<PAGE> 1
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)
August 24, 1999
Advanta Conduit Receivables, Inc.
(Exact name of registrant as specified in its charter)
Nevada 333-75295 88-0360305
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
Attention: General Counsel
10790 Rancho Bernardo Drive
San Diego, California 92127
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code (858) 676-3099
Advanta Conduit Receivables, Inc., as Sponsor
on behalf of Advanta Mortgage Loan Trust 1999-3
(Exact name of registrant as specified in its charter)
Nevada 333-75295-01 88-0360305
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
Advanta Conduit Receivables, Inc. (the "Registrant" or the
"Sponsor") registered an issuance of $1,699,051,007.20 in principal amount of
Mortgage Loan Asset-Backed Certificates on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"),
by the Registration Statement on Form S-3 (File No. 333-75295) (the
"Registration Statement").
Pursuant to the Registration Statement, the Sponsor formed
Advanta Mortgage Loan Trust 1999-3 (the "Trust") which issued approximately
$525,000,000 in aggregate principal amount of its Mortgage Loan Asset-Backed
Certificates (the "Certificates"), on August 24, 1999 (the "Closing Date").
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 Certificates were issued pursuant to a Pooling and
Servicing Agreement (the "P&S Agreement") attached hereto as Exhibit 4.1, dated
as of August 24, 1999, among the Sponsor, Advanta Mortgage Corp. USA, as Master
Servicer, and Bankers Trust Company of California, N.A., as Trustee.
The primary assets of the Trust are pool of closed-end
mortgage loans ("Mortgage Loans"), used predominantly to refinance an existing
mortgage loan on more favorable terms, to consolidate debt or to obtain cash
proceeds by borrowing against the related borrower's equity in the real property
and improvements pledged to secure the related Mortgage Loan, secured primarily
by mortgages on 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) which were conveyed to the Trust on the Closing Date. As of the
Closing Date, the Mortgage Loans had the characteristics described in the
Prospectus dated August 10, 1999, the Preliminary Prospectus Supplement dated
August 13, 1999 filed pursuant to Rule 424(b)(3) of the Act with the Commission
and the Prospectus Supplement dated August 17, 1999 filed pursuant to Rule
424(b)(2) of the Act with the Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
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(c) Exhibits:
1.1 Underwriting Agreement, dated August 17, 1999, between the
Sponsor and Bear, Stearns & Co. Inc., as Representative of the Underwriters.
4.1 Pooling and Servicing Agreement, dated August 1, 1999,
among the Sponsor, Advanta Mortgage Corp. USA, as Master Servicer, and Bankers
Trust Company of California, N.A., as Trustee.
4.2 Certificate Insurance Policy, dated August 24, 1999, and
issued and delivered by Ambac Assurance Corporation.
4.3 Conveyance Agreement, dated August 24, 1999, among Advanta
National Bank, Advanta Mortgage Corp. Midwest, Advanta Mortgage Corp. Northeast,
Advanta Finance Corp., Advanta Bank Corp., Advanta Mortgage Corp. USA and
Advanta Mortgage Conduit Services, Inc. (collectively, the "Affiliated
Originators"), the Sponsor, and Bankers Trust Company of California, N.A., as
Trustee.
4.4 Mortgage Loan Transfer Agreement, dated August 1, 1999,
among the Affiliated Originators, the Sponsor and Bankers Trust Company of
California, N.A., as Trustee.
5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated as of August 24, 1999.*
8.1 Opinion of Dewey Ballantine LLP regarding tax matters,
dated as of August 24, 1999.*
10.1 Indemnification Agreement, dated August 17, 1999, among
Bear, Stearns & Co. Inc., Salomon Smith Barney, Inc. and Prudential Securities
Incorporated, as Underwriters (the "Underwriters") and Ambac Assurance
Corporation, as Certificate Insurer.
10.2 Guaranty, dated August 24, 1999, to Ambac Assurance
Corporation and Bear, Stearns & Co. Inc., as Representative of the Underwriters,
issued by Advanta Mortgage Holding Company.
10.3 Guaranty, dated August 24, 1999, to Ambac Assurance
Corporation and Advanta Mortgage Loan Trust 1999-3 issued by Advanta Mortgage
Holding Company.
23.1 Consent of KPMG Inc. regarding financial statements of
Ambac Assurance Corporation, and their report.*
* Previously filed on Form 8-K filed with the Securities and
Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
ADVANTA CONDUIT RECEIVABLES, INC.
By: /s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor on behalf of Advanta Mortgage
Loan Trust 1999-3
By: /s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
Dated: August 24, 1999
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EXHIBIT INDEX
Exhibit No. Description
1.1 Underwriting Agreement, dated August 17, 1999, between the
Sponsor and Bear, Stearns & Co. Inc., as Representative of the
Underwriters.
4.1 Pooling and Servicing Agreement, dated August 1, 1999, among
the Sponsor, Advanta Mortgage Corp. USA, as Master Servicer,
and Bankers Trust Company of California, N.A., as Trustee.
4.2 Certificate Insurance Policy, dated August 24, 1999, and
issued and delivered by Ambac Assurance Corporation.
4.3 Conveyance Agreement, dated August 24, 1999, among Advanta
National Bank, Advanta Mortgage Corp. Midwest, Advanta
Mortgage Corp. Northeast, Advanta Finance Corp., Advanta Bank
Corp., Advanta Mortgage Corp. USA and Advanta Mortgage Conduit
Services, Inc. (collectively, the "Affiliated Originators"),
the Sponsor, and Bankers Trust Company of California, N.A., as
Trustee.
4.4 Mortgage Loan Transfer Agreement, dated August 1, 1999, among
the Affiliated Originators, the Sponsor and Bankers Trust
Company of California, N.A., as Trustee.
5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated as of August 24, 1999.*
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated
as of August 24, 1999.*
10.1 Indemnification Agreement, dated August 17, 1999, among Bear,
Stearns & Co. Inc., Salomon Smith Barney, Inc. and Prudential
Securities Incorporated, as Underwriters (the "Underwriters")
and Ambac Assurance Corporation, as Certificate Insurer.
10.2 Guaranty, dated August 24, 1999, to Ambac Assurance
Corporation and Bear, Stearns & Co. Inc., as Representative of
the Underwriters, issued by Advanta Mortgage Holding Company.
10.3 Guaranty, dated August 24, 1999, to Ambac Assurance
Corporation and Advanta Mortgage Loan Trust 1999-3 issued by
Advanta Mortgage Holding Company.
23.1 Consent of KPMG Inc. regarding financial statements of Ambac
Assurance Corporation, and their report.*
* Previously filed on Form 8-K filed with the Securities and
Exchange Commission.
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Exhibit 1.1
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ADVANTA CONDUIT RECEIVABLES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1999-3
UNDERWRITING AGREEMENT
August 17, 1999
BEAR, STEARNS & CO. INC.
As Representative of the Underwriters (the "Representative")
named in Schedule I
245 Park Avenue, New York, NY 10167
Ladies and Gentlemen:
Advanta Conduit Receivables, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1999-3, consisting of (i) the Class A-1 Certificates (the "Class A-1
Certificates"), (ii) the Class A-2 Certificates (the "Class A-2 Certificates"),
(iii) the Class A-3 Certificates (the "Class A-3 Certificates"), (iv) the Class
A-4 Certificates (the "Class A-4 Certificates"), (v) the Class A-5 Certificates
(the "Class A-5 Certificates"), (vi) the Class A-6 Certificates (the "Class A-6
Certificates" and together with the Class A-1 Certificates, Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the
Class A-5 Certificates, the "Fixed Rate Group Certificates"), (vii) the Class
A-7 Certificates (the "Class A-7 Certificates" or the "Adjustable Rate Group
Certificates", and together with the Fixed Rate Group Certificates, the "Offered
Certificates"), (viii) the Class B Certificates, (ix) the residual class with
respect to the Upper-Tier REMIC held by the Trust (the "Class R Certificates")
and (x) the residual class with respect to the Lower-Tier REMIC held by the
Trust (the "Class RL Certificates", together with the Offered Certificates, the
Class B Certificates and the Class R Certificates, the "Certificates"). Only the
Offered Certificates are offered by the Underwriters.
The Offered Certificates will be issued by the Advanta
Mortgage Loan Trust 1999-3 (the "Trust"), and will evidence in the aggregate the
beneficial interest in a trust estate (the "Trust Estate") consisting primarily
of a pool of closed-end mortgage loans having fixed rates of interest (the
"Fixed Rate Group"), a pool of closed-end mortgage loans having adjustable rates
of interest (the "ARM Group", and together with the Fixed Rate Group, the
"Mortgage Loans"), amounts on deposit with Bankers Trust Company of California,
N.A., as trustee of the Trust (the "Trustee") in an account to be used to
acquire additional mortgage loans following the Closing Date (as hereinafter
defined) for the Trust (the "Pre-Funding Account") and certain related property.
The Mortgage Loans shall have, on or about August 24, 1999 (the "Closing Date"),
an aggregate principal balance of approximately $474,500,582 and the Pre-Funding
Account shall have approximately $58,850,000, of which an amount equal to
$46,100,000 may be applied to the purchase of additional loans for the Fixed
Rate Group and an amount equal to approximately $12,750,000 may be applied to
the purchase of additional loans for the ARM
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Group during the period from the Closing Date to on or before November 18, 1999.
The Offered Certificates are to be issued under a pooling and servicing
agreement, to be dated as of August 1, 1999 (the "Pooling and Servicing
Agreement"), among the Company, as Sponsor, Advanta Mortgage Corp. USA, as
Master Servicer, and the Trustee.
On or prior to the date of issuance of the Certificates, the
Company will obtain a certificate guaranty insurance policy (the "Policy")
issued by Ambac Assurance Corporation (the "Insurer") which will unconditionally
and irrevocably guarantee to the Trustee for the benefit of the holders of the
Offered Certificates the amount equal to (i) Group I Insured Payment (as defined
in the Pooling and Servicing Agreement), for the Fixed Rate Group Certificates
and (ii) the Group II Insured Payment (as defined in the Pooling and Servicing
Agreement), for the Adjustable Rate Group.
The Offered Certificates are more fully described in a
Registration Statement which the Company has furnished to the Underwriters.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Pooling and Servicing Agreement.
Simultaneously with the execution of the Pooling and Servicing
Agreement, the Company will enter into a conveyance agreement pursuant to the
Mortgage Loan Transfer Agreement dated on or about August 1, 1999 among the
Trustee, Advanta Conduit Receivables, Inc. and the Affiliated Originators or the
Unaffiliated Originators named therein (together, the "Purchase Agreement"),
pursuant to which the Affiliated Originators and the Unaffiliated Originators
will transfer to the Company all of their right, title and interest in and to
the Mortgage Loans as of the Closing Date.
The Company will also enter into an Indemnification Agreement
(the "Indemnification Agreement") dated as of August 17, 1999 among the
Underwriters and the Insurer.
