date as provided herein. The Indenture Trustee also shall be entitled to (i) payment of or reimbursement for expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any of the provisions of this Indenture (including, but not limited to, the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), and (ii) indemnification against losses, liability and expenses, including reasonable attorney's fees, incurred, arising out of or in connection with this Indenture, the Notes and the Sale and Servicing Agreement. The Indenture Trustee and any director, officer, employee or agent of the Indenture Trustee shall be indemnified by the Trust and held harmless against any loss, liability or reasonable expense incurred in connection with this Indenture or the Notes, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance by the Indenture Trustee of its duties hereunder. The obligations of the Servicer and the Trust under this Section 6.16 shall survive termination of the Trust and payment of the Notes, and shall extend to any co-Indenture Trustee or separate-Indenture Trustee appointed pursuant to this Article VI. ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less than forty-five (45) days nor more than sixty (60) days after the Distribution Date occurring closest to six (6) months after the Closing Date and each Distribution Date occurring at six (6) month intervals thereafter, all information in the possession or control of the Note Registrar, in such form as the Indenture Trustee may reasonably require, as to names and addresses of the Holders of Notes, and (ii) at such other times, as the Indenture Trustee may 40 request in writing, within thirty (30) days after receipt by the Note Registrar of any such request, a list of similar form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. (b) In addition to furnishing to the Indenture Trustee the Noteholder lists, if any, required under clause (a) of this Section 7.01, the Note Registrar shall also furnish all Noteholder lists, if any, required under Section 3.03 hereof at the times required by such Section 3.03. Section 7.02. Preservation of Information; Communications to Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee as provided in Section 7.01 hereof and the names and addresses of the Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 hereof upon receipt of a new list so furnished. (b) Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. (c) The Trust, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c). Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60) days after December 31 of each year (the "reporting date"), commencing with the year after the issuance of the Notes, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail to all Holders a brief report dated as of such reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the Indenture Trustee's Remittance Report pursuant to Section 2.08(d) hereof, also mail to Holders of Notes and the Note Insurer with respect to which it has made advances, any reports with respect to such advances that are required by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of Notes and the Note Insurer any reports required by TIA Section 313(b)(1). For purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal amount of indenture securities outstanding on the date as of which such information is provided shall be the Note Principal Balance of the then Outstanding Notes covered by the report. (b) A copy of each report required under this Section 7.03 shall, at the time of such transmission to Holders of Notes and the Note Insurer be filed by the Indenture Trustee with the Commission and with each securities exchange upon which the Notes are listed. The Servicer, on behalf of the Trust, will notify the Indenture Trustee when the Notes are listed on any securities exchange. Section 7.04. Reports by Trust. The Servicer, on behalf of the Trust, (a) shall deliver to the Indenture Trustee within fifteen (15) days after the Trust is required to file the same with the Commission copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules 41 and regulations prescribe) that the Trust is required to file with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b) shall also comply with the other provisions of TIA Section 314(a). ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust hereby directs the Indenture Trustee to establish, on or before the Closing Date, for each Class of Notes, at its Corporate Trust Office, one or more Eligible Accounts that shall collectively be the "Distribution Account" for such Class. The Indenture Trustee shall promptly deposit in the related Distribution Account (i) the Servicer Remittance Amount for the related Pool received by it from the Servicer on the Servicer Distribution Date pursuant to the Sale and Servicing Agreement, (ii) any other funds from any deposits for such Pool to be made by the Servicer pursuant to the Sale and Servicing Agreement, (iii) any amount for such Pool required to be deposited in such Distribution Account pursuant to this Section 8.01, (iv) all amounts for such Pool received pursuant to Section 8.03 hereof, (v) any amount for such Pool required to be deposited pursuant to Section 8.05 hereof, (vi) on each Distribution Date, in accordance with the Servicer Remittance Report, the Shortfall Amount for the related Class, until paid in full, first, from the Distribution Account relating to the other Class of Notes, to the extent of the Net Monthly Excess Cashflow from the other Pool of Mortgage Loans remaining after payment of any Net Mortgage Loan Interest Shortfalls for such other Pool, second, from the Cross-collateralization Reserve Account relating to this Class of Notes, and third, from the Cross-collateralization Reserve Account relating to the other Class of Notes, and (vii) all other amounts for such Pool received for deposit in such Distribution Account, including the payment of any Loan Repurchase Price for a Mortgage Loan in such Pool received by the Indenture Trustee. All amounts that are deposited from time to time in a Distribution Account are subject to withdrawal by the Indenture Trustee for the purposes set forth in Sections 8.02 hereof. All funds withdrawn from a Distribution Account pursuant to Section 8.02 hereof for the purpose of making payments to the Holders of Notes shall be applied in accordance with Sections 3.03 and 8.02 hereof. (b) The Trust hereby directs the Indenture Trustee to establish for each Class of Notes, at its Corporate Trust Office, an Eligible Account which shall be the "Pre-Funding Account" for such Class of Notes. On the Closing Date, the Indenture Trustee shall deposit the Original Pre-Funded Amount for each Class of Notes in the related Pre-Funding Account from the proceeds of the sale of the related Class of Notes. The Indenture Trustee shall withdraw and distribute or cause to be distributed funds on deposit therein only at the times specified below, based on written instructions provided by the Servicer or other party as indicated: (i) on any Subsequent Transfer Date, the Unaffiliated Seller shall instruct in writing the Indenture Trustee to withdraw from the related Pre-Funding Account an amount equal to 100% of the aggregate Principal Balances as of the related Subsequent Cut-Off Date of the Subsequent Mortgage Loans sold to the Trust in respect of the related Pool and pledged to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, on such Subsequent Transfer Date and pay such amount to or upon the order of the Unaffiliated Seller upon satisfaction of the conditions set forth in Section 2.14 hereof 42 with respect to such transfer; the Indenture Trustee may conclusively rely on such written instructions from the Unaffiliated Seller; (ii) if the Pre-Funding Amount for a Class of Notes (exclusive of Pre-Funding Earnings for such Class) has been reduced to $100,000 or less by the April 1999 Distribution Date, then, on such Distribution Date, after giving effect to any reductions in the related Pre-Funding Account on such date, the Indenture Trustee shall withdraw, from the related Pre-Funding Account on such date and deposit in the Distribution Account relating to such Class, the amount on deposit in such Pre-Funding Account, other than any Pre-Funding Earnings, for payment to the related Noteholders as a prepayment of principal on such Distribution Date; (iii) if any amounts remain on deposit in either Pre-Funding Account at the close of business on April 30, 1999, the Indenture Trustee shall withdraw, from such Pre-Funding Account on the following Distribution Date and deposit in the Distribution Account relating to the related Class, the amount on deposit in such Pre-Funding Account, other than any Pre-Funding Earnings, for payment to the related Noteholders as a prepayment of principal on such Distribution Date; and (iv) on the April 1999 and May 1999 Distribution Dates, the Indenture Trustee shall transfer from each Pre-Funding Account to the related Distribution Account, the Pre-Funding Earnings, if any, applicable to such Distribution Date. (c) The Trust hereby directs the Indenture Trustee to establish for each Class of Notes, at its Corporate Trust Office, an Eligible Account which shall be the "Capitalized Interest Account" for such Class of Notes. On the Closing Date, the Indenture Trustee shall deposit the Original Capitalized Interest Amount for each Class of Notes in the related Capitalized Interest Account from the proceeds of the sale of the related Class of Notes. The Indenture Trustee shall withdraw and distribute or cause to be distributed funds on deposit therein only at the times specified below, based on written instructions provided by the Servicer or other party as indicated: (i) on the April 1999 and the May 1999 Distribution Dates, the Indenture Trustee shall transfer from each Capitalized Interest Account to the related Distribution Account, the applicable Capitalized Interest Requirement, if any, for such Class and such Distribution Date; and (ii) on the Distribution Date immediately following, or on which, the amount on deposit in the related Pre-Funding Account is reduced to zero, any amounts remaining in either Capitalized Interest Account, after taking into account the transfers in respect of the Distribution Date described in clause (i) above, shall be paid to the Unaffiliated Seller. (d) The Trust hereby directs the Indenture Trustee to establish, on or before the Closing Date, for each Class of Notes, at its Corporate Trust Office, an Eligible Account that shall be the "Cross-collateralization Reserve Account" for such Class. The Indenture Trustee 43 shall deposit and withdraw funds in each Cross-collateralization Reserve Account in accordance with the provisions of Sections 8.01(a) and 8.02(a) hereof. (e) So long as no Default or Event of Default shall have occurred and be continuing, amounts held in the Accounts, other than the Note Insurance Payment Account, shall be invested in Permitted Investments, which Permitted Investments shall mature no later than the Business Day preceding the immediately following Distribution Date. All income or other gains, if any, from investment of moneys deposited in the Distribution and Collection Accounts shall be for the benefit of the Servicer and on each Distribution Date, any such amounts may be released from the Accounts and paid to the Servicer as part of its compensation for acting as Servicer. Any loss resulting from such investment of moneys deposited in an Account shall be reimbursed immediately as incurred to the related Account by the Servicer. Subject to Section 6.01 hereof and the preceding sentence, neither the Indenture Trustee nor the Servicer shall in any way be held liable by reason of any insufficiency in the Accounts. The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any Account held by the Indenture Trustee resulting from any investment loss on any Permitted Investment included therein (except to the extent that the Indenture Trustee is the obligor and has defaulted thereon). (f) Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold all such money and property received by it as part of the Trust Estate and shall apply it as provided in this Indenture. If the Indenture Trustee shall not have received the Servicer Remittance Amount by close of business on any related Servicer Distribution Date, the Indenture Trustee shall, unless the Servicer shall have made provisions satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice, with a copy to the Note Insurer, to the Servicer of its failure to remit such Servicer Remittance Amount and that such failure, if not remedied by the close of business on the Business Day after the date upon which such notice is delivered to the Servicer, shall constitute a Servicer Event of Default under the Sale and Servicing Agreement. If the Indenture Trustee shall subsequently receive any such Servicer Remittance Amount by the close of business on such Business Day, such Servicer Event of Default shall not be deemed to have occurred. Notwithstanding any other provision hereof, the Indenture Trustee shall deliver to the Servicer, or its designee or assignee, any Servicer Remittance Amount received with respect to a Mortgage Loan after the related Servicer Distribution Date to the extent that the Servicer previously made payment or provision for payment with respect to such Servicer Remittance Amount in accordance with this Section 8.01, and any such Servicer Remittance Amount shall not be deemed part of the Trust Estate. Except as otherwise expressly provided in this Indenture and the Sale and Servicing Agreement, if, following delivery by the Indenture Trustee of the notice described 44 above, the Servicer shall fail to remit the Servicer Remittance Amount on any Servicer Distribution Date, the Indenture Trustee shall deliver a second notice to the Servicer, the Trust and the Note Insurer by the close of business on the third Business Day prior to the related Distribution Date indicating that a Servicer Event of Default occurred and is continuing under the Sale and Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as are required of the Indenture Trustee under Article VII of the Sale and Servicing Agreement. In addition, if a default occurs in any other performance required under the Sale and Servicing Agreement, the Indenture Trustee may, and upon the request of the Note Insurer or, with the consent of the Note Insurer, the Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes shall, take such action as may be appropriate to enforce such payment or performance including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and to proceed thereafter as provided in Article V hereof. Section 8.02. Distributions; Statements. On each Distribution Date, unless the Notes have been declared due and payable pursuant to Section 5.02 hereof and moneys collected by the Indenture Trustee are being applied in accordance with Section 5.07 hereof, Available Funds on deposit in each Distribution Account on any Distribution Date or Redemption Date shall be withdrawn from such Distribution Account, in the amounts required (based solely on the Servicer's Remittance Report delivered to the Indenture Trustee on or before such Distribution Date), for application on such Distribution Date in respect of payments relating to the applicable Pool of Mortgage Loans and the related Class of Notes as follows: (i) to the Indenture Trustee, an amount equal to the Indenture Trustee Fees then due to it with respect to the related Class of Notes; (ii) from amounts then on deposit in the related Distribution Account (excluding any Insured Payments), to the Note Insurer, the lesser of (x) the excess of (i) the amount then on deposit in such Distribution Account over (ii) the Insured Distribution Amount for such Pool on such Distribution Date and (y) the sum of the amount of all Reimbursement Amounts relating to such Class of Notes which have not been previously paid as of such Distribution Date and any other amounts relating to such Class then due to the Note Insurer pursuant to the Insurance Agreement; (iii) from amounts then on deposit in the related Distribution Account, to the Holders of the related Class of Notes, the Distribution Amount for such Class; (iv) from amounts then on deposit in the related Distribution Account, to the Holders of the related Class of Notes, the amount of any Net Mortgage Loan Interest Shortfalls for such Class; (v) from amounts then on deposit in the related Distribution Account, to the Cross-collateralization Reserve Account relating to the other Class of Notes, the Reserve Payment Amount for such Class; 45 (vi) following the making by the Indenture Trustee of all allocations, transfers and disbursements described above, from amounts then on deposit in the related Distribution Account, the Indenture Trustee shall distribute to the Holders of the related Trust Certificates, the amount remaining on such Distribution Date, if any. Section 8.03. Claims against the Note Insurance Policy. (a) Within two (2) Business Days of receipt of each Servicer Remittance Report, the Indenture Trustee shall determine with respect to the immediately following Distribution Date, the amount to be on deposit in each Distribution Account on such Distribution Date as a result of the (i) Servicer's remittance of the Servicer Remittance Amount on the related Servicer Distribution Date, and (ii) any transfers to each Distribution Account made from the related Capitalized Interest Account and/or the related Pre-Funding Account relating to such Distribution Date pursuant to Section 8.01 hereof, excluding the amount of any Insured Payment and prior to the application of the amounts described in clauses (i) through (vi) of Section 8.02 hereof for the related Distribution Date. (b) If on any Distribution Date there is an Available Funds Shortfall for either Pool, the Indenture Trustee shall complete a Notice in the form of Exhibit A to the Note Insurance Policy and submit such notice to the Note Insurer no later than 12:00 noon New York City time on the second Business Day preceding such Distribution Date as a claim for an Insured Payment in an amount equal to such Available Funds Shortfall for such Pool. (c) The Indenture Trustee shall establish a separate Eligible Account for the benefit of Holders of the Notes and the Note Insurer referred to herein as the "Note Insurance Payment Account" over which the Indenture Trustee shall have exclusive control and sole right of withdrawal. The Indenture Trustee shall deposit upon receipt any amount paid under the Note Insurance Policy in the Note Insurance Payment Account and distribute such amount only for purposes of payment to the Noteholders of the related Pool of the Insured Distribution Amount for such Pool for which a claim was made and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Indenture Trustee or the Trust. Amounts paid under the Note Insurance Policy, to the extent needed to pay the Insured Distribution Amount shall be transferred to the related Distribution Account on the related Distribution Date and disbursed by the Indenture Trustee to the Noteholders in accordance with Section 8.02. It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Insured Distribution Amount with other funds available to make such payment. However, the amount of any payment of principal or of interest on the Notes to be paid from funds transferred from the Note Insurance Payment Account shall be noted as provided in subsection (d) of this Section 8.03 in the Note Register and in the Indenture Trustee's Remittance Report. Funds held in the Note Insurance Payment Account shall not be invested. Any funds remaining in the Note Insurance Payment Account on the first Business Day following a Distribution Date shall be returned to the Note Insurer pursuant to the written instructions of the Note Insurer by the end of such Business Day. (d) The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid in respect of any Note from moneys received under the Note Insurance Policy. The Note Insurer shall have the right to inspect such records at 46 reasonable times during normal business hours upon one (1) Business Day's prior notice to the Indenture Trustee. (e) In the event that the Indenture Trustee has received a certified copy of an order of the appropriate court that any Insured Payment has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Indenture Trustee shall so notify the Note Insurer, shall comply with the provisions of the Note Insurance Policy to obtain payment by the Note Insurer of such voided Insured Payment, and shall, at the time it provides notice to the Note Insurer, notify, by mail to the Noteholders of the affected Notes that, in the event any Noteholder's Insured Payment is so recovered, such Noteholder will be entitled to payment pursuant to the Note Insurance Policy, a copy of which shall be made available through the Indenture Trustee, the Note Insurer or the Note Insurer's fiscal agent, if any, and the Indenture Trustee shall furnish to the Note Insurer or its fiscal agent, if any, its records evidencing the payments which have been made by the Indenture Trustee and subsequently recovered from the Noteholders, and dates on which such payments were made. (f) The Indenture Trustee shall promptly notify the Note Insurer of any proceeding or the institution of any action, of which a Responsible Officer of the Indenture Trustee has actual knowledge, seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a "Preference Claim") of any distribution made with respect to the Notes. Each Noteholder, by its purchase of Notes, the Servicer and the Indenture Trustee agree that, the Note Insurer (so long as no Note Insurer Default exists) may at any time during the continuation of any proceeding relating to a Preference Claim direct all matters relating to such Preference Claim, including, without limitation, (i) the direction of any appeal of any order relating to such Preference Claim and (ii) the posting of any surety, supersedeas or performance bond pending any such appeal. In addition and without limitation of the foregoing, the Note Insurer shall be subrogated to, and each Noteholder, the Servicer and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the fullest extent permitted by law, the rights of the Servicer, the Indenture Trustee and each Noteholder in the conduct of any such Preference Claim, including, without limitation, all rights of any party to any adversary proceeding or action with respect to any court order issued in connection with any such Preference Claim. (g) The Indenture Trustee shall, upon retirement of the Notes, furnish to the Note Insurer a notice of such retirement, and, upon retirement of the Notes and the expiration of the term of the Note Insurance Policy, surrender the Note Insurance Policy to the Note Insurer for cancellation. (h) Unless a Note Insurer Default exists and is continuing, the Indenture Trustee and the Trust shall cooperate in all respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer's rights or interests hereunder without limiting the rights or affecting the interests of the Noteholders as otherwise set forth herein. (i) Each Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agree that, unless a Note Insurer Default exists and is continuing, the Note Insurer shall have the right to direct all matters relating to the Notes in any proceeding in a bankruptcy of the Trust, 47 including without limitation any proceeding relating to a Preference Amount and the posting of any surety or Note pending any such appeal. (j) Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest on the Notes which is made with moneys received pursuant to the terms of the Note Insurance Policy shall not be considered payment of the Notes from the Trust. The Trust and the Indenture Trustee acknowledge, and each Holder by its acceptance of a Note agrees, that without the need for any further action on the part of the Note Insurer, the Trust, the Indenture Trustee or the Note Registrar (x) to the extent the Note Insurer makes payments, directly or indirectly, on account of principal of or interest on the Notes to the Holders of such Notes, the Note Insurer will be fully subrogated to, and each Noteholder, the Trust and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust, including, without limitation, any amounts due to the Noteholders in respect of securities law violations arising from the offer and sale of the Notes, and (y) the Note Insurer shall be paid such amounts from the sources and in the manner provided herein for the payment of such amounts. Section 8.04. General Provisions Regarding the Distribution Accounts and Mortgage Loans. (a) Each Distribution Account shall relate solely to the Notes of the related Class and to the Mortgage Loans in the related Pool, Permitted Investments and other property securing the related Notes. Funds and other property in each Distribution Account shall not be commingled with the other Distribution Account or any other moneys or property of the Trust or any Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other property received or held by it as part of a Distribution Account in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other Persons (which may include the Trust or an Affiliate); provided, that such accounts are under the sole control of the Indenture Trustee and the Indenture Trustee maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to the related Distribution Account. (b) If any amounts are needed for payment from a Distribution Account and sufficient uninvested funds are not available therein to make such payment, the Indenture Trustee shall cause to be sold or otherwise converted to cash a sufficient amount of the investments in such Distribution Account. (c) The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its possession, or in the possession of an agent whose actions with respect to such items are under the sole control of the Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Distribution Accounts. The Indenture Trustee shall relinquish possession of such items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in the Distribution Accounts, against delivery of the amount receivable in connection with any sale. (d) The Indenture Trustee shall not invest any part of the Trust Estate in Permitted Investments that constitute uncertificated securities (as defined in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant jurisdiction) or in any other book-entry securities 48 unless it has received an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each type of security for which authority to invest is being sought, the procedures that must be followed to maintain the lien and security interest created by this Indenture with respect to the Trust Estate. Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or discovery by a Responsible Officer of the Indenture Trustee that any of the representations or warranties of the Unaffiliated Seller set forth in Section 3.03 of the Unaffiliated Seller's Agreement was materially incorrect or otherwise misleading with respect to any Mortgage Loan as of the time made, the Indenture Trustee shall direct the Unaffiliated Seller to either cure, repurchase or substitute for such Mortgage Loan as provided in Section 3.05 of the Unaffiliated Seller's Agreement. Upon any purchase of or substitution for a Deleted Mortgage Loan by the Unaffiliated Seller in accordance with Section 3.05 of the Unaffiliated Seller's Agreement, the Indenture Trustee shall cause the Collateral Agent to deliver the Indenture Trustee's Mortgage File relating to such Deleted Mortgage Loan to the Unaffiliated Seller, and the Trust, the Collateral Agent and the Indenture Trustee shall execute such instruments of transfer as are necessary to convey title to such Deleted Mortgage Loan to the Unaffiliated Seller from the lien of this Indenture. Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information. On each Distribution Date, the Indenture Trustee shall deliver the written reports required by Section 2.08(d) to Noteholders of record as of the related Record Date (including the Clearing Agency, if any). The Indenture Trustee shall make available at its Corporate Trust Office, during normal business hours, for review by any Noteholder or any person identified to the Indenture Trustee as a prospective Noteholder, originals or copies of the following items: (a) the Indenture and any amendments thereto, (b) all Indenture Trustee's Remittance Reports and other reports delivered since the Closing Date pursuant to Section 2.08(d) hereof, (c) any Officers' Certificates delivered to the Indenture Trustee since the Closing Date as described in the Indenture and (d) any Accountants' reports delivered to the Indenture Trustee since the Closing Date as required under the Sale and Servicing Agreement. Copies of any and all of the foregoing items will be available from the Indenture Trustee upon request; however, the Indenture Trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing such copies and shall not be required to provide such copies without reasonable assurances that such sum will be paid. Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at such time as there are no Notes Outstanding, release all of the Trust Estate to the Trust (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02 hereof). Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture Trustee may, without the consent of any Holder, enter into or consent to any amendment or supplement to the Sale and Servicing Agreement for the purpose of increasing the obligations or duties of any party other than the Indenture Trustee or the Holders of the Notes. The Indenture Trustee may, in its discretion, decline to enter into or consent to any such supplement or amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that the position of the Holders would not be materially adversely affected or written confirmation of satisfaction of 49 the Rating Agency Condition or (ii) if its own rights, duties or immunities would be adversely affected. Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement. As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to deliver to the Servicer the Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee and the Collateral Agent on or prior to the date such release is to be made of: (a) such Officer's Certificates, if any, as are required by the Sale and Servicing Agreement; and (b) a Request for Release, executed by the Servicer, providing that the Servicer will hold or retain the Indenture Trustee's Mortgage Files in trust for the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes. Section 8.10. Servicer as Agent. In order to facilitate the servicing of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been appointed by the Trust to retain, in accordance with the provisions of the Sale and Servicing Agreement and this Indenture, all Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into the related Distribution Account on or prior to the related Servicer Distribution Date. Section 8.11. Termination of Servicer. In the event of an event of the occurrence of a Servicer Event of Default specified in Section 7.01 of the Sale and Servicing Agreement, the Indenture Trustee may, with the consent of the Note Insurer or, with the prior written consent of the Note Insurer, the Holder of Notes representing not less than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, and shall, upon the direction of the Note Insurer (or as otherwise provided in the Sale and Servicing Agreement), terminate the Servicer as provided in Section 7.01 of the Sale and Servicing Agreement. If the Indenture Trustee terminates the Servicer, the Indenture Trustee shall, pursuant to Section 7.02 of the Sale and Servicing Agreement, assume the duties of the Servicer or appoint a successor Servicer acceptable to the Trust, the Note Insurer and the Rating Agencies and meeting the requirements set forth in the Sale and Servicing Agreement. Section 8.12. Opinion of Counsel. The Indenture Trustee shall be entitled to receive at least five (5) Business Days' notice of any action to be taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with releases of Mortgage Loans that were subject to a prepayment in full), accompanied by copies of any instruments involved, and the Indenture Trustee shall be entitled to receive an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action. 50 Section 8.13. Appointment of Collateral Agents. The Indenture Trustee may, at no additional cost to the Trust or to the Indenture Trustee, with the consent of the Note Insurer, appoint one or more Collateral Agents to hold all or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture Trustee. Such Collateral Agent shall meet the requirements of Article IX of the Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be governed by said Article IX. Chase Bank of Texas, N.A. is hereby appointed as the initial Collateral Agent hereunder. Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall have the right to exercise all rights of the Noteholders under this Indenture, without any further consent of the Noteholders, including, without limitation: (a) the right to require the Servicer to effect foreclosures upon Mortgage Loans upon failure of the Servicer to do so; (b) the right to require the Unaffiliated Seller to repurchase or substitute for Deleted Mortgage Loans pursuant to Section 8.05; (c) the right to direct the actions of the Indenture Trustee during the continuance of an Event of Default; and (d) the right to vote on proposed amendments to this Indenture. In addition, each Noteholder agrees that, unless a Note Insurer Default exists, the rights specifically set forth above may be exercised by the Noteholders only with the prior written consent of the Note Insurer. Except as otherwise provided in Section 8.03 hereof and notwithstanding any provision in this Indenture to the contrary, so long as a Note Insurer Default has occurred and is continuing, the Note Insurer shall have no rights to exercise any voting rights of the Noteholders hereunder, nor shall the Indenture Trustee be required to obtain the consent of, or act at the direction of, the Note Insurer. All notices, statements, reports, certificates or opinions required by this Indenture to be sent to any other party hereto or to the Noteholders shall also be sent to the Note Insurer. Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of the Noteholders and the Note Insurer, and all references in this Indenture and in the Notes to the benefit of Holders of the Notes shall be deemed to include the Note Insurer (provided there does not exist a Note Insurer Default). 51 ARTICLE IX SUPPLEMENTAL INDENTURES Section 9.01. Supplemental Indentures Without Consent of Noteholders. With the consent of the Note Insurer and without the consent of the Holders of any Notes, the Trust and the Indenture Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes: (a) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; (b) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of the issuance, authentication and delivery of any Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; (c) to evidence the succession of another Person to the Trust to the extent permitted herein, and the assumption by any such successor of the covenants of the Trust herein and in the Notes contained; (d) to add to the covenants of the Trust, for the benefit of the Holders of all Notes and the Note Insurer, or to surrender any right or power herein conferred upon the Trust; (e) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided that such action shall not adversely affect in any material respect the interests of the Holders of the Notes or the Holders of the Trust Certificates; provided, that the amendment shall not be deemed to adversely affect in any material respect the interests of the Holders of the Notes and the Note Insurer if the Person requesting the amendment obtains written confirmation of the satisfaction of the Rating Agency Condition; or (f) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA. Section 9.02. Supplemental Indentures With Consent of Noteholders. With the consent of the Note Insurer and with the consent of Holders of Notes representing not less than a majority of the Note Principal Balance of all Outstanding Notes of both Classes by Act of said Holders delivered to the Trust and the Indenture Trustee, the Trust and the Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; 52 provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby: (a) change any Distribution Date or the Final Stated Maturity Date of the Notes or, with respect to the Notes, reduce the Note Principal Balance thereof, the Note Rate thereon or the Redemption Price with respect thereto, change the earliest date on which any Note may be redeemed at the option of the Servicer, change any place of payment where, or the coin or currency in which, any Note or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Note on or after the Final Stated Maturity Date thereof or for the enforcement of the payment of the entire remaining unpaid principal amount of any Note on or after the Final Stated Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date); (b) reduce the percentage of the Note Principal Balance of the Outstanding Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences provided for in this Indenture; (c) modify any of the provisions of this Section 9.02 or Sections 5.13 or 5.17(b) hereof, except to increase any percentage specified therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby; (d) modify or alter the provisions of the proviso to the definition of the term "Outstanding"; (e) permit the creation of any lien other than the lien of this Indenture with respect to any part of the Trust Estate or terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security afforded by the lien of this Indenture; (f) modify any of the provisions of this Indenture in such manner as to affect the calculation of the Interest Distribution Amount or Principal Distribution Amount for any Distribution Date and any Class (including the calculation of any of the individual components of such amounts) or to affect rights of the Holders of the Notes to the benefits of any provisions for the mandatory redemption of Notes contained herein; or (g) incur any indebtedness, other than the Notes, that would cause the Trust or the Trust Estate to be treated as a "taxable mortgage pool" within the meaning of Code Section 7701(i). The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder. The Indenture Trustee shall not be liable for any such determination made in good faith. 53 It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Promptly after the execution by the Trust and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Notes to which such supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and (subject to Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties or immunities under this Indenture or otherwise. The Servicer, on behalf of the Trust, shall cause executed copies of any supplemental indentures to be delivered to the Note Insurer and the Rating Agencies. Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes to which such supplemental indenture relates that have theretofore been or thereafter are authenticated and delivered hereunder shall be bound thereby. Section 9.05. Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA. Section 9.06. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Owner Trustee, acting at the direction of the Majority Certificateholders, shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Owner Trustee, acting at the direction of the Majority Certificateholders, to any such supplemental indenture may be prepared by the Servicer and executed by the Owner Trustee, acting at the direction of the Majority Certificateholders, on behalf of the Trust, and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. Section 9.07. Amendments to Governing Documents. The Indenture Trustee shall, upon a Trust Request, consent to any proposed amendment to the Trust's governing documents, or an amendment to or waiver of any provision of any other document relating to the 54 Trust's governing documents, such consent to be given without the necessity of obtaining the consent of the Holders of any Notes upon receipt by the Indenture Trustee of: (a) an Officer's Certificate, to which such proposed amendment or waiver shall be attached, stating that such attached copy is a true copy of the proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; and (b) written confirmation of the satisfaction of the Rating Agency Condition with respect to such proposed amendment. Notwithstanding the foregoing, the Indenture Trustee may decline to consent to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise. Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the proposed amendment or waiver. ARTICLE X REDEMPTION OF NOTES Section 10.01. Redemption. (a) At the option of the Servicer, and at its sole cost and expense, (x) this Indenture may be terminated and all the Notes may be redeemed in whole, but not in part, on any Redemption Date after the Clean-Up Call Date by purchase of all of the outstanding Mortgage Loans and REO Properties at a price equal the Termination Price or (y) the Class A-1 Notes or the Class A-2 Notes may be redeemed in whole, but not in part, on any Redemption Date after the related Note Clean-Up Call Date at the applicable Note Termination Price. (b) Any such purchase or redemption shall be accomplished by deposit into the related Distribution Account or Accounts of the applicable Redemption Price on the Servicer Distribution Date preceding the Redemption Date. The amounts on deposit therein shall be distributed by the Indenture Trustee on such Redemption Date in accordance with the priority set forth in Section 8.02 hereof. No termination or redemption is permitted without the prior written consent of the Note Insurer if it would result in a draw on the Note Insurance Policy. (c) Notice of the election to redeem any Notes pursuant to subsection (a) of this Section 10.01 shall be furnished to the Indenture Trustee not later than thirty (30) days prior to the Distribution Date selected for such redemption. Upon receiving such notice, the Indenture Trustee shall notify each Holder of such Notes and Note Insurer of such election pursuant to Section 10.02 hereof. Any expenses associated with the compliance of the provisions hereof in connection with a redemption of the Notes shall be paid by the Servicer. 55 (d) Upon the redemption of all of the Notes, the Mortgage Loans in the Trust Estate shall be released and delivered to the Servicer. In the case of a redemption of the Class A-2 Notes only, the Mortgage Loans in Pool II will not be released from the lien of the Indenture until such time as the Class A-1 Notes are either redeemed or terminated. In such case, the Pool II Mortgage Loans will continue to be pledged to the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, to secure the obligations of the Trust with respect to the Class A-1 Notes. In the case of a redemption of the Class A-1 Notes only, the Mortgage Loans in Pool I will not be released from the lien of the Indenture until such time as the Class A-2 Notes are either redeemed or terminated. In such case, the Pool I Mortgage Loans will continue to be pledged to the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, to secure the obligations of the Trust with respect to the Class A-2 Notes. (e) Upon receipt of the notice from the Servicer of its election to redeem any Notes pursuant to Section 10.01(a) hereof, the Indenture Trustee shall prepare and deliver to the Trust, the Servicer and the Note Insurer, no later than the related Redemption Date, an Indenture Trustee's Remittance Report stating therein that it has determined that the conditions to redemption at the option of the Servicer have been satisfied and setting forth the amount, if any, to be withdrawn from each Distribution Account and paid to the Servicer as reimbursement for Nonrecoverable Advances in respect of the related Mortgage Loans and such other information as may be required to accomplish such redemption. Section 10.02. Form of Redemption Notice. Notice of redemption shall be given by the Indenture Trustee in the name of and at the expense of the Trust by first class mail, postage prepaid, mailed not less than ten days prior to the Redemption Date to each Holder of Notes to be redeemed, such Holders being determined as of the Record Date for such Distribution Date, and to the Note Insurer. All notices of redemption shall state: (a) the Redemption Date; (b) the Redemption Price at which the Notes of such Class will be redeemed; and (c) the fact of payment in full on such Notes, the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Trust to be maintained as provided in Section 3.02 hereof), and that no interest shall accrue on such Note for any period after the date fixed for redemption. Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for redemption shall not impair or affect the validity of the redemption of any other Note. Section 10.03. Notes Payable on Optional Redemption. Notice of redemption having been given as provided in Section 10.02 hereof, the Notes to be redeemed shall, on the applicable Redemption Date, become due and payable at the Redemption Price and (unless the Trust shall default in the payment of the Redemption Price) no interest shall accrue on such Redemption Price for any period after such Redemption Date; provided, however, that if such 56 Redemption Price is not paid on the Redemption Date, the Note Principal Balance shall, until paid, bear interest from the Redemption Date at the applicable Note Rate. ARTICLE XI MISCELLANEOUS Section 11.01. Compliance Certificates and Opinions. (a) Upon any application or request by any Person to the Indenture Trustee to take any action under any provision of this Indenture, such Person shall furnish to the Indenture Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel, if requested by the Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. (b) Every certificate, opinion or letter with respect to compliance with a condition or covenant provided for in this Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request (other than certificates provided pursuant to TIA Section 314(a)(4)) shall include and shall be deemed to include (regardless of whether specifically stated therein) the following: (i) a statement that each individual signing such certificate, opinion or letter has read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based; (iii) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 11.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of the Trust may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer 57 knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other counsel's opinion and shall include a statement to the effect that such counsel believes that such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Wherever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Trust shall deliver any document as a condition of the granting of such application, or as evidence of the Trust's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Trust to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(ii) hereof. Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the request or direction of the Trust, then, notwithstanding that the satisfaction of such condition is a condition precedent to the Trust's right to make such request or direction, the Indenture Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.01(d) hereof. Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Trust. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Trust, if made in the manner provided in this Section 11.03. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution 58 thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership of Notes shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Trust in reliance thereon, whether or not notation of such action is made upon such Notes. Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Trust. Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (a) the Indenture Trustee by any Noteholder or by the Trust shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and received by the Indenture Trustee at its Corporate Trust Office; or (b) the Trust by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder (except as provided in Section 5.01(c) and (d)) hereof if in writing and mailed, first-class postage prepaid, to the Trust addressed to it at ABFS Mortgage Loan Trust 1999-1, in care of First Union Trust Company, National Association, One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware, 19801, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Trust. (c) the Note Insurer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to Financial Security Assurance Inc. addressed to it at 350 Park Avenue, New York, New York, 10022, Attention: Surveillance Department (in each case in which notice or other communication to the Note Insurer refers to an Event of Default, a claim on the Note Insurance Policy or with respect to which failure on the part of the Note Insurer to respond shall be deemed to constitute consent or acceptance, then a copy of such notice or other communication should also be sent to the attention of each of the General Counsel and the Head--Financial Guaranty Group and shall be marked to indicate "URGENT MATERIAL ENCLOSED"), or at any other address previously furnished in writing to the Indenture Trustee by the Note Insurer; or (d) the Depositor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Prudential Securities Secured Financing Corporation c/o Prudential Securities Incorporated, One New York Plaza, New York, New York 10292; Attention: Managing Director - Asset-Backed Finance Group, or at any other address previously furnished in writing to the Indenture Trustee by the Depositor; or 59 (e) the Unaffiliated Seller or the Servicer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to such party, in care of American Business Financial Services, Inc., BalaPointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania, 19004, Attention: General Counsel or at any other address previously furnished in writing to the Indenture Trustee by the Unaffiliated Seller or the Servicer; or (f) the Underwriter by any party or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to Prudential Securities Incorporated, One New York Plaza, New York, New York 10292, Attention: Managing Director - Asset-Backed Finance, or at any other address previously furnished in writing to the Indenture Trustee by the Underwriter. Notices required to be given to the Rating Agencies by the Trust or the Indenture Trustee shall be in writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of Moody's, at the following address: Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10007 and (ii) in the case of S&P, at the following address: Standard & Poor's Ratings Services, 26 Broadway, 15th Floor, New York, New York, 10004, Attention: Asset-Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designed by written notice to the other parties. Section 11.05. Notices and Reports to Noteholders; Waiver of Notices. Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed, first-class postage prepaid, to each Noteholder affected by such event or to whom such report is required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such report. In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any notice or report that is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice. 60 Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may make reasonable rules for any meeting of Noteholders. Section 11.07. Conflict With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control. Section 11.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 11.09. Successors and Assigns. All covenants and agreements in this Indenture by the Trust shall bind its successors and assigns, whether so expressed or not. Section 11.10. Separability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any separate trustee or co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 11.12. Legal Holidays. In any case where the date of any Distribution Date, Redemption Date or any other date on which principal of or interest on any Note is proposed to be paid shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Distribution Date, Redemption Date or other date for the payment of principal of or interest on any Note and no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day. Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN. Section 11.14. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 61 Section 11.15. Recording of Indenture. This Indenture is subject to recording in any appropriate public recording offices, such recording to be effected by the Servicer, on behalf of the Trust, and at its expense in compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or 3.06 hereof. Section 11.16. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Trust hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement. Section 11.17. No Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Unaffiliated Seller or the Trust, or join in any institution against the Unaffiliated Seller or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents. In addition, the Indenture Trustee will on behalf of the Holders of the Notes, (a) file a written objection to any motion or other proceeding seeking the substantive consolidation of any Originator with the Unaffiliated Seller or the Trust, (b) file an appropriate memorandum of points and authorities or other brief in support of such objection, or (c) endeavor to establish at the hearing on such objection that the substantive consolidation of such entity would be materially prejudicial to the Noteholders. This Section 11.17 will survive for one year and one day following the termination of this Indenture. Section 11.18. Inspection. The Trust agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee and the Note Insurer, during the Trust's normal business hours, to examine all of books of account, records, reports and other papers of the Trust, to make copies and extracts therefrom, to cause such books to be audited by Independent Accountants selected by the Indenture Trustee or the Note Insurer, as the case may be, and to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by this provision the Trust hereby authorizes its Accountants to discuss with such representatives such affairs, finances and accounts), all at such reasonable times and as 62 often as may be reasonably requested. Any expense incident to the exercise by the Indenture Trustee of any right under this Section 11.18 shall be borne by the Trust. Section 11.19. Usury. The amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to an amount that shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New York (whichever shall permit the higher rate), that could lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In the event any payment of interest on any Note exceeds the Highest Lawful Rate, the Trust stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of both the Indenture Trustee, acting on behalf of the Holder of such Note, and the Trust, and the Holder receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the Trust or the Indenture Trustee, refund the amount of such excess or, at the option of the Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee for the benefit of Holders of Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Notes. Section 11.20. Note Insurer Default. Any right conferred to the Note Insurer shall be suspended during any period in which a Note Insurer Default exists. At such time as the Notes are no longer Outstanding under this Indenture, and no amounts owed to the Note Insurer under the Basic Documents remain unpaid, the Note Insurer's rights under this Indenture shall terminate. Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as a third- party beneficiary of this Indenture which shall be binding upon and inure to the benefit of the Note Insurer; provided, that, notwithstanding the foregoing, for so long as a Note Insurer Default is continuing with respect to its obligations under the Note Insurance Policy, the Noteholders shall succeed to the Note Insurer's rights hereunder. Without limiting the generality of the foregoing, all covenants and agreements in this Indenture that expressly confer rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such covenants to the same extent as if it were a party to this Indenture. [Remainder of Page Intentionally Left Blank] 63 IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, all as of the day and year first above written. ABFS MORTGAGE LOAN TRUST 1999-1 By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement By: ____________________________________ Name: Title: THE BANK OF NEW YORK, as Indenture Trustee By: ____________________________________ Name: Title: [Signature Page to Indenture] +++ EXECUTED COPY INDENTURE dated as of March 1, 1999 by and between ABFS MORTGAGE LOAN TRUST 1999-1, as Issuer and THE BANK OF NEW YORK, as Indenture Trustee TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS ...................................................... 2 Section 1.01. General Definitions ................................. 2 ARTICLE II THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS .................. 2 Section 2.01. Forms Generally ..................................... 2 Section 2.02. Form of Certificate of Authentication ............... 2 Section 2.03. General Provisions With Respect to Principal and Interest Payment ............................. 3 Section 2.04. Denominations ....................................... 3 Section 2.05. Execution, Authentication, Delivery and Dating ...... 3 Section 2.06. Registration, Registration of Transfer and Exchange ......................................... 4 Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes .......... 5 Section 2.08. Payments of Principal and Interest .................. 5 Section 2.09. Persons Deemed Owner ................................ 7 Section 2.10. Cancellation ........................................ 8 Section 2.11. Authentication and Delivery of Notes ................ 8 Section 2.12. Book-Entry Note ..................................... 9 Section 2.13. Termination of Book Entry System .................... 10 Section 2.14. Pledge of Subsequent Mortgage Loans ................. 11 ARTICLE III COVENANTS ...................................................... 13 Section 3.01. Payment of Notes .................................... 13 Section 3.02. Maintenance of Office or Agency ..................... 13 Section 3.03. Money for Note Payments to Be Held In Trust ......... 13 Section 3.04. Existence of Trust .................................. 15 Section 3.05. Protection of Trust Estate .......................... 16 Section 3.06. Opinions as to the Trust Estate ..................... 16 Section 3.07. Performance of Obligations .......................... 17 Section 3.08. Investment Company Act .............................. 17 Section 3.09. Negative Covenants .................................. 17 Section 3.10. Annual Statement as to Compliance ................... 18 Section 3.11. Restricted Payments ................................. 18 Section 3.12. Treatment of Notes as Debt for Tax Purposes ......... 19 Section 3.13. Notice of Events of Default ......................... 19 Section 3.14. Further Instruments and Acts ........................ 19 ARTICLE IV SATISFACTION AND DISCHARGE ...................................... 19 Section 4.01. Satisfaction and Discharge of Indenture ............. 19 Section 4.02. Application of Trust Money .......................... 20 ARTICLE V DEFAULTS AND REMEDIES ............................................ 21 Section 5.01. Event of Default .................................... 21 Section 5.02. Acceleration of Maturity; Rescission and Annulment ........................................ 22 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee ................. 23 Section 5.04. Remedies ............................................ 23 Section 5.05. Indenture Trustee May File Proofs of Claim .......... 23 Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes .............................. 24 Section 5.07. Application of Money Collected ...................... 24 Section 5.08. Limitation on Suits ................................. 25 Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest ........................... 26 Section 5.10. Restoration of Rights and Remedies .................. 26 Section 5.11. Rights and Remedies Cumulative ...................... 27 Section 5.12. Delay or Omission Not Waiver ........................ 27 Section 5.13. Control by Noteholders .............................. 27 Section 5.14. Waiver of Past Defaults ............................. 27 Section 5.15. Undertaking for Costs ............................... 28 Section 5.16. Waiver of Stay or Extension Laws .................... 28 Section 5.17. Sale of Trust Estate ................................ 28 Section 5.18. Action on Notes ..................................... 30 Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust .............................. 30 Section 5.20. Application of the Trust Indenture Act .............. 30 Section 5.21. Note Insurer Default ................................ 30 ARTICLE VI THE INDENTURE TRUSTEE ........................................... 31 Section 6.01. Duties of Indenture Trustee ......................... 31 Section 6.02. Notice of Default ................................... 32 Section 6.03. Rights of Indenture Trustee ......................... 33 Section 6.04. Not Responsible for Recitals or Issuance of Notes ............................................ 34 Section 6.05. May Hold Notes ...................................... 34 Section 6.06. Money Held in Trust ................................. 34 Section 6.07. Eligibility, Disqualification ....................... 34 Section 6.08. Indenture Trustee's Capital and Surplus ............. 34 Section 6.09. Resignation and Removal; Appointment of Successor ........................................ 34 Section 6.10. Acceptance of Appointment by Successor Indenture Trustee ................................ 36 Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee ................. 36 Section 6.12. Preferential Collection of Claims Against Trust ............................................ 37 Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees ......................................... 37 Section 6.14. Authenticating Agents ............................... 38 Section 6.15. Review of Mortgage Files ............................ 39 Section 6.16. Indenture Trustee Fees and Expenses ................. 40 ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS ................................. 40 Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders ............... 40 Section 7.02. Preservation of Information; Communications to Noteholders ................................... 41 Section 7.03. Reports by Indenture Trustee ........................ 41 Section 7.04. Reports by Trust .................................... 41 ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES ............................................................ 42 Section 8.01. Accounts; Investment; Collection of Moneys .......... 42 Section 8.02. Distributions; Statements ........................... 45 Section 8.03. Claims against the Note Insurance Policy ............ 46 Section 8.04. General Provisions Regarding the Distribution Accounts and Mortgage Loans ...................... 48 Section 8.05. Releases of Deleted Mortgage Loans .................. 49 Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information .................... 49 Section 8.07. Release of Trust Estate ............................. 49 Section 8.08. Amendment to Sale and Servicing Agreement ........... 49 Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement .......................... 50 Section 8.10. Servicer as Agent ................................... 50 Section 8.11. Termination of Servicer ............................. 50 Section 8.12. Opinion of Counsel .................................. 50 Section 8.13. Appointment of Collateral Agents .................... 51 Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders ................................... 51 Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer ................................. 51 ARTICLE IX SUPPLEMENTAL INDENTURES ......................................... 52 Section 9.01. Supplemental Indentures Without Consent of Noteholders ...................................... 52 Section 9.02. Supplemental Indentures With Consent of Noteholders ...................................... 52 Section 9.03. Execution of Supplemental Indentures ................ 54 Section 9.04. Effect of Supplemental Indentures ................... 54 Section 9.05. Conformity With Trust Indenture Act ................. 54 Section 9.06. Reference in Notes to Supplemental Indentures ....... 54 Section 9.07. Amendments to Governing Documents ................... 54 ARTICLE X REDEMPTION OF NOTES .............................................. 55 Section 10.01. Redemption .......................................... 55 Section 10.02. Form of Redemption Notice ........................... 56 Section 10.03. Notes Payable on Optional Redemption ................ 56 ARTICLE XI MISCELLANEOUS ................................................... 57 Section 11.01. Compliance Certificates and Opinions ................ 57 Section 11.02. Form of Documents Delivered to Indenture Trustee .......................................... 57 Section 11.03. Acts of Noteholders ................................. 58 Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Trust ................................ 59 Section 11.05. Notices and Reports to Noteholders; Waiver of Notices .......................................... 60 Section 11.06. Rules by Indenture Trustee .......................... 61 Section 11.07. Conflict With Trust Indenture Act ................... 61 Section 11.08. Effect of Headings and Table of Contents ............ 61 Section 11.09. Successors and Assigns .............................. 61 Section 11.10. Separability ........................................ 61 Section 11.11. Benefits of Indenture ............................... 61 Section 11.12. Legal Holidays ...................................... 61 Section 11.13. Governing Law ....................................... 61 Section 11.14. Counterparts ........................................ 61 Section 11.15. Recording of Indenture .............................. 62 Section 11.16. Trust Obligation .................................... 62 Section 11.17. No Petition ......................................... 62 Section 11.18. Inspection .......................................... 62 Section 11.19. Usury ............................................... 63 Section 11.20. Note Insurer Default ................................ 63 Section 11.21. Third-Party Beneficiary ............................. 63 APPENDICES, SCHEDULES AND EXHIBITS Appendix I Defined Terms Schedule l Mortgage Loan Schedule Exhibit A Form of Note Exhibit B Form of Subsequent Pledge Agreement Exhibit C Form of Note Insurer Consent for Subsequent Mortgage Loans CROSS-REFERENCE TABLE Cross-reference sheet showing the location in the Indenture of the provisions inserted pursuant to Sections 310 through 318(a) inclusive of the Trust Indenture Act of 1939.* Trust Indenture Act of 1939 Indenture Section - --------------------------- ----------------- Section 310 (a)(1)................................. 6.07 (a)(2)................................. 6.07, 6.08 (a)(3)................................. 6.13 (a)(4)................................. Not Applicable (a)(5)................................. 6.07 (b).................................... 6.07, 6.09 (c).................................... Not Applicable Section 311 (a).................................... 6.12 (b).................................... 6.12 (c).................................... Not Applicable Section 312 (a).................................... 7.01(a), 7.02(a) (b).................................... 7.02(b) (c).................................... 7.02(c) Section 313 (a).................................... 7.03(a) (b).................................... 7.03(a) (c).................................... 11.05 (d).................................... 7.03(b) Section 314 (a)(1)................................. 7.04 (a)(2)................................. 7.04 (a)(3)................................. 7.04 (a)(4)................................. 7.04 (b)(1)................................. 2.11(c), 11.01 (b)(2)................................. 3.06 (c)(1)................................. 2.11(d), 4.01, 8.02(d), 11.01 (c)(2)................................. 2.11(c), 4.01, 8.02(d), 11.01 (c)(3)................................. 8.02(d) (d)(1)................................. 11.01(a) (d)(2)................................. 11.01(a) (d)(3)................................. 11.01(a) (e).................................... 11.01(b) - ---------- * This Cross-Reference Table is not part of the Indenture. Section 315 (a).................................... 6.01(b), 6.01(c)(1) (b).................................... 6.02, 11.05 (c).................................... 6.01(a) (d)(1)................................. 6.01(b), 6.01(c) (d)(2)................................. 6.01(c)(2) (d)(3)................................. 6.01(c)(3) (e).................................... 5.15 Section 316 (a).................................... 5.20 (b).................................... 5.09 (c).................................... 5.20 Section 317 (a)(1)................................. 5.03 (a)(2)................................. 5.05 (b).................................... 3.01 Section 318 (a).................................... 11.07 SCHEDULE I MORTGAGE LOAN SCHEDULE EXHIBIT A FORM OF NOTE ABFS MORTGAGE LOAN TRUST 1999-1 CLASS A-[1][2] NOTE UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. ------------------------------------------- Note No.: CUSIP No.: A-[1][2]- Class A-1 Original Note Principal Balance: Percentage Interest: $__________ 100% Date of Indenture: First Distribution Date: As of March 1, 1999 April 26, 1999 ------------------------------------------ A-1 ABFS MORTGAGE LOAN TRUST 1999-1 MORTGAGE BACKED NOTES, SERIES 1999-1, CLASS A-[1][2] ABFS Mortgage Loan Trust 1999-1, a business trust organized and existing under the laws of the State of Delaware (herein referred to as the "Trust"), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $__________ (_________________________ Thousand Dollars) payable on each Distribution Date in an amount equal to the result obtained by multiplying (x) the Percentage Interest of this Note set forth on the cover page hereof, by (y) the aggregate amount, if any, payable from the related Distribution Account in respect of principal on the Class A-[1][2] Notes, pursuant to the Indenture, dated as of March 1, 1999, between the Trust and The Bank of New York, a New York banking corporation, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of (i) the Distribution Date occurring in May 2030 (this Note's "Final Stated Maturity Date"), (ii) the Redemption Date, if any, applicable to this Notes pursuant to Article X of the Indenture or (iii) the date on which an Event of Default shall have occurred and be continuing, if the Notes have been declared to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. Capitalized terms used but not defined herein are defined in Appendix I to the Indenture. Pursuant to the terms of the Indenture, payments will be made on the 25th day of each month or, if such day is not a Business Day, on the Business Day immediately following such 25th day (each a "Distribution Date"), commencing on the first Distribution Date specified on the cover page hereof, to the Person in whose name this Note is registered at the close of business on the applicable Record Date, in an amount equal to the product of (a) the Percentage Interest evidenced by this Note and (b) the sum of the amounts to be paid on the Class A-[1][2] Notes with respect to such Distribution Date, all as more specifically set forth in the Indenture. Notwithstanding the foregoing, in the case of Definitive Notes, upon written request at least five (5) days prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Principal Balance of at least $1,000,000), any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States of America designated by such Holder reasonably satisfactory to the Indenture Trustee. On each Distribution Date, Noteholders will be entitled to receive interest payments in an aggregate amount equal to the Current Interest for such Class for such Distribution Date, together with principal payments in an aggregate amount equal to the Principal Distribution Amount for such Class for such Distribution Date, plus, until the Over-collateralization Amount for the related Pool and such Distribution Date is equal to the Specified Over-collateralization Amount for such Pool and such Distribution Date, the Net Monthly Excess Cashflow, if any, for such Pool and such Distribution Date. The "Note Principal Balance" of a Note as of any date of determination is equal to the initial Note Principal Balance thereof as of the Closing Date, reduced by the aggregate of all amounts previously paid with respect to such Note on account of principal. A-2 The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Trust with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. This Note is one of a duly authorized issue of Notes of the Trust, designated as the "ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class A-[1][2]," issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Trust, the Indenture Trustee and the Holders of the Notes. Also issued under the Indenture are the "ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class A[1][2]." To the extent that any provision of this Note contradicts or is inconsistent with the provisions of the Indenture, the provisions of the Indenture shall control and supersede such contradictory or inconsistent provision herein. The Notes are subject to all terms of the Indenture. The Class A-[1][2] Notes are and will be equally and ratably secured by the Mortgage Loans in the Pool [I][II], the other collateral related thereto pledged as security therefor as provided in the Indenture, and, to the extent provided in the Indenture, by the Mortgage Loans in Pool [I][II]. As described above, the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of the Final Stated Maturity Date and any Redemption Date applicable to such Class, pursuant to Article X of the Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal Balance of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing if the Indenture Trustee, at the direction or upon the prior written consent of Financial Security Assurance Inc. (the "Note Insurer") in the absence of a Note Insurer Default, or the Holders of the Notes representing not less than 50% of the Note Principal Balance of the Outstanding Notes (with the prior written consent of the Note Insurer in the absence of a Note Insurer Default) of both Classes, shall have declared the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto. The Note Insurer, in consideration of the payment of the premium and subject to the terms of the Note Guaranty Insurance Policy (the "Note Insurance Policy") thereby has unconditionally and irrevocably guaranteed the payment of the Insured Payments. Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note Insurer shall be deemed to be the holder of the Notes for certain purposes specified in the Indenture and will be entitled to exercise all rights of the Noteholders thereunder, including the rights of Noteholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of such Noteholders, and (ii) the Indenture Trustee may take actions which would otherwise be at its option or within its discretion, including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction of the Note Insurer. In addition, on each Distribution Date, after the Noteholders have been paid all A-3 amounts to which they are entitled, the Note Insurer will be entitled to be reimbursed for any unreimbursed Insured Payments, unreimbursed Premium Amounts (each with interest thereon at the "Late Payment Rate" specified in the Insurance Agreement) and any other amounts owed under the Note Insurance Policy. The Trust shall not be liable upon the indebtedness evidenced by the Notes except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Notes. The assets included in the Trust Estate and payments under the Note Insurance Policy will be sole source of payments on the Notes, and each Holder hereof, by its acceptance of this Note, agrees that (i) such Note will be limited in right of payment to amounts available from the Trust Estate and the Note Insurance Policy as provided in the Indenture and (ii) such Holder shall have no recourse to the Trust, the Owner Trustee, the Indenture Trustee, the Depositor, the Seller, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Trust pledged to secure the Notes pursuant to the Indenture. Payments of interest on this Note due and payable on each Distribution Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Notwithstanding the foregoing, in the case of Definitive Notes, upon written request at least five days prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Principal Balance of at least $1,000,000), any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States of America designated by such Holder reasonably satisfactory to the Indenture Trustee. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Distribution Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Distribution Date, then the Indenture Trustee, in the name of and on behalf of the Trust, will notify the Person who was the Holder hereof as of the Record Date preceding such Distribution Date by notice mailed or transmitted by facsimile prior to such Distribution Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes. As provided in the Indenture, the Indenture may be terminated and the Notes redeemed in whole, but not in part, at the option of the Servicer, on any Distribution Date on and after the date on which the Aggregate Principal Balance of all of the Mortgage Loans is less than 10% of the Maximum Collateral Amount for Pool I and Pool II. As provided in the Indenture, A-4 either Class of Notes may be redeemed in whole, but not in part, at the option of the Servicer, on any Distribution Date on and after the date on which the unpaid Note Principal Balance of such Class of Notes is less than or equal to 10% of the Original Note Principal Balance for such Class of Notes. As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Trust pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange. In the case of a transfer of a Class A-[1][2] Note, the Note Registrar shall not register the transfer of this Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not, and is not acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or arrangement that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the acquisition and holding of this Note by the transferee qualifies for exemptive relief under a Department of Labor Prohibited Transaction Class Exemption. Each Beneficial Owner, by acceptance of a beneficial interest herein, shall be deemed to make one of the foregoing representations. Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits A-5 of the Indenture that such Noteholder or Beneficial Owner will not at any time institute against American Business Financial Services, Inc. or the Trust, or join in any institution against American Business Financial Services, Inc. or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, the Trust Agreement, the Unaffiliated Seller's Agreement, the Sale and Servicing Agreement, the Insurance Agreement and the Indemnification Agreement (the "Basic Documents"). The Trust has entered into the Indenture and this Note is issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Trust secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business and franchise tax purposes as indebtedness of the Trust. Prior to the due presentment for registration of transfer of this Note, the Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Trust, the Indenture Trustee or any such agent shall be affected by notice to the contrary. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Trust and the rights of the Holders of the Notes under the Indenture at any time by the Trust with the consent of the Note Insurer and the Holders of Notes representing a majority of the Note Principal Balance of all Outstanding Notes. The Indenture also contains provisions permitting the (i) Note Insurer or (ii) if a Note Insurer Default exists, the Holders of Notes representing specified percentages of the Note Principal Balance of Outstanding Notes, on behalf of the Holders of all the Notes, to waive compliance by the Trust with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Note Insurer or by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the amendment thereof, in certain limited circumstances, or the waiver of certain terms and conditions set forth in the Indenture, without the consent of Holders of the Notes issued thereunder. The term "Trust" as used in this Note includes any successor to the Trust under the Indenture. Initially, each Class of Notes will be represented by one Note registered in the name of Cede & Co. as nominees of the Clearing Agency. The Notes will be delivered in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Notes are exchangeable for a like aggregate initial Note Principal Balance of Notes of different authorized denominations, as requested by the Holder surrendering the same. A-6 THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Unless the certificate of authentication hereon has been executed by the Authenticating Agent whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to herein, or be valid or obligatory for any purpose. A-7 IN WITNESS WHEREOF, the Trust has caused this Instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Dated: ABFS MORTGAGE LOAN TRUST 1999-1 By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement By: __________________________________ Authorized Signatory CERTIFICATE OF AUTHENTICATION This is one of the Class A-[1][2] Notes designated above and referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, as Authenticating Agent By: __________________________________ Authorized Signatory A-8 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: - -------------------------------------------------------------------------------- (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints _______________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: _______________________________*/ Signature Guaranteed: ______________________________________*/ */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-9 EXHIBIT B FORM OF SUBSEQUENT PLEDGE AGREEMENT This SUBSEQUENT PLEDGE AGREEMENT, dated as of __________, 1999 (the "Subsequent Transfer Date"), is entered into by and between ABFS MORTGAGE LOAN TRUST 1999-1, as issuer (the "Trust"), and THE BANK OF NEW YORK, as indenture trustee (the "Indenture Trustee"). W I T N E S S E T H: Reference is hereby made to that certain Indenture, dated as of March 1, 1999 (the "Indenture"), by and between the Trust and the Indenture Trustee. Pursuant to the Indenture, the Trust agreed to pledge, and the Indenture Trustee agreed to accept, from time to time, a security interest in Subsequent Mortgage Loans (as defined below). The Indenture provides that each such pledge of Subsequent Mortgage Loans be evidenced by the execution and delivery of a Subsequent Pledge Agreement such as this Subsequent Pledge Agreement. The assets pledged to the Indenture Trustee pursuant to this Subsequent Pledge Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool II listed in the Mortgage Loan Schedule attached hereto (including property that secures a Subsequent Mortgage Loan that becomes an REO Property), including the related Mortgage Files delivered or to be delivered to the Collateral Agent, on behalf of the Indenture Trustee, including all payments of principal received, collected or otherwise recovered after the Subsequent Cut-Off Date for each Subsequent Mortgage Loan, all payments of interest accruing on each Subsequent Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and all other proceeds received in respect of such Subsequent Mortgage Loans, (b) the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all insurance proceeds and condemnation awards. The "Subsequent Mortgage Loans" are those listed on the Schedule of Mortgage Loans attached hereto. The Aggregate Principal Balance of such subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in Pool I and $_________ in Pool II. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. For the purposes of this Subsequent Pledge Agreement, capitalized terms used herein but not otherwise defined shall have the respective meanings assigned to such terms in Appendix I to the Indenture. Section 2. Pledge. In consideration of $__________ (such amount being approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans) from the Indenture Trustee, the Trust hereby pledges to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, without recourse, all of the Trust's right, title and interest B-1 in, to, and under the Subsequent Mortgage Loans and related assets described above, whether now existing or hereafter arising. In connection with such pledge, the Originators and the Unaffiliated Seller shall satisfy the document delivery requirements set forth in Section 2.05 of the Sale and Servicing Agreement with respect to each Subsequent Mortgage Loan. In connection with such pledge, the Servicer shall make a Special Advance of $________ as set forth in Section 5.18(b) of the Sale and Servicing Agreement. Section 3. Representations and Warranties Concerning the Subsequent Mortgage Loans. With respect to each Subsequent Mortgage Loan, the Trust hereby assigns each of the representations and warranties made by the Originators and the Unaffiliated Seller in Section 3 of the Subsequent Transfer Agreement, for the benefit of the Indenture Trustee, the Note Insurer and the Noteholders, on which the Indenture Trustee relies in accepting the pledge of the Subsequent Mortgage Loans and the Note Insurer relies in connection with the Note Insurance Policy. Such representations and warranties speak as of the Subsequent Transfer Date unless otherwise indicated, and shall survive each pledge, assignment, transfer and conveyance of the respective Subsequent Mortgage Loans to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any Noteholder of a breach of any of the representations and warranties made by the Originators and the Unaffiliated Seller pursuant to Section 3.03 of the Unaffiliated Seller's Agreement or Section 3 of any Subsequent Transfer Agreement, the party discovering such breach shall give prompt written notice to such other Person; provided, that the Indenture Trustee shall have no duty to inquire or to investigate the breach of any such representations and warranties. The Originators and the Unaffiliated Seller will be obligated to repurchase a Subsequent Mortgage Loan which breaches a representation or warranty in accordance with the provisions of Section 4.02 of the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g) of the Unaffiliated Seller's Agreement. Such repurchase and indemnification obligation of the Originators and the Unaffiliated Seller shall constitute the sole remedy against the Originators and the Unaffiliated Seller, and the Trust for such breach available to the Servicer, the Trust, the Indenture Trustee, the Note Insurer and the Noteholders. Section 5. Amendment. This Subsequent Pledge Agreement may be amended from time to time by the Trust and the Indenture Trustee only with the prior written consent of the Note Insurer (or, in the event of a Note Insurer Default, the Majority Holders). Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT PLEDGE AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT PLEDGE B-2 AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM THEREIN. Section 7. Counterparts. This Subsequent Pledge Agreement may be executed in counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which shall constitute one and the same instrument. Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent Pledge Agreement will inure to the benefit of and be binding upon the parties hereto, the Note Insurer, the Noteholders, and their respective successors and permitted assigns. Section 9. Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 10. Exhibits. The exhibits attached hereto and referred to herein shall constitute a part of this Subsequent Pledge Agreement and are incorporated into this Subsequent Pledge Agreement for all purposes. [Remainder of Page Intentionally Left Blank] B-3 IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused this Subsequent Pledge Agreement to be duly executed by their respective officers as of the day and year first above written. ABFS MORTGAGE LOAN TRUST 1999-1, as Issuer By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: ________________________________ Name: Title: THE BANK OF NEW YORK, as Indenture Trustee By: ________________________________ Name: Title: [Signature Page to Subsequent Pledge Agreement] B-4 EXHIBIT C FORM OF NOTE INSURER CONSENT TO SUBSEQUENT MORTGAGE LOANS __________, 1999 The Bank of New York, as Indenture Trustee 101 Barclay Street New York, New York 10286 Re: ABFS Mortgage Loan Trust 1999-1; Mortgage Backed Notes, Series 1999-1 ------------------------------------ Ladies and Gentlemen: Reference is made to the Indenture, dated as of March 1, 1999 (the "Indenture"), by and between ABFS Mortgage Loan Trust 1999-1, as issuer (the "Trust"), and you, as indenture trustee (the "Indenture Trustee"). Pursuant to Section 2.14(b)(viii) of the Indenture, the undersigned hereby approves and consents to the acquisition of the Subsequent Mortgage Loans listed on Schedule I attached hereto aggregating $____________ in Aggregate Principal Balance by the Trust and the subsequent pledge of such Subsequent Mortgage Loans by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. FINANCIAL SECURITY ASSURANCE INC. By: ________________________________ Name: Title: C-1 Exhibit 4.1A APPENDIX I DEFINED TERMS "Accepted Servicing Practices": The Servicer's normal servicing practices, which in general will conform to the mortgage servicing practices of prudent mortgage lending institutions which service, for their own account, mortgage loans of the same type as the Mortgage Loans in the jurisdictions in which the related Mortgaged Properties are located. "Account": Any of the Collection Account, the Distribution Accounts, the Cross-collateralization Reserve Accounts, the Note Insurance Payment Account, the Pre-Funding Accounts or the Capitalized Interest Accounts. "Accountant": A Person engaged in the practice of accounting who (except when the Indenture provides that an Accountant must be Independent) may be employed by or affiliated with the Trust or an Affiliate of the Trust. "Accrual Period": With respect to the Notes and any Distribution Date, the prior calendar month. "Act": With respect to any Noteholder, as defined in Section 11.03 of the Indenture. "Addition Notice": A written notice from the Unaffiliated Seller to the Depositor, the Trust, the Indenture Trustee, the Collateral Agent, the Rating Agencies and the Note Insurer that the Unaffiliated Seller desires to make a Subsequent Transfer. "Adjusted Note Rate": With respect to any Distribution Date for the Class A-1 Notes, the percentage equal to (i) the Class A-1 Note Rate plus (ii) the Premium Percentage for such Class; with respect to any Distribution Date for the Class A-2 Notes, the percentage equal to (i) the Class A-2 Note Rate plus (ii) the Premium Percentage for such Class. "Administrative Costs": With respect to each Class of Notes and any Distribution Date, the sum of the Indenture Trustee Fee, the Premium Amount and the Servicing Fee for such Distribution Date and such Class of Notes. "Affiliate": With respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent": Any Note Registrar, Collateral Agent, or Authenticating Agent. "Aggregate Principal Balance": With respect to any Mortgage Loans and any date of determination, the aggregate of the Principal Balances of such Mortgage Loans as of such date of determination. "Appraised Value": As to any Mortgaged Property, the appraised value of the Mortgaged Property based upon the appraisal made by or on behalf of the related Originator at the time referred to in the related Basic Documents or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the sales price of the Mortgaged Property, if such sales price is less than such appraised value. "Assignment of Mortgage": With respect to each Mortgage Loan, an assignment of the Mortgage, notice of transfer or equivalent instrument sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. "Authenticating Agent": The Person, if any, appointed as Authenticating Agent by the Owner Trustee, acting at the direction of the Majority Certificateholders, pursuant to Section 6.14 of the Indenture, until any successor Authenticating Agent for the Notes is named, and thereafter "Authenticating Agent" shall mean such successor. The initial Authenticating Agent shall be the Indenture Trustee. Any Authenticating Agent other than the Indenture Trustee shall sign an instrument under which it agrees to be bound by all of the terms of this Indenture applicable to the Authenticating Agent. "Authorized Denominations": Each Class of Notes is issuable only in the minimum Percentage Interest corresponding to a minimum denomination of $1,000 or integral multiples of $1,000 in excess thereof; provided, however, that one Note of each Class is issuable in a denomination equal to any such multiple plus an additional amount such that the aggregate denomination of all Notes of such Class shall be equal to the Original Note Principal Balance of such Class. "Authorized Officer": With respect to (i) the Indenture Trustee, any Responsible Officer, (ii) the Owner Trustee or the Collateral Agent, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer, any financial services officer or any other officer of the Owner Trustee or the Collateral Agent customarily performing functions similar to those performed by the above officers and (iii) any other Person, the chairman, chief operating officer, president or any vice president of such Person. "Available Funds": With respect to any Distribution Date and any Distribution Account, the amount to be on deposit in such Distribution Account on such Distribution Date (excluding the amount of any Insured Payment and prior to the application of such amounts as described in Section 8.02 of the Indenture for such Distribution Date) as a result of (a) the Servicer's remittance of the Servicer Remittance Amount on the related Servicer Distribution Date, (b) any transfers to such Distribution 2 Account made from the related Capitalized Interest Account and/or the related Pre-Funding Account and relating to such Distribution Date pursuant to Section 8.01 of the Indenture, and (c) any transfers to such Distribution Account in respect of the Shortfall Amount for such Class and such Distribution Date pursuant to Section 8.01 of the Indenture, until such Shortfall Amount is paid in full, made first, to the extent of the Net Monthly Excess Cashflow for the other Pool of Mortgage Loans remaining after payment of any Net Mortgage Loan Interest Shortfalls for such other Pool, from the Distribution Account relating to such other Pool, second, from the Cross-collateralization Reserve Account relating to this Pool, and third, from the Cross-collateralization Reserve Account relating to the other Pool. For purposes of calculating the Available Funds, any Loan Repurchase Price or Substitution Adjustment that is paid shall be deemed deposited in the Distribution Account in the Due Period preceding such Servicer Distribution Date. "Available Funds Shortfall": With respect to any Distribution Date and any Class, an amount equal to the excess of the Insured Distribution Amount for such Distribution Date and for such Class over the Available Funds for such Distribution Date and such Class available for distribution in respect of such Insured Distribution Amount. "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended. "Basic Documents": The Indenture, the Trust Agreement, the Sale and Servicing Agreement, the Unaffiliated Seller's Agreement, the Insurance Agreement and the Indemnification Agreement. "Beneficial Owner": With respect to a Book-Entry Note, the Person who is the beneficial owner of such Note as reflected on the books of the Clearing Agency for the Notes or on the books of a Person maintaining an account with such Clearing Agency (as either a Direct Participant or an Indirect Participant, in accordance with the rules of such Clearing Agency). "Best Efforts": Efforts determined to be in good faith and reasonably diligent by the Person performing such efforts, specifically the Trust or the Servicer or any other agent of the Trust, as the case may be, in its reasonable discretion. Such efforts do not require the Trust or the Servicer or any other agent of the Trust, as the case may be, to enter into any litigation, arbitration or other legal or quasi-legal proceeding, nor do they require the Trust or the Servicer or any other agent of the Trust, as the case may be, to advance or expend fees or sums of money in addition to those specifically set forth in this Indenture and the Sale and Servicing Agreement. "Book-Entry Notes": Any Notes registered in the name of the Clearing Agency or its nominee, ownership of which is reflected on the books of the Clearing Agency or on the books of a person maintaining an account with such Clearing Agency (as either a Direct Participant or an Indirect Participant in accordance with the rules of such Clearing Agency). 3 "Book-Entry Termination": The time at which the book-entry registration of the Book-Entry Notes shall terminate, as specified in Section 2.13 of the Indenture. "Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal holiday or a day on which the Note Insurer or banking institutions in the State of New York, the State of Delaware, the State of New Jersey, the State of North Carolina, or the state in which the Indenture Trustee's office from which payments will be made to Certificateholders, are authorized or obligated by law, regulation or executive order to be closed. "Business Purpose Property": Any mixed-use property, commercial property, or four or more unit multifamily property. "Capitalized Interest Account": Each of the Capitalized Interest Accounts established in accordance with Section 8.01(c) of the Indenture and maintained by the Indenture Trustee. "Capitalized Interest Requirement": With respect to each Class of Notes and the Distribution Date occurring in April 1999 and May 1999, (A) the product of (i) one-twelfth of the related Adjusted Note Rate as calculated as of such Distribution Date and (ii) the related Pre-Funded Amount as of the first day of the related Due Period, minus (B) thirty (30) days' interest, at the related Mortgage Interest Rate, on the Subsequent Mortgage Loans for the related Pool transferred to the Trust during the related Due Period which had a Due Date after the related Subsequent Cut-Off Date during the related Due Period, minus (C) the amount of any Pre-Funding Earnings for the related Pool earned from the last Distribution Date (or the Closing Date with respect to the April 1999 Distribution Date). In no event will the Capitalized Interest Requirement for either Pool be less than zero. "CERCLA": The Comprehensive Environmental Response, Compensation and Liability Act of 1980. "Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as amended. "Civil Relief Act Interest Shortfall": With respect to any Distribution Date, for any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Civil Relief Act, the amount, if any, by which (a) interest collectible on such Mortgage Loan during the most recently ended calendar month is less than (b) the sum of one month's interest on the Principal Balance of such Mortgage Loan, calculated at a rate equal to the related Mortgage Interest Rate. "Class": Each class of Notes designated as the Class A-1 Notes and the Class A-2 Notes. "Class A-1 Current Interest": With respect to the Class A-1 Notes for any Distribution Date, the interest accrued during the related Accrual Period at the Class A-1 4 Note Rate applicable to such Distribution Date on the Class A-1 Note Principal Balance as of such Distribution Date (and prior to making any distributions on such Distribution Date). "Class A-1 Distribution Amount": With respect to the Class A-1 Notes for any Distribution Date, the amount to be distributed to the Holders of the Class A-1 Notes on such Distribution Date, applied first to interest and then to principal, which amount shall be the sum of (i) any moneys released from the Pre-Funding Account as a prepayment of principal on the Class A-1 Notes pursuant to Section 8.01(b) of the Indenture, and (ii) the lesser of (x) the Class A-1 Formula Distribution Amount for such Distribution Date and (y) the amount (including any applicable portion of any Insured Payment) available for distribution on account of the Class A-1 Notes for such Distribution Date. "Class A-1 Formula Distribution Amount": With respect to the Class A-1 Notes for any Distribution Date, the sum of the Class A-1 Interest Distribution Amount and the Class A-1 Principal Distribution Amount. "Class A-1 Interest Distribution Amount": With respect to the Class A-1 Notes for any Distribution Date, an amount equal to the Class A-1 Current Interest less the Class A-1 Mortgage Loan Interest Shortfall Amount. "Class A-1 Mortgage Loan Interest Shortfall Amount": With respect to the Mortgage Loans in Pool I and any Distribution Date, the sum of (x) the excess, if any, of the aggregate Prepayment Interest Shortfalls for the related Due Period over the aggregate amount of Compensating Interest paid by the Servicer in respect thereto and (y) the aggregate amount of Civil Relief Act Interest Shortfalls in respect of which the Servicer did not make a Servicer Advance. "Class A-1 Note": Any Note designated as a "Class A-1 Note" on the face thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. "Class A-1 Note Principal Balance": As of any date of determination, the Original Note Principal Balance of the Class A-1 Notes less any amounts actually distributed with respect to principal thereon on all prior Distribution Dates. "Class A-1 Note Rate": With respect to any Distribution Date, the per annum rate equal to 6.545%; provided, that, on any Distribution Date after the Note Clean-Up Call Date for the Class A-1 Notes, the Class A-1 Note Rate will be 7.045%. "Class A-1 Principal Distribution Amount": With respect to the Class A-1 Notes for any Distribution Date, the lesser of (x) the Principal Distribution Amount for Pool I for such Distribution Date, and (y) the Class A-1 Note Principal Balance as of such Distribution Date. 5 "Class A-2 Current Interest": With respect to the Class A-2 Notes for any Distribution Date, the interest accrued during the related Accrual Period at the Class A-2 Note Rate applicable to such Distribution Date on the Class A-2 Note Principal Balance as of such Distribution Date (and prior to making any distributions on such Distribution Date). "Class A-2 Distribution Amount": With respect to the Class A-2 Notes for any Distribution Date, the amount to be distributed to the Holders of the Class A-2 Notes on such Distribution Date, applied first to interest and then to principal, which amount shall be the lesser of (x) the Class A-2 Formula Distribution Amount for such Distribution Date and (y) the amount (including any applicable portion of any Insured Payment) available for distribution on account of the Class A-2 Notes for such Distribution Date. "Class A-2 Formula Distribution Amount": With respect to the Class A-2 Notes for any Distribution Date, the sum of the Class A-2 Interest Distribution Amount and the Class A-2 Principal Distribution Amount. "Class A-2 Interest Distribution Amount": With respect to the Class A-2 Notes for any Distribution Date, an amount equal to (a) the related Class A-2 Current Interest, less the Class A-2 Mortgage Loan Interest Shortfall Amount. "Class A-2 Mortgage Loan Interest Shortfall Amount": With respect to the Mortgage Loans in Pool II and any Distribution Date, the sum of (x) the excess, if any, of the aggregate Prepayment Interest Shortfalls for the related Due Period over the aggregate amount of Compensating Interest paid by the Servicer in respect thereto and (y) the aggregate amount of Civil Relief Act Interest Shortfalls in respect of which the Servicer did not make a Servicer Advance. "Class A-2 Note": Any Note designated as a "Class A-2 Note" on the face thereof, in the form of Exhibit A to the Indenture. The Class A-2 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. "Class A-2 Note Principal Balance": As of any date of determination, the Original Note Principal Balance of the Class A-2 Notes less any amounts actually distributed with respect to principal thereon on all prior Distribution Dates. "Class A-2 Note Rate": With respect to any Distribution Date, the per annum rate equal to 6.580%; provided that, on any Distribution Date after the Note Clean-up Call Date for the Class A-2 Notes, the Class A-2 Note Rate will be 7.080%. "Class A-2 Principal Distribution Amount": With respect to the Class A-2 Notes for any Distribution Date, the lesser of (x) the Principal Distribution Amount for Pool II for such Distribution Date and (y) the Class A-2 Note Principal Balance as of such Distribution Date. 6 "Clean-Up Call Date": The first Distribution Date after the sum of the Aggregate Principal Balances of the Mortgage Loans in Pool I and Pool II is less than 10% of the sum of the Maximum Collateral Amount for Pool I and Pool II. "Clearing Agency": An organization registered as a "clearing agency" pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended, and the regulations of the Commission thereunder and shall initially be The Depository Trust Company of New York, the nominee for which is Cede & Co. "Clearing Agency Participants": The entities for whom the Clearing Agency will maintain book-entry records of ownership and transfer of Book-Entry Notes, which may include securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations. "Closing Date": March 30, 1999. "Code": The Internal Revenue Code of 1986, as amended. "Collateral Agent": Chase Bank of Texas, N.A., a national banking association, or its successor-in-interest, or any successor Collateral Agent appointed as provided in Section 9.08 of the Sale and Servicing Agreement. "Collection Account": The Eligible Account established and maintained by the Servicer pursuant to Section 5.02(b) of the Sale and Servicing Agreement. "Combined Loan-to-Value Ratio" or "CLTV": As to any Mortgage Loan at any time, the fraction, expressed as a percentage, the numerator of which is the sum of (i) the Principal Balance thereof at such time and (ii) if such Mortgage Loan is subject to a second mortgage, the unpaid principal balance of any related first mortgage loan or loans, if any, as of such time, and the denominator of which is the Appraised Value of any related Mortgaged Property or Properties as of the date of the appraisal used by or on behalf of the Unaffiliated Seller to underwrite such Mortgage Loan. "Commission": The United States Securities and Exchange Commission. "Compensating Interest": As defined in Section 6.05 of the Sale and Servicing Agreement. "Corporate Trust Office": With respect to (x) the Indenture Trustee, the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the execution of the Basic Documents is located at 101 Barclay Street, New York, New York, 10286, Attention: ABFS Mortgage Loan Trust 1999-1; (y) the Owner Trustee, the principal office of the Owner Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the execution of the Basic Documents is located at One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware 19801, Attention: Corporate Trust Administration; and (z) the Collateral Agent, the principal office of the Collateral Agent at which at any particular time its 7 corporate trust business shall be principally administered, which office at the date of the execution of the Basic Documents is located at 801 West Greens Road, Houston, Texas 77067, Attention: Custody Manager. "Cross-collateralization Reserve Accounts": With respect to each Class of Notes, the segregated trust account, which shall be an Eligible Account, established and maintained pursuant to Section 8.01(d) of the Indenture and entitled "The Bank of New York, as Indenture Trustee for ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes, Series 1999-1, Class A-[1][2], Cross-collateralization Reserve Account," as the case may be, on behalf of the related Noteholders and the Note Insurer. "Cumulative Loan Loss": With respect to any period, the sum of all Liquidated Loan Losses which occurred during such period. "Cumulative Loss Percentage": As of any date of determination thereof, the aggregate of all Liquidated Loan Losses since the Closing Date as a percentage of the sum of (i) the aggregate Principal Balance of the Initial Mortgage Loans as of the Initial Cut-Off Date and (ii) the aggregate Principal Balance of any Subsequent Mortgage Loans transferred to the Trust as of the related Subsequent Cut-Off Date. "Cumulative Loss Test": The Cumulative Loss Test for each period indicated below is satisfied if the Cumulative Loss Percentage for such period does not exceed the percentage set out for such period below: Period Cumulative Loss Percentage ------ -------------------------- 1st - 24th Distribution Date 1.00% 25th - 36th Distribution Date 1.50% 37th - 48th Distribution Date 1.75% 49th - 60th Distribution Date and thereafter 2.00% "Curtailment": With respect to a Mortgage Loan, any payment of principal received during a Due Period as part of a payment that is in excess of the amount of the Monthly Payment due for such Due Period and which is not intended to satisfy the Mortgage Loan in full, nor is intended to cure a Delinquency. "Cut-Off Date": With respect to the Initial Mortgage Loans, the Initial Cut-Off Date, and with respect to the Subsequent Mortgage Loans, the Subsequent Cut-Off Date. "Cut-Off Date Aggregate Principal Balance": Means the aggregate unpaid principal balance of the Initial Mortgage Loans as of the Initial Cut-Off Date (or, with respect to Initial Mortgage Loans which were originated after the Initial Cut-Off Date, as of the date of origination). The Cut-Off Date Aggregate Principal Balance for the Trust is $167,633,030.25. The Cut-Off Date Aggregate Principal Balance for Pool I and Pool II is $89,436,393.09 and $78,196,637.16, respectively. 8 "Cut-Off Date Principal Balance": Means as to each Initial Mortgage Loan, its unpaid principal balance as of the Initial Cut-Off Date (or, with respect to Initial Mortgage Loans which were originated after the Initial Cut-Off Date, as of the date of origination). "Debt Service Reduction": With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction of the Monthly Payment due on such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a reduction that constitutes a Deficient Valuation or a permanent forgiveness of principal. "Default": Any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. "Deficient Valuation": With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding Principal Balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code. "Definitive Notes": Notes other than Book-Entry Notes. "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan. "Delinquency Ratio": With respect to any Distribution Date, the percentage equivalent of a fraction (a) the numerator of which equals the aggregate Principal Balances of all Mortgage Loans that are sixty (60) or more days Delinquent, in foreclosure or converted to REO Property as of the last day of such Due Period and (b) the denominator of which is the aggregate Principal Balance of the Mortgage Loans as of the last day of such Due Period. "Delinquent": A Mortgage Loan is "delinquent" if any payment due thereon is not made by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month) then on the last day of such immediately succeeding month. Similarly for "60 days delinquent," "90 days delinquent" and so on. "Depositor": Prudential Securities Secured Financing Corporation, a Delaware corporation. "Direct Participant": Any broker-dealer, bank or other financial institution for which the Clearing Agency holds Notes from time to time as a securities depositary. "Distribution Account": With respect to each Class of Notes, the segregated trust account, which shall be an Eligible Account, established and maintained pursuant to Section 8.01(a) of the Indenture and entitled "The Bank of New York, as 9 Indenture Trustee for ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes, Series 1999-1, Class A-[1][2], Distribution Account," as the case may be, on behalf of the related Noteholders and the Note Insurer. "Distribution Amount": The Class A-1 Distribution Amount or the Class A-2 Distribution Amount, as applicable. "Distribution Date": The 25th day of any month or if such 25th day is not a Business Day, the first Business Day immediately following, commencing on April 26, 1999. "Due Date": With respect to each Mortgage Loan and any Distribution Date, the day of the calendar month preceding the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due. "Due Period": With respect to each Distribution Date, the calendar month preceding the related Distribution Date. "Eligible Account": Either (A) an account or accounts maintained with an institution (which may include the Indenture Trustee; provided, that the Indenture Trustee otherwise meets these requirements) whose deposits are insured by the FDIC, the unsecured and uncollateralized debt obligations of which institution shall be rated "AA" or better by S&P and "Aa2" or better by Moody's and in the highest short term rating category by S&P and Moody's, and which is (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution (including the Indenture Trustee) duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or (v) approved in writing by the Note Insurer and the Rating Agencies or (B) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company (which may include the Indenture Trustee; provided, that the Indenture Trustee otherwise meets these requirements), having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity. "ERISA": The Employee Retirement Income Security Act of 1974, as amended. "Excess Over-collateralized Amount": With respect to a Pool of Mortgage Loans and any Distribution Date, the excess, if any, of (x) the Over-collateralized Amount for such Pool that would apply on such Distribution Date after taking into account the payment of the Class A-1 Distribution Amount or the Class A-2 Distribution Amount, as applicable, on such Distribution Date (except for any distributions of Over-collateralization Reduction Amounts for such Pool on such Distribution Date) over (y) the related Specified Over-collateralized Amount for such Pool for such Distribution Date; provided, however, that the Excess Over-collateralized Amount for the period 10 beginning with the Distribution Date as to which clause (b)(i)(y)(A) of "Specified Over-collateralized Amount" applies (the "Trigger Date") and ending on the Distribution Date occurring in the month six months subsequent to the Trigger Date (inclusive) shall be limited to the amount obtained using the following formula. n --- x E.S.A. 6 Where "n" is equal to the number of Distribution Dates that have occurred since the Trigger Date and "E.S.A." is equal to the amount of Excess Over-collateralized Amount that would otherwise be obtained for such Distribution Date without regard to the provisions of this proviso. "Exchange Act": Means the Securities Exchange Act of 1934, as amended. "Event of Default": As defined in Section 5.01 of the Indenture. "Fannie Mae": The Federal National Mortgage Association, and any successor thereto. "FDIC": The Federal Deposit Insurance Corporation, and any successor thereto. "Final Certification": A certification as to the completeness of each Indenture Trustee's Mortgage File prepared by the Collateral Agent, on behalf of the Indenture Trustee, and provided by the Collateral Agent within ninety (90) of the Closing Date pursuant to Section 2.06(a)(iii) of the Sale and Servicing Agreement. "Final Stated Maturity Date": With respect to both the Class A-1 Notes and the Class A-2 Notes, the May 2030 Distribution Date. "Foreclosure Profits": As to any Distribution Date, the excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a Liquidated Mortgage Loan during the related Due Period over (ii) the sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal Balance thereof from the Due Date on which interest was last paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the Due Date on which interest was last deemed to have been paid pursuant to Section 5.06 of the Sale and Servicing Agreement) to the Due Date in the month succeeding the date the Loan became a Liquidated Mortgage Loan. "Freddie Mac": The Federal Home Loan Mortgage Corporation, and any successor thereto. "GAAP": Generally accepted accounting principles, consistently applied. 11 "Grant": To assign, transfer, mortgage, pledge, create and grant a security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan and the related Mortgage Files, a Permitted Investment, the Sale and Servicing Agreement, the Unaffiliated Seller's Agreement, or any other instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including without limitation the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments thereunder, Insurance Proceeds, Loan Purchase Prices and all other moneys payable thereunder and all proceeds thereof, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise, and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. "Highest Lawful Rate": As defined in Section 11.19 of the Indenture. "I&I Payments": Payments due and owing under the Insurance Agreement other than pursuant to Section 3.02(b) of such Insurance Agreement. "Indemnification Agreement": As defined in the Insurance Agreement. "Indenture": The Indenture, dated as of March 1, 1999, between the Trust and the Indenture Trustee, relating to the issuance of the Notes. "Indenture Trustee": The Bank of New York, a New York banking corporation, or its successor-in-interest, or any successor Indenture Trustee appointed as provided for in Section 6.09 of the Indenture. "Indenture Trustee Fee": As to any Distribution Date, the fee payable to the Indenture Trustee in respect of its services as Indenture Trustee pursuant to Section 6.16 of the Indenture that accrues at a monthly rate equal to one-twelfth of 0.025% on the Principal Balance of each Mortgage Loan, as of the immediately preceding Due Date. "Indenture Trustee's Mortgage File": The documents delivered to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05 of the Sale and Servicing Agreement. "Indenture Trustee's Remittance Report": The statement prepared pursuant to Section 2.08(d) of the Indenture, containing the following information with respect to each Class: (a) the amount of the distribution with respect to the each Class of Notes and the Trust Certificates; (b) the amount of such distributions allocable to principal, separately identifying the aggregate amount of any Prepayments or other unscheduled recoveries of principal included therein and separately identifying any Over-collateralization Increase Amounts for each Pool; 12 (c) the amount of such distributions allocable to interest and the calculation thereof; (d) the Note Principal Balance of each Class of Notes as of such Distribution Date, together with the Note Principal Balance of each Class of Notes (based on a Note in an original Note Principal Balance of $1,000) then outstanding, in each case after giving effect to any payment of principal on such Distribution Date; (e) the amount of any Insured Payment included in the amounts distributed to the Noteholders on such Distribution Date; (f) the total of any Substitution Adjustments and any Loan Repurchase Price amounts included in such distribution; (g) the amounts, if any, of any Liquidated Loan Losses for consumer purpose loans and for business purpose loans for the related Due Period and cumulative Liquidated Loan Losses since the Closing Date for consumer purpose loans and for business purpose loans; and (h) the Pre-Funding Amount for each Class on such Distribution Date. Items (a), (b) and (c) above shall, with respect to each Class of Notes, be presented on the basis of a Note having a $1,000 denomination. In addition, by January 31 of each calendar year following any year during which the Notes are outstanding, the Indenture Trustee shall furnish a report to each Holder of record if so requested in writing at any time during each calendar year as to the aggregate of amounts reported pursuant to (a), (b) and (c) with respect to the Notes for such calendar year. "Independent": When used with respect to any specified Person, means such a Person who (i) is in fact independent of the Trust and any other obligor upon the Notes, (ii) does not have any direct financial interest or any material indirect financial interest in the Trust or in any such other obligor or in an Affiliate of the Trust or such other obligor, and (iii) is not connected with the Trust or any such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person's opinion or certificate shall be furnished to the Indenture Trustee, such Person shall be appointed by a Trust Order and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof. "Indirect Participant": Any financial institution for whom any Direct Participant holds an interest in a Note. "Individual Note": A Note of an Original Note Principal Balance of $1,000; a Note of an Original Note Principal Balance in excess of $1,000 shall be deemed to be a number of Individual Notes equal to the quotient obtained by dividing such Original Note Principal Balance amount by $1,000. 13 "Initial Certification": A certification as to the completeness of each Mortgage File prepared by the Collateral Agent, on behalf of the Indenture Trustee, and provided by the Collateral Agent within thirty (30) of the Closing Date pursuant to Section 2.06(a)(ii) of the Sale and Servicing Agreement. "Initial Cut-Off Date": The close of business on February 28, 1999 (or with respect to any Initial Mortgage Loan originated or otherwise acquired by an Originator after February 28, 1999, the date of origination or acquisition of such Initial Mortgage Loan). "Initial Mortgage Loans": The Mortgage Loans delivered by the Trust on the Closing Date. "Initial Over-collateralized Amount": With respect to any Pool, an amount equal to 0.50% of the Maximum Collateral Amount for such Pool. "Insurance Agreement": The Insurance and Indemnity Agreement dated as of March 1, 1999 among the Note Insurer, the Depositor, the Trust, the Servicer, the Unaffiliated Seller, and the Originators as such agreement may be amended or supplemented in accordance with the provisions thereof. "Insurance Policies": All insurance policies insuring any Mortgage Loan or Mortgaged Property, to the extent the Trust or the Indenture Trustee has any interest therein. "Insurance Proceeds": Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with Accepted Servicing Practices. "Insurance Proceeds" do not include "Insured Payments." "Insured Distribution Amount": With respect to any Distribution Date and for any Pool, is the sum of (i) the Interest Distribution Amount for such Pool, (ii) the amount of the Over-collateralization Deficit applicable to such Pool, if any, with respect to such Distribution Date, and (iii) with respect to the Distribution Date which is a Final Stated Maturity Date, the outstanding Note Principal Balance for the related Class of Notes. "Insured Payment": With respect to any Distribution Date and any Class of Notes, the Available Funds Shortfall for such Class. "Interest Distribution Amount": The Class A-1 Interest Distribution Amount or the Class A-2 Interest Distribution Amount, as applicable. "Late Payment Rate": Has the meaning ascribed thereto in the Insurance Agreement. 14 "Letter Agreement": The Letter of Representations to the Clearing Agency from the Indenture Trustee and the Trust dated March 24, 1999. "Liquidated Loan Loss": With respect to any Distribution Date, the aggregate of the amount of losses with respect to each Mortgage Loan which became a Liquidated Mortgage Loan prior to the Due Date preceding such Distribution Date, equal to the excess of (i) the unpaid Principal Balance of each such Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the amortization schedule at the time applicable thereto at the applicable Mortgage Interest Rate from the Due Date as to which interest was last paid with respect thereto through the Due Date in the month succeeding the date such Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to such Liquidated Mortgage Loan. "Liquidated Mortgage Loan": A Mortgage Loan with respect to which the related Mortgaged Property has been acquired, liquidated or foreclosed and with respect to which the Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered. "Liquidation Expenses": Expenses incurred by the Servicer in connection with the liquidation of any defaulted Mortgage Loan or property acquired in respect thereof (including, without limitation, legal fees and expenses, committee or referee fees, and, if applicable, brokerage commissions and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to Sections 5.04 and 5.06 of the Sale and Servicing Agreement respecting the related Mortgage Loan and any unreimbursed expenditures for real property taxes or for property restoration or preservation of the related Mortgaged Property. Liquidation Expenses shall not include any previously incurred expenses in respect of an REO Mortgage Loan which have been netted against related REO Proceeds. "Liquidation Proceeds": The amount (other than Insurance Proceeds) received by the Servicer in connection with (i) the taking of all or a part of Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a Indenture Trustee's sale, foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of any other security for such Mortgage Loan, including, without limitation, pledged equipment, inventory and working capital and assignments of rights and interests made by the related Mortgagor. "Loan Repurchase Price": With respect to any Mortgage Loan, the Principal Balance of such Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest on such Principal Balance computed, as of the next succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest Rate, net of the Servicing Fee if the Unaffiliated Seller or any of its Affiliates is the Servicer, plus the amount of any unreimbursed Servicing Advances made by the Servicer with respect to such Mortgage Loan, which purchase price shall be deposited in the Collection Account on the next succeeding Servicer Distribution Date, after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan or Loans and being held in the 15 Collection Account for future distribution to the extent such amounts have not yet been applied to principal or interest on such Mortgage Loan. "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan as of its date of origination, the ratio on such date borne by the outstanding Principal Balance of the Mortgage Loan to the Appraised Value of the related Mortgaged Property. "Majority Certificateholders": The Holder or Holders of Trust Certificates evidencing Percentage Interests in excess of 51% in the aggregate. "Majority Noteholders": The Holder or Holders of Notes evidencing Percentage Interests in excess of 51% in the aggregate. "Maximum Collateral Amount": The sum of the Original Pool Principal Balance and the Original Pre-Funded Amount for each Class of Notes. "Monthly Payment": As to any Mortgage Loan (including any REO Mortgage Loan) and any Due Date, the payment of principal and interest due thereon as specified for such Due Date in the related amortization schedule at the time applicable thereto (after adjustment for any Curtailments and Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than Deficient Valuations, or similar proceeding or any moratorium or similar waiver or grace period). "Monthly Servicing Fee": As defined in Section 5.08 of the Sale and Servicing Agreement. "Moody's": Moody's Investors Service, Inc., a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized rating agency designated by the Note Insurer. "Mortgage": The mortgage, deed of trust or other instrument creating a first or second lien on the Mortgaged Property. "Mortgage File": As described in Exhibit A to the Sale and Servicing Agreement. "Mortgage Interest Rate": As to any Mortgage Loan, the per annum fixed rate at which interest accrues on the unpaid Principal Balance thereof. "Mortgage Loan Interest Shortfall": With respect to any Distribution Date, as to any Mortgage Loan, the sum of (a) the excess, if any, of the Prepayment Interest Shortfall for such Mortgage Loan for the related Due Period over the Compensating Interest for such Mortgage Loan paid by the Servicer in respect thereto and (b) any Civil Relief Act Interest Shortfall in respect of which the Servicer did not make a Servicer Advance. 16 "Mortgage Loan Schedule": The schedule of Initial Mortgage Loans as of the Initial Cut-Off Date attached as Schedule I to the Indenture, which will be deemed to be modified automatically to reflect any replacement, sale, substitution, liquidation, transfer or addition of any Mortgage Loan, including the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and any subsequent Mortgage Loan Schedule provided in connection with the Subsequent Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its identifying number and the name of the related Mortgagor; (ii) the billing address for the related Mortgaged Property including the state and zip code; (iii) its date of origination; (iv) the original number of months to stated maturity; (v) the original stated maturity; (vi) the original Principal Balance; (vii) its Principal Balance as of the applicable Cut-Off Date; (viii) the Mortgage Interest Rate; (ix) the scheduled monthly payment of principal and interest and (x) a Pool designation. "Mortgage Loans": The Initial Mortgage Loans and the Subsequent Mortgage Loans, together with any Qualified Substitute Mortgage Loans substituted therefor in accordance with the Basic Documents, as from time to time are held as a part of the Trust, the Initial Mortgage Loans originally so held being identified in the initial Mortgage Loan Schedule. When used in respect of any Distribution Date, the term Mortgage Loans shall mean all Mortgage Loans (including those in respect of which the Indenture Trustee has acquired the related Mortgaged Property) which have not been repaid in full prior to the related Due Period, did not become Liquidated Mortgage Loans prior to such related Due Period or were not repurchased or replaced by the Unaffiliated Seller prior to such related Due Period. "Mortgage Note": The original, executed note or other evidence of any indebtedness of a Mortgagor under a Mortgage Loan. "Mortgage Portfolio Performance Test": The Mortgage Portfolio Performance Test is satisfied for any date of determination thereof if either (a) (i) the Rolling Six Month Delinquency Rate is less than or equal to 11.00%, (ii) the Over-collateralization Loss Test is satisfied and (iii) if the Twelve Month Loss Amount is not greater than or equal to 1.25% of the Principal Balance of the Mortgage Loans in each Pool as of the first day of the twelfth preceding calendar month or (b) the Note Insurer, by notice to the Trust, the Servicer, the Indenture Trustee and the Collateral Agent, expressly waives in writing compliance with the foregoing tests for such Distribution Date. "Mortgaged Property": The underlying property or properties securing a Mortgage Loan, consisting of a fee simple interest in one or more parcels of land. "Mortgagor": The obligor on a Mortgage Note. "Net Foreclosure Profits": As to any Distribution Date, the excess, if any, of (i) the aggregate Foreclosure Profits with respect to such Distribution Date over (ii) Liquidated Loan Losses with respect to such Distribution Date. 17 "Net Liquidation Proceeds": As to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed Periodic Advances and Servicing Advances made by the Servicer. For all purposes of the Basic Documents, Net Liquidation Proceeds shall be allocated first to accrued and unpaid interest on the related Mortgage Loan and then to the unpaid Principal Balance thereof. "Net Monthly Excess Cashflow": With respect to any Distribution Date and any Pool, the excess of (x) the Available Funds for such Pool then on deposit in the related Distribution Account over (y) the sum of (i) the Interest Distribution Amount for such Pool and such Distribution Date, (ii) the Principal Distribution Amount for such Pool and such Distribution Date, calculated for this purpose without regard to any Over-collateralization Increase Amount (or portion thereof included therein) for such Pool and such Distribution Date, (iii) the amounts due to the Note Insurer for such Pool on such Distribution Date pursuant to Section 8.02(ii) of the Indenture, and (iv) the Indenture Trustee Fees allocable to such Pool for such Distribution Date. "Net Mortgage Loan Interest Shortfall Amount": The Class A-1 Mortgage Loan Interest Shortfall or the Class A-2 Mortgage Loan Interest Shortfall Amount, as applicable. "Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds net of any related expenses of the Servicer. "Net Weighted Average Mortgage Interest Rate": With respect to any Due Period, the weighted average Mortgage Interest Rates (weighted by Principal Balances) of the Mortgage Loans, calculated at the opening of business on the first day of such Due Period, less the Servicing Fee Rate, and less the Premium Percentage. "Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any Periodic Advance previously made and not reimbursed from late collections pursuant to Section 5.03 of the Sale and Servicing Agreement, or (b) a Periodic Advance proposed to be made in respect of a Mortgage Loan or REO Property either of which, in the good faith business judgment of the Servicer, as evidenced by an Officer's Certificate delivered to the Note Insurer and the Indenture Trustee no later than the Business Day following such determination, would not ultimately be recoverable pursuant to Section 5.03 of the Sale and Servicing Agreement. "Note": Any Class A-1 Note or Class A-2 Note executed by the Owner Trustee on behalf of the Trust and authenticated by the Indenture Trustee. "Noteholder" or "Holder": Each Person in whose name a Note is registered in the Note Register, except that, solely for the purposes of giving any consent, waiver, request or demand pursuant to the Indenture, any Note registered in the name of the Servicer or any Subservicer or the Unaffiliated Seller, or any Affiliate of any of them, shall be deemed not to be outstanding and the undivided Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite percentage of Notes necessary to effect any such consent, waiver, request or demand has been obtained. 18 For purposes of any consent, waiver, request or demand of Noteholders pursuant to the Indenture, upon the Indenture Trustee's request, the Servicer and the Unaffiliated Seller shall provide to the Indenture Trustee a notice identifying any of their respective Affiliates or the Affiliates of any Subservicer that is a Noteholder as of the date(s) specified by the Indenture Trustee in such request. Any Notes on which payments are made under the Note Insurance Policy shall be deemed to be Outstanding and held by the Note Insurer to the extent of such payment. "Note Clean-Up Call Date": With respect to the Class A-1 Notes, the first Distribution Date after the Class A-1 Note Principal Balance is less than or equal to 10% of the Original Note Principal Balance of the Class A-1 Notes; with respect to the Class A-2 Notes, the first Distribution Date after the Class A-2 Note Principal Balance is less than or equal to 10% of the Original Note Principal Balance of the Class A-2 Notes. "Note Insurance Payment Account": The Note Insurance Payment Account established in accordance with Section 8.03(c) of the Indenture and maintained by the Indenture Trustee. "Note Insurance Policy": The Financial Guaranty Insurance Policy No. 50792-N, all endorsements thereto dated the Closing Date, issued by the Note Insurer for the benefit of the Noteholders. "Note Insurer": Financial Security Assurance Inc., a monoline stock insurance company organized and created under the laws of the State of New York, and any successors thereto. "Note Insurer Default": The existence and continuance of any of the following: (a) the Note Insurer shall have failed to make a required payment when due under the Note Insurance Policy; (b) the Note Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a general assignment for the benefit of its creditors or (iii) had an order for relief entered against it under the Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization that is final and nonappealable; or (c) a court of competent jurisdiction, the New York Department of Insurance or any other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, indenture trustee, agent, or receiver for the Note Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, indenture trustee, agent, or receiver of the Note Insurer or of all or any material portion of its property. 19 "Note Principal Balance": As to any particular Note and date of determination, the product of the Percentage Interest evidenced thereby and the aggregate principal balance of all Notes of the same Class as of such date of determination. The Trust Certificates do not have a "Note Principal Balance". "Note Rate": The Class A-1 Note Rate or the Class A-2 Note Rate, as applicable. "Note Register": As defined in Section 2.06 of the Indenture. "Note Registrar": As defined in Section 2.06 of the Indenture. "Note Termination Price": With respect to either Class, an amount equal to the sum of (i) 100% of the aggregate Note Principal Balance of such Class, plus accrued and unpaid interest thereon, and (ii) any unreimbursed amounts due to the Note Insurer under the Basic Documents and any I&I Payments. "Notes": The Class A-1 Notes and the Class A-2 Notes. "Officer's Certificate": A certificate signed by the chairman of the board, the president or a vice president and the treasurer, the secretary or one of the assistant treasurers or assistant secretaries of the Unaffiliated Seller, the Servicer, or the Depositor, or, with respect to the Trust, a certificate signed by a Responsible Officer of the Owner Trustee, at the direction of the related Majority Certificateholders as required by any Basic Document. "Opinion of Counsel": A written opinion of counsel, who may, without limitation, be counsel for the Unaffiliated Seller, the Servicer, the Depositor, the Indenture Trustee, the Owner Trustee, a Noteholder or a Noteholder's prospective transferee or the Note Insurer (including except as otherwise provided herein, in-house counsel) reasonably acceptable to each addressee of such opinion and experienced in matters relating to the subject of such opinion. "Original Note Principal Balance": As of the Closing Date and as to the Class A-1 Notes, $100,000,000.00 and as to the Class A-2 Notes, $84,075,000.00. The Trust Certificates do not have an "Original Note Principal Balance." "Original Pool Principal Balance": The aggregate Principal Balance of the Mortgage Loans, as of the Initial Cut-Off Date, which amount for the Trust is equal to $167,152,311.98. The Original Pool Principal Balance for Pool I and Pool II is $89,127,717.90 and $78,024,594.08, respectively. "Original Capitalized Interest Amount": With respect to the Class A-1 Notes, $80,287.09 and with respect to the Class A-2 Notes, $46,065.42 "Original Pre-Funded Amount": With respect to the Class A-1 Notes, $11,374,794.66 and with respect to the Class A-2 Notes, $6,472,893.36. 20 "Originators": American Business Credit, Inc., HomeAmerican Credit, Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp. "Outstanding": As of the date of determination, all Notes theretofore authenticated and delivered under the Indenture except: (a) Definitive Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation; (b) Notes or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the Indenture Trustee in trust for the Holders of such Notes; provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor, satisfactory to the Indenture Trustee, has been made; (c) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser (as defined by the Uniform Commercial Code of the applicable jurisdiction); and (d) Notes alleged to have been destroyed, lost or stolen that have been paid as provided for in Section 2.07 of the Indenture; provided, however, that in determining whether the Holders of the requisite percentage of the Note Principal Balance of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Trust, any other obligor upon the Notes or any Affiliate of the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Trust, any other obligor upon the Notes or any Affiliate of the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other obligor; provided, further, however, that Notes that have been paid with the proceeds of the Note Insurance Policy shall be deemed to be Outstanding for the purposes of this Indenture, such payment to be evidenced by written notice from the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed to be the Holder thereof to the extent of any payments thereon made by the Note Insurer which have not been reimbursed. "Over-collateralization Deficit": As of any Distribution Date, the amount, if any, by which (a) the aggregate Note Principal Balance of the Notes, after taking into account the payment of the Principal Distribution Amount for each Pool (except for any 21 amount in respect of the Over-collateralization Deficit) on such date exceeds (b) the sum of (i) the Aggregate Principal Balances of the Mortgage Loans in such Pool determined as of the end of the immediately preceding Due Period, (ii) the amount, if any, on deposit in the Pre-Funding Accounts as of the close of business on the last day of the immediately preceding Due Period, and (iii) the amount on deposit in the Cross-collateralization Reserve Accounts on such Distribution Date, after application of all amounts due on such Distribution Date. "Over-collateralization Deficiency Amount": With respect to any Distribution Date and any Pool, the difference, if greater than zero, between (a) the Specified Over-collateralized Amount for such Pool applicable to such Distribution Date and (b) the Over-collateralized Amount for such Pool applicable to such Distribution Date prior to taking into account the payment of any related Over-collateralization Increase Amount for such Pool on such Distribution Date. "Over-collateralization Increase Amount": With respect to any Distribution Date and any Pool, the lesser of: (a) the Over-collateralization Deficiency Amount for such Pool as of such Distribution Date (after taking into account the payment of the Principal Distribution Amount for such Pool on such Distribution Date (except for any Over-collateralization Increase Amount for such Pool)); and (b) (i) with respect to the first Distribution Date, zero, and (ii) with respect to any other Distribution Date, 100% of the amount of Net Monthly Excess Cashflow on such Distribution Date. "Over-collateralization Loss Test": The Over-collateralization Loss Test for any period set out below is satisfied if the Cumulative Loss Percentage for such period does not exceed the percentage set out for such period below: Period Cumulative Loss Percentage ---------------------------------- -------------------------- 1st - 12th Distribution Date 0.75% 13th - 24th Distribution Date 1.25% 25th - 36th Distribution Date 1.75% 37th - 48th Distribution Date 2.00% 49th - 60th Distribution Date and thereafter 2.50% "Over-collateralization Reduction Amount": With respect to any Pool and Distribution Date, is the positive difference, if any, between (a) the Over-collateralized Amount for such pool that would apply on such Distribution Date after taking into account all distributions to be made on such Distribution Date (except for any distributions of related Over-collateralization Reduction Amounts as described in this sentence) and (b) the Specified Over-collateralized Amount for such Pool to the extent of principal available for distribution. 22 "Over-collateralized Amount": As of any Distribution Date and any Pool, the difference, if any, between (a) the sum of (i) the aggregate Principal Balances of the Mortgage Loans in such Pool as of the close of business on the last day of the related Due Period and (ii) the amount on deposit in the related Pre-Funding Account as of the close of business on the last day of the immediately preceding Due Period and (b) the aggregate Note Principal Balance of the related Class as of such Distribution Date (after taking into account the payment of the Principal Distribution Amount for such Pool on such Distribution Date, except for any portion thereof related to an Insured Payment); provided, however, that such amount shall not be less than zero. "Overfunded Interest Amount": With respect to each Pool and each Subsequent Transfer Date occurring in March 1999, the excess of (i) the amount on deposit in the related Capitalized Interest Account, over (ii) two-months' interest calculated at the related Adjusted Note Rate on the amount on deposit in the related Pre-Funding Account (net of any Pre-Funding Earnings for such Pre-Funding Account) immediately following such Subsequent Transfer Date (disregarding any amount applied from such Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in March 1999). With respect to each Pool and each Subsequent Transfer Date occurring in April 1999, the excess of (i) the amount on deposit in the related Capitalized Interest Account, over (ii) one-month's interest calculated at the related Adjusted Note Rate on the amount on deposit in the related Pre-Funding Account (net of any Pre-Funding Earnings for such Pre-Funding Account) immediately following such Subsequent Transfer Date (disregarding any amount applied from the such Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in April 1999). "Owner-Occupied Mortgaged Property": A Residential Dwelling as to which (a) the related Mortgagor represented an intent to occupy as such Mortgagor's primary residence at the origination of the Mortgage Loan, and (b) the Unaffiliated Seller has no actual knowledge that such Residential Dwelling is not so occupied. "Ownership Interest": As to any Note, any ownership or security interest in such Note, including any interest in such Note as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. "Owner Trustee": First Union Trust Company, National Association, a national banking association, not in its individual capacity, but solely as owner trustee under the Trust Agreement, and any successor owner trustee thereunder. "Owner Trustee Fee": As defined in Section 8.01 of the Trust Agreement. "Paying Agent": The Indenture Trustee or any other depository institution or trust company that is authorized by the Trust pursuant to Section 3.03 of the Indenture to pay the principal of, or interest on, any Notes on behalf of the Trust, which agent, if not the Indenture Trustee, shall have signed an instrument agreeing to be bound by the terms of the Indenture applicable to such Paying Agent. 