Section 1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with the Underwriters that:
a. A Registration Statement on Form S-3 (registration
statement number 333-75295), as amended by Post-Effective Amendments thereto,
have (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933 (the "Securities Act") and the rules and regulations (the
"Rules and Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies of
such Registration Statement has been delivered by the Company to the
Underwriters. As used in this Agreement, "Effective Time" means the date and the
time as of which such Registration Statements, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such Registration Statement, or amendments thereof,
including a preliminary prospectus supplement which, as completed, is proposed
to be used in connection with the sale of the Offered Certificates and any
prospectus filed with
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the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended by all
Post-Effective Amendments thereto heretofore filed with the Commission,
at the Effective Time, including any documents incorporated by
reference therein at such time; and "Prospectus" means such final
prospectus, as supplemented by a final prospectus supplement (the
"Prospectus Supplement") relating to the Offered Certificates, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to include any report of the Company filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
Effective Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. There are no
contracts or documents of the Company which are required to be filed as
exhibits to the Registration Statement pursuant to the Securities Act
or the Rules and Regulations which have not been so filed or
incorporated by reference therein on or prior to the Effective Date of
the Registration Statement. The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
To the extent that any Underwriter (i) has provided
to the Company Collateral term sheets (as hereinafter defined) that
such Underwriter has provided to a prospective investor, the Company
has filed such Collateral term sheets as an exhibit to a report on Form
8-K within two business days of its receipt thereof, or (ii) has
provided to the Company Structural term sheets or Computational
Materials (each as defined below) that such Underwriter has provided to
a prospective investor, the Company will file or cause to be filed with
the Commission a report on Form 8-K containing such Structural term
sheet and Computational Materials, as soon as reasonably practicable
after the date of this Agreement, but in any event, not later than the
date on which the Prospectus is filed with the Commission pursuant to
Rule 424 of the Rules and Regulations.
b. The Registration Statement conforms, and the
Preliminary Prospectus and the Prospectus and any further amendments or
supplements to the Registration Statement or the Preliminary Prospectus
and the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material
fact or omit to state a material fact
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required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of its date, and as amended
or supplemented as of the Closing Date does not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided
that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to
the Company in writing by the Underwriters expressly for use therein.
c. The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
d. Since the respective dates as of which information
is given in the Prospectus, there has not been any material adverse
change in the general affairs, management, financial condition, or
results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus as supplemented or amended as of the
Closing Date.
e. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority necessary
to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the Indemnification
Agreement, the Insurance and Indemnity Agreement, dated as of August
24, 1999, between the Insurer, the Master Servicer, the Company and the
Trustee (the "Insurance Agreement"), and the Purchase Agreement, and to
cause the Certificates to be issued.
f. There are no actions, proceedings or
investigations pending before or threatened by any court,
administrative agency or other tribunal to which the Company is a party
or of which any of its properties is the subject (a) which if
determined adversely
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to the Company would have a material adverse effect on the business or
financial condition of the Company, (b) which asserts the invalidity of
this Agreement, the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, the Purchase Agreement, or
the Certificates, (c) which seeks to prevent the issuance of the
Certificates or the consummation by the Company of any of the
transactions contemplated by the Pooling and Servicing Agreement, the
Insurance Agreement, the Indemnification Agreement, the Purchase
Agreement or this Agreement, as the case may be, or (d) which might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, the Pooling
and Servicing Agreement, the Insurance Agreement, the Indemnification
Agreement, the Purchase Agreement, this Agreement or the Certificates.
g. This Agreement has been, and the Pooling and
Servicing Agreement, the Insurance Agreement, the Indemnification
Agreement and the Purchase Agreement when executed and delivered as
contemplated hereby and thereby will have been, duly authorized,
executed and delivered by the Company, and this Agreement constitutes,
and the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement when executed and
delivered as contemplated herein, will constitute, legal, valid and
binding instruments enforceable against the Company in accordance with
their respective terms, subject as to enforceability to (x) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (z) with respect to rights of indemnity under
this Agreement, the Indemnification Agreement and limitations of public
policy under applicable securities laws.
h. The execution, delivery and performance of this
Agreement, the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement and the Purchase Agreement by
the Company and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of the Certificates
do not and will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party, by which the Company is
bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation or by-laws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets.
i. Arthur Andersen LLP are independent public
accountants with respect to the Company as required by the Securities
Act and the Rules and Regulations.
j. The direction by the Company to the Trustee to
execute, authenticate, issue and deliver the Certificates has been duly
authorized by the Company, and assuming the Trustee has been duly
authorized to do so, when executed,
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authenticated, issued and delivered by the Trustee in accordance with
the Pooling and Servicing Agreement, the Certificates will be validly
issued and outstanding and will be entitled to the benefits provided by
the Pooling and Servicing Agreement.
k. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States is required for the issuance of the
Certificates and the sale of the Offered Certificates to the
Underwriters, or the consummation by the Company of the other
transactions contemplated by this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification Agreement and
the Purchase Agreement, except 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 Certificates by the Underwriters or as
have been obtained.
l. The Company possesses all material licenses,
certificates, authorities or permits issued by the appropriate State,
Federal or foreign regulatory agencies or bodies necessary to conduct
the business now conducted by it and as described in the Prospectus,
and the Company has not received notice of any proceedings relating to
the revocation or modification of any such license, certificate,
authority or permit which if decided adversely to the Company would,
singly or in the aggregate, materially and adversely affect the conduct
of its business, operations or financial condition.
m. At the time of execution and delivery of the
Pooling and Servicing Agreement, the Company will or will cause the
Trust to: (i) have good title to the interest in the Mortgage Loans,
free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"); (ii)
not have assigned to any person any of its right, title or interest in
the Mortgage Loans, in the Purchase Agreement, in the Pooling and
Servicing Agreement or in the Certificates being issued pursuant
thereto; and (iii) have the power and authority to sell its interest in
or cause the sale of the Mortgage Loans to the Trustee, on behalf of
the Trust, and to sell the Offered Certificates to the Underwriters.
Upon execution and delivery of the Pooling and Servicing Agreement by
the Trustee, the Trustee will have acquired beneficial ownership of all
of the Company's right, title and interest in and to the Mortgage
Loans. Upon delivery to the Underwriters of the Offered Certificates,
the Underwriters will have good title to the Offered Certificates, free
of any Liens.
n. As of the opening of business on August 1, 1999
(the "Cut-Off Date"), and on each Subsequent Cut-Off Date (as defined
in the Pooling and Servicing Agreement) each of the Mortgage Loans will
meet the eligibility criteria described in the Prospectus and will
conform to the descriptions thereof contained in the Prospectus.
o. Neither the Company nor the Trust created by the
Pooling and Servicing Agreement is an "investment company" within the
meaning of such term under
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the Investment Company Act of 1940, as amended (the "1940 Act") and the
rules and regulations of the Commission thereunder.
p. At the Closing Date, the Offered Certificates and
the Pooling and Servicing Agreement will conform in all material
respects to the descriptions thereof contained in the Prospectus.
q. At the Closing Date, the Offered Certificates
shall have been rated in the highest rating category by at least two
nationally recognized rating agencies.
r. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement,
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and the Certificates
have been paid or will be paid at or prior to the Closing Date.
s. At the Closing Date, each of the representations
and warranties of the Company set forth in the Pooling and Servicing
Agreement will be true and correct in all material respects.
Any certificate signed by an officer of the Company and
delivered to the Representative or counsel for the Underwriters in connection
with an offering of the Offered Certificates shall be deemed, and shall state
that it is, a representation and warranty as to the matters covered thereby to
each person to whom the representations and warranties in this Section 1 are
made.
Section 2. Purchase and Sale. The commitment of the
Underwriters to purchase the Offered Certificates pursuant to this Agreement
shall be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and conditions
herein set forth. The Company agrees to instruct the Trustee to issue and agrees
to sell to the Underwriters, and the Underwriters agree (except as provided in
Sections 10 and 11 hereof) to purchase from the Company the aggregate initial
principal amounts of Offered Certificates set forth on Schedule A, at the
purchase price or prices set forth in Schedule A.
The obligations of the Underwriters hereunder to purchase the
Offered Certificates of each Class shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate principal amount of
Offered Certificates as is indicated with respect to each Underwriter under the
caption "Underwriting" in the Prospectus. The rights of the Company and a
non-defaulting Underwriter shall be as set forth in Section 13 hereof.
Section 3. Delivery and Payment. Delivery of and payment for
the Offered Certificates to be purchased by the Underwriters shall be made at
the offices of Dewey Ballantine LLP, 1301 Sixth Avenue, New York, New York
10019, or at such other place as shall be agreed upon by the Representative and
the Company at 10:00 A.M. New York City time on August 24, 1999 or at such other
time or date as shall be agreed upon by the Representative and the Company.
Payment shall be made to the Company by wire transfer of same day funds payable
to
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the account of the Company. Delivery of the Offered Certificates shall be made
to the Representative for the accounts of the Underwriters against payment of
the purchase price thereof. The Offered Certificates shall be in such
denominations and registered in such names as the Company and the Representative
have agreed upon at least two business days prior to the Closing Date. The
Offered Certificates will be made available for examination by the
Representative no later than 2:00 p.m. New York City time on the first business
day prior to the Closing Date.
Section 4. Offering by the Underwriters. It is understood
that, subject to the terms and conditions hereof, the Underwriters propose to
offer the Offered Certificates for sale to the public as set forth in the
Prospectus.
Section 5. Covenants of the Company. The Company agrees as
follows:
a. (i) To prepare the Preliminary Prospectus
Supplement and the Prospectus Supplement in a form approved by the
Representative and to file such Preliminary Prospectus Supplement and
the Prospectus Supplement pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement;
(ii) to make no further amendment or any supplement to the Registration
Statement or to the Preliminary Prospectus and the Prospectus prior to
the Closing Date except as permitted herein; (iii) to advise the
Representative, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Preliminary Prospectus and
the Prospectus or any amended Preliminary Prospectus or the Prospectus
has been filed and to furnish the Representative with copies thereof;
(iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Preliminary Prospectus and
the Prospectus and, for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Offered
Certificates; and (v) to promptly advise the Representative of its
receipt of notice of the issuance by the Commission of any stop order
or of: (w) any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus; (x) the suspension of the
qualification of the Offered Certificates for offering or sale in any
jurisdiction; (y) the initiation of or threat of any proceeding for any
such purpose; (z) any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information. In the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, the
Company promptly shall use its best efforts to obtain the withdrawal of
such order or suspension.
b. To furnish promptly to the Representative and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and of each
amendment thereto filed with the Commission, including all consents and
exhibits filed therewith.
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<PAGE> 10
c. To deliver promptly to the Representative such
number of the following documents as the Representative shall
reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission and each amendment thereto (in
each case including exhibits); (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus; and (iii) any
document incorporated by reference in the Prospectus (including
exhibits thereto). If the delivery of a prospectus is required at any
time prior to the expiration of nine months after the Effective Time in
connection with the offering or sale of the Offered Certificates, and
if at such time any events shall have occurred 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
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act
or the Exchange Act, the Company shall notify the Representative and,
upon the Representative's request, shall file such document and prepare
and furnish without charge to the Underwriters and to any dealer in
securities as many copies as the Representative may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which corrects such statement or omission or effects such
compliance, and in case any of the Underwriters are required to deliver
a Prospectus in connection with sales of any of the Offered
Certificates at any time nine months or more after the Effective Time,
upon the request of the Representative but at the expense of such
Underwriter, the Company shall prepare and deliver to such Underwriter
as many copies as such Underwriter may reasonably request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the
Securities Act.
d. To file promptly with the Commission any amendment
to the Registration Statement or the Prospectus or any supplement to
the Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission.
e. Prior to filing with the Commission any (i)
Preliminary Prospectus, (ii) amendment to the Registration Statement or
supplement to the Prospectus, or document incorporated by reference in
the Prospectus, or (iii) Prospectus pursuant to Rule 424 of the Rules
and Regulations, to give at least three business days prior
notification to the Representative and to furnish a copy thereof to the
Representative and counsel for the Underwriters, provided, however,
that if any of the foregoing filings referred to in (i), (ii), or (iii)
relate to the Offered Certificates, the Company shall obtain the
consent of the Representative to such filing, which consent shall not
be unreasonably withheld.
f. [Reserved].