23 "Percentage Interest": With respect to a Note of any Class, the portion evidenced by such Note, expressed as a percentage rounded to four decimal places, equal to a fraction the numerator of which is the denomination represented by original principal balance of such Note and the denominator of which is the Original Note Principal Balance of such Class. With respect to a Trust Certificate, the portion evidenced thereby as stated on the face of such Trust Certificate. "Periodic Advance": The aggregate of the advances required to be made by the Servicer on any Servicer Distribution Date pursuant to Section 5.18 of the Sale and Servicing Agreement, the amount of any such advances being equal to the sum of: (a) with respect to each Mortgage Loan that was Delinquent as of the close of business on the last day of the Due Period preceding the related Servicer Distribution Date, the product of (i) the Principal Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage Interest Rate for such Mortgage Loan net of the Servicing Fee, and (b) with respect to each REO Property which was acquired during or prior to the related Due Period and as to which an REO Disposition did not occur during the related Due Period, an amount equal to the excess, if any, of (i) interest on the Principal Balance of such REO Mortgage Loan at the Mortgage Interest Rate for such REO Mortgage Loan net of the Servicing Fee, for the most recently ended Due Period over (ii) the net proceeds from the REO Property transferred to the Distribution Account for such Distribution Date; provided, however, that in each such case such advance has not been determined by the Servicer to be a Nonrecoverable Advance. "Permitted Investments": As used herein, Permitted Investments shall include the following: (a) obligations of, or guaranteed as to principal and interest by, the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; (b) repurchase agreements on obligations specified in clause (a) maturing not more than three months from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated in one of the two highest rating categories by the Rating Agencies; (c) certificates of deposit, time deposits and bankers' acceptances (which, in the case of bankers' acceptances, shall in no event have an original maturity of more than 365 days) of any U.S. depository institution or trust company, incorporated under the laws of the United States or any state; provided, that the debt obligations of such depository institution or trust company at the date of acquisition thereof have been rated in one of the two highest rating categories by the Rating Agencies; 24 (d) commercial paper (having original maturities of not more than 270 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated in the highest short-term rating category by the Rating Agencies; (e) the VISTA U.S. Government Money Market Fund, the VISTA Prime Money Market Fund and the VISTA Treasury Plus Fund, so long as any such fund is rated in the highest rating category by Moody's or S&P; provided, that no instrument described hereunder shall evidence either the right to receive (x) only interest with respect to the obligations underlying such instrument or (y) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provided a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations; and provided, further, that no instrument described hereunder may be purchased at a price greater than par if such instrument may be prepaid or called at a price less than its purchase price prior to stated maturity. "Person": Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, national banking association, unincorporated organization or government or any agency or political subdivision thereof. "Plan": A pension or benefit plan or individual retirement arrangement that is subject to ERISA or Section 4975 of the Code. "Pool": Pool I or Pool II, as the case may be. "Pool I": The pool of Mortgage Loans held by the Trust, as a separate sub-trust, which secure the obligations of the Trust with respect to the Class A-1 Notes, as reflected on the Mortgage Loan Schedule. "Pool I Trust Certificate": A certificate evidencing the beneficial interest of a Trust Certificateholder in the sub-trust of the Trust consisting of the Mortgage Loans in Pool I, substantially in the form of Exhibit A to the Trust Agreement. "Pool II": The pool of Mortgage Loans held by the Trust, as a separate sub-trust, which secure the obligations of the Trust with respect to the Class A-2 Notes, as reflected on the Mortgage Loan Schedule. "Pool II Trust Certificate": A certificate evidencing the beneficial interest of a Trust Certificateholder in the sub-trust of the Trust consisting of the Mortgage Loans in Pool II, substantially in the form of Exhibit A to the Trust Agreement. "Predecessor Notes": With respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.07 of the Indenture in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note. 25 "Preference Amount": Any amounts distributed in respect of the Notes which are recovered from any Holder of a Note as a voidable preference by a trustee in bankruptcy pursuant to the Bankruptcy Code or other similar law in accordance with a final, nonappealable order of a court having competent jurisdiction and which have not theretofore been repaid to such Holder. "Preference Claim": As defined in Section 8.03(f) of the Indenture. "Pre-Funding Account": Each of the Pre-Funding Accounts established in accordance with Section 8.01(b) of the Indenture and maintained by the Indenture Trustee. "Pre-Funding Amount": With respect to either Pool and any date of determination, the amount on deposit in the related Pre-Funding Account. "Pre-Funding Earnings": With respect to either Pool and any date of determination, the actual investment earnings realized on amounts deposited in the related Pre-Funding Account. "Pre-Funding Period": With respect to either Pre-Funding Account, the period commencing on the Closing Date and ending on the earliest to occur of (i) the date on which the amount on deposit in such Pre-Funding Account (exclusive of any investment earnings) is less than $100,000, (ii) the date on which any Event of Default or Servicer Event Default occurs and (iii) the close of business on April 30, 1999. "Premium Amount": The product of the Premium Percentage and the aggregate outstanding Note Principal Balance for the related Class on the related Distribution Date, but prior to any distributions on such Distribution Date. "Premium Percentage": The rate at which the "Premium" is determined, as described in the letter dated March 30, 1999 between the Servicer and the Note Insurer. "Premium Supplement Event": Means any Event of Default, Servicer Event of Default or an "Event of Default" as defined in the Insurance Agreement. "Prepayment Assumption": A constant prepayment rate of 25% HEP, used solely for determining the accrual of original issue discount and market discount on the Notes for federal income tax purposes. "Prepayment Interest Shortfall": With respect to any Distribution Date, for each Mortgage Loan that was the subject during the related Due Period of a Principal Prepayment, an amount equal to the excess, if any, of (a) 30 days' interest on the Principal Balance of such Mortgage Loan at a per annum rate equal to (i) the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus (ii) the Servicing Fee Rate over (b) the amount of interest actually 26 remitted by the Mortgagor in connection with such Principal Prepayment less the Servicing Fee for such Mortgage Loan in such month. "Principal Balance": As to any Mortgage Loan and any date of determination, the outstanding principal balance of such Mortgage Loan as of such date of determination after giving effect to prepayments received prior to the end of the related Due Period and Deficient Valuations incurred prior to such date of determination. The Principal Balance of a Mortgage Loan which becomes a Liquidated Mortgage Loan on or prior to such date of determination shall be zero. "Principal Distribution Amount": For any Distribution Date and any Pool of Mortgage Loans will be the lesser of: (a) the excess of (i) the sum, as of such Distribution Date, of (A) the Available Funds for such Pool and (B) any Insured Payment with respect to the related Class of Notes plus, if the Note Insurer shall so elect in its sole discretion, an amount of principal (including Liquidated Loan Losses) that would have been payable pursuant to clauses (b)(i) through (ix) below if sufficient funds were made available to the Indenture Trustee, in accordance with the terms of the Note Insurance Policy, over (ii) the sum of (w) the Interest Distribution Amount for such Pool, (x) the Indenture Trustee Fee allocable to such Pool and (y) the amount due the Note Insurer on such Distribution Date pursuant to Section 8.02(ii) of the Indenture in respect to the related Class of Notes; and (b) the sum, without duplication, of: (i) all principal in respect of the Mortgage Loans in such Pool actually collected during the related Due Period; (ii) the principal balance of each Mortgage Loan that either was repurchased by the Unaffiliated Seller or purchased by the Servicer on the related Servicer Distribution Date from such Pool, to the extent such principal balance is actually received by the Indenture Trustee; (iii) any Substitution Adjustments delivered by the Unaffiliated Seller on the related Servicer Distribution Date in connection with a substitution of a Mortgage Loan in such Pool, to the extent such Substitution Adjustments are actually received by the Indenture Trustee; (iv) the Net Liquidation Proceeds actually collected by the Servicer with respect to Mortgage Loans in such Pool during the related Due Period (to the extent such Net Liquidation Proceeds relate to principal); (v) with respect to the April 1999 or May 1999 Distribution Dates, moneys released from the related Pre-Funding Account, if any; 27 (vi) the proceeds received by the Indenture Trustee upon the exercise by the Servicer of the optional redemption of the related Class of Notes pursuant to Section 10.01 of the Indenture (to the extent such proceeds relate to principal); (vii) the amount of any Over-collateralization Deficit with respect to such Pool for such Distribution Date; (viii) the proceeds received by the Indenture Trustee on any termination of the Trust pursuant to Section 10.01 of the Indenture (to the extent such proceeds relate to principal) allocable to such Pool; (ix) the amount of any Over-collateralization Increase Amount with respect to such Pool for such Distribution Date, to the extent of any Remaining Excess Cashflow for such Pool available for such purpose; (x) if the Note Insurer shall so elect in its sole discretion, an amount of principal (including Liquidated Loan Losses) that would have been payable pursuant to clauses (i) through (ix) above if sufficient funds were made available to the Indenture Trustee in accordance with the terms of the Note Insurance Policy; minus (xi) the amount of any Over-collateralization Reduction Amount for such Pool for such Distribution Date. In no event will the Principal Distribution Amount for a Pool with respect to any Distribution Date be (x) less than zero or (y) greater than the then aggregate outstanding Note Principal Balance of the related Class of Notes. "Principal Prepayment": Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date. "Proceeding": Any suit in equity, action at law or other judicial or administrative proceeding. "Prospectus Supplement": The Prospectus Supplement dated March 24, 1999 relating to the Notes filed with the Commission in connection with the Registration Statement heretofore filed or to be filed with the Commission pursuant to Rule 424(b)(2) or 424(b)(5). "Qualified Appraiser": An appraiser, duly appointed by the Unaffiliated Seller, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, 28 Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated. "Qualified Substitute Mortgage Loan": A mortgage loan or mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section 2.06(b) or 4.02(b) of the Sale and Servicing Agreement, which (a) has or have an interest rate at least equal to those applicable to the Deleted Mortgage Loan, (b) relates or relate to a detached one-family residence or to the same type of Residential Dwelling or Business Purpose Property, or any combination thereof, as the Deleted Mortgage Loan and in each case has or have the same or a better lien priority as the Deleted Mortgage Loan and has or have the same occupancy status as the Deleted Mortgage Loan or is or are Owner-Occupied Mortgaged Property(ies), (c) matures or mature no later than (and not more than one year earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such substitution no higher than the Loan-to-Value of the Deleted Mortgage Loan, (e) has or have a Combined Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such substitution no higher than the Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (f) has or have a Principal Balance or Principal Balances (after application of all payments received on or prior to the date of substitution) not substantially less and not more than the Principal Balance of the Deleted Mortgage Loan as of such date, and (g) complies or comply as of the date of substitution with each representation and warranty set forth in Sections 3.01 and 3.02 of the Unaffiliated Seller's Agreement. "Rating Agency": S&P or Moody's. "Rating Agency Condition": Means, with respect to any action to which a Rating Agency Condition applies, that each Rating Agency shall have been given ten (10) days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof and that each of the Rating Agencies shall have notified the Indenture Trustee, the Servicer, the Depositor, the Note Insurer and the Trust in writing that such action will not result in a reduction or withdrawal of the then current "implied" rating of the Notes that it maintains without taking into account the Note Insurance Policy. "Record Date": With respect to the Notes, the last Business Day of the month immediately preceding a month in which a Distribution Date occurs. "Redemption Price": The Termination Price or the Note Termination Price, as applicable. "Redemption Date": The Distribution Date, if any, on which (i) the Indenture is terminated and all of the Notes are redeemed pursuant to Article X of the Indenture, which date may occur on or after the Clean-Up Call Date, or (ii) a Class of Notes is redeemed pursuant to Article X of the Indenture, which date may occur on or after the related Note Clean-Up Call Date. "Reimbursement Amount": With respect to any Distribution Date and any Pool of Mortgage Loans, equals the sum of (a)(i) all Insured Payments previously 29 received by the Indenture Trustee and all Preference Amounts previously paid by the Note Insurer and in each case not previously repaid to the Note Insurer pursuant to Section 8.02(ii) of the Indenture, plus (ii) interest accrued on each such Insured Payment and Preference Amounts not previously repaid calculated at the Late Payment Rate from the date the Indenture Trustee received the related Insured Payment or Preference Amounts paid by the Note Insurer, and (b)(i) any amounts then due and owing to the Note Insurer under the Insurance Agreement (excluding the Premium Amount due on such Distribution Date), as certified to the Indenture Trustee by the Note Insurer plus (ii) interest on such amounts at the rate specified in the Insurance Agreement. The Note Insurer shall notify the Indenture Trustee and the Servicer of the amount of any Reimbursement Amount. "Remaining Excess Cashflow": For a Distribution Date and a Pool of Mortgage Loans, the Net Monthly Excess Cashflow with respect to such Pool remaining, if any, after payment of (i) any Net Mortgage Loan Interest Shortfall Amounts for such Pool and such Distribution Date, and (ii) the Shortfall Amount with respect to the other Pool of Mortgage Loans. "REMIC": A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code. "REO Disposition": The final sale by the Servicer of a Mortgaged Property acquired by the Servicer in foreclosure or by deed in lieu of foreclosure. "REO Mortgage Loan": Any Mortgage Loan which is not a Liquidated Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage Note is discharged and the related Mortgaged Property is held as part of the Trust. "REO Proceeds": Proceeds received in respect of any REO Mortgage Loan (including, without limitation, proceeds from the rental of the related Mortgaged Property). "REO Property": A Mortgaged Property acquired by the Servicer in the name of the Indenture Trustee on behalf of the Noteholders through foreclosure or deed-in-lieu of foreclosure. "Request for Release": A request for release in substantially the form attached as Exhibit F of the Sale and Servicing Agreement. "Reserve Payment Amount": With respect to any Distribution Date and any Class of Notes, the amount necessary for the funds on deposit in the related Cross-collateralization Reserve Account to equal the Specified Reserve Amount. "Residential Dwelling": A one- to four-family dwelling, a unit in a planned unit development, a unit in a condominium development or a townhouse. "Responsible Officer": When used with respect to the Indenture Trustee or the Owner Trustee, any officer assigned to the Corporate Trust Division (or any 30 successor thereto), including any Vice President, Second Vice President, Senior Trust Officer, Trust Officer, Assistant Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Indenture Trustee or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and to whom, with respect to a particular matter, such matter is referred because of such officer's knowledge of and familiarity with the particular subject. When used with respect to the Unaffiliated Seller or the Servicer, the president or any vice president, assistant vice president, or any secretary or assistant secretary. "Rolling Six Month Delinquency Rate": For any Distribution Date, the fraction, expressed as a percentage, equal to the average of the Delinquency Ratio for each of the six (1, 2, 3, 4 or 5 in the case of the first six (6) Distribution Dates, as the case may be) immediately preceding Due Periods. "Sale": The meaning specified in Section 5.17 of the Indenture. "Sale and Servicing Agreement": The Sale and Servicing Agreement, dated as of March 1, 1999, among the Trust, the Servicer, the Depositor, the Collateral Agent and the Indenture Trustee, providing for, among other things, the sale of the Mortgage Loans from the Depositor to the Trust and the servicing of the Mortgage Loans. "Securities Act": Means the Securities Act of 1933, as amended. "Servicer": American Business Credit, Inc., a Pennsylvania corporation, or any successor appointed as herein provided. "Servicer Distribution Date": With respect to any Distribution Date, the 20th day of the month in which such Distribution Date occurs, or if such 20th day is not a Business Day, the Business Day preceding such 20th day. "Servicer Event of Default": As defined in Section 7.01 of the Sale and Servicing Agreement. "Servicer Extension Notice": Has the meaning set forth in Section 8.04 of the Sale and Servicing Agreement. "Servicer Remittance Amount": With respect to any Servicer Distribution Date, an amount equal to the sum of (i) all collections of principal and interest on the Mortgage Loans (including Principal Prepayments, Net REO Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during the related Due Period, (ii) all Periodic Advances made by the Servicer with respect to interest payments due to be received on the Mortgage Loans on the related Due Date and (iii) any other amounts required to be placed in the Collection Account by the Servicer pursuant to the Sale and Servicing Agreement but excluding the following: 31 (a) amounts received on particular Mortgage Loans as late payments of interest and respecting which the Servicer has previously made an unreimbursed Periodic Advance; (b) amounts received on a particular Mortgage Loan with respect to which the Servicer has previously made an unreimbursed Servicing Advance, to the extent of such unreimbursed Servicing Advance; (c) those portions of each payment of interest on a particular Mortgage Loan which represent the Servicing Fee; (d) that portion of Liquidation Proceeds and REO Proceeds to the extent of any unpaid Servicing Fee; (e) all income from Permitted Investments that is held in the Collection Account for the account of the Servicer; (f) all amounts in respect of late fees, assumption fees, prepayment fees and similar fees; (g) certain other amounts which are reimbursable to the Servicer, as provided in this Sale and Servicing Agreement; and (h) Net Foreclosure Profits. "Servicer Remittance Report": The monthly report prepared by the Servicer and delivered to the parties specified in Section 5.16(a) of the Sale and Servicing Agreement. "Servicing Advances": All reasonable and customary "out-of-pocket" costs and expenses incurred in the performance by the Servicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged Property, (b) any enforcement or judicial proceedings, including foreclosures, (c) the management and liquidation of the REO Property, including reasonable fees paid to any independent contractor in connection therewith, (d) compliance with the obligations under Section 5.06 of the Sale and Servicing Agreement, all of which reasonable and customary out-of-pocket costs and expenses are reimbursable to the Servicer to the extent provided in Sections 5.03 and 5.06 of the Sale and Servicing Agreement. "Servicing Compensation": The Servicing Fee and other amounts to which the Servicer is entitled pursuant to Section 5.08 of the Sale and Servicing Agreement. "Servicing Fee": As to each Mortgage Loan, the annual fee payable to the Servicer, which is calculated as an amount equal to the product of (a) Servicing Fee Rate, and (b) the Principal Balance thereof. Such fee shall be calculated and payable monthly only from the amounts received in respect of interest on such Mortgage Loan and shall be 32 computed on the basis of the same Principal Balance and for the period respecting which any related interest payment on a Mortgage Loan is computed. The Servicing Fee includes any servicing fees owed or payable to any Subservicer. "Servicing Fee Rate": 0.50% per annum "Servicing Officer": Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee, the Collateral Agent and the Note Insurer by the Servicer, as such list may from time to time be amended. "Shortfall Amount": With respect to any Distribution Date and any Class of Notes, an amount, not less than zero, equal to the excess, if any, of (A) the sum of (x) the amounts specified in clause (a)(ii) of the definition of the Principal Distribution Amount for such Class and (y) the amount specified in clause (b)(vii) of the definition of the Principal Distribution Amount for such Class and (z) any shortfall in the amount distributed to the Holders of such Class in respect of the Net Mortgage Loan Interest Shortfall Amount for such Class and such Distribution Date over (B) the Available Funds for such Class and such Distribution Date, without taking into effect any Insured Payment or Shortfall Amount and prior to the application of the amounts described in Section 8.02 of the Indenture. "Special Advance": As defined in Section 5.18(b) of the Sale and Servicing Agreement. "Specified Over-collateralized Amount": Means with respect to any Distribution Date and any Pool: (a) With respect to a Distribution Date occurring on or prior to the Stepdown Date and after the Stepdown Date, if the Unaffiliated Seller has given five days written notice of its election not to "step down" as described in clause (b) below to the Indenture Trustee and the Note Insurer, the amount which is equal to 5.00% of the Maximum Collateral Amount for such Pool; (b) With respect to a Distribution Date after the Stepdown Date unless the Unaffiliated Seller has given five (5) days written notice of its election not to "step down" as described in this clause to the Indenture Trustee and the Note Insurer, (i) if the Stepdown Requirement is satisfied, the lesser of (x) the amount equal to 5.00% of the Maximum Collateral Amount for such Pool and (y) the greater of (A) the amount equal to 10.00% of the then outstanding aggregate Principal Balance of the Mortgage Loans in the related Pool of Mortgage Loans or (B) 0.50% of the Maximum Collateral Amount for such Pool or (ii) if the Stepdown Requirement is not satisfied, the amount which is equal to 5.00% of the Maximum Collateral Amount for such Pool; 33 provided, however, that if on any Distribution Date, the Mortgage Portfolio Performance Test is not satisfied, then the Specified Over-collateralized Amount will be unlimited during the period that such Mortgage Portfolio Performance Test is not satisfied. "Specified Reserve Amount": Means, with respect to any Pool and any Distribution Date, the excess, if any, of (x) the Specified Over-collateralized Amount for such Pool and such Distribution Date, over (y) the Over-collateralized Amount for such Pool and such Distribution Date. "Standard & Poor's" or "S&P": Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized statistical rating organization designated by the Note Insurer. "Startup Day": The day designated as such pursuant to Section 2.07(a) of the Trust Agreement. "Step Down Date": The Distribution Date occurring in September 2001. "Step Down Requirement": The Stepdown Requirement is satisfied for any date of determination thereof if as of such date of determination either (i) (x) the Rolling Six Month Delinquency Rate is less than 9.75%, (y) the Cumulative Loss Test is satisfied and (z) the Twelve Month Loss Amount is not greater than or equal to 0.75% of the Pool Principal Balance as of the first day of the twelfth preceding calendar month or (ii) the Note Insurer, by notice to each of the parties hereto in accordance with Section 10.06 of the Sale and Servicing Agreement, expressly waives in writing compliance with the foregoing tests for such Distribution Date. "Subsequent Cut-Off Date": With respect to any Subsequent Mortgage Loans, the close of business on the last day of the calendar month preceding the month in which the Subsequent Transfer Date for such Subsequent Mortgage Loans occurred. "Subsequent Contribution Agreement": Any Subsequent Contribution Agreement, between the Depositor and the Trust, in the form of Exhibit G to the Sale and Servicing Agreement, relating to the contribution to the Trust of Subsequent Mortgage Loans. "Subsequent Mortgage Loans": The Mortgage Loans hereafter purchased by the Trust and pledged to the Indenture Trustee with funds on deposit in either Pre-Funding Account pursuant to Section 2.14 of the Indenture. "Subsequent Pledge Agreement": Any Subsequent Pledge Agreement, between the Trust and the Indenture Trustee, in the form of Exhibit B to the Indenture, relating to the pledge to the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, of Subsequent Mortgage Loans. 34 "Subsequent Transfer": The purchase by the Trust and pledge to the Indenture Trustee of the Subsequent Mortgage Loans. "Subsequent Transfer Agreement": Any Subsequent Transfer Agreement, among the Originators, the Unaffiliated Seller and the Depositor, in the form of the Exhibit A to the Unaffiliated Seller's Agreement, relating to the transfer to the Depositor of any Subsequent Mortgage Loans. "Subsequent Transfer Date": The date on which Subsequent Mortgage Loans are purchased by the Trust with funds in either Pre-Funding Account, such date occurring before the end of either Pre-Funding Period. "Subservicers": HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a Pennsylvania corporation, or its successor in interest and New Jersey Mortgage and Investment Corp., a New Jersey corporation, or its successor in interest. "Subservicing Agreement": The agreement between the Servicer and the Subservicers relating to subservicing and/or administration of certain Mortgage Loans as provided in Section 5.13 of the Sale and Servicing Agreement, a copy of which shall be delivered, along with any modifications thereto, to the Indenture Trustee and the Note Insurer. "Substitution Adjustment": As to any date on which a substitution occurs pursuant to Sections 2.06(b) or 4.02(b) of the Sale and Servicing Agreement, the amount (if any) by which the aggregate principal balances (after application of principal payments received on or before the date of substitution) of any Qualified Substitute Mortgage Loans as of the date of substitution, are less than the aggregate of the Principal Balances of the related Deleted Mortgage Loans together with 30-days' interest thereon at the Mortgage Interest Rate. "Termination Price": The sum of (i) 100% of the Aggregate Principal Balance of each outstanding Mortgage Loan and (ii) the greater of (A) the aggregate amount of accrued and unpaid interest on the Mortgage Loans through the related Due Period and (B) thirty (30) days' interest thereon, computed at a rate equal to the related Mortgage Interest Rate, in each case net of the Servicing Fee, and (iii) any unpaid amount due the Note Insurer. "Trust": ABFS Mortgage Loan Trust 1999-1, a Delaware statutory business trust. "Trust Agreement": The Trust Agreement, dated as of March 1, 1999, among the Unaffiliated Seller, the Depositor and the Owner Trustee, relating to the establishment of the Trust. "Trust Certificate": Any one of the Pool I Trust Certificates or the Pool II Trust Certificates. 35 "Trust Certificateholder" or "Holder": A Person in whose name a Trust Certificate is registered. "Trust Estate": All money, instruments and other property subject or intended to be subject to the lien of the Indenture, for the benefit of the Noteholders and the Note Insurer, as of any particular time, including, without limitation, all property and interests, including all proceeds thereof, Granted to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to the Granting Clauses of the Indenture. The Trust Estate shall consist of two separate sub-trusts comprised of Pool I and Pool II. "Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it may be amended from time to time. "Trust Order" and "Trust Request": A written order or request of the Trust signed on behalf of the Trust by an Authorized Officer of the Owner Trustee, at the direction of the related Majority Certificateholders and delivered to the Indenture Trustee or the Authenticating Agent, as applicable. "Twelve Month Loss Amount": With respect to any Distribution Date, an amount equal to the aggregate of all Liquidated Loan Losses on the Mortgage Loans which became Liquidated Mortgage Loans during the twelve (12) preceding Due Periods. "Unaffiliated Seller": ABFS 1999-1, Inc., a Delaware corporation. "Unaffiliated Seller's Agreement": The Unaffiliated Seller's Agreement, dated as of March 1, 1999, among the Unaffiliated Seller, the Originators and the Depositor relating to the sale of the Mortgage Loans from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor. "Underwriter": Prudential Securities Incorporated. "Underwriting Guidelines": The underwriting guidelines of the Originators as approved by the Note Insurer and the Depositor. "United States Person": A citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States or any political subdivision thereof, or an estate or trust whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States or a trust if a court within the United States can exercise primary jurisdiction over its administration and at least one United States fiduciary has the authority to control all substantial decisions of the trust. 36 EX-4.2 5 UNAFFILIATED SELLER'S AGREEMENT Exhibit 4.2 UNAFFILIATED SELLER'S AGREEMENT dated as of March 1, 1999 by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as Depositor, ABFS 1999-1, INC., as Unaffiliated Seller and AMERICAN BUSINESS CREDIT, INC., HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and NEW JERSEY MORTGAGE AND INVESTMENT CORP., as Originators TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS ..................................................... 1 Section 1.01. Definitions ............................................ 1 ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS ................ 3 Section 2.01. Agreement to Purchase the Initial Mortgage Loans................................................... 3 Section 2.02. Agreement to Purchase the Subsequent Mortgage Loans .... 3 Section 2.03. Purchase Price ......................................... 4 Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage Files ......................................... 4 Section 2.05. Delivery of Mortgage Loan Documents .................... 5 Section 2.06. Acceptance of Mortgage Loans ........................... 6 Section 2.07. Transfer of Mortgage Loans; Assignment of Agreement .............................................. 7 Section 2.08. Examination of Mortgage Files .......................... 7 Section 2.09. Books and Records ...................................... 8 Section 2.10. Cost of Delivery and Recordation of Documents .......... 8 ARTICLE III REPRESENTATIONS AND WARRANTIES ................................ 8 Section 3.01. Representations and Warranties as to the Originators ............................................ 8 Section 3.02. Representations and Warranties as to the Unaffiliated Seller .................................... 11 Section 3.03. Representations and Warranties Relating to the Mortgage Loans ......................................... 13 Section 3.04. Representations and Warranties of the Depositor ........ 23 Section 3.05. Repurchase Obligation for Defective Documentation and for Breach of a Representation or Warranty ......... 24 ARTICLE IV THE UNAFFILIATED SELLER ........................................ 26 Section 4.01. Covenants of the Originators and the Unaffiliated Seller ................................................. 26 Section 4.02. Merger or Consolidation ................................ 27 Section 4.03. Costs .................................................. 27 Section 4.04. Indemnification ........................................ 28 ARTICLE V CONDITIONS OF CLOSING ........................................... 30 Section 5.01. Conditions of Depositor's Obligations .................. 30 Section 5.02. Conditions of Unaffiliated Seller's Obligations ........ 32 Section 5.03. Termination of Depositor's Obligations ................. 33 ARTICLE VI MISCELLANEOUS .................................................. 33 Section 6.01. Notices ................................................ 33 Section 6.02. Severability of Provisions ............................. 34 Section 6.03. Agreement of Unaffiliated Seller ....................... 34 Section 6.04. Survival ............................................... 34 Section 6.05. Effect of Headings and Table of Contents ............... 34 Section 6.06. Successors and Assigns ................................. 34 Section 6.07. Confirmation of Intent; Grant of Security Interest ..... 34 Section 6.08. Miscellaneous .......................................... 35 Section 6.09. Amendments ............................................. 35 Section 6.10. Third-Party Beneficiaries .............................. 36 Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL ................................... 36 Section 6.12. Execution in Counterparts .............................. 37 SCHEDULES AND EXHIBITS Schedule I - Mortgage Loan Schedule Exhibit A - Form of Subsequent Transfer Agreement This UNAFFILIATED SELLER'S AGREEMENT, dated as of March 1, 1999 (this "Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, a Delaware corporation, (the "Depositor"), ABFS 1999-1, INC., a Delaware corporation (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, a Pennsylvania corporation ("Upland") and NEW JERSEY MORTGAGE AND INVESTMENT CORP., a New Jersey corporation ("NJMIC", and together with ABC and Upland, the "Originators"). W I T N E S S E T H: WHEREAS, Schedule I attached hereto and made a part hereof lists certain fixed rate business and consumer purpose first and second lien mortgage loans (the "Mortgage Loans") owned by the Originators that the Originators desire to sell to the Unaffiliated Seller, the Unaffiliated Seller desires to sell to the Depositor and that the Depositor desires to purchase; WHEREAS, it is the intention of the Originators, the Unaffiliated Seller and the Depositor that simultaneously with the Originators' conveyance of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's conveyance of the Mortgage Loans to the Depositor on the Closing Date, (a) the Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust 1999-1, a Delaware business trust (the "Trust") pursuant to a Sale and Servicing Agreement to be dated as of March 1, 1999 (the "Sale and Servicing Agreement"), to be entered into by and among the Depositor, as depositor, the Trust, as issuer, ABC, as servicer (in such capacity, the "Servicer"), Chase Bank of Texas, N.A., a national banking association, as collateral agent (the "Collateral Agent"), and The Bank of New York, a New York banking corporation, as indenture trustee (the "Indenture Trustee"), and (b) the Trust shall issue its Mortgage Backed Notes (the "Notes"), pursuant to an Indenture, to be dated as of March 1, 1999 (the "Indenture"), by and between the Trust and the Indenture Trustee, which Notes will be secured by a pledge of the assets of the Trust. NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. (a) Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article I: "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Prospectus" means the Prospectus dated March 23, 1999 relating to the offering by the Depositor from time to time of its Mortgage Backed Notes (Issuable in Series) in the form in which it was or will be filed with the Commission pursuant to Rule 424(b) under the Securities Act with respect to the offer and sale of the Notes. "Prospectus Supplement" means the Prospectus Supplement dated March 24, 1999, relating to the offering of the Notes in the form in which it was or will be filed with the Commission pursuant to Rule 424(b) under the Securities Act with respect to the offer and sale of the Notes. "Registration Statement" means that certain registration statement on Form S-3, as amended (Registration No. 333-74859) relating to the offering by the Depositor from time to time of its Mortgage Backed Notes (Issuable in Series) as heretofore declared effective by the Commission. "Securities Act" means the Securities Act of 1933, as amended. "Termination Event" means the existence of any one or more of the following conditions: (a) a stop order suspending the effectiveness of the Registration Statement shall have been issued or a proceeding for that purpose shall have been initiated or threatened by the Commission; or (b) subsequent to the execution and delivery of this Agreement, a downgrading, or public notification of a possible change, without indication of direction, shall have occurred in the rating afforded any of the debt securities or claims paying ability of any person providing any form of credit enhancement for any of the Notes, by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act; or (c) subsequent to the execution and delivery of this Agreement, there shall have occurred an adverse change in the condition, financial or otherwise, earnings, affairs, regulatory situation or business prospects of the Note Insurer or the Unaffiliated Seller reasonably determined by the Depositor to be material; or (d) subsequent to the date of this Agreement there shall have occurred any of the following: (i) a suspension or material limitation in trading in securities substantially similar to the Notes; (ii) a general moratorium on commercial banking activities in the State of New York declared by either Federal or New York State authorities; or (iii) the engagement by the United States in hostilities, or the escalation of such hostilities, or any calamity or crisis, if the effect of any such event specified in this clause (iii) in the reasonable judgment of the Depositor makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Prospectus Supplement. (b) Capitalized terms used herein that are not otherwise defined shall have the respective meanings ascribed thereto in Appendix I to the Indenture. 2 ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS Section 2.01 Agreement to Purchase the Initial Mortgage Loans. (a) Subject to the terms and conditions of this Agreement, the Originators agree to sell, and the Unaffiliated Seller agrees to purchase on the Closing Date and immediately subsequent thereto, the Unaffiliated Seller agrees to sell, and the Depositor agrees to purchase, the Mortgage Loans having the Cut-Off Date Aggregate Principal Balance or, in accordance with Section 2.08 hereof, such other balance as is evidenced by the actual Cut-Off Date Aggregate Principal Balance of the Mortgage Loans accepted by the Depositor on the Closing Date and listed in the Mortgage Loan Schedule. (b) Subject to Section 2.08 hereof, the Depositor and the Unaffiliated Seller have agreed upon which of the Unaffiliated Seller's Mortgage Loans are to be purchased by the Depositor on the Closing Date pursuant to this Agreement, and the Unaffiliated Seller has prepared a schedule describing the Mortgage Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage Loans to be purchased under this Agreement, which Mortgage Loan Schedule is attached hereto as Schedule I. The Mortgage Loan Schedule shall conform to the requirements of the Depositor and to the definition of "Mortgage Loan Schedule" in Appendix I to the Indenture. (c) The closing for the purchase and sale of the Mortgage Loans shall take place at the offices of Dewey Ballantine LLP, New York, New York, at 10:00 a.m., New York time, on the Closing Date, or such other place and time as the parties shall agree. Section 2.02 Agreement to Purchase the Subsequent Mortgage Loans. Subject to the satisfaction of the conditions set forth in Section 2.14(b) of the Indenture, (i) in consideration of the Unaffiliated Seller's delivery on the related Subsequent Transfer Dates to or upon the order of the Originators of all or a portion of the balance of funds on deposit in the Pre-Funding Accounts, the Originators shall on any Subsequent Transfer Date sell, transfer, assign, set over and convey to the Unaffiliated Seller, without recourse, but subject to the terms and provisions of this Agreement, all of the right, title and interest of the Originators in and to the Subsequent Mortgage Loans, including all principal of, and all interest due on, such Subsequent Mortgage Loans, and all other assets included or to be included in the Trust Estate and (ii) in consideration of the Depositor's delivery on the related Subsequent Transfer Dates to or upon the order of the Unaffiliated Seller of all or a portion of the balance of funds on deposit in the Pre-Funding Accounts, the Unaffiliated Seller shall on any Subsequent Transfer Date sell, transfer, assign, set over and convey to the Depositor, without recourse, but subject to the terms and provisions of this Agreement, all of the right, title and interest of the Unaffiliated Seller in and to the Subsequent Mortgage Loans, including all principal of, and all interest due on, such Subsequent Mortgage Loans, and all other assets included or to be included in the Trust Estate. The amount released from a Pre-Funding Account with respect to a transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred percent (100%) of the Aggregate Principal Balance of such Subsequent Mortgage Loans so transferred, as of the related Subsequent Cut-Off Date. 3 The obligation of the Depositor to purchase a Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of the requirements set forth in Section 2.14(b) of the Indenture. Section 2.03 Purchase Price. (a) On the Closing Date, as consideration for the Originators' sale of the Initial Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller will deliver to the Originators an amount in cash equal to the sum of (A) 99.65%, and 99.65% of the Original Note Principal Balance as of the Closing Date of the Class A-1 Notes and Class A-2 Notes, respectively, plus (B) accrued interest on the Original Note Principal Balance of the Class A-1 Notes and Class A-2 Notes at the rate of 6.545% per annum and 6.580% per annum, respectively, from (and including) March 1, 1999 to (but not including) March 30, 1999, minus (C) the Original Pre-Funded Amount and the Original Capitalized Interest Amount for each class of Notes, payable by wire transfer of same day funds. On the Closing Date, as full consideration for the Unaffiliated Seller's sale of the Initial Mortgage Loans to the Depositor, the Depositor will deliver to, or at the direction of, the Unaffiliated Seller (i) an amount in cash equal to the sum of (A) 99.65 and 99.65% of the Original Note Principal Balance as of the Closing Date of the Class A-1 Notes and Class A-2 Notes, respectively, plus (B) accrued interest on the Original Note Principal Balance of the Class A-1 Notes and Class A-2 Notes at the rate of 6.545% per annum and 6.580% per annum, respectively, from (and including) March 1, 1999 to (but not including) March 30, 1999, minus (C) the Original Pre-Funded Amount and the Original Capitalized Interest Amount for each class of Notes, payable by wire transfer of same day funds, and (ii) the Trust Certificates to be issued pursuant to the Trust Agreement. (b) On each Subsequent Transfer Date, as full consideration for the Originators' sale of the Subsequent Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's sale of the Subsequent Mortgage Loans to the Depositor, the Depositor will deliver to the Unaffiliated Seller and the Unaffiliated Seller will deliver to the Originators an amount in cash equal to the sum of 100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans of the related Pool as of the related Subsequent Cut-Off Date. Section 2.04 Conveyance of Mortgage Loans; Possession of Mortgage Files. (a) On the Closing Date and on each Subsequent Transfer Date, the Originators shall sell, transfer, assign, set over and convey to the Unaffiliated Seller, without recourse, but subject to the terms of this Agreement, all right, title and interest in and to the applicable Mortgage Loans, including all principal outstanding as of, and all interest due after, the related Cut-Off Date, the Insurance Policies relating to each such Mortgage Loan and all right, title and interest in and to the proceeds of such Insurance Policies and all of its rights under this Agreement with respect to the Mortgage Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as applicable, and the Unaffiliated Seller shall sell, transfer, assign, set over and convey to the Depositor, without recourse, but subject to the terms of this Agreement, all right, title and interest in and to the applicable Mortgage Loans, including all principal outstanding as of, and all interest due after, the related Cut-Off Date, the Insurance Policies relating to each such Mortgage Loan, all right, title and interest in and to the proceeds of such Insurance Policies and all of its rights under this Agreement with respect to the Mortgage Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as applicable. Upon payment of the purchase price for 4 such Mortgage Loans as provided in Section 2.03 of this Agreement, the Originators and the Unaffiliated Seller shall have hereby, and shall be deemed to have, sold, transferred, assigned, set over and conveyed to the Depositor such Mortgage Loans, the Insurance Policies relating to each such Mortgage Loan, all right, title and interest in and to the proceeds of such Insurance Policies and all of its rights under this Agreement with respect to the Mortgage Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as applicable. (b) Upon the sale of such Mortgage Loans, the ownership of each related Mortgage Note, each related Mortgage and the contents of the related Mortgage File shall immediately vest in the Depositor and the ownership of all related records and documents with respect to each Mortgage Loan prepared by or which come into the possession of the Originators or the Unaffiliated Seller shall immediately vest in the Depositor. The contents of any Indenture Trustee's Mortgage File in the possession of the Originators or the Unaffiliated Seller at any time after such sale, and any principal collected and interest due on the Mortgage Loans after the related Cut-Off Date and received by the Originators or the Unaffiliated Seller, shall be held in trust by the Originators or the Unaffiliated Seller for the benefit of the Depositor as the owner thereof, and shall be promptly delivered by the Originators or the Unaffiliated Seller to or upon the order of the Depositor. (c) Pursuant to the Sale and Servicing Agreement, the Depositor shall, on the Closing Date, assign all of its right, title and interest in and to the Initial Mortgage Loans to the Trust. Pursuant to the Indenture, the Trust shall, on the Closing Date, pledge all of its right, title and interest in and to the Initial Mortgage Loans to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Section 2.05 Delivery of Mortgage Loan Documents. (a) On or prior to the Closing Date or Subsequent Transfer Date, as applicable, the related Originator shall deliver to the Unaffiliated Seller, and the Unaffiliated Seller shall deliver to the Collateral Agent, on behalf of the Indenture Trustee (as pledgee of the Trust pursuant to the Indenture, the Trust being the assignee of the Depositor pursuant to the Sale and Servicing Agreement), each of the documents for each applicable Mortgage Loan in accordance with the provisions of Section 2.05 of the Sale and Servicing Agreement. (b) As promptly as practicable, but in any event within thirty (30) days from the Closing Date or the Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall promptly submit, or cause to be submitted by the related Originator, for recording in the appropriate public office for real property records, each assignment referred to in Section 2.05(a)(iv) of the Sale and Servicing Agreement. The Collateral Agent, on behalf of the Indenture Trustee, shall be required to retain a copy of each assignment submitted for recording. In the event that any such assignment is lost or returned unrecorded because of a defect therein, the Unaffiliated Seller or such Originator shall promptly prepare a substitute assignment or cure such defect, as the case may be, and thereafter the Unaffiliated Seller or such Originator shall submit each such assignment for recording. (c) The Unaffiliated Seller or the related Originator shall, within five (5) Business Days after the receipt thereof, deliver or cause to be delivered to the Collateral Agent, on behalf of the Indenture Trustee (as pledgee of the Trust pursuant to the Indenture, the Trust 5 being the assignee of the Depositor pursuant to the Sale and Servicing Agreement): (i) the original recorded Mortgage and related power of attorney, if any, in those instances where a copy thereof certified by the related Originator was delivered to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05 of the Sale and Servicing Agreement; (ii) the original recorded assignment of Mortgage from the related Originator to the Indenture Trustee, which, together with any intervening assignments of Mortgage, evidences a complete chain of assignment from the originator of the Mortgage Loan to the Indenture Trustee in those instances where copies of such assignments certified by the related Originator were delivered to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05 of the Sale and Servicing Agreement; and (iii) the title insurance policy or title opinion required in Section 2.05(a)(vi) of the Sale and Servicing Agreement. Notwithstanding anything to the contrary contained in this Section 2.05, in those instances where the public recording office retains the original Mortgage, power of attorney, if any, assignment or assignment of Mortgage after it has been recorded or such original has been lost, the Unaffiliated Seller or the related Originator shall be deemed to have satisfied its obligations hereunder upon delivery to the Collateral Agent, on behalf of the Indenture Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or assignment of Mortgage certified by the public recording office to be a true copy of the recorded original thereof. From time to time the Unaffiliated Seller or the related Originator may forward or cause to be forwarded to the Collateral Agent, on behalf of the Indenture Trustee, additional original documents evidencing an assumption or modification of a Mortgage Loan. (d) All original documents relating to the Mortgage Loans that are not delivered to the Collateral Agent, on behalf of the Indenture Trustee, as permitted by Section 2.05(a) hereof are and shall be held by the Servicer, the Unaffiliated Seller or the related Originator in trust for the benefit of the Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the event that any such original document is required pursuant to the terms of this Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document shall be delivered promptly to the Collateral Agent, on behalf of the Indenture Trustee. From and after the sale of the Mortgage Loans to the Depositor pursuant hereto, to the extent that the Unaffiliated Seller or the related Originator retains legal title of record to any Mortgage Loans prior to the vesting of legal title in the Indenture Trustee, such title shall be retained in trust for the Trust as the owner of the Mortgage Loans, as the Depositor's assignee, and the Indenture Trustee, as the Trust's pledgee. Section 2.06 Acceptance of Mortgage Loans. (a) To evidence the transfer of the Mortgage Loans and related Mortgage Files to the Collateral Agent, on behalf of the Indenture Trustee, the Collateral Agent shall deliver the acknowledgement of receipt, the Initial Certification and the Final Certification required to be delivered pursuant to Section 2.06(b) of the Sale and Servicing Agreement. (b) The Sale and Servicing Agreement provides that, if the Collateral Agent during the process of reviewing the Indenture Trustee's Mortgage Files, finds any document constituting a part of a Indenture Trustee's Mortgage File which is not executed, has not been received, is unrelated to the Mortgage Loan identified in the Mortgage Loan Schedule, or does 6 not conform to the requirements of Section 2.05 of the Sale and Servicing Agreement or the description thereof as set forth in the Mortgage Loan Schedule, the Collateral Agent shall promptly so notify the Servicer, the Unaffiliated Seller, the Indenture Trustee, the related Originator and the Note Insurer. The Unaffiliated Seller and the Originators agrees that in performing any such review, the Collateral Agent may conclusively rely on the Unaffiliated Seller and the Originators as to the purported genuineness of any such document and any signature thereon. Each of the Originators and the Unaffiliated Seller agrees to use reasonable efforts to remedy a material defect in a document constituting part of an Indenture Trustee's Mortgage File of which it is notified. If, however, within sixty (60) days after such notice neither the Unaffiliated Seller nor any Originator has remedied the defect and the defect materially and adversely affects the interest of the Noteholders in the related Mortgage Loan or the interests of the Note Insurer, then the Unaffiliated Seller and the Originators shall be obligated to either substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan or purchase such Mortgage Loan in the manner and subject to the conditions set forth in Section 3.05 hereof. (c) The failure of the Collateral Agent, the Indenture Trustee or the Note Insurer to give any notice contemplated herein within the time periods specified above shall not affect or relieve the Unaffiliated Seller's or the Originators obligation to repurchase for any Mortgage Loan pursuant to this Section 2.06 or Section 3.05 of this Agreement. Section 2.07 Transfer of Mortgage Loans; Assignment of Agreement. The Originators and the Unaffiliated Seller each hereby acknowledges and agrees that the Depositor or the Trust may assign its interest under this Agreement to the Indenture Trustee as may be required to effect the purposes of the Indenture and the Sale and Servicing Agreement, without further notice to, or consent of, the Unaffiliated Seller or the Originators, and the Indenture Trustee shall succeed to such of the rights and obligations of the Depositor and the Trust hereunder as shall be so assigned. The Depositor shall, pursuant to the Sale and Servicing Agreement, assign all of its right, title and interest in and to the Mortgage Loans and its right to exercise the remedies created by Sections 2.06 and 3.05 hereof for breaches of the representations, warranties, agreements and covenants of the Unaffiliated Seller or the Originators contained in Sections 2.05, 2.06, 3.02 and 3.03 hereof to the Trust, and the Trust shall, pursuant to the Indenture, pledge such right, title and interest to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Each of the Originators and the Unaffiliated Seller agrees that, upon such assignment to the Trust and pledge to the Indenture Trustee, such representations, warranties, agreements and covenants will run to and be for the benefit of the Indenture Trustee and the Indenture Trustee may enforce, without joinder of the Depositor or the Trust, the repurchase obligations of the Unaffiliated Seller and the Originators set forth herein with respect to breaches of such representations, warranties, agreements and covenants. Section 2.08 Examination of Mortgage Files. Prior to the Closing Date and each Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall make the Mortgage Files available to the Depositor or its designee for examination at the Unaffiliated Seller's offices or at such other place as the Unaffiliated Seller shall reasonably specify. Such examination may be made by the Depositor or its designee at any time on or before the Closing Date or Subsequent Transfer Date, as the case may be. If the Depositor or its designee makes such examination prior to the Closing Date or Subsequent Transfer Date, as the case may be, and 7 identifies any Mortgage Loans that do not conform to the requirements of the Depositor as described in this Agreement, such Mortgage Loans shall be deleted from the Mortgage Loan Schedule and may be replaced, prior to the Closing Date or Subsequent Transfer Date, as the case may be, by substitute Mortgage Loans acceptable to the Depositor. The Depositor may, at its option and without notice to the Unaffiliated Seller, purchase all or part of the Mortgage Loans without conducting any partial or complete examination. The fact that the Depositor, the Collateral Agent or the Indenture Trustee has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the rights of the Depositor or the Indenture Trustee to demand repurchase or other relief as provided in this Agreement. Section 2.09 Books and Records. The transfer of each Mortgage Loan shall be reflected on each of the Originators' and the Unaffiliated Seller's accounting and other records, balance sheet and other financial statements as a sale of assets by the Originators to the Unaffiliated Seller, by the Unaffiliated Seller to the Depositor and by the Depositor to the Trust; provided, that the Unaffiliated Seller's tax returns shall not reflect the transfer from the Unaffiliated Seller to the Depositor and from the Depositor to the Trust as a sale of the Mortgage Loans. Each of the Originators and the Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a complete set of books and records for each Mortgage Loan which shall be clearly marked to reflect the ownership of each Mortgage Loan by the Trust, and the pledge of each Mortgage Loan by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Section 2.10 Cost of Delivery and Recordation of Documents. The costs relating to the delivery and recordation of the documents in connection with the Mortgage Loans as specified in this Article II and in Article II of the Sale and Servicing Agreement shall be borne by the Unaffiliated Seller or the Originators. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01 Representations and Warranties as to the Originators. Each of the Originators hereby represents and warrants to the Unaffiliated Seller and the Depositor, as of the Closing Date, that: (a) The Originator is a corporation duly organized, validly existing and in good standing under the laws of (i) with respect to ABC and Upland, the State of Pennsylvania, or (ii) with respect to NJMIC, the State of New Jersey, and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Originator and to perform its obligations as the Originator hereunder, and in any event the Originator is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan; the Originator has the full power and authority, corporate and otherwise, to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered 8 pursuant to this Agreement) by the Originator and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Originator; and all requisite corporate action has been taken by the Originator to make this Agreement valid and binding upon the Originator in accordance with its terms; (b) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Originator of, or compliance by the Originator with, this Agreement or the sale of the Mortgage Loans pursuant to the terms of this Agreement or the consummation of the transactions contemplated by this Agreement, or if required, such approval has been obtained prior to the Closing Date; (c) Neither the execution and delivery of this Agreement, the acquisition nor origination of the Mortgage Loans by the Originator or the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, has or will conflict with or result in a breach of any of the terms, conditions or provisions of the Originator's charter or by-laws or any legal restriction or any agreement or instrument to which the Originator is now a party or by which it is bound or to which its property is subject, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Originator or its property is subject, or impair the ability of the Indenture Trustee (or the Servicer as the agent of the Indenture Trustee) to realize on the Mortgage Loans, or impair the value of the Mortgage Loans; (d) Neither this Agreement nor the information contained in the Prospectus Supplement (other than the information under the caption "Underwriting") nor any statement, report or other document prepared by the Originator and furnished or to be furnished pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement or alleged untrue statement of any material fact or omits to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading; (e) There is no action, suit, proceeding or investigation pending or, to the knowledge of the Originator, threatened before a court, administrative agency or government tribunal against the Originator which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Originator, or in any material impairment of the right or ability of the Originator to carry on its business substantially as now conducted, or in any material liability on the part of the Originator, or which would draw into question the validity of this Agreement, the Mortgage Loans, or of any action taken or to be taken in connection with the obligations of the Originator contemplated herein, or which would impair materially the ability of the Originator to perform under the terms of this Agreement or that will prohibit its entering into this Agreement or the consummation of any of the transactions contemplated hereby; 9 (f) The Originator is not in violation of or in default with respect to, and the execution and delivery of this Agreement by the Originator and its performance of and compliance with the terms hereof will not constitute a violation or default with respect to, any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which violation or default might have consequences that would materially and adversely affect the condition (financial or other) or operations of the Originator or its properties or might have consequences that would materially and adversely affect its performance hereunder or under any subservicing agreement; (g) Upon the receipt of each Mortgage File by the Depositor (or its assignee) under this Agreement, the Depositor (or its assignee) will have good title to each related Mortgage Loan and such other items comprising the corpus of the Trust Estate free and clear of any lien created by the Originator (other than liens which will be simultaneously released); (h) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Originator, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Originator pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction; (i) With respect to any Mortgage Loan purchased by the Originator, the Originator acquired title to the Mortgage Loan in good faith, without notice of any adverse claim; (j) The Originator does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Originator is solvent and the sale of the Mortgage Loans by the Originator pursuant to the terms of this Agreement will not cause the Originator to become insolvent. The sale of the Mortgage Loans by the Originator pursuant to the terms of this Agreement was not undertaken with the intent to hinder, delay or defraud any of the Originator's creditors; (k) The Mortgage Loans are not intentionally selected in a manner so as to affect adversely the interests of the Depositor or of any transferee of the Depositor (including the Trust and the Indenture Trustee); (l) The Originator has determined that it will treat the disposition of the Mortgage Loans pursuant to this Agreement as a sale for accounting and tax purposes; (m) The Originator has not dealt with any broker or agent or anyone else that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans to the Depositor other than to the Depositor or an affiliate thereof; and (n) The consideration received by the Originator upon the sale of the Mortgage Loans under this Agreement constitutes fair consideration and reasonably equivalent value for the Mortgage Loans. 10 Section 3.02 Representations and Warranties as to the Unaffiliated Seller. The Unaffiliated Seller hereby represents and warrants to the Depositor, as of the Closing Date, that: (a) The Unaffiliated Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Unaffiliated Seller and to perform its obligations as the Unaffiliated Seller hereunder, and in any event the Unaffiliated Seller is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan; the Unaffiliated Seller has the full power and authority, corporate and otherwise, to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Unaffiliated Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Unaffiliated Seller; and all requisite corporate action has been taken by the Unaffiliated Seller to make this Agreement valid and binding upon the Unaffiliated Seller in accordance with its terms; (b) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Unaffiliated Seller of or compliance by the Unaffiliated Seller with this Agreement or the sale of the Mortgage Loans pursuant to the terms of this Agreement or the consummation of the transactions contemplated by this Agreement, or if required, such approval has been obtained prior to the Closing Date; (c) Neither the execution and delivery of this Agreement, the acquisition nor origination of the Mortgage Loans by the Unaffiliated Seller nor the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, has or will conflict with or result in a breach of any of the terms, conditions or provisions of the Unaffiliated Seller's charter or by-laws or any legal restriction or any agreement or instrument to which the Unaffiliated Seller is now a party or by which it is bound or to which its property is subject, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Unaffiliated Seller or its property is subject, or impair the ability of the Indenture Trustee (or the Servicer as the agent of the Indenture Trustee) to realize on the Mortgage Loans, or impair the value of the Mortgage Loans; (d) Neither this Agreement nor the information contained in the Prospectus Supplement (other than the information under the caption "Underwriting") nor any statement, report or other document prepared by the Unaffiliated Seller and furnished or to be furnished pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement or alleged untrue statement of any material fact or omits to state a material fact necessary to make the statements contained 11 herein or therein, in light of the circumstances under which they were made, not misleading; (e) There is no action, suit, proceeding or investigation pending nor, to the knowledge of the Unaffiliated Seller, threatened before a court, administrative agency or government tribunal against the Unaffiliated Seller which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Unaffiliated Seller, or in any material impairment of the right or ability of the Unaffiliated Seller to carry on its business substantially as now conducted, or in any material liability on the part of the Unaffiliated Seller, or which would draw into question the validity of this Agreement, the Mortgage Loans, or of any action taken or to be taken in connection with the obligations of the Unaffiliated Seller contemplated herein, or which would impair materially the ability of the Unaffiliated Seller to perform under the terms of this Agreement or that will prohibit its entering into this Agreement or the consummation of any of the transactions contemplated hereby; (f) The Unaffiliated Seller is not in violation of or in default with respect to, and the execution and delivery of this Agreement by the Unaffiliated Seller and its performance of and compliance with the terms hereof will not constitute a violation or default with respect to, any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which violation or default might have consequences that would materially and adversely affect the condition (financial or other) or operations of the Unaffiliated Seller or its properties or might have consequences that would materially and adversely affect its performance hereunder or under any subservicing agreement; (g) Upon the receipt of each Mortgage File by the Depositor (or its assignee) under this Agreement, the Depositor (or its assignee) will have good title to each related Mortgage Loan and such other items comprising the corpus of the Trust Estate free and clear of any lien created by the Unaffiliated Seller (other than liens which will be simultaneously released); (h) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Unaffiliated Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Unaffiliated Seller pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction; (i) With respect to any Mortgage Loan purchased by the Unaffiliated Seller, the Unaffiliated Seller acquired title to the Mortgage Loan in good faith, without notice of any adverse claim; (j) The Unaffiliated Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Unaffiliated Seller is solvent and the sale of the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this Agreement will not cause the Unaffiliated 12 Seller to become insolvent. The sale of the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this Agreement was not undertaken with the intent to hinder, delay or defraud any of the Unaffiliated Seller's creditors; (k) The Mortgage Loans are not intentionally selected in a manner so as to affect adversely the interests of the Depositor or of any transferee of the Depositor (including the Trust and the Indenture Trustee); (l) The Unaffiliated Seller has determined that it will treat the disposition of the Mortgage Loans pursuant to this Agreement as a sale for accounting purposes; (m) The Unaffiliated Seller has not dealt with any broker or agent or anyone else that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans to the Depositor other than to the Depositor or an affiliate thereof; and (n) The consideration received by the Unaffiliated Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair consideration and reasonably equivalent value for the Mortgage Loans. Section 3.03 Representations and Warranties Relating to the Mortgage Loans. The Originators represent and warrant to the Unaffiliated Seller and the Unaffiliated Seller represents to the Depositor that, as of the Closing Date, as to each Initial Mortgage Loan, and as of the Subsequent Transfer Date, as to each Subsequent Mortgage Loan, immediately prior to the sale and transfer of such Mortgage Loan by the Unaffiliated Seller to the Depositor: (a) The information set forth in each Mortgage Loan Schedule is complete, true and correct; (b) The information to be provided by the Unaffiliated Seller or the Originators, directly or indirectly, to the Depositor in connection with a Subsequent Mortgage Loan will be true and correct in all material respects at the date or dates respecting which such information is furnished; (c) Each Mortgage is a valid first or second lien on a fee simple (or its equivalent under applicable state law) estate in the real property securing the amount owed by the Mortgagor under the Mortgage Note subject only to (i) the lien of current real property taxes and assessments which are not delinquent, (ii) with respect to any Mortgage Loan identified on the Mortgage Loan Schedule as secured by a second lien, the related first mortgage loan, (iii) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions appearing of record being acceptable to mortgage lending institutions generally in the area wherein the property subject to the Mortgage is located or specifically reflected in the appraisal obtained in connection with the origination of the related Mortgage Loan obtained by the Unaffiliated Seller and (iv) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by such Mortgage; 13 (d) Immediately prior to the transfer and assignment by the related Originator to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor, the Unaffiliated Seller or such Originator, as applicable, had good title to, and was the sole owner of each Mortgage Loan, free of any interest of any other Person, and the Unaffiliated Seller or such Originator has transferred all right, title and interest in each Mortgage Loan to the Depositor or the Unaffiliated Seller, as applicable; (e) As of the applicable Cut-Off Date, no payment of principal or interest on or in respect of any Mortgage Loan remains unpaid for thirty (30) or more days past the date the same was due in accordance with the related Mortgage Note without regard to applicable grace periods; (f) As of the Initial Cut-Off Date, no Mortgage Loan has a Mortgage Interest Rate less than 8.24% per annum in Pool I and 7.50% per annum in Pool II and the weighted average Mortgage Interest Rate of the Mortgage Loans is 11.04% in Pool I and 11.49% in Pool II; (g) At origination, no Mortgage Loan in Pool I or Pool II had an original term to maturity of greater than 360 months; (h) As of the Initial Cut-Off Date, the weighted average remaining term to maturity of the Mortgage Loans is 266 months for the Mortgage Loans in Pool I and 244 months for the Mortgage Loans in Pool II; (i) To the best knowledge of the Unaffiliated Seller and each of the Originators, there is no mechanics' lien or claim for work, labor or material (and no rights are outstanding that under law could give rise to such lien) affecting the premises subject to any Mortgage which is or may be a lien prior to, or equal or coordinate with, the lien of such Mortgage, except those which are insured against by the title insurance policy referred to in (ff) below; (j) To the best knowledge of the Unaffiliated Seller and each of the Originators, there is no delinquent tax or assessment lien against any Mortgaged Property; (k) Such Mortgage Loan, the Mortgage, and the Mortgage Note, including, without limitation, the obligation of the Mortgagor to pay the unpaid principal of and interest on the Mortgage Note, are each not subject to any right of rescission (or any such rescission right has expired in accordance with applicable law), set-off, counterclaim, or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim, or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim, or defense has been asserted with respect thereto; (l) To the best knowledge of the Unaffiliated Seller and each of the Originators, the Mortgaged Property is free of material damage and is in good repair, and 14 there is no pending or threatened proceeding for the total or partial condemnation of the Mortgaged Property; (m) Neither the Originators nor the Unaffiliated Seller has received a notice of default of any first mortgage loan secured by the Mortgaged Property which has not been cured by a party other than the Unaffiliated Seller; (n) Each Mortgage Note and Mortgage are in substantially the forms previously provided to the Depositor and the Indenture Trustee on behalf of the Unaffiliated Seller; (o) No Mortgage Loan had, at the date of origination, a CLTV in excess of 100%, and the weighted average CLTV of all Mortgage Loans as of the Initial Cut-Off Date is approximately 78.98% in Pool I and 73.43% in Pool II; (p) The Mortgage Loan was not originated in a program in which the amount of documentation in the underwriting process was limited in comparison to the originator's normal documentation requirements; (q) No more than the following percentages of the Mortgage Loans by Cut-Off Date Aggregate Principal Balance are secured by Mortgaged Properties located in the following states: Pool I --------------------------------------------------------------------- Percentage of Cut-Off Date Aggregate State Principal Balance ------------------------------- ------------------------------ California 0.12% Connecticut 1.62 Delaware 2.45 Florida 7.65 Georgia 7.49 Illinois 4.50 Indiana 0.05 Kentucky 0.16 Maine 0.05 Maryland 2.42 Michigan 0.02 Mississippi 0.52 New Jersey 29.78 New York 23.88 North Carolina 1.20 Ohio 1.80 Pennsylvania 14.10 South Carolina 0.17 Tennessee 0.24 Virginia 1.51 West Virginia 0.24 ---------------------- 100.00% ====================== 15 Pool II --------------------------------------------------------------------- Percentage of Cut-Off Date Aggregate State Principal Balance ------------------------------- ------------------------------ Arizona 0.08 Colorado 0.09 Connecticut 2.45 Delaware 1.88 Florida 9.19 Georgia 10.37 Illinois 5.43 Indiana 0.47 Kentucky 0.41 Maryland 1.70 Michigan 0.13 Mississippi 0.80 Missouri 0.06 Nebraska 0.37 New Jersey 20.78 New York 17.73 North Carolina 1.75 Ohio 1.98 Pennsylvania 21.11 South Carolina 0.45 Tennessee 0.50 Vermont 0.07 Virginia 1.87 West Virginia 0.33 ---------------------- 100.00% ====================== (r) The Mortgage Loans were not selected by the Unaffiliated Seller or the Originators for sale hereunder or inclusion in the Trust Estate on any basis adverse to the Trust Estate relative to the portfolio of similar mortgage loans of the Unaffiliated Seller or the Originators; (s) None of the Mortgage Loans constitutes a lien on leasehold interests; (t) Each Mortgage contains customary and enforceable provisions which render the rights and remedies of the holder thereof adequate for the realization against the related Mortgaged Property of the benefits of the security including (A) in the case of a Mortgage designated as a deed of trust, by trustee's sale and (B) otherwise by judicial foreclosure. To the best of the Unaffiliated Seller's and the Originators' knowledge, there is no homestead or other exemption available to the related Mortgagor which would materially interfere with the right to sell the related Mortgaged Property at a trustee's sale or the right to foreclose the related Mortgage. The Mortgage contains customary and enforceable provisions for the acceleration of the payment of the Principal Balance of such Mortgage Loan in the event all or any part of the related Mortgaged Property is sold or otherwise transferred without the prior written consent of the holder thereof; (u) The proceeds of such Mortgage Loan have been fully disbursed, including reserves set aside by the Unaffiliated Seller or the Originators, there is no requirement for, and neither the Unaffiliated Seller nor the Originators shall make any, future advances thereunder. Any future advances made prior to the applicable Cut-Off Date have been consolidated with the principal balance secured by the Mortgage, and such 16 principal balance, as consolidated, bears a single interest rate and single repayment term reflected on the applicable Mortgage Loan Schedule. The Principal Balance as of the applicable Cut-Off Date does not exceed the original principal amount of such Mortgage Loan. Except with respect to no more than $150,000 of escrow funds, any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with. All costs, fees, and expenses incurred in making, or recording such Mortgage Loan have been paid; (v) All Mortgage Loans were originated in compliance with the Originators' Underwriting Guidelines; (w) The terms of the Mortgage and the Mortgage Note have not been impaired, waived, altered, or modified in any respect, except by a written instrument which has been recorded, if necessary, to protect the interest of the Indenture Trustee and which has been delivered to the Collateral Agent, on behalf of the Indenture Trustee. The substance of any such alteration or modification is or as to Subsequent Mortgage Loans will be reflected on the applicable Mortgage Loan Schedule and, to the extent necessary, has been or will be approved by (i) the insurer under the applicable mortgage title insurance policy, and (ii) the insurer under any other insurance policy required hereunder for such Mortgage Loan where such insurance policy requires approval and the failure to procure approval would impair coverage under such policy; (x) No instrument of release, waiver, alteration, or modification has been executed in connection with such Mortgage Loan, and no Mortgagor has been released, in whole or in part, except in connection with an assumption agreement which has been approved by the insurer under any insurance policy required hereunder for such Mortgage Loan where such policy requires approval and the failure to procure approval would impair coverage under such policy, and which is part of the Mortgage File and has been delivered to the Collateral Agent, on behalf of the Indenture Trustee, and the terms of which are reflected in the applicable Mortgage Loan Schedule; (y) Other than delinquencies described in clause (e) above, there is no default, breach, violation, or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute such a default, breach, violation or event of acceleration, and neither the Originators nor the Unaffiliated Seller has waived any such default, breach, violation or event of acceleration. All taxes, governmental assessments (including assessments payable in future installments), insurance premiums, water, sewer, and municipal charges, leaseholder payments, or ground rents which previously became due and owing in respect of or affecting the related Mortgaged Property have been paid. Neither the Originators nor the Unaffiliated Seller has advanced funds, or induced, solicited, or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required by the Mortgage or the Mortgage Note; (z) All of the improvements which were included for the purposes of determining the Appraised Value of the Mortgaged Property were completed at the time 17 that such Mortgage Loan was originated and lie wholly within the boundaries and building restriction lines of such Mortgaged Property. Except for de minimis encroachments, no improvements on adjoining properties encroach upon the Mortgaged Property. To the best of the Unaffiliated Seller's and the Originators' knowledge, no improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation. All inspections, licenses, and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property (including all such improvements which were included for the purpose of determining such Appraised Value) and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriters certificates, have been made or obtained from the appropriate authorities and the Mortgaged Property is lawfully occupied under applicable law; (aa) To the best of the Unaffiliated Seller's and the Originators' knowledge, there do not exist any circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor, or the Mortgagor's credit standing that can be reasonably expected to cause such Mortgage Loan to become delinquent or adversely affect the value or marketability of such Mortgage Loan, other than any such circumstances or conditions permitted under the Originator's Underwriting Guidelines; (bb) All parties which have had any interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located and (ii) (A) organized under the laws of such state, (B) qualified to do business in such state, (C) federal savings and loan associations or national banks having principal offices in such state, (D) not doing business in such state, or (E) not required to qualify to do business in such state; (cc) The Mortgage Note and the Mortgage are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors' rights generally and except that the equitable remedy of specific performance and other equitable remedies are subject to the discretion of the courts. All parties to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and convey the estate therein purported to be conveyed, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties or pursuant to a valid power-of-attorney that has been recorded with the Mortgage; (dd) The transfer of the Mortgage Note and the Mortgage as and in the manner contemplated by this Agreement is sufficient either (i) fully to transfer to the Depositor all right, title, and interest of the Unaffiliated Seller and the Originators thereto as note holder and mortgagee or (ii) to grant to the Depositor the security interest referred to in Section 6.07 hereof. The Mortgage has been duly assigned and the Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.04(a)(iv) of the Sale and Servicing 18 Agreement is in recordable form and is acceptable for recording under the laws of the applicable jurisdiction. The endorsement of the Mortgage Note, the delivery to the Collateral Agent, on behalf of the Indenture Trustee, of the endorsed Mortgage Note, and such Assignment of Mortgage, and the delivery of such Assignment of Mortgage for recording to, and the due recording of such Assignment of Mortgage in, the appropriate public recording office in the jurisdiction in which the Mortgaged Property is located are sufficient to permit the Indenture Trustee to avail itself of all protection available under applicable law against the claims of any present or future creditors of the Unaffiliated Seller and the Originators, and are sufficient to prevent any other sale, transfer, assignment, pledge, or hypothecation of the Mortgage Note and Mortgage by the Unaffiliated Seller or the Originators from being enforceable; (ee) Any and all requirements of any federal, state, or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, or disclosure laws applicable to such Mortgage Loan have been complied with, and the Servicer shall maintain in its possession, available for the Indenture Trustee's inspection, and shall deliver to the Indenture Trustee or its designee upon demand, evidence of compliance with all such requirements. The consummation of the transactions contemplated by this Agreement will not cause the violation of any such laws; (ff) Such Mortgage Loan is covered by an ALTA mortgage title insurance policy or such other generally used and acceptable form of policy, issued by and the valid and binding obligation of a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the Unaffiliated Seller, and its successors and assigns, as to the first or second priority lien, as applicable, of the Mortgage in the original principal amount of such Mortgage Loan. The assignment to the Indenture Trustee of the Unaffiliated Seller's interest in such mortgage title insurance policy does not require the consent of or notification to the insurer. Such mortgage title insurance policy is in full force and effect and will be in full force and effect and inure to the benefit of the Indenture Trustee upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such mortgage title insurance policy and none of the Unaffiliated Seller, the Originators nor any prior holder of the Mortgage has done, by act or omission, anything which would impair the coverage of such mortgage title insurance policy; (gg) All improvements upon the Mortgaged Property are insured against loss by fire, hazards of extended coverage, and such other hazards as are customary in the area where the Mortgaged Property is located pursuant to insurance policies conforming to the requirements of Section 3.05 hereof. If the Mortgaged Property at origination was located in an area identified on a flood hazard boundary map or flood insurance rate map issued by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available), such Mortgaged Property was covered by flood insurance at origination. Each individual insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of the Indenture Trustee upon the consummation of the transactions contemplated by this Agreement, and contain a standard mortgage clause 19 naming the originator of such Mortgage Loan, and its successors and assigns, as mortgagee and loss payee. All premiums thereon have been paid. The Mortgage obligates the Mortgagor to maintain all such insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at the Mortgagor's cost and expense and to seek reimbursement therefor from the Mortgagor, and none of the Unaffiliated Seller, the related Originator or any prior holder of the Mortgage has acted or failed to act so as to impair the coverage of any such insurance policy or the validity, binding effect, and enforceability thereof; (hh) If the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in such Mortgage, as no fees or expenses are or will become payable by the trustee or the Noteholders to the Indenture Trustee under the deed of trust, except in connection with a trustee's sale after default by the Mortgagor; (ii) The Mortgaged Property consists of one or more parcels of real property separately assessed for tax purposes. To the extent there is erected thereon a detached or an attached one-family residence or a detached two-to six-family dwelling, or an individual condominium unit in a low-rise condominium, or an individual unit in a planned unit development, or a commercial property, a mobile home, or a mixed use or multiple purpose property, such residence, dwelling or unit is not (i) a unit in a cooperative apartment, (ii) a property constituting part of a syndication, (iii) a time share unit, (iv) a property held in trust, (v) a manufactured dwelling, (vi) a log-constructed home, or (vii) a recreational vehicle; (jj) There exist no material deficiencies with respect to escrow deposits and payments, if such are required, for which customary arrangements for repayment thereof have not been made or which the Unaffiliated Seller or the related Originator expects not to be cured, and no escrow deposits or payments of other charges or payments due the Unaffiliated Seller have been capitalized under the Mortgage or the Mortgage Note; (kk) Such Mortgage Loan was not originated at a below market interest rate. Such Mortgage Loan does not have a shared appreciation feature, or other contingent interest feature; (ll) The origination and collection practices used by the Unaffiliated Seller, the Originators or the Servicer with respect to such Mortgage Loan have been in all respects legal, proper, prudent, and customary in the mortgage origination and servicing business; (mm) The Mortgagor has, to the extent required by applicable law, executed a statement to the effect that the Mortgagor has received all disclosure materials, if any, required by applicable law with respect to the making of fixed-rate mortgage loans. The Servicer shall maintain or cause to be maintained such statement in the Mortgage File; 20 (nn) All amounts received by the Unaffiliated Seller or the Originators with respect to such Mortgage Loan after the applicable Cut-Off Date and required to be deposited in the related Distribution Account have been so deposited in the related Distribution Account and are, as of the Closing Date, or will be as of the Subsequent Transfer Date, as applicable, in the related Distribution Account; (oo) The appraisal report with respect to the Mortgaged Property contained in the Mortgage File was signed prior to the approval of the application for such Mortgage Loan by a qualified appraiser, duly appointed by the originator of such Mortgage Loan, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof and whose compensation is not affected by the approval or disapproval of such application; (pp) When measured by the Cut-Off Date Aggregate Principal Balance, the Mortgagors with respect to at least 93.20% of the Mortgage Loans in Pool I and 86.76% of the Mortgage Loans in Pool II, represented at the time of origination that the Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary residence; (qq) Each of the Originators and the Unaffiliated Seller has no knowledge with respect to the Mortgaged Property of any governmental or regulatory action or third party claim made, instituted or threatened in writing relating to a violation of any applicable federal, state or local environmental law, statute, ordinance, regulation, order, decree or standard; (rr) [Reserved]; (ss) With respect to second lien Mortgage Loans: (i) the Unaffiliated Seller and the Originators have no knowledge that the Mortgagor has received notice from the holder of the prior mortgage that such prior mortgage is in default, (ii) no consent from the holder of the prior mortgage is needed for the creation of the second lien Mortgage or, if required, has been obtained and is in the related Mortgage File, (iii) if the prior mortgage has a negative amortization, the CLTV was determined using the maximum loan amount of such prior mortgage, (iv) the related first mortgage loan encumbering the related Mortgaged Property does not have a mandatory future advance provision, and (v) the Mortgage Loans conform in all material respects to the description thereof in the Prospectus Supplement. (tt) Each of the Originators and the Unaffiliated Seller further represents and warrants to the Indenture Trustee, the Note Insurer and the Noteholders that as of the Subsequent Cut-Off Date all representations and warranties set forth in clauses (a) 21 through (ss) above will be correct in all material respects as to each Subsequent Mortgage Loan, and the representations so made in this subsection (tt) as to the following matters will be deemed to be correct if: (i) each Subsequent Mortgage Loan may not be thirty (30) or more days contractually delinquent as of the related Subsequent Cut-Off Date; (ii) the original term to maturity of such Subsequent Mortgage Loan may not exceed 360 months for Pool I and 360 months for Pool II; (iii) such Subsequent Mortgage Loan must have a mortgage interest rate of at least 7.75% for Pool I and 7.00% for Pool II; (iv) the purchase of the Subsequent Mortgage Loans is consented to by the Note Insurer and the Rating Agencies, notwithstanding the fact that the Subsequent Mortgage Loans meet the parameters stated herein; (v) the principal balance of any such Subsequent Mortgage Loan may not exceed $240,000.00 for Pool I and $340,000.00 for Pool II; (vi) no more than 13.50% for Pool I and 30.00% for Pool II of the aggregate principal balance of such Subsequent Mortgage Loans may be Second Liens; (vii) no such Subsequent Mortgage Loan shall have a CLTV of more than (a) for consumer purpose loans, 91.75% for Pool I and 90.25% for Pool II, and (b) for business purpose loans, 75% for Pool I and 78% for Pool II; (viii) no more than 40% for Pool I and 55% for Pool II of such Subsequent Mortgage Loans may be Balloon Loans; (ix) no more than 6% for Pool I and 13% for Pool II of such Subsequent Mortgage Loans may be secured by mixed-use properties, commercial properties, or five or more unit multifamily properties; and (x) following the purchase of such Subsequent Mortgage Loans by the Trust, the Mortgage Loans (including the Subsequent Mortgage Loans), (a) will have a weighted average mortgage interest rate, (I) for consumer purpose loans, of at least 10.25% for Pool I and 10.50% for Pool II and (II) for business purpose loans, of at least 15.75% for Pool I and 15.75% for Pool II; and (b) will have a weighted average CLTV of not more than (I) for consumer purpose loans, 80% for Pool I and 75% for Pool II, and (II) for business purpose loans, 62% for Pool I and 62% for Pool II. (uu) To the best of the Unaffiliated Seller's and the Originators' knowledge, no error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of any person, including without limitation the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan; (vv) Each Mortgaged Property is in compliance with all environmental laws, ordinances, rules, regulations and orders of federal, state or governmental authorities relating thereto. No hazardous material has been or is incorporated in, stored on or under, released from, treated on, transported to or from, or disposed of on or from, any Mortgaged Property such that, under applicable law (A) any such hazardous material would be required to be eliminated before the Mortgaged Property could be altered, renovated, demolished or transferred, or (B) the owner of the Mortgaged Property, or the holder of a security interest therein, could be subjected to liability for the removal of such hazardous material or the elimination of the hazard created thereby. Neither the Unaffiliated Seller nor any Mortgagor has received notification from any federal, state or other governmental authority relating to any hazardous materials on or affecting the Mortgaged Property or to any potential or known liability under any environmental law arising from the ownership or operation of the Mortgaged Property. For the purposes of 22 this subsection, the term "hazardous materials" shall include, without limitation, gasoline, petroleum products, explosives, radioactive materials, polychlorinated biphenyls or related or similar materials, asbestos or any material containing asbestos, lead, lead-based paint and any other substance or material as may be defined as a hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, regulation or order, including, without limitation, CERCLA, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act and any regulations promulgated pursuant thereto; and (ww) With respect to any business purpose loan, the related Mortgage Note contains an acceleration clause, accelerating the maturity date under the Mortgage Note to the date the individual guarantying such loan becomes subject to any bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors' rights generally. Section 3.04 Representations and Warranties of the Depositor. The Depositor hereby represents, warrants and covenants to the Unaffiliated Seller, as of the date of execution of this Agreement and the Closing Date, that: (a) The Depositor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) The Depositor has the corporate power and authority to purchase each Mortgage Loan and to execute, deliver and perform, and to enter into and consummate all the transactions contemplated by this Agreement; (c) This Agreement has been duly and validly authorized, executed and delivered by the Depositor, and, assuming the due authorization, execution and delivery hereof by the Unaffiliated Seller and the Originators, constitutes the legal, valid and binding agreement of the Depositor, enforceable against the Depositor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); (d) No consent, approval, authorization or order of or registration or filing with, or notice to, any governmental authority or court is required for the execution, delivery and performance of or compliance by the Depositor with this Agreement or the consummation by the Depositor of any of the transactions contemplated hereby, except such as have been made on or prior to the Closing Date; (e) The Depositor has filed or will file the Prospectus and Prospectus Supplement with the Commission in accordance with Rule 424(b) under the Securities Act; and (f) None of the execution and delivery of this Agreement, the purchase of the Mortgage Loans from the Unaffiliated Seller, the consummation of the other transactions contemplated hereby, or the fulfillment of or compliance with the terms and conditions of 23 this Agreement, (i) conflicts or will conflict with the charter or bylaws of the Depositor or conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default or results or will result in an acceleration under, any term, condition or provision of any indenture, deed of trust, contract or other agreement or other instrument to which the Depositor is a party or by which it is bound and which is material to the Depositor, or (ii) results or will result in a violation of any law, rule, regulation, order, judgment or decree of any court or governmental authority having jurisdiction over the Depositor. Section 3.05 Repurchase Obligation for Defective Documentation and for Breach of a Representation or Warranty. (a) Each of the representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall survive the purchase by the Depositor of the Mortgage Loans, the subsequent transfer thereof by the Depositor to the Trust and the subsequent pledge thereof by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and shall continue in full force and effect, notwithstanding any restrictive or qualified endorsement on the Mortgage Notes and notwithstanding subsequent termination of this Agreement, the Sale and Servicing Agreement or the Indenture. (b) With respect to any representation or warranty contained in Sections 3.01 or 3.03 hereof that is made to the best of the Originators' knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the best of the Unaffiliated Seller's knowledge, if it is discovered by the Servicer, any Subservicer, the Indenture Trustee, the Collateral Agent, the Depositor, the Note Insurer or any Noteholder that the substance of such representation and warranty was inaccurate as of the Closing Date or the Subsequent Transfer Date, as applicable, and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding the Originators' or the Unaffiliated Seller's lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made, such inaccuracy shall be deemed a breach of the applicable representation or warranty. Upon discovery by the Originators, the Unaffiliated Seller, the Servicer, any Subservicer, the Indenture Trustee, the Collateral Agent, the Note Insurer, the Depositor or any Noteholder of a breach of any of such representations and warranties which materially and adversely affects the value of Mortgage Loans or the interest of the Noteholders, or which materially and adversely affects the interests of the Note Insurer or the Noteholders in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan (notwithstanding that such representation and warranty was made to the Originators' or the Unaffiliated Seller's best knowledge), the party discovering such breach shall give, pursuant to this Section 3.05(b) and pursuant to Section 4.02 of the Sale and Servicing Agreement, prompt written notice to the others. Subject to the next to last paragraph of this Section 3.05(b), within sixty (60) days of the earlier of its discovery or its receipt of notice of any breach of a representation or warranty, the Unaffiliated Seller and the Originators shall (a) promptly cure such breach in all material respects, or (b) purchase such Mortgage Loan at a purchase price equal to the Loan Repurchase Price, or (c) remove such Mortgage Loan from the Trust Estate (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans. Any such substitution shall be accompanied by payment by the Unaffiliated Seller of the Substitution Adjustment, if any, to be deposited in the related Distribution Account pursuant to the Sale and Servicing Agreement. 24 The Originators shall cooperate with the Unaffiliated Seller to cure any breach and shall reimburse the Unaffiliated Seller for the costs and expenses related to any cure, substitution (including any Substitution Adjustment) or repurchase incurred by the Unaffiliated Seller pursuant to this Section 3.05. (c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller or an Originator substitutes a Qualified Substitute Mortgage Loan or Loans, the Unaffiliated Seller or such Originator shall effect such substitution by delivering to the Indenture Trustee and the Collateral Agent, a certification in the form attached to the Sale and Servicing Agreement as Exhibit H, executed by a Servicing Officer and the documents described in Section 2.05(a) of the Sale and Servicing Agreement for such Qualified Substitute Mortgage Loan or Loans. Pursuant to the Sale and Servicing Agreement, upon receipt by the Indenture Trustee and the Collateral Agent of a certification of a Servicing Officer of such substitution or purchase and, in the case of a substitution, upon receipt by the Collateral Agent, on behalf of the Indenture Trustee of the related Mortgage File, and the deposit of certain amounts in the related Distribution Account pursuant to Section 2.07(b) of the Sale and Servicing Agreement (which certification shall be in the form of Exhibit H to the Sale and Servicing Agreement), the Collateral Agent, on behalf of the Indenture Trustee, shall be required to release to the Servicer for release to the Unaffiliated Seller the related Indenture Trustee's Mortgage File and shall be required to execute, without recourse, and deliver such instruments of transfer furnished by the Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to the Unaffiliated Seller or such Originator. (d) Pursuant to the Sale and Servicing Agreement, the Servicer shall deposit in the related Distribution Account all payments received in connection with such Qualified Substitute Mortgage Loan or Loans after the date of such substitution. Monthly Payments received with respect to Qualified Substitute Mortgage Loans on or before the date of substitution will be retained by the Unaffiliated Seller. The Trust will own all payments received on the Deleted Mortgage Loan on or before the date of substitution, and the Unaffiliated Seller shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. Pursuant to the Sale and Servicing Agreement, the Servicer shall be required to give written notice to the Indenture Trustee, the Collateral Agent and the Note Insurer that such substitution has taken place and shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of the Sale and Servicing Agreement and the substitution of the Qualified Substitute Mortgage Loan. The parties hereto agree to amend the Mortgage Loan Schedule accordingly. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of the Indenture, the Sale and Servicing Agreement and this Agreement in all respects, and the Unaffiliated Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the representations and warranties set forth in Sections 3.02 and 3.03 herein. On the date of such substitution, the Unaffiliated Seller will remit to the Servicer and, pursuant to the Sale and Servicing Agreement, the Servicer will deposit into the related Distribution Account, an amount equal to the Substitution Adjustment, if any. (e) [Reserved]; (f) It is understood and agreed that the obligations of the Unaffiliated Seller and the Originator set forth in Section 2.06 and this Section 3.05 to cure, purchase or substitute 25 for a defective Mortgage Loan as provided in Section 2.06 and this Section 3.05 constitute the sole remedies of the Depositor, the Indenture Trustee, the Note Insurer and the Noteholders respecting a breach of the foregoing representations and warranties. (g) The Unaffiliated Seller and the Originator shall be obligated to indemnify the Indenture Trustee, the Trust, the Owner Trustee, the Collateral Agent, the Noteholders and the Note Insurer (in their individual and trust capacities) and their successors, assigns, agents and servants (collectively, the "Indemnified Parties") from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, "Expenses") which may at any time be imposed on, incurred by, or asserted against any Indemnified Party in any way relating to or arising out of a breach of the Unaffiliated Seller or the related Originator of the representations or warranties herein. The indemnities contained in this Section 3.05 shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement. (h) Each of the Originators and the Unaffiliated Seller shall be jointly and severally responsible for any repurchase, cure or substitution obligation of any of the Originators or the Unaffiliated Seller under this Agreement, the Indenture and the Sale and Servicing Agreement. (i) Any cause of action against the Unaffiliated Seller or an Originator relating to or arising out of the breach of any representations and warranties or covenants made in Sections 2.06, 3.02 or 3.03 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by any party and notice thereof to the Unaffiliated Seller or such Originator, (ii) failure by the Unaffiliated Seller or such Originator to cure such breach or purchase or substitute such Mortgage Loan as specified above, and (iii) demand upon the Unaffiliated Seller or such Originator by the Indenture Trustee for all amounts payable in respect of such Mortgage Loan. ARTICLE IV THE UNAFFILIATED SELLER Section 4.01 Covenants of the Originators and the Unaffiliated Seller. Each of the Originators and the Unaffiliated Seller covenants to the Depositor as follows: (a) The Originators and the Unaffiliated Seller shall cooperate with the Depositor and the firm of independent certified public accountants retained with respect to the issuance of the Notes in making available all information and taking all steps reasonably necessary to permit the accountants' letters required hereunder to be delivered within the times set for delivery herein. (b) The Unaffiliated Seller agrees to satisfy or cause to be satisfied on or prior to the Closing Date, all of the conditions to the Depositor's obligations set forth in Section 5.01 hereof that are within the Unaffiliated Seller's (or its agents') control. 26 (c) The Originators and the Unaffiliated Seller hereby agree to do all acts, transactions, and things and to execute and deliver all agreements, documents, instruments, and papers by and on behalf of the Originators or the Unaffiliated Seller as the Depositor or its counsel may reasonably request in order to consummate the transfer of the Mortgage Loans to the Depositor and the subsequent transfer thereof to the Indenture Trustee, and the rating, issuance and sale of the Notes. Section 4.02 Merger or Consolidation. Each of the Originators and the Unaffiliated Seller will keep in full effect its existence, rights and franchises as a corporation and will obtain and preserve its qualification to do business as a foreign corporation, in each jurisdiction necessary to protect the validity and enforceability of this Agreement or any of the Mortgage Loans and to perform its duties under this Agreement. Any Person into which any of the Originators or the Unaffiliated Seller may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Originators or the Unaffiliated Seller shall be a party, or any Person succeeding to the business of the Originators or the Unaffiliated Seller, shall be approved by the Note Insurer which approval shall not be unreasonably withheld. If the approval of the Note Insurer is not required, the successor shall be an established mortgage loan servicing institution that is a Permitted Transferee and in all events shall be the successor of the Originators or the Unaffiliated Seller without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. The Originators and the Unaffiliated Seller shall send notice of any such merger or consolidation to the Indenture Trustee and the Note Insurer. Section 4.03 Costs. In connection with the transactions contemplated under this Agreement, the Trust Agreement, the Indenture and the Sale and Servicing Agreement, the Unaffiliated Seller shall promptly pay (or shall promptly reimburse the Depositor to the extent that the Depositor shall have paid or otherwise incurred): (a) the fees and disbursements of the Depositor's, the Unaffiliated Seller's and the Originators' counsel; (b) the fees of S&P and Moody's; (c) any of the fees of the Indenture Trustee and the fees and disbursements of the Indenture Trustee's counsel; (d) any of the fees of the Owner Trustee and the fees and disbursements of the Owner Trustee's counsel; (e) expenses incurred in connection with printing the Prospectus, the Prospectus Supplement, any amendment or supplement thereto, any preliminary prospectus and the Notes; (f) fees and expenses relating to the filing of documents with the Commission (including without limitation periodic reports under the Exchange Act); (g) the shelf registration amortization fee of 0.04% of the Note Principal Balance of the Notes on the Closing Date, paid in connection with the issuance of Notes; (h) the fees and disbursements for Deloitte & Touche LLP, accountants for the Originators; and (i) all of the initial expenses (not to exceed $75,000) of the Note Insurer including, without limitation, legal fees and expenses, accountant fees and expenses and expenses in connection with due diligence conducted on the Mortgage Files but not including the initial premium paid to the Note Insurer. For the avoidance of doubt, the parties hereto acknowledge that it is the intention of the parties that the Depositor shall not pay any of the Indenture Trustee's or Owner Trustee's fees and expenses in connection with the transactions contemplated by this Agreement, the Trust Agreement, the Indenture and the Sale and Servicing Agreement. All other costs and expenses in connection with the transactions contemplated hereunder shall be borne by the party incurring such expenses. 27 Section 4.04 Indemnification. (a) The Originators and the Unaffiliated Seller, jointly and severally, agree (i) to indemnify and hold harmless the Depositor, each of its directors, each of its officers who have signed the Registration Statement, and each of its directors and each person or entity who controls the Depositor or any such person, within the meaning of Section 15 of the Securities Act, against any and all losses, claims, damages or liabilities, joint and several, to which the Depositor or any such person or entity may become subject, under the Securities Act or otherwise, and will reimburse the Depositor and each such controlling person for any legal or other expenses incurred by the Depositor or such controlling person in connection with investigating or defending any such loss, claim, damage, liability or action, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Prospectus Supplement or any amendment or supplement to the Prospectus Supplement or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements in the Prospectus Supplement or any amendment or supplement to the Prospectus Supplement approved in writing by the Originators or the Unaffiliated Seller, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission relates to the information contained in the Prospectus Supplement referred to in Section 3.01(d). This indemnity agreement will be in addition to any liability which the Originators and the Unaffiliated Seller may otherwise have; and (ii) to indemnify and to hold the Depositor harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Depositor may sustain in any way related to the failure of any of the Originators or the Unaffiliated Seller to perform its duties in compliance with the terms of this Agreement. The Originators or the Unaffiliated Seller shall immediately notify the Depositor if a claim is made by a third party with respect to this Agreement, and the Originators or the Unaffiliated Seller shall assume the defense of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Depositor in respect of such claim. Pursuant to the Indenture, the Indenture Trustee shall reimburse the Unaffiliated Seller in accordance with the Indenture for all amounts advanced by the Unaffiliated Seller pursuant to the preceding sentence except when the claim relates directly to the failure of the Unaffiliated Seller to perform its duties in compliance with the terms of this Agreement. (b) The Depositor agrees to indemnify and hold harmless each of the Originators and the Unaffiliated Seller, each of their respective directors and each person or entity who controls the Originators or the Unaffiliated Seller or any such person, within the meaning of Section 15 of the Securities Act, against any and all losses, claims, damages or liabilities, joint and several, to which the Originators or the Unaffiliated Seller or any such person or entity may become subject, under the Securities Act or otherwise, and will reimburse the Originators and the Unaffiliated Seller and any such director or controlling person for any 28 legal or other expenses incurred by such party or any such director or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, the Prospectus Supplement, any amendment or supplement to the Prospectus or the Prospectus Supplement or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission is other than a statement or omission relating to the information set forth in subsection (a)(i) of this Section 4.04; provided, however, that in no event shall the Depositor be liable to the Unaffiliated Seller under this paragraph (b) in an amount in excess of the Depositor's resale profit or the underwriting fee on the sale of the Notes. This indemnity agreement will be in addition to any liability which the Depositor may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 4.04 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 4.04, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent such indemnifying party has been prejudiced thereby. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. After notice from the indemnifying party to such indemnified party of its election to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 4.04 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. The indemnifying party shall not be liable for the expenses of more than one separate counsel. (d) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in the preceding parts of this Section 4.04 is for any reason held to be unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or subsection (b) of this Section 4.04 in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) subject to the limits set forth in subsection (a) and subsection (b) of this Section 4.04; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall 29 be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by the Originators and the Unaffiliated Seller on the one hand, and the Depositor on the other, the Originators', the Unaffiliated Seller's and the Depositor's relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate in the circumstances. The Originators, the Unaffiliated Seller and the Depositor agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation. For purposes of this Section 4.04, each director of the Depositor, each officer of the Depositor who signed the Registration Statement, and each person, if any who controls the Depositor within the meaning of Section 15 of the Securities Act, shall have the same rights to contribution as the Depositor, and each director of the Originators or the Unaffiliated Seller, and each person, if any who controls the Originators or the Unaffiliated Seller within the meaning of Section 15 of the Securities Act, shall have the same rights to contribution as the Originators and the Unaffiliated Seller. ARTICLE V CONDITIONS OF CLOSING Section 5.01 Conditions of Depositor's Obligations. The obligations of the Depositor to purchase the Mortgage Loans will be subject to the satisfaction on the Closing Date of the following conditions. Upon payment of the purchase price for the Mortgage Loans, such conditions shall be deemed satisfied or waived. (a) Each of the obligations of the Unaffiliated Seller required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with and all of the representations and warranties of the Unaffiliated Seller and the Originators under this Agreement shall be true and correct as of the Closing Date and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, and the Depositor shall have received a certificate to the effect of the foregoing signed by an authorized officer of the Unaffiliated Seller and the Originators. (b) The Depositor shall have received a letter dated the date of this Agreement, in form and substance acceptable to the Depositor and its counsel, prepared by Deloitte & Touche LLP, independent certified public accountants, regarding the numerical information contained in the Prospectus Supplement including, but not limited to the information under the captions "Prepayment and Yield Considerations" and "The Mortgage Loan Pools" regarding any numerical information in any marketing materials relating to the Notes and regarding any other information as reasonably requested by the Depositor. (c) The Mortgage Loans will be acceptable to the Depositor, in its sole reasonable discretion. 30 (d) The Depositor shall have received the following additional closing documents, in form and substance reasonably satisfactory to the Depositor and its counsel: (i) the Mortgage Loan Schedule; (ii) this Agreement, the Sale and Servicing Agreement, the Indenture, the Trust Agreement, and the Underwriting Agreement dated as of March 11, 1999 between the Depositor and Prudential Securities Incorporated and all documents required thereunder, duly executed and delivered by each of the parties thereto other than the Depositor; (iii) officer's certificates of an officer of each of the Originators and the Unaffiliated Seller, dated as of the Closing Date, and attached thereto resolutions of the board of directors and a copy of the charter and by-laws; (iv) copy of each of the Originators and the Unaffiliated Seller's charter and all amendments, revisions, and supplements thereof, certified by a secretary of each entity; (v) an opinion of the counsel for the Originators and the Unaffiliated Seller as to various corporate matters in a form acceptable to the Depositor, its counsel, the Note Insurer, S&P and Moody's (it being agreed that the opinion shall expressly provide that the Indenture Trustee shall be entitled to rely on the opinion); (vi) opinions of counsel for the Unaffiliated Seller, in forms acceptable to the Depositor, its counsel, the Note Insurer, S&P and Moody's as to such matters as shall be required for the assignment of a rating to the Notes of "AAA" by S&P, and "Aaa" by Moody's (it being agreed that such opinions shall expressly provide that the Indenture Trustee shall be entitled to rely on such opinions); (vii) a letter from Moody's that it has assigned a rating of "Aaa" to the Notes; (viii) a letter from S&P that it has assigned a rating of "AAA" to the Notes; (ix) an opinion of counsel for the Indenture Trustee in form and substance acceptable to the Depositor, its counsel, the Note Insurer, Moody's and S&P (it being agreed that the opinion shall expressly provide that the Unaffiliated Seller shall be entitled to rely on the opinion); (x) an opinion of counsel for the Owner Trustee in form and substance acceptable to the Depositor, its counsel, the Note Insurer, Moody's and S&P (it being agreed that the opinion shall expressly provide that the Unaffiliated Seller shall be entitled to rely on the opinion); 31 (xi) an opinion or opinions of counsel for the Servicer, in form and substance acceptable to the Depositor, its counsel, the Note Insurer, Moody's and S&P (it being agreed that the opinion shall expressly provide that the Unaffiliated Seller shall be entitled to rely on the opinion); and (xii) an opinion or opinions of counsel for the Note Insurer, in each case in form and substance acceptable to the Depositor, its counsel, Moody's and S&P (it being agreed that the opinion shall expressly provide that the Unaffiliated Seller shall be entitled to rely on the opinion). (e) The Note Insurance Policy shall have been duly executed, delivered and issued with respect to the Notes. (f) All proceedings in connection with the transactions contemplated by this Agreement and all documents incident hereto shall be satisfactory in form and substance to the Depositor and its counsel. (g) The Unaffiliated Seller shall have furnished the Depositor with such other certificates of its officers or others and such other documents or opinions as the Depositor or its counsel may reasonably request. Section 5.02 Conditions of Unaffiliated Seller's Obligations. The obligations of the Unaffiliated Seller under this Agreement shall be subject to the satisfaction, on the Closing Date, of the following conditions: (a) Each of the obligations of the Depositor required to be performed by it at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with and all of the representations and warranties of the Depositor contained in this Agreement shall be true and correct as of the Closing Date and the Unaffiliated Seller shall have received a certificate to that effect signed by an authorized officer of the Depositor. (b) The Unaffiliated Seller shall have received the following additional documents: (i) this Agreement and the Sale and Servicing Agreement, and all documents required thereunder, in each case executed by the Depositor as applicable; and (ii) a copy of a letter from Moody's to the Depositor to the effect that it has assigned a rating of "Aaa" to the Notes and a copy of a letter from S&P to the Depositor to the effect that it has assigned a rating of "AAA" to the Notes. (iii) an opinion of counsel for the Indenture Trustee in form and substance acceptable to the Unaffiliated Seller and its counsel; (iv) an opinion of counsel for the Owner Trustee in form and substance acceptable to the Unaffiliated Seller and its counsel; 32 (v) an opinion of counsel for the Note Insurer in form and substance acceptable to the Unaffiliated Seller and its counsel; (vi) an opinion of the counsel for the Depositor as to securities and tax matters; and (vii) an opinion of the counsel for the Depositor as to true sale matters. (c) The Depositor shall have furnished the Unaffiliated Seller with such other certificates of its officers or others and such other documents to evidence fulfillment of the conditions set forth in this Agreement as the Unaffiliated Seller may reasonably request. Section 5.03 Termination of Depositor's Obligations. The Depositor may terminate its obligations hereunder by notice to the Unaffiliated Seller at any time before delivery of and payment of the purchase price for the Mortgage Loans if: (a) any of the conditions set forth in Section 5.01 are not satisfied when and as provided therein; (b) there shall have been the entry of a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Unaffiliated Seller, or for the winding up or liquidation of the affairs of the Unaffiliated Seller; (c) there shall have been the consent by the Unaffiliated Seller to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Unaffiliated Seller or of or relating to substantially all of the property of the Unaffiliated Seller; (d) any purchase and assumption agreement with respect to the Unaffiliated Seller or the assets and properties of the Unaffiliated Seller shall have been entered into; or (e) a Termination Event shall have occurred. The termination of the Depositor's obligations hereunder shall not terminate the Depositor's rights hereunder or its right to exercise any remedy available to it at law or in equity. ARTICLE VI MISCELLANEOUS Section 6.01 Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered to or mailed by registered mail, postage prepaid, or transmitted by telex or telegraph and confirmed by a similar mailed writing, if to the Depositor, addressed to the Depositor at Prudential Securities Secured Financing Corporation, One New York Plaza, 14th Floor, New York, New York 10292, Attention: Managing Director - Asset Backed Finance Group, or to such other address as the Depositor may designate in writing to the Unaffiliated Seller and the Originators and if to the Unaffiliated Seller or an Originator, addressed to the Unaffiliated Seller or such Originator at Balapointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: Mr. Anthony Santilli, Jr., or to such other address as the Unaffiliated Seller or such Originator may designate in writing to the Depositor. 33 Section 6.02 Severability of Provisions. Any part, provision, representation, warranty or covenant of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation, warranty or covenant of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. Section 6.03 Agreement of Unaffiliated Seller. The Unaffiliated Seller agrees to execute and deliver such instruments and take such actions as the Depositor may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement. Section 6.04 Survival. The parties to this Agreement agree that the representations, warranties and agreements made by each of them herein and in any Note or other instrument delivered pursuant hereto shall be deemed to be relied upon by the other party hereto, notwithstanding any investigation heretofore or hereafter made by such other party or on such other party's behalf, and that the representations, warranties and agreements made by the parties hereto in this Agreement or in any such certificate or other instrument shall survive the delivery of and payment for the Mortgage Loans. Section 6.05 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 6.06 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Except as expressly permitted by the terms hereof, this Agreement may not be assigned, pledged or hypothecated by any party hereto to a third party without the written consent of the other party to this Agreement and the Note Insurer; provided, however, that the Depositor may assign its rights hereunder without the consent of the Unaffiliated Seller. Section 6.07 Confirmation of Intent; Grant of Security Interest. It is the express intent of the parties hereto that the conveyance of the Mortgage Loans by the Originators to the Unaffiliated Seller as contemplated by this Unaffiliated Seller's Agreement be, and be treated for all purposes as, a sale of the Mortgage Loans and that the conveyance of the Mortgage Loans by the Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated Seller's Agreement be, and be treated for accounting purposes as, a sale of the Mortgage Loans. It is, further, not the intention of the parties that any such conveyance be deemed a pledge of the Mortgage Loans by the Originators to the Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a debt or other obligation of the Originators or the Unaffiliated Seller, as the case may be. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans are held to continue to be property of the Originators or the Unaffiliated Seller then (a) this Unaffiliated 34 Seller's Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of the Mortgage Loans provided for herein shall be deemed to be a grant by the Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor of a security interest in all of such parties' right, title and interest in and to the Mortgage Loans and all amounts payable on the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property; (c) the possession by the Depositor (or its assignee) of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-305 of the Uniform Commercial Code; and (d) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Depositor (or its assignee) for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Depositor pursuant to any provision hereof shall also be deemed to be an assignment of any security interest created hereby. The Originators, the Unaffiliated Seller and the Depositor shall, to the extent consistent with this Unaffiliated Seller's Agreement, take such actions as may be necessary to ensure that, if this Unaffiliated Seller's Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement. Section 6.08 Miscellaneous. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. Section 6.09 Amendments. (a) This Agreement may be amended from time to time by the Originators, the Unaffiliated Seller and the Depositor by written agreement, upon the prior written consent of the Note Insurer, without notice to or consent of the Noteholders to cure any ambiguity, to correct or supplement any provisions herein, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, at the expense of the party requesting the change, delivered to the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder; and provided, further, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Note without the consent of the Holder of such Note, or change the rights or obligations of any other party hereto without the consent of such party. (b) This Agreement may be amended from time to time by the Originators, the Unaffiliated Seller and the Depositor with the consent of the Note Insurer, the Majority Noteholders and the Holders of the majority of the Percentage Interest in the Trust Certificates for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders; provided, however, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Note 35 without the consent of the Holder of such Note or reduce the percentage for each Class the Holders of which are required to consent to any such amendment without the consent of the Holders of 100% of each Class of Notes affected thereby. (c) It shall not be necessary for the consent of Holders under this Section 6.09 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. Section 6.10 Third-Party Beneficiaries. The parties agree that each of the Trust, the Owner Trustee, the Note Insurer and the Indenture Trustee is an intended third-party beneficiary of this Agreement to the extent necessary to enforce the rights and to obtain the benefit of the remedies of the Depositor under this Agreement which are assigned to the Trust and then to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to the Sale and Servicing Agreement and the Indenture, respectively, and to the extent necessary to obtain the benefit of the enforcement of the obligations and covenants of the Unaffiliated Seller under Section 4.01 and 4.04(a)(ii) of this Agreement. The parties further agree that Prudential Securities Incorporated and each of its directors and each person or entity who controls Prudential Securities Incorporated or any such person, within the meaning of Section 15 of the Securities Act (each, an "Underwriter Entity") is an intended third-party beneficiary of this Agreement to the extent necessary to obtain the benefit of the enforcement of the obligations and covenants of the Unaffiliated Seller with respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement. Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. (b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION. 36 (c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. Section 6.12 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. [Remainder of Page Intentionally Left Blank] 37 IN WITNESS WHEREOF, the parties to this Unaffiliated Seller's Agreement have caused their names to be signed by their respective officers thereunto duly authorized as of the date first above written. PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By: ___________________________________ Name: Title: ABFS 1999-1, INC. By: ___________________________________ Name: Title: AMERICAN BUSINESS CREDIT, INC. By: ___________________________________ Name: Title: HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE By: ___________________________________ Name: Title: NEW JERSEY MORTGAGE AND INVESTMENT CORP. By: ___________________________________ Name: Title: SCHEDULE I MORTGAGE LOAN SCHEDULE
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 10307 WILLIAM J. SOEDER JR. $200,000 $199,462.48 1 10309 STEPHEN S. SCHILDE $20,000 $19,963.48 1 10326 H. & M. TOOL AND MACHINE $150,000 $150,000.00 1 10330 CLASSIC MARINE, INC. $20,000 $19,990.66 1 10334 CHERYL L. PAGE $90,000 $90,000.00 1 10336 SW AUTO REPAIR CORP. $92,000 $91,630.15 1 10339 FREEWAY TAVERN, INC $100,000 $100,000.00 1 10342 WILLIAM C. MEHAFFEY $110,000 $109,997.51 1 10349 PAUL J. EGBERT $85,000 $84,620.52 1 10350 CLINTON AVENUE BEAUTY SUP $13,000 $12,959.11 1 10355 CHARLES ROBERT WALLS $195,000 $194,419.69 1 10373 MILLENNIUM INTERNATIONAL $112,000 $112,000.00 1 10377 REGAL PUBLISHING CORP. $93,000 $93,000.00 1 10379 BRANDYWINE INN, INC. $16,000 $16,000.00 1 10383 HARVEY'S DELIVERY SERVICE $100,000 $100,000.00 1 10397 ROBERT G. MELLINGER $80,000 $80,000.00 1 10410 FREDERICK D. SAMS $80,000 $80,000.00 1 10411 IMPERIAL PROPERTIES OF SA $120,000 $120,000.00 1 10413 JERALD A. SIMON $95,000 $95,000.00 1 10415 JAMES L. THOMPSON $120,000 $120,000.00 1 10419 WILLIAMS FUNERAL HOME P.A $143,000 $143,000.00 1 10422 JIM CHAMBERS POWER EQUIPM $120,000 $120,000.00 1 10425 CHARLES L. ROBINSON SR. $120,000 $120,000.00 1 10426 ROSSIE LACEY $10,000 $10,000.00 1 8882106 WORLD FAMOUS RESTAURANT, $203,000 $202,976.75 1 8882109 PAUL HOWIESON $12,000 $11,754.06 1 8882113 RAJENDRA PAUL $15,000 $14,983.41 1 8882117 MARYAM SHAMOON $142,000 $142,000.00 1 8882129 EL RUBI, INC. $110,000 $110,000.00 1 8882131 REGINALD TONEY $106,000 $106,000.00 1 8882134 PAUL G. JONES $90,000 $90,000.00 1 8882138 JESSE WILSON $14,000 $14,000.00 1 8882141 JOSHUA'S CLASSROOM, INC. $17,000 $17,000.00 1 8882145 JOSEPH P. PAYTAS $222,000 $222,000.00 1 10097 OFF THE TOP HAIRCUTTERS, $12,000 $11,794.15 1 10431 DAVID A. DEGENERO $14,000 $14,000.00 1 8882137 NELSON D. SHER $131,000 $131,000.00 1 1038173 RUSSELL ALDEN MULKINS $92,750 $92,729.54 1 1041008 KENNETH GRIZZLE, JR. $88,800 $88,248.76 1 1041186 GERALDA SOTOLONGO $118,800 $118,800.00 1 1041697 TRACY D. PIERCE $123,700 $123,229.01 1 1041940 LEONARD CHIARELLO $183,000 $183,000.00 1 1042082 RUDRAKANT S. JOSHI $147,600 $147,598.52 1 1043420 ROY W. DORSEY SR. $100,800 $100,660.28 1 1043489 GEORGE A. RODRIGUEZ $121,500 $121,500.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1043829 GARY WELDEN $114,300 $114,300.00 1 1043894 DARLENE H. BRADSHAW $91,800 $91,800.00 1 1044035 ANGUS DAVIS $12,400 $12,325.32 1 1044097 DARRELL BULLOCH $82,800 $82,800.00 1 1044241 CHARLES DEVER $81,480 $81,480.00 1 1044796 COSBERT L. WORRELL SR. $100,000 $99,926.21 1 1044802 JOHN P. MASTELENIS $15,500 $15,339.32 1 1044950 JAMES E. JOHNSON $229,500 $229,500.00 1 1044998 WILLIAM D. CARMICHAEL $103,500 $103,500.00 1 1045243 JEFFERY PHILLIPS $86,400 $86,175.80 1 1045451 ARMAND BRUNO $94,500 $94,431.33 1 1045484 MARY TATE $81,000 $80,989.93 1 1045582 MICKEY L. TURNER $90,000 $88,922.58 1 1045765 WASHINGTON A. SOTO $88,000 $87,940.81 1 1045868 WILLIAM F. PRECOURT JR. $102,150 $101,834.38 1 1045873 THERESA L. MIMS $116,550 $116,550.00 1 1045973 TIMOTHY A. MCCLEERY $94,500 $94,500.00 1 1046041 DANIEL J. MINKUS $18,375 $18,375.00 1 1046050 BILLY C. SHEPPARD $85,600 $85,471.55 1 1046062 PAUL M. RISSER $112,500 $112,179.56 1 1046278 JAMES ADAIR JR. $153,000 $152,926.13 1 1046337 BESSIE M. WARD $162,000 $161,970.56 1 1046346 LONNIE D. STOVER $87,550 $87,550.00 1 1046367 BUDDY CHARBONNET $190,000 $189,645.27 1 1046379 SUE LINDA ANDERSON $20,000 $19,914.79 1 1046434 JOSEPH M. GIRINI $89,100 $89,100.00 1 1046450 BARBARA A. CORDERRE $110,500 $110,500.00 1 1046506 PAMELA GREEN $15,000 $14,850.65 1 1046521 LEONARD ROLA $134,640 $134,622.74 1 1046594 IMOGENE V. SAUNDERS $144,000 $143,998.56 1 1046609 THOMAS W. BROTHERTON $112,000 $111,420.18 1 1046618 TOM WILCOX $80,000 $79,731.09 1 1046620 THOMAS F. SHELLEY $117,000 $116,957.46 1 1046659 ALEANE B. WHITE $103,500 $103,500.00 1 1046677 VINCENT M. BOZZUTO $135,000 $134,851.52 1 1046695 AJODHIA PRASAD RAMPRASHAD $170,000 $169,905.24 1 1046707 BARBARA S. KROLIK $207,500 $207,500.00 1 1046771 JOSEPH P. YOUNG $185,120 $185,120.00 1 1046794 SHARON D. COLEMAN $148,000 $147,727.12 1 1046813 RICHARD BYRD $150,000 $149,253.06 1 1046825 DANIEL C. HANCOTTE JR. $17,200 $17,161.36 1 1046840 CHERYL HEDGES $117,000 $117,000.00 1 1046903 KEITH A. KEATING $234,500 $234,071.23 1 1046906 GEORGE LINDER $91,000 $91,000.00 1 1046915 SANDRA COLLYMORE $98,600 $98,493.44 1 1046940 FRED T. CONSOLAZIO $14,000 $14,000.00 1 1046951 CONNIE A. DAY $184,450 $184,250.32 1 1046980 DENNYS ROSA $103,500 $103,385.64 1 1046999 ARTHUR J. EVANS $99,000 $98,670.62 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1047024 JOSE L. ROMERO $180,000 $179,850.50 1 1047045 GERALD A. SMITH JR. $94,500 $94,378.82 1 1047062 DOROTHY ANNE BORGES $89,100 $89,100.00 1 1047070 GLENDA PATTERSON $100,000 $99,916.09 1 1047107 ROBERT L. MERCER SR. $100,000 $100,000.00 1 1047111 THOMAS REGANATO $225,000 $225,000.00 1 1047122 THOMAS J. GEISHEIMER $148,500 $148,205.74 1 1047209 JUANA E. SALAS $95,400 $94,957.95 1 1047211 WILLIAM SCOTT RAGSDALE $96,000 $95,973.76 1 1047216 OLIVIA H. JACKSON $82,800 $82,710.12 1 1047217 MARIE PERRY HUME $90,000 $90,000.00 1 1047221 HAYWOOD CLYDE SR. $90,500 $90,371.16 1 1047258 GARY E. EILER $180,000 $179,579.44 1 1047311 ANGEL AYALA $83,725 $83,708.37 1 1047322 MARIA A. OJEDA $151,200 $151,197.32 1 1047325 CROSSETTE N. NESBITT $110,400 $110,096.72 1 1047341 D. WAYNE DAVIS $84,000 $84,000.00 1 1047351 HERMAN STEVENSON $87,300 $87,284.13 1 1047383 MICHAEL GLASS $212,500 $212,500.00 1 1047395 KRISTI A. CHITWOOD $18,000 $17,901.30 1 1047415 SAMIR RAIS $134,910 $134,573.94 1 1047449 FREDERICK A. JOE SR. $82,800 $82,800.00 1 1047502 MARIA TRINIDAD $196,000 $196,000.00 1 1047571 BRENDA TERRY $87,000 $87,000.00 1 1047609 LEROY MICHAEL ROYER $80,000 $79,933.78 1 1047664 CARRIE MAE STONE $94,500 $94,369.00 1 1047669 VERONICA PATTERSON $84,600 $84,600.00 1 1047698 KEVIN GRAY $200,000 $200,000.00 1 1047704 EUGENIA GREENE $134,000 $133,863.95 1 1047720 DANIEL M. JOHNSON $16,540 $16,446.24 1 1047726 JEFFREY H. KAZANOW $200,000 $200,000.00 1 1047760 WILLIAM D. EVANS $12,300 $12,188.60 1 1047804 THOMAS V. HUTTON $10,000 $9,936.73 1 1047806 ANTONETTA E. ALBERTI $121,750 $121,750.00 1 1047925 LARRY E. GUNTER $108,000 $107,769.03 1 1047950 PATRICK J. QUINN $17,000 $17,000.00 1 1047964 JOHN LASEK $80,000 $79,775.90 1 1047975 ROBERT M. FULLER JR. $99,900 $99,896.82 1 1047978 PAUL L. WARE $162,377 $162,257.09 1 1047991 MICHAEL B. KYLE $132,000 $131,927.50 1 1048072 STANLEY M.J. BAKER $90,000 $90,000.00 1 1048102 MICHELLE FISCHER $117,000 $116,672.07 1 1048232 EDWARD L. SPRUILL JR. $90,000 $90,000.00 1 1048238 STEPHANIE A. SCOTT $116,550 $116,488.35 1 1048307 JOSPEH QUIROLI $10,000 $9,927.84 1 1048340 EDWARD YARUSI $80,000 $79,469.12 1 1048354 LONNIE P. ALLEN $130,500 $130,199.04 1 1048374 JAMES H. OSHERHOSKI $85,000 $85,000.00 1 1048388 ROY F. BURKETT JR. $86,400 $86,357.69 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1048393 JERRY L. COOLEY $16,750 $16,729.15 1 1048413 DAVID FRIEDMAN $10,000 $9,953.12 1 1048418 JEFFREY HOUSE $11,200 $11,200.00 1 1048460 JAMES BEAVER $96,000 $95,731.43 1 1048487 THOMAS E. GOLDRICK $137,900 $137,814.80 1 1048489 KIMBERLY A. WILLOUGHBY $86,670 $86,569.91 1 1048492 BERNICE VIOLA ANDREWS $15,000 $14,902.56 1 1048495 HIEU TRAN VAN $16,500 $16,340.61 1 1048627 GAIL HOLLOWAY $107,450 $107,005.02 1 1048630 JOHN PFEIFER $136,850 $136,850.00 1 1048664 KELLY ELISE SALONE $18,900 $18,899.01 1 1048670 BARRY ZAJDZINSKI $96,000 $95,912.85 1 1048684 MARGARET MARSH $92,000 $92,000.00 1 1048693 SUSAN L. MURNANE $100,000 $100,000.00 1 1048700 TUNA OZDEN $138,740 $138,740.00 1 1048732 JOSE JUSINO $16,500 $16,500.00 1 1048734 FRANCIS J. DALTON $145,500 $145,500.00 1 1048737 JENNIFER E. STEVENS $13,600 $13,595.82 1 1048738 RAYMOND P. YANCY $79,200 $79,200.00 1 1048747 KAREN E. KLAES $14,000 $14,000.00 1 1048759 BRYANT O'NEILL ROSBY $12,000 $11,943.13 1 1048791 ELIZABETH BILLINGS $18,000 $18,000.00 1 1048836 ANN ROCCO $18,000 $18,000.00 1 1048882 LUCILLE FORREST $10,000 $9,902.41 1 1048917 TRACY A. KROPCHAK $103,200 $103,200.00 1 1049018 KEVIN C RAY MCCONNELL $112,000 $111,856.60 1 1049061 LOUIS CAPORASO $15,000 $15,000.00 1 1049105 EDNA RICHARD $160,200 $159,350.87 1 1049119 LEE J. BETHUNE $81,600 $81,600.00 1 1049134 CHRISTOPHER T. CIFONE $130,500 $130,276.69 1 1049148 MICHAEL WASHINGTON $134,300 $133,997.31 1 1049158 ELIGAH GARY $135,000 $135,000.00 1 1049213 BRIAN D. WHITLEY $162,000 $162,000.00 1 1049222 JEANNIE H. STARRS $133,600 $133,600.00 1 1049231 DOREEN PAOLELLA $20,000 $19,943.56 1 1049272 KENNETH RAY HENDERSON $100,000 $100,000.00 1 1049280 BOBBY G. SMITH $20,000 $19,822.56 1 1049329 RAY E. PRUDEN $157,500 $157,380.53 1 1049344 FRED P. GRANT $93,750 $93,669.31 1 1049359 ANTHONY P. CAVALUZZO $12,500 $12,419.14 1 1049407 RICARDO MEJIA $112,000 $112,000.00 1 1049448 LEROY SOMERS $121,505 $121,368.80 1 1049451 SHIRLEY M. BELLAMY $82,800 $82,759.55 1 1049485 WILLIAM E. SMITH $87,500 $86,868.98 1 1049529 RICHARD A. WOJCIAK $118,900 $118,900.00 1 1049531 FRANK PASHEL $86,250 $86,250.00 1 1049532 GEORGE A. SCHMIDT $168,000 $167,918.88 1 1049534 DORA M. PARKER $18,850 $18,850.00 1 1049538 DAWN M. OLIVER $10,000 $9,934.04 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1049656 SEAN C. SECOR $100,000 $99,883.80 1 1049657 MARTIN D. MURPHY $112,500 $112,436.44 1 1049663 RUDOLPH JARRET $193,000 $193,000.00 1 1049710 ROY L. CLOSE $130,500 $130,500.00 1 1049735 CALANTHIA CARTER $84,500 $84,500.00 1 1049743 EVONNE L. WRIGHT $96,000 $96,000.00 1 1049777 MICHAEL J. LANCELLA $94,000 $93,931.84 1 1049824 ARTHUR CULPEPPER $161,300 $161,300.00 1 1049870 RONALD R. TAYLOR JR. $106,200 $106,200.00 1 1050070 FRANK S. LAW $119,000 $119,000.00 1 1050096 EDWARD KENNY $193,000 $192,945.24 1 1050123 LARRY D. CARNES $112,000 $111,927.19 1 1050162 MICHAEL L. HURD $194,000 $194,000.00 1 1050246 ANTHONY JOHNSON $141,750 $141,750.00 1 1050251 MINETTE WILLIAMS $10,000 $9,942.01 1 1050286 MICHAEL MIELE SR. $153,000 $153,000.00 1 1050311 MATTHEW W. DONOVAN $104,000 $104,000.00 1 1050362 CAROLYN PATTERSON $13,300 $13,288.03 1 1050401 MARY C. PO $13,950 $13,950.00 1 1050486 LLOYD FIELDS $130,500 $130,500.00 1 1050505 JOSEPH CAGGIANO $121,500 $121,297.89 1 1050513 TERRY M. GARDNER $104,400 $104,400.00 1 1050522 DELMA HOLDER $102,500 $102,500.00 1 1050549 ALMA J. KELLY $15,600 $15,600.00 1 1050559 RICHARD CENATIEMPO $120,700 $120,387.32 1 1050646 ALIX AUGUSTIN $83,700 $83,700.00 1 1050697 DIANE WILLIAMS $95,400 $95,400.00 1 1050752 JUNE VARAS $152,000 $151,923.57 1 1050764 NICOLE R. DARBY $86,400 $86,400.00 1 1050810 BARBARA PIROG $14,295 $14,295.00 1 1050819 LUIS CORNEJO $85,000 $84,860.49 1 1050845 LEROY SIMMONS $93,500 $93,500.00 1 1050846 HAZEL MAPP $168,800 $168,566.01 1 1050884 DUANE MILLS $90,000 $90,000.00 1 1050904 TROY A. VELLIQUETTE $10,000 $9,934.74 1 1050948 JOSELITO C. VELASQUEZ $20,000 $19,873.30 1 1050989 ANATOLY GRINBERG $132,500 $132,500.00 1 1051003 ROCCO S. CRESCENZI $82,100 $82,100.00 1 1051038 EDDY JEAN-BAPTISTE $110,000 $110,000.00 1 1051053 MARIO MARESCA $13,500 $13,500.00 1 1051125 DARRYL O'HANNON $97,600 $97,600.00 1 1051138 DARRELL R. WILBUR $120,000 $120,000.00 1 1051140 MARK WEISS $89,500 $89,500.00 1 1051143 DINDIAL SOOGRIM $150,300 $150,300.00 1 1051171 JAMMIE J. FYLER $100,000 $100,000.00 1 1051173 ROBERT A. CRAWFORD JR. $85,500 $85,500.00 1 1051180 WILLIAM J. BOXLER $86,400 $86,400.00 1 1051243 JERALD W. MORRIS $115,000 $115,000.00 1 1051280 ROBIN C. BROWN $10,000 $10,000.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1051285 QUINCY J. BONNETT $225,000 $225,000.00 1 1051287 PATRICIA TROTMAN $80,000 $80,000.00 1 1051288 JAMES POSTERINO $85,500 $85,500.00 1 1051307 CYNTHIA W. BROWN $92,000 $92,000.00 1 1051330 SHARON PORTER $99,000 $99,000.00 1 1051431 JAMES MICHAEL JUDKINS $156,600 $156,189.14 1 1051440 LARRY L. RAYMER $15,500 $15,500.00 1 1051460 SUSAN J. MATYAS $111,300 $111,300.00 1 1051487 STEVEN R. RICHTER $123,400 $123,400.00 1 1051500 MARCY SCHER $100,400 $100,400.00 1 1051527 TRENT SEXTON JR. $88,000 $88,000.00 1 1051608 MICHELLE KUPFERSCHMID $15,500 $15,406.09 1 1051609 BARBARA J. GROSS $160,000 $160,000.00 1 1051613 KENNETH LEACH $93,500 $93,500.00 1 1051614 DANA M. LANG $120,000 $120,000.00 1 1051632 JAMES L. HANNIGAN $103,000 $103,000.00 1 1051727 MILTON EDWARDS $86,400 $86,400.00 1 1051768 JOSEPH DECINQUE JR. $148,500 $148,500.00 1 1051813 ANTHONY MARINI $12,900 $12,900.00 1 1051818 ROMAN MICHAEL GURTLER $105,000 $105,000.00 1 1051823 SHEILA BROWN $143,000 $143,000.00 1 1051837 JOHN T. CANNON $88,825 $88,825.00 1 1051874 JOYCE L. FRANZ-KIN $213,000 $213,000.00 1 1051889 IRWIN L. GORSKY $90,000 $90,000.00 1 1051903 BENJAMIN VEGA $83,000 $83,000.00 1 1051911 PAULETTE S. PERRY $100,000 $100,000.00 1 1051916 THOMAS H. QUINN $88,800 $88,800.00 1 1051983 LATANYA M. JUNIOR $15,500 $15,500.00 1 1052012 JOSEPH A. MIROBALLI $83,400 $83,400.00 1 1052035 ROBERT KEITH ELLINGTON $80,000 $80,000.00 1 1052132 CHRISTINE CHEN $18,000 $18,000.00 1 1052141 DOUGLAS GREEN $88,000 $88,000.00 1 1052178 RANJINI CHANDRA SEKHAR $225,000 $225,000.00 1 1052180 NICOLA STRANIERI $100,000 $100,000.00 1 1052185 KELLY KEITH $18,000 $18,000.00 1 1052194 JOANN PERRINO $184,500 $184,500.00 1 1052246 STEPHEN S. GRANDE $104,400 $104,400.00 1 1052248 JEFFREY T. SHAW $13,073 $13,073.00 1 1052278 JOHN VITERITTI $80,000 $80,000.00 1 1052280 RICHARD L. TARDIFF $80,000 $80,000.00 1 1052368 PAUL CHRISTY $88,000 $88,000.00 1 1052370 ELLEN GIBBS $16,000 $16,000.00 1 1052407 JOHN GARDNER $132,000 $132,000.00 1 1052409 MAREK A. MISZKURKA $120,000 $120,000.00 1 1052427 JAMES H. TILL $108,000 $108,000.00 1 1052440 DAVID O. BLEVINS $108,000 $108,000.00 1 1052445 AUDIE W. DELP $106,000 $106,000.00 1 1052448 CHARLMOUS OFERRALL $90,000 $90,000.00 1 1052477 CARL S. RAPHAEL $161,600 $161,600.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1052506 JOHN E. HENKES $172,800 $172,800.00 1 1052507 DAVID SKIFF $154,000 $154,000.00 1 1052510 IRENE G. KEYSER $131,400 $131,400.00 1 1052517 MARTHA CORDOVI $17,000 $17,000.00 1 1052518 GREG0RY L. WOOTEN $15,000 $15,000.00 1 1052664 MARK JOHNS $159,000 $159,000.00 1 1052714 KHEESHA M. WALLS $93,321 $93,321.00 1 1052744 JACQUELYN Y. TOLLIVER $185,400 $185,400.00 1 1052766 BRUCE N. WILLMAN $16,000 $16,000.00 1 1052807 FERNANDO CLAVERIA $153,000 $153,000.00 1 1052841 RAYMOND L. MORGAN $15,000 $15,000.00 1 1052865 ELMERE CHARLES $93,750 $93,750.00 1 1052872 ELMORE CHARLES $93,750 $93,750.00 1 1052874 PATRICK CLOSE $136,000 $136,000.00 1 1052920 PATRICK J. O'DONNELL $107,000 $107,000.00 1 1052976 KATHLEEN B. WICKUM $15,000 $15,000.00 1 1052984 DONALD BATES $84,575 $84,575.00 1 1053014 ALICE N. T. REID $101,600 $101,600.00 1 1053094 JEREMY PACK $18,750 $18,750.00 1 1053119 ISSAC JOHNSON $84,000 $84,000.00 1 1053235 LAVERN CLARK $20,320 $20,320.00 1 1053328 JAMIE B SIMS N/K/A JAMIE $165,000 $165,000.00 1 1053337 JAMIE B. SIMS N/K/A JAMIE $105,700 $105,700.00 1 1053361 GREGORY SWEET $89,500 $89,500.00 1 1053363 ANTHONY SPADARO $189,000 $189,000.00 1 1053367 MERLE A. BARTHEL $95,000 $95,000.00 1 1053394 BRUCE HIGGINS $80,000 $80,000.00 1 1053426 MARIA J. LAMAS GRANDA $202,500 $202,500.00 1 1053542 KIMBERLY ABATE $106,250 $106,250.00 1 1053543 JOSEPH F. RUMMLER $166,500 $166,500.00 1 1053549 JENNIFER L. JANSEN $140,000 $140,000.00 1 1053551 BARBARA TREGLOWD $148,500 $148,500.00 1 1053651 RICHARD D. KENNEDY $136,000 $136,000.00 1 1053710 MARY L. PHILLIPS $85,500 $85,500.00 1 1053718 RUBEN GARCIA $99,000 $99,000.00 1 1053768 HENRY VANDER MALLIE III $84,000 $84,000.00 1 1053776 JOAN G. RACE $140,200 $140,200.00 1 1053780 JOHN J. MAHONEY $15,000 $15,000.00 1 1053785 DAVID CAPE $88,000 $88,000.00 1 1053890 KATRINA CALLAWAY $145,600 $145,600.00 1 1053824 WILLIAM C. KERSHAW $110,700 $110,700.00 1 1053963 THOMAS J. SARNO $20,200 $20,200.00 1 1054014 DONNA MILLS $94,500 $94,500.00 1 1054115 LAGUANDA C. LYMAS $105,300 $105,300.00 1 1054122 ANTOINETTE BOYKIN $181,800 $181,800.00 1 1054171 STEVEN J. KOMINSKY $87,630 $87,630.00 1 1054173 BRUCE A. HENSCHEN $115,000 $115,000.00 1 1054198 LEE A. COUCH $179,350 $179,350.00 1 1054199 SUZANNE YAWGER $133,000 $133,000.