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<PAGE> 11
g. To use its best efforts, in cooperation with the
Representative, to qualify the Offered Certificates for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate,
and maintain or cause to be maintained such qualifications in effect
for as long as may be required for the distribution of the Offered
Certificates. The Company will file or cause the filing of such
statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
h. The Company shall not, without the
Representative's prior written consent, which consent shall not be
unreasonably withheld, publicly offer or sell or contract to sell any
mortgage pass-through securities, collateralized mortgage obligations
or other similar securities representing interests in or secured by
other mortgage-related assets originated or owned by the Company for a
period of 5 business days following the commencement of the offering of
the Offered Certificates to the public.
i. So long as the Offered Certificates shall be
outstanding, to deliver to the Representative as soon as such
statements are furnished to the Trustee: (i) the annual statement as to
compliance delivered to the Trustee pursuant to Article VII of the
Pooling and Servicing Agreement; (ii) the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to
Article VIII of the Pooling and Servicing Agreement; and (iii) the
Monthly Statement furnished to the Certificateholders pursuant to
Article VII of the Pooling and Servicing Agreement.
j. To apply the net proceeds from the sale of the
Offered Certificates in the manner set forth in the Prospectus.
Section 6. Conditions to the Underwriters' Obligations. The
obligations of the Underwriters to purchase the Offered Certificates pursuant to
this Agreement are subject to: (i) the accuracy on and as of the Closing Date of
the representations and warranties on the part of the Company herein contained;
(ii) the performance in all material respects by the Company of all of their
respective obligations hereunder; and (iii) the following conditions as of the
Closing Date:
a. The Representative shall have received
confirmation of the effectiveness of the Registration Statement. No
stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission. Any
request of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus shall have been complied
with.
b. None of the Underwriters shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact or omits to state a fact
which, in the opinion of Fried, Frank, Harris, Shriver & Jacobson,
counsel for the Underwriters, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
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<PAGE> 12
c. All corporate proceedings and other legal matters
relating to the authorization, form and validity of this Agreement, the
Pooling and Servicing Agreement, the Purchase Agreement, the Insurance
Agreement, the Indemnification Agreement, the Certificates, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to counsel for the Underwriters,
and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
d. The Representative shall have received the
favorable opinion of Dewey Ballantine LLP, special counsel to the
Company with respect to the following items, dated the Closing Date, to
the effect that:
1. The Company has been duly organized and
is validly existing as a corporation in good standing under
the laws of the State of Nevada, and is qualified to do
business in each state necessary to enable it to perform its
obligations as Sponsor under the Pooling and Servicing
Agreement. The Company has the requisite power and authority
to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of,
this Agreement, the Insurance Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement.
2. This Agreement, the Certificates, the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement have been
duly and validly authorized, executed and delivered by the
Company, all requisite corporate action having been taken with
respect thereto, and each (other than the Certificates)
constitutes the valid, legal and binding agreement of the
Company.
3. Neither the transfer of the Mortgage
Loans to the Trust Estate, the issuance or sale of the
Certificates nor the execution, delivery or performance by the
Company of the Pooling and Servicing Agreement, this
Agreement, the Insurance Agreement, the Indemnification
Agreement or the Purchase Agreement (A) conflicts or will
conflict with or results or will result in a breach of, or
constitutes or will constitute a default under, (i) any term
or provision of the certificate of incorporation or bylaws of
the Company; (ii) any term or provision of any material
agreement, contract, instrument or indenture, to which the
Company is a party or is bound and known to such counsel; or
(iii) any order, judgment, writ, injunction or decree of any
court or governmental agency or body or other tribunal having
jurisdiction over the Company and known to such counsel; 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 Certificates, except as otherwise contemplated by the
Pooling and Servicing Agreement.
-11-
<PAGE> 13
4. With respect to the Mortgage Loans, the
endorsement and delivery of each Note, and the preparation,
delivery and recording of an Assignment in each case with
respect to each Mortgage is sufficient to fully transfer to
the Trustee for the benefit of the Owners of the Certificates
all right, title and interest of the Company in the Note and
Mortgage, as noteholder and mortgagee or assignee thereof,
subject to any exceptions set forth in such opinion, and will
be sufficient to permit the Trustee to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company and to
prevent any other sale, transfer, assignment, pledge or other
encumbrance of the Mortgage Loans by the Company from being
enforceable.
5. No consent, approval, authorization or
order of, registration or filing with, or notice to, courts,
governmental agency or body or other tribunal is required
under the laws of the State of New York, for the execution,
delivery and performance of the Pooling and Servicing
Agreement, this Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement or the
offer, issuance, sale or delivery of the Offered Certificates
or the consummation of any other transaction contemplated
thereby by the Company, except such which have been obtained.
6. There are no actions, proceedings or
investigations, to such counsel's knowledge, pending or
threatened against the Company before any court, governmental
agency or body or other tribunal (i) asserting the invalidity
of the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, this Agreement, the
Purchase Agreement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by the Pooling and
Servicing Agreement, the Indemnification Agreement, or this
Agreement, (iii) which would materially and adversely affect
the performance by the Company of obligations under, or the
validity or enforceability of, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification
Agreement, the Certificates, the Purchase Agreement or this
Agreement or (iv) that would adversely affect the status of
the Trust Estate as a "real estate mortgage investment
conduit" ("REMIC") as such term is defined in the Internal
Revenue Code of 1986, as amended.
7. To the best of the knowledge of such
counsel, the Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or
any order directed to any prospectus relating to the Offered
Certificates (including the Prospectus), and has not initiated
or threatened any proceeding for that purpose.
8. The Registration Statement and the
Prospectus (other than the financial and statistical data
included therein, as to which such counsel need
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<PAGE> 14
express no opinion), including the Incorporated Documents, as
of the date on which the Registration Statement was declared
effective and as of the date hereof, comply as to form in all
material respects with the requirements of the Securities Act
and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder, and such counsel
does 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 which has not been filed or described
as required.
9. Neither the qualification of the Pooling
and Servicing Agreement under the Trust Indenture Act of 1939,
as amended nor the registration of the Trust created by such
Pooling and Servicing Agreement under the Investment Company
Act of 1940, as amended is presently required.
10. The statements in the Prospectus set
forth under the captions "DESCRIPTION OF THE SECURITIES," "THE
AGREEMENTS" and the statements in the Prospectus Supplement
set forth under the caption "DESCRIPTION OF THE CERTIFICATES,"
to the extent such statements purport to summarize certain
provisions of the Offered Certificates or of the Pooling and
Servicing Agreement, are fair and accurate in all material
respects.
11. The statements in the Prospectus and
Prospectus Supplement set forth under the captions "ERISA
CONSIDERATIONS," "MATERIAL FEDERAL INCOME TAX CONSEQUENCES,"
and the statements in the Prospectus set forth under the
caption "LEGAL ASPECTS OF MORTGAGE LOANS," to the extent that
they constitute matters of federal, New York or California
law, or federal, New York or California legal conclusions
provide a fair and accurate summary of such law or
conclusions.
12. Assuming that (a) the Trustee causes the
Trust created under the Pooling and Servicing Agreement to
elect, as the Trustee has covenanted to do in the Pooling and
Servicing Agreement, to be treated as a REMIC and (b) the
parties to the Pooling and Servicing Agreement comply with the
terms thereof, the Trust will be treated as a REMIC, the
Offered Certificates and the Class B Certificates issued
pursuant to the Pooling and Servicing Agreement will be
treated as the "regular interests" in a REMIC and the Class R
Certificates and the Class RL Certificates issued pursuant to
the Pooling and Servicing Agreement will be treated as
"residual interests" in a REMIC. The Trust will not be subject
to tax upon its income or assets by any taxing authority of
the State of New York or New York City or of the State of
California (except that no opinion need be expressed with
respect to any minimum tax).
13. Such opinion shall also relate to
comparable matters with respect to the Affiliated Originators
and Advanta Mortgage Holding Company.
-13-
<PAGE> 15
14. No information has come to such
counsel's attention which causes them to believe that the
Prospectus (other than the financial statement and other
financial and statistical data contained therein, as to which
such counsel need express no opinion), as of the date thereof,
contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
15. Such other matters as the Representative
may reasonably request.
In rendering its opinions, the counsel described above may
rely, as to matters of fact, on certificates of responsible officers of the
Company, the Trustee and public officials. Such opinions may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
e. The Representative shall have received letters,
including bring-down letters, from Arthur Andersen LLP, dated on or
before the Closing Date, in form and substance satisfactory to the
Representative and counsel for the Underwriters, to the effect that
they have performed certain specified procedures requested by the
Representative with respect to the information set forth in the
Prospectus and certain matters relating to the Company.
f. The Offered Certificates shall have received the
ratings listed on Schedule A hereto, and such ratings shall not have
been rescinded or downgraded as of the Closing Date. The Representative
and counsel for the Underwriters shall have received copies of any
opinions of counsel supplied to the rating organizations relating to
any matters with respect to the Offered Certificates. Any such opinions
shall be dated the Closing Date and addressed to the Underwriters or
accompanied by reliance letters to the Underwriters or shall state that
the Underwriters may rely upon them.
g. The Representative shall have received from the
Company a certificate, signed by the president, a senior vice president
or a vice president of the Company, dated the Closing Date, to the
effect that the signer of such certificate has carefully examined the
Registration Statement, the Pooling and Servicing Agreement and this
Agreement and that, to the best of his or her knowledge based upon
reasonable investigation:
1. the representations and warranties of the
Company in this Agreement, as of the Closing Date, and in the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and in all
related agreements, as of the date specified in such
agreements, are true and correct, and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Closing Date;
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<PAGE> 16
2. except as set forth in the Prospectus,
there are no actions, suits or proceedings pending, or to the
best of such officer's knowledge, threatened against or
affecting the Company which if adversely determined,
individually or in the aggregate, would be reasonably likely
to adversely affect the Company's obligations under the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, this Agreement or the Purchase
Agreement in any material way; and no merger, liquidation,
dissolution or bankruptcy of the Company is pending or
contemplated;
3. the information contained in the
Registration Statement and the Prospectus relating to the
Company, the Mortgage Loans or the servicing procedures of it
or its affiliates or subservicer is true and accurate in all
material respects and nothing has come to his or her attention
that would lead such officer to believe that the Registration
Statement or Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein not misleading;
4. the information set forth in the Schedule
of Mortgage Loans required to be furnished pursuant to the
Pooling and Servicing Agreement is true and correct in all
material respects;
5. there has been no amendment or other
document filed affecting the articles of incorporation or
bylaws of the Company since December 31, 1998, and no such
amendment has been authorized. No event has occurred since
June 30, 1999, which has affected the good standing of the
Company under the laws of the State of Nevada;
6. there has not occurred any material
adverse change or, except as set forth in the Prospectus, any
development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, from June 30, 1999;
7. on or prior to the Closing Date, there
has been no downgrading, nor has any notice been given of (A)
any intended or potential downgrading or (B) any review or
possible changes in rating the direction of which has not been
indicated, if any, accorded the Company or in any rating
accorded any securities of the Company, if any, by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of the Securities Act; and
8. each person who, as an officer or
representative of the Company, signed or signs the
Registration Statement, the Pooling and Servicing Agreement,
the Insurance Agreement, the Indemnification Agreement, this
Agreement, or any other document delivered pursuant hereto, on
the date of such execution, or on the Closing Date, as the
case may be, in connection with the
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<PAGE> 17
transactions described in the Pooling and Servicing Agreement,
the Insurance Agreement, the Indemnification Agreement, the
Purchase Agreement and this Agreement was, at the respective
times of such signing and delivery, and is now, duly elected
or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing
on such documents are their genuine signatures.