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1054203 RONALD THOMAS $108,000 $108,000.00 1 1054204 WILLIAM F. WICKWIRE $11,000 $11,000.00 1 1054209 MARSHALL C. WOLLMAN $90,000 $90,000.00 1 1054369 MICHAEL E. SCHOETTLER $87,500 $87,500.00 1 1054374 EDWARD MILLS $160,000 $160,000.00 1 1054389 ROY SIEVERS $85,000 $85,000.00 1 1054404 RONALD GOYDEN $13,000 $13,000.00 1 1054566 DAYAWATI BISHUNAUTH $189,000 $189,000.00 1 1054846 JAMES W. CLEGG II $13,000 $13,000.00 1 1054866 DOUGLAS J. WELCH $106,600 $106,600.00 1 1054956 WICLIFF REID $180,000 $180,000.00 1 1055028 HELEN KANN $184,875 $184,875.00 1 1055038 DOROTHY PIERCE $165,000 $165,000.00 1 1055043 DWIGHT SANDS $86,100 $86,100.00 1 9013079 THOMAS P. SCRIVO $20,300 $20,200.23 1 9013122 DONALD A. WEBSTER $17,000 $16,949.36 1 9013232 DUANE H. HALLOCK SR. $20,000 $19,777.23 1 9013381 LEROY W. KAUFMAN $79,800 $79,799.19 1 9013383 CARL A. ADAMOLI $10,100 $9,792.27 1 9013384 JAMES J. COUGHLIN JR. $110,600 $110,212.46 1 9013389 GIACOMA GINA BUFFA $20,000 $19,515.60 1 9013406 DAWN M. MANSFIELD $20,000 $19,767.42 1 9013441 THOMAS F. MCLAUGHLIN $110,500 $110,500.00 1 9013458 DENNIS GAHR $20,244 $20,137.27 1 9013490 ABIGAIN MERCADO VELEZ $20,400 $20,323.43 1 9013506 CLIFFORD H. BEIDLER JR. $141,000 $140,047.74 1 9013510 WILLIAM M. SHANK $19,500 $19,353.78 1 9013536 WILLIAM E. PHILLIPS $14,000 $13,986.50 1 9013549 MICHAEL B. O'MEARA $14,750 $14,333.10 1 9013550 KENNETH C. KIME SR. $158,300 $156,233.82 1 9013561 WILLIAM T. BLANCHARD $110,000 $109,395.76 1 9013578 ELIZABETH HANLON $20,000 $19,854.48 1 9013599 ALAN B. LEVINE $140,000 $139,855.64 1 9013608 VIRGINIA SZUMSKI $11,000 $11,000.00 1 9013614 VICTORIA W. YANCEY $116,000 $115,483.23 1 9013620 HELEN ANN ALMEIDA $103,000 $103,000.00 1 9013626 ALBERT T. TOTH SR. $12,500 $12,448.61 1 9013627 KATHLEEN MCCLOSKEY $100,000 $99,020.07 1 9013638 JEFFREY J. FREIRICH $17,500 $17,500.00 1 9013639 ALFRED ATANDA $80,000 $79,903.13 1 9013642 BARBARA A. MCCURRY $96,000 $95,584.80 1 9013648 KENNETH C. KIME SR. $19,900 $19,740.26 1 9013649 DANIEL J. KENNEDY $16,402 $16,402.43 1 9013697 KRISTY E. REES $19,450 $19,341.70 1 9013707 CARLA M. HOOKS $15,000 $15,000.00 1 9013710 JEAN WROBEL $15,000 $14,874.15 1 9013713 RITA ANN MATTHEWS $16,500 $16,500.00 1 9013716 BERNADETTE LOVE $13,500 $13,500.00 1 9013730 JOSEPH J. ZARECZKY $97,775 $97,775.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 9013733 DOUGLAS BERENGER $86,000 $86,000.00 1 9013762 GAIL L. WURSTER $85,000 $85,000.00 1 9013784 ANTHONY CELESTE $106,200 $106,200.00 1 9013794 MARY WERTS $10,000 $10,000.00 1 9013796 DORIS D. HOLADAY, TRUSTEE $165,000 $165,000.00 1 9013812 MYRON POPOWYCH $100,000 $100,000.00 1 9013822 JULIA V. RIOS $17,000 $17,000.00 1 3100000938 DEBORAH FATOURAS $240,000 $240,000.00 1 3000000184 BARBARA R. BOWERS $182,000 $181,966.64 1 3000000188 JOSEPH ANDREWS $114,750 $114,431.87 1 3000000202 BEVERLY DESTEFANO $82,500 $82,288.72 1 3000000206 LEROY A. BARNES $193,500 $193,500.00 1 3000000215 HARRY ACETI $81,000 $81,000.00 1 3000000216 STEPHEN SARDINO $162,900 $162,900.00 1 3000000224 RAYMOND E. BURNS $85,000 $85,000.00 1 3000000226 CARMEN COLLAZO $92,000 $92,000.00 1 3000000229 THOMAS DOS SANTOS $166,500 $166,500.00 1 3000000236 GARY A. PARIS $112,200 $112,200.00 1 3019800662 HERNAN SARRIA $188,700 $188,700.00 1 3019800733 DARIO GARAY $87,000 $86,903.53 1 3019800794 JESSICA KUCHINOV $91,000 $90,792.54 1 3019800830 CARIDAD CASTILLO $85,000 $85,000.00 1 3019804806 ROBERT V. HENRY, JR. $83,250 $83,236.85 1 3019806393 DAVID HARDING COLES SR. $83,720 $83,720.00 1 3019806733 JESSE L WILLIAMS $84,000 $84,000.00 1 3019806750 JAMES PALADINO $90,000 $89,650.76 1 3019806812 ROBERT BACCELLO $112,500 $112,500.00 1 3019806868 NANCY L. BAIRD $93,000 $93,000.00 1 3019806910 FREDERICK C. KNIESLER, JR $200,000 $200,000.00 1 3019806915 VIOLET C. SHAUBERGER $19,000 $18,990.82 1 3019806918 JAMES J. BURKE $163,200 $163,177.69 1 3019807024 JERRY STEFANOWICZ $95,200 $95,068.04 1 3019836060 ERROL HENRY $138,000 $137,997.01 1 3019838491 JOANNE MEARS $19,600 $19,569.30 1 3019838811 STEVEN FREEDMAN $107,250 $107,101.33 1 3019839632 TADEUSZ MAJCHRZAK $221,000 $221,000.00 1 3019840403 DANIEL VALENTINO $93,600 $93,600.00 1 3019840467 LEONARD WHEELER $102,400 $102,400.00 1 3019841082 JOSEPH COGDELL $104,000 $104,000.00 1 3019841221 BERNICE LONDON $107,000 $106,733.28 1 3019841355 DAVID L. MONACO $91,800 $91,753.88 1 3019841359 CLAYTON TURNER $108,800 $108,727.68 1 3019841384 JOANNIE ROSE $118,400 $118,366.80 1 3019841410 JOAN SANTOS $83,000 $82,937.27 1 3019841425 MICHAEL RICKETTS $131,750 $131,750.00 1 3019841434 ALEX ZUNIGA $140,000 $140,000.00 1 3019841435 ALEX HERNANDEZ $86,250 $86,250.00 1 3019841534 ARTHUR H. CLARK III $119,000 $118,871.40 1 3019841605 JANET SIRIGNANO $138,000 $137,752.40 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019841609 VERNEY BENDER $119,000 $118,700.88 1 3019841610 MIGUEL DEJESUS $97,750 $97,708.58 1 3019841628 ANDRE SEAN DAVIS $89,600 $89,600.00 1 3019841631 CHERRY FRANCIS $221,859 $221,859.00 1 3019841691 FREDERICA GRAYSON ENSLEY $100,000 $99,994.01 1 3019841711 WILLAIM V. VOGT, JR. $118,400 $118,200.23 1 3019841786 GLENNA CARAMBA-COKER $156,000 $156,000.00 1 3019841847 DOROTHY EDWARDS $112,200 $112,074.23 1 3019841860 OMAR TOWNES $105,600 $105,600.00 1 3019841872 THOMAS J. REIDY $160,000 $160,000.00 1 3019841962 VALERIE MOORE BIERA $88,000 $87,991.12 1 3019841965 JOYCE ROUGHGARDEN $116,600 $116,405.72 1 3019841986 JUDITH VIEIRA $116,000 $116,000.00 1 3019841990 ERNEST RODRIGUEZ $109,350 $109,194.06 1 3019892339 VINCENT I. COLLINS $108,000 $108,000.00 1 3019892348 JAMES E. HALL, JR. $152,915 $152,915.00 1 3019892409 FRANKLIN A. BOWLES $94,710 $94,475.75 1 3019892522 ROBERT B. KEYES JR. $89,250 $89,250.00 1 3019892526 MORRIS ALEXANDER MURRAY $131,750 $131,750.00 1 3019900831 NANCY LORIA $104,400 $104,400.00 1 3019900838 LUIS R. SUAREZ $152,000 $152,000.00 1 3019904704 THEODORE C KELLER $172,700 $172,700.00 1 3019904741 WILLIE F. DAVIS $136,000 $136,000.00 1 3019904912 WILLIAM H. CLARK $118,800 $118,800.00 1 3019906972 TONIE LOVE $12,000 $12,000.00 1 3019907017 NANCY GAYMON $120,000 $120,000.00 1 3019907099 LARRY H. WERKHEISER $90,000 $90,000.00 1 3019907131 JOSEPH L. DEMARCO $135,000 $135,000.00 1 3019907155 MILDRED ELWOOD $107,950 $107,950.00 1 3019907168 MARCIA WILLIAMS $175,100 $175,100.00 1 3019907193 TONY W FEIMSTER $95,200 $95,200.00 1 3019907198 SCOTT A. NAGY $92,000 $92,000.00 1 3019907337 VANESSA DYKES MUHAMMAD $148,500 $148,500.00 1 3019940346 SANDRA DIGGS $18,000 $17,807.12 1 3019941765 BRYON D. MILLHAM $98,175 $98,175.00 1 3019941871 YASMINE DAVIS $212,000 $212,000.00 1 3019941894 GERARD DROGE $145,000 $145,000.00 1 3019941959 LINDA SHERIDA BANNERMAN M $12,600 $12,600.00 1 3019941961 STEPHANIE CABONARGI $161,100 $161,100.00 1 3019941985 RAYMOND A.PIZZO $180,000 $180,000.00 1 3019942043 PHILOGENE MEDACIER $148,750 $148,750.00 1 3019942050 INDIRA BARON $119,000 $119,000.00 1 3019942116 OMAR BETANCOURTH $130,500 $130,500.00 1 3019942155 CHRISTOPHER RIVERA $120,000 $120,000.00 1 3019942188 JOSEPH COGDELL $112,500 $112,500.00 1 3019942201 DENNIS P O'ROURKE $95,200 $95,200.00 1 3019942231 THOMAS BOJNOSKI $104,800 $104,800.00 1 3019942269 BAYO OKPAKU $183,750 $183,750.00 1 3019942293 MONICA ADDISON $103,700 $103,700.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019942369 DENISE L. WHEELER $136,000 $136,000.00 1 3019942388 ALEX MANSARAY $104,000 $104,000.00 1 3019942460 ELAINE M. ROBERTS $193,000 $193,000.00 1 3019942469 LOREN LEVENSTEIN $180,000 $180,000.00 1 3019992448 GAIL A. CHRISTIAN $120,000 $120,000.00 1 3019992474 BERNICE J. BRACEY $92,450 $92,450.00 1 3019992527 RAYMOND K. SPARKS $116,500 $116,500.00 1 3019992568 KRYSTAL A. JOHNSTON $147,000 $147,000.00 1 3039904851 JEFFREY P. ANDREWS $11,668 $11,668.00 1 3039907300 MARK A. BOLINSKY $14,736 $14,736.00 1 3039941783 ROSALIE A. MONDELLO $14,881 $14,881.00 1 3039942083 ROBERT BERG $91,250 $91,250.00 1 3100000215 MANUEL DIAZ $113,900 $113,660.25 1 3100003231 MICHAEL J. CIRCELLI $136,350 $136,350.00 1 3100003282 DOUGLAS A. SANCHEZ $93,000 $92,440.58 1 3100003289 BILLY D. MCMILLION $101,700 $101,413.49 1 3100003310 DAVID K. THAANUM $142,500 $142,500.00 1 3100003351 GLEN C. ALDRICH $82,500 $82,251.51 1 3100003399 VERNA SMITH $15,000 $14,897.34 1 3100003435 BRADLEY ROSENAU $12,950 $12,865.59 1 3100003474 WANDA MCDANIELS $80,000 $79,888.65 1 3100003515 PATRICIA L. DARDEN $15,000 $15,000.00 1 3100003563 DANIEL L. BOSCH $16,400 $16,400.00 1 3100003569 DENNIS CALIZ $155,000 $155,000.00 1 3100003579 JANNIE L. FULTON $132,000 $132,000.00 1 3100003597 ROBIN S. HOLLINGSHEAD $121,300 $121,277.95 1 3100003632 LESLIE I. MARSHALL $167,090 $167,090.00 1 3100003644 GLADYS V. LUTHER $10,000 $9,988.50 1 3100003691 JODIE ANN COGAR $100,000 $99,725.29 1 3100003705 SHARON M. NELSON $89,600 $89,390.68 1 3100003781 ROBERT L. REYNOLDS $12,000 $12,000.00 1 3100003793 CHARLES W. MANGIN JR. $225,000 $224,620.38 1 3100003794 LARRY L. PARKS $15,000 $15,000.00 1 3100003851 NAOMI LAUGHTON $230,400 $230,400.00 1 3100003874 TINA F. ROBINSON $17,829 $17,829.00 1 3100003894 GRADY ROGERS $119,000 $119,000.00 1 3100003900 DAWN A. THOMAS $90,000 $90,000.00 1 3100003902 MICHAEL R. LAURIA JR. $109,055 $108,750.08 1 3100003953 MARY C. GALEA $17,700 $17,700.00 1 3100004018 ALFRED J. ROTOLI $96,000 $96,000.00 1 3100004038 JOHN J. NIEMIEC $103,500 $103,500.00 1 3100004128 IRIS CAROL FENSTER $119,000 $119,000.00 1 3100004134 VINCENT S. DRAMIS $152,800 $152,800.00 1 3100004158 WILLIAM R. JENSEN $163,200 $163,200.00 1 3100004161 ILA WILLIAMS $144,000 $144,000.00 1 3100004184 PATRICIA FAIRCHILD $110,500 $110,500.00 1 3100004251 RONALD S. ROMANCHIK $230,000 $230,000.00 1 10125 DENNIS SANSONI $72,000 $72,000.00 2 10276 GALLANT CONSTRUCTION INC. $50,000 $49,776.78 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 10317 MICHAEL WHITE $60,000 $59,705.49 2 10319 SHAWN M. ZERBE $39,000 $38,912.50 2 10320 NATILI NURSERY, INC. $60,000 $59,892.04 2 10321 WILLIE FRED WHEELER $22,000 $22,000.00 2 10322 NATHAN BOOKMAN $31,000 $30,834.06 2 10324 ELMER L. GOODWIN JR. $25,000 $25,000.00 2 10325 KELLY'S SHEET METAL, INC. $75,000 $75,000.00 2 10327 MARIA L. MENTZER $38,000 $38,000.00 2 10332 MORGAN/PATTERSON CONSTRUC $30,000 $29,946.85 2 10335 BERLIN MOTOR CARS L.L.C. $20,000 $20,000.00 2 10338 CHIPPEWA WINDOW AND DOOR $20,000 $20,000.00 2 10340 BYONG YEON CHOI $130,000 $130,000.00 2 10341 GERALD R. JACOBS $65,000 $64,883.04 2 10343 HAGEPANOS & WALTERS, INC. $40,000 $39,999.09 2 10344 TRADITION, L.L.C. $61,000 $60,510.92 2 10346 MIGUEL PANTOJA $30,000 $30,000.00 2 10348 DITOMA CONTRACTING, INC. $50,600 $50,374.10 2 10351 D. & S. IMPROVEMENT, INC. $35,000 $34,952.55 2 10352 ANTHONY F. SANTA MARIA JR $20,000 $20,000.00 2 10353 PATRICK B. PIERCE $21,000 $20,878.95 2 10354 FOWLKES AND SONS, INC. $45,000 $44,938.61 2 10357 GEORGE D. MORSE $45,000 $44,939.01 2 10360 BARRY DEVLIEGHER $31,000 $30,875.59 2 10362 KOFI BARRY $43,000 $43,000.00 2 10364 HERMAN SCIULLI $33,000 $33,000.00 2 10366 JOSEPH M. FOREMAN $60,000 $60,000.00 2 10370 WAYNE FORTE $68,000 $68,000.00 2 10374 SWEET BRIER BED AND BREAK $55,000 $54,583.45 2 10376 MARY L. YOUNKER $30,000 $30,000.00 2 10378 JOSEPH KARBOW $44,000 $43,432.24 2 10380 JOHN P. SHLATZ $30,000 $30,000.00 2 10381 STEPHEN F. STOLTZFUS $23,000 $23,000.00 2 10386 ELENI ATHANASIOU $70,000 $70,000.00 2 10388 EDWARD W. RAUSCH $70,000 $70,000.00 2 10390 GRIGORE DANCIU $35,000 $35,000.00 2 10392 KOENEMUND ENTERPRISES, IN $45,000 $45,000.00 2 10393 MICHELE R. HOWARD $29,000 $29,000.00 2 10394 LINCOLN JAMES $40,000 $40,000.00 2 10396 THOMAS VELEZ $20,000 $20,000.00 2 10398 MID-ISLAND REAL ESTATE, I $45,000 $44,599.22 2 10399 DICK ROBERTS & SON AUTO S $40,000 $40,000.00 2 10401 JOHNNY B. BLACKSHEAR JR. $125,000 $125,000.00 2 10404 LOGAN CLEANING, INC. $20,000 $20,000.00 2 10405 RONALD SCARLETT $56,000 $56,000.00 2 10409 CARL J. PODJED $37,000 $37,000.00 2 10416 GLEN ROCK TAVERN, INC. $69,000 $69,000.00 2 10424 JOSEPH E. MILLER $28,000 $28,000.00 2 8882111 PAUL D. ALFIERI JR. $55,000 $54,949.89 2 8882112 THE REAL MCCOY HERB SHOP, $25,000 $24,988.33 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 8882114 UNIVERSAL TOOL REPAIRS, I $30,000 $30,000.00 2 8882120 LULA L. KING $40,000 $39,910.25 2 8882121 ENTECH PARTNERSHIP $42,000 $42,000.00 2 8882122 356 7TH STREET CORP. $129,000 $128,412.24 2 8882123 JEAN E. WILSON $45,000 $44,898.65 2 8882132 ARCHITECTURAL WOOD PRODUC $53,500 $53,500.00 2 8882136 STEVEN G. GENTRY $22,000 $22,000.00 2 8882140 JOSE LOPEZ $55,000 $55,000.00 2 8882142 HOUCK BUSINESS FORMS, INC $55,000 $55,000.00 2 8882143 OMEGA'S FASHIONS, INC. $24,000 $24,000.00 2 8882144 LE LOOK OPTICAL, INC. $35,000 $35,000.00 2 8882146 R & T RENTALS, INC. $65,000 $65,000.00 2 8775 J W PARKS HOME IMPROVEMEN $43,000 $42,559.71 2 10433 SAMANTHA CHU-CHENG $35,000 $35,000.00 2 8882149 LALER REALTY, INC. $78,000 $78,000.00 2 10434 MICHAEL E. ORTIZ $28,000 $28,000.00 2 10435 ROBERT R. VOYTON $20,000 $20,000.00 2 8882153 DOROTHY E. ENRIQUEZ $30,000 $30,000.00 2 10294 VILLA REGINA CATERERS, IN $40,000 $39,519.39 2 10298 DANIEL LAWRENCE $250,000 $250,000.00 2 10318 DAVE'S REPAIR SHOP, INC. $260,000 $259,618.21 2 10329 GREATER BALTIMORE RECORD $350,000 $350,000.00 2 10363 ZENON CHRISTOFOROU $275,000 $275,000.00 2 10369 MAN-NAN 878 CORP. $250,000 $250,000.00 2 10400 STEVE'S DEEPWATER MARINA, $250,000 $250,000.00 2 10421 THOMAS M. KINNEY SR. $32,000 $32,000.00 2 8882118 WE-KILL PEST CONTROL, INC $80,000 $79,962.65 2 8882101 PATRICIA KNIGHT, INC. $63,000 $63,000.00 2 10268 NIGHT LIFE BAR & GRILLE, $300,000 $300,000.00 2 1042110 IRANOR FALDOR $54,500 $54,389.15 2 1042715 LINDA JUSTIN $65,250 $65,138.56 2 1043181 JOHN G. DAVIS $63,000 $63,000.00 2 1043407 RICHARD RAY LEE $37,125 $37,125.00 2 1043724 MARK E. GEORGE $21,150 $21,150.00 2 1043757 HORACE LOWE $37,000 $37,000.00 2 1043758 CHAUNCEY SULLIVAN $24,750 $24,750.00 2 1044072 LOFTON HULL $49,500 $49,431.75 2 1044094 VERA JORDAN $74,000 $73,832.40 2 1044113 ELEANOR JACKSON $33,000 $33,000.00 2 1044609 BENJAMIN WILLIAMS $36,000 $36,000.00 2 1044689 CELIA B VARGAS $124,500 $124,500.00 2 1044743 KEITH J. CALDWELL $42,000 $41,992.83 2 1044878 ROSE MARIE MCGEARY $31,500 $31,447.26 2 1045069 JESSE ESPARZA $30,000 $29,842.87 2 1045084 JAIME BELLO $70,000 $69,959.69 2 1045094 DEBORAH HOLMES $51,000 $50,910.03 2 1045111 ANTHONY KOSIENSKI JR. $250,000 $250,000.00 2 1045146 JANET R. MOURADIAN $35,000 $34,958.51 2 1045228 PATRICIA MONROE $37,500 $37,500.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1045435 JOHN R. SCUELLO $282,000 $280,765.55 2 1045488 STEPHEN M. ABIUSO $72,600 $72,600.00 2 1045692 CHARLES B. STEWARD $64,000 $63,929.60 2 1045695 MARINE MARTIN $45,000 $45,000.00 2 1045711 ANDREA LORETTA DACOSTA $48,000 $47,736.65 2 1045755 RAYBURN EUGENE ADAMS II $59,850 $59,850.00 2 1045771 NELSON G. ANCRUM $49,600 $49,600.00 2 1045787 JOSEPH RODIA $37,500 $37,429.13 2 1045917 CHARLES T. WIMPY JR. $74,000 $74,000.00 2 1045947 JOHN S. LESSER $22,000 $21,856.42 2 1046078 CATHARINE A TAYLOR BY HER $61,200 $61,200.00 2 1046163 JEFFREY SMITH $60,000 $59,980.23 2 1046187 WILLIAM M. TINGLER $37,800 $37,800.00 2 1046190 ANNA CIRRONE $47,000 $46,947.70 2 1046248 MILDRED V. BIBBS $25,000 $24,993.87 2 1046250 RICK E. DAVID $67,200 $67,200.00 2 1046268 CATHERINE A. O'BRIEN $249,500 $249,442.46 2 1046284 MARY D. BOYD $63,000 $62,884.07 2 1046295 DWAYNE LOCKMAN SR. $39,000 $39,000.00 2 1046300 NOEL A. STRAW $72,000 $71,974.43 2 1046303 ARTHUR W. JOHNSON $78,000 $77,974.30 2 1046306 MATTHEW SHEFFIELD $40,000 $39,970.50 2 1046329 JOHN LEACH $62,400 $62,400.00 2 1046364 JULIA ARNOLD $64,000 $64,000.00 2 1046376 MARTIN R. COHEN $38,665 $38,545.86 2 1046383 DARYL G. DEW $68,000 $67,557.67 2 1046476 JOHN THOMAS STROUP $48,000 $48,000.00 2 1046489 FIRAS RIMAWI $35,500 $35,500.00 2 1046500 ANGELA V. JAY $25,000 $24,922.36 2 1046591 ERROL SUBARAN $35,000 $35,000.00 2 1046661 GARY D. FREULER SR. $22,500 $22,500.00 2 1046667 RONALD J. RICHARDS $76,500 $76,461.77 2 1046705 CHRISTINE R. CANTER $53,100 $53,100.00 2 1046713 WILLIAM RIVERA $72,000 $72,000.00 2 1046740 HAROLD JOHNSON $43,200 $43,200.00 2 1046746 SARAH OLIVIA WILLIAMS SHO $68,000 $67,998.94 2 1046778 MARY JO SEWELL $47,600 $47,565.37 2 1046795 MARVIN ULYSSES BATEMAN $57,100 $57,100.00 2 1046812 PAUL A. HENRY $72,000 $72,000.00 2 1046833 SHERMAN POYTHRESS $40,000 $40,000.00 2 1046848 LINDA GRAVES MANGUM $67,500 $67,327.95 2 1046859 THEODORE L. PACK JR. $35,000 $35,000.00 2 1046867 JOAN THERESA SCOTT CLARK $32,000 $31,982.16 2 1046877 GEORGE W. LOFLAND $77,400 $77,400.00 2 1046902 DIANE L. KING $27,200 $27,200.00 2 1046909 PAMELA J. PERRY $71,550 $71,550.00 2 1046919 VICENTE A. DELACRUZ $73,800 $73,800.00 2 1046935 BRENDA GREENE $66,427 $66,376.44 2 1047000 DARRELL D. WINN $61,300 $61,233.57 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1047065 SAMUEL TEEL $25,000 $24,903.57 2 1047075 LAMAR WATKINS $56,000 $56,000.00 2 1047081 ADELINA MARIE P. KUHL $40,000 $40,000.00 2 1047087 RETHA PERRY $45,000 $44,850.40 2 1047094 JAMES P. MITCHELL $53,700 $53,673.48 2 1047101 KRISTINA HNYDA $61,750 $61,750.00 2 1047138 BRIAN S. RUSSELL $64,350 $64,350.00 2 1047166 DEBRA LONDON SHAPIRO $29,272 $29,272.00 2 1047171 JUDITH H. EDLIN $54,500 $54,385.57 2 1047183 JAY CEE CHAMPION $40,000 $39,997.09 2 1047212 MILDRED UPSHAW $21,600 $21,600.00 2 1047233 WILLIAM JANOS III $45,000 $44,980.41 2 1047245 VICTORIANO RIVERA $30,000 $29,732.53 2 1047271 ANA SHOUMATOFF $125,000 $124,792.18 2 1047273 BRIAN E. DEWITT $50,000 $49,917.76 2 1047276 FLORENCE SHORE $36,100 $36,100.00 2 1047290 DEAN EVERETTE LAIL $42,500 $41,918.75 2 1047301 MARY LYNN FLANIGAN $40,000 $39,798.93 2 1047305 KEITH G. KEENER $75,150 $74,965.37 2 1047310 ROBERT J. SMITH $56,100 $55,921.05 2 1047315 WINIFRED D. DIXON $39,100 $39,056.64 2 1047339 ANTHONY SCAFIRO JR. $65,700 $65,250.17 2 1047354 DEWITT CARTHAN JR. $37,750 $37,695.80 2 1047394 MARLON THOMPSON $127,500 $127,498.36 2 1047398 ANTHONY D. JARRELL $60,350 $60,226.12 2 1047399 DAVID A. CALVANO $70,000 $70,000.00 2 1047402 ALLAN S. PALAIS $71,200 $70,891.82 2 1047439 EDWARD MEYER $62,720 $62,424.65 2 1047445 DARYL H. BLACK $77,000 $76,961.11 2 1047467 ETHEL MAE CARTER $72,500 $72,341.54 2 1047497 RICHARD A. DALTON $43,350 $43,264.83 2 1047524 LOUEDA M. KENNEDY $48,150 $48,146.91 2 1047549 RONNIE C. MCLEAN $127,500 $127,358.55 2 1047572 GERARDO I. SOLARTE $69,700 $69,644.49 2 1047618 TRISTAN COOLEY $65,700 $65,700.00 2 1047629 ROBERT E. MCCORMACK $34,000 $33,889.92 2 1047647 JAMES T. BROADWATER $48,000 $47,780.61 2 1047699 SPENCER BAUCOM $48,400 $48,400.00 2 1047763 WALTER J. TOMES $66,000 $65,959.63 2 1047773 PHILIP E. WALKLET $40,500 $40,296.58 2 1047782 WILMER GILYARD JR. $58,500 $58,500.00 2 1047802 SHIRLEY BURTS $64,800 $64,786.79 2 1047811 DIANA M. KECK $39,500 $39,444.68 2 1047842 ELAINE T VAUGHN $65,500 $65,369.96 2 1047850 MARIA D. FERNANDEZ $70,000 $69,696.93 2 1047881 MATTHEW L. SETTING $33,000 $33,000.00 2 1047891 KINGSEL MCKENZIE $22,900 $22,884.51 2 1047932 RYAN KEITH WILLIAMS $129,600 $129,600.00 2 1047943 GLORIA T. FRATONI $76,000 $75,822.08 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1047956 MICHAEL D' AMELIO $41,000 $40,861.20 2 1047973 ROLLEN E. FISHER SR. $45,000 $44,938.14 2 1047996 MATTHEW J. SPAHIC $35,000 $34,905.60 2 1048000 DORIS PAIGE $20,000 $20,000.00 2 1048002 RAQUEL RAELENE SCIBETTA $63,000 $62,954.05 2 1048018 CLAUDIO BRIANTE $20,000 $20,000.00 2 1048033 GEORGE CLARY $51,000 $50,798.91 2 1048035 SUSAN K. KENDIG $26,000 $25,848.01 2 1048038 WALTER D. KINCAID $28,000 $28,000.00 2 1048075 JOSEPH M. BASILE $52,000 $52,000.00 2 1048082 CHRISTOPHER R. GEDNEY $33,480 $33,329.04 2 1048083 JOAN K. LEFF $35,000 $35,000.00 2 1048095 WARREN LIGHT $100,000 $99,990.83 2 1048107 KYLE HOLMBECK $55,000 $54,918.76 2 1048111 GEORGE L. KINIMONTH $245,000 $245,000.00 2 1048116 MARTIN R. COHEN $38,500 $38,500.00 2 1048144 FRANK RUSSO $50,000 $49,816.52 2 1048153 MICHAEL P. BUTLER $127,500 $127,500.00 2 1048159 JACQUELINE MALASZECKI $21,000 $20,983.37 2 1048176 MARTHA ROBERTS $45,000 $44,652.29 2 1048191 ROBERT NOACK $32,645 $32,645.00 2 1048197 CHARLES F. HUSTED $45,000 $45,000.00 2 1048198 SEAN M. DEEGAN $43,000 $43,000.00 2 1048206 BETTY MCEWEN $35,000 $34,880.89 2 1048231 MARY A. CELIS $37,000 $36,905.77 2 1048252 VINCENZO SCHIANO- DI-COLA $30,000 $29,803.20 2 1048262 RONALD W. MILLSPAUGH $66,300 $66,089.27 2 1048269 WILLIAM A. MATTHEWS $75,000 $74,773.97 2 1048275 JEAN A. DAVIS $76,500 $76,477.88 2 1048287 STEVE L. GRAY $62,800 $62,746.74 2 1048293 THELMA GRAY $48,000 $47,962.36 2 1048303 MARY E. HARMON $22,000 $22,000.00 2 1048311 RODNEY ROLLE $33,600 $33,555.63 2 1048321 KATHLEEN NISTOCK $45,000 $44,878.33 2 1048330 LOUISE T. WILLIAMS $55,540 $55,512.57 2 1048342 STEVEN W. DUNBAR $52,000 $51,900.23 2 1048344 BARBARA ANNE CLUCAS $56,000 $55,894.74 2 1048366 BARBARA H. MORGAN $20,359 $20,359.00 2 1048377 JODIE T. COLELLA $129,000 $128,681.29 2 1048390 PAM VANGROUW $25,000 $24,665.74 2 1048396 JEFFREY R. HECHT $25,000 $25,000.00 2 1048403 FRANK GIORDIANO $20,000 $20,000.00 2 1048411 MARLENE DUVIVIER $40,000 $40,000.00 2 1048417 KENNETH V. BRONSON $38,500 $38,404.21 2 1048427 JAMES J. DOUGHERTY $52,000 $51,754.43 2 1048428 NELSON G. ANCRUM $26,250 $26,250.00 2 1048432 VIET THANH NGUYEN $51,082 $51,082.00 2 1048448 CATHERINE M. PALUMBO $72,000 $71,870.32 2 1048454 ALEXANDER WILLIAM DUNLOP $68,000 $68,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1048462 BETTY L. DUNLEAVY $33,000 $32,819.65 2 1048464 MARION WILLIAMS $59,600 $59,600.00 2 1048478 CHARLES F. HUSTED $37,600 $37,600.00 2 1048558 GLORIA THOMAS $36,000 $35,950.69 2 1048572 MARA GOMOLKA $21,300 $21,195.20 2 1048639 JAMES T. DUNMEYER $38,000 $37,884.44 2 1048641 MELVIN T. AUGHTMAN $31,300 $30,974.80 2 1048646 BRIAN D. SNOOK $21,000 $20,868.31 2 1048652 JENNIE L. FENTOS $50,000 $49,810.25 2 1048680 DAMION L. BARBER $40,000 $39,822.00 2 1048682 RODRINA Y. AARON $55,250 $55,222.25 2 1048687 WILTON R. MASSENGILL JR. $250,000 $250,000.00 2 1048704 ELLIS L. VIRGLE $55,180 $55,180.00 2 1048740 NEAL J. HUGHES $20,000 $20,000.00 2 1048745 JAMES E. WHITE $54,900 $54,875.20 2 1048753 ETHELL TAYLOR $30,600 $30,600.00 2 1048806 GARY MULE $57,900 $57,900.00 2 1048840 DONNA L. DAVIS $40,000 $39,836.15 2 1048844 ALVIN LEVINE $68,000 $68,000.00 2 1048871 DIANA V. JACKOWSKI $50,500 $50,421.33 2 1048934 STEVEN M. HINKLE $25,000 $24,896.44 2 1048942 EMMALINE DODSON MCNEAL $62,000 $61,914.41 2 1048944 QUEEN E. BROWN $22,000 $22,000.00 2 1048946 JOHN KLEBAUR $58,000 $58,000.00 2 1048968 SHEILA B. GILLIAM $67,500 $67,177.78 2 1048971 BERNICE JORDAN $72,500 $72,497.86 2 1048974 EMMA JEAN R. RATLIFF $40,800 $40,800.00 2 1048980 FRANK EVERETT THOMPSON $60,000 $60,000.00 2 1048992 RONALD B. HAWCROFT $34,500 $34,500.00 2 1048999 JOHN E. FARNUM $21,100 $21,050.35 2 1049000 RAYMOND A. MINUTOLO $27,000 $26,914.44 2 1049006 CARLOS GEORGE SR. $40,000 $40,000.00 2 1049007 JAMES FREY $52,000 $52,000.00 2 1049032 ROBERT E. CLEVELAND $44,000 $44,000.00 2 1049059 SALLY HAYES MACKAY $30,000 $29,987.28 2 1049074 PHILOMENA M. FEDELE $70,000 $69,884.75 2 1049080 KAZI A. HOSSAIN $29,700 $29,675.29 2 1049096 THOMAS TENNIS JR. $32,000 $32,000.00 2 1049097 JANET D. CORNETT $53,550 $53,550.00 2 1049131 PRISCILLA A. JONES A/K/A $60,300 $60,300.00 2 1049140 WALTER I. AARON $61,750 $61,750.00 2 1049144 CYRIL VILLAFANA $65,000 $64,876.10 2 1049146 NANCY CARLISLE SCHUMACHER $63,750 $63,741.28 2 1049152 TIMOTHY PRICE $38,700 $38,700.00 2 1049160 MILLICENT PIERCE $48,750 $48,556.15 2 1049195 JEANETTE C. MOON $25,000 $24,975.94 2 1049225 JOANNE WOMBLE $72,000 $72,000.00 2 1049237 DAVID GROSS $25,000 $25,000.00 2 1049238 TERENCE SIKORYAK $25,000 $25,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1049282 ROB MARION $56,250 $56,250.00 2 1049321 BRUNO P. SIMONELLI $130,000 $130,000.00 2 1049394 JACQUELINE P. VALENTINE $70,000 $70,000.00 2 1049396 WALTER F. DEGROOT $20,000 $20,000.00 2 1049413 GARY PFAUTZ $33,300 $33,228.71 2 1049432 RICHARD BURGESS $43,650 $43,650.00 2 1049452 ANN NOLAN $27,500 $27,290.91 2 1049453 STEPHEN G. CAVALLO $28,000 $28,000.00 2 1049454 JOAN DOLORES BENNIS-SALLE $55,800 $55,516.00 2 1049491 ANNE Y. THROWER $31,000 $31,000.00 2 1049493 JOHN P. BROWN $20,000 $20,000.00 2 1049500 JAMES GEORGE HYDRO $30,400 $30,400.00 2 1049533 BARBARA ELIZABETH DOMRASE $60,000 $60,000.00 2 1049535 PAUL CHRISTIAN $65,700 $65,606.50 2 1049539 FRANK PASHEL $67,500 $67,500.00 2 1049563 DONALD R. BLY $41,500 $41,500.00 2 1049573 FRED MITCHELL $52,800 $52,800.00 2 1049574 BRENDA DILLARD $62,850 $62,821.14 2 1049577 BARBARA S. THIGPEN $30,000 $29,904.27 2 1049630 LAWRENCE H. MORINI $35,000 $35,000.00 2 1049659 DONNA M. BROWN-BURROUGH $30,000 $30,000.00 2 1049722 JOE C. WORKMAN $57,500 $57,339.23 2 1049726 PATRICIA A. LAFFERTY $68,000 $67,987.01 2 1049733 ALLAN H. ROSENBERG $45,900 $45,900.00 2 1049752 LAURENCE HIRSHON $48,000 $48,000.00 2 1049763 WILLIAM J. VANORE II $28,400 $28,357.18 2 1049767 ERIC TUSHAWN BURDEN $78,200 $78,200.00 2 1049768 ROBERT JOE AMOO $40,950 $40,950.00 2 1049778 JOHNNIE MAE THOMAS $54,000 $54,000.00 2 1049806 KAREN M. BAILEY $45,000 $44,886.92 2 1049858 VALERIE J. DUNN $78,200 $77,961.35 2 1049860 MARJORIE A. JONES $39,200 $38,895.79 2 1049905 CHARLES YACKLON $34,500 $34,500.00 2 1049938 RUZANNA BOGATI $74,760 $74,760.00 2 1049944 NANCY WOLINSKY $275,000 $275,000.00 2 1049981 NELSON WINGFIELD $30,000 $29,885.51 2 1049990 JOYCE GASKIN $50,000 $49,758.61 2 1049997 TERRY K. WHITE $56,800 $56,800.00 2 1050041 VALLIE GAPAC $56,500 $56,494.39 2 1050052 DONALD L. HAYES $36,550 $36,549.11 2 1050079 CLIFFORD BRYANT $46,000 $45,936.55 2 1050097 EMMETT COX $74,800 $74,673.79 2 1050100 LARRY D. CARNES $68,000 $67,998.79 2 1050152 SUSAN M. JOHNSON $55,000 $55,000.00 2 1050157 LINWOOD JOHNSON JR. $52,000 $52,000.00 2 1050160 GLADYS COLLAZO $28,000 $27,709.80 2 1050216 SILVIA VERHEECK $35,000 $34,886.54 2 1050220 ROY R. HOWARD $54,000 $54,000.00 2 1050234 ANTHONY J. MELE JR. $27,000 $26,921.66 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1050256 PETROLINE REID $29,000 $29,000.00 2 1050258 BERNICE HEATH $50,000 $50,000.00 2 1050272 P.DAVID HENRY $52,000 $52,000.00 2 1050353 RICHARD RIMMER $31,000 $30,874.37 2 1050437 SOLOMON EDWARDS $54,000 $53,713.77 2 1050500 WANDA SUE RICHARDS $76,086 $76,086.00 2 1050508 WILLIAM KISH $61,000 $61,000.00 2 1050527 JOEL ALANIZ $50,000 $49,880.26 2 1050553 BRIAN J. DAVEY $24,200 $24,071.93 2 1050555 THOMAS W. BANKS $33,800 $33,800.00 2 1050557 ADRIANE PARKS $25,500 $25,500.00 2 1050563 THOMAS ROSOLUK $27,500 $27,500.00 2 1050625 PETER IANNUCCI $30,000 $30,000.00 2 1050647 JAMES MIKE HERRIOTT $63,000 $63,000.00 2 1050652 WILLIAM DAVID CARDELL $30,000 $29,893.80 2 1050661 NANCY RYAN $49,000 $49,000.00 2 1050672 JOHN G. DYER $36,000 $35,846.29 2 1050745 EDWARD K. LOWERY $33,600 $33,600.00 2 1050749 ALTON SAWYER $54,000 $54,000.00 2 1050776 DEBORAH SIMMONS-BROWN $60,000 $59,866.99 2 1050805 MICHAEL A. BRUMMELL $51,000 $50,792.01 2 1050824 TERRENCE LEE HEWITT $64,000 $63,828.40 2 1050840 MOISES RODRIGUEZ $68,000 $68,000.00 2 1050868 TERESA M. ROBINSON $46,800 $46,595.69 2 1050869 THOMAS ALAN FAIR $69,300 $69,180.48 2 1050894 ADA SCOTT ITF AHNNA R. SC $45,000 $44,862.12 2 1050926 SHEILA HARRIS $58,500 $58,500.00 2 1050936 SHEILA HARRIS $49,500 $49,500.00 2 1051024 LUZ RIVAS $20,000 $20,000.00 2 1051026 PAMELA M. CHAVIS $57,600 $57,600.00 2 1051045 HAROLD E. LANE $57,000 $57,000.00 2 1051047 JAMES EVANS $27,000 $27,000.00 2 1051098 MELODY A. MILLEDGE $71,250 $71,150.11 2 1051103 LARRY HOWARD BROWDY $31,000 $30,873.57 2 1051114 DUANE E. COON $63,750 $63,750.00 2 1051118 HELEN D. DIVERS $42,400 $42,400.00 2 1051119 KATHY HALLOCK $61,200 $61,200.00 2 1051129 SAMUEL LESTER $25,000 $25,000.00 2 1051137 SARAH RILEY $25,000 $24,927.59 2 1051142 CARLA HUNTER $51,600 $51,600.00 2 1051242 SUSAN ZIZZA $45,000 $45,000.00 2 1051261 TAYLOR TULIP $28,800 $28,800.00 2 1051271 WARREN MC NEILL $26,000 $26,000.00 2 1051273 BENEDICTO TAVERAS $20,000 $20,000.00 2 1051281 BILLY JOE YOUNG $77,400 $77,400.00 2 1051283 BARBARA STRAND $43,200 $43,200.00 2 1051295 TRAVIS MCADOO $69,300 $69,247.51 2 1051301 JEFFREY CRAIG $48,250 $48,250.00 2 1051309 DAVID E. IRICK $35,000 $35,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1051312 LUCILLE S. HINE N/K/A LUC $61,600 $61,600.00 2 1051314 EDWARD WATTS $48,000 $48,000.00 2 1051326 EUGENE CASH $35,000 $35,000.00 2 1051355 JAMES I. MACPHERSON $39,000 $39,000.00 2 1051356 MARILYN STEERS $60,300 $60,300.00 2 1051361 HASENE SAMRIOGLU $69,175 $68,791.96 2 1051410 JANETTE SAMPSON $61,200 $61,200.00 2 1051469 LAURIE L. HUMES $32,500 $32,500.00 2 1051471 RANDY PAUL LEE $75,000 $75,000.00 2 1051480 DAVID SERRANO $43,500 $43,226.98 2 1051492 HENRY A P ELDON $57,600 $57,600.00 2 1051494 MANUEL LOUREIRO $126,500 $126,500.00 2 1051512 JOSEPH MAZZONE $65,000 $65,000.00 2 1051551 LOUIS BRICENO $21,500 $21,500.00 2 1051569 LEE SHERMAN $33,000 $33,000.00 2 1051586 MANUEL DELEON $52,500 $52,269.14 2 1051605 JOHN KUBICEK $62,100 $62,100.00 2 1051639 DAVID M. FITZPATRICK $45,000 $45,000.00 2 1051665 MITCHELL H. WARREN $45,500 $45,500.00 2 1051666 HENRY W. MCNUTT $57,000 $57,000.00 2 1051670 RITA GAINOR $56,800 $56,800.00 2 1051687 JUANITA LEE $26,250 $26,250.00 2 1051706 CHRISTINE A. CARSON COMER $70,000 $70,000.00 2 1051712 MICHAEL E. MILLER $45,000 $45,000.00 2 1051730 CALVERT W. THOMASON $36,000 $36,000.00 2 1051744 JOANN A. LEWIS GAINES $52,000 $52,000.00 2 1051765 DAVID M. SMART $55,000 $55,000.00 2 1051807 LORA D. BRACEY $128,700 $128,700.00 2 1051810 ESTHER M. WOJNO $39,000 $38,707.72 2 1051822 MAUREEN SOLOMON $30,000 $30,000.00 2 1051831 MICHAEL H. VELASCO $318,750 $318,750.00 2 1051834 EUGENE W. HARRIS $23,400 $23,400.00 2 1051859 SHARON Y. LONG $61,500 $61,500.00 2 1051875 STEPHEN M. GERHART $68,500 $68,500.00 2 1051886 ELIZABETH ARMFIELD $25,000 $25,000.00 2 1051912 BESSIE L. AUTRY $46,750 $46,750.00 2 1051918 ELLEN GIBBS $73,500 $73,500.00 2 1051998 JARET THOMPSON $50,000 $50,000.00 2 1052001 DIANE D. LUCAS $62,000 $62,000.00 2 1052013 CHRISTOPHER A. ROANE $41,000 $41,000.00 2 1052015 TOM WISE $79,000 $79,000.00 2 1052030 DANIEL J. CUGLER $65,700 $65,700.00 2 1052071 THOMAS F. WESTON $37,500 $37,500.00 2 1052079 ANTHONY HENDLEY $30,750 $30,750.00 2 1052096 ELEANOR D. FRANCK $76,300 $76,300.00 2 1052099 JOHN L. MULDOON $55,000 $55,000.00 2 1052117 LARRY R. SMITH $49,300 $49,300.00 2 1052128 LAVOYD THOMAS BASS $30,000 $30,000.00 2 1052184 JAMIE BULGER $246,500 $246,500.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1052197 ETHEL V. LITTLE TRUSTEE O $56,500 $56,500.00 2 1052205 FRED R. PARRY $20,000 $20,000.00 2 1052209 OWEN HOLLOWAY $40,000 $40,000.00 2 1052247 PATRICK HOBAN $40,500 $40,500.00 2 1052251 ANDREW KAYE $34,000 $34,000.00 2 1052256 BARBARA COTTER $40,000 $40,000.00 2 1052265 JOHN M. ZANNI $50,000 $50,000.00 2 1052286 TERRY MICHAEL SPRATLING $78,300 $78,300.00 2 1052306 PEARLIE M. KING $20,000 $20,000.00 2 1052310 COREEN YOUNG $30,000 $30,000.00 2 1052322 ADEN COLEMAN $40,000 $40,000.00 2 1052326 WALTER I. AARON $37,500 $37,500.00 2 1052337 BETSY A. FAIRLEY $46,000 $46,000.00 2 1052347 ELMARSERECIA NELOMS $59,500 $59,500.00 2 1052372 ELLEN GIBBS $62,100 $62,100.00 2 1052380 RONNIE WILLIAMS $56,361 $56,361.00 2 1052396 BARBARA ANN DAIGNAULT $39,600 $39,600.00 2 1052408 MICHAEL S. KORNHAUSER $50,001 $50,001.00 2 1052412 PATRICIA RIDGWAY $32,200 $32,200.00 2 1052418 ANNA LASOTA $30,000 $30,000.00 2 1052420 ANGELIA F. TILLMAN $55,250 $55,250.00 2 1052421 STANLEY H. CIESLAK JR. $129,000 $129,000.00 2 1052423 MICHAEL PERRY $35,000 $35,000.00 2 1052430 SARAH D. HENRY $55,800 $55,800.00 2 1052432 BOBBY MITCHELL SMITH $45,000 $45,000.00 2 1052446 JOSEPH BRUNI $27,500 $27,500.00 2 1052502 ROBERTO VELEZ JR. $30,000 $30,000.00 2 1052508 TRACY K. COWARD $25,000 $25,000.00 2 1052521 JOSEPH P. LARDINELLI $65,000 $65,000.00 2 1052523 PETER HONERKAMP $78,800 $78,800.00 2 1052571 JOY LYNN MURRAY $72,000 $72,000.00 2 1052575 RONALD M. BERRY $41,600 $41,600.00 2 1052627 THOMAS HOLLOWAY $60,000 $60,000.00 2 1052662 JOHN MEZZINA $25,000 $25,000.00 2 1052679 KEITH R. WITTENRICH $40,000 $40,000.00 2 1052682 PAMALA AMOS $45,000 $45,000.00 2 1052686 PATRICIA W. MIXON $78,300 $78,300.00 2 1052695 MARIA VAN DER KLEUT $42,000 $42,000.00 2 1052735 DAVID R. WILLIAMS $55,800 $55,800.00 2 1052740 BRENDA L. COX $62,780 $62,780.00 2 1052749 MARGITA KUNDID-RUDOVICH $40,000 $40,000.00 2 1052800 PETER GRAHAM $75,000 $75,000.00 2 1052824 MARY B. CHESTER $55,800 $55,800.00 2 1052825 ROBERT P. MCDONALD $43,200 $43,200.00 2 1052864 SONYA REED CATO $59,400 $59,400.00 2 1052868 MARION E. THOMAS $29,700 $29,700.00 2 1052885 SHERRIE L. WALL BOHANON $77,400 $77,400.00 2 1052889 RAY K. GROVE $70,000 $70,000.00 2 1052894 KARL BRITTELL $27,000 $27,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1052896 HERMAN RAY BURNS $31,500 $31,500.00 2 1052913 JOHN D. CRESTA SR. $25,000 $25,000.00 2 1052919 JAMES MALAQUIAS $40,000 $40,000.00 2 1052937 MARLIESE R. MARTIN $39,400 $39,400.00 2 1052963 RICHARD A. BAUGH $63,750 $63,750.00 2 1052969 THOMAS BECKVERMIT $30,000 $30,000.00 2 1052978 GARY W. PATTESON $30,000 $30,000.00 2 1052986 GERALD PROVOST $258,000 $258,000.00 2 1053009 CASSANDRA SHAW $31,200 $31,200.00 2 1053011 CASSANDRA SHAW $32,000 $32,000.00 2 1053049 JODI MICHELLE BURKE $52,650 $52,650.00 2 1053060 DENISE R. COUBAROUS $62,500 $62,500.00 2 1053061 STUART M. PEPOSE $25,000 $25,000.00 2 1053065 MITCHELL BENNETT $64,500 $64,500.00 2 1053121 PHILOMENA MILLER $60,000 $60,000.00 2 1053130 ARTHUR MAE, TRUSTEE OF AR $70,200 $70,200.00 2 1053179 JOHN T. GASPARAITIS $30,300 $30,300.00 2 1053184 FRANK L. MELLOR $42,500 $42,500.00 2 1053195 WALTER F. BUCKLEY JR. $30,000 $30,000.00 2 1053205 LAWRENCE E. MAYO III $22,000 $22,000.00 2 1053224 BETTY R. DEAN $30,000 $30,000.00 2 1053254 ROZELLA R. HILL $55,200 $55,200.00 2 1053259 PHILIP WHITE $54,600 $54,600.00 2 1053360 JESSIE TOMPKINS $37,000 $37,000.00 2 1053419 VINCENT DIBERARDO $25,000 $25,000.00 2 1053428 GARY ALLEN LINK $70,200 $70,200.00 2 1053442 TRISTAN F. COOLEY $68,000 $68,000.00 2 1053474 WILFREDO E. MEDINA $73,700 $73,700.00 2 1053520 LEOLA L. GIVINS $76,000 $76,000.00 2 1053545 DEBORAH A. TESMER $45,500 $45,500.00 2 1053547 ROGELIO MARTINEZ $74,000 $74,000.00 2 1053559 SHARON R. ESTES $241,740 $241,740.00 2 1053564 VIVIAN MCBRIDE $36,000 $36,000.00 2 1053566 STEVEN P. PENNY $21,000 $21,000.00 2 1053568 GEORGE A. BINNS $25,000 $25,000.00 2 1053585 WAYNE HACKETT $51,300 $51,300.00 2 1053636 HORACIO TENDERIO $42,000 $42,000.00 2 1053642 CATHERINE ROMAN $25,000 $25,000.00 2 1053673 RONALD J. BARRETT $85,380 $85,380.00 2 1053701 LYNDA C. TAYLOR $55,000 $55,000.00 2 1053709 PAUL B. HALL $25,500 $25,500.00 2 1053719 ROBERT L. BRITTON III $30,000 $30,000.00 2 1053734 THERESE HIMAIA $34,000 $34,000.00 2 1053757 TIMOTHY M. RODGERS $65,000 $65,000.00 2 1053791 DAVE R. BANASZYNSKI $30,000 $30,000.00 2 1053815 ROBERT J. FOX $24,400 $24,400.00 2 1053893 GEORGE SWALLOW $68,800 $68,800.00 2 1053926 RICHARD FORTUNA $20,000 $20,000.00 2 1053942 DEAN A. CATIGNANI $245,000 $245,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1054011 MARK A. NOCE $55,250 $55,250.00 2 1054017 HILARY NIXON $25,000 $25,000.00 2 1054019 BRENDA MCCOY $35,000 $35,000.00 2 1054036 IRENE SIBLEY $79,000 $79,000.00 2 1054066 JOSEPHINE M. ROBINSON $62,100 $62,100.00 2 1054120 BENITO NATIVIDAD $40,000 $40,000.00 2 1054124 THOMAS BABIARZ $27,500 $27,500.00 2 1054166 SOPHIA SMITH $26,400 $26,400.00 2 1054201 JOHN M. ADAMS $40,000 $40,000.00 2 1054254 ROGER E. MORGAN $58,500 $58,500.00 2 1054262 VERNIDA HAMILTON $57,300 $57,300.00 2 1054285 THOMAS A. GIGLIOTTI $124,000 $124,000.00 2 1054317 MARCEL R. LAMBRECHT $128,000 $128,000.00 2 1054358 JEAN L. WAKEFIELD $67,500 $67,500.00 2 1054426 BARBARA A. TREGLOWN $71,500 $71,500.00 2 1054478 JOHN E. VETERI $29,300 $29,300.00 2 1054518 PATSY E. DAVIS $75,000 $75,000.00 2 1054559 BRENDA J. HUGHES $40,500 $40,500.00 2 1054562 JULIA B. TODD $51,000 $51,000.00 2 1054564 JULIA BELL TODD $66,600 $66,600.00 2 1054571 MARVIN A. ROTH $33,800 $33,800.00 2 1054591 ALAN D. SILVERMAN $22,000 $22,000.00 2 1054676 SHIRLEY G. LIPSCOMB NKA S $42,000 $42,000.00 2 1054729 EDWARD E. CHARLIER JR. $24,600 $24,600.00 2 1054733 SIMON WILSON $67,000 $67,000.00 2 1054756 JOSEPH E. HAMNER $49,300 $49,300.00 2 1054808 WEYMAN B. WHEELER $32,500 $32,500.00 2 1054932 MARYANN MCFADDEN $38,476 $38,476.00 2 1054961 BODO FOITZIK $73,150 $73,150.00 2 1055031 SANDY RAPAGLIA $30,500 $30,500.00 2 1055153 WEYMAN B. WHEELER $37,700 $37,700.00 2 1055154 WEYMAN B. WHEELER $65,000 $65,000.00 2 2021730 MARK W. WILLIS $35,600 $35,260.50 2 9013166 ARTHUR OLSEN $49,000 $48,723.80 2 9013242 JEANNOT R. HANKINS JR. $30,000 $29,870.50 2 9013250 JOHN R. SOPKO $36,000 $36,000.00 2 9013261 CHERYL DAVIS $45,600 $45,600.00 2 9013396 LOUIS A. PATERNOSTRO $50,000 $49,552.75 2 9013404 TERRANCE E. BRUNNER $41,000 $41,000.00 2 9013409 DOUGLAS W. POPPALARDO $30,000 $29,882.71 2 9013413 HELEN O. CAMERON $28,000 $27,926.40 2 9013428 CYNTHIA R. STEVENS $32,000 $31,903.58 2 9013431 DONNA M. ABBEY $27,500 $27,500.00 2 9013436 NELSON CAPOTE $26,400 $25,980.45 2 9013461 WILLIAM F. PALMIERI $96,600 $96,574.98 2 9013462 GABRIEL T. OBESTER $129,500 $128,494.11 2 9013467 CATHERINE C. JAMES $36,000 $35,742.42 2 9013474 PATRICIA L. WEYGAND $35,000 $34,818.47 2 9013476 BETTY J. BRADDOCK $54,000 $53,733.81 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 9013479 WILLIAM HOLDERNESS JR. $51,450 $51,053.43 2 9013493 FREDERICK C. HEILBRON $35,000 $34,976.54 2 9013497 SHADIFF MC KAMIE $36,985 $36,562.64 2 9013501 DONALD L. HEILMAN $44,000 $43,993.05 2 9013502 PAUL E. STEINMETZ $68,383 $68,383.00 2 9013504 MARY TAYLOR $33,000 $32,949.17 2 9013509 WILLIAM V. ROACHE $126,000 $125,863.86 2 9013513 SPARKLE GABRIELLE $48,000 $47,822.28 2 9013514 ANGELA CUNNINGHAM $42,300 $42,300.00 2 9013515 JESSIE L. COLES $42,250 $42,211.18 2 9013519 EDWARD F. MALLOY $45,000 $44,787.61 2 9013521 COLIN CAMPBELL $35,000 $34,961.84 2 9013527 WILLIAM RAZZANO $30,000 $29,992.80 2 9013528 HERMAN A. MEYER $30,000 $29,959.46 2 9013535 DAVID J. CUTMAN $24,500 $24,500.00 2 9013554 CALVIN H. KNOWLTON $74,800 $74,800.00 2 9013555 ANN MARIE GILMARTIN $59,000 $58,845.37 2 9013556 EILEEN CHIULLI $28,400 $28,045.03 2 9013558 THOMAS E. POPE $38,250 $38,011.67 2 9013577 VINCENTINA M. RUGGERI $21,500 $21,477.48 2 9013592 BRIAN D. CLARK $26,500 $26,437.37 2 9013594 JAMES R. KNAPP $45,000 $44,663.49 2 9013606 GARY L. LAUBSCHER $31,000 $30,925.75 2 9013616 SANDRA L. PANAGOS $42,000 $41,771.47 2 9013619 MARY ANN POLK-UMANSKY $29,700 $29,416.38 2 9013637 FRANK JOHN TALLARICO JR. $60,000 $59,804.91 2 9013645 FRANCIS T. ROBBINS $22,000 $21,803.05 2 9013652 MICHAEL J. GARMAN $20,600 $20,502.42 2 9013658 PETE P. BONACCI $24,477 $24,477.00 2 9013660 JEFFREY J. SLODYSKO $44,800 $44,800.00 2 9013662 ROBERT E. LANNAN $20,000 $20,000.00 2 9013663 ELIZABETH GONZALEZ $29,800 $29,800.00 2 9013668 LEONARD R. WINOGORA $26,000 $26,000.00 2 9013671 EDWARD P. OSMOND $75,000 $75,000.00 2 9013685 JOSEPH J. CIOCCO $40,306 $40,291.42 2 9013692 EDA SOLE $26,100 $26,053.21 2 9013714 WILLARD GROVER VANEGAS $21,500 $21,476.59 2 9013725 MARLENE AZZUOLO $58,000 $57,937.32 2 9013729 LORRAINE FRITH $60,000 $60,000.00 2 9013741 LINDA M. WILLIAMS $45,300 $45,300.00 2 9013770 ANGELINE K. KRAMER $37,000 $37,000.00 2 9013777 WILLIAM J. STADELMAN $24,000 $24,000.00 2 9013783 EUGENE MILARSKY $50,000 $50,000.00 2 9013793 ROBERTA PHOENIX $50,000 $50,000.00 2 9013797 PAUL C. BROWN $31,500 $31,500.00 2 9013798 JAMES HULICK $40,000 $40,000.00 2 9013806 MARLIN PAUL $35,000 $35,000.00 2 9013810 SALLY A. EARLY $20,000 $20,000.00 2 9013813 JAMES A. SONNER $35,592 $35,592.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 9013821 SANDRA L. SEVER $72,000 $72,000.00 2 9013828 RICHARD H. RAUER $69,000 $69,000.00 2 9013830 CHRIS HONORE $26,000 $26,000.00 2 9013848 JAMES J. CAPRIO $37,500 $37,500.00 2 9013852 JESSE K. WITMER $58,800 $58,800.00 2 9013869 BRUCE T. DAUDELIN $21,500 $21,500.00 2 9013878 CHARLES J. KREGLOW $128,000 $128,000.00 2 3000000185 ADRIENNE MCWILLIAMS $310,000 $310,000.00 2 3019841476 BEDROS BAHARYAN $236,000 $236,000.00 2 3019841840 SPIROS KATSONOPOULOS $284,750 $284,750.00 2 3019941621 JOHN W. CORDRAY $350,000 $350,000.00 2 3019941994 MICHELE STEPHENSON $242,250 $242,250.00 2 3039806984 FREDERICK C. KNIESLER, JR $200,000 $200,000.00 2 3039837699 BEVERLY CRIFASI $40,000 $40,000.00 2 3039841458 IRWIN E. BILLMAN $200,000 $199,252.21 2 3039942077 DAVID DENNISON $85,000 $85,000.00 2 3039942213 LAWRENCE LEFCORT $174,166 $174,166.00 2 3039942445 DERMOTT CLANCY $259,400 $259,400.00 2 3000000100 NICHOLAS J. GONNELLA $41,000 $41,000.00 2 3000000182 RICHARD B. MCPHERSON $42,250 $42,040.18 2 3000000196 TERRI L. GABRIEL $45,000 $44,966.15 2 3000000199 DERERK W. COPELAND SR. $27,000 $27,000.00 2 3019800777 FRANK VALDES $60,000 $60,000.00 2 3019800811 MARIANNE R. CASPER $25,000 $24,981.19 2 3019804609 EARL SPAHLINGER $63,750 $63,710.62 2 3019804724 ROGER A. HORONETZ $33,000 $32,934.70 2 3019804818 TERESA STOTT $37,050 $36,848.90 2 3019804822 BRYAN S. MADDOX $32,250 $32,136.11 2 3019804839 DAVID BARTHEL $22,400 $22,357.62 2 3019806479 HAROLD E. CONNOR $38,400 $38,400.00 2 3019806642 HENRIETTA McLEAN $24,200 $24,200.00 2 3019806651 LAKESHIA THOMAS $28,000 $28,000.00 2 3019806697 CHARLES D. TOBLER $66,400 $66,400.00 2 3019806764 EDWIN ROMAN $30,600 $30,595.44 2 3019806834 MARY M. EYER $73,100 $72,998.66 2 3019806885 RONALD L. SIMMONS $42,000 $41,856.54 2 3019806978 RUSSELL D. FINNEY $42,000 $41,966.92 2 3019807005 PEDRO A. MALDONADO $55,000 $54,994.46 2 3019807040 RICHARD JOHNS $66,725 $66,704.26 2 3019807098 MARTHA J. BURLSON $43,575 $43,416.12 2 3019837578 LYNN LYMON $29,250 $29,250.00 2 3019840255 ROBERT A. ENGLISH $76,000 $75,839.04 2 3019841563 JOSEPH G. WERNOCK $70,000 $69,993.40 2 3019841578 SYLVIA ANN ROWLAND $68,600 $68,388.93 2 3019841599 GERALD WILLAIDOM $123,750 $123,579.31 2 3019841612 CHARLOTTE R. AIKEN $31,500 $31,458.13 2 3019841657 SALVATORE F SACINO $50,000 $49,907.87 2 3019841697 TIMOTHY J. ECKENRODE $50,000 $49,857.74 2 3019841759 LUCEA REID $30,000 $29,929.66 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019841812 PRICE D. BENNETT, JR. $39,200 $39,200.00 2 3019841837 THOMAS WARD $65,000 $64,966.13 2 3019841982 SHEENA C BALLARD $72,100 $71,893.16 2 3019842016 EARL HINSON $127,500 $127,500.00 2 3019891934 WILLIAM T HANDY SR $35,275 $35,226.36 2 3019892280 JEROME A. ATKINS $63,375 $63,375.00 2 3019892535 GINGER L. VARTULI $60,000 $60,000.00 2 3019904764 CHRISTOPHER J. MARTIN $48,160 $48,160.00 2 3019904809 KEVIN M. SINGLETON $57,750 $57,750.00 2 3019904819 ERMA J. CAMPBELL $68,400 $68,400.00 2 3019904823 STANLEY E. WYATT $70,000 $70,000.00 2 3019904825 DAVID WILLIAMS $62,625 $62,625.00 2 3019904836 DAVID WILLIAMS $58,175 $58,175.00 2 3019904866 EDWARD L LAWLER $40,800 $40,800.00 2 3019904901 WALTER A. ALFORD $56,100 $56,100.00 2 3019904913 WILLIAM K. JONES $52,500 $52,500.00 2 3019904922 PATRICK F. BARRETT $39,000 $39,000.00 2 3019906829 EMMETT M. WRIGHT $64,000 $64,000.00 2 3019906960 DAVID M SERENY $26,250 $26,250.00 2 3019906975 DONALD A. THOMAS $45,000 $45,000.00 2 3019907049 ALBERT L. HAMMOCK $66,400 $66,400.00 2 3019907059 GEORGE T. ANTONIOU $125,000 $125,000.00 2 3019907060 LISA G. DAVIS $44,800 $44,640.42 2 3019907104 SCOTT A. SARGENT $68,800 $68,800.00 2 3019907147 RICHARD TOKAR $63,750 $63,750.00 2 3019907152 FRANK S.J. GROSSI $48,000 $48,000.00 2 3019907182 KIM L. GRANTHAM $65,900 $65,900.00 2 3019907184 DAVID M SERENY $24,000 $24,000.00 2 3019907201 ANTONI X. PULLIAM $66,400 $66,400.00 2 3019907255 JAMES D. HAMLET $32,000 $32,000.00 2 3019907270 TONIE LOVE $50,250 $50,250.00 2 3019907286 BRYAN E. SMITH $37,200 $37,200.00 2 3019907342 JUANITA DRYDEN $56,100 $56,100.00 2 3019907389 GUADALUPE BALLESTER $45,120 $45,120.00 2 3019907394 MARY ELLEN T. LEOTTA $64,000 $64,000.00 2 3019930694 WILLIAM J. ECKENRODE $34,500 $34,500.00 2 3019939785 GAMAL PRESTON $47,250 $47,250.00 2 3019940950 FAMI JOYCE $28,500 $28,500.00 2 3019941692 BRUCE ASHLINE $32,000 $32,000.00 2 3019941940 GEORGE MICHAELS $23,100 $23,100.00 2 3019942024 VIBERT BAPISTE $124,000 $124,000.00 2 3019942219 KENNETH JOHNSON $38,500 $38,500.00 2 3019942222 DION HOUSER $52,000 $52,000.00 2 3019942226 KENNETH JOHNSON $38,500 $38,500.00 2 3019942240 FRANK N. GERCARELLI $25,000 $24,887.39 2 3019942253 VICTOR RIVERA $26,250 $26,082.22 2 3019992421 I. HIWOTT $23,375 $23,231.82 2 3019992465 WILLIE E. HILL $67,150 $67,150.00 2 3019992483 MARVA ELIZABETH TYLGHMAN $76,000 $76,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019992519 JERRY W. MCGINNIS, SR. $42,000 $42,000.00 2 3019992569 BEAULAH D ZABEL $64,800 $64,800.00 2 3019992626 PARKE R. BROWN $63,750 $63,750.00 2 3039840888 EDWARD RADEMAKER $49,770 $49,693.98 2 3039841203 DENNIS B GARDNER $23,888 $23,853.93 2 3039841573 JUSTIN R. TUPIK $25,000 $25,000.00 2 3039841670 MILTON WILLS $47,530 $47,506.13 2 3039841863 MARK H. DALALIAN $42,345 $42,250.00 2 3039841903 JOHN LOTITO, JR. $64,000 $63,878.68 2 3039841958 RICHARD PASINER $63,000 $63,000.00 2 3039842047 IDA M. RADVANSKY $48,000 $48,000.00 2 3039906946 SHEILA BROWN CORA $60,000 $60,000.00 2 3039942176 FRANCISA S. MIER $23,083 $23,083.00 2 3039942489 WAYNE H. SAPP $43,500 $43,500.00 2 3100001283 PETER P. NERI $27,000 $26,836.53 2 3100001323 THOMAS LAWRENCE SUMMEY $78,000 $77,721.17 2 3100001775 NORMAN C. GARRISON $76,500 $76,111.25 2 3100002123 GARY W. WHITESELL $30,400 $30,400.00 2 3100002696 RAY M. GAMIDO $65,000 $64,808.02 2 3100003078 DOUG E. COTTER $46,875 $46,875.00 2 3100003082 DAVID A. MATAGIESE $31,000 $31,000.00 2 3100003136 RANDY L. HATCHETTE $25,000 $24,898.67 2 3100003342 ZANNIE LEE WILLIAMS $42,500 $42,381.70 2 3100003346 TANCY BERT UTLEY $20,000 $20,000.00 2 3100003370 SHARON R. JORDAN $55,250 $55,250.00 2 3100003418 GREGORY G. REAGAN $48,000 $47,891.26 2 3100003426 EZEKIEL JOHNSON $44,200 $44,200.00 2 3100003437 BERNARD SHANNON $27,000 $26,937.22 2 3100003462 JAY C. ISRAEL $72,250 $72,250.00 2 3100003492 KEITH DELAPORTE $50,063 $49,988.87 2 3100003507 ROBERT D. ROBERTS $54,400 $54,400.00 2 3100003523 TEGWEN H. HAURIN $29,000 $28,888.01 2 3100003566 JERRY CAPORALE $30,700 $30,306.03 2 3100003567 PATRICIA R. DICKMAN $52,500 $52,322.87 2 3100003570 WAYNE P. HAMMER $24,000 $23,915.24 2 3100003621 JOHN B. PACANOWSKI $55,250 $55,250.00 2 3100003622 EARLENE L. MILLER $23,000 $23,000.00 2 3100003643 EMMETT E. REID $20,000 $20,000.00 2 3100003650 BARBARA C. JOHNSON $59,500 $59,500.00 2 3100003673 GEORGE D. MORSE $31,200 $31,200.00 2 3100003694 KALWATTI MAHARAJ $20,000 $20,000.00 2 3100003724 JUDITH A. LANDER $58,000 $58,000.00 2 3100003725 BERNICE PRICE $44,000 $43,750.10 2 3100003731 RICARDO R. RIVERA $20,000 $20,000.00 2 3100003739 DOMINICK A. CIMINO $22,400 $22,400.00 2 3100003784 J0HNNY JONES III $72,000 $72,000.00 2 3100003826 TODD A. BAYLOCK $51,000 $51,000.00 2 3100003847 MICHELE GADSON $25,000 $25,000.00 2 3100003852 MELVIN D. MARIETTA $68,000 $68,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3100003856 GLORIA HUDSON $54,000 $54,000.00 2 3100003864 HELEN GILL $55,750 $55,750.00 2 3100003892 MARY GOODEN $24,000 $24,000.00 2 3100003911 RICHARD A. SHEKELL $32,400 $32,400.00 2 3100003913 MARY P. ASHLEY $22,166 $22,166.00 2 3100003914 ROGER D. EVANS $22,500 $22,500.00 2 3100003944 CYNTHIA A. CURETON $60,775 $60,775.00 2 3100003958 SAUNDRA L. WOODS $30,000 $30,000.00 2 3100003982 TANZY BRASWELL $29,250 $29,250.00 2 3100003983 RODGER L. HANNAH $44,000 $44,000.00 2 3100004028 RUSSEL N. BUSBY $68,000 $68,000.00 2 3100004055 ROSEMARY SEDALIS $74,000 $74,000.00 2 3100004176 LARNELL JONES $30,250 $30,250.00 2 3100004271 NATALE AMMIRATI $21,000 $21,000.00 2 10408 STAAT'S HEROLD TOURS, INC $150,000 $150,000.00 1 10436 RICHARD A. DIDIO JR. $25,000 $25,000.00 1 10438 F. EARL REED JR. $20,000 $19,901.83 1 10441 MICHELE MAFFEI $23,000 $23,000.00 1 10442 MARYLAND MASONRY CORPORAT $200,000 $200,000.00 1 10445 AKILLE, INC, $80,000 $80,000.00 1 10450 A. & C. PRECISION, INC. $150,000 $150,000.00 1 10451 FIVE STARS TRANSMISSION S $85,000 $85,000.00 1 10460 ROME RECORDING, INC. $88,000 $88,000.00 1 10464 Z.J.H., INC. $211,000 $211,000.00 1 10465 CAROLYNN SCHAFFT $25,000 $25,000.00 1 10471 RHYMER & RHYMER REALTY CO $200,000 $200,000.00 1 10474 ALEXANDER HERRERO $23,000 $23,000.00 1 10476 CAFFE AURORA $100,000 $100,000.00 1 10477 ABDUL BILAL $100,000 $100,000.00 1 10482 BURGETTSTOWN AREA DAY CAR $80,000 $80,000.00 1 10484 MELVIN DURANT $20,000 $20,000.00 1 8882155 SHERRY L. ALLEN $25,000 $25,000.00 1 8882157 THE OUTDOOR EXPERIENCE, L $30,000 $29,639.54 1 8882158 THOMAS H. COLTON JR. $20,000 $20,000.00 1 8882160 JUNG I. HA $108,000 $108,000.00 1 8882164 EDUARDO GONZALEZ $17,000 $17,000.00 1 8882165 LORI STONE $180,000 $180,000.00 1 10492 THOMAS ADAMS $200,000 $200,000.00 1 10495 AXIOCOM, INC. $150,000 $150,000.00 1 1044879 DORIS KLEIN $20,000 $20,000.00 1 1045359 MUHAMMAD SHARIF $80,000 $80,000.00 1 1046366 RILEY W. TRAVERS JR. $86,275 $86,275.00 1 1047560 BEATRICE TAMAY $144,000 $144,000.00 1 1047608 CECILIA SOTO $144,000 $144,000.00 1 1047631 PASTOR M. BONILLA $148,500 $148,497.30 1 1048370 KYWONG MCINTYRE $104,000 $104,000.00 1 1048551 NIDIA DEJESUS TAVERAS $148,500 $148,458.11 1 1048965 MARY E. HARMON $28,400 $28,400.00 1 1048978 JOSEPH B. WALSH $120,500 $120,500.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1049164 WILLIAM M. GAINES JR. $81,500 $81,500.00 1 1049301 DARRYL JONES $148,500 $148,245.92 1 1049401 JUDY BISCOTTI LEWIS $22,000 $22,000.00 1 1049742 MARY E. BROWN $22,400 $22,400.00 1 1050063 BENNIE WILKINS $144,000 $144,000.00 1 1050879 PATRICK J. VOLINO $19,000 $18,940.98 1 1051345 RONNIE CLARK $162,000 $162,000.00 1 1051447 DAVID NORRIS $84,065 $84,065.00 1 1051465 RICHARD R. SULLIVAN $110,500 $110,500.00 1 1051814 WILLIAM C. WALKER $13,000 $12,782.29 1 1051884 HENRY MARTIN $148,500 $148,092.07 1 1051913 SCOTT ERICK HUGHES $112,500 $112,500.00 1 1051940 CLINTON GEORGE ROWE $162,000 $162,000.00 1 1052019 MARK RYAN $29,250 $29,250.00 1 1052220 KATHLEEN M. VANCE $28,000 $28,000.00 1 1052543 GLORIA D. RICKETTS $195,000 $195,000.00 1 1052583 MICHAEL T. REIS $204,000 $204,000.00 1 1052774 BERNABE GONZALES $171,000 $171,000.00 1 1052893 DANNY H. CLAXTON $87,750 $87,750.00 1 1052994 WILLIAM SLAUGHTER $81,900 $81,588.45 1 1053098 BEDFORD E. HAWKINS $157,500 $157,500.00 1 1053227 CAROL W. QUINN $23,000 $22,884.51 1 1053299 JERRY HOOVER JR. $92,000 $92,000.00 1 1053689 MICHEAL S. BEAVER $24,000 $24,000.00 1 1053781 CLAUDETTE DUNSTON $28,000 $27,929.93 1 1053782 GEORGE T. MUNLEY $22,545 $22,545.00 1 1053792 JAMES LABRIOLA $14,900 $14,900.00 1 1053795 KATHLEEN K. MARTIN $85,000 $84,794.19 1 1053816 STEVEN J. CORMIER $20,000 $20,000.00 1 1053932 GENEVIEVE RUDERSON RORIE $29,000 $29,000.00 1 1053968 MARY ELIZABETH EVANS $106,642 $106,642.00 1 1054056 PATRICIA M. BOUDER $103,000 $103,000.00 1 1054068 NAOMI SNEED $121,550 $121,550.00 1 1054076 GLENN W. DAVIS $116,500 $116,194.72 1 1054140 DEAN K. SHIMABUKURO $152,100 $152,100.00 1 1054158 SHIRLEY HALL $91,800 $91,800.00 1 1054250 LEONILDA RODRIGUEZ $113,900 $113,900.00 1 1054270 FANNIE MAE RENFRO $93,000 $93,000.00 1 1054316 WILLIE L. COOPER $85,500 $85,359.12 1 1054373 LOIS F. BELL $88,000 $88,000.00 1 1054410 HENRY A. GARCIA $97,750 $97,750.00 1 1054414 ELLA HILL CORDERY $20,000 $20,000.00 1 1054430 JEFFIE HILL $184,500 $183,874.17 1 1054453 VALARIE PAVILISH $108,500 $108,500.00 1 1054493 WILLIAM FOY BY HIS ATTORN $157,500 $157,500.00 1 1054521 MOHAMED SAMAD FARROUQ $20,000 $20,000.00 1 1054587 DALE W. HEPPER $88,000 $88,000.00 1 1054652 KEVIN STONE $25,000 $25,000.00 1 1054654 FELICIA STEWART $92,500 $92,500.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1054693 ROBERT SMITH $15,000 $15,000.00 1 1054752 JANET B. BLAKE $107,200 $107,200.00 1 1054755 JOHN L. HUGHES $25,550 $25,550.00 1 1054785 ACQUANETTA SHEPPARD N/K/A $25,000 $25,000.00 1 1054790 PATRICIA A. GASIOROWSKI $15,000 $15,000.00 1 1054805 ALBERT HARRIS $90,000 $90,000.00 1 1054818 JOSEPH L. AHEARN $106,000 $106,000.00 1 1054826 TODD G. TARVER $155,000 $155,000.00 1 1054902 MORRIS LARK $150,500 $150,500.00 1 1054921 SUSAN STYLES MAPP $26,400 $26,400.00 1 1054926 LUTHER T. NEELY JR. $20,000 $19,898.87 1 1054936 JOSEPH SALERNO $26,000 $26,000.00 1 1054943 KATHY P. HARDING $15,220 $15,220.00 1 1054978 MICHAEL R. VETETO $93,100 $93,100.00 1 1055007 NATHANIEL HILL $25,000 $25,000.00 1 1055050 ARTHUR RUSSELL $115,000 $115,000.00 1 1055091 PENNY J.C MENSCH $104,000 $103,714.31 1 1055097 CATHERINE B. SUTTON $112,500 $112,500.00 1 1055105 ZOLLIE EUGENE ALLMOND $109,000 $109,000.00 1 1055189 BRONSON G. OSTEK $26,000 $26,000.00 1 1055225 CHRISTOPHER M. LOUDON $15,000 $15,000.00 1 1055229 ROBERT T. LOMAN $149,600 $149,600.00 1 1055277 TIMOTHY A. PERRY $108,000 $108,000.00 1 1055318 CARLOS M. RAMOS $169,000 $169,000.00 1 1055371 HORACE WALTON $15,000 $15,000.00 1 1055384 TYRONE E. INGRAM $85,000 $85,000.00 1 1055430 W. LEE HALL JR. $80,700 $80,700.00 1 1055432 ROBERT L. CLYBURN $120,000 $120,000.00 1 1055457 EDWARD D. WOOLRIDGE $232,000 $232,000.00 1 1055477 TIMOTHY J. LLOYD $24,000 $24,000.00 1 1055505 ROBERT L. SMALE $102,150 $102,150.00 1 1055515 NORMAN ROBINSON $25,000 $25,000.00 1 1055520 WILLIAM GONZALES NKA WILL $15,000 $15,000.00 1 1055593 ALLAN V. THOMAS $99,450 $99,157.79 1 1055609 JAMES P. PRENDERGAST JR. $21,500 $21,500.00 1 1055617 JOHN H. VANDELINDE $21,275 $21,275.00 1 1055635 CHARLES M. VANARELLI JR. $99,000 $99,000.00 1 1055641 THOMAS A. SAVARESE $17,000 $17,000.00 1 1055702 MICHAEL J. CALLAN SR. $201,000 $201,000.00 1 1055744 ROGER J. MARASCO $28,000 $28,000.00 1 1055746 TROY C. SUPPLEE $25,740 $25,740.00 1 1055748 MURRAY PERLOFF $193,500 $193,500.00 1 1055766 JOHN T. KELCHNER $82,800 $82,800.00 1 1055783 CARRIE GRIFFIN $108,000 $108,000.00 1 1055810 JOAN A. AARONSON N.K.A. J $16,700 $16,700.00 1 1055825 GLENN CLARK $22,500 $22,500.00 1 1055879 THOMAS CASTIGLIONE $161,500 $161,500.00 1 1055912 JOHN P. LAGANA $108,000 $108,000.00 1 1055923 JANET HAMILTON $85,500 $85,500.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1055925 GEORGE T. STILL $28,000 $28,000.00 1 1055931 PERCY DAVIS $115,000 $114,472.05 1 1055934 DANA M. FOSBURGH $26,000 $26,000.00 1 1055942 STREADICK MORGAN $153,000 $153,000.00 1 1056003 DONALD E. OSTER $20,000 $20,000.00 1 1056055 NEIL A. KUNTZ $14,000 $14,000.00 1 1056074 PHILIP J. POLIZZOTTO $197,100 $197,100.00 1 1056079 PETER B. MARIOTTI $227,000 $227,000.00 1 1056083 SAMUEL ANGULO $112,500 $112,500.00 1 1056117 ALEX LLARENA $100,000 $100,000.00 1 1056121 FRANK SIERRA $13,500 $13,500.00 1 1056147 JOANNE ELAINE KOSTICK $25,000 $25,000.00 1 1056154 DANIEL PURE $25,000 $25,000.00 1 1056171 VENESSA S. EDWARDS $20,000 $20,000.00 1 1056216 TERRY PRICE $23,650 $23,650.00 1 1056218 NICOLE CASCONE, UX $84,250 $84,250.00 1 1056238 ELIZABETH LEMING $144,000 $144,000.00 1 1056311 RICHARD NUNEZ $17,000 $17,000.00 1 1056423 WILLIAM O. GERLING $23,500 $23,500.00 1 1056431 LAWRENCE J. IACOFANO $115,600 $115,600.00 1 1056532 LORETA DERUBEIS $103,000 $103,000.00 1 1056692 JAMES LEE COWANS III $93,000 $93,000.00 1 1056727 BERYL E. FULLER $90,000 $90,000.00 1 1056755 JOYCE P. ELLIS $184,500 $184,500.00 1 1056860 JUDY MARSHALL $115,000 $115,000.00 1 1056897 STEPHEN R. MERRILL $20,500 $20,500.00 1 1056914 MICHAEL H. MATHIS $110,000 $110,000.00 1 1057176 LEWIS CROMER $95,400 $95,400.00 1 1057207 AMOS L. BROKENBOROUGH SR. $25,000 $25,000.00 1 1057245 GERALD W. SMITH $113,000 $113,000.00 1 1057258 STEVEN D. CYR $169,200 $169,200.00 1 1057343 DENNIS R. FINCH $80,000 $80,000.00 1 1057365 VIVIAN R. DRISCOL $107,100 $107,100.00 1 1057395 ROBYN L. BALCAITIS $88,400 $88,400.00 1 1057412 SCOTT HALL $113,000 $113,000.00 1 1057446 ALFRED H. GLEGHORN JR. $23,000 $23,000.00 1 1057501 JAMES SHORT $100,000 $100,000.00 1 1057527 DOROTHY VANDER WEY NKA DO $88,000 $88,000.00 1 1057555 H. KEITH PIERCE $113,600 $113,600.00 1 1057576 MICHAEL J. ADKINS $187,200 $187,200.00 1 1057685 ELVIS BOYD $12,000 $12,000.00 1 1057702 VINCENZO PILLITTERI $108,000 $108,000.00 1 1057711 JOSEPH L. CALHOUN III $108,000 $108,000.00 1 1057818 EMMITT Y. SMITH JR. $28,000 $28,000.00 1 1057872 GOLOVER WOODFORD $28,000 $28,000.00 1 1058072 LEE NELMS $91,800 $91,800.00 1 1058542 JEFFREY S. STANLEY $19,500 $19,500.00 1 2020717 DONALD L. SHAFFER $29,300 $29,300.00 1 2021537 HOSIE L. BRYANT JR. $27,000 $26,940.16 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 9013842 JOSEPH L. BACKER $91,750 $91,750.00 1 9013862 COLWOOD DUNKLEY $15,200 $15,200.00 1 9013900 DOROTHY CONOWAL $24,000 $23,950.21 1 9013903 HENRY SIMMONS SR. $21,500 $21,500.00 1 9013904 DENNIS A. OAKLEY $25,889 $25,889.00 1 9013932 ROBERT E. HESSER $25,000 $25,000.00 1 9013941 STEPHEN R. SIMONE $100,800 $100,800.00 1 9013955 DAVID P. MEZZATESTA $26,000 $25,821.79 1 9013969 FRANCIS P. O'BRIEN $13,000 $13,000.00 1 9013983 TIMOTHY GYVES $24,200 $24,200.00 1 9013986 ROBERT W. CROAK $28,000 $28,000.00 1 9013997 MARIE A. HAGNER $82,000 $81,266.68 1 9014013 GARY H. ROOD $10,000 $10,000.00 1 9014025 MICHAEL A. WALTHER $18,640 $18,640.00 1 9014064 STEVEN J. BAKER $26,942 $26,942.00 1 9014104 CATHERINE G. HOOK $80,000 $80,000.00 1 9014129 JUAN E. ROJAS $25,400 $25,400.00 1 1052240 STEVEN T. NADOLNY $110,800 $110,800.00 1 1052828 ERMA J. CRONCE $20,500 $20,500.00 1 1053588 EDDLON D. KNOX JR. $87,300 $87,300.00 1 1054243 TIFFANY F. HOWELL $90,000 $90,000.00 1 1054311 KERRY B. WILSON $92,000 $92,000.00 1 1054795 WILLIAM D. VASSEN JR. $21,750 $21,750.00 1 1054895 GARY M. GRIST $164,000 $164,000.00 1 1055637 CHARLES D. COLEMAN $26,700 $26,700.00 1 1055659 ROBERT E. SMITH $115,000 $115,000.00 1 1056220 STEPHEN ALAN DEWEES $88,000 $88,000.00 1 1056286 RICHARD FOLEY $20,180 $20,180.00 1 1056362 ROGELIO F. TRUJILLO $95,200 $95,200.00 1 1056659 SCOTT KUNZ $25,000 $25,000.00 1 1056673 FRANCES E. COX $88,000 $88,000.00 1 1056769 VICTOR A. RIVERA $22,500 $22,500.00 1 1056864 DAVID FIGUEROA $94,500 $94,500.00 1 1056875 DOUGLAS C. KRAMER $229,500 $229,500.00 1 1056882 JACOB APPLEBAUM $120,000 $120,000.00 1 1057173 RAFAEL TORRES $100,000 $100,000.00 1 1057198 JAMES MCKALE $117,000 $117,000.00 1 1057298 BRENDA BATEMAN LINTON $145,350 $145,350.00 1 1057330 JEFFREY I. GRENTZ $29,575 $29,575.00 1 1057393 JAYAMON JACOB $85,600 $85,600.00 1 1057410 IVEL WALTERS $10,000 $10,000.00 1 1057519 JOEL C. STEPHENS $94,500 $94,500.00 1 1057575 CHARLES P. SIMONCELLI $17,000 $17,000.00 1 1057667 HOWELL M. YOUNG $13,400 $13,400.00 1 1057693 JAMES DORAN $25,000 $25,000.00 1 1057808 KURTIS W. REINER $216,000 $216,000.00 1 1057893 MAREK A. MISZKURKA $18,000 $18,000.00 1 1058050 BRUCE A. PARTIN $211,000 $211,000.00 1 1058051 YOLANDA BORGES $176,400 $176,400.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1058122 MITCHELL L. VALENTINE A/K $25,000 $25,000.00 1 1058226 DIANA L. LYONS $153,900 $153,900.00 1 1058380 MOHAMMAD R. ISLAM $193,600 $193,600.00 1 1058459 LEON JAMISON JR. $92,000 $92,000.00 1 1058590 PAUL CASE $10,000 $10,000.00 1 1058614 RONALD K. LEWIS $167,227 $167,227.20 1 9014080 FRANCIS D. SAMUELS $110,500 $110,500.00 1 1054182 ALMOND $105,000 $105,000.00 1 1055195 FISHER $25,000 $25,000.00 1 1056061 ESTEP $92,000 $92,000.00 1 1056386 BENNETT $102,500 $102,500.00 1 1056945 CAPPS $220,000 $220,000.00 1 1057212 BUTLER $121,500 $121,500.00 1 1057362 HELMER $105,000 $105,000.00 1 1057564 BATTAGLIA $15,600 $15,600.00 1 1057618 UNDERWOOD $118,400 $118,400.00 1 1057631 FLOWERS $158,900 $158,900.00 1 1057819 MESSINA $86,500 $86,500.00 1 1057850 LEE $104,000 $104,000.00 1 1057863 DOLORES FALLON $20,170 $20,170.00 1 1057930 RODRIGUEZ $101,000 $101,000.00 1 1058087 MONCRIEFFE $115,000 $115,000.00 1 1058158 ROCCO $100,000 $100,000.00 1 1058200 LYONS $12,500 $12,500.00 1 1058230 FANTINO $84,200 $84,200.00 1 1058257 DOZIER $200,000 $200,000.00 1 1058333 PLUMLEY $25,000 $25,000.00 1 1058359 CHERE $13,500 $13,500.00 1 1058362 RODRIQUEZ $110,000 $110,000.00 1 1058568 LOWRIE $11,200 $11,200.00 1 1058577 CAMPBELL $93,600 $93,600.00 1 1058705 DE MONACO $150,000 $150,000.00 1 1058722 STAFFIERI $19,750 $19,750.00 1 1058873 BAKSH $166,000 $166,000.00 1 1059035 MUMCUOGLU $229,500 $229,500.00 1 1059501 GOBA $95,000 $95,000.00 1 9013121 STALEY $22,200 $22,200.00 1 9013892 QUIETI $22,500 $22,500.00 1 9013907 MCGEE $83,000 $83,000.00 1 9014024 O'NEILL $18,776 $18,776.00 1 9014029 GUIDICE $25,000 $25,000.00 1 9014042 SPAID $26,400 $26,400.00 1 9014069 BATTAGLIA $28,000 $28,000.00 1 9014183 RYAN $26,550 $26,550.00 1 3000000240 EDWARD CHANDLER $100,000 $100,000.00 1 3000000253 CARLTON JONES $110,500 $110,500.00 1 3000000261 CHARLIE TRAWICK $83,200 $83,200.00 1 3000000268 MARIO PENA $85,000 $85,000.00 1 3000000269 DAVID M. BAUER $20,000 $20,000.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3000000281 OLGA A. FIELDS $204,000 $204,000.00 1 3000000293 VERNA E. GRIFFITH RUDDER $148,750 $148,750.00 1 3000000294 JOSEPH BAIR $90,400 $90,400.00 1 3000000300 DALE R. STACKHOUSE $92,000 $92,000.00 1 3000000303 GWENDOLYN LEVATTE $86,250 $86,250.00 1 3000000317 FELISHA T. STOKLEY $116,250 $116,250.00 1 3000000321 LEMIAH COLLINS $98,000 $98,000.00 1 3000000323 MARY CLEMONS $195,250 $195,250.00 1 3000000324 FRANK T. DI FILIPPI $153,000 $153,000.00 1 3000000335 STEPHEN MORGENSTERN $200,000 $200,000.00 1 3000000337 DONALD A. LEON $189,000 $189,000.00 1 3000000338 MARIA E. CAROLONZA $204,000 $204,000.00 1 3000000345 FRANK BAIRD $24,612 $24,612.00 1 3000000352 JAMES A. MACANA $157,600 $157,600.00 1 3000000360 ANTHONY DEMARCO $93,500 $93,500.00 1 3000000372 VITO P. MATTURRO $5,000 $5,000.00 1 3000000378 GAIL LYTE $178,500 $178,500.00 1 3000000383 JACOB DOLLISON $148,750 $148,750.00 1 3000000388 LINDON T. SINCLAIR $144,900 $144,900.00 1 3000000396 FRANCISCO VERA $153,000 $153,000.00 1 3000000402 WILLIAM ROSS $225,000 $225,000.00 1 3000000424 THOMAS S. BARNES $111,000 $111,000.00 1 3019804617 JOHN MCGREGOR $19,500 $19,493.07 1 3019806603 ROSE MARIA GALLO $81,900 $81,727.33 1 3019807034 ROBERT JOHNS $98,100 $98,097.98 1 3019834065 SAMUEL RODRIGUEZ JR $212,391 $211,816.01 1 3019840611 ANTHONY PALMA $144,000 $143,684.20 1 3019840899 JOSE A. LOPEZ $166,500 $166,500.00 1 3019840936 PAUL P. COPPOLA, JR $162,000 $160,780.65 1 3019840979 JOSE M. SANTIAGO $111,350 $111,203.96 1 3019841117 KEITH J. HANSEN $123,250 $122,806.08 1 3019841457 SILVESTRE LUNA $80,000 $79,951.45 1 3019841794 STEVEN GRECO $210,000 $209,955.44 1 3019841844 MARLENE HARRIS $89,100 $89,100.00 1 3019841893 FRANCIS X. TAGUE $152,000 $151,675.95 1 3019841964 ANNINA GENCARELLI $153,750 $153,401.35 1 3019892403 LYNN R. TOMLIN $156,000 $155,797.19 1 3019900870 OMAR FLORES $117,300 $117,300.00 1 3019904048 MICHAEL J. DELBONO $28,500 $28,500.00 1 3019904687 MICHAEL P. ELSEG $84,800 $84,800.00 1 3019904824 YVONNE COLEMAN $16,800 $16,745.62 1 3019904884 CHARLES M. LAVERTY $27,950 $27,864.02 1 3019904945 JOHN SMITH $24,800 $24,690.32 1 3019905051 DAVID A. BIRCH $91,200 $90,882.12 1 3019906879 ANGELA V. PAYNE $19,200 $19,200.00 1 3019907132 MARLOWE S. LEE $100,200 $100,200.00 1 3019907236 JAMES N. PESTER $112,800 $112,800.00 1 3019907245 SAMUEL HINSON $121,050 $121,050.00 1 3019907246 LOUIS H. PAOLINA $116,000 $116,000.00 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019907253 CATHERINE D. MCCARTHY $90,400 $90,193.03 1 3019907274 FREEMAN SMITH $25,200 $25,130.81 1 3019907276 GERALD A. COLESON $116,000 $116,000.00 1 3019907328 W. ROBERT SHORT, JR. $224,910 $224,910.00 1 3019907347 BRENDA GRACE $25,000 $24,807.59 1 3019907412 ALEXANDER ADDUCI $140,250 $140,250.00 1 3019907420 MARY LOU WAGNER $97,750 $97,614.63 1 3019907431 HAYDEN KLINGLER $86,400 $86,400.00 1 3019907527 JEFFREY W. BAIRD $81,000 $81,000.00 1 3019907597 QUEEN E. GRIFFIN-BOWEN $17,500 $17,500.00 1 3019907608 ERIC ROBINSON $189,929 $189,929.00 1 3019907635 DAVID J. GARD $93,500 $93,500.00 1 3019907641 ROBERT J. BENNETT $85,000 $85,000.00 1 3019936894 SHIRLEY DUNN $96,000 $96,000.00 1 3019938872 CHAMAINE SUDLER $26,400 $26,379.30 1 3019940055 DENNIS G HEYMAN $210,000 $210,000.00 1 3019941238 ARTHUR HALL $196,875 $196,875.00 1 3019941253 DANIEL E. COURTMAN $92,000 $92,000.00 1 3019941561 STEPHEN J. ANDERSON $98,000 $97,819.29 1 3019941693 KENRICK MARSHALL $150,000 $150,000.00 1 3019941777 QUIENTON JOHNSON $169,600 $169,236.27 1 3019942081 GERARD YEARWOOD $80,000 $80,000.00 1 3019942105 HILLARY LAWRENCE $161,500 $161,277.35 1 3019942130 JOSEPH P. ABINANTI $218,450 $218,450.00 1 3019942150 ANN HENRY WILLIAMS $112,000 $112,000.00 1 3019942205 KENDRA HAVEN $211,500 $211,500.00 1 3019942235 CHRISTOPHER JAKUBOWSKI $105,000 $105,000.00 1 3019942263 ALBERT O. KASSIM $124,290 $122,790.72 1 3019942304 WILLIAM URQUIJO $120,000 $119,942.06 1 3019942315 LAWRENCE DiGIACOMO $144,000 $143,801.10 1 3019942339 CARMEN MARIA VARGAS $151,300 $150,398.14 1 3019942384 JOHN H. GEIGER $110,000 $110,000.00 1 3019942421 LUIS A. LEON $148,500 $148,500.00 1 3019942422 FRANCIS K. OYENUGA $108,180 $108,180.00 1 3019942444 VINCENT VOGT $90,100 $90,100.00 1 3019942458 SARAI LEWIS $188,250 $188,250.00 1 3019942472 SOPHIA ROBERTS $22,100 $22,100.00 1 3019942495 WILLIAM ALFRED $157,590 $157,134.31 1 3019992560 JESUS DELGADO $89,250 $89,250.00 1 3019992656 GREGORY T. RICKARDS $96,750 $96,490.46 1 3019992677 GARY L RADER $116,250 $115,898.84 1 3019992764 RONALD L. BLIZZARD $119,000 $119,000.00 1 3039840859 GREGORY YFANTIS $23,000 $22,838.59 1 3039891838 JOSEPH R. STANGER $14,800 $14,738.80 1 3039907293 MARGARET B. CATALFAMO $17,650 $17,650.00 1 3039907464 ERNEST A CRANFORD $18,487 $18,487.00 1 3100000318 NICOLE MCCUTCHEON $112,500 $112,344.05 1 3100000599 FRANK TORRES $21,248 $20,422.19 1 3100003080 KYLE K. MCCORMICK $90,000 $89,441.08 1
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3100003237 DEE A. ANDREU $11,500 $11,361.66 1 3100003470 GEORGE BRADFORD $20,800 $20,770.78 1 3100003641 BRUCE MORRISON $142,000 $141,248.32 1 3100003810 RALPH M. BUMP $23,000 $22,924.40 1 3100003899 FREDRIC BOLTON $100,000 $99,974.43 1 3100003909 SANVONIA DIANNE BELL $22,000 $21,665.56 1 3100003952 RICHARD E. ALLEN $29,000 $29,000.00 1 3100003986 STELLA P. JACOBI $89,100 $88,570.74 1 3100004042 PATRICIA DAWN VENA KOTALA $155,000 $155,000.00 1 3100004089 ILA BURTON $144,000 $143,801.50 1 3100004103 ROBERT NIEVES $213,350 $212,871.57 1 3100004111 CYNTHIA CROMARTIE $15,000 $15,000.00 1 3100004113 FLORENCE YOUNG $23,000 $22,930.84 1 3100004168 GUSTAVO C. MERINO $148,500 $148,295.28 1 3100004198 ANTHONY TROCCHIA $185,000 $184,697.48 1 3100004202 THERESA WILLIAMS $28,000 $28,000.00 1 3100004320 RICKY T. WILLIAMS $84,000 $84,000.00 1 3100004324 DAVID MARAINO $17,066 $16,940.92 1 3100004359 PATRICK F. LEWIS JR. $12,000 $12,000.00 1 3100004361 HEYWARD HEMMINGWAY JR. $18,000 $18,000.00 1 3100004365 VIRGINIA E. CAGER $17,000 $16,866.40 1 3100004368 EVODIO J. MATA $21,575 $21,575.00 1 3100004388 EILEEN A. MATHEWS $93,000 $93,000.00 1 3100004452 JOHN W. BERGER $27,000 $26,026.08 1 3100004456 MARIANNE MIZENIS $81,250 $81,250.00 1 3100004491 CAROL WEBBER $19,000 $19,000.00 1 3100004496 CHERI J. BUFFINGTON $27,000 $26,812.08 1 3100004538 ANTHONY RODRIGUEZ $112,000 $112,000.00 1 3100004592 THOMAS DONOVAN $11,000 $11,000.00 1 3100004740 CLAIRE A. BRINK $110,000 $110,000.00 1 3100004758 SCOTT ANNITTI $115,500 $115,500.00 1 3100004766 MIGUEL MORALES $10,000 $10,000.00 1 3100004890 KERRY S. JOHNSON $18,000 $18,000.00 1 3100004911 DEAN NICHOLAS $15,500 $15,500.00 1 10427 LONG ISLAND FITNESS TRAIN $45,000 $45,000.00 2 10437 THE BEER JOINT, INC. $50,000 $50,000.00 2 10439 PAMELA RUFF $68,000 $68,000.00 2 10446 HARVEY ROBINSON, INC. $45,000 $45,000.00 2 10453 MICHAEL LOPEZ $57,500 $57,500.00 2 10454 MARY DEPRIMO $80,000 $78,433.38 2 10455 DERRICK STRAHORN $38,000 $38,000.00 2 10457 XI HUI WU $40,000 $40,000.00 2 10461 GABBY, INC. $30,000 $30,000.00 2 10462 CHUN SUP LEE $51,000 $51,000.00 2 10463 DOUGLAS VICKERS $32,500 $32,500.00 2 10467 FERNANDO T. TOMAS $32,000 $32,000.00 2 10475 JOHN H. HILBURT JR. $58,000 $58,000.00 2 10481 GEORGE KREIER COMPANY, I $42,000 $42,000.00 2 8882133 ASRB, INC. $36,000 $36,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 8882152 STERLING L. LOCKETT $52,000 $52,000.00 2 8882156 ANNA TERRANOVA $50,000 $50,000.00 2 8882163 TITAN DEVELOPMENT, L.L.C $65,000 $65,000.00 2 8882166 DIGIORGIO HOLDING CORPORA $35,000 $35,000.00 2 10178 ROBERT O. TATE JR. $50,000 $50,000.00 2 10395 BILLIE H. ENGLAND $47,000 $46,852.80 2 10485 RICHARD F. REICHART SR. $55,000 $55,000.00 2 10486 SHELLEY R. BARTLETT $50,000 $50,000.00 2 10487 CLUB 17, INC. $48,000 $48,000.00 2 10488 THERA-CON MEDICAL CORP. I $50,000 $50,000.00 2 10489 ROXANNA BENNETT $60,000 $60,000.00 2 10498 ALICE A. BAKER, INC. $130,000 $130,000.00 2 10440 SIMINS FALOTICO GROUP, IN $250,000 $250,000.00 2 10443 ALEX M. ALEXIADES $325,000 $325,000.00 2 10447 GEORGE WAKE, INC. $350,000 $350,000.00 2 10448 GEORGE T. WAKE $250,000 $250,000.00 2 10449 GEORGE T. WAKE $250,000 $250,000.00 2 10470 FELIPE LUNA $60,000 $60,000.00 2 10473 R. C. DELLS, INC. $350,000 $350,000.00 2 8882159 JOHN ALLERT $135,000 $135,000.00 2 10466 LENNY'S SPIRITS, INC. $205,000 $205,000.00 2 10490 ORANGE CENTER CONVENIENCE $90,000 $90,000.00 2 1041334 MARK ALLEN SHOOK $74,700 $74,700.00 2 1047278 CARL BECKETT $65,000 $64,587.23 2 1048486 ARTEMIO APONTE $133,200 $133,200.00 2 1049128 SUSIE MALONE $38,400 $38,400.00 2 1049189 CORNELIUS V. GRAY $55,250 $55,250.00 2 1050490 ORGILIO A. ALFONSO $72,250 $72,250.00 2 1050981 MICHAEL SPIEGEL $63,900 $63,900.00 2 1051270 KATHY VANCE $30,100 $30,100.00 2 1051417 CARMEN J. CARTIGLIA $150,000 $150,000.00 2 1051733 VERLON D. HILL $58,500 $58,500.00 2 1052127 MILDRED H. MATES $60,000 $60,000.00 2 1052145 MARK ALLEN NELSON $58,500 $58,500.00 2 1052212 BOBBY CROZIER $36,000 $36,000.00 2 1052230 KATHLEEN M. VANCE $31,500 $31,500.00 2 1052321 ROSELYN P. SIMMONS $42,800 $42,800.00 2 1052340 ROBERT M. HAND $76,500 $76,201.21 2 1052363 JEAN LADOUCEUR $72,000 $72,000.00 2 1052398 LEE DOROTHY SMITH $58,650 $58,650.00 2 1052605 WILLIAM MCGARRAH JR. $50,850 $50,850.00 2 1052610 LORI LYN HUFF $52,000 $52,000.00 2 1052644 RUFUS RIVERS $59,200 $59,200.00 2 1052665 VERNON A. OGLETREE JR. $67,122 $67,122.00 2 1052850 FERNANDO L. GENSOLLEN $57,000 $57,000.00 2 1052883 LENOX R. GRANDERSON $62,500 $62,092.57 2 1052897 WINSTON HAUGHTON $126,000 $126,000.00 2 1052995 TAMMY C. REESE $55,250 $55,250.00 2 1053115 ZUFER DERVISEVIC $70,850 $70,850.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1053170 ESSIE E. DANIELS $52,000 $51,901.10 2 1053171 JEFF SCHULZ $40,000 $39,776.41 2 1053177 JOHN B. HENRY JR. $56,250 $56,250.00 2 1053274 HARVEY MERKERSON $55,200 $55,200.00 2 1053385 JAMES WILLIAM CONNOR $30,000 $30,000.00 2 1053690 NEIL W. MANSUR $37,517 $37,517.00 2 1053753 PATRICIA ANN DILLON $58,500 $58,500.00 2 1053806 LINDA SMITH $72,000 $72,000.00 2 1053811 BARRINGTON WILLIAMS $30,000 $30,000.00 2 1053852 CHARLES KENT $72,500 $72,074.99 2 1053877 GREGG S. RITTENHOUSE $32,500 $32,500.00 2 1053921 RUSSELL J. GRANDCHAMP JR. $140,000 $140,000.00 2 1053973 MARTIN KILSTEIN $60,000 $60,000.00 2 1054018 BRYAN E. WOODARDS $135,000 $135,000.00 2 1054025 MUSA SPENCER $56,000 $56,000.00 2 1054062 CATHERINE C. PIZZO $50,000 $49,636.19 2 1054117 PATRICK YOUNGKIN $135,000 $135,000.00 2 1054123 PAMELA BLACKMAN $75,000 $75,000.00 2 1054157 LEE CASH $316,000 $316,000.00 2 1054244 GELSOMINA ROSIELLO $129,000 $129,000.00 2 1054301 WILLIAM R. SHULER $60,000 $59,853.30 2 1054305 GWENEVER YOUNG $34,000 $34,000.00 2 1054309 GWENEVER L. YOUNG $40,000 $40,000.00 2 1054330 KENNETH M.W. DAY II $30,000 $30,000.00 2 1054361 ROBERT WILLIAMS $128,000 $128,000.00 2 1054368 SHIRLEY M. SHORES $35,000 $35,000.00 2 1054496 JAMES E. FINNEGAN $35,000 $34,819.64 2 1054502 ROBERT K. MASON JR. $73,600 $73,600.00 2 1054567 JOHNNY R. RICE $66,000 $66,000.00 2 1054597 CARLOS THOMAS $249,500 $249,500.00 2 1054649 SUSSANE DE PRE A/K/A SUSS $60,000 $60,000.00 2 1054718 CARRIE F. DOVE MOORE $71,250 $71,250.00 2 1054764 JOAN R. CACCIUTTI $138,600 $138,600.00 2 1054774 DERRICK V. REIFF $69,500 $69,500.00 2 1054848 PRATHRON HENRY $72,000 $72,000.00 2 1054851 DONNA M. MCGRATH $41,500 $41,500.00 2 1054873 SARAH K. WOODS $61,200 $61,200.00 2 1054878 WILLIAM FAAS $43,000 $42,893.64 2 1054890 DONALD E. GLOS $137,700 $137,700.00 2 1054897 ANNIE D. MCNEIL $62,000 $62,000.00 2 1054915 JOSEPH PATRICK SCOTT $38,500 $38,371.64 2 1054918 RAYMOND F. BRACHER $67,200 $67,200.00 2 1054923 RONALD C. PALMER $100,000 $100,000.00 2 1054971 LETTIE WAY-SLOCUM $30,450 $30,450.00 2 1054995 JESSE LOUIS PATTERSON $63,000 $63,000.00 2 1055000 THELMA HAWES $60,480 $60,480.00 2 1055044 PAULA POOLE $130,000 $129,271.29 2 1055147 JACK A. BARNES JR. $42,000 $42,000.00 2 1055161 LARRY H. ZELLER $36,000 $35,771.01 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1055162 RUTH BERRIOS $58,500 $58,500.00 2 1055164 GEORGE B. SHOTWELL $132,000 $132,000.00 2 1055188 JOANN SANTALUCIA $42,700 $42,700.00 2 1055197 DONNA ANN BRADNEY $40,000 $40,000.00 2 1055233 PETER FOUDY $30,000 $30,000.00 2 1055236 LINDA J. UNDERWOOD $133,000 $133,000.00 2 1055259 OLGA ARANA $65,000 $65,000.00 2 1055264 JOHN RIGGINS $52,200 $52,200.00 2 1055326 SHIRLEY E. CHANCE $56,000 $56,000.00 2 1055335 MARY ANNE BURNS WINK $72,000 $72,000.00 2 1055339 MATTHEW BROWN $77,000 $77,000.00 2 1055377 JERRY RHETT III $36,000 $36,000.00 2 1055388 ELANA A. ACOX $60,000 $60,000.00 2 1055393 WILLIAM R. JONES $37,800 $37,800.00 2 1055398 LOIS FERGUSON $40,000 $40,000.00 2 1055408 GABRIEL I. ENRIQUEZ $39,000 $39,000.00 2 1055429 ROBERT N. LINDHOLM $180,000 $180,000.00 2 1055453 LAURA REED $60,000 $60,000.00 2 1055463 STEVEN GEORGE DALTON $37,000 $37,000.00 2 1055470 JEFFERY LOVE $43,200 $43,200.00 2 1055516 GERALD V. FERRANTE $21,000 $21,000.00 2 1055535 DEBBIE DYESS $73,750 $73,750.00 2 1055586 EZEQUIEL HOLGUIN $50,000 $50,000.00 2 1055592 NANCY BAXTER $42,000 $42,000.00 2 1055618 NICOLE JOHNSON $67,500 $67,500.00 2 1055619 TERESA M. CROCKETT $34,400 $34,400.00 2 1055650 STEPHEN A. BUDHU $135,000 $135,000.00 2 1055670 EDWINA T. NAGGLES $60,800 $60,800.00 2 1055692 JERRY RHETT III $32,000 $32,000.00 2 1055697 STEPHEN G. PELLEGRINI $30,000 $29,799.19 2 1055704 CHARLES B. HUBBARD $67,500 $67,500.00 2 1055750 JEAN L. QUINTAVALLE $30,000 $30,000.00 2 1055767 GLENN A. DERRICOTT $45,900 $45,900.00 2 1055780 PATRICIA A. LEECH $56,700 $56,700.00 2 1055802 LONNIE H. LOREDO $72,250 $72,250.00 2 1055804 RUTH T. HERON $69,000 $69,000.00 2 1055805 WILFORD C. JAMES $76,500 $76,500.00 2 1055816 MACHIKO RAINEY $130,500 $129,829.45 2 1055848 ALMA BURNETT $66,500 $66,500.00 2 1055851 LULA SWEENEY $71,550 $71,550.00 2 1055882 RUTHANN LLOYD $35,900 $35,900.00 2 1055886 NATHANIEL BAILEY $140,000 $140,000.00 2 1055927 RONALD RICHARDSON $64,000 $64,000.00 2 1055930 SHARON M. BAKER $67,700 $67,700.00 2 1055932 LOUIS D. LOPEZ $50,000 $50,000.00 2 1055950 ERLA ARTHUR $40,000 $40,000.00 2 1056006 DONALD E. OSTER $39,600 $39,600.00 2 1056118 CARMEN D NIXON BELCARIE $68,000 $68,000.00 2 1056164 JOHN F. HUGHES $50,000 $50,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1056221 DOMINICO EMILIANI $75,500 $75,500.00 2 1056287 EDITH ARROWSMITH $48,800 $48,800.00 2 1056289 SAMUEL E. TUCKER $30,000 $30,000.00 2 1056314 KELVIN P ASHE BY HIS ATTO $48,600 $48,600.00 2 1056475 PATRICIA MORROW $71,400 $71,400.00 2 1056494 DARLENE MOBLEY $62,100 $62,100.00 2 1056533 MORRIS W. GREEN $133,200 $133,200.00 2 1056537 MICHELE RENE SHAFFER $46,000 $46,000.00 2 1056607 LARRY L. SPRANKLE $37,600 $37,600.00 2 1056647 JOAN TRIMBLE $43,000 $42,950.31 2 1056683 LENORA ODOM $45,000 $45,000.00 2 1056761 DOYLE WINSTON INGRAM $35,000 $35,000.00 2 1056766 IDA M. ATHANS $248,427 $248,427.00 2 1056789 MICHAEL VAIANO $50,000 $50,000.00 2 1056837 RALPH DAVIS $58,000 $58,000.00 2 1056865 THOMAS BELL $45,000 $45,000.00 2 1056963 RICHARD L. BUDELMAN $46,000 $46,000.00 2 1056974 JAMES F. HUGHES $130,000 $130,000.00 2 1057119 BENJAMIN MCCURDY $32,000 $32,000.00 2 1057140 NEIL ANDREW GRIFFIN $32,725 $32,725.00 2 1057209 GLENN A. BLACKBURN $60,000 $60,000.00 2 1057233 WILLIAM F. LEASURE $70,200 $70,200.00 2 1057297 C. JEFF BURNS $43,827 $43,827.00 2 1057367 CHARLES DONELY FINKBEINER $57,000 $57,000.00 2 1057369 DARLENE BROOKS $53,910 $53,910.00 2 1057382 DOROTHY PIERCE $71,200 $71,200.00 2 1057401 AARON HASIUK $269,000 $269,000.00 2 1057422 IDA MANCINI $40,000 $40,000.00 2 1057433 PEDRO CORDOBA $57,000 $57,000.00 2 1057459 CHARLOTTE A. FRANKOWSKI $71,400 $71,400.00 2 1057484 QUEEN ESTER BELTON $55,800 $55,800.00 2 1057500 MARTIN T. WALSH JR. $48,000 $48,000.00 2 1057514 GREGORY CRISWELL $135,000 $135,000.00 2 1057529 DIANE P. TIERI $48,000 $48,000.00 2 1057557 VICTORIA E. BARNY-NEGRON $56,800 $56,800.00 2 1057574 DAVID R. TURNER $30,000 $30,000.00 2 1057611 YVONNE S. MILLER $72,000 $72,000.00 2 1057646 ALAN J. PIKEY $264,000 $264,000.00 2 1057662 RICHARD CHAKEJIAN SR. $35,000 $35,000.00 2 1057924 CHARLES C. HAM $76,500 $76,500.00 2 1057935 V SCOTT REIDLING $33,000 $33,000.00 2 1057941 ELFRIEDE E. WERNER $243,900 $243,900.00 2 1058039 WILBERT CLARK SR. $36,000 $36,000.00 2 1058101 LISA SWEAT $45,000 $45,000.00 2 1058231 LARRY D. CROWDER $45,050 $45,050.00 2 1058392 KESHA VENNING $54,000 $54,000.00 2 1058496 MARY A. SHEPPARD $38,000 $38,000.00 2 1058571 DAVID BOOTH $42,500 $42,500.00 2 1058644 SHERI L. WEST $76,500 $76,500.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 9013630 ALFRED CAVALLARO JR. $40,500 $40,500.00 2 9013680 HAN K. CHANG $57,600 $57,309.06 2 9013693 LOUISE C. WHITE $40,500 $40,500.00 2 9013785 PHILOMENA D'AGOSTINO $46,700 $46,700.00 2 9013801 GEORGE M. CIARAMELLA $50,400 $50,312.45 2 9013829 JOSEPH A. CAPONE $70,000 $69,880.27 2 9013843 SANDRA D. MARTIN $40,500 $40,500.00 2 9013935 JOSEPH F. CARL $60,800 $60,510.30 2 9013950 MATTHEW FORD $55,250 $55,250.00 2 9013976 ANTHONY L. CUCCHI $40,000 $40,000.00 2 9013979 PIETRO PAOLUCCI $46,800 $46,800.00 2 9013980 RICHARD THORNE $40,000 $40,000.00 2 9013989 MARIE R. ZUCK $75,200 $75,200.00 2 9013990 STEVEN J. CULLEN $42,000 $42,000.00 2 9014016 PETER D. WYNKOOP $92,645 $92,645.00 2 9014033 PELMA G. WHITE $37,000 $37,000.00 2 9014036 ANTONIO ROSADO $75,000 $75,000.00 2 1045779 GARY ALLEN SCALES $73,650 $73,650.00 2 1051181 THEODORE W. BYRD $135,000 $135,000.00 2 1051324 HUEY SMITH $38,000 $38,000.00 2 1051531 EDNA L. SMITH $76,500 $76,500.00 2 1052274 RONALD J. HALL $46,200 $46,200.00 2 1052328 SUSAN MAGAR $137,500 $137,500.00 2 1053178 DENNIS BURPOE $59,500 $59,500.00 2 1053318 AGNES BROOKS $76,000 $76,000.00 2 1054163 SIDNEI E. VALENTIM $69,600 $69,600.00 2 1054575 ERROL V. H. GILBERT $75,500 $75,500.00 2 1054651 MIKE C. ROBB $69,600 $69,600.00 2 1055353 DEBORAH N. VICKS $63,000 $63,000.00 2 1055574 VICTOR GRIFFIN $35,700 $35,700.00 2 1055715 OSCAR L. WIMBUSH $50,000 $50,000.00 2 1055898 DAVID BRICKETT $44,000 $44,000.00 2 1056085 DANIEL JODEXNIS $57,000 $57,000.00 2 1056168 JOHN R. TERRACCIANO $60,000 $60,000.00 2 1056180 SHIRLEY ANDERSON $50,400 $50,400.00 2 1056182 FOREST PRIMER $46,750 $46,750.00 2 1056731 JOSEPH L. CHILLEMI $50,000 $50,000.00 2 1056918 FREDERICK SHELTON $38,165 $38,165.00 2 1056948 CARLTON L. BUTLER JR. $131,000 $131,000.00 2 1056995 ESSIE MIMS $36,000 $36,000.00 2 1057210 MAURICE C. VANDERVALL $51,300 $51,300.00 2 1057281 BOBBY G. AMERSON $47,580 $47,580.00 2 1057414 CHERYL A. CANNON $45,000 $45,000.00 2 1057508 RICHARD J. CHEESMAN $73,600 $73,600.00 2 1057601 ROSE CHERY $41,500 $41,500.00 2 1057682 FRANCIS A. FLORES BY HIS $46,800 $46,800.00 2 1057695 KENNETH V. MILLER $69,650 $69,650.00 2 1057718 PHILIP FORAND $67,500 $67,500.00 2 1057822 CHRISTOPHER MELLEVOLD $323,000 $323,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1057864 ESSICK A. MAYS $74,800 $74,800.00 2 1057890 KEVIN W. HEINE $33,000 $33,000.00 2 1057929 ELVIRA MASTRIANI $47,700 $47,700.00 2 1058019 ADAM SIMON $44,500 $44,500.00 2 1058032 ANNIE P. MCSWAIN $49,000 $49,000.00 2 1058052 ANGELA C. AIKENS $60,000 $60,000.00 2 1058055 WILLIAM R. MCKEON III $68,000 $68,000.00 2 1058164 CAROL BAKER $40,000 $40,000.00 2 1058209 RICHARD H. BYRD $32,190 $32,190.00 2 1058215 SHIRLEY J. MARTIN $32,000 $32,000.00 2 1058387 CECIL D. CORNETTE $126,000 $126,000.00 2 1058419 KATHERINE YAMICH $45,000 $45,000.00 2 1058955 KEITH CIRLINCIONE $44,000 $44,000.00 2 9013838 JOYCE A. RIGHTER $30,000 $30,000.00 2 9013912 GREGORY A. RUTHERFORD $288,000 $288,000.00 2 9014003 LAVINIA L. IMES $37,000 $37,000.00 2 9014015 DEBORAH DEMING $35,250 $35,250.00 2 1049549 JOHNSON $50,360 $50,360.00 2 1051111 ALLEN $337,000 $337,000.00 2 1053285 PALMIERI $63,000 $63,000.00 2 1054743 BARNES $41,400 $41,400.00 2 1054884 BATTIATO $36,270 $36,270.00 2 1055423 WILLIAMS $71,000 $71,000.00 2 1055433 O'BRIEN $75,500 $75,500.00 2 1056084 HUTTO $43,200 $43,200.00 2 1056255 MCGRATH $74,400 $74,400.00 2 1056457 HAWKINS $43,200 $43,200.00 2 1056522 BURRELL $38,633 $38,632.53 2 1056559 MAURER $44,000 $44,000.00 2 1056672 JONES $67,400 $67,400.00 2 1056729 LA DUCA $30,000 $30,000.00 2 1056820 DUNSCOMBE $64,800 $64,800.00 2 1057216 WILKINSON $40,000 $40,000.00 2 1057274 HANDLE $77,000 $77,000.00 2 1057506 COOSEY $61,000 $61,000.00 2 1057528 TAYLOR $39,100 $39,100.00 2 1057638 LOHMEYER $76,500 $76,500.00 2 1057684 WARBURTON $51,525 $51,525.00 2 1057739 REED $38,000 $38,000.00 2 1057813 SMITH $57,400 $57,400.00 2 1058146 MILLER $77,400 $77,400.00 2 1058232 BRYANT $48,000 $48,000.00 2 1058236 BEATTY $40,500 $40,500.00 2 1058244 BECKER $48,000 $48,000.00 2 1058324 CASALINO $126,000 $126,000.00 2 1058499 WORRELLS $52,000 $52,000.00 2 1058582 MORRISSEY $35,000 $35,000.00 2 1058675 STANSKY $69,300 $69,300.00 2 1058706 ANTON $50,000 $50,000.00 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 1058813 CARTER $54,400 $54,400.00 2 1058885 DE GROAT $135,000 $135,000.00 2 1059016 ECKNA $60,000 $60,000.00 2 1059036 GIORDANO $57,750 $57,750.00 2 1059190 BOWMAN $64,600 $64,600.00 2 1059506 GRAHAM $127,500 $127,500.00 2 9013675 CURLEY $56,900 $56,900.00 2 9013881 LOPEZ $45,000 $45,000.00 2 9013944 RYAN $120,000 $120,000.00 2 9013949 SHEERIN $38,000 $38,000.00 2 9014040 DEPAZZA $79,000 $79,000.00 2 9014052 LUCKEY $43,200 $43,200.00 2 9014065 ROSATI $30,000 $30,000.00 2 9014068 DOWNEY $70,000 $70,000.00 2 9014081 BRODZIK $49,000 $49,000.00 2 9014082 SELOVER $44,500 $44,500.00 2 9014085 FINKELSTEIN $125,800 $125,800.00 2 9014099 ALVES $60,000 $60,000.00 2 9014119 DE BLANCO $74,250 $74,250.00 2 3000000225 YVONNE D. BURKHALTER $130,000 $126,871.20 2 3000000270 LEONARD L. DARRELL JR. $33,750 $33,480.70 2 3000000287 FABIOLA SANTOS GAERLAN $93,057 $93,057.00 2 3000000292 THOMAS OPDYKE $125,000 $125,000.00 2 3000000302 AVE CRAIGG $67,500 $67,425.42 2 3000000306 SOPHIE GEORGOKAS $55,000 $55,000.00 2 3000000326 JAMES F. TRAINER SR. $74,000 $74,000.00 2 3000000336 LINDA PEOPLES $44,000 $44,000.00 2 3000000339 PATRICIA NORTON $155,000 $155,000.00 2 3000000350 MICHAEL J. SARANCHAK $68,000 $68,000.00 2 3000000368 ERWIN O. HALLEY $63,250 $63,250.00 2 3000000375 ELVIN ALVAREZ $140,000 $140,000.00 2 3000000390 NANET HAMLIN $66,500 $66,500.00 2 3000000394 WILLIAM F. RYAN $35,000 $35,000.00 2 3000000421 SALVATORE M. AMORELLO $128,000 $128,000.00 2 3010199800 IRA M SCHWARTZ $90,005 $64,362.99 2 3019806661 STEPHEN E. WING $60,000 $60,000.00 2 3019806830 SELINA THOMAS $50,400 $50,296.22 2 3019840048 PASQUALE DOMICOLO $137,600 $137,600.00 2 3019840094 SALVATORE MOTTO $266,250 $265,497.17 2 3019840297 MICHAEL J. PRETOLA, JR. $46,750 $46,636.92 2 3019840710 DONALD SMITH $32,300 $32,300.00 2 3019840929 LEONA H. TAYLOR $32,000 $31,911.94 2 3019840978 CHARLES E WALTERS $129,600 $129,600.00 2 3019841259 GUSTINE ROYSTER $49,300 $49,269.71 2 3019841429 RALPH R. SCOTT $65,700 $65,273.43 2 3019841517 JESSIE R. HORTON $64,800 $64,669.15 2 3019892056 W. CEDRIC WILSON $46,400 $46,400.00 2 3019892223 GLADYS L. PERSON $64,800 $64,791.19 2 3019900812 CHARLES F. KRAUSE $140,000 $139,344.04 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019900866 MALEK ETMINAN-RAD $393,250 $393,250.00 2 3019904678 THERESA GRACE $75,200 $75,200.00 2 3019904728 BOBBY CAMPBELL $32,500 $32,500.00 2 3019904948 KAREN J. BROWN $76,500 $75,949.29 2 3019904981 EARL R. FAULKERSON $39,000 $39,000.00 2 3019905027 DIANA PUGH $36,000 $36,000.00 2 3019905031 MARILYN J. BEAN $48,000 $48,000.00 2 3019905033 JOHNNY B. BURKEEN $33,750 $33,750.00 2 3019905058 TIMOTHY HERRING $34,300 $34,300.00 2 3019905085 JUDY BAILEY $77,400 $77,400.00 2 3019906624 KEVIN L. IMPINK $76,000 $75,856.98 2 3019906979 MICHELLE R. BANNISTER $62,250 $62,250.00 2 3019907029 PATRICIA A. SPINDEN $62,400 $62,400.00 2 3019907070 CAROLYN G. STOKES $67,500 $67,447.11 2 3019907112 JAMES LUONGO $64,000 $64,000.00 2 3019907125 JOHN W. BERRY $58,410 $58,410.00 2 3019907141 SHIRLEY A. SHERMAN $34,200 $34,200.00 2 3019907143 GERALD C. FISHER $50,150 $50,150.00 2 3019907209 KATIE REINHARDT BRACEY $60,800 $60,734.31 2 3019907308 CHARLES W. ANDERSON $73,600 $73,600.00 2 3019907331 ANDREW AVELLINO $127,500 $127,360.56 2 3019907339 WILLIAM ALEXANDER $59,250 $59,250.00 2 3019907419 EDWARD J. SHILKOSKI $61,400 $61,188.51 2 3019907421 VICTOR M. KORNASKI $49,600 $49,600.00 2 3019907432 MARTHA ANN TATE $62,100 $62,100.00 2 3019907468 JOHN FRANCIS STALLARD $53,500 $53,500.00 2 3019907476 LEONARD A. HARRISON $63,750 $63,750.00 2 3019907477 MICHAEL P. GRECO $65,700 $65,700.00 2 3019907485 ANGELA D. HUDSON $53,400 $53,400.00 2 3019907496 WANDA BARNER $48,750 $48,488.51 2 3019907497 DENVER D. ACORD,JR. $54,000 $54,000.00 2 3019907505 KEVIN WRIGHT $74,240 $74,240.00 2 3019907520 PAUL A. TAYLOR $131,750 $131,750.00 2 3019907625 HENRY GLENN $31,200 $31,200.00 2 3019907706 KELLY RONETTE LARGENT $52,200 $52,200.00 2 3019907762 MYRNA STERLING $33,600 $33,600.00 2 3019941077 EVANGILEAN JONES $39,000 $39,000.00 2 3019941160 RONALD H. AGABABIAN $315,000 $315,000.00 2 3019941255 JOSEPH W. DONAHUE, JR $309,000 $308,735.20 2 3019941634 DON P. MELIA $68,250 $68,250.00 2 3019941793 JAMES H. LENNOX $52,000 $51,796.96 2 3019942096 THOMAS TYRONE SCOTT $74,800 $74,800.00 2 3019942124 GERTRUDE BEASLEY $76,500 $76,471.09 2 3019942245 JIMMY E. THOMAS $132,000 $132,000.00 2 3019942250 LATISHA S. SMITH $78,750 $78,750.00 2 3019942307 PATRICK CARO $65,000 $65,000.00 2 3019942309 ELWOOD H. KERNS $66,400 $66,400.00 2 3019942328 MARGARET G. MARTIN $35,000 $35,000.00 2 3019942375 MARIA JUSTE $130,500 $130,319.11 2
ORIGINAL CURRENT Loan ID Name BALANCE BALANCE POOL - ------- ---- -------- ------- ---- 3019942377 VICTOR ESPINAL $131,750 $131,750.00 2 3019942379 MIRIAM M. WAGNER $59,150 $59,150.00 2 3019942394 THOMAS A. JOHNSON $51,000 $51,000.00 2 3019942400 ETIE MERMERSTEIN $346,500 $346,021.05 2 3019942437 SAMUEL I. DODEK $289,000 $289,000.00 2 3019942506 ANTONIO TAPIA $129,200 $129,200.00 2 3019942712 JOHN W. CORDRAY $291,349 $291,349.00 2 3019992557 ORAS V. FREEMAN $46,000 $45,759.65 2 3019992559 IKE PEELE $46,800 $46,800.00 2 3019992580 KENNETH W. WILLIAMS $40,500 $40,500.00 2 3019992662 HENRY R. RUFUS $78,375 $78,375.00 2 3019992667 WILLIE MAE SAVAGE $49,500 $49,500.00 2 3019992684 JACKIE L. JOHNSON $31,875 $31,875.00 2 3019992842 HOBART D. CAYWOOD $48,750 $48,750.00 2 3039907174 GLORIA P. LEWIS $30,433 $30,356.52 2 3039942404 STEPHEN JACKSON $74,216 $74,216.00 2 3039942639 RONA MADRI $108,000 $108,000.00 2 3039992680 WILLIAM A. JAMES $46,550 $46,550.00 2 3100000455 PETER R. WALL $43,897 $43,722.02 2 3100003325 JAFREY S. LIU $50,120 $50,035.93 2 3100003332 LAURA C. KYDD $59,500 $59,500.00 2 3100003374 HAMLET MALKHASSIAN $247,500 $247,359.57 2 3100003489 PAULINE HEFFREN $65,000 $64,844.85 2 3100003511 ANDRE ABMA $40,300 $40,207.18 2 3100003520 MARCY JACK $56,500 $56,500.00 2 3100003526 PATRICIA E. AARON $57,600 $57,600.00 2 3100003740 RUSSELL E. CREWS $55,875 $55,749.65 2 3100003750 LORRAINE VAUGHAN $42,400 $42,400.00 2 3100004045 WILLIAM C. SMITH $75,500 $75,500.00 2 3100004138 EVAN SILVERSTEIN $35,000 $34,834.90 2 3100004152 CLARENCE W. BIVENS $60,000 $60,000.00 2 3100004235 HELEN CASTRO $72,000 $72,000.00 2 3100004239 JAMES VINCENT CLINE $32,584 $32,472.99 2 3100004248 RUSSELL B. GREENLIEF $44,000 $43,888.79 2 3100004258 ROY E. PARRAN $50,700 $50,700.00 2 3100004291 EDWARD R. SMALL JR. $30,000 $30,000.00 2 3100004347 DARRYL JAMES $138,750 $138,307.01 2 3100004396 TRACEY THEA GORDON $60,000 $59,749.67 2 3100004397 JANE MEYERSON $40,000 $40,000.00 2 3100004398 ANASTACIO B. CUBERO $30,000 $30,000.00 2 3100004423 SUSAN J. KADIN $45,000 $45,000.00 2 3100004425 ROY MONROE JR. $45,500 $45,500.00 2 3100004494 JOSEPH M. OUGE $68,000 $68,000.00 2 3100004541 MICHAEL J. ELLIOTT $44,000 $44,000.00 2 3100004599 CAROLE A. LUNAPIENA $56,000 $56,000.00 2 3100004675 LORRAINE M. RAGNONE $40,000 $40,000.00 2 3100004705 GEORGE CHICHESTER $137,600 $137,600.00 2 3100005110 THOMAS M. DRAKE $76,800 $76,800.00 2
EXHIBIT A FORM OF SUBSEQUENT TRANSFER AGREEMENT This SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, 1999 (the "Subsequent Transfer Date"), is entered into by and among ABFS 1999-1, INC., as unaffiliated seller (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC., as an originator ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an originator ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP., as an originator ("NJMIC") (ABC, Upland and NJMIC are collectively referred to herein as the "Originators"), and PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as depositor (the "Depositor"). W I T N E S S E T H: Reference is hereby made to (x) that certain Unaffiliated Seller's Agreement, dated as of March 1, 1999 (the "Unaffiliated Seller's Agreement"), by and among the Unaffiliated Seller, the Originators and the Depositor, and (y) that certain Indenture, dated as of March 1, 1999 (the "Indenture"), by and between the ABFS Mortgage Loan Trust 1999-1 (the "Trust") and The Bank of New York, as indenture trustee (the "Indenture Trustee"). Pursuant to the Unaffiliated Seller's Agreement, the Originators have agreed to sell, assign and transfer, and the Unaffiliated Seller has agreed to accept, from time to time, Subsequent Mortgage Loans (as defined below), and the Unaffiliated Seller has agreed to sell, assign and transfer, and the Depositor has agreed to accept, from time to time, such Subsequent Mortgage Loans. The Unaffiliated Seller's Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced by the execution and delivery of a Subsequent Transfer Agreement such as this Subsequent Transfer Agreement. The assets sold to the Unaffiliated Seller, and then sold to the Depositor pursuant to this Subsequent Transfer Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool II listed in the Mortgage Loan Schedule attached hereto (including property that secures a Subsequent Mortgage Loan that becomes an REO Property), including the related Mortgage Files delivered or to be delivered to the Collateral Agent, on behalf of the Indenture Trustee, including all payments of principal received, collected or otherwise recovered after the Subsequent Cut-Off Date for each Subsequent Mortgage Loan, all payments of interest due on each Subsequent Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and all other proceeds received in respect of such Subsequent Mortgage Loans, (b) the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all insurance proceeds and condemnation awards. The "Subsequent Mortgage Loans" are those listed on the Schedule of Mortgage Loans attached hereto. The Aggregate Principal Balance of such Subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in Pool I and $__________ in Pool II. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. For the purposes of this Subsequent Transfer Agreement, capitalized terms used herein but not otherwise defined shall have the respective meanings assigned to such terms in Appendix I to the Indenture. Section 2. Sale, Assignment and Transfer. In consideration of the receipt of $__________ (such amount being approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans) from the Unaffiliated Seller, each of the Originators hereby sells, assigns and transfers to the Unaffiliated Seller, without recourse, all of their respective right, title and interest in, to, and under the Subsequent Mortgage Loans and related assets described above, whether now existing or hereafter arising. In consideration of receipt of $__________ (such amount being approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans) from the Depositor, the Unaffiliated Seller hereby sells, assigns and transfers to the Depositor, without recourse, all of its right, title and interest in, to, and under the Subsequent Mortgage Loans and related assets described above, whether now existing or hereafter arising. In connection with each such sale, assignment and transfer, the Originators and the Unaffiliated Seller shall satisfy the document delivery requirements set forth in Section 2.05 of the Sale and Servicing Agreement with respect to each Subsequent Mortgage Loan. Section 3. Representations and Warranties of the Originators and the Unaffiliated Seller. With respect to each Subsequent Mortgage Loan, each of the Originators and the Unaffiliated Seller hereby remake each of the representations, warranties and covenants made by the Originators and the Unaffiliated Seller in Section 3.03 of the Unaffiliated Seller's Agreement, on which the Depositor relies in accepting the Subsequent Mortgage Loans. Such representations and warranties speak as of the Subsequent Transfer Date unless otherwise indicated, and shall survive each sale, assignment, transfer and conveyance of the Subsequent Mortgage Loans to the Depositor. Each of the Originators and the Unaffiliated Seller hereby acknowledge that the Depositor is transferring the Subsequent Mortgage Loans to the Trust, and that the Trust is pledging the Subsequent Mortgage Loans to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, on the date hereof. Each of the Originators and the Unaffiliated Seller hereby acknowledge and agree that the Depositor may assign to the Trust, and the Trust may assign to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, its interest in the representations and warranties set forth in this Section 3. Each of the Originators and the Unaffiliated Seller agrees that, 2 upon such assignment to the Trust and pledge to the Indenture Trustee, such representations, warranties, agreements and covenants will run to and be for the benefit of the Indenture Trustee and the Indenture Trustee may enforce, without joinder of the Depositor or the Trust, the repurchase and indemnification obligations of the Unaffiliated Seller and the Originators set forth herein with respect to breaches of such representations, warranties, agreements and covenants. Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture Trustee, the Servicer on behalf of the Trust, the Note Insurer or any Noteholder of a breach of any of the representations and warranties made by the Originators and the Unaffiliated Seller pursuant to Section 3.03 of the Unaffiliated Seller's Agreement or this Section 3, the party discovering such breach shall give prompt written notice to each other Person; provided, that the Indenture Trustee shall have no duty to inquire or to investigate the breach of any such representations and warranties. The Originators and the Unaffiliated Seller will be obligated to repurchase a Subsequent Mortgage Loan which breaches a representation or warranty in accordance with the provisions of Section 4.02 of the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g) of the Unaffiliated Seller's Agreement. Such repurchase and indemnification obligation of the Originators and the Unaffiliated Seller shall constitute the sole remedy against the Originators and the Unaffiliated Seller, and the Trust for such breach available to the Servicer, the Trust, the Depositor, the Indenture Trustee, the Note Insurer and the Noteholders. Section 5. Amendment. This Subsequent Transfer Agreement may be amended from time to time by the Originators, the Unaffiliated Seller and the Depositor only with the prior written consent of the Note Insurer (or, in the event of a Note Insurer Default, the Majority Holders). Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT TRANSFER AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT TRANSFER AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM THEREIN. Section 7. Counterparts. This Subsequent Transfer Agreement may be executed in counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which shall constitute one and the same instrument. Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent Transfer Agreement will inure to the benefit of and be binding upon the parties hereto, the Note Insurer, the Trust, the Noteholders, and their respective successors and permitted assigns. 3 Section 9. Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 10. Exhibits. The exhibits attached hereto and referred to herein shall constitute a part of this Subsequent Transfer Agreement and are incorporated into this Subsequent Transfer Agreement for all purposes. Section 11. Intent of the Parties; Security Agreement. The Originators, the Unaffiliated Seller and the Depositor intend that the conveyance of all right, title and interest in and to the Subsequent Mortgage Loans and related assets described above by the Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor pursuant to this Subsequent Transfer Agreement shall be, and be construed as, a sale of the Subsequent Mortgage Loans from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor. It is, further, not intended that such conveyances be deemed to be pledges of the Subsequent Mortgage Loans by the Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor to secure a debt or other obligation of the Originators or of the Unaffiliated Seller, as the case may be. However, in the event that the Subsequent Mortgage Loans are held to be property of the Originators or the Unaffiliated Seller, or if for any reason this Subsequent Transfer Agreement is held or deemed to create a security interest in the Subsequent Mortgage Loans, then it is intended that: (a) this Subsequent Transfer Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code of any other applicable jurisdiction; (b) the conveyance provided for in this Subsequent Transfer Agreement shall be deemed to be a grant by the Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor of a security interest in all of the Originators' and the Unaffiliated Seller's respective right, title and interest, whether now owned or hereafter acquired, in and to the Subsequent Mortgage Loans and related assets described above. The Originators and the Unaffiliated Seller, as applicable, shall, to the extent consistent with this Subsequent Transfer Agreement, take such reasonable actions as may be necessary to ensure that, if this Subsequent Transfer Agreement were deemed to create a security interest in the Subsequent Mortgage Loans and the other property described above, such interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Subsequent Transfer Agreement. [Remainder of Page Intentionally Left Blank] 4 IN WITNESS WHEREOF, the Originators, the Unaffiliated Seller and the Depositor have caused this Subsequent Transfer Agreement to be duly executed by their respective officers as of the day and year first above written. AMERICAN BUSINESS CREDIT, INC. By: _________________________________ Name: Title: HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE By: _________________________________ Name: Title: NEW JERSEY MORTGAGE AND INVESTMENT, INC. By: _________________________________ Name: Title: ABFS 1999-1, INC. By: _________________________________ Name: Title: PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By: _________________________________ Name: Title: [Signature Page to Subsequent Transfer Agreement] EX-4.3 6 SALE AND SERVICING AGREEMENT Exhibit 4.3 SALE AND SERVICING AGREEMENT dated as of March 1, 1999 by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as Depositor, ABFS MORTGAGE LOAN TRUST 1999-1, as Issuer, AMERICAN BUSINESS CREDIT, INC., as Servicer, CHASE BANK OF TEXAS, N.A., as Collateral Agent, and THE BANK OF NEW YORK, as Indenture Trustee SALE AND SERVICING AGREEMENT, dated as of March 1, 1999 (this "Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, a Delaware corporation, as depositor (the "Depositor"), ABFS MORTGAGE LOAN TRUST 1999-1, a Delaware business trust, as issuer (the "Trust"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation, as servicer (the "Servicer"), CHASE BANK OF TEXAS, N.A., a national banking association, as collateral agent (the "Collateral Agent"), and THE BANK OF NEW YORK, a New York banking corporation, as indenture trustee (the "Indenture Trustee"). W I T N E S S E T H WHEREAS, the Depositor desires to sell to the Trust, and the Trust desires to purchase from the Depositor, the mortgage loans (the "Mortgage Loans") listed on Schedule I to this Agreement; WHEREAS, immediately after such purchase, the Trust will pledge such Mortgage Loans to the Indenture Trustee pursuant to the terms of an Indenture, dated as of March 1, 1999 (the "Indenture"), between the Trust and the Indenture Trustee, and issue the ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes (the "Notes"); WHEREAS, the Servicer has agreed to service the Mortgage Loans, which constitute the principal assets of the Trust; WHEREAS, the Collateral Agent will hold, on behalf of the Indenture Trustee, the Mortgage Loans and certain other assets pledged to the Indenture Trustee pursuant to the Indenture; and WHEREAS, Financial Security Assurance Inc. (the "Note Insurer") is intended to be a third-party beneficiary of this Agreement, and is hereby recognized by the parties hereto to as a third-party beneficiary of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Trust, the Depositor, the Servicer, the Collateral Agent and the Indenture Trustee hereby agree as follows: ARTICLE I. DEFINITIONS Section 1.01 Certain Defined Terms. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in Appendix I attached hereto. Section 1.02 Provisions of General Application. (a) All accounting terms not specifically defined herein shall be construed in accordance with GAAP. (b) The terms defined herein and in Appendix I to the Indenture include the plural as well as the singular. (c) The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole. All references to Articles and Sections shall be deemed to refer to Articles and Sections of this Agreement. (d) Any reference to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute to which reference is made and all regulations promulgated pursuant to such statutes. (e) All calculations of interest with respect to the Notes provided for herein shall be made on the basis of a 360-day year consisting of twelve 30-day months. All calculations of interest with respect to any Mortgage Loan provided for herein shall be made in accordance with the terms of the related Mortgage Note and Mortgage or, if such documents do not specify the basis upon which interest accrues thereon, on the basis of a 360-day year consisting of twelve 30-day months, to the extent permitted by applicable law. (f) Any Mortgage Loan payment is deemed to be received on the date such payment is actually received by the Servicer; provided, however, that, for purposes of calculating distributions on the Notes, prepayments with respect to any Mortgage Loan are deemed to be received on the date they are applied in accordance with Accepted Servicing Practices consistent with the terms of the related Mortgage Note and Mortgage to reduce the outstanding Principal Balance of such Mortgage Loan on which interest accrues. Section 1.03 Business Day Certificate. On the Closing Date (with respect to the calendar years 1999 and 2000) and thereafter, within fifteen (15) days prior to the end of each calendar year while this Agreement remains in effect (with respect to the succeeding calendar years), the Servicer shall provide to the Indenture Trustee and the Collateral Agent a certificate of a Servicing Officer specifying the days on which banking institutions in the Commonwealth of Pennsylvania are authorized or obligated by law, executive order or governmental decree to be closed. ARTICLE II. SALE AND CONVEYANCE OF THE MORTGAGE LOANS Section 2.01 Purchase and Sale of Initial Mortgage Loans. The Depositor does hereby sell, transfer, assign, set over and convey to the Trust, without recourse, but subject to the terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to the Initial Mortgage Loans, including the outstanding principal of, and interest due on, such Initial Mortgage Loans listed on Schedule I attached hereto, and all other assets included or to be included in the Trust Estate. In connection with such transfer and assignment, and pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the Depositor does hereby also irrevocably transfer, assign, set over and otherwise convey to the Trust all of its rights under the Unaffiliated Seller's Agreement, including, without limitation, its right to exercise the remedies created by Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for defective documentation and for breaches of representations and warranties, agreements and covenants of the Unaffiliated Seller and the Originators contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. 2 Section 2.02 Purchase and Sale of Subsequent Mortgage Loans. (a) Subject to the satisfaction of the conditions set forth in Section 2.14(b) of the Indenture, in consideration of the Trust's delivery on the related Subsequent Transfer Dates to or upon the order of the Depositor of all or a portion of the balance of funds in the related Pre-Funding Account, the Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over and convey to the Trust without recourse, but subject to terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to the Subsequent Mortgage Loans in the related Pool, including the outstanding principal of, and interest due on, such Subsequent Mortgage Loans, and all other assets included or to be included in the Trust Estate. In connection with such transfer and assignment, and pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the Depositor will also irrevocably transfer, assign, set over and otherwise convey to the Trust all of its rights under the Unaffiliated Seller's Agreement and the related Subsequent Transfer Agreement, including, without limitation, its right to exercise the remedies created by Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for defective documentation and for breaches of representations and warranties, agreements and covenants of the Unaffiliated Seller and the Originators contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. The amount released from a Pre-Funding Account with respect to a transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred percent (100%) of the Aggregate Principal Balances of the Subsequent Mortgage Loans so transferred, as of the related Subsequent Cut-Off Date. (b) In connection with the transfer and assignment of the Subsequent Mortgage Loans to the Trust, the Depositor shall cause the Unaffiliated Seller to satisfy the document delivery requirements set forth in Section 2.05 hereof. (c) For any Subsequent Mortgage Loan that has a first Due Date that occurs later than the last day of the Due Period following the Due Period in which the Subsequent Mortgage Loan was sold to the Trust, on each applicable Servicer Distribution Date, the Servicer will deposit into the Distribution Account 30 days' interest at the related Mortgage Interest Rate, net of the Servicing Fee, for each month after the month in which the Subsequent Transfer occurs until, but not including, the month in which such first Due Date occurs. Section 2.03 Purchase Price. On the Closing Date, as full consideration for the Depositor's sale of the Initial Mortgage Loans to the Trust, the Underwriter, on behalf of the Trust, will deliver to, or at the direction of, the Depositor (i) an amount in cash equal to the sum of (A) 99.65% and 99.65% of the Original Note Principal Balance as of the Closing Date of the Class A-1 Notes and the Class A-2 Notes, respectively, plus (B) accrued interest on the Original Note Principal Balance of the Class A-1 Notes and the Class A-2 Notes at the rate of 6.545% per annum and 6.580% per annum, respectively, from (and including) March 1, 1999 to (but not including) the Closing Date, minus (C) the Original Pre-Funded Amount and the Original Capitalized Interest Amount for each class of Notes, payable by wire transfer of same day funds, and (ii) the Trust Certificates to be issued pursuant to the Trust Agreement. Section 2.04 Possession of Mortgage Files; Access to Mortgage Files. (a) Upon the receipt by the Depositor, or its designee, of the purchase price for the Initial 3 Mortgage Loans set forth in Section 2.03 hereof and the issuance of the Notes pursuant to the Indenture, the ownership of each Mortgage Note, each Mortgage and the contents of the Mortgage File related to each Initial Mortgage Loan will be vested in the Trust, and will be pledged to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. (b) Pursuant to Section 2.05 hereof and Section 2.05 of the Unaffiliated Seller's Agreement, the Unaffiliated Seller has delivered or caused to be delivered the Indenture Trustee's Mortgage File related to each Initial Mortgage Loan to the Collateral Agent, on behalf of the Indenture Trustee. (c) The Collateral Agent will be the custodian, on behalf of the Indenture Trustee, to hold the Indenture Trustee's Mortgage Files in trust for the benefit of all present and future Noteholders and the Note Insurer. In the event the Collateral Agent resigns or is removed, the Indenture Trustee shall either (x) hold the Indenture Trustee's Mortgage Files, or (y) appoint a successor Collateral Agent to hold the Indenture Trustee's Mortgage Files as set forth in Section 9.08 hereof. (d) The Collateral Agent shall afford the Depositor, the Trust, the Note Insurer and the Servicer reasonable access to all records and documentation regarding the Mortgage Loans relating to this Agreement, such access being afforded at customary charges, upon reasonable prior written request and during normal business hours at the offices of the Collateral Agent. Section 2.05 Delivery of Mortgage Loan Documents. (a) In connection with the transfer and assignment of the Mortgage Loans, the Depositor shall on or before the Closing Date, with respect to the Initial Mortgage Loans, and shall on or before the Subsequent Transfer Date with respect to Subsequent Mortgage Loans, deliver, or cause the Unaffiliated Seller to deliver, to the Collateral Agent, on behalf of the Indenture Trustee (as pledgee of the Trust pursuant to the Indenture), the following documents or instruments with respect to each Mortgage Loan so transferred or assigned: (i) the original Mortgage Note, endorsed without recourse in blank by the related Originator, including all intervening endorsements showing a complete chain of endorsement; (ii) the related original Mortgage with evidence of recording indicated thereon or a copy thereof certified by the applicable recording office; (iii) the recorded mortgage assignment, or copy thereof certified by the applicable recording office, if any, showing a complete chain of assignment from the originator of the related Mortgage Loan to the related Originator (which assignment may, at such Originator's option, be combined with the assignment referred to in subpart (iv) hereof, in which case it must be in recordable form, but need not have been previously recorded); (iv) a mortgage assignment in recordable form (which, if acceptable for recording in the relevant jurisdiction, may be included in a blanket assignment or assignments) of each Mortgage from the related Originator to the Indenture Trustee; 4 (v) originals of all assumption, modification and substitution agreements in those instances where the terms or provisions of a Mortgage or Mortgage Note have been modified or such Mortgage or Mortgage Note has been assumed; and (vi) an original title insurance policy (or (A) a copy of the title insurance policy, or (B) a binder thereof or copy of such binder together with a certificate from the related Originator that the original Mortgage has been delivered to the title insurance company that issued such binder for recordation). In instances where the original recorded Mortgage and a completed assignment thereof in recordable form cannot be delivered by the related Originator to the Unaffiliated Seller, and by the Unaffiliated Seller to the Collateral Agent, on behalf of the Indenture Trustee prior to or concurrently with the execution and delivery of this Agreement (or, with respect to Subsequent Mortgage Loans, prior to or on the related Subsequent Transfer Date), due to a delay in connection with recording, the related Originator may: (x) in lieu of delivering such original recorded Mortgage, deliver to the Collateral Agent, on behalf of the Indenture Trustee, a copy thereof; provided, that the related Originator certifies that the original Mortgage has been delivered to a title insurance company for recordation after receipt of its policy of title insurance or binder therefor; and (y) in lieu of delivering the completed assignment in recordable form, deliver to the Collateral Agent, on behalf of the Indenture Trustee, the assignment in recordable form, otherwise complete except for recording information. The Collateral Agent, on behalf of the Indenture Trustee, shall promptly upon receipt thereof, with respect to each Mortgage Note described in Section 2.05(a)(i) hereof and each assignment described in Section 2.05(a)(iv) hereof, endorse such Mortgage Note and assignment as follows: "The Bank of New York, as Indenture Trustee under the Indenture dated as of March 1, 1999, ABFS Mortgage Loan Trust 1999-1." (b) As promptly as practicable, but in any event within thirty (30) days from the Closing Date or the Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall promptly submit, or cause to be submitted by the related Originator, for recording in the appropriate public office for real property records, each assignment referred to in Section 2.05(a)(iv). The Collateral Agent, on behalf of the Indenture Trustee, shall retain a copy of each assignment submitted for recording. In the event that any such assignment is lost or returned unrecorded because of a defect therein, the Unaffiliated Seller or such Originator shall promptly prepare a substitute assignment or cure such defect, as the case may be, and thereafter the Unaffiliated Seller or such Originator shall submit each such assignment for recording. The costs relating to the delivery and recordation of the documents in connection with the Mortgage Loans as specified in this Article II shall be borne by the Unaffiliated Seller. (c) The Unaffiliated Seller or the related Originator shall, within five (5) Business Days after the receipt thereof, deliver, or cause to be delivered, to the Collateral Agent, on behalf of the Indenture Trustee: (i) the original recorded Mortgage and related power of 5 attorney, if any, in those instances where a copy thereof certified by the related Originator was delivered to the Collateral Agent, on behalf of the Indenture Trustee; (ii) the original recorded assignment of Mortgage from the related Originator to the Indenture Trustee, which, together with any intervening assignments of Mortgage, evidences a complete chain of assignment from the originator of the Mortgage Loan to the Indenture Trustee, in those instances where copies of such assignments certified by the related Originator were delivered to the Collateral Agent, on behalf of the Indenture Trustee, and (iii) the title insurance policy or title opinion required in Section 2.05(a)(vi). The Collateral Agent shall review the recorded assignment to confirm the information contained therein. The Collateral Agent shall notify Indenture Trustee, the Note Insurer and the Servicer, of any defect in such assignment based on such review. The Servicer shall have a period of sixty (60) days following such notice to correct or cure such defect. In the event that the Servicer fails to record an assignment of a Mortgage as provided herein, the Collateral Agent shall, at the Servicer's expense, use reasonable efforts to prepare and, if required hereunder, file such assignments for recordation in the appropriate real property or other records and the Servicer hereby appoints the Collateral Agent as its attorney-in-fact with full power and authority acting in its stead for the purpose of such preparation, execution and filing. Notwithstanding anything to the contrary contained in this Section 2.05, in those instances where the public recording office retains the original Mortgage, power of attorney, if any, assignment or assignment of Mortgage after it has been recorded or such original has been lost, the Unaffiliated Seller or the related Originator shall be deemed to have satisfied its obligations hereunder upon delivery to the Collateral Agent, on behalf of the Indenture Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or assignment of Mortgage certified by the public recording office to be a true copy of the recorded original thereof. From time to time the Unaffiliated Seller or the related Originator may forward, or cause to be forwarded, to the Collateral Agent, on behalf of the Indenture Trustee, additional original documents evidencing any assumption or modification of a Mortgage Loan. (d) All original documents relating to the Mortgage Loans that are not delivered to the Collateral Agent, on behalf of the Indenture Trustee, as permitted by Section 2.05(a) hereof are, and shall be, held by the Servicer, the Unaffiliated Seller or the related Originator, as the case may be, in trust for the benefit of the Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the event that any such original document is required pursuant to the terms of this Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document shall be delivered promptly to the Collateral Agent, on behalf of the Indenture Trustee. From and after the sale of the Mortgage Loans to the Trust pursuant hereto, to the extent that the Unaffiliated Seller or the related Originator retains legal title of record to any Mortgage Loans prior to the vesting of legal title in the Trust, such title shall be retained in trust for the Trust as the owner of the Mortgage Loans, and the Indenture Trustee, as the pledgee of the Trust under the Indenture. In acting as custodian of any original document which is part of the Indenture Trustee's Mortgage Files, the Servicer agrees further that it does not and will not have or assert any beneficial ownership interest in the related Mortgage Loans or the Mortgage Files. Promptly upon the Servicer's receipt of any such original document, the Servicer, on behalf of the Trust, shall mark conspicuously each such original document, and its master data processing records with a legend evidencing that the Trust has purchased the related Mortgage Loan and all right and title thereto and interest therein, and pledged such Mortgage Loan and all 6 right and title thereto and interest therein to the Indenture Trustee, on behalf of the Noteholders and the Note Insurer. Section 2.06 Acceptance of the Trust Estate; Certain Substitutions; Certification by the Collateral Agent. (a) The Indenture Trustee agrees to execute and deliver to the Depositor, the Note Insurer, the Collateral Agent and the Servicer on or prior to the Closing Date an acknowledgement of receipt of the Note Insurance Policy in the form attached as Exhibit B hereto. (b) The Collateral Agent, on behalf of the Indenture Trustee, agrees to: (i) execute and deliver to the Depositor, the Note Insurer, the Indenture Trustee, the Servicer and the Unaffiliated Seller, on or prior to the Closing Date or any Subsequent Transfer Date, as applicable, with respect to each Mortgage Loan transferred on such date, an acknowledgement of receipt of the Mortgage File containing the original Mortgage Note (with any exceptions noted), in the form attached as Exhibit C hereto, and declares that it will hold such documents and any amendments, replacements or supplements thereto, as well as any other assets included in the definition of Trust Estate and delivered to the Collateral Agent, on behalf of the Indenture Trustee, in trust upon and subject to the conditions set forth herein, for the benefit of the Noteholders and the Note Insurer. (ii) to review (or cause to be reviewed) each Indenture Trustee's Mortgage File within thirty (30) days after the Closing Date or any Subsequent Transfer Date, as applicable (or, with respect to any Qualified Substitute Mortgage Loans, within thirty (30) days after the receipt by the Collateral Agent, on behalf of the Indenture Trustee, thereof), and to deliver to the Unaffiliated Seller, the Servicer, the Depositor, the Indenture Trustee and the Note Insurer a certification, in the form attached hereto as Exhibit D, to the effect that, except as otherwise noted, as to each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in such certification as not covered by such certification), (i) all documents required to be delivered to it pursuant to Section 2.05 are in its possession, (ii) each such document has been reviewed by it and has not been mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections shall not constitute physical alteration if they reasonably appear to have been initialed by the Mortgagor), appears regular on its face and relates to such Mortgage Loan, and (iii) based on its examination and only as to the foregoing documents, the information set forth on the Mortgage Loan Schedule as to the information set forth in (i), (ii), (v) and (vi) of the definition of "Mortgage Loan Schedule" accurately reflects the information set forth in the Indenture Trustee's Mortgage File delivered on such date. (iii) to review (or cause to be reviewed) each Indenture Trustee's Mortgage File within ninety (90) days after the Closing Date or any Subsequent Transfer Date, as applicable (or, with respect to any Qualified Substitute Mortgage Loans, within ninety (90) days after the receipt by the Collateral Agent, on behalf of the Indenture Trustee, thereof), and to deliver to the Unaffiliated Seller, the Servicer, the Depositor, the Indenture Trustee, the Rating Agencies and the Note Insurer a certification in the form 7 attached hereto as Exhibit E to the effect that, except as otherwise noted, as to each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in such certification as not covered by such certification), (i) all documents required to be delivered to it pursuant to Section 2.05 are in its possession, (ii) each such document has been reviewed by it and has not been mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections shall not constitute physical alteration if they reasonably appear to be initialed by the Mortgagor), appears regular on its face and relates to such Mortgage Loan, and (iii) based on its examination and only as to the foregoing documents, the information set forth in the definition of "Mortgage Loan Schedule" accurately reflects the information set forth in the Indenture Trustee's Mortgage File delivered on such date. In performing any such review, the Collateral Agent may conclusively rely on the Unaffiliated Seller as to the purported genuineness of any such document and any signature thereon. It is understood that the scope of the Collateral Agent's review of the Indenture Trustee's Mortgage Files is limited solely to confirming that the documents listed in Section 2.05 have been executed and received and relate to the Indenture Trustee's Mortgage Files identified in the related Mortgage Loan Schedule. The Collateral Agent shall be under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they are other than what they purport to be on their face. (c) If the Collateral Agent during the process of reviewing the Indenture Trustee's Mortgage Files finds any document constituting a part of a Indenture Trustee's Mortgage File which is not executed, has not been received, is unrelated to the Mortgage Loan identified in the related Mortgage Loan Schedule, or does not conform to the requirements of Section 2.05 or the description thereof as set forth in the related Mortgage Loan Schedule, the Collateral Agent shall promptly so notify the Servicer, the Unaffiliated Seller, the Originators, the Note Insurer and the Indenture Trustee. Pursuant to Section 2.06(b) of the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the Originators have agreed to use reasonable efforts to cause to be remedied a material defect in a document constituting part of an Indenture Trustee's Mortgage File of which it is so notified by the Collateral Agent. If, however, within sixty (60) days after the Collateral Agent's notice to it respecting such defect the Unaffiliated Seller or the Originators have not caused to be remedied the defect and the defect materially and adversely affects the interest of the Noteholders and the Note Insurer in the related Mortgage Loan, the Unaffiliated Seller and the Originators will be obligated, pursuant to Section 3.05 of the Unaffiliated Seller's Agreement, to either (i) substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner and subject to the conditions set forth in Section 3.05 of the Unaffiliated Seller's Agreement or (ii) purchase such Mortgage Loan at a purchase price equal to the Loan Repurchase Price. Upon receipt by the Collateral Agent and the Indenture Trustee of a certification, in the form attached hereto as Exhibit F, of a Servicing Officer of such substitution or purchase and, in the case of a substitution, upon receipt by the Collateral Agent, on behalf of the Indenture Trustee, of the related Indenture Trustee's Mortgage File, and the deposit of the amounts described above in the Collection Account, the Collateral Agent shall release to the Servicer for release to the Unaffiliated Seller the related Indenture Trustee's Mortgage File and the Indenture Trustee shall execute, without recourse, and deliver 8 such instruments of transfer furnished by the Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to the Unaffiliated Seller. The Collateral Agent shall notify the Indenture Trustee, who shall notify the Note Insurer if the Unaffiliated Seller fails to repurchase or substitute for a Mortgage Loan in accordance with the foregoing. Section 2.07 Grant of Security Interest. (a) It is intended that the conveyance of the Mortgage Loans and other property by the Depositor to the Trust as provided in this Article II be, and be construed as, a sale of the Mortgage Loans and such other property by the Depositor to the Trust. It is, further, not intended that such conveyance be deemed a pledge of the Mortgage Loans or such other property by the Depositor to the Trust to secure a debt or other obligation of the Depositor. However, in the event that the Mortgage Loans or any of such other property are held to be property of the Depositor, or if for any reason this Agreement is held or deemed to create a security interest in the Mortgage Loans or any of such other property, then it is intended that: (i) this Agreement shall also be deemed to be a security agreement within the meaning of the Uniform Commercial Code; (ii) the conveyance provided for in this Article II shall be deemed to be a grant by the Depositor to the Trust of a security interest in all of the Depositor's right, title and interest in and to the Mortgage Loans and such other property and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including, without limitation, all amounts from time to time held or invested in the Distribution Account, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Collateral Agent, on behalf of the Indenture Trustee, of the Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to the Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from financial intermediaries, bailees or agents, as applicable, of the Indenture Trustee for the purpose of perfecting such security interest under applicable law. The Depositor, the Servicer, on behalf of the Trust, the Collateral Agent and the Indenture Trustee, shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans or any of such other property, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement. (b) The Unaffiliated Seller, the Depositor and the Servicer shall take no action inconsistent with the Trust's ownership of the Trust Estate and each shall indicate or shall cause to be indicated in its records and records held on its behalf that ownership of each Mortgage Loan and the other assets in the Trust Estate are held by the Collateral Agent, on behalf of the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. In addition, the Unaffiliated Seller, the Depositor and the Servicer shall respond to any inquiries from third parties with respect to ownership of a Mortgage Loan or any other asset in the Trust Estate by stating that it is not the owner of such asset and that the Trust is the owner of such Mortgage Loan or other asset in the Trust Estate, which is held by the Collateral Agent, on behalf of the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. 9 Section 2.08 Further Action Evidencing Assignments. (a) The Servicer agrees that, from time to time, at its expense, it shall cause the Unaffiliated Seller to (and the Depositor on behalf of itself also agrees that it shall), promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or appropriate, or that the Servicer, the Indenture Trustee or the Collateral Agent may reasonably request, in order to perfect, protect or more fully evidence the transfer of ownership of the Mortgage Loans and other assets in the Trust Estate or to enable the Collateral Agent, on behalf of the Indenture Trustee, to exercise or enforce any of its rights hereunder. Without limiting the generality of the foregoing, the Servicer and the Depositor will, upon the request of the Servicer, the Indenture Trustee or the Collateral Agent execute and file (or cause to be executed and filed) such real estate filings, financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate. (b) The Depositor hereby grants to the Servicer, the Indenture Trustee and the Collateral Agent powers of attorney to execute all documents on its behalf under this Agreement and the Unaffiliated Seller's Agreement as may be necessary or desirable to effectuate the foregoing. Section 2.09 Assignment of Agreement. The Depositor hereby acknowledges and agrees that the Trust may assign its interest under this Agreement to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, as may be required to effect the purposes of the Indenture, without further notice to, or consent of, the Depositor, and the Indenture Trustee shall succeed to such of the rights and obligations of the Trust hereunder as shall be so assigned. The Trust shall, pursuant to the Indenture, assign all of its right, title and interest in and to the Mortgage Loans and its right to exercise the remedies created by Section 2.06 and 3.05 of the Unaffiliated Seller's Agreement for breaches of the representations, warranties, agreements and covenants of the Unaffiliated Seller or the Originators contained in Sections 2.05, 2.06, 3.02 and 3.03 of the Unaffiliated Seller's Agreement, assign such right, title and interest to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. The Depositor agrees that, upon such assignment to the Indenture Trustee, such representations, warranties, agreements and covenants will run to and be for the benefit of the Indenture Trustee and the Indenture Trustee may enforce, without joinder of the Depositor or the Trust, the repurchase obligations of the Unaffiliated Seller and the Originators set forth herein with respect to breaches of such representations, warranties, agreements and covenants. ARTICLE III. REPRESENTATIONS AND WARRANTIES Section 3.01 Representations of the Servicer. The Servicer hereby represents and warrants to the Indenture Trustee, the Depositor, the Collateral Agent, the Trust, the Note Insurer and the Noteholders as of the Closing Date and during the term of this Agreement that: (a) Each of the Servicer and the Subservicers is duly organized, validly existing and in good standing under the laws of their respective states of incorporation and has the power to own its assets and to transact the business in which it is currently engaged. Each of the Servicer and the Subservicers is duly qualified to do business as a 10 foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it or the performance of its obligations hereunder requires such qualification and in which the failure so to qualify could reasonably be expected to have a material adverse effect on the business, properties, assets, or condition (financial or other) of the Servicer or the Subservicers or the performance of their respective obligations hereunder; (b) The Servicer has the power and authority to make, execute, deliver and perform this Agreement and all of the transactions contemplated under this Agreement, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement, and assuming the due authorization, execution and delivery hereof by the other parties hereto constitutes, or will constitute, the legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); (c) The Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency which consent already has not been obtained in connection with the execution, delivery, performance, validity or enforceability of this Agreement, except such as have been obtained prior to the Closing Date; (d) The execution, delivery and performance of this Agreement by the Servicer will not violate any provision of any existing law or regulation or any order or decree of any court or the charter or bylaws of the Servicer, or constitute a breach of any mortgage, indenture, contract or other Agreement to which the Servicer is a party or by which it may be bound; (e) There is no action, suit, proceeding or investigation pending or threatened against the Servicer or the Subservicers which, either in any one instance or in the aggregate, is, in the Servicer's judgment, likely to result in any material adverse change in the business, operations, financial condition, properties, or assets of the Servicer or the Subservicers, or in any material impairment of the right or ability of any of them to carry on its business substantially as now conducted, or in any material liability on the part of any of them, or which would draw into question the validity of this Agreement, the Notes, or the Mortgage Loans or of any action taken or to be taken in connection with the obligations of the Servicer or the Subservicers contemplated herein or therein, or which would be likely to impair materially the ability of the Servicer or the Subservicers to perform their respective obligations hereunder; (f) Neither this Agreement nor any statement, report, or other document furnished by the Servicer or the Subservicers pursuant to this Agreement or in connection with the transactions contemplated hereby, including, without limitation, the sale or placement of the Notes, contains any untrue statement of fact provided by or on behalf of 11 the Servicer or omits to state a fact necessary to make the statements provided by or on behalf of the Servicer contained herein or therein not misleading: (g) The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement; and (h) None of the Servicer or the Subservicers is an "investment company" or a company "controlled by an investment company," within the meaning of the Investment Company Act of 1940, as amended. It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.01 shall survive the delivery of the respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf of the Indenture Trustee or to another custodian, as the case may be, and inure to the benefit of the Indenture Trustee. Section 3.02 Representations, Warranties and Covenants of the Depositor. The Depositor hereby represents, warrants and covenants to the Indenture Trustee, the Trust, the Collateral Agent and the Servicer that as of the date of this Agreement or as of such date specifically provided herein: (a) The Depositor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) The Depositor has the corporate power and authority to convey the Mortgage Loans and to execute, deliver and perform, and to enter into and consummate transactions contemplated by this Agreement; (c) This Agreement has been duly and validly authorized, executed and delivered by the Depositor, all requisite corporate action having been taken, and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Depositor, enforceable against the Depositor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); (d) No consent, approval, authorization or order of or registration or filing with, or notice to, any governmental authority or court is required for the execution, delivery and performance of or compliance by the Depositor with this Agreement or the consummation by the Depositor of any of the transactions contemplated hereby, except as have been made on or prior to the Closing Date; (e) None of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i) conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default or results or will result in an acceleration under (A) the charter or bylaws of the Depositor, or (B) of 12 any term, condition or provision of any material indenture, deed of trust, contract or other agreement or instrument to which the Depositor or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii) results or will result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Depositor of any court or governmental authority having jurisdiction over the Depositor or its subsidiaries; or (iii) results in the creation or imposition of any lien, charge or encumbrance which would have a material adverse effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans; (f) There are no actions, suits or proceedings before or against or investigations of, the Depositor pending, or to the knowledge of the Depositor, threatened, before any court, administrative agency or other tribunal, and no notice of any such action, which, in the Depositor's reasonable judgment, might materially and adversely affect the performance by the Depositor of its obligations under this Agreement, or the validity or enforceability of this Agreement; and (g) The Depositor is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency that may materially and adversely affect its performance hereunder. It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.02 shall survive delivery of the respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf of the Indenture Trustee or to another custodian, as the case may be, and shall inure to the benefit of the Indenture Trustee. Section 3.03 Representations, Warranties and Covenants of the Collateral Agent. The Collateral Agent hereby represents, warrants and covenants to the Indenture Trustee, the Trust, the Servicer and the Depositor that as of the date of this Agreement or as of such date specifically provided herein: (a) The Collateral Agent is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America; (b) The Collateral Agent has the corporate power and authority to execute, deliver and perform, and to enter into and consummate transactions contemplated by this Agreement; and (c) This Agreement has been duly and validly authorized, executed and delivered by the Collateral Agent, all requisite corporate action having been taken, and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Collateral Agent, enforceable against the Collateral Agent in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). 13 It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.03 shall survive delivery of the respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf of the Indenture Trustee or to another custodian, as the case may be, and shall inure to the benefit of the Indenture Trustee. Section 3.04 Representations, Warranties and Covenants of the Indenture Trustee. The Indenture Trustee hereby represents, warrants and covenants to the Collateral Agent, the Trust, the Servicer and the Depositor that as of the date of this Agreement or as of such date specifically provided herein: (a) The Indenture Trustee is a banking corporation duly organized, validly existing and in good standing under the laws of the State of New York; (b) The Indenture Trustee has the corporate power and authority to execute, deliver and perform, and to enter into and consummate transactions contemplated by this Agreement; (c) This Agreement has been duly and validly authorized, executed and delivered by the Indenture Trustee, all requisite corporate action having been taken, and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.04 shall survive delivery of the respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf of the Indenture Trustee or to another custodian, as the case may be. ARTICLE IV. THE MORTGAGE LOANS Section 4.01 Representations and Warranties Concerning the Mortgage Loans. With respect to each Mortgage Loan, the Depositor hereby assigns to the Trust, pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the representations, warranties and covenants of the Unaffiliated Seller and the Originators set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. Such representations, warranties and covenants are made or deemed to be made (x) with respect to the Initial Mortgage Loans, as of the Initial Cut-Off Date and (y) with respect to the Subsequent Mortgage Loans, as of the related Subsequent Cut-Off Date. Section 4.02 Purchase and Substitution. (a) It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated 14 Seller's Agreement shall survive the purchase by the Depositor of the Mortgage Loans, the subsequent transfer thereof by the Depositor to the Trust, the subsequent pledge thereof by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Notes Insurer, and the delivery of the Notes to the Noteholders, and shall continue in full force and effect, notwithstanding any restrictive or qualified endorsement on the Mortgage Notes and notwithstanding subsequent termination of this Agreement or the Unaffiliated Seller's Agreement. (b) Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, any Subservicer, the Indenture Trustee, the Collateral Agent, the Note Insurer or a Noteholder of a breach of any of the representations and warranties in Sections 3.01, 3.02 or 3.03 of the Unaffiliated Seller's Agreement which materially and adversely affects the value of the Mortgage Loans or the interest of the Noteholders or the Note Insurer, or which materially and adversely affects the interests of the Note Insurer or the Noteholders in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan (notwithstanding that such representation and warranty was made to the Unaffiliated Seller's or the Originator's best knowledge), the party discovering such breach or failure shall promptly (and in any event within five (5) days of the discovery) give written notice thereof to the others. Within sixty (60) days of the earlier of its discovery or its receipt of notice of any breach of a representation or warranty, the Servicer shall, or shall cause the Unaffiliated Seller or an Originator to, (a) promptly cure such breach in all material respects, (b) purchase such Mortgage Loan on the next succeeding Servicer Distribution Date, in the manner and at the price specified in Section 2.06(b) and this Section 4.02, or (c) remove such Mortgage Loan from the Trust Estate (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in the manner specified in Section 2.06(b) and this Section 4.02. The Collateral Agent shall give prompt written notice to the Indenture Trustee, who shall deliver such notice to the Note Insurer and the Rating Agencies of any repurchase or substitution made pursuant to this Section 4.02 or Section 2.06(b). (c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall cause the Unaffiliated Seller or an Originator, as applicable, to effect such substitution by delivering to the Indenture Trustee a certification, in the form attached hereto as Exhibit F, executed by a Servicing Officer, and the documents described in Sections 2.05(a)(i)-(vi) for such Qualified Substitute Mortgage Loan or Loans. (d) The Servicer shall deposit in the Distribution Account all payments received in connection with such Qualified Substitute Mortgage Loan or Loans after the date of such substitution. Monthly Payments received with respect to Qualified Substitute Mortgage Loan or Loans on or before the date of substitution will be retained by the Unaffiliated Seller. The Trust will own all payments received on the Deleted Mortgage Loan on or before the date of substitution, and the Unaffiliated Seller shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Servicer shall give written notice to the Indenture Trustee, the Collateral Agent and the Note Insurer that such substitution has taken place and shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the 15 Qualified Substitute Mortgage Loan or Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects. (e) [Reserved]; (f) It is understood and agreed that the obligations of the Unaffiliated Seller and the Originators set forth in Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement to, and the Servicer's obligation set forth in this Section 4.02 to cause the Unaffiliated Seller and the Originators to, cure, purchase or substitute for a defective Mortgage Loan, or to indemnify as described in Section 3.05(g) of the Unaffiliated Seller's Agreement, constitute the sole remedies of the Indenture Trustee, the Collateral Agent, the Note Insurer and the Noteholders respecting a breach of the representations and warranties of the Unaffiliated Seller and the Originators set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. (g) Pursuant to Section 3.05(g) of the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the Originators shall be obligated to indemnify the Indenture Trustee, the Trust, the Owner Trustee, the Collateral Agent, the Noteholders and the Note Insurer for any third party claims arising out of a breach by the Unaffiliated Seller or the related Originator of representations or warranties regarding the Mortgage Loans. (h) Pursuant to Section 3.05(h) of the Unaffiliated Seller's Agreement, the Unaffiliated Seller and each of the Originators shall be jointly and severally responsible for any repurchase, cure or substitution obligation of the Unaffiliated Seller or any of the Originators under this Agreement, the Unaffiliated Seller's Agreement or the Indenture. ARTICLE V. ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS Section 5.01 The Servicer. The Servicer shall service and administer the Mortgage Loans in accordance with the Accepted Servicing Practices and shall have full power and authority to do any and all things not inconsistent therewith in connection with such servicing and administration which it may deem necessary or desirable subject to the limitations set forth in this Agreement. The Indenture Trustee shall furnish the Servicer with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered by the Indenture Trustee, to execute and deliver, on behalf of itself, the Noteholders and the Indenture Trustee or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, and to effect such modifications, waivers, indulgences and other like matters as are in its judgment necessary or desirable, with respect to the Mortgage Loans and the Mortgaged Properties and the servicing and administration thereof. The Servicer shall notify the Indenture Trustee of any such waiver, release, discharge, modification, indulgence or other such matter by delivering to the Indenture Trustee an Officer's Certificate certifying that such agreement is in compliance with this Section 5.01 together with the original copy of any written agreement or other document executed in connection therewith, all of which written agreements or documents shall, for all purposes, be considered a part of the 16 related Indenture Trustee's Mortgage File to the same extent as all other documents and instruments constituting a part thereof. Notwithstanding anything in this Agreement to the contrary, the Servicer shall not permit any modification with respect to any Mortgage Loan that would decrease the Mortgage Interest Rate, reduce or increase the principal balance, decrease the lien priority, or change the final maturity date on or of such Mortgage Loan unless (i) the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, imminent and (ii) the Note Insurer consents to such modifications in writing; provided, however, that the Servicer shall be permitted to extend the final maturity date on a Mortgage Loan by 180 days or less without the consent of the Note Insurer. The relationship of the Servicer (and of any successor to the Servicer as servicer under this Agreement) to the Indenture Trustee under this Agreement is intended by the parties to be that of an independent contractor and not that of a joint venturer, partner or agent. Section 5.02 Collection of Certain Mortgage Loan Payments; Collection Account. (a) The Servicer shall make its reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement, follow Accepted Servicing Practices. Consistent with the foregoing, the Servicer may in its discretion waive any assumption fees or other fees which may be collected in the ordinary course of servicing such Mortgage Loans. (b) The Servicer shall establish and maintain, in the name of the Indenture Trustee, the Collection Account, in trust for the benefit of the Noteholders and the Note Insurer. The Collection Account shall be established and maintained as an Eligible Account. (c) The Servicer shall deposit in the Collection Account any amounts representing Monthly Payments on the Mortgage Loans due or to be applied as of a date after the Cut-Off Date, and thereafter, on each Business Day (except as otherwise permitted herein), the following payments and collections received or made by it (other than in respect of principal collected and interest due on the Mortgage Loans on or before the Cut-Off Date): (i) payments of interest on the Mortgage Loans; (ii) payments of principal of the Mortgage Loans; (iii) the Loan Repurchase Price of Mortgage Loans repurchased pursuant to Sections 2.06, 4.02 or 5.05; (iv) the Substitution Adjustment received in connection with Mortgage Loans for which Qualified Substitute Mortgage Loans are received pursuant to Sections 2.06, 4.02 and 3.03; (v) all Liquidation Proceeds; and (vi) all Insurance Proceeds (including, for this purpose, any amounts required to be deposited by the Servicer pursuant to Section 5.04 hereof). 