The Company shall attach to such certificate a true and
correct copy of its certificate or articles of incorporation, as appropriate,
and bylaws which are in full force and effect on the date of such certificate
and a certified true copy of the resolutions of its Board of Directors with
respect to the transactions contemplated herein.
h. The Representative shall have received a favorable
opinion of counsel to the Trustee, dated the Closing Date and in form
and substance satisfactory to the Representative, to the effect that:
1. the Trustee is a national banking
association duly organized, validly existing and in good
standing under the laws of the United States and has the power
and authority to enter into and to take all actions required
of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has
been duly authorized, executed and delivered by the Trustee
and the Pooling and Servicing Agreement constitutes the legal,
valid and binding obligation of the Trustee, enforceable
against the 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 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 Trustee in connection
with its execution and delivery of the Pooling and Servicing
Agreement or the performance of its obligations thereunder;
4. the Offered Certificates have been duly
executed, authenticated and delivered by the Trustee; and
5. the execution and delivery of, and
performance by the Trustee of its obligations under, the
Pooling and Servicing Agreement do not conflict with or result
in a violation of any statute or regulation applicable to the
Trustee, or the charter or bylaws of the Trustee, or to the
best knowledge of such counsel, any governmental authority
having jurisdiction over the Trustee or the
-16-
<PAGE> 18
terms of any indenture or other agreement or instrument to
which the Trustee is a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Trustee.
i. The Representative shall have received from the
Trustee a certificate, signed by the President, a senior vice president
or a vice president of the Trustee, dated the Closing Date, to the
effect that each person who, as an officer or representative of the
Trustee, signed or signs the Offered Certificates, the Pooling and
Servicing Agreement or any other document delivered pursuant hereto, on
the date hereof or on the Closing Date, in connection with the
transactions described in the Pooling and Servicing Agreement was, at
the respective times of such signing and delivery, and is now, duly
elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures.
j. The Policy relating to the Offered Certificates
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.
k. The Representative shall have received a favorable
opinion of in-house counsel to the Insurer, dated the Closing Date and
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
1. The Insurer is a stock insurance company
duly organized and validly existing under the laws of the
State of Wisconsin and duly qualified to conduct an insurance
business in the State of California and the State of New York.
The Insurer is validly licensed and authorized to issue the
Policy and perform its obligations under the Policy in
accordance with the terms thereof under the laws of the State
of California, State of New York and the State of Wisconsin.
2. The Insurer has full corporate power and
authority to execute and deliver the Policy and the Policy has
been duly authorized, executed and delivered by the Insurer
and constitutes a legal, valid and binding obligation of the
Insurer enforceable in accordance with its terms except to the
extent that the enforceability (but not the validity) of such
obligation may be limited by any applicable bankruptcy,
insolvency, liquidation, rehabilitation or other similar law
or enactment now or hereafter enacted affecting the
enforcement of creditors' rights and by general principles of
equity.
3. The execution and delivery by the Insurer
of the Policy, the Insurance Agreement and the Indemnification
Agreement will not, and the consummation of the transactions
contemplated thereby and the satisfaction of the
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<PAGE> 19
terms thereof will not, conflict with or result in a breach of
any of the terms, conditions or provisions of the Certificate
of Incorporation or By-Laws of the Insurer, or any restriction
contained in any contract, agreement or instrument to which
the Insurer is a party or by which it is bound or constitute a
default under any of the foregoing.
4. Proceedings legally required for the
issuance of the Policy, and the execution, delivery and
performance of the Insurance Agreement and the Indemnification
Agreement have been taken by the Insurer and licenses, orders,
consents or other authorizations or approvals of any
governmental boards or bodies legally required for the
enforceability of the Policy have been obtained; any
proceedings not taken and any licenses, authorizations or
approvals not obtained are not material to the enforceability
of the Policy, the Insurance Agreement and the Indemnification
Agreement.
5. The Policy is exempt from registration
under the Securities Act.
6. There is no action, suit or proceeding
pending against or affecting the Insurer in any court, or
before or by any governmental body, which is likely to affect
or impair the validity or enforceability of the Policy, the
Insurance Agreement or the Indemnification Agreement.
7. The statements contained in the
Prospectus under the heading "THE CERTIFICATE INSURER" and
"THE CERTIFICATE INSURANCE POLICY", insofar as such statements
constitute summaries of the matters referred to therein,
accurately reflect and fairly present the information
purported to be shown and, insofar as such statements describe
the Insurer, fairly and accurately describe the Insurer, other
than any financial or statistical information contained or
incorporated by reference therein, as to which no opinion is
expressed.
8. The Insurer is authorized to deliver the
Insurance Agreement and the Indemnification Agreement, and
each of the Insurance Agreement and the Indemnification
Agreement has been duly executed and is the valid and binding
obligation of the Insurer enforceable in accordance with its
terms except to the extent that the enforceability (but not
the validity) of such obligation may be limited by any
applicable bankruptcy, insolvency, liquidation, rehabilitation
or other similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights and by general
principles of equity and subject to principles of public
policy limiting the right to enforce the indemnification
provisions contained therein insofar as such provisions relate
to indemnification for liabilities arising under the
securities laws.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee, the Insurer and public officials.
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<PAGE> 20
Such opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
the Insurer.
The Insurer shall attach to such opinion a true and correct
copy of its certificate or articles of incorporation, as appropriate, and its
bylaws, all of which are in full force and effect on the date of such
certificate.
l. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the Securities Act.
m. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the Securities
Act.
n. 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 June
30, 1999, of (A) the Company and its subsidiaries or (B) the 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 Certificates on the terms and in the manner contemplated in the
Prospectus.
o. [Reserved].
p. The Representative shall have received from Dewey
Ballantine LLP, special counsel to the Company, a survey in form and
substance satisfactory to the Representative, indicating the
requirements of applicable local law which must be complied with in
order to transfer and service the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and the Company shall have complied
with all such requirements.
q. The Representative shall have received from Fried,
Frank, Harris, Shriver & Jacobson, special counsel to the Underwriters,
such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Offered Certificates, the Prospectus and such
other related matters as the Representative shall reasonably require.
r. The Representative and counsel for the
Underwriters shall have received copies of any opinions of counsel to
the Company supplied to the Trustee relating to matters with respect to
the Certificates. Any such opinions shall be dated the Closing Date and
addressed to the Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely thereon.
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<PAGE> 21
s. The Representative shall have received such
further information, certificates and documents as the Representative
may reasonably have requested not fewer than three (3) full business
days prior to the Closing Date.
t. There shall have been executed and delivered by
Advanta Mortgage Holding Company, the indirect corporate parent of the
Company ("AMHC"), a letter agreement with the Trustee and the Insurer,
pursuant to which AMHC agrees to become jointly and severally liable
with the Company and Advanta Mortgage Corp. USA for the payment of the
Joint and Several Obligations (as defined in such letter agreement).
u. There shall have been executed and delivered by
AMHC, the corporate parent of the Company, a letter agreement with the
Underwriters and the Insurer, pursuant to which AMHC agrees to become
jointly and severally liable with the Company and Advanta Mortgage
Corp. USA for the payment of the Joint and Several Obligations (as
defined in such letter agreement).
v. Prior to the Closing Date, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Offered Certificates as herein
contemplated and related proceedings or in order to evidence the
accuracy and completeness of any of the representations and warranties,
or the fulfillment of any of the conditions, herein contained, and all
proceedings taken by the Company in connection with the issuance and
sale of the Offered Certificates as herein contemplated shall be
satisfactory in form and substance to the Representative and counsel
for the Underwriters.
w. Subsequent to the execution and delivery of this
Agreement none of the following shall have occurred: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
minimum prices shall have been established on either of such exchanges
or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; (ii) a
banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation of hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States; or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets of the United States shall be such)
as to make it, in the judgment of the Representative, impractical or
inadvisable to proceed with the public offering or delivery of the
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
x. The Offered Certificates shall have received the
ratings set forth on Schedule A hereto.
If any condition specified in this Section 6 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative by notice to
-20-
<PAGE> 22
the Company at any time at or prior to the Closing Date, and such termination
shall be without liability of any party to any other party except as provided in
Section 7.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
Section 7. Payment of Expenses. The Company agrees to pay: (a)
the costs incident to the authorization, issuance, sale and delivery of the
Offered Certificates and any taxes payable in connection therewith; (b) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), the Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
all as provided in this Agreement; (d) the fees and expenses of qualifying the
Offered Certificates under the securities laws of the several jurisdictions as
provided in Section 5(g) hereof and of preparing, printing and distributing a
Blue Sky Memorandum and a Legal Investment Survey (including related fees and
expenses of counsel to the Underwriters); (e) any fees charged by securities
rating services for rating the Offered Certificates; (f) the costs and expenses
of Dewey Ballantine LLP, counsel to the Company; and (g) all other costs and
expenses incident to the performance of the obligations of the Company; provided
that, except as provided in this Section 7, the Underwriters shall pay their own
costs and expenses, including the costs and expenses of Fried, Frank, Harris,
Shriver & Jacobson, any transfer taxes on the Offered Certificates which they
may sell and the expenses of advertising any offering of the Offered
Certificates made by the Underwriters.
If this Agreement is terminated by the Representative, in
accordance with the provisions of Section 6 or Section 10, the Company shall
reimburse the Underwriters for their respective reasonable out-of-pocket
expenses, including fees and disbursements of Fried, Frank, Harris, Shriver &
Jacobson, counsel for the Underwriters.
Section 8. Indemnification and Contribution.
a. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act from and against any and all loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Offered Certificates), to which such
Underwriter or any such controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
(ii) 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,
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or (iv) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
-21-
<PAGE> 23
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse such Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Prospectus or the
Registration Statement in reliance upon and in conformity with written
information (including any Derived Information) furnished to the Company through
the Representative specifically for inclusion therein; and provided, further,
that as to any Preliminary Prospectus this indemnity shall not inure to the
benefit of any Underwriter or any controlling person on account of any loss,
claim, damage, liability or action arising from the sale of the Offered
Certificates to any person by such Underwriter if such Underwriter failed to
send or give a copy of the Prospectus, as amended or supplemented, to that
person within the time required by the Securities Act, and the untrue statement
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact in the Preliminary Prospectus was corrected in
the Prospectus, unless such failure resulted from non-compliance by the Company
with Section 5(c). For purposes of the last proviso to the immediately preceding
sentence, the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and none of the Underwriters shall be
obligated to send or give any supplement or amendment to any document
incorporated therein by reference to any person other than a person to whom such
Underwriter had delivered such incorporated document or documents in response to
a written request therefor. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Underwriters or any
controlling person of such Underwriter.
b. Each Underwriter agrees severally, and not jointly to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
against any and all loss, claim, damage or liability, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, (ii) 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, (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus or (iv)
the omission or alleged omission to state therein a 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, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability
-22-
<PAGE> 24
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer or controlling person.
c. Promptly after receipt by any indemnified party under this
Section 8 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure, and provided, further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions 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 (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Underwriters, if the indemnified
parties under this Section 8 consist of the Underwriters or any of their
controlling persons, or by the Company, if the indemnified parties under this
Section 8 consist of the Company or any of the Company's directors, officers or
controlling persons.