17 It is understood that the Servicer need not deposit amounts representing fees, prepayment premiums, late payment charges or extension or other administrative charges payable by Mortgagors, or amounts received by the Servicer for the account of Mortgagors for application towards the payment of taxes, insurance premiums, assessments and similar items. (d) The Indenture Trustee shall invest any funds in the Collection Account in Permitted Investments as directed by the Servicer, which shall mature not later than the Business Day next preceding the Servicer Distribution Date next following the date of such investment (except that any investment held by the Indenture Trustee may mature on such Servicer Distribution Date) and shall not be sold or disposed of prior to its maturity. All net income and gain realized from any such investment shall be for the benefit of the Servicer and shall be subject to its withdrawal or order on a Servicer Distribution Date. The Servicer shall deposit from its own funds the amount of any loss, to the extent not offset by investment income or earnings, in the Collection Account upon the realization of such loss. Section 5.03 Permitted Withdrawals from the Collection Account. The Servicer may make withdrawals from the Collection Account, on or prior to any Servicer Distribution Date, for the following purposes: (a) to reimburse the Servicer for Liquidation Expenses theretofore incurred in respect of any Mortgage Loan in an amount not to exceed the amount of the sum of the related Insurance Proceeds and Liquidation Proceeds deposited in the Collection Account pursuant to Section 5.02(c)(v)-(vi); (b) to reimburse the Servicer for amounts expended by it pursuant to Section 5.04 in good faith in connection with the restoration of damaged property, in an amount not to exceed the amount of the related Insurance Proceeds and Liquidation Proceeds (net of withdrawals pursuant to Section 5.03(a)) and amounts representing proceeds of other insurance policies covering the property subject to the related Mortgage deposited in the Collection Account pursuant to Section 5.02(c)(v)-(vi); (c) to pay to the Unaffiliated Seller amounts received in respect of any Defective Mortgage Loan purchased or substituted for by the Unaffiliated Seller to the extent that the distribution of any such amounts on the Servicer Distribution Date upon which the proceeds of such purchase are distributed would make the total amount distributed in respect of any such Mortgage Loan on such Servicer Distribution Date greater than the Loan Repurchase Price or the Substitution Adjustment therefor; (d) to reimburse the Servicer for unreimbursed Servicing Advances, without interest, with respect to the Mortgage Loans for which it has made a Servicing Advance, from subsequent collections with respect to interest on such Mortgage Loans and from Liquidation Proceeds, Insurance Proceeds and/or the Loan Repurchase Price or Substitution Adjustment of or relating to such Mortgage Loans; (e) to reimburse the Servicer for any Periodic Advances determined in good faith to have become Nonrecoverable Advances, such reimbursement to be made from any funds in the Collection Account; 18 (f) to withdraw any amount received from a Mortgagor that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction; (g) to withdraw any funds deposited in the Collection Account that were not required to be deposited therein; and (h) to pay the Servicer the Servicing Compensation pursuant to Section 5.08 hereof to the extent not retained or paid. The Servicer shall keep and maintain a separate accounting for each Mortgage Loan for the purpose of accounting for withdrawals from the Collection Account pursuant to this Section 5.03. Section 5.04 Hazard Insurance Policies; Property Protection Expenses. (a) The Servicer shall cause to be maintained for each Mortgage Loan a hazard insurance policy with extended coverage which contains a standard mortgagee's clause with an appropriate endorsement in an amount equal to the lesser of (x) the maximum insurable value of the related Mortgaged Property or (y) the sum of the Principal Balance of such Mortgage Loan plus the outstanding balance of any mortgage loan senior to such Mortgage Loan, but in no event shall such amount be less than is necessary to prevent the Mortgagor from becoming a coinsurer thereunder. The Servicer shall also maintain on property acquired upon foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended coverage in an amount which is at least equal to the lesser of (i) the maximum insurable value from time to time of the improvements which are a part of such property or (ii) the sum of the Principal Balance of such Mortgage Loan and the principal balance of any mortgage loan senior to such Mortgage Loan at the time of such foreclosure plus accrued interest and the good-faith estimate of the Servicer of related Liquidation Expenses to be incurred in connection therewith. Amounts collected by the Servicer under any such policies shall be deposited in the Collection Account to the extent that they constitute Liquidation Proceeds or Insurance Proceeds. Each hazard insurance policy shall contain a standard mortgage clause naming the Originator, its successors and assigns, as mortgagee. The Servicer shall be under no obligation to require that any Mortgagor maintain earthquake or flood or other additional insurance and shall be under no obligation itself to maintain any such additional insurance on property acquired in respect of a Mortgage Loan, other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance. (b) If the Servicer shall obtain and maintain a blanket policy issued by an insurer acceptable to the Rating Agencies and the Note Insurer insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its obligations as set forth in Section 5.04(a), it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property a policy complying with Section 5.04(a), and there shall have been a loss which would have been covered by such policy, deposit in the Collection Account the amount not otherwise payable under the blanket policy because of such deductible clause. 19 (c) If the Mortgaged Property or REO Property is located at the time of origination of the Mortgage Loan in a federally designated special flood hazard area (and if the flood insurance policy referenced herein has been made available), the Servicer will cause to be maintained flood insurance in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the sum of the Principal Balance of the related Mortgage Loan and the principal balance of the related first lien, if any, (ii) the maximum insurable value of the related Mortgaged Property, and (iii) the maximum amount of such insurance available for the related Mortgaged Property under the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating in such program). Section 5.05 Assumption and Modification Agreements. In any case in which a Mortgaged Property has been or is about to be conveyed by the Mortgagor, the Servicer shall exercise its right to accelerate the maturity of the related Mortgage Loan and require that the Principal Balance thereof be paid in full on or prior to such conveyance by the Mortgagor under any "due-on-sale" clause applicable thereto. If such "due-on-sale" clause, by its terms, is not operable or the Servicer is prevented, as provided in the last paragraph of this Section 5.05, from enforcing any such clause, the Servicer is authorized, subject to the consent of the Note Insurer, to take or enter into an assumption and modification agreement from or with the Person to whom such property has been or is about to be conveyed, pursuant to which such Person becomes liable under the Mortgage Note and the Mortgagor remains liable thereon or, if the Servicer in its reasonable judgment finds it appropriate, is released from liability thereon. The Servicer shall notify the Indenture Trustee and the Collateral Agent that any assumption and modification agreement has been completed by delivering to the Indenture Trustee, the Collateral Agent and the Note Insurer an Officer's Certificate certifying that such agreement is in compliance with this Section 5.05 together with the original copy of such assumption and modification agreement. Any such assumption and modification agreement shall, for all purposes, be considered a part of the related Mortgage File to the same extent as all other documents and instruments constituting a part thereof. In connection with any such agreement, the then current Mortgage Interest Rate thereon shall not be increased or decreased. Any fee collected by the Servicer for entering into any such agreement will be retained by the Servicer as additional servicing compensation. At its sole election, the Servicer may purchase from the Trust any Mortgage Loan that has been assumed in accordance with this Section 5.05 within one month after the date of such assumption at a price equal to the greater of (i) the fair market value of such Mortgage Loan (as determined by the Servicer in its good faith judgment) and (ii) the Loan Repurchase Price. Such amount, if any, shall be deposited into the Collection Account in the Due Period in which such repurchase is made. Notwithstanding the foregoing paragraph of this Section 5.05 or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan, or transfer of any Mortgaged Property without the assumption thereof, by operation of law or any assumption or transfer which the Servicer reasonably believes it may be restricted by law from preventing for any reason whatsoever. Section 5.06 Realization Upon Defaulted Mortgage Loans. (a) The Servicer shall foreclose upon or otherwise comparably convert to ownership Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no 20 satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 5.02(a). Prior to conducting any sale in a foreclosure proceeding or accepting a deed-in-lieu of foreclosure with respect to any Mortgaged Property, the Servicer shall cause an environmental review to be performed, in accordance with Accepted Servicing Practices on the Mortgaged Property by a company such as Equifax, Inc. or Toxicheck. If such review reveals that the Mortgaged Property has on it, under it or is near hazardous or toxic material or waste or reveals any other environmental problem, the Servicer shall not foreclose or accept a deed-in-lieu of foreclosure, without the prior written consent of the Note Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related senior mortgage loan, the advancing of funds to correct such default) and procedures which are consistent with Accepted Servicing Practices as it shall deem necessary or advisable and as shall be normal and usual in its general first and second mortgage loan servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related senior mortgage loan or restoration of any property unless, in the reasonable judgment of the Servicer, such expenses will be recoverable from Liquidation Proceeds. (b) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Indenture Trustee, or to its nominee, on behalf of Noteholders and the Note Insurer. (c) Any Insurance Proceeds or Liquidation Proceeds received with respect to a Mortgage Loan or REO Property (other than received in connection with a purchase by the Trust Certificateholders of all the Mortgage Loans and REO Properties in the Trust Estate pursuant to Section 10.01 of the Indenture) will be applied in the following order of priority, in each case to the extent of Available Funds: first, to pay the Servicer any accrued and unpaid Servicing Fees relating to such Mortgage Loan; second, to reimburse the Servicer or any Subservicer for any related unreimbursed Servicing Advances, and any related unreimbursed Periodic Advances theretofore funded by the Servicer or any Subservicer from its own funds, in each case, with respect to the related Mortgage Loan; third, to accrued and unpaid interest on the Mortgage Loan, at the Mortgage Interest Rate (or at such lesser rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act) on the Principal Balance of such Mortgage Loan, to the date such Mortgage Loan is determined to be a Liquidated Mortgage Loan if it is a Liquidated Mortgage Loan, or to the Due Date in the Due Period prior to the Distribution Date on which such amounts are to be distributed if such determination has not yet been made, minus any unpaid Servicing Fees with respect to such Mortgage Loan; fourth, to the extent of the Principal Balance of the Mortgage Loan outstanding immediately prior to the receipt of such proceeds, as a recovery of principal of the related Mortgage Loan; and fifth, to any prepayment or late payment charges or penalty interest payable in connection with the receipt of such proceeds and to all other fees and charges due and payable with respect to such Mortgage Loan. The amount of any gross Insurance Proceeds and Liquidation Proceeds received with respect to any Mortgage Loan or REO Property minus the amount of any unreimbursed Servicing Advances, unreimbursed Periodic Advances or unpaid Servicing Fees, in each case, with respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with respect to such Mortgage Loan or REO Property. 21 Section 5.07 Indenture Trustee to Cooperate. Upon the payment in full of the Principal Balance of any Mortgage Loan, the Servicer will notify the Indenture Trustee and the Collateral Agent by a certification (which certification shall include a statement to the effect that all amounts received in connection with such payment which are required to be deposited in the Collection Account pursuant to Section 5.02 have been so deposited) of a Servicing Officer. Upon any such payment in full, the Servicer is authorized to execute, pursuant to the authorization contained in Section 5.01, an instrument of satisfaction regarding the related Mortgage, which instrument of satisfaction shall be recorded by the Servicer if required by applicable law and be delivered to the Person entitled thereto, it being understood and agreed that no expenses incurred in connection with such instrument of satisfaction shall be reimbursed from the Collection Account. From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan, the Collateral Agent shall, upon request of the Servicer and delivery to the Collateral Agent of a Request for Release signed by a Servicing Officer, release the related Mortgage File to the Servicer and shall execute such documents as shall be necessary for the prosecution of any such proceedings. Such Request for Release shall obligate the Servicer to return the Indenture Trustee's Mortgage File to the Collateral Agent when the need therefor by the Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that hereinabove specified, the Request for Release shall be released by the Collateral Agent to the Servicer. Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer. On each Distribution Date, the Servicer shall be entitled to receive, and the Indenture Trustee shall pay, out of collections on the Mortgage Loans for the Due Period, as servicing compensation for such Due Period, an amount (the "Monthly Servicing Fee") equal to the product of one-twelfth of the Servicing Fee Rate and the aggregate outstanding Principal Balance of each Pool of Mortgage Loans as of the beginning of such Due Period. Additional servicing compensation in the form of assumption fees, late payment charges or extension and other administrative charges shall be retained by the Servicer. The Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder (including payment of all fees and expenses of the Subservicer, payment of the Indenture Trustee Fee and payment of the Collateral Agent Fee to the extent that monies in the Collection Account are insufficient therefor, as provided in Section 6.16 of the Indenture and Section 9.05 hereof, and all other fees and expenses not expressly stated hereunder to be payable by or from another source) and shall not be entitled to reimbursement therefor except as specifically provided herein. Section 5.09 Annual Statement as to Compliance. The Servicer will deliver to the Indenture Trustee, the Collateral Agent, the Rating Agencies, the Note Insurer and each Noteholder, on or before April 30 of each year, beginning April 30, 2000, an Officer's Certificate of the Servicer stating that (a) a review of the activities of the Servicer during the preceding calendar year and of its performance under this Agreement has been made under such officer's supervision and (b) to the best of such officer's knowledge, based on such review, the Servicer has fulfilled all its material obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. Section 5.10 Annual Independent Public Accountants' Servicing Report. On or before April 30 of each year, beginning April 30, 2000, the Servicer at its expense shall cause a 22 firm of independent public accountants that is a member of the American Institute of Certified Public Accountants (who may also render other services to the Servicer) to furnish a report to the Indenture Trustee, the Collateral Agent, the Rating Agencies and each Noteholder to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans under servicing agreements (including this Agreement) substantially similar to this Agreement, and that such examination, which has been conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers (to the extent that the procedures in such audit guide are applicable to the servicing obligations set forth in such agreements), has disclosed no items of noncompliance with the provisions of this Agreement which, in the opinion of such firm, are material, except for such items of noncompliance as shall be set forth in such report. Section 5.11 Access to Certain Documentation. The Servicer shall permit the designated agents or representatives of each Noteholder, the Note Insurer, the Collateral Agent and the Indenture Trustee (i) to examine and make copies of and abstracts from all books, records and documents (including computer tapes and disks) in the possession or under the control of the Servicer relating to the Mortgage Loans and (ii) to visit the offices and properties of the Servicer for the purpose of examining such materials and to discuss matters relating to the Mortgage Loans and the Servicer's performance under this Agreement with any of the officers or employees of the Servicer having knowledge thereof and with the independent public accountants of the Servicer (and by this provision the Servicer authorizes its accountants to discuss their respective finances and affairs), all at such reasonable times, as often as may be reasonably requested and without charge to such Noteholder, the Note Insurer, the Collateral Agent or the Indenture Trustee. Section 5.12 Maintenance of Fidelity Bond. The Servicer shall during the term of its service as Servicer maintain in force a fidelity bond and errors and omissions insurance in respect of its officers, employees or agents. Such bond and insurance shall comply with the requirements from time to time of the FNMA for Persons performing servicing for mortgage loans purchased by such association. Section 5.13 The Subservicers. The parties acknowledge that the Servicer intends to appoint the Subservicers as the Servicer's agents for the purpose of servicing on the Servicer's behalf such of the Mortgage Loans as were originated in the States of New Jersey, Pennsylvania and New York. The Servicer agrees to cause the Subservicers to service such Mortgage Loans in a manner consistent with the Accepted Servicing Practices set forth in this Agreement, and agrees that receipt by the Subservicers of any and all amounts which by the terms hereof are required to be deposited in the Collection Account shall constitute receipt thereof by the Servicer for all purposes hereof as of the date so received by the Subservicers. Notwithstanding such designation of the Subservicers, the Servicer agrees that it is, and it shall remain, fully obligated under the terms hereof as Servicer with respect to all such Mortgage Loans, and nothing herein shall relieve or release the Servicer from its obligations to the other parties hereto to service such Mortgage Loans in the manner provided in this Agreement. Section 5.14 Reports to the Indenture Trustee; Collection Account Statements. Not later than fifteen (15) days after each Distribution Date, the Servicer shall provide to the Indenture Trustee, the Collateral Agent and the Note Insurer a statement, certified by a Servicing 23 Officer, setting forth the status of the Collection Account as of the close of business on the related Distribution Date, stating that all distributions required by this Agreement to be made by the Servicer on behalf of the Indenture Trustee have been made (or if any required distribution has not been made by the Servicer, specifying the nature and status thereof) and showing, for the period covered by such statement, the aggregate of deposits into and withdrawals from the Collection Account for each category of deposit specified in Section 5.02 and each category of withdrawal specified in Section 5.03 and the aggregate of deposits into the Collection Account as specified in Section 6.01. Such statement shall also state the aggregate unpaid principal balance of all the Mortgage Loans as of the close of business on the last day of the month preceding the month in which such Distribution Date occurs. Copies of such statement shall be provided by the Indenture Trustee to any Noteholder upon request. Section 5.15 Optional Purchase of Defaulted Mortgage Loans. (a) Subject to Section 5.15(b), the Unaffiliated Seller or any Affiliate of the Unaffiliated Seller, in its sole discretion, shall have the right to elect (by written notice sent to the Servicer, the Indenture Trustee and the Note Insurer), but shall not be obligated, to purchase for its own account from the Trust any Mortgage Loan which is ninety (90) days or more Delinquent in the manner and at the Loan Purchase Price (except that the amount described in clause (ii) of the definition of Loan Purchase Price shall in no case be net of the Servicing Fee). The purchase price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account and the Collateral Agent, upon the Indenture Trustee's receipt of such deposit, shall release or cause to be released to the purchaser of such Mortgage Loan the related Indenture Trustee's Mortgage File and shall execute and deliver such instruments of transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan shall succeed to all the Indenture Trustee's right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and all security and documents, free of any further obligation to the Indenture Trustee, the Collateral Agent, the Note Insurer or the Noteholders with respect thereto. (b) After the Unaffiliated Seller or an Affiliate of the Unaffiliated Seller has repurchased defaulted Mortgage Loans in a Aggregate Principal Balance equal to 1% of the Maximum Collateral Amount, then notwithstanding the foregoing, unless the Note Insurer consents, any such Unaffiliated Seller or Affiliate of the Unaffiliated Seller may only exercise its option pursuant to this Section 5.15 with respect to the Mortgage Loan or Mortgage Loans that have been Delinquent for the longest period at the time of such repurchase. Any request by the Unaffiliated Seller or Affiliate to the Note Insurer for consent to repurchase Mortgage Loans that are not the most Delinquent shall be accompanied by a description of the Mortgage Loans that have been Delinquent longer than the Mortgage Loan or Mortgage Loans the Unaffiliated Seller or such Affiliate proposes to repurchase. If the Note Insurer fails to respond to such request within ten (10) Business Days after receipt thereof, the Unaffiliated Seller or such Affiliate may repurchase the Mortgage Loan or Mortgage Loans proposed to be repurchased without the consent of, or any further action by, the Note Insurer. Notice to the Note Insurer shall be delivered in accordance with the terms of the Insurance and Indemnity Agreement. 24 Section 5.16 Reports to be Provided by the Servicers. (a) Two (2) Business Days prior to each Servicer Distribution Date, the Servicer shall deliver to the Indenture Trustee a Servicer Remittance Report for such Distribution Date, setting forth the information required in the definition of "Indenture Trustee's Remittance Report." (b) On each Servicer Distribution Date, the Servicer shall deliver to the Indenture Trustee and the Note Insurer (via E-mail at rmgtapes@fsa.com) the following information with respect to all Mortgage Loans as well as a break out as to (x) consumer purpose and business purpose Mortgage Loans and (y) each Mortgage Loan Group, in each case, as of the close of business on the last Business Day of the prior calendar month (except as otherwise provided in clause (v) below): (i) the total number of Mortgage Loans and the Aggregate Principal Balances thereof, together with the number, Aggregate principal balances of such Mortgage Loans and the percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans (A) 31-59 days Delinquent, (B) 60-89 days Delinquent and (C) 90 or more days Delinquent; (ii) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the aggregate Principal Balance of all Mortgage Loans in foreclosure proceedings and the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage Loans also included in any of the statistics described in the foregoing clause (i); (iii) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans relating to Mortgagors in bankruptcy proceedings and the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage Loans also included in any of the statistics described in the foregoing clause (i); (iv) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans relating to REO Properties and the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage Loans also included in any of the statistics described in the foregoing clause (i); (v) the weighted average Mortgage Interest Rate as of the Due Date occurring in the Due Period related to such Distribution Date; 25 (vi) the weighted average remaining term to stated maturity of all Mortgage Loans; (vii) the book value of any REO Property; (viii) the Cumulative Loan Losses and the aggregate Cumulative Loan Losses since the Closing Date; and (ix) the total number of Mortgage Loans and the Pool Principal Balance. (c) In connection with the transfer of the Notes, the Indenture Trustee on behalf of any Noteholder may request that the Servicer make available to any prospective Noteholder annual audited financial statements of the Servicer for one or more of the most recently completed five (5) fiscal years for which such statements are publicly available, which request shall not be unreasonably denied or unreasonably delayed. Such annual audited financial statements also shall be made available to the Note Insurer upon request. (d) The Servicer also agrees to make available on a reasonable basis to the Note Insurer or any prospective Noteholder a knowledgeable financial or accounting officer for the purpose of answering reasonable questions respecting recent developments affecting the Servicer or the financial statements of the Servicer and to permit the Note Insurer or any prospective Noteholder to inspect the Servicer's servicing facilities during normal business hours for the purpose of satisfying the Note Insurer or such prospective Noteholder that the Servicer has the ability to service the Mortgage Loans in accordance with this Agreement. Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be entitled to receive with respect to each Mortgage Loan and each Distribution Date shall be offset on such Distribution Date by an amount equal to the Prepayment Interest Shortfall with respect to such Mortgage Loan to the extent that it is the subject of Principal Prepayments during the month preceding the month of such Distribution Date. The amount of any offset against the Monthly Servicing Fee with respect to any Distribution Date under this Section 5.17 shall be limited to the Monthly Servicing Fee otherwise payable to the Servicer (without adjustment on account of Prepayment Interest Shortfalls) with respect to such Mortgage Loan, and the rights of the Noteholders to the offset of the aggregate Prepayment Interest Shortfalls against the Monthly Servicing Fee shall not be cumulative. Section 5.18 Periodic Advances; Special Advance. (a) If, on any Servicer Distribution Date, the Servicer determines that any Monthly Payments due on the Due Date immediately preceding such Servicer Distribution Date have not been received as of the end of the related Due Period, the Servicer shall determine the amount of any Periodic Advance required to be made with respect to the related Distribution Date. The Servicer shall, one (1) Business Day after such Servicer Distribution Date, deliver a magnetic tape or diskette to the Indenture Trustee indicating the payment status of each Mortgage Loan as of such Servicer Distribution Date. The Servicer shall include in the amount to be deposited in the Collection Account on such Servicer Distribution Date an amount equal to the Periodic Advance, if any, which deposit may be made in whole or in part from funds in the Collection Account being held for future distribution or withdrawal on or in connection with Distribution Dates in subsequent months. Any funds being held 26 for future distribution to Noteholders and so used shall be replaced by the Servicer from its own funds by deposit in the Collection Account on or before the Business Day preceding any such future Servicer Distribution Date to the extent that funds in the Collection Account on such Servicer Distribution Date shall be less than payments to Noteholders required to be made on such date. The Servicer shall designate on its records the specific Mortgage Loans and related installments (or portions thereof) as to which such Periodic Advance shall be deemed to have been made, such determination being conclusive for purposes of withdrawals from the Collection Account pursuant to Section 5.03 hereof. (b) In addition to the Periodic Advances the Servicer shall make special advances ("Special Advances") on the Servicer Distribution Date occurring in April 1999, of $140,507.43, with respect to interest on Mortgage Loans in Pool I not having their first payment due until after March 1999 and $139,098.50 with respect to interest on Mortgage Loans in Pool II not having their first payment due until after March 1999. In addition to the Periodic Advances, the Servicer shall make a Special Advance on the Servicer Distribution Date occurring in May 1999, of $1,893.23, with respect to interest on Mortgage Loans in Pool I not having their first payment due until after April 1999. The Special Advances shall be made without regard to recoverability, and shall not be reimbursable. In no event shall the Indenture Trustee, as successor Servicer, be liable for the payment of the Special Advances. On each Subsequent Transfer Date, the Servicer will make the Special Advance set forth in the related subsequent Pledge Agreement. Section 5.19 Indemnification; Third Party Claims. (a) The Servicer agrees to indemnify and to hold each of the Trust, the Owner Trustee, the Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller, the Note Insurer and each Noteholder harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Trust, the Owner Trustee, the Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller, the Note Insurer and any Noteholder may sustain in any way related to the failure of the Servicer to perform its duties and service the Mortgage Loans in compliance with the terms of this Agreement and the other Basic Document. Each indemnified party and the Servicer shall immediately notify the other indemnified parties if a claim is made by a third party with respect to this Agreement and the other Basic Documents, and the Servicer shall assume the defense of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Trust, the Owner Trustee, the Depositor, the Servicer, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller, the Note Insurer and/or a Noteholder in respect of such claim. The Indenture Trustee shall reimburse the Servicer in accordance with Section 5.08 hereof, out of collections on the Mortgage Loans for the Due Period, for all amounts advanced by it pursuant to the preceding sentence except to the extent that the claim relates directly to the failure of the Servicer to service and administer the Mortgages in compliance with the terms of this Agreement; provided, that the Servicer's indemnity hereunder shall not be in any manner conditioned on the availability of funds for such reimbursement. The obligations of the Servicer under this Section 5.19 arising 27 prior to any resignation or termination of the Servicer hereunder shall survive the resignation or termination of the Servicer (b) The Indenture Trustee may, if necessary, reimburse the Servicer from amounts otherwise distributable on the related Trust Certificates for all amounts advanced by it pursuant to Section 4.04(a)(ii) of the Unaffiliated Seller's Agreement, except to the extent that the claim relates directly to the failure of the Servicer, if it is the Unaffiliated Seller, or is an Affiliate of the Unaffiliated Seller, to perform its obligations to service and administer the Mortgages in compliance with the terms of the Unaffiliated Seller's Agreement and this Agreement, or the failure of the Unaffiliated Seller to perform its duties in compliance with the terms of this Agreement. (c) The Indenture Trustee shall reimburse the Unaffiliated Seller from amounts otherwise distributable on the related Trust Certificates for all amounts advanced by the Unaffiliated Seller pursuant to the second sentence of Section 4.04(a)(ii) of the Unaffiliated Seller's Agreement except when the relevant claim relates directly to the failure of the Unaffiliated Seller to perform its duties in compliance with the terms of the Unaffiliated Seller's Agreement. Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Servicer. (a) The Servicer will keep in full effect its existence, rights and franchises as a corporation, will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction necessary to protect the validity and enforceability of this Agreement or any of the Mortgage Loans and to perform its duties under this Agreement and will otherwise operate its business so as to cause the representations and warranties under Section 3.01 to be true and correct at all times under this Agreement. (b) Any Person into which the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer, shall be an established mortgage loan servicing institution that has a net worth of at least $15,000,000 and is a Permitted Transferee, and in all events shall be the successor of the Servicer without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. The Servicer shall send notice of any such merger or consolidation to the Owner Trustee, the Indenture Trustee, the Collateral Agent and the Note Insurer. Section 5.21 Assignment of Agreement by Servicer; Servicer Not to Resign. The Servicer shall not assign this Agreement nor resign from the obligations and duties hereby imposed on it except by mutual consent of the Trust, the Depositor, the Servicer, the Unaffiliated Seller, the Note Insurer, the Collateral Agent and the Indenture Trustee or upon the determination that the Servicer's duties hereunder are no longer permissible under applicable law and that such incapacity cannot be cured by the Servicer without incurring, in the reasonable judgment of the Note Insurer, unreasonable expense. Any such determination that the Servicer's duties hereunder are no longer permissible under applicable law permitting the resignation of the Servicer shall be evidenced by a written Opinion of Counsel (who may be counsel for the Servicer) to such effect delivered to the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller, the Trust, the Depositor and the Note Insurer. No such resignation shall become effective 28 until the Indenture Trustee or a successor appointed in accordance with the terms of this Agreement has assumed the Servicer's responsibilities and obligations hereunder in accordance with Section 7.02. The Servicer shall provide the Indenture Trustee, the Collateral Agent, the Rating Agencies and the Note Insurer with 30 days' prior written notice of its intention to resign pursuant to this Section 5.21. Section 5.22 Periodic Filings with the Securities and Exchange Commission; Additional Information. The Indenture Trustee shall prepare or cause to be prepared for filing with the Commission (other than the initial Current Report on Form 8-K to be filed by the Depositor in connection with the issuance of the Notes) any and all reports, statements and information respecting the Trust and/or the Notes required to be filed, and shall solicit any and all proxies of the Noteholders whenever such proxies are required to be solicited, pursuant to the Securities Exchange Act of 1934, as amended. The Depositor shall promptly file, and exercise its reasonable best efforts to obtain a favorable response to, no-action requests with, or other appropriate exemptive relief from, the Commission seeking the usual and customary exemption from such reporting requirements granted to issuers of securities similar to the Notes. Fees and expenses incurred by the Indenture Trustee in connection with the foregoing shall be reimbursed pursuant to Section 6.16 of the Indenture and shall not be paid by the Trust. The Servicer and the Depositor each agree to promptly furnish to the Indenture Trustee, from time to time upon request, such further information, reports and financial statements as the Indenture Trustee deems appropriate to prepare and file all necessary reports with the Commission. ARTICLE VI. APPLICATION OF FUNDS Section 6.01 Deposits to the Distribution Account. On each Servicer Distribution Date, the Servicer shall cause to be deposited in the Distribution Account, from funds on deposit in the Collection Account, (a) an amount equal to the Servicer Remittance Amount and (b) Net Foreclosure Profits, if any with respect to the related Distribution Date, minus any portion thereof payable to the Servicer pursuant to Section 5.03. On each Servicer Distribution Date, the Servicer shall also deposit into the Distribution Account any Periodic Advances with respect to the related Distribution Date calculated in accordance with Section 5.18 and any amounts required to be deposited in connection with a Subsequent Mortgage Loan pursuant to Section 2.14(b) of the Indenture; on the Servicer Distribution Date occurring in April 1999, the Servicer also will deposit the related Special Advance pursuant to Section 5.18(b). Section 6.02 Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of all money and other property payable to or receivable by the Indenture Trustee pursuant to this Agreement, including (a) all payments due on the Mortgage Loans in accordance with the respective terms and conditions of such Mortgage Loans and required to be paid over to the Indenture Trustee by the Servicer or by any Subservicer and (b) Insured Payments. The Indenture Trustee shall hold all such money and property received by it, as part of the Trust Estate and shall apply it as provided in the Indenture. 29 Section 6.03 Application of Principal and Interest. In the event that Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the Principal Balance of the related Mortgage Loan plus accrued interest thereon, or any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage Loan, such Net Liquidation Proceeds or partial payment shall be applied to payment of the related Mortgage Note as provided therein, and if not so provided, first to interest accrued at the Mortgage Interest Rate and then to principal. Section 6.04 Information Concerning the Mortgage Loans. No later than 12:00 noon Pennsylvania time on the fourth Business Day preceding each Distribution Date, the Servicer shall deliver to the Indenture Trustee a report in computer-readable form containing such information as to each Mortgage Loan and as to each Mortgage Loan Pool as of such Distribution Date and such other information as the Indenture Trustee shall reasonably require. Section 6.05 Compensating Interest. Not later than the close of business on the third Business Day prior to the Distribution Date, the Servicer shall remit to the Indenture Trustee (without right to reimbursement therefor) for deposit into the related Distribution Account, an amount equal to, for each Mortgage Loan, the lesser of (a) the Prepayment Interest Shortfall for such Mortgage Loan for the related Distribution Date resulting from Principal Prepayments during the related Due Period and (b) its Monthly Servicing Fees with respect to such Mortgage Loan received in the related Due Period and shall not have the right to reimbursement therefor (the "Compensating Interest"). Section 6.06 Effect of Payments by the Note Insurer; Subrogation. Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest on the Notes which is made with moneys received pursuant to the terms of the Note Insurance Policy shall not be considered payment of the Notes from the Trust Estate. The Depositor, the Servicer, the Trust, the Collateral Agent and the Indenture Trustee acknowledge and agree, that without the need for any further action on the part of the Note Insurer, the Depositor, the Servicer, the Trust, the Collateral Agent, the Indenture Trustee or the Note Registrar (a) to the extent the Note Insurer makes payments, directly or indirectly, on account of principal of or interest on the Notes to the Holders of such Notes, the Note Insurer will be fully subrogated to, and each Noteholder, the Servicer, the Depositor, the Trust, the Collateral Agent and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust Estate, including, without limitation, any amounts due to the Noteholders in respect of securities law violations arising from the offer and sale of the Notes, and (b) the Note Insurer shall be paid such amounts from the sources and in the manner provided herein for the payment of such amounts and as provided in the Insurance Agreement. The Indenture Trustee, the Collateral Agent and the Servicer shall cooperate in all respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer's rights or interests under this Agreement without limiting the rights or affecting the interests of the Holders as otherwise set forth herein. 30 ARTICLE VII. SERVICER DEFAULT Section 7.01 Servicer Events of Default. (a) The following events shall each constitute a "Servicer Event of Default" hereunder: (i) any failure by the Servicer to remit to the Indenture Trustee any payment required to be made by the Servicer under the terms of this Agreement (other than Servicing Advances covered by clause (ii) below), which continues unremedied for one (1) Business Day after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer and the Note Insurer by the Indenture Trustee or to the Servicer and the Indenture Trustee by the Note Insurer or Noteholders of Notes evidencing Percentage Interests of at least 25%; (ii) the failure by the Servicer to make any required Servicing Advance, which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Indenture Trustee or to the Servicer and the Indenture Trustee by any Noteholder or the Note Insurer; (iii) any failure on the part of the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer contained in this Agreement, or the failure of any representation and warranty made pursuant to Section 3.01(a) hereof to be true and correct which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Indenture Trustee or to the Servicer and the Indenture Trustee by any Noteholder or the Note Insurer; (iv) a decree or order of a court or agency or supervisory authority having jurisdiction in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or for the appointment of a conservator or receiver or liquidation in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force, undischarged or unstayed for a period of sixty (60) days; (v) the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of the Servicer's property; (vi) the Servicer shall admit in writing its inability generally to pay its debts as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; 31 (vii) the Note Insurer shall notify the Indenture Trustee of any "event of default" under the Insurance Agreement; (viii) if on any Distribution Date the Rolling Six Month Delinquency Rate exceeds 12.75% of the aggregate outstanding Principal Balance for the Mortgage Loans; (ix) if on any Distribution Date, commencing in March 2000, the Twelve Month Loss Amount exceeds 1.75% of the aggregate outstanding Principal Balance for the Mortgage Loans, as of the close of business on the first day of the twelfth preceding calendar month; (x) if (a) on any Distribution Date occurring before March 1, 2000, the aggregate Cumulative Loan Losses since the Initial Cut-Off Date exceed 1.00% of the Original Pool Principal Balance, (b) on any Distribution Date on or after March 1, 2000 and before March 1, 2001, the aggregate Cumulative Loan Losses since the Initial Cut-Off Date exceed 1.50% of the Original Pool Principal Balance, (c) on any Distribution Date on or after March 1, 2001 and before March 1, 2002, the aggregate Cumulative Loan Losses since the Initial Cut-Off Date exceed 2.25% of the Original Pool Principal Balance, (d) on any Distribution Date on or after March 1, 2002 and before December 1, 2003, the aggregate Cumulative Loan Losses since the Initial Cut-Off Date exceed 3.00% of the Original Pool Principal Balance, or (e) on any Distribution Date on or after March 1, 2003, the aggregate Cumulative Loan Losses since the Initial Cut-Off Date exceed 3.75% of the Original Pool Principal Balance; (xi) the occurrence of an Event of Default under the Indenture; or (xii) a Servicer Extension Notice shall not have been delivered as set forth in Section 8.04 hereof. (b) So long as a Servicer Event of Default shall have occurred and not have been remedied: (x) with respect solely to Section 7.01(a)(i), if such payment is in respect of Periodic Advances or Compensating Interest owing by the Servicer and such payment is not made by 12:00 noon New York time on the second Business Day prior to the applicable Distribution Date, the Indenture Trustee, upon receipt of written notice or discovery by a Responsible Officer of such failure, shall give immediate telephonic and facsimile notice of such failure to a Servicing Officer of the Servicer and to the Note Insurer and the Indenture Trustee shall, with the consent of the Note Insurer, terminate all of the rights and obligations of the Servicer under this Agreement and the Indenture Trustee, or a successor Servicer appointed in accordance with Section 7.02, shall immediately make such Periodic Advance or payment of Compensating Interest and assume, pursuant to Section 7.02 hereof, the duties of a successor Servicer; (y) with respect to that portion of Section 7.01(a)(i) not referred to in the preceding clause (x) and with respect to clauses (ii), (iii), (iv), (v), (vi) and (vii) of Section 7.01, the Indenture Trustee shall, but only at the direction of the Note Insurer or the Majority Noteholders, by notice in writing to the Servicer and a Responsible Officer of the Indenture Trustee and subject to the prior written consent of the Note Insurer, in the case of any removal at the direction of the Majority Noteholders, and in addition to whatever rights such Noteholders may have at law or equity to damages, including injunctive relief and specific performance, terminate 32 all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof, as servicer; and (z) with respect to clauses (viii)-(x) of Section 7.01(a), the Indenture Trustee shall, but only at the direction of the Note Insurer, after notice in writing to the Servicer and a Responsible Officer of the Indenture Trustee, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof, as Servicer. Upon receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall, subject to Section 7.02, pass to and be vested in the Indenture Trustee, or its designee approved by the Note Insurer, and the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, at the expense of the Servicer, any and all documents and other instruments and do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including, but not limited to, the transfer and endorsement or assignment of the Mortgage Loans and related documents. The Servicer agrees to cooperate (and pay any related costs and expenses) with the Indenture Trustee in effecting the termination of the Servicer's responsibilities and rights hereunder, including, without limitation, the transfer to the Indenture Trustee, or its designee, for administration by it of all amounts which shall at the time be credited by the Servicer to the Collection Account or thereafter received with respect to the Mortgage Loans. The Indenture Trustee shall promptly notify the Note Insurer and the Rating Agencies of the occurrence of a Servicer Event of Default. Section 7.02 Indenture Trustee to Act; Appointment of Successor. (a) On and after the time the Servicer receives a notice of termination pursuant to Section 7.01 or fails to receive a Servicer Extension Notice pursuant to Section 8.04, or the Indenture Trustee receives the resignation of the Servicer evidenced by an Opinion of Counsel pursuant to Section 5.21, or the Servicer is removed as Servicer pursuant to this Article VII, in which event the Indenture Trustee shall promptly notify the Rating Agencies, except as otherwise provided in Section 7.01, the Indenture Trustee shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof arising on or after the date of succession; provided, however, that the Indenture Trustee shall not be liable for any actions or the representations and warranties of any Servicer prior to it and including, without limitation, the obligations of the Servicer set forth in Sections 2.06 and 4.02 hereof. The Indenture Trustee, as successor Servicer, shall be obligated to pay Compensating Interest pursuant to Section 6.05 in any event and to make advances pursuant to Section 5.18 unless, and only to the extent the Indenture Trustee determines reasonably and in good faith that such advances would not be recoverable pursuant to Section 5.04, such determination to be evidenced by a certification of a Responsible Officer of the Indenture Trustee delivered to the Note Insurer. (b) Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act or if the Majority Noteholders with the consent of the Note Insurer or the Note Insurer so requests in writing to the Indenture Trustee, appoint, pursuant to such direction of the Majority Noteholders and Note Insurer or the Note Insurer, or if no such direction is provided to the Indenture Trustee, pursuant to the provisions set forth in Section 7.02(c), or petition a court of competent jurisdiction to appoint, any established mortgage loan servicing institution acceptable to the Note Insurer that has a net worth of not less 33 than $15,000,000 as the successor to the Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Servicer hereunder. (c) In the event the Indenture Trustee is the successor Servicer, it shall be entitled to the same Servicing Compensation (including the Servicing Fee as adjusted pursuant to the definition thereof) and other funds pursuant to Section 5.08 hereof as the Servicer if the Servicer had continued to act as servicer hereunder. In the event the Indenture Trustee is unable or unwilling to act as successor Servicer, the Indenture Trustee shall solicit, by public announcement, bids from housing and home finance institutions, banks and mortgage servicing institutions meeting the qualifications set forth above. Such public announcement shall specify that the successor servicer shall be entitled to the full amount of the aggregate Servicing Fees hereunder as servicing compensation, together with the other Servicing Compensation. Within thirty (30) days after any such public announcement, the Indenture Trustee shall negotiate and effect the sale, transfer and assignment of the servicing rights and responsibilities hereunder to the qualified party submitting the highest qualifying bid. The Indenture Trustee shall deduct from any sum received by the Indenture Trustee from the successor to the Servicer in respect of such sale, transfer and assignment all costs and expenses of any public announcement and of any sale, transfer and assignment of the servicing rights and responsibilities hereunder and the amount of any unreimbursed Servicing Advances and Periodic Advances owed to the Indenture Trustee. After such deductions, the remainder of such sum shall be paid by the Indenture Trustee to the Servicer at the time of such sale, transfer and assignment to the Servicer's successor. (d) The Indenture Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. The Servicer agrees to cooperate with the Indenture Trustee and any successor Servicer in effecting the termination of the Servicer's servicing responsibilities and rights hereunder and shall promptly provide the Indenture Trustee or such successor Servicer, as applicable, at the Servicer's cost and expense, all documents and records reasonably requested by it to enable it to assume the Servicer's functions hereunder and shall promptly also transfer to the Indenture Trustee or such successor servicer, as applicable, all amounts that then have been or should have been deposited in the Collection Account by the Servicer or that are thereafter received with respect to the Mortgage Loans. Any collections received by the Servicer after such removal or resignation shall be endorsed by it to the Indenture Trustee and remitted directly to the Indenture Trustee or, at the direction of the Indenture Trustee, to the successor Servicer. Neither the Indenture Trustee nor any other successor Servicer shall be held liable by reason of any failure to make, or any delay in making, any distribution hereunder or any portion thereof caused by (i) the failure of the Servicer to deliver, or any delay in delivering, cash, documents or records to it, or (ii) restrictions imposed by any regulatory authority having jurisdiction over the Servicer hereunder. Notwithstanding anything to the contrary herein, no appointment of a successor Servicer under this Agreement shall be effective until the Indenture Trustee and the Note Insurer shall have consented thereto, and written notice of such proposed appointment shall have been provided by the Indenture Trustee to the Note Insurer and to each Noteholder. The Indenture Trustee shall not resign as Servicer until a successor Servicer reasonably acceptable to the Note Insurer has been appointed. The Note Insurer shall have the right to remove the Indenture Trustee as successor Servicer under this Section 7.02 without cause, and the Indenture Trustee shall appoint such other successor Servicer as directed by the Note Insurer. 34 (e) Pending appointment of a successor Servicer hereunder, the Indenture Trustee shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the Indenture Trustee may make such arrangements for the compensation of such successor Servicer out of payments on Mortgage Loans as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that permitted the Servicer pursuant to Section 5.08, together with other Servicing Compensation. The Servicer, the Indenture Trustee and such successor Servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. Section 7.03 Waiver of Defaults. The Majority Noteholders may, on behalf of all Noteholders, and subject to the consent of the Note Insurer, waive any events permitting removal of the Servicer as servicer pursuant to this Article VII; provided, however, that the Majority Noteholders may not waive a default in making a required distribution on a Note without the consent of the Holder of such Note. Upon any waiver of a past default, such default shall cease to exist, and any Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly so waived. Notice of any such waiver shall be given by the Indenture Trustee to the Rating Agencies and the Note Insurer. Section 7.04 Rights of the Note Insurer to Exercise Rights of the Noteholders. By accepting its Note, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall be deemed to be the Noteholders for all purposes (other than with respect to the receipt of payment on the Notes) and shall have the right to exercise all rights of the Noteholders under this Agreement and under the Notes without any further consent of the Noteholders, including, without limitation: (a) the right to require the Unaffiliated Seller to repurchase Mortgage Loans pursuant to Sections 2.06 and 4.02 hereof to the extent set forth therein; (b) the right to give notices of breach or to terminate the rights and obligations of the Servicer as servicer pursuant to Section 7.01 hereof and to consent to or direct waivers of Servicer defaults pursuant to Section 7.03 hereof; (c) the right to direct the actions of the Indenture Trustee during the continuance of a Servicer Event of Default pursuant to Sections 7.01 and 7.02 hereof; (d) the right to institute proceedings against the Servicer pursuant to Section 7.01 hereof; (e) the right to remove the Indenture Trustee pursuant to Section 6.09 of the Indenture; (f) the right to direct foreclosures upon the failure of the Servicer to do so in accordance with the provisions of Section 5.06 of this Agreement; and (g) any rights or remedies expressly given the Majority Noteholders. 35 In addition, each Noteholder agrees that, subject to Section 10.02, unless a Note Insurer Default exists, the rights specifically enumerated above may only be exercised by the Noteholders with the prior written consent of the Note Insurer. Section 7.05 Indenture Trustee To Act Solely with Consent of the Note Insurer. Unless a Note Insurer Default exists, the Indenture Trustee shall not, without the Note Insurer's consent or unless directed by the Note Insurer: (a) terminate the rights and obligations of the Servicer as Servicer pursuant to Section 7.01 hereof; (b) agree to any amendment pursuant to Section 10.03 hereof; or (c) undertake any litigation. The Note Insurer may, in writing and in its sole discretion renounce all or any of its rights under Sections 7.04, 7.05 or 7.06 or any requirement for the Note Insurer's consent for any period of time. Section 7.06 Mortgage Loans, Trust Estate and Accounts Held for Benefit of the Note Insurer. (a) The Indenture Trustee shall hold the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of the Noteholders and the Note Insurer, and all references in this Agreement and in the Notes to the benefit of Noteholders shall be deemed to include the Note Insurer. The Indenture Trustee shall cooperate in all reasonable respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer's rights or interests under this Agreement and the Notes unless, as stated in an Opinion of Counsel addressed to the Indenture Trustee and the Note Insurer, such action is adverse to the interests of the Noteholders or diminishes the rights of the Noteholders or imposes additional burdens or restrictions on the Noteholders. (b) The Servicer hereby acknowledges and agrees that it shall service the Mortgage Loans for the benefit of the Noteholders and for the benefit of the Note Insurer, and all references in this Agreement to the benefit of or actions on behalf of the Noteholders shall be deemed to include the Note Insurer. Section 7.07 Note Insurer Default. Notwithstanding anything elsewhere in this Agreement or in the Notes to the contrary, if a Note Insurer Default exists, or if and to the extent the Note Insurer has delivered its written renunciation of all of its rights under this Agreement, the provisions of this Article VII and all other provisions of this Agreement which (a) permit the Note Insurer to exercise rights of the Noteholders, (b) restrict the ability of the Noteholders, the Servicer, the Collateral Agent or the Indenture Trustee to act without the consent or approval of the Note Insurer, (c) provide that a particular act or thing must be acceptable to the Note Insurer, (d) permit the Note Insurer to direct (or otherwise to require) the actions of the Indenture Trustee, the Collateral Agent, the Servicer or the Noteholders, (e) provide that any action or omission taken with the consent, approval or authorization of the Note Insurer shall be authorized hereunder or shall not subject the party taking or omitting to take such action to any liability hereunder or (f) which have a similar effect, shall be of no further force and effect and the Indenture Trustee shall administer the Trust Estate and perform its obligations hereunder 36 solely for the benefit of the Holders of the Notes. Nothing in the foregoing sentence, nor any action taken pursuant thereto or in compliance therewith, shall be deemed to have released the Note Insurer from any obligation or liability it may have to any party or to the Noteholders hereunder, under any other agreement, instrument or document (including, without limitation, the Note Insurance Policy) or under applicable law. ARTICLE VIII. TERMINATION Section 8.01 Termination. (a) Subject to Section 8.02, this Agreement shall terminate upon notice to the Indenture Trustee of either: (i) the disposition of all funds with respect to the last Mortgage Loan and the remittance of all funds due hereunder and the payment of all amounts due and payable to the Note Insurer and the Indenture Trustee or (ii) mutual consent of the Trust, the Indenture Trustee, the Collateral Agent, the Servicer, the Note Insurer and all Noteholders in writing. (b) In addition, subject to Section 8.02, the Servicer may, at its option and at its sole cost and expense, call the Class A-1 Notes or the Class A-2 Notes or terminate the Trust in accordance with the terms of Section 10.01 of the Indenture. (c) If on any Distribution Date, the Servicer determines that there are no outstanding Mortgage Loans and no other funds or assets in the Trust Estate other than funds in the Distribution Account, the Servicer shall send a final distribution notice promptly to each Noteholder in accordance with Section 8.01(d). (d) Notice of any termination, specifying the Distribution Date upon which the Trust will terminate and the Noteholders shall surrender their Notes to the Indenture Trustee for payment of the final distribution and cancellation, shall be given promptly by the Servicer by letter to Noteholders mailed during the month of such final distribution before the Servicer Distribution Date in such month, specifying (i) the Distribution Date upon which final payment of the Notes will be made upon presentation and surrender of Notes at the office of the Indenture Trustee therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Notes at the office of the Indenture Trustee therein specified. The Servicer shall give such notice to the Indenture Trustee therein specified at the time such notice is given to Noteholders. The obligations of the Note Insurer hereunder shall terminate upon the deposit by the Servicer with the Indenture Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO Properties as set forth in Section 10.01 of the Indenture or when the Note Principal Balance of the Notes has been reduced to zero. (e) In the event that all of the Noteholders do not surrender their Notes for cancellation within six (6) months after the time specified in the above-mentioned written notice, the Servicer shall give a second written notice to the remaining Noteholders to surrender their Notes for cancellation and receive the final distribution with respect thereto. If within six (6) months after the second notice, all of the Notes shall not have been surrendered for cancellation, the Indenture Trustee may take appropriate steps, or may appoint an agent to take appropriate 37 steps, to contact the remaining Noteholders concerning surrender of their Notes and the cost thereof shall be paid out of the funds and other assets which remain subject hereto. If within nine (9) months after the second notice all the Notes shall not have been surrendered for cancellation, the related Trust Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto and the Indenture Trustee upon transfer of such funds shall be discharged of any responsibility for such funds and the Noteholders shall look only to the related Trust Certificateholders for payment and not to the Note Insurer. Such funds shall remain uninvested. Section 8.02 Additional Termination Requirements. By their acceptance of the Notes, the Holders thereof hereby agree to appoint the Servicer as their attorney in fact to: (i) adopt such a plan of complete liquidation (and the Noteholders hereby appoint the Indenture Trustee as their attorney in fact to sign such plan) as appropriate or upon the written request of the Note Insurer and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation all in accordance with the terms hereof. Section 8.03 Accounting Upon Termination of Servicer. Upon termination of the Servicer, the Servicer shall, at its expense: (a) deliver to the successor Servicer or, if none shall yet have been appointed, to the Indenture Trustee, the funds in any Account; (b) deliver to the successor Servicer or, if none shall yet have been appointed, to the Indenture Trustee all Indenture Trustee's Mortgage Files and related documents and statements held by it hereunder and a Mortgage Loan portfolio computer tape; (c) deliver to the successor Servicer or, if none shall yet have been appointed, to the Indenture Trustee and, upon request, to the Noteholders a full accounting of all funds, including a statement showing the Monthly Payments collected by it and a statement of monies held in trust by it for the payments or charges with respect to the Mortgage Loans; and (d) execute and deliver such instruments and perform all acts reasonably requested in order to effect the orderly and efficient transfer of servicing of the Mortgage Loans to the successor Servicer and to more fully and definitively vest in such successor all rights, powers, duties, responsibilities, obligations and liabilities of the Servicer under this Agreement. Section 8.04 Retention and Termination of the Servicer. The Servicer hereby covenants and agrees to act as Servicer under this Agreement for an initial term commencing on the Closing Date and expiring on June 30, 1999 (the "Initial Term"). Thereafter, the Initial Term shall be extendible in the sole discretion of the Note Insurer by written notice (each, a "Servicer Extension Notice") of the Note Insurer (or the Indenture Trustee if revocable written standing instructions of the Note Insurer have been previously delivered to the Indenture Trustee), for any specified number of three (3) month terms to the Servicer. Each such Servicer Extension Notice, if any, shall be delivered by the Note Insurer (or the Indenture Trustee, as applicable,) to the other parties to this Agreement. The Servicer hereby agrees that, as of the date hereof and upon 38 its receipt of any Servicer Extension Notice, the Servicer shall be bound for the duration of the Initial Term and the term covered by any such Servicer Extension Notice to act as the Servicer, subject to and in accordance with the other provisions of this Agreement. The Servicer agrees that if, as of the fifteenth day prior to the last day of any such servicing term, the Servicer shall not have received a Servicer Extension Notice from the Note Insurer or Indenture Trustee, as applicable, the Servicer shall, within five (5) days thereafter, give written notice of such non-receipt to the Note Insurer and the Indenture Trustee. The failure of the Note Insurer or the Indenture Trustee, as applicable, to deliver a Servicer Extension Notice by the end of any such three-month term shall result in the automatic termination of the Servicer. ARTICLE IX. THE COLLATERAL AGENT Section 9.01 Duties of the Collateral Agent. (a) The Collateral Agent, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. If an Event of Default has occurred and has not been cured or waived, the Collateral Agent shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) The Collateral Agent, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Collateral Agent which are specifically required to be furnished pursuant to any provision of this Agreement, shall examine them to determine whether they conform on their face to the requirements of this Agreement; provided, however, that the Collateral Agent shall not be responsible for the accuracy or content of any resolution, certificate, statement, opinion, report, document, order or other instrument furnished by any Person hereunder. If any such instrument is found not to conform on its face to the requirements of this Agreement, the Collateral Agent shall note it as such on the Initial Certification or Final Certification delivered pursuant to Section 2.06(b). (c) No provision of this Agreement shall be construed to relieve the Collateral Agent from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that: (i) prior to the occurrence of an Event of Default, and after the curing of all such Events of Default which may have occurred, the duties and obligations of the Collateral Agent shall be determined solely by the express provisions of this Agreement, the Collateral Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Collateral Agent and, in the absence of bad faith on the part of the Collateral Agent, the Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Collateral Agent and conforming to the requirements of this Agreement; 39 (ii) the Collateral Agent shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or other officers of the Collateral Agent, unless it shall be proved that the Collateral Agent was negligent in ascertaining the pertinent facts; (iii) the Collateral Agent shall not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Note Insurer or the Indenture Trustee or with the consent of the Note Insurer or the Indenture Trustee; (iv) the Collateral Agent shall not be required to expend or risk its own funds or otherwise incur financial liability for the performance of any of its duties hereunder or the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it and none of the provisions contained in this Agreement shall in any event require the Collateral Agent to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer or the Indenture Trustee under this Agreement; and (v) subject to the other provisions of this Agreement and without limiting the generality of this Section 9.01, the Collateral Agent shall have no duty (A) to see to any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust, the Trust Estate, the Noteholders or the Mortgage Loans, (D) to confirm or verify the contents of any reports or certificates of any Person delivered to the Collateral Agent pursuant to this Agreement believed by the Collateral Agent to be genuine and to have been signed or presented by the proper party or parties. Section 9.02 Certain Matters Affecting the Collateral Agent. Except as otherwise provided in Section 9.01 hereof: (a) the Collateral Agent may rely and shall be protected in acting or refraining from acting upon any resolution, Officer's Certificate, Opinion of Counsel, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) the Collateral Agent may consult with counsel and any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such Opinion of Counsel; 40 (c) the Collateral Agent shall be under no obligation to exercise any of the trusts or powers vested in it by this Agreement or to institute, conduct or defend by litigation hereunder or in relation hereto at the request, order or direction of the Note Insurer or any of the Noteholders, pursuant to the provisions of this Agreement, unless such Noteholders or the Note Insurer, as applicable, shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein by the Collateral Agent or thereby; nothing contained herein shall, however, relieve the Collateral Agent of the obligation, upon the occurrence of an Event of Default (which has not been cured), to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs; (d) the Collateral Agent shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement; (e) prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, the Collateral Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Note Insurer or Holders of Class A Notes evidencing Percentage Interests aggregating not less than 25%; provided, however, that if the payment within a reasonable time to the Collateral Agent of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Collateral Agent, not reasonably assured to the Collateral Agent by the security afforded to it by the terms of this Agreement, the Collateral Agent may require reasonable indemnity against such expense or liability as a condition to taking any such action. The reasonable expense of every such examination shall be paid by the Servicer or, if paid by the Collateral Agent, shall be repaid by the Servicer upon demand from the Servicer's own funds; (f) the right of the Collateral Agent to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Collateral Agent shall not be answerable for anything other than its negligence or willful misconduct in the performance of such act; (g) the Collateral Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys. Section 9.03 Collateral Agent Not Liable for Notes or Mortgage Loans. (a) The recitals contained herein shall be taken as the statements of the Trust and the Servicer, as the case may be, and the Collateral Agent assumes no responsibility for their correctness. The Collateral Agent makes no representations as to the validity or sufficiency of this Agreement or of any Mortgage Loan or related document. The Collateral Agent shall not be accountable for the use or application of any funds paid to the Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the Collection Account by the Servicer. The Collateral Agent 41 shall not be responsible for the legality or validity of the Agreement or the validity, priority, perfection or sufficiency of the security for the Notes issued or intended to be issued under the Indenture. Section 9.04 Collateral Agent May Own Notes. (a) The Collateral Agent in its individual or any other capacity may become the owner or pledgor of Notes with the same rights it would have if it were not Collateral Agent, and may otherwise deal with the parties hereto. Section 9.05 Collateral Agent's Fees and Expenses; Indemnity. (a) The Collateral Agent acknowledges that in consideration of the performance of its duties hereunder it is entitled to receive its fees and expenses from the Servicer, as separately agreed between the Servicer and the Collateral Agent. The Trust, the Depositor, the Indenture Trustee and the Note Insurer shall not pay any of the Collateral Agent fees and expenses in connection with this transaction. The Collateral Agent shall not be entitled to compensation for any expense, disbursement or advance as may arise from its negligence or bad faith, and the Collateral Agent shall have no lien on the Trust Estate for the payment of its fees and expenses. (b) The Collateral Agent and any director, officer, employee or agent of the Collateral Agent shall be indemnified by the Servicer and held harmless against any loss, liability, claim, damage or expense arising out of, or imposed upon the Trust Estate or the Collateral Agent through the Servicer's acts or omissions in violation of this Agreement, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence of the Collateral Agent in the performance of its duties hereunder or by reason of the Collateral Agent 's reckless disregard of obligations and duties hereunder. The obligations of the Servicer under this Section 9.05 arising prior to any resignation or termination of the Servicer hereunder shall survive termination of the Servicer and payment of the Notes. Section 9.06 Eligibility Requirements for Collateral Agent. (a) The Collateral Agent hereunder shall at all times be a banking entity (a) organized and doing business under the laws of any state or the United States of America subject to supervision or examination by federal or state authority, (b) authorized under such laws to exercise corporate trust powers, including taking title to the Trust Estate on behalf of the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, (c) having a combined capital and surplus of at least $50,000,000, (d) whose long-term deposits, if any, shall be rated at least BBB- by S&P and Baa3 by Moody's (except as provided herein) or such lower long-term deposit rating as may be approved in writing by the Note Insurer, and (e) reasonably acceptable to the Note Insurer as evidenced in writing. If such banking entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of determining an entity's combined capital and surplus for clause (c) of this Section 9.06, the amount set forth in its most recent report of condition so published shall be deemed to be its combined capital and surplus. In case at any time the Collateral Agent shall cease to be eligible in accordance with the provisions of this Section 9.06, the Collateral Agent shall resign immediately in the manner and with the effect specified in Section 9.07. Section 9.07 Resignation and Removal of the Collateral Agent. (a) The Collateral Agent may at any time resign and be discharged from the trusts hereby created by 42 giving thirty (30) days' written notice thereof to the Indenture Trustee, the Servicer, and the Note Insurer. (b) If at any time the Collateral Agent shall cease to be eligible in accordance with the provisions of Section 9.06 and shall fail to resign after written request therefor by the Indenture Trustee, the Servicer or the Note Insurer, or if at any time the Collateral Agent shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Collateral Agent or of its property shall be appointed, or any public officer shall take charge or control of the Collateral Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Indenture Trustee or the Servicer, with the consent of the Note Insurer, or the Note Insurer may remove the Collateral Agent. (c) If the Collateral Agent fails to perform in accordance with the terms of this Agreement, the Indenture Trustee, the Servicer or the Majority Noteholders, with the consent of the Note Insurer, or the Note Insurer may remove the Collateral Agent. (d) Upon removal or receipt of notice of resignation of the Collateral Agent, the Indenture Trustee shall either (i) take possession of the Indenture Trustee's Mortgage Files and assume the duties of the Collateral Agent hereunder or (ii) appoint a successor Collateral Agent pursuant to Section 9.08. If the Indenture Trustee shall assume the duties of the Collateral Agent hereunder, it shall notify the Trust, the Depositor, the Servicer and Note Insurer in writing. Section 9.08 Successor Collateral Agent. Upon the resignation or removal of the Collateral Agent, the Indenture Trustee may appoint a successor Collateral Agent, with the written approval of the Note Insurer; provided, however, that the successor Collateral Agent so appointed shall in no event be the Unaffiliated Seller, the Depositor or the Servicer or any Person known to a Responsible Officer of the Indenture Trustee to be an Affiliate of the Unaffiliated Seller, the Depositor or the Servicer and shall be approved by the Note Insurer. The Indenture Trustee or such custodian, as the case may be, shall assume the duties of the Collateral Agent hereunder. Any successor Collateral Agent appointed as provided in this Section 9.08 shall execute, acknowledge and deliver to the Trust, the Depositor, the Note Insurer, the Servicer, the Indenture Trustee and to its predecessor Collateral Agent an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Collateral Agent shall become effective and such successor Collateral Agent, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as Collateral Agent herein. The predecessor Collateral Agent shall deliver to the successor Collateral Agent all Indenture Trustee's Mortgage Files and related documents and statements held by it hereunder, and the Servicer and the predecessor Collateral Agent shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor Collateral Agent all such rights, powers, duties and obligations. The cost of any such transfer to the successor Collateral Agent shall be for the account of the Collateral Agent in the event of the resignation of the Collateral Agent, and shall be for the account of the Servicer in the event of the removal of the Collateral Agent. No successor Collateral Agent shall accept appointment as provided in this Section 9.08 unless at the time of such acceptance such successor Collateral Agent shall be eligible under the provisions of Section 9.06. Upon acceptance of appointment by a successor Collateral Agent as provided in this 43 Section 9.08, the Servicer shall mail notice of the succession of such Collateral Agent hereunder to all Noteholders at their addresses as shown in the Note Register and to the Rating Agencies. If the Servicer fails to mail such notice within ten (10) days after acceptance of appointment by the successor Collateral Agent, the successor Collateral Agent shall cause such notice to be mailed at the expense of the Servicer. Section 9.09 Merger or Consolidation of Collateral Agent. Any Person into which the Collateral Agent may be merged or converted or with which it may be consolidated or any corporation or national banking association resulting from any merger, conversion or consolidation to which the Collateral Agent shall be a party, or any corporation or national banking association succeeding to the business of the Collateral Agent, shall be the successor of the Collateral Agent hereunder; provided, that such corporation or national banking association shall be eligible under the provisions of Section 9.06, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. ARTICLE X. MISCELLANEOUS PROVISIONS Section 10.01 Limitation on Liability. None of the Trust, the Owner Trustee, the Depositor, the Servicer, the Collateral Agent, the Indenture Trustee or any of the directors, officers, employees or agents of such Persons shall be under any liability to the Trust, the Noteholders or the Note Insurer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Trust, the Owner Trustee, the Depositor, the Servicer, the Collateral Agent, the Indenture Trustee or any such Person against any breach of warranties or representations made herein, or against any specific liability imposed on each such party pursuant to this Agreement or against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations or duties hereunder. The Trust, the Owner Trustee, the Depositor, the Servicer, the Collateral Agent, the Indenture Trustee and any director, officer, employee or agent of such Person may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any appropriate Person respecting any matters arising hereunder. Section 10.02 Acts of Noteholders. (a) Except as otherwise specifically provided herein, whenever Noteholder action, consent or approval is required under this Agreement, such action, consent or approval shall be deemed to have been taken or given on behalf of, and shall be binding upon, all Noteholders if the Majority Noteholders or the Note Insurer agrees to take such action or give such consent or approval. (b) The death or incapacity of any Noteholder shall not operate to terminate this Agreement or the Trust, nor entitle such Noteholder's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. 