-23-
<PAGE> 25
Each indemnified party, as a condition of the indemnity
agreements contained in Section 8(a) and (b), shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
d. Each Underwriter agrees to deliver to the Company no later
than the date on which the Preliminary Prospectus Supplement and the Prospectus
Supplement is required to be filed pursuant to Rule 424 with a copy of its
Derived Information (defined below) for filing with the Commission on Form 8-K.
e. Each Underwriter agrees, assuming all Company-Provided
Information (defined below) is accurate and complete in all material respects,
to severally and not jointly indemnify and hold harmless the Company, each of
the Company's officers and directors and each person who controls the Company
within the meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Securities 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 of a material fact contained in the Derived
Information provided by such Underwriter, 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, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of each of the Underwriters under this
Section 8(e) shall be in addition to any liability which such Underwriter may
otherwise have.
The procedures set forth in Section 8(c) shall be equally
applicable to this Section 8(e).
f. For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information delivered to the
Company pursuant to Section 8(d) for filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without
taking into account information incorporated
therein by reference;
-24-
<PAGE> 26
(ii) does not constitute Company-Provided
Information; and
(iii) is of the type of information defined as
Collateral term sheets, Structural term
sheets or Computational Materials (as such
terms are interpreted in the No-Action
Letters).
"Company-Provided Information" means any computer tape
furnished to the Underwriters by the Company concerning the Mortgage Loans
comprising all or a portion of the Trust Estate.
The terms "Collateral term sheet" and "Structural term sheet"
shall have the respective meanings assigned to them in the February 13, 1995
letter (the "PSA Letter") of Cleary, Gottlieb, Steen & Hamilton on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, were publicly available February 17, 1995). The term "Collateral term
sheet" as used herein includes any subsequent Collateral term sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Kidder letter" and together with the PSA Letter, the "No-Action
Letters") of Brown & Wood on behalf of Kidder, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
g. If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Offered Certificates or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 8(c), 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 Company on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations.
The relative benefits of the Underwriters and the Company
shall be deemed to be in such proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions.
The relative fault of the Underwriters and the Company shall
be determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by one of the Underwriters, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and other equitable
considerations.
-25-
<PAGE> 27
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(g) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 8(g)
shall be deemed to include, for purposes of this Section 8(g), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
h. For purposes of this Section 8, in no case shall any Underwriter be
responsible for any amount in excess of (x) the amount received by such
Underwriter in connection with its resale of the Offered Certificates over (y)
the amount paid by such Underwriter to the Company for the Offered Certificates
purchased by such Underwriter hereunder. 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.
g. The Underwriters severally confirm that the information set forth
(i) in the Prospectus Supplement relating to market making and (ii) in the third
paragraph under the caption "Underwriting" in the Prospectus Supplement,
together with the Derived Information, is correct and constitutes the only
information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Company and shall survive delivery of
any Offered Certificates to the Underwriters.
Section 10. Termination of Agreement. The Representative may terminate
this Agreement immediately upon notice to the Company, at any time at or prior
to the Closing Date if any of the events or conditions described in Section 6(w)
of this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section 5(g), the provisions of Section
7, the indemnity agreement set forth in Section 8, and the provisions of
Sections 8 and 9 shall remain in effect.
Section 11. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
a. if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Bear, Stearns & Co., Inc., as
Representative of the Underwriters, Asset-Backed Securities Group, 245
Park Avenue, 4th Floor, New York, NY, 10167, Attention: General Counsel
(fax: (212) 272-7294);
-26-
<PAGE> 28
b. if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to Advanta Conduit Receivables, Inc.,
10790 Rancho Bernardo Road, San Diego, California 92127, Attention:
General Counsel (Fax: (858) 674-3592).
Section 12. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriters within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
Section 13. Default by One of the Underwriters. If one of the
Underwriters shall fail on the Closing Date to purchase the Offered Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), the
remaining Underwriters (the "Non-Defaulting Underwriter"), shall have the right,
but not the obligation within one (1) Business Day thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted
Certificates upon the terms herein set forth; if, however, the Non-Defaulting
Underwriter shall not have completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section 13 shall relieve the
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Non-Defaulting Underwriter or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
Section 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
Section 15. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
Section 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
-27-
<PAGE> 29
STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH SUCH LAWS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME.
Section 17. Counterparts. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
Section 19. Representations of Underwriters. The Representative will
act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all of the Underwriters.
-28-
<PAGE> 30
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
ADVANTA CONDUIT RECEIVABLES, INC.
By: /s/ Michael Coco
----------------
Name: Michael Coco
Title: Vice-President
CONFIRMED AND ACCEPTED, as of the date first above written:
BEAR, STEARNS & CO., INC.
as Representative of the Underwriters
By: /s/ Tom Dunstan
---------------
Name: Tom Dunstan
Title: Vice President
282419
-29-
<PAGE> 31
SCHEDULE A
<TABLE>
<CAPTION>
INITIAL PRINCIPAL
AMOUNT OF OFFERED PURCHASE PRICE TO
CERTIFICATES UNDERWRITERS
REQUIRED RATINGS PURCHASED BY DISREGARDING
CLASS S&P/MOODY'S UNDERWRITERS COUPON ACCRUED INTEREST
- ----- ---------------- ----------------- ------ ------------------
<S> <C> <C> <C> <C>
Class A-1 AAA /Aaa $117,581,000 Fixed $117,394,798.73
Class A-2 AAA /Aaa $ 69,182,000 Fixed $ 69,041,733.50
Class A-3 AAA /Aaa $ 46,259,000 Fixed $ 46,147,895.13
Class A-4 AAA /Aaa $ 74,498,000 Fixed $ 74,264,955.36
Class A-5 AAA /Aaa $ 29,980,000 Fixed(1),(2) $ 29,859,270.54
Class A-6 AAA /Aaa $ 37,500,000 Fixed(1) $ 37,397,666.25
Class A-7 AAA /Aaa $150,000,000 Floating(2),(3) $149,662,500.00
</TABLE>
1 Class A-5 and A-6 are subject to the Fixed Rate Group Available Funds
Cap Rate as defined in the Prospectus Supplement.
2 Class A-5 and Class A-7 are subject to an increase in the pass-through
rate on the payment date immediately following the month in which the
clean-up call may first be exercised, as defined in the Prospectus
Supplement.
3 Class A-7 is subject to the ARM Group Available Funds Cap Rate as
defined in the Prospectus Supplement.
-1-
<PAGE> 32
SCHEDULE I
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-1:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $ 58,790,500
Salomon Smith Barney Inc. $ 58,790,500
------------
TOTAL FOR CLASS A-1 $117,581,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-2:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $34,591,000
Salomon Smith Barney Inc. $34,591,000
------------
TOTAL FOR CLASS A-2 $69,182,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-3:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $23,129,500
Salomon Smith Barney Inc. $23,129,500
------------
TOTAL FOR CLASS A-3 $46,259,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-4:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $37,249,000
Salomon Smith Barney Inc. $37,249,000
------------
TOTAL FOR CLASS A-4 $74,498,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-5:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $14,990,000
Salomon Smith Barney Inc. $14,990,000
------------
TOTAL FOR CLASS A-5 $27,980,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-6:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $18,750,000
Salomon Smith Barney Inc. $18,750,000
------------
TOTAL FOR CLASS A-6 $37,500,000
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF CLASS A-7:
----------- ------------------------------
<S> <C>
Bear, Stearns & Co. Inc. $ 50,000,000
Prudential Securities Incorporated $ 50,000,000
Salomon Smith Barney Inc. $ 50,000,000
------------
TOTAL FOR CLASS A-7 $150,000,000
</TABLE>
-2-
<PAGE> 1
Exhibit 4.1
<PAGE> 2
POOLING AND SERVICING AGREEMENT
Relating to
ADVANTA MORTGAGE LOAN TRUST 1999-3
Among
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor,
ADVANTA MORTGAGE CORP. USA,
as Master Servicer,
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
Dated as of August 1, 1999
<PAGE> 3
TABLE OF CONTENTS
(Not a Part of this Agreement)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties................................................................................ 1
Recitals............................................................................... 1
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION................................ 1
Section 1.1. Definitions....................................................... 1
Section 1.2. Use of Words and Phrases......................................... 34
Section 1.3. Captions; Table of Contents...................................... 34
Section 1.4. Opinions......................................................... 34
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST...................... 34
Section 2.1. Establishment of the Trust....................................... 34
Section 2.2. Office........................................................... 34
Section 2.3. Purposes and Powers.............................................. 34
Section 2.4. Appointment of the Trustee; Declaration of Trust................. 34
Section 2.5. Expenses of the Trust............................................ 35
Section 2.6. Ownership of the Trust........................................... 35
Section 2.7. Situs of the Trust............................................... 35
Section 2.8. Miscellaneous REMIC Provisions................................... 35
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SPONSOR AND THE MASTER SERVICER; COVENANT
OF SPONSOR TO CONVEY MORTGAGE LOANS.............................. 39
Section 3.1. Representations and Warranties of the Sponsor.................... 39
Section 3.2. Representations and Warranties of the Master Servicer............ 41
Section 3.3. Representations and Warranties of the Sponsor with
Respect to the Mortgage Loans................................ 43
Section 3.4. Covenants of Sponsor to Take Certain Actions with
Respect to the Mortgage Loans in Certain Situations.......... 44
Section 3.5. Conveyance of the Mortgage Loans................................. 46
Section 3.6. Acceptance by Trustee; Certain Substitutions of
Mortgage Loans; Certification by Trustee..................... 50
Section 3.7. Cooperation Procedures........................................... 52
Section 3.8. Conveyance of the Subsequent Mortgage Loans...................... 52
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES................................ 54
Section 4.1. Issuance of Certificates......................................... 54
Section 4.2. Sale of Certificates............................................. 54
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS........................... 55
Section 5.1. Terms............................................................ 55
Section 5.2. Forms............................................................ 55
Section 5.3. Execution, Authentication and Delivery........................... 55
Section 5.4. Registration and Transfer of Certificates........................ 56
Section 5.5. Mutilated, Destroyed, Lost or Stolen Certificates................ 58
Section 5.6. Persons Deemed Owners............................................ 58
</TABLE>
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Section 5.7. Cancellation..................................................... 58
Section 5.8. Limitation on Transfer of Ownership Rights....................... 59
Section 5.9. Assignment of Rights............................................. 60
ARTICLE VI COVENANTS........................................................ 60
Section 6.1. Distributions.................................................... 60
Section 6.2. Money for Distributions to be Held in Trust; Withholding......... 60
Section 6.3. Protection of Trust Estate....................................... 61
Section 6.4. Performance of Obligations....................................... 62
Section 6.5. Negative Covenants............................................... 62
Section 6.6. No Other Powers.................................................. 62
Section 6.7. Limitation of Suits.............................................. 62
Section 6.8. Unconditional Rights of Owners to Receive Distributions.......... 63
Section 6.9. Rights and Remedies Cumulative................................... 63
Section 6.10. Delay or Omission Not Waiver..................................... 63
Section 6.11. Control by Owners................................................ 64
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES............................. 65
Section 7.1. Collection of Money.............................................. 65
Section 7.2. Establishment of Accounts........................................ 65
Section 7.3. The Certificate Insurance Policy................................. 65
Section 7.4. Pre-Funding Account and Capitalized Interest Account............. 66
Section 7.5. Flow of Funds.................................................... 67
Section 7.6. Investment of Accounts........................................... 71
Section 7.7. Eligible Investments............................................. 71
Section 7.8. Reports by Trustee............................................... 74
Section 7.9. Additional Reports by Trustee.................................... 77
Section 7.10. Supplemental Interest Payment Account and Supplemental
Interest Payments............................................ 77
ARTICLE VIII SERVICING AND ADMINISTRATION OF MORTGAGE LOANS................... 78
Section 8.1. Master Servicer and Sub-Servicers................................ 78
Section 8.2. Collection of Certain Mortgage Loan Payments..................... 81
Section 8.3. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers................................................ 81
Section 8.4. Successor Sub-Servicers.......................................... 82
Section 8.5. Liability of Master Servicer..................................... 82
Section 8.6. No Contractual Relationship Between Sub-Servicer and
Trustee or the Owners........................................ 82
Section 8.7. Assumption or Termination of Sub-Servicing Agreement
by Trustee................................................... 82
Section 8.8. Principal and Interest Account................................... 82
Section 8.9. Delinquency Advances, Compensating Interest and
Servicing Advances........................................... 85
Section 8.10. Purchase of Mortgage Loans....................................... 87
Section 8.11. Maintenance of Insurance......................................... 87
Section 8.12. Due-on-Sale Clauses; Assumption and Substitution
Agreements................................................... 89
Section 8.13. Realization Upon Defaulted Mortgage Loans........................ 90
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Section 8.14. Trustee to Cooperate; Release of Mortgage Files.................. 92
Section 8.15. Servicing Compensation........................................... 94
Section 8.16. Annual Statement as to Compliance................................ 94
Section 8.17. Annual Independent Certified Public Accountants'
Reports...................................................... 94
Section 8.18. Access to Certain Documentation and Information
Regarding the Mortgage Loans................................. 94
Section 8.19. Assignment of Agreement.......................................... 94
Section 8.20. Removal of Master Servicer; Resignation of Master
Servicer..................................................... 95
Section 8.21. Inspections by the Certificate Insurer and the
Trustee; Errors and Omissions Insurance..................... 100
Section 8.22. Merger, Conversion, Consolidation or Succession
to Business of Master Servicer.............................. 100
Section 8.23. Notices of Material Events...................................... 100
ARTICLE IX TERMINATION OF TRUST............................................ 101
Section 9.1. Termination of Trust............................................ 101
Section 9.2. Clean-Up Call Termination....................................... 101
Section 9.3. Termination Upon Loss of REMIC Status........................... 102
Section 9.4. Disposition of Proceeds......................................... 104
Section 9.5. Netting of Amounts.............................................. 104
ARTICLE X THE TRUSTEE..................................................... 104
Section 10.1. Certain Duties and Responsibilities............................. 104
Section 10.2. Removal of Trustee for Cause.................................... 106
Section 10.3. Certain Rights of the Trustee................................... 107
Section 10.4. Not Responsible for Recitals or Issuance of
Certificates................................................ 108
Section 10.5. May Hold Certificates........................................... 108
Section 10.6. Money Held in Trust............................................. 108
Section 10.7. No Lien for Fees................................................ 108
Section 10.8. Corporate Trustee Required; Eligibility......................... 108
Section 10.9. Resignation and Removal; Appointment of Successor............... 109
Section 10.10. Acceptance of Appointment by Successor Trustee.................. 110
Section 10.11. Merger, Conversion, Consolidation or Succession to
Business of the Trustee..................................... 111
Section 10.12. Reporting; Withholding.......................................... 111
Section 10.13. Liability of the Trustee........................................ 111
Section 10.14. Appointment of Co-Trustee or Separate Trustee................... 112
ARTICLE XI MISCELLANEOUS................................................... 113
Section 11.1. Compliance Certificates and Opinions............................ 113
Section 11.2. Form of Documents Delivered to the Trustee...................... 114
Section 11.3. Acts of Owners.................................................. 114
Section 11.4. Notices, etc., to Trustee....................................... 115
Section 11.5. Notices and Reports to Owners; Waiver of Notices................ 115
Section 11.6. Rules by Trustee and Sponsor.................................... 117
Section 11.7. Successors and Assigns.......................................... 117
Section 11.8. Severability.................................................... 117
Section 11.9. Benefits of Agreement........................................... 117
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Section 11.10. Legal Holidays.................................................. 117
Section 11.11. Governing Law................................................... 117
Section 11.12. Counterparts.................................................... 117
Section 11.13. Usury........................................................... 117
Section 11.14. Amendment....................................................... 118
Section 11.15. REMIC Status; Taxes............................................. 119
Section 11.16. Additional Limitation on Action and Imposition of Tax........... 121
Section 11.17. Appointment of Tax Matters Person............................... 122
Section 11.18. The Certificate Insurer......................................... 122
Section 11.19. Maintenance of Records.......................................... 123
Section 11.20. Notices......................................................... 123
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SCHEDULES AND EXHIBITS
SCHEDULE I -- Schedule of Mortgage Loans
EXHIBIT A -- Form of Certificates
EXHIBIT B -- Form of Notice of Establishment of Principal and Interest
Account
EXHIBIT C -- Form of Trustee's Acknowledgement of Receipt
EXHIBIT D -- Form of Certification
EXHIBIT E -- Form of Delivery Order
EXHIBIT F -- Form of Class R-I and Class R-II Tax Matters Transfer
Certificate
EXHIBIT G -- Power of Attorney
EXHIBIT H -- Form of Monthly Report
EXHIBIT I -- Form of Master Servicer's Trust Receipt
EXHIBIT J -- Form of Subsequent Transfer Agreement
EXHIBIT K -- Form of Lost Note Affidavit
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POOLING AND SERVICING AGREEMENT, relating to ADVANTA MORTGAGE
LOAN TRUST 1999-3, dated as of August 1, 1999, by and among ADVANTA CONDUIT
RECEIVABLES, INC., a Nevada corporation, in its capacity as sponsor of the trust
created pursuant to this Agreement (the "Sponsor"), ADVANTA MORTGAGE CORP. USA,
a Delaware corporation, in its capacity as master servicer (the "Master
Servicer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association, in its capacity as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Sponsor wishes to establish a trust, and to provide for
the allocation and sale of the beneficial interests therein and the maintenance
and distribution of the trust estate;
WHEREAS, the Master Servicer has agreed to service the Mortgage Loans,
which constitute the principal assets of the trust estate;
WHEREAS, all things necessary to make the Certificates (as defined
herein), when executed and authenticated by the Trustee, valid instruments, and
to make this Agreement a valid agreement, in accordance with their and its
terms, have been done;
WHEREAS, Bankers Trust Company of California, N.A. is willing to serve
in the capacity of Trustee hereunder; and
WHEREAS, Ambac Assurance Corporation (the "Certificate Insurer") is
intended to be a third-party beneficiary of this Agreement and is hereby
recognized by the parties hereto to be a third-party beneficiary of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Sponsor, the Master Servicer and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.1. Definitions. For all purposes of this Agreement, the
following terms shall have the meanings set forth below, unless the context
clearly indicates otherwise:
"Accepted Servicing Practices": The Master Servicer's normal servicing
practices in servicing and administering mortgage loans for its own account,
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
Properties are located.
"Account": Any account established in accordance with Sections 7.2,
7.4, 7.10 or 8.8 hereof, each of which shall be established at a Designated
Depository Institution.
"Accrual Period": On any Payment Date, (x) with respect to the Group I
Certificates, the immediately preceding calendar month and (y) with respect to
the Group II
<PAGE> 8
Certificates, the period commencing on the immediately preceding Payment Date
(or the Startup Day in the case of the first Payment Date) to and including the
day prior to the current Payment Date. Calculations of interest on the Group I
Certificates will be made on the basis of a 360-day year consisting of twelve
thirty-day months and calculations of interest on the Group II Certificates will
be made on the basis of the actual number of days elapsed in the related Accrual
Period in a year of 360 days.
"Addition Notice": With respect to the transfer of Subsequent Mortgage
Loans to the Trust pursuant to Section 3.8(b) of this Agreement, notice, which
shall be given not later than two (2) Business Days prior to the related
Subsequent Transfer Date, of the Sponsor's designation of Subsequent Mortgage
Loans to be sold to the Trust, such notice shall include the approximate
aggregate Loan Balance and the approximate weighted average Coupon Rate of such
Subsequent Mortgage Loans, and whether such Subsequent Mortgage Loans are
designated for assignment to Group I or to Group II.
"Affiliated Originators": Advanta Mortgage Corp. USA, a Delaware
corporation, Advanta Mortgage Conduit Services, Inc., a Delaware corporation,
Advanta Bank Corp., a Utah industrial loan corporation, Advanta Mortgage Corp.
Midwest, a Pennsylvania corporation, Advanta Mortgage Corp. Northeast, a New
York corporation, Advanta National Bank, a national banking association, and
Advanta Finance Corp., a Nevada corporation.
"Aggregate Certificate Principal Balance": As of any date of
determination thereof, the sum of the Outstanding Certificate Principal Balance
of the Class A Certificates.
"Agreement": This Pooling and Servicing Agreement, as it may be amended
from time to time, and including the Exhibits hereto.
"AMHC": Advanta Mortgage Holding Company, a Delaware corporation and
the corporate parent of Advanta Mortgage Corp. USA, and the indirect corporate
parent of Advanta Conduit Receivables, Inc.
"Appraised Value": The appraised value of any Property based upon the
appraisal or other valuation made at the time of the origination of the related
Mortgage Loan, or, in the case of a Mortgage Loan which is a purchase money
mortgage, the sales price of the Property at such time of origination, if such
sales price is less than such appraised value.
"ARM Group Available Funds Cap Rate": As of any Payment Date, an
amount, expressed as a per annum rate, and calculated on the basis of a 360-day
year and the actual number of days elapsed in the related Accrual Period for the
Group II Certificates, equal to (a) the sum of (i) the aggregate amount of
interest accrued and collected (or advanced) at the Coupon Rates on all of the
Mortgage Loans in the Group II Pool for the related Remittance Period minus (ii)
the aggregate of the Servicing Fee, the Premium Amount and the Trustee's Fee, in
each case relating to the Group II Pool, on such Payment Date and minus (iii)
commencing on the seventh Payment Date following the Startup Day, an amount
equal to 0.75% per annum times the aggregate principal balance of the Mortgage
Loans in Group II as of the beginning of such related Remittance Period, divided
by (b) the aggregate principal balance of the Mortgage Loans in Group II as of
the beginning of the related Remittance Period.
"Authorized Officer": (A) With respect to any Person, any person who is
authorized to act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person and (B) with respect to the Trustee,
the Sponsor and the Master
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<PAGE> 9
Servicer, those individuals whose names appear on the lists of Authorized
Officers delivered on the Startup Day, which lists may be amended or
supplemented from time to time.
"Available Funds": Group I Available Funds or Group II Available Funds.
"Available Funds Cap Rate": The Fixed Rate Group Available Funds Cap
Rate or the ARM Group Available Funds Cap Rate, as applicable.
"Balance Ratio": As defined in Section 2.8(b) hereof.
"Balloon Loan": Any Mortgage Loan which has an amortization schedule
which extends beyond its maturity date, resulting in a relatively large
unamortized principal balance due in a single payment at maturity.
"Base Principal Distribution Amount": The Group I Base Principal
Distribution Amount or the Group II Base Principal Distribution Amount, as
applicable.
"Benefit Plan Entity": As defined in Section 5.8(c) hereof.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which the Certificate Insurer, the Master Servicer, the Sponsor or the Trustee
is closed or commercial banking institutions in the States of New York, Delaware
or California are authorized or obligated by law or executive order to be
closed.
"Capitalized Interest Account": The Capitalized Interest Account
established in accordance with Section 7.2 hereof and maintained by the Trustee.