44 (c) No Noteholder shall have any right to vote (except as expressly provided for herein) or in any manner otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Notes, be construed so as to constitute the Noteholders from time to time as partners or members of an association; nor shall any Noteholder be under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof. Section 10.03 Amendment. (a) This Agreement may be amended from time to time by the Owner Trustee, on behalf of the Trust, the Servicer, the Depositor, the Collateral Agent and the Indenture Trustee by written agreement, upon the prior written consent of the Note Insurer, without notice to or consent of the Noteholders to cure any ambiguity, to correct or supplement any provisions herein, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, at the expense of the party requesting the change, delivered to the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder; and provided further, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Note without the consent of such Noteholder, or change the rights or obligations of any other party hereto without the consent of such party. The Indenture Trustee shall give prompt written notice to the Rating Agencies of any amendment made pursuant to this Section 10.03. (b) This Agreement may be amended from time to time by the Owner Trustee, on behalf of the Trust, the Servicer, the Depositor, the Collateral Agent and the Indenture Trustee, with the consent of the Note Insurer, the Majority Noteholders and the Holders of the majority of the Percentage Interest in the Trust Certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Class of Notes without the consent of the Holders of such Class of Notes or reduce the percentage for the Holders of which are required to consent to any such amendment without the consent of the Holders of 100% of such Class of Notes affected thereby. (c) It shall not be necessary for the consent of Holders under this Section 10.03 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. Section 10.04 Recordation of Agreement. To the extent permitted by applicable law, this Agreement, or a memorandum thereof if permitted under applicable law, is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Servicer at the Noteholders' expense on direction and at the expense of Majority Noteholders requesting such recordation, but only when accompanied by an Opinion of Counsel 45 to the effect that such recordation materially and beneficially affects the interests of the Noteholders or is necessary for the administration or servicing of the Mortgage Loans. Section 10.05 Duration of Agreement. This Agreement shall continue in existence and effect until terminated as herein provided. Section 10.06 Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given when delivered to (i) in the case of the Servicer, the Subservicers, the Originators or the Unaffiliated Seller, addressed to such Person, c/o American Business Financial Services, Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: General Counsel; (ii) in the case of the Trust, ABFS Mortgage Loan Trust 1999-1, c/o the Owner Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration; (iii) in the case of the Collateral Agent, Chase Bank of Texas, N.A., at its Corporate Trust Office, Attention: Document Custody Manager; (iv) in the case of the Indenture Trustee, The Bank of New York, at its Corporate Trust Office, Attention: ABFS Mortgage Loan Trust 1999-1; (v) in the case of the Depositor or the Underwriter, Prudential Securities Secured Financing Corporation or Prudential Securities Incorporated, One New York Plaza, New York, New York 10292, Attention: Managing Director- Asset Backed Finance Group; (vi) in the case of the Note Insurer, Financial Security Assurance Inc., 350 Park Avenue, New York, New York 10022 Attention: Surveillance Department (in each case in which notice or other communication to the Note Insurer refers to an Event of Default, a Servicer Event of Default or a claim on the Note Insurance Policy or with respect to which failure on the part of the Note Insurer to respond shall be deemed to constitute consent or acceptance, then a copy of such notice or other communication should also be sent to the attention of each of the General Counsel and the Head- Financial Guaranty Group, and shall be marked to indicate "URGENT MATERIAL ENCLOSED"); (vii) in the case of Standard & Poor's Rating Services, 26 Broadway, New York, New York 10004 Attention: Residential Mortgage Surveillance Group; (viii) in the case of Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007 Attention: Home Equity Monitoring Group; and (ix) in the case of the Noteholders, as set forth in the Note Register. Any such notices shall be deemed to be effective with respect to any party hereto upon the receipt of such notice by such party, except that notices to the Noteholders shall be effective upon mailing or personal delivery. Section 10.07 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions or terms of this Agreement. Section 10.08 No Partnership. Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the Servicer shall be rendered as an independent contractor and not as agent for the Noteholders. Section 10.09 Counterparts. This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so 46 executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. Section 10.10 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Trust, the Servicer, the Depositor, the Indenture Trustee, the Collateral Agent and the Noteholders and their respective successors and permitted assigns. Section 10.11 Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. Section 10.12 The Note Insurer Default. Any right conferred to the Note Insurer shall be suspended during any period in which a Note Insurer Default exists. At such time as the Notes are no longer outstanding hereunder, and no amounts owed to the Note Insurer hereunder remain unpaid, the Note Insurer's rights hereunder shall terminate. Section 10.13 Third Party Beneficiary. The parties agree that each of the Owner Trustee, the Unaffiliated Seller and the Note Insurer is intended and shall have all rights of a third-party beneficiary of this Agreement. Section 10.14 Intent of the Parties. It is the intent of the parties hereto and Noteholders that, for federal income taxes, state and local income or franchise taxes and other taxes imposed on or measured by income, the Notes be treated as debt. The parties to this Agreement and the Holder of each Note, by acceptance of its Note, and each Beneficial Owner thereof, agree to treat, and to take no action inconsistent with the treatment of, the related Notes in accordance with the preceding sentence for purposes of federal income taxes, state and local income and franchise taxes and other taxes imposed on or measured by income. Section 10.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. (b) THE TRUST, THE SERVICER, THE DEPOSITOR, THE COLLATERAL AGENT AND THE INDENTURE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 10.06 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND THE INDENTURE TRUSTEE EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED 47 APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 10.15 SHALL AFFECT THE RIGHT OF THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT OR THE INDENTURE TRUSTEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION. (c) THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND THE INDENTURE TRUSTEE EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. [Remainder of Page Intentionally Left Blank] 48 IN WITNESS WHEREOF, the Servicer, the Trust, the Indenture Trustee, the Collateral Agent and the Depositor have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written. PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as Depositor By: __________________________________ Name: Title: ABFS MORTGAGE LOAN TRUST 1999-1 By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement By: __________________________________ Name: Title: AMERICAN BUSINESS CREDIT, INC., as Servicer By: __________________________________ Name: Title: THE BANK OF NEW YORK, as Indenture Trustee By: __________________________________ Name: Title: CHASE BANK OF TEXAS, N.A., as Collateral Agent By: __________________________________ Name: Title: [Signature Page to Sale and Servicing Agreement] TABLE OF CONTENTS Page ---- ARTICLE I. DEFINITIONS .................................................... 1 Section 1.01 Certain Defined Terms ................................... 1 Section 1.02 Provisions of General Application ....................... 1 Section 1.03 Business Day Certificate ................................ 2 ARTICLE II. SALE AND CONVEYANCE OF THE MORTGAGE LOANS ..................... 2 Section 2.01 Purchase and Sale of Initial Mortgage Loans ............. 2 Section 2.02 Purchase and Sale of Subsequent Mortgage Loans .......... 3 Section 2.03 Purchase Price .......................................... 3 Section 2.04 Possession of Mortgage Files; Access to Mortgage Files ................................................... 3 Section 2.05 Delivery of Mortgage Loan Documents ..................... 4 Section 2.06 Acceptance of the Trust Estate; Certain Substitutions; Certification by the Collateral Agent ................... 7 Section 2.07 Grant of Security Interest .............................. 9 Section 2.08 Further Action Evidencing Assignments ................... 10 Section 2.09 Assignment of Agreement ................................. 10 ARTICLE III. REPRESENTATIONS AND WARRANTIES ............................... 10 Section 3.01 Representations of the Servicer ......................... 10 Section 3.02 Representations, Warranties and Covenants of the Depositor ............................................... 12 Section 3.03 Representations, Warranties and Covenants of the Collateral Agent ........................................ 13 Section 3.04 Representations, Warranties and Covenants of the Indenture Trustee ....................................... 14 ARTICLE IV. THE MORTGAGE LOANS ............................................ 14 Section 4.01 Representations and Warranties Concerning the Mortgage Loans ................................................... 14 Section 4.02 Purchase and Substitution ............................... 14 ARTICLE V. ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS ............. 16 Section 5.01 The Servicer ............................................ 16 Section 5.02 Collection of Certain Mortgage Loan Payments; Collection Account ...................................... 17 Section 5.03 Permitted Withdrawals from the Collection Account ....... 18 Section 5.04 Hazard Insurance Policies; Property Protection Expenses ................................................ 19 Section 5.05 Assumption and Modification Agreements .................. 20 Section 5.06 Realization Upon Defaulted Mortgage Loans ............... 20 Section 5.07 Indenture Trustee to Cooperate .......................... 22 Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer ............................................. 22 Section 5.09 Annual Statement as to Compliance ....................... 22 Section 5.10 Annual Independent Public Accountants' Servicing Report .................................................. 22 Section 5.11 Access to Certain Documentation ......................... 23 Section 5.12 Maintenance of Fidelity Bond ............................ 23 Section 5.13 The Subservicers ........................................ 23 Section 5.14 Reports to the Indenture Trustee; Collection Account Statements .............................................. 23 i Section 5.15 Optional Purchase of Defaulted Mortgage Loans ........... 24 Section 5.16 Reports to be Provided by the Servicer .................. 25 Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans .................................. 26 Section 5.18 Periodic Advances; Special Advance ...................... 26 Section 5.19 Indemnification; Third Party Claims ..................... 27 Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Servicer ................. 28 Section 5.21 Assignment of Agreement by Servicer; Servicer Not to Resign .................................................. 28 Section 5.22 Periodic Filings with the Securities and Exchange Commission; Additional Information ...................... 29 ARTICLE VI. APPLICATION OF FUNDS .......................................... 29 Section 6.01 Deposits to the Distribution Account .................... 29 Section 6.02 Collection of Money ..................................... 29 Section 6.03 Application of Principal and Interest ................... 30 Section 6.04 Information Concerning the Mortgage Loans ............... 30 Section 6.05 Compensating Interest ................................... 30 Section 6.06 Effect of Payments by the Note Insurer; Subrogation ..... 30 ARTICLE VII. SERVICER DEFAULT ............................................. 31 Section 7.01 Servicer Events of Default .............................. 31 Section 7.02 Indenture Trustee to Act; Appointment of Successor ...... 33 Section 7.03 Waiver of Defaults ...................................... 35 Section 7.04 Rights of the Note Insurer to Exercise Rights of the Noteholders ......................................... 35 Section 7.05 Indenture Trustee To Act Solely with Consent of the Note Insurer ............................................ 36 Section 7.06 Mortgage Loans, Trust Estate and Accounts Held for Benefit of the Note Insurer ............................. 36 Section 7.07 Note Insurer Default .................................... 36 ARTICLE VIII. TERMINATION ................................................. 37 Section 8.01 Termination ............................................. 37 Section 8.02 Additional Termination Requirements ..................... 38 Section 8.03 Accounting Upon Termination of Servicer ................. 38 Section 8.04 Retention and Termination of the Servicer ............... 38 ARTICLE IX. THE COLLATERAL AGENT .......................................... 39 Section 9.01 Duties of the Collateral Agent .......................... 39 Section 9.02 Certain Matters Affecting the Collateral Agent .......... 40 Section 9.03 Collateral Agent Not Liable for Notes or Mortgage Loans ................................................... 41 Section 9.04 Collateral Agent May Own Notes .......................... 42 Section 9.05 Collateral Agent's Fees and Expenses; Indemnity ......... 42 Section 9.06 Eligibility Requirements for Collateral Agent ........... 42 Section 9.07 Resignation and Removal of the Collateral Agent ......... 42 Section 9.08 Successor Collateral Agent .............................. 43 ii Section 9.09 Merger or Consolidation of Collateral Agent ............. 44 ARTICLE X. MISCELLANEOUS PROVISIONS ....................................... 44 Section 10.01 Limitation on Liability ................................. 44 Section 10.02 Acts of Noteholders ..................................... 44 Section 10.03 Amendment ............................................... 45 Section 10.04 Recordation of Agreement ................................ 45 Section 10.05 Duration of Agreement ................................... 46 Section 10.06 Notices ................................................. 46 Section 10.07 Severability of Provisions .............................. 46 Section 10.08 No Partnership .......................................... 46 Section 10.09 Counterparts ............................................ 46 Section 10.10 Successors and Assigns .................................. 47 Section 10.11 Headings ................................................ 47 Section 10.12 The Note Insurer Default ................................ 47 Section 10.13 Third Party Beneficiary ................................. 47 Section 10.14 Intent of the Parties ................................... 47 Section 10.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL .............................................. 47 EXHIBITS EXHIBIT A Contents of the Mortgage File EXHIBIT B Indenture Trustee's Acknowledgement of Receipt EXHIBIT C Collateral Agent's Acknowledgement of Receipt EXHIBIT D Initial Certification of Collateral Agent EXHIBIT E Final Certification of Collateral Agent EXHIBIT F Request for Release of Documents EXHIBIT G Form of Subsequent Contribution Agreement SCHEDULES SCHEDULE I Mortgage Loan Schedule Exhibit 4.3Ex EXHIBITS TO SALE AND SERVICING AGREEMENT EXHIBIT A CONTENTS OF THE MORTGAGE FILE With respect to each Mortgage Loan, the Mortgage File shall include each of the following items (copies to the extent the originals have been delivered to the Collateral Agent, on behalf of the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to Section 2.05 of the Sale and Servicing Agreement), all of which shall be available for inspection by the Noteholders, to the extent required by applicable laws: 1. The original Mortgage Note, with all prior and intervening endorsements showing a complete chain of endorsements from the originator of the Mortgage Loan to the Person so endorsing the Mortgage Loan to the Trustee, endorsed by such Person "Pay to the order of ________________ without recourse" and signed, by facsimile or manual signature, in the name of the Unaffiliated Seller by a Responsible Officer. 2. Either: (i) the original Mortgage, and related power of attorney, if any, with evidence of recording thereon, or (ii) a copy of the Mortgage and related power of attorney, if any, certified as a true copy of the original Mortgage or power of attorney by a Responsible Officer of the Unaffiliated Seller on the face of such copy substantially as follows: "certified true and correct copy of original which has been transmitted for recordation." 3. Either: (i) The original Assignment of Mortgage in recordable form in blank or (ii) a copy of the Assignment of Mortgage certified as a true copy of the original Assignment of Mortgage by a Responsible Officer of the Unaffiliated Seller on the face of such copy substantially as follows: "certified true and correct copy of original which has been transmitted for recordation." Any such Assignments of Mortgage may be made by blanket assignments for Mortgage Loans secured by the Mortgaged Properties located in the same county, if permitted by applicable law. 4. The original lender's policy of title insurance or a true copy thereof, or if such original lender's title insurance policy has been lost, a copy thereof certified by the appropriate title insurer to be true and complete, or if such lender's title insurance policy has not been issued as of the Closing Date, a marked up commitment (binder) to issue such policy. 5. All original intervening assignments, if any, showing a complete chain of assignments from the originator to the related Originator, including any recorded warehousing assignments, with evidence of recording thereon, certified by a Responsible Officer of the related Originator by facsimile or manual signature as a true copy of the original of such intervening assignments. 6. Originals of all assumption, written assurance, substitution and modification agreements, if any. A-1 EXHIBIT B INDENTURE TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT March 30, 1999 Prudential Securities Secured American Business Credit, Inc. Financing Corporation BalaPointe Office Centre One New York Plaza 111 Presidential Boulevard, Suite 127 New York, New York 10292 Bala Cynwyd, Pennsylvania 19004 Chase Bank of Texas, N.A., Financial Security Assurance Inc. as Collateral Agent 350 Park Avenue 801 West Green Road, Suite 200 New York, New York 10022 Houston, TX 77067 Re: Sale and Servicing Agreement, dated as of March 1, 1999 among Prudential Securities Secured Financing Corporation, as Depositor, ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank of Texas, N.A., as Collateral Agent ------------------------------------------------------------- Ladies and Gentlemen: In accordance with Section 2.06 of the above-captioned Sale and Servicing Agreement, the undersigned, as Indenture Trustee, hereby acknowledges receipt by it in good faith without notice of adverse claims, of (x) the Original Pre-Funded Amount and the Original Capitalized Interest Amount for both Pool I and Pool II and (y) the Note Insurance Policy, and declares that it holds and will hold such Accounts and the Note Insurance Policy in trust for the exclusive use and benefit of all present and future Noteholders. Capitalized words and phrases used herein shall have the respective meanings assigned to them in Appendix I to the Indenture, dated as of March 1, 1999, by and between ABFS Mortgage Loan Trust 1999-1 and the Indenture Trustee. THE BANK OF NEW YORK, as Trustee By: ---------------------------------- Name: Title: B-1 EXHIBIT C COLLATERAL AGENT'S ACKNOWLEDGEMENT OF RECEIPT March 30, 1999 Prudential Securities Secured American Business Credit, Inc. Financing Corporation BalaPointe Office Centre One New York Plaza 111 Presidential Boulevard, Suite 127 New York, New York 10292 Bala Cynwyd, Pennsylvania 19004 The Bank of New York, Financial Security Assurance Inc. as Indenture Trustee 350 Park Avenue 101 Barclay Street New York, New York 10022 New York, New York 10286 Re: Sale and Servicing Agreement, dated as of March 1, 1999 among Prudential Securities Secured Financing Corporation, as Depositor, ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank of Texas, N.A., as Collateral Agent ------------------------------------------------------------------ Ladies and Gentlemen: In accordance with Section 2.06 of the above-captioned Sale and Servicing Agreement, the undersigned, as Collateral Agent, hereby acknowledges receipt by it in good faith without notice of adverse claims, subject to the provisions of Sections 2.04 and 2.05 of the Sale and Servicing Agreement (as such provisions relate to the Initial Mortgage Loans), of, with respect to each of the Initial Mortgage Loans, the Mortgage File containing the original Mortgage Note, except with respect to the list of exceptions attached hereto, and based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule accurately reflects information set forth in the Mortgage Note, and declares that it holds and will hold such documents and the other documents delivered to it constituting the Indenture Trustee's Mortgage Files, and that it holds or will hold all such assets and such other assets included in the definition of "Trust Estate" that are delivered to it, on behalf of the Indenture Trustee, in trust for the exclusive use and benefit of all present and future Noteholders and the Note Insurer. The Collateral Agent has made no independent examination of any such documents beyond the review specifically required in the above-referenced Sale and Servicing Agreement. The Collateral Agent makes no representations as to: (i) the validity, legality, sufficiency, enforceability or genuineness of any such documents or any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan. The Schedule of Mortgage Loans is attached to this Receipt. C-1 Capitalized words and phrases used herein shall have the respective meanings assigned to them in Appendix I to the Indenture, dated as of March 1, 1999, by and between ABFS Mortgage Loan Trust 1999-1 and the Indenture Trustee. CHASE BANK OF TEXAS, N.A., as Collateral Agent By: ---------------------------------- Name: Title: C-2 EXHIBIT D INITIAL CERTIFICATION OF COLLATERAL AGENT ______________, 1999 Prudential Securities Secured American Business Credit, Inc. Financing Corporation BalaPointe Office Centre One New York Plaza 111 Presidential Boulevard, Suite 127 New York, New York 10292 Bala Cynwyd, Pennsylvania 19004 The Bank of New York, Financial Security Assurance Inc. as Indenture Trustee 350 Park Avenue 101 Barclay Street New York, New York 10022 New York, New York 10286 Re: Sale and Servicing Agreement, dated as of March 1, 1999 among Prudential Securities Secured Financing Corporation, as Depositor, ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank of Texas, N.A., as Collateral Agent ------------------------------------------------------------- Ladies and Gentlemen: In accordance with the provisions of Section 2.06 of the above-referenced Sale and Servicing Agreement, the undersigned, as Collateral Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto), it has reviewed the documents delivered to it pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined that (i) all documents required to be delivered to it pursuant to Section 2.05 of the above-referenced Sale and Servicing Agreement are in its possession, (ii) such documents have been reviewed by it and appear regular on their face and have not been mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections do not constitute physical alteration if they reasonably appear to have been initialed by the Mortgagor) appears regular on its face and relates to such Mortgage Loan and (iii) based on its examination and only as to the foregoing documents, the information set forth in the Mortgage Loan Schedule as to the information in clauses (i), (ii), (v) and (vi) of the definition of "Mortgage Loan Schedule" respecting such Mortgage Loan accurately reflects the information set forth in Indenture Trustee's Mortgage File. The Collateral Agent has made no independent examination of such documents beyond the review specifically required in the above-referenced Sale and Servicing Agreement. The Collateral Agent makes no representations as to: (x) the validity, legality, enforceability or genuineness of any such documents contained in each or any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (y) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan. D-1 Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Sale and Servicing Agreement. CHASE BANK OF TEXAS, N.A., as Collateral Agent By: ---------------------------------- Name: Title: D-2 EXHIBIT E FINAL CERTIFICATION OF COLLATERAL AGENT ________________, 1999 Prudential Securities Secured American Business Credit, Inc. Financing Corporation BalaPointe Office Centre One New York Plaza 111 Presidential Boulevard, Suite 127 New York, New York 10292 Bala Cynwyd, Pennsylvania 19004 The Bank of New York, Financial Security Assurance Inc. as Indenture Trustee 350 Park Avenue 101 Barclay Street New York, New York 10022 New York, New York 10286 Re: Sale and Servicing Agreement, dated as of March 1, 1999 among Prudential Securities Secured Financing Corporation, as Depositor, ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank of Texas, N.A., as Collateral Agent -------------------------------------------------------------------- Ladies and Gentlemen: In accordance with the provisions of Section 2.06 of the above-referenced Sale and Servicing Agreement, the undersigned, as Collateral Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto), it has reviewed the documents delivered to it pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined that (i) all documents required to be delivered to it pursuant to Section 2.05 of the above-referenced Sale and Servicing Agreement are in its possession, (ii) such documents have been reviewed by it and appear regular on their face and have not been mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections do not constitute physical alteration if they reasonably appear to have been initialed by the Mortgagor) appears regular on its face and relates to such Mortgage Loan and (iii) based on its examination and only as to the foregoing documents, the information set forth in the Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the information set forth in the Indenture Trustee's Mortgage File. The Collateral Agent has made no independent examination of such documents beyond the review specifically required in the above-referenced Sale and Servicing Agreement. The Collateral Agent makes no representations as to: (x) the validity, legality, enforceability or genuineness of any such documents contained in each or any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (y) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan. Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Sale and Servicing Agreement. E-1 CHASE BANK OF TEXAS, N.A., as Collateral Agent By: ---------------------------------- Name: Title: E-2 EXHIBIT F REQUEST FOR RELEASE OF DOCUMENTS ----------------, Chase Bank of Texas, N.A., as Collateral Agent 801 West Greens Road, Suite 200 Houston, Texas 77067 The Bank of New York, as Indenture Trustee 101 Barclay Street New York, New York 10286 Re: Sale and Servicing Agreement, dated as of March 1, 1999 among Prudential Securities Secured Financing Corporation, as Depositor, ABFS Mortgage Loan Trust 1999-1, American Business Credit, Inc., as Servicer, The Bank of New York, as Indenture Trustee, and Chase Bank of Texas, N.A., as Collateral Agent -------------------------------------------------------------------- In connection with the administration of the pool of Mortgage Loans held by Chase Bank of Texas, N.A., as Collateral Agent, on behalf of The Bank of New York, as Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, we request the release, and acknowledge receipt, of the (Indenture Trustee's Mortgage File/[specify document]) for the Mortgage Loan described below, for the reason indicated. Mortgagor's Name, Address & Zip Code: - ------------------------------------ Mortgage Loan Number: - -------------------- Reason for Requesting Documents (check one) ____ 1. Mortgage Loan Paid in Full (Servicer hereby certifies that all amounts received in connection therewith have been credited to the Collection Account.) ____ 2. Mortgage Loan Liquidated (Servicer hereby certifies that all proceeds of foreclosure, insurance or other liquidation have been finally received and credited to the Collection Account.) F-1 ____ 3. Mortgage Loan in Foreclosure ____ 4. Mortgage Loan Repurchased Pursuant to Section 5.18 of the Pooling and Servicing Agreement. ____ 5. Mortgage Loan Repurchased or Substituted pursuant to Article II or III of the Sale and Servicing Agreement (Servicer hereby certifies that the repurchase price or Substitution Adjustment has been credited to the related Distribution Account and that the substituted mortgage loan is a Qualified Substitute Mortgage Loan.) ____ 6. Other (explain)____________________________________________________ If box 1 or 2 above is checked, and if all or part of the Indenture Trustee's Mortgage File was previously released to us, please release to us our previous receipt on file with you, as well as any additional documents in your possession relating to the above specified Mortgage Loan. If box 3, 4, 5 or 6 above is checked, upon our return of all of the above documents to the Collateral Agent, please acknowledge your receipt by signing in the space indicated below, and returning this form. AMERICAN BUSINESS CREDIT, INC., as Servicer By: ---------------------------------- Name: Title: Documents returned to Collateral Agent: CHASE BANK OF TEXAS, N.A., as Collateral Agent By: ------------------------------------ Name: Title: Date: F-2 EXHIBIT G FORM OF SUBSEQUENT CONTRIBUTION AGREEMENT This SUBSEQUENT CONTRIBUTION AGREEMENT, dated as of ________, 1999 (the "Subsequent Transfer Date"), is entered into by and between PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as depositor (the "Depositor"), and the ABFS MORTGAGE LOAN TRUST 1999-1 (the "Trust"). W I T N E S S E T H: Reference is hereby made to (x) that certain Sale and Servicing Agreement, dated as of March 1, 1999 (the "Sale and Servicing Agreement"), by and among the Depositor and the Trust, and (y) that certain Indenture, dated as of March 1, 1999 (the "Indenture"), by and between the Trust and The Bank of New York, as indenture trustee (the "Indenture Trustee"). Pursuant to the Sale and Servicing Agreement, the Depositor has agreed to sell, assign and transfer, and the Trust has agreed to accept, from time to time, Subsequent Mortgage Loans (as defined below). The Sale and Servicing Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced by the execution and delivery of a Subsequent Contribution Agreement such as this Subsequent Contribution Agreement. The assets sold to the Trust pursuant to this Subsequent Contribution Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool II listed in the Mortgage Loan Schedule attached hereto (including property that secures a Subsequent Mortgage Loan that becomes an REO Property), including the related Mortgage Files delivered or to be delivered to the Collateral Agent, on behalf of the Indenture Trustee, including all payments of principal received, collected or otherwise recovered after the Subsequent Cut-Off Date for each Subsequent Mortgage Loan, all payments of interest accruing on each Subsequent Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and all other proceeds received in respect of such Subsequent Mortgage Loans, (b) the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all insurance proceeds and condemnation awards. The "Subsequent Mortgage Loans" are those listed on the Schedule of Mortgage Loans attached hereto. The Aggregate Principal Balance of such Subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in Pool I and $__________ in Pool II. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: Section 1.Definitions. For the purposes of this Subsequent Contribution Agreement, capitalized terms used herein but not otherwise defined shall have the respective meanings assigned to such terms in Appendix I to the Indenture. G-1 Section 2.Sale, Assignment and Transfer. In consideration of the receipt of $_________ (such amount being approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans) from the Trust, the Depositor hereby sells, assigns and transfers to the Trust, without recourse, all of its right, title and interest in, to, and under the Subsequent Mortgage Loans and related assets described above, whether now existing or hereafter arising. In connection with such sale, assignment and transfer, the Originators and the Unaffiliated Seller shall satisfy the document delivery requirements set forth in Section 2.05 of the Sale and Servicing Agreement with respect to each Subsequent Mortgage Loan. Section 3. Representations and Warranties of Concerning the Subsequent Mortgage Loans. With respect to each Subsequent Mortgage Loan, the Depositor hereby assigns each of the representations and warranties made by the Originators and the Unaffiliated Seller in Section 3 of the Subsequent Transfer Agreement, on which the Trust relies in accepting the pledge of the Subsequent Mortgage Loans. Such representations and warranties speak as of the Subsequent Transfer Date unless otherwise indicated, and shall survive each sale, assignment, transfer and conveyance of the respective Subsequent Mortgage Loans to the Trust. Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any Noteholder of a breach of any of the representations and warranties made by the Originators and the Unaffiliated Seller pursuant to Section 3.03 of the Unaffiliated Seller's Agreement or this Section 3, the party discovering such breach shall give prompt written notice to such other Person; provided, that the Indenture Trustee shall have no duty to inquire or to investigate the breach of any such representations and warranties. The Originators and the Unaffiliated Seller will be obligated to repurchase a Subsequent Mortgage Loan which breaches a representation or warranty in accordance with the provisions of Section 4.02 of the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g) of the Unaffiliated Seller's Agreement. Such repurchase and indemnification obligation of the Originators and the Unaffiliated Seller shall constitute the sole remedy against the Originators and the Unaffiliated Seller, and the Trust for such breach available to the Servicer, the Trust, the Indenture Trustee, the Note Insurer and the Noteholders. Section 5. Amendment. This Subsequent Contribution Agreement may be amended from time to time by the Depositor and the Trust only with the prior written consent of the Note Insurer (or, in the event of a Note Insurer Default, the Majority Holders). Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT CONTRIBUTION AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT CONTRIBUTION AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM THEREIN. G-2 Section 7. Counterparts. This Subsequent Contribution Agreement may be executed in counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which shall constitute one and the same instrument. Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent Contribution Agreement will inure to the benefit of and be binding upon the parties hereto, the Note Insurer, the Noteholders, and their respective successors and permitted assigns. Section 9. Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 10. Exhibits. The exhibits attached hereto and referred to herein shall constitute a part of this Subsequent Contribution Agreement and are incorporated into this Subsequent Contribution Agreement for all purposes. Section 11. Intent of the Parties; Security Agreement. The Depositor and the Trust intend that the conveyance of all right, title and interest in and to the Subsequent Mortgage Loans and related assets described above by the Depositor to the Trust pursuant to this Subsequent Contribution Agreement shall be, and be construed as, a sale of the Subsequent Mortgage Loans from the Depositor to the Trust. It is, further, not intended that such conveyances be deemed to be pledges of the Subsequent Mortgage Loans by the Depositor to the Trust to secure a debt or other obligation of the Depositor. However, in the event that the Subsequent Mortgage Loans are held to be property of the Depositor, or if for any reason this Subsequent Contribution Agreement is held or deemed to create a security interest in the Subsequent Mortgage Loans, then it is intended that: (a) this Subsequent Contribution Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code of any other applicable jurisdiction; (b) the conveyance provided for in this Subsequent Contribution Agreement shall be deemed to be a grant by the Depositor to the Trust of a security interest in all of the Depositor's right, title and interest, whether now owned or hereafter acquired, in and to the Subsequent Mortgage Loans and related assets described above. The Depositor shall, to the extent consistent with this Subsequent Contribution Agreement, take such reasonable actions as may be necessary to ensure that, if this Subsequent Contribution Agreement were deemed to create a security interest in the Subsequent Mortgage Loans and the other property described above, such interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Subsequent Contribution Agreement. [Remainder of Page Intentionally Left Blank] G-3 IN WITNESS WHEREOF, the Depositor and the Trust have caused this Subsequent Contribution Agreement to be duly executed by their respective officers as of the day and year first above written. ABFS MORTGAGE LOAN TRUST 1999-1 By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee By: --------------------------------- Name: Title: PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION By: --------------------------------- Name: Title: G-4 EX-8.1 7 OPINION OF DEWEY BALLANTINE LLP Exhibit 8.1 ----------- March 30, 1999 The Addressees Listed on Schedule I Hereto Re: ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1 ------------------------------------ Ladies and Gentlemen: We have acted as special tax counsel in connection with the issuance and delivery of (x) certain mortgage backed notes denominated as ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1, Class A-1 (the "Class A-1 Notes") and Class A-2 (the "Class A-2 Notes" and, together with the Class A-1 Notes, the "Notes"), pursuant to an Indenture, dated as of March 1, 1999 (the "Indenture"), by and between the ABFS Mortgage Loan Trust 1999-1 (the "Trust") and The Bank of New York, as indenture trustee (the "Indenture Trustee"), and (y) two classes of trust certificates (the "Trust Certificates"), pursuant to a Trust Agreement, dated as of March 1, 1999 (the "Trust Agreement"), by and among First Union Trust Company, National Association, as owner trustee (the "Owner Trustee"), Prudential Securities Secured Financing Corporation, and ABFS 1999-1, Inc., as unaffiliated seller (the "Unaffiliated Seller"). Each class of Notes will be secured by a pledge of a separate portion of the assets of the Trust. The assets of the Trust (the "Trust Estate") will consist primarily of two pools of fixed-rate, closed-end, monthly-pay, business and consumer purpose home equity loans secured by first- or second-lien mortgages or deeds of trust on residential or commercial real properties (the "Mortgage Loans"). The Class A-1 Notes will be secured by the Mortgage Loans in the first pool ("Pool I") and the Class A-2 Notes will be secured by the Mortgage Loans in the second pool ("Pool II"). Each pool will constitute a separate sub-trust of the Trust. Each class of Trust Certificates evidences the entire beneficial ownership interest in the sub-trust of the Trust consisting of the related pool of Mortgage Loans. As special tax counsel, we have examined such documents as we deemed appropriate for the purposes of rendering the opinions set forth below, including the following: (a) a Prospectus, dated March 23, 1999, and a Prospectus Supplement, dated March 24, 1999 (together the "Prospectus"), with respect to the Notes, (b) an executed copy of the Indenture and the exhibits attached thereto, and (c) an executed copy of the Trust Agreement and the exhibits attached thereto. Terms capitalized herein and not otherwise defined herein shall have their respective meanings as set forth in Appendix I to the Indenture. We have examined the question of whether the Notes issued under the Indenture will be treated as indebtedness for federal income tax purposes. Our analysis is based on the The Addressees Listed on Schedule I Hereto; March 30, 1999; Page 2 provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder as in effect on the date hereof and on existing judicial and administrative interpretations thereof. These authorities are subject to change and to differing interpretations, which could apply retroactively. The opinion of special tax counsel is not binding on the courts or the Internal Revenue Service (the "IRS"). In general, whether a transaction constitutes the issuance of indebtedness for federal income tax purposes is a question of fact, the resolution of which is based primarily upon the economic substance of the instruments and the transaction pursuant to which they are issued rather than the form of the transaction or the manner in which the instruments are labeled. The IRS and the courts have set forth various factors to be taken into account in determining whether or not a transaction constitutes the issuance of indebtedness for federal income tax purposes, which we have reviewed as they apply to this transaction. Based upon the foregoing and upon the assumptions set forth below, we are of the opinion that for federal income tax purposes: 1. The Notes will be treated as indebtedness because (a) the characteristics of the Notes strongly indicate that in economic substance the Notes are a form of indebtedness and (b) the parties have stated unambiguously their intention to treat the Notes as indebtedness for tax purposes. 2. The statements under the caption "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" in the Prospectus are accurate and complete in all material respects. 3. Neither the sub-trust of the Trust consisting of the Pool I Mortgage Loans nor the sub-trust of the Trust consisting of the Pool II Mortgage Loans will be characterized as an association (or a publicly traded partnership) taxable as a corporation or a taxable mortgage pool. This opinion is furnished by us as counsel in connection with the conveyance of the Mortgage Loans to the Trust as of the date hereof. We express no opinion on any matter not discussed in this letter and we undertake no obligation to update this letter or the opinions contained herein after the date hereof. This opinion letter is rendered as of the Closing Date, at the request of the addressees hereof, for the sole benefit of each addressee, and no other person or entity is entitled to rely hereon without our prior written consent. Copies of this opinion letter may not be furnished to any other person or entity, nor may any portion of this opinion letter be quoted, circulated or referred to in any other document, without our prior written consent. Very truly yours, SCHEDULE I Financial Security Assurance Inc. Prudential Securities Incorporated 350 Park Avenue One New York Plaza New York, New York 10022 New York, New York 10292 Chase Bank of Texas, N.A., Prudential Securities Secured Financing Corporation as Collateral Agent One New York Plaza 801 West Greens Road New York, New York 10292 Suite 200 Houston, Texas 77067 Standard & Poor's Ratings Services Moody's Investors Service, Inc. 25 Broadway 99 Church Street New York, New York 10004 New York, New York 10007 American Business Credit, Inc. The Bank of New York, BalaPointe Office Centre as Indenture Trustee 111 Presidential Boulevard, Suite 127 101 Barclay Street Bala Cynwyd, PA 19004 New York, New 10286 ABFS Mortgage Loan Trust 1999-1 First Union Trust Company, National Association, as Owner c/o First Union Trust Company, National Association, as Trustee Owner Trustee One Rodney Square One Rodney Square 920 King Street, Suite 102 920 King Street, Suite 102 Wilmington, Delaware 19801 Wilmington, Delaware 19801
EX-10.1 8 FINANCIAL GUARANTY INSURANCE POLICY Exhibit 10.1 FINANCIAL FINANCIAL GUARANTY SECURITY INSURANCE POLICY ASSURANCE(Registered) Obligor: As described in Endorsement No. 1 Policy No.: 50792-N Obligations: $184,075,000 ABFS Mortgage Loan Trust Date of Issuance: 3/30/99 1999-1, Mortgage Backed Notes, Series 1999-1, Class A-1 and Class A-2 FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY GUARANTEES to each Holder, subject only to the terms of this Policy (which includes each endorsement hereto), the full and complete payment by the Obligor of Scheduled Payments of principal of, and interest on, the Obligations. For the further protection of each Holder, Financial Security irrevocably and unconditionally guarantees: (a) payment of the amount of any distribution of principal of, or interest on, the Obligations made during the Term of this Policy to such Holder that is subsequently avoided in whole or in part as a preference payment under applicable law (such payment to be made by Financial Security in accordance with Endorsement No. 1 hereto). (b) payment of any amount required to be paid under this Policy by Financial Security following Financial Security's receipt of notice as described in Endorsement No. 1 hereto. Financial Security shall be subrogated to the rights of each Holder to receive payments under the Obligations to the extent of any payment by Financial Security hereunder. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Holder" means the registered owner of any Obligation as indicated on the registration books maintained by or on behalf of the Obligor for such purpose or, if the Obligation is in bearer form, the holder of the Obligation. Scheduled Payments" means payments which are scheduled to be made during the Term of this Policy in accordance with the original terms of the Obligations when issued and without regard to any amendment or modification of such Obligations thereafter; payments which become due on an accelerated basis as a result of (a) a default by the Obligor, (b) an election by the Obligor to pay principal on an accelerated basis or (c) any other cause, shall not constitute "Scheduled Payments" unless Financial Security shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration. "Term of this Policy" shall have the meaning set forth in Endorsement No. 1 hereto. This Policy sets forth in full the undertaking of Financial Security, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto, or by the merger, consolidation or dissolution of the Obligor. Except to the extent expressly modified by an endorsement hereto, the premiums paid in respect of this Policy are nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Obligations prior to maturity. This Policy may not be canceled or revoked during the Term of this Policy. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this Policy to be executed on its behalf by its Authorized Officer. FINANCIAL SECURITY ASSURANCE INC. By: ------------------------------ AUTHORIZED OFFICER A subsidiary of Financial Security Assurance Holdings Ltd. 350 Park Avenue, New York, N.Y. 10022-6022 (212) 826-0100 Form 100NY (5/89) ENDORSEMENT NO. 1 TO FINANCIAL GUARANTY INSURANCE POLICY FINANCIAL SECURITY ASSURANCE INC. OBLIGOR: ABFS MORTGAGE LOAN TRUST 1999-1 OBLIGATIONS: $184,075,000 ABFS Mortgage Loan Trust 1999-1 Mortgage Backed Notes, Series 1999-1, Class A-1 and Class A-2 POLICY NO. 50792-N DATE OF ISSUANCE: March 30, 1999 1. Definitions. For all purposes of this Policy, the terms specified below shall have the meanings or constructions provided below. Capitalized terms used herein and not otherwise defined herein shall have the meanings provided in the Indenture unless the context shall otherwise require. "Business Day" means any day other than (i) a Saturday or Sunday, or (ii) a day on which banking institutions in New York are authorized or obligated by law or executive order to be closed. "Holder" shall not include the Obligor or any affiliates or successors thereof in the event the Obligor, or any such affiliate or successor, is a registered or beneficial owner of the Obligation. "Indenture" means the Indenture, dated as of March 1, 1999, between ABFS Mortgage Loan Trust 1999-1 as Issuer and the Indenture Trustee, as amended from time to time with the consent of Financial Security. "Indenture Trustee" means The Bank of New York, in its capacity as Indenture Trustee under the Indenture and the Sale and Servicing Agreement and any successor in such capacity. "Policy" means this Financial Guaranty Insurance Policy and includes each endorsement thereto. "Receipt" and "Received" mean actual delivery to Financial Security and to the Fiscal Agency (as defined below), if any, at or prior to 12:00 noon, New York City time, on a Business Day; delivery either on a day that is not a Business Day, or after 12:00 noon, New York City time, shall be deemed to be Received on the next succeeding Business Day. If any notice or Policy No.: 50792-N Date of Issuance: March 30, 1999 certificate given hereunder by the Indenture Trustee is not in proper form or is not properly completed, executed or delivered, it shall be deemed not to have been Received, and Financial Security or its Fiscal Agent shall promptly so advise the Indenture Trustee and the Indenture Trustee may submit an amended notice. "Sale and Servicing Agreement" means the Sale and Servicing Agreement, dated as of March 1, 1999, among ABFS Mortgage Loan Trust 1999-1 as Issuer, American Business Credit, Inc. as Servicer, Chase Bank of Texas, N.A. as Collateral Agent, Prudential Securities Secured Financing Corporation as Depositor and the Indenture Trustee, as amended from time to time with the consent of Financial Security. "Scheduled Payments" means, with respect to any Payment Date and the Obligations, the Insured Payments, without regard to any amendment or modification of the Notes, the Indenture or the Sale and Servicing Agreement, except such amendments or modifications to which Financial Security has given its prior written consent. Scheduled Payments shall not include any amounts due in respect of the Obligations attributable to any increase in interest rate, penalty or other sum payable by the Obligor by reason of any default or event of default in respect of the Obligations, or by reason of any deterioration of the creditworthiness of the Obligor, nor shall Scheduled Payments include, nor shall coverage be provided under this Policy in respect of, any taxes, withholding or other charge imposed by any governmental authority due in connection with the payment of any Scheduled Payment to a Holder. "Term of This Policy" means the period from and including the Date of Issuance to and including the date on which (i) all Scheduled Payments have been paid that have been required to be paid by the Obligor within the meaning of Section 4.01 of the Indenture, (ii) any period during which any Scheduled Payment could have been avoided in whole or in part as a preference payment under applicable bankruptcy, insolvency, receivership or similar law has expired, and (iii) if any proceedings requisite to avoidance as a preference payment have been commenced prior to the occurrence of (i) and (ii), a final and non-appealable order in resolution of each such proceeding has been entered. 2. Notices and Conditions to Payment in Respect of Scheduled Payments. Following Receipt by Financial Security of a notice and certificate from the Indenture Trustee in the form attached as Exhibit A to this Endorsement, Financial Security will pay any amount payable hereunder in respect of Scheduled Payments out of the funds of Financial Security on the later to occur of (a) 12:00 noon, New York City time, on the second Business Day following such Receipt; and (b) 12:00 noon, New York City time, on the Payment Date to which such claim relates. Payments due hereunder in respect of Scheduled Payments will be disbursed by wire transfer of immediately available funds to the Policy Payments Account established pursuant to the Sale and Servicing Agreement or, if no such Policy Payments Account has been established, to the Indenture Trustee. Financial Security shall be entitled to pay any amount hereunder in respect of Scheduled Payments on the Obligations, including any amounts due on the Obligations on an accelerated basis, whether or not any notice and certificate shall have been Received by A-2 Policy No.: 50792-N Date of Issuance: March 30, 1999 Financial Security as provided above; provided, however, that by acceptance of this Policy the Indenture Trustee agrees to provide upon request to Financial Security a notice and certificate in respect of any such payments made by Financial Security. Financial Security shall be entitled to pay hereunder any amount due on the Obligations on an accelerated basis at any time or from time to time, in whole or in part, prior to the scheduled date of payment thereof. Scheduled Payments insured hereunder shall not include interest, in respect of principal paid hereunder on an accelerated basis, accruing from after the date of such payment of principal. Financial Security's obligations hereunder in respect of Scheduled Payments shall be discharged to the extent such amounts are paid by the Issuer in accordance with the Indenture or disbursed by Financial Security as provided herein whether or not such funds are properly applied by the Indenture Trustee except as otherwise proved in paragraph 3 of this Endorsement. 3. Notices and Conditions to Payment in Respect of Scheduled Payments Avoided as Preference Payments. If any Scheduled Payment is avoided as a preference payment under applicable bankruptcy, insolvency, receivership or similar law, Financial Security will pay such amount out of the funds of Financial Security on the later of (a) the date when due to be paid pursuant to the Order referred to below or (b) the first to occur of (i) the fourth Business Day following Receipt by Financial Security from the Indenture Trustee of (A) a certified copy of the order of the court or other governmental body which exercised jurisdiction to the effect that the relevant Holder is required to return principal or interest distributed with respect to the Obligations during the Term of this Policy because such distributions were avoidable as preference payments under applicable bankruptcy law (the "Order"), (B) a certificate of the relevant Holder that the Order has been entered and is not subject to any stay and (C) an assignment duly executed and delivered by the relevant Holder, in such form as is reasonably required by Financial Security and provided to the relevant Holder by Financial Security, irrevocably assigning to Financial Security all rights and claims of the relevant Holder relating to or arising under the Obligations against the estate of the Obligor or otherwise with respect to such preference payment or (ii) the date of Receipt by Financial Security from the Indenture Trustee of the items referred to in clauses (A), (B) and (C) above if, at least four Business Days prior to such date of Receipt, Financial Security shall have Received written notice from the Indenture Trustee that such items were to be delivered on such date and such date was specified in such notice. Such payment shall be disbursed to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order and not to the Indenture Trustee or any Holder directly (unless a Holder has previously paid such amount to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order, in which case such payment shall be disbursed to the Indenture Trustee for distribution to such Holder upon proof of such payment reasonably satisfactory to Financial Security). In connection with the foregoing, Financial Security shall have the rights provided pursuant to Section 6.06 of the Sale and Servicing Agreement and Section 8.03(f) of the Indenture. 4. Governing Law. This Policy shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflict of laws principles thereof. 5. Fiscal Agent. At any time during the Term of this Policy, Financial Security may appoint a fiscal agent (the "Fiscal Agent") for purposes of this Policy by written A-3 Policy No.: 50792-N Date of Issuance: March 30, 1999 notice to the Indenture Trustee at the notice address specified in the Indenture specifying the name and notice address of the Fiscal Agent. From and after the date of receipt of such notice by the Indenture Trustee, (i) copies of all notices and documents required to be delivered to Financial Security pursuant to this Policy shall be simultaneously delivered to the Fiscal Agent and to Financial Security and shall not be deemed Received until Received by both and (ii) all payments required to be made by Financial Security under this Policy may be made directly by Financial Security or by the Fiscal Agent on behalf of Financial Security. The Fiscal Agent is the agent of Financial Security only and the Fiscal Agent shall in no event be liable to any Owner for any acts of the Fiscal Agent or any failure of Financial Security to deposit, or cause to be deposited, sufficient funds to make payments due under this Policy. 6. Waiver of Defenses. To the fullest extent permitted by applicable law, Financial Security agrees not to assert, and hereby waives, for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to Financial Security to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. 7. Notices. All notices to be given hereunder shall be in writing (except as otherwise specifically provided herein) and shall be mailed by registered mail or personally delivered or telecopied to Financial Security as follows: Financial Security Assurance Inc. 350 Park Avenue New York, NY 10022 Attention: Senior Vice President - Surveillance Department Re: ABFS Mortgage Loan Trust 1999-1 Telecopy No.: (212) 339-3518 Confirmation: (212) 826-0100 Financial Security may specify a different address or addresses by writing mailed or delivered to the Indenture Trustee. 8. Priorities. In the event any term or provision of the face of this Policy is inconsistent with the provisions of this Endorsement, the provisions of this Endorsement shall take precedence and shall be binding. 9. Exclusions From Insurance Guaranty Funds. This Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. This Policy is not covered by the Florida Insurance Guaranty Association created under Part II of Chapter 631 of the Florida Insurance Code. In the event Financial Security were to become insolvent, any claims arising under this Policy are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 14.2 of Chapter 1 of Part 2 of Division 1 of the California Insurance Code. A-4 Policy No.: 50792-N Date of Issuance: March 30, 1999 10. Surrender of Policy. The Indenture Trustee shall surrender this Policy to Financial Security for cancellation upon expiration of the Term of this Policy. IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused this Endorsement No. 1 to be executed by its Authorized Officer. FINANCIAL SECURITY ASSURANCE INC. By: ------------------------------ Authorized Officer A-5 Policy No.: 50792-N Date of Issuance: March 30, 1999 Exhibit A To Endorsement 1 NOTICE OF CLAIM AND CERTIFICATE ------------------------------- Financial Security Assurance Inc. 350 Park Avenue New York, NY 10022 The undersigned, a duly authorized officer of The Bank of New York (the "Indenture Trustee"), hereby certifies to Financial Security Assurance Inc. ("Financial Security"), with reference to Financial Guaranty Insurance Policy No. 50792-N, dated March 30, 1999 (the "Policy"), issued by Financial Security in respect of ABFS Mortgage Loan Trust 1999-1, Mortgage Backed Notes, Series 1999-1: (i) The Indenture Trustee is the Indenture Trustee under the Indenture for the Holders. (ii) The sum of all amounts on deposit or scheduled to be on deposit) in the Note Account and available for distribution to the Holders pursuant to the Indenture and the Sale and Servicing Agreement will be $_______________ (the "Shortfall") less than the aggregate amount of Scheduled Payments due on _______________. (iii) The Trustee is making a claim under the Policy for the Shortfall to be applied to the payment of Scheduled Payments. (iv) The Indenture Trustee agrees that, following receipt of funds from Financial Security, it shall (a) hold such amounts in trust and apply the same directly to the payment of Scheduled Payments on the Obligations when due; (b) not apply such funds for any other purpose; (c) not commingle such funds with other funds held by the Indenture Trustee and (d) maintain an accurate record of such payments with respect to each Obligation the corresponding claim on the Policy and proceeds thereof and, if the Obligation is required to be surrendered for such payment, shall stamp on each such Obligation the legend "$[insert applicable amount] paid by Financial Security and the balance hereof has been cancelled and reissued" and then shall deliver such Obligation to Financial Security. (v) The Indenture Trustee, on behalf of the Holders, hereby assigns to Financial Security the rights of the Holders with respect to the Trust Estate to the extent of any payments under the Policy, including, without limitation, any amounts due to the Holders in respect of securities law violations arising from the offer and sale A-1 Policy No.: 50792-N Date of Issuance: March 30, 1999 of the Obligations. The foregoing assignment is in addition to, and not in limitation of, rights of subrogation otherwise available to Financial Security in respect of such payments. The Indenture Trustee shall take such action and deliver such instruments as may be reasonably requested or required by Financial Security to effectuate the purpose or provisions of this clause (v). (vi) The Indenture Trustee, on its behalf and on behalf of the Holders, hereby appoints Financial Security as agent and attorney-in-fact for the Indenture Trustee and each such Holder in any legal proceeding with respect to the Obligations. The Indenture Trustee hereby agrees that Financial Security may at any time during the continuation of any proceeding by or against the Seller under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim in connection with an Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment with respect to the Obligations (a "Preference Claim"), (B) the direction of any appeal of any order relating to any Preference Claim at the expense of Financial Security but subject to reimbursement as provided in the Insurance Agreement and (C) the posting of any surety, supersedeas or performance bond pending any such appeal. In addition, the Indenture Trustee hereby agrees that Financial Security shall be subrogated to, and the Indenture Trustee on its behalf and on behalf of each Holder, hereby delegates, and assigns, to the fullest extent permitted by law, the rights of the Indenture Trustee and each Holder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. (vii) Payment should be made by wire transfer directed to the [SPECIFY INSURANCE ACCOUNT]. Unless the context otherwise requires, capitalized terms used in this Notice of Claim and Certificate and not defined herein shall have the meanings provided in the Policy. A-2 Policy No.: 50792-N Date of Issuance: March 30, 1999 IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this Notice of Claim and Certificate as of the ____ day of ___________________, _____. THE BANK OF NEW YORK as Indenture Trustee By: ------------------------ Title: --------------------- - -------------------------------------------------------------------------------- For Financial Security or Fiscal Agent Use Only Wire transfer sent _______________ by ____________________________ Confirmation Number ______________________________ A-3 EX-23.1 9 CONSENT OF PRICEWATERHOUSECOOPERS, L.L.P. Exhibit 23.1 [PricewaterhouseCoopers LLP Letterhead] CONSENT OF INDEPENDENT ACCOUNTANTS ------------- We consent to the incorporation by reference in the Prospectus Supplement of ABFS 1999-1, Inc. relating to the ABFS Mortgage Loan Trust 1999-1 of our report dated January 26, 1998 on our audits of the consolidated financial statements of Financial Security Assurance Inc. and Subsidiaries as of December 31, 1997 and 1996, and for each of the three years in the period ended December 31, 1997. We also consent to the reference to our Firm under the caption "Experts". PricewaterhouseCoopers LLP March 24, 1999 -----END PRIVACY-ENHANCED MESSAGE-----