"Certificate": Any one of the Class A Certificates, the Class B
Certificates, the Class BS Certificates, the Class R-I Certificates and the
Class R-II Certificates, each representing the interests and the rights
described in this Agreement.
"Certificate Account": The Certificate Account established in
accordance with Section 7.2 hereof and maintained by the Trustee.
"Certificate Insurance Policy": The Certificate Guaranty Insurance
Policy No. AB0284BE dated August 24, 1999 issued by the Certificate Insurer to
the Trustee for the benefit of the Owners of the Class A Certificates.
"Certificate Insurer": Ambac Assurance Corporation, a Wisconsin
domiciled stock insurance corporation, or any successor thereto.
"Certificate Insurer Default": Any one of the following events shall
have occurred and be continuing:
(a) The Certificate Insurer shall have failed to make a
payment required under the Certificate Insurance Policy;
(b) The Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code 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
3
<PAGE> 10
creditors, or (iii) had an order for relief entered against it under
the United States Bankruptcy Code or any other similar Federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) A court of competent jurisdiction, the New York Department
of Insurance, or other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for the Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent or
receiver of the Certificate Insurer (or the taking of possession of all
or any material portion of the property of the Certificate Insurer).
"Certificate Principal Balance": With respect to any Class A
Certificate as of any date of determination, the Original Certificate Principal
Balance less any principal amounts actually distributed on such Class A
Certificates pursuant to Section 7.5(c) hereof on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Certificate Principal Balance shall not be
reduced by any principal amounts paid to the Owners thereof from Insured
Payments. The Class B Certificate, the Class BS Certificate, the Class R-I
Certificate, the Class R-II Certificate and each Supplemental Interest Right do
not have a Certificate Principal Balance.
"Civil Relief Act": The Soldiers and Sailors' Civil Relief Act of 1940,
as amended from time to time.
"Civil Relief Act Shortfalls": Interest shortfalls resulting from the
application of the Civil Relief Act.
"Class": Any Class of the Class A Certificates, the Class B
Certificates, the Class BS Certificate, the Class R-I Certificates or the Class
R-II Certificates.
"Class A Certificate": Any one of the Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the
Class A-5 Certificates, the Class A-6 Certificates or the Class A-7
Certificates.
"Class A Current Interest": With respect to any Payment Date, the Class
A-1 Current Interest, the Class A-2 Current Interest, the Class A-3 Current
Interest, the Class A-4 Current Interest, the Class A-5 Current Interest, the
Class A-6 Current Interest or the Class A-7 Current Interest, as applicable.
"Class A Distribution Amount": The sum of the Class A-1 Distribution
Amount, the Class A-2 Distribution Amount, the Class A-3 Distribution Amount,
the Class A-4 Distribution Amount, the Class A-5 Distribution Amount, the Class
A-6 Distribution Amount and the Class A-7 Distribution Amount.
"Class A Interest Carry Forward Amount": With respect to any Payment
Date, the Class A-1 Interest Carry Forward Amount, the Class A-2 Interest Carry
Forward Amount, the Class A-3 Interest Carry Forward Amount, the Class A-4
Interest Carry Forward Amount, the Class A-5 Interest Carry Forward Amount, the
Class A-6 Interest Carry Forward Amount or the Class A-7 Interest Carry Forward
Amount, as applicable.
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<PAGE> 11
"Class A Principal Distribution Amount": With respect to any Payment
Date, the Group I Principal Distribution Amount or the Group II Principal
Distribution Amount, as applicable.
"Class A-1 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-1 Certificate, substantially in the form annexed
hereto as Exhibit A-1, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-1 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-1
Certificates less any principal amounts actually distributed with respect to the
Class A-1 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-1 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-1 Certificate Principal Balance during
the related Accrual Period at the Class A-1 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-1 Certificates' pro rata share of any
Civil Relief Act Shortfalls relating to Group I during the related Remittance
Period.
"Class A-1 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-1 Current Interest, (y) the Class A-1 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-1 Certificates pursuant to Section 7.5(c)(i)
hereof.
"Class A-1 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-1 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-1 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-1 Certificates on the immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-1
Pass-Through Rate.
"Class A-1 Pass-Through Rate": With respect to any Payment Date, the
Class A-1 Pass-Through Rate will be equal to 6.81% per annum.
"Class A-2 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-2 Certificate, substantially in the form annexed
hereto as Exhibit A-2, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-2 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-2
Certificates less any principal amounts actually distributed with respect to the
Class A-2 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-2 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-2 Certificate Principal Balance during
the related Accrual Period at the Class A-2 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-2
5
<PAGE> 12
Certificates' pro rata share of any Civil Relief Act Shortfalls relating to
Group I during the related Remittance Period.
"Class A-2 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-2 Current Interest, (y) the Class A-2 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-2 Certificates pursuant to Section 7.5(c)(i)
hereof.
"Class A-2 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-2 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-2 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-2 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-2
Pass-Through Rate.
"Class A-2 Pass-Through Rate": With respect to any Payment Date, the
Class A-2 Pass-Through Rate will be equal to 7.23% per annum.
"Class A-3 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-3 Certificate, substantially in the form annexed
hereto as Exhibit A-3, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-3 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-3
Certificates less any principal amounts actually distributed with respect to the
Class A-3 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-3 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-3 Certificate Principal Balance during
the related Accrual Period at the Class A-3 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-3 Certificates' pro rata share of any
Civil Relief Act Shortfalls relating to Group I during the related Remittance
Period.
"Class A-3 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-3 Current Interest, (y) the Class A-3 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-3 Certificates pursuant to Section 7.5(c)(i)
hereof.
"Class A-3 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-3 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-3 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-3 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-3
Pass-Through Rate.
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<PAGE> 13
"Class A-3 Pass-Through Rate": With respect to any Payment Date, the
Class A-3 Pass-Through Rate will be equal to 7.38% per annum.
"Class A-4 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-4 Certificate, substantially in the form annexed
hereto as Exhibit A-4, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-4 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-4
Certificates less any principal amounts actually distributed with respect to the
Class A-4 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-4 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-4 Certificate Principal Balance during
the related Accrual Period at the Class A-4 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-4 Certificates' pro rata share of any
Civil Relief Act Shortfalls relating to Group I during the related Remittance
Period.
"Class A-4 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-4 Current Interest, (y) the Class A-4 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-4 Certificates pursuant to Section 7.5(c)(i)
hereof.
"Class A-4 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-4 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-4 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-4 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-4
Pass-Through Rate.
"Class A-4 Pass-Through Rate": With respect to any Payment Date, the
Class A-4 Pass-Through Rate will be equal to 7.75% per annum.
"Class A-5 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-5 Certificate, substantially in the form annexed
hereto as Exhibit A-5, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-5 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-5
Certificates less any principal amounts actually distributed with respect to the
Class A-5 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-5 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-5 Certificate Principal Balance during
the related Accrual Period at the Class A-5 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-5
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Certificates' pro rata share of any Civil Relief Act Shortfalls relating to
Group I during the related Remittance Period.
"Class A-5 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-5 Current Interest, (y) the Class A-5 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-5 Certificates pursuant to Section 7.5(c)(i)
hereof.
"Class A-5 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-5 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-5 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-5 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-5
Pass-Through Rate.
"Class A-5 Pass-Through Rate": The Class A-5 Pass-Through Rate will be
equal to the lesser of (x)(i) with respect to any Payment Date which occurs on
or prior to the Step-Up Payment Date, 8.04% per annum, or (ii) with respect to
any Payment Date thereafter, 8.54% per annum and (y) the Fixed Rate Group
Available Funds Cap Rate for such Payment Date.
"Class A-6 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-6 Certificate, substantially in the form annexed
hereto as Exhibit A-6, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-6 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-6
Certificates less any principal amounts actually distributed with respect to the
Class A-6 Certificates pursuant to Section 7.5(c)(i) hereof on all prior Payment
Dates.
"Class A-6 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-6 Certificate Principal Balance during
the related Accrual Period at the Class A-6 Pass-Through Rate; provided, that
such amount will be reduced by the Class A-6 Certificates' pro rata share of any
Civil Relief Act Shortfalls relating to Group I during the related Remittance
Period.
"Class A-6 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-6 Current Interest, (y) the Class A-6 Interest Carry
Forward Amount, if any, and until the Class A-6 Certificate Principal Balance
has been reduced to zero and (z) Class A-6 Principal Distribution Amount payable
to the Owners of the Class A-6 Certificates pursuant to Section 7.5(c)(i).
"Class A-6 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-6 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-6 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-6 Certificates on such immediately
8
<PAGE> 15
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-6
Pass-Through Rate.
"Class A-6 Pass-Through Rate": With respect to any Payment Date, the
Class A-6 Pass-Through Rate will be equal to the lesser of (x) 7.59% per annum
and (y) the Fixed Rate Group Available Funds Cap Rate for such Payment Date.
"Class A-6 Principal Distribution Amount": With respect to any Payment
Date will be the "applicable percentage" set forth below of the Class A-6 Pro
Rata Principal Distribution Amount:
<TABLE>
<CAPTION>
APPLICABLE
PERIOD PERCENTAGE
------ ----------
<S> <C>
September 1999 - August 2002 0.00%
September 2002 - August 2004 45.00%
September 2004 - August 2005 80.00%
September 2005 - August 2006 100.00%
September 2006 - and thereafter 300.00%
</TABLE>
"Class A-6 Pro Rata Principal Distribution Amount": With respect to any
Payment Date, an amount equal to the product of (x) the Group I Principal
Distribution Amount for such Payment Date and (y) a fraction, the numerator of
which is the Class A-6 Certificate Principal Balance immediately prior to such
Payment Date and the denominator of which is the aggregate Certificate Principal
Balance of the Group I Certificates immediately prior to such Payment Date.
"Class A-7 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-7 Certificate, substantially in the form annexed
hereto as Exhibit A-7, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class A-7 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-7
Certificates less any principal amounts actually distributed with respect to the
Class A-7 Certificates pursuant to Section 7.5(c)(ii) hereof on all prior
Payment Dates.
"Class A-7 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-7 Certificate Principal Balance during
the related Accrual Period at the Class A-7 Pass-Through Rate; provided, that
such amount will be reduced by any Civil Relief Act Shortfalls relating to Group
II during the related Remittance Period.
"Class A-7 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-7 Current Interest, (y) the Class A-7 Interest Carry
Forward Amount, if any, and (z) the Group II Principal Distribution Amount
payable to the Owners of Class A-7 Certificates pursuant to Section 7.5(c)(ii)
hereof.
"Class A-7 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-7 Current Interest as of
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<PAGE> 16
the immediately preceding Payment Date and (B) any unpaid Class A-7 Interest
Carry Forward Amount, as calculated up through the previous Payment Date and
outstanding on such immediately preceding Payment Date, exceeds (ii) the amount
of the actual distribution with respect to interest, including the payment of
any related Supplemental Interest Amount, made to the Owners of the Class A-7
Certificates on such immediately preceding Payment Date and (y) interest on such
amount at the Class A-7 Pass-Through Rate calculated on the basis of the actual
number of days in the related Accrual Period and a year of 360 days.
"Class A-7 Pass-Through Rate": The Class A-7 Pass-Through Rate
will be equal to the lesser of (x)(i) with respect to any Payment Date which
occurs on or prior to the Step-Up Payment Date, LIBOR plus 0.40% per annum or
(ii) with respect to any Payment Date thereafter, LIBOR plus 0.80% per annum and
(y) the ARM Group Available Funds Cap Rate for such Payment Date.
"Class B Certificate": Any one of the Certificates designated
on the face thereof as a Class B Certificate, substantially in the form annexed
hereto as Exhibit A-B, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.
"Class B Distribution Amount": With respect to any Payment
Date, the amount payable to the Owners of the Class B Certificates pursuant to
footnotes 4 and 5 of Section 2.8(c).
"Class B Pass-Through Rate": With respect to any Payment Date,
the interest payable at the Group I Net Weighted Average Coupon Rate and the
Group II Net Weighted Average Coupon Rate on the Group I and Group II Mortgage
Loans in excess of the interest payable on the Class A Certificates, expressed
as a per annum rate on the aggregate Loan Balance of the Mortgage Loans in Group
I and Group II, respectively.
"Class BS Certificate": Any one of the Certificates designated
on the face thereof as a Class BS Certificate, substantially in the form annexed
hereto as Exhibit A-BS, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class R-I Certificate": Any one of the Certificates
designated on the face thereof as a Class R-I Certificate, substantially in the
form annexed hereto as Exhibit A-RI, authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein, and evidencing an
interest designated as the "residual interest" in the Lower-Tier REMIC for the
purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates
designated on the face thereof as a Class R-II Certificate, substantially in the
form annexed hereto as Exhibit A-RII, authenticated and delivered by the
Trustee, representing the right to receive distributions as set forth herein,
and evidencing an interest designated as the "residual interest" in the
Upper-Tier REMIC for the purposes of the REMIC Provisions.
"Clean-Up Call Date": The Payment Date on which the Redeeming
Party elects to exercise its right to purchase all of the Mortgage Loans
pursuant to Section 9.2 hereof.
"Code": The Internal Revenue Code of 1986, as amended and any
successor statute.
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<PAGE> 17
"Combined Loan-to-Value Ratio": (A) With respect to any First
Mortgage Loan, the percentage equal to the Original Principal Amount of the
related Note divided by the Appraised Value of the related Property and (B) with
respect to any Junior Mortgage Loan, the percentage equal to the sum of (i) the
remaining principal balance of the Senior Lien note(s), as of the date of
origination of the Junior Mortgage Loan, as appropriate, and (ii) the Original
Principal Amount of the Note of such Junior Mortgage Loan, as appropriate,
divided by the Appraised Value of the related Property.
"Commitment": The Commitment to issue a Certificate Guaranty
Insurance Policy dated August 24, 1999 and issued by the Certificate Insurer.
"Compensating Interest": The amount defined in Section 8.9(b)
hereof.
"Control Party": Until the last sentence of Section 11.18
hereof is applicable and so long as no Certificate Insurer Default has occurred
and is continuing, the Certificate Insurer, and thereafter, the Trustee.
"Coupon Rate": The rate of interest borne by each Note.
"Current Interest": With respect to any Payment Date, the sum
of the Class A-1 Current Interest, the Class A-2 Current Interest, the Class
A-3 Current Interest, the Class A-4 Current Interest, the Class A-5 Current
Interest, the Class A-6 Current Interest and the Class A-7 Current Interest.
"Date of Payment Loan": Any Mortgage Loan as to which,
pursuant to the Note relating thereto, interest is computed and charged to the
Mortgagor at the Coupon Rate on the outstanding principal balance of such Note
based on the number of days elapsed between receipt of the Mortgagor's last
payment through receipt of the Mortgagor's most current payment.
"Definitive Certificate": Certificates issued in definitive
form without coupons.
"Delinquency Advance": The amount defined in Section 8.9(a)
hereof.
"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.
"Delivery Order": The delivery order in the form set forth
as Exhibit E hereto and delivered by the Sponsor to the Trustee on the Startup
Day pursuant to Section 4.1 hereof.
"Depository": The Depository Trust Company, 7 Hanover Square,
New York, New York 10004 and any successor Depository hereafter named.
"Designated Depository Institution": With respect to each
Account, an institution whose deposits are insured by the Bank Insurance Fund or
the Savings Association Insurance Fund of the FDIC, the long-term deposits of
which shall be rated A2 or better by Moody's or A or
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<PAGE> 18
better by Standard & Poor's and the short-term deposits of which shall be rated
P-1 or better by Moody's and A-1 or better by Standard & Poor's, unless
otherwise approved in writing by the Trustee, the Certificate Insurer, Moody's
and Standard & Poor's, and which is any of the following: (i) a federal savings
and loan association duly organized, validly existing and in good standing under
the federal banking laws, (ii) an institution 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 Trustee, the Certificate
Insurer, Moody's and Standard & Poor's; provided, however, that any such
institution or association shall have combined capital, surplus and undivided
profits of at least $100,000,000. Notwithstanding the foregoing, an Account may
be held by an institution otherwise meeting the preceding requirements except
that the only applicable rating requirement shall be that the unsecured and
uncollateralized debt obligations thereof shall be rated Baa3 or better by
Moody's or BBB or better by Standard & Poor's if such institution has trust
powers and such Account is held by such institution in its corporate trust
department.
"Designated Residual Owner": Advanta Finance Residual
Corporation.
"Determination Date": As to each Payment Date, the third
Business Day preceding such Payment Date or such earlier day as shall be agreed
to by the Certificate Insurer and the Trustee.
"Direct Participant" or "DTC Participant": Any broker-dealer,
bank or other financial institution for which the Depository holds Class A
Certificates from time to time as a securities depository.
"Disqualified Organization": Shall have the meaning set forth
from time to time in the definition thereof at Section 860E(e)(5) of the Code
(or any successor statute thereto) and applicable to the Trust.
"Document Delivery Requirements": The Sponsor's obligations to
deliver certain legal documents, to prepare and record certain Mortgage
assignments or to deliver certain opinions relating to Mortgage assignments, in
each case with respect to the Mortgage Loans and as set forth in Section 3.5(c)
hereof.
"Eligible Investments": Those investments so designated
pursuant to Section 7.7 hereof.
"Event of Default": Any event described in Sections 8.20(a) or
(b) hereof.
"Fannie Mae": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor thereof.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"Final Determination": As defined in Section 9.3(a) hereof.
"First Mortgage Loan": A Mortgage Loan which constitutes a
first priority mortgage lien with respect to any Property.
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<PAGE> 19
"Fixed Rate Group Available Funds Cap Rate": As of any Payment
Date, an amount, expressed as a per annum rate and calculated on the basis of a
360-day year consisting of twelve thirty-day months, equal to (A)(i) the
aggregate amount of interest accrued and collected (or advanced) at the Coupon
Rates on all of the Mortgage Loans in the Group I Pool for the related
Remittance Period minus (ii) the aggregate of the Servicing Fee, the Premium
Amount and the Trustee's Fee, in each case relating to Group I, divided by (B)
the aggregate outstanding principal balance of the Mortgage Loans in Group I as
of the beginning of the related Remittance Period.
"Formula Pass-Through Rate": With respect to the Class A-7
Certificates, the interest rate resulting from the calculation set forth in
clause (x) in the definition of the Class A-7 Pass-Through Rate.
"Freddie Mac": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created pursuant to the Emergency
Home Finance Act of 1970, as amended, or any successor thereof.
"Gross Margin": With respect to each Mortgage Loan with an
adjustable Coupon Rate, the fixed percentage amount set forth in the related
Note which amount is added to the Index in accordance with the terms of the
related Note to determine, on each Interest Rate Adjustment Date, the Coupon
Rate for such Mortgage Loan, subject to any maximum.
"Group": Group I or Group II.
"Group I" or "Group I Pool": The pool of Mortgage Loans which
have fixed Coupon Rates and are identified in the related Schedule of Mortgage
Loans as having been assigned to Group I, including any Qualified Replacement
Mortgages and Subsequent Mortgage Loans assigned to Group I.
"Group I Available Funds": As defined in Section 7.3(a)
hereof.
"Group I Base Principal Distribution Amount": With respect to
the Group I Certificates, as of any Payment Date, the lesser of:
(a) the Group I Available Funds, plus any Group I Insured
Payment and minus the Group I Interest Distribution Amount, and
(b) (i) the sum, without duplication of:
(A) the principal actually collected by the
Master Servicer with respect to the Mortgage
Loans in Group I during the related
Remittance Period;
(B) the Loan Balance of each Mortgage Loan in
Group I that either was repurchased by the
Sponsor or an Originator or purchased by the
Master Servicer or any Sub-Servicer on the
related Remittance Date, to the extent such
Loan Balance is actually received by the
Trustee;
(C) any Substitution Amounts delivered by the
Sponsor or an Originator on the related
Remittance Date in connection with a
13
<PAGE> 20
substitution of a Mortgage Loan in Group I,
to the extent such Substitution Amounts are
actually received by the Trustee;
(D) all Net Liquidation Proceeds related to
principal and actually collected by the
Master Servicer with respect to the Mortgage
Loans in Group I during the related
Remittance Period;
(E) the proceeds related to principal received
by the Trustee from any termination of
Group I;
minus
(ii) the amount of any Group I
Overcollateralization Reduction Amount.
"Group I Capitalized Interest Deposit": $575,659.19.
"Group I Capitalized Interest Requirement": As of any Payment
Date occurring during the Pre-Funding Period and the Payment Date immediately
following the Pre-Funding Period, the difference, if any, between (x) the sum of
(i) the Group I Interest Distribution Amount for such Payment Date, (ii) the
Premium Amount relating to the Group I Certificates and (iii) the Trustee's Fee
relating to the Group I Certificates and (y) the sum of (i) the Group I Interest
Remittance Amount as of such Payment Date, and (ii) any Pre-Funding Earnings
related to the Group I Pre-Funded Amount to be transferred to the Certificate
Account on such Payment Date pursuant to Section 7.4 hereof.
"Group I Certificates": The Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the
Class A-5 Certificates and the Class A-6 Certificates.
"Group I Deficiency Amount": The excess, if any, of the Group
I Required Distributions over the Group I Available Funds.
"Group I Insured Payment": As of any Payment Date, an amount
equal to the sum of (a) the Group I Deficiency Amount and (b) any unpaid Group I
Preference Amount (without duplication).
"Group I Interest Distribution Amount": As of any Payment
Date, the sum of (i) the Class A-1 Current Interest, Class A-2 Current Interest,
Class A-3 Current Interest, Class A-4 Current Interest, Class A-5 Current
Interest and Class A-6 Current Interest and (ii) any Class A-1 Interest Carry
Forward Amount, Class A-2 Interest Carry Forward Amount, Class A-3 Interest
Carry Forward Amount, Class A-4 Interest Carry Forward Amount, Class A-5
Interest Carry Forward Amount and Class A-6 Interest Carry Forward Amount.
"Group I Interest Remittance Amount": As of any Remittance
Date with respect to the Mortgage Loans in Group I, the sum, without
duplication, of (i) all interest accrued during the related Remittance Period
(less the Servicing Fee with respect to such Mortgage Loans) and actually
collected prior to such Remittance Date, (ii) all Delinquency Advances and all
Special Advances made by the Master Servicer on such Remittance Date, (iii) all
Compensating Interest paid by the Master Servicer on such Remittance Date, net
of amounts allowed to be retained pursuant to Section 8.8(c), (iv) the portion
of the Loan Purchase Price and the Substitution
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<PAGE> 21
Amount relating to accrued interest on the Mortgage Loans in Group I, (v) the
portion of any Net Liquidation Proceeds relating to accrued and unpaid interest
with respect to Group I and (vi) the proceeds of any liquidation of the Trust
Estate related to Group I (to the extent such proceeds relate to interest).
"Group I Monthly Remittance Amount": As of any Remittance
Date, the sum of (i) the Group I Interest Remittance Amount and (ii) the Group I
Principal Remittance Amount.
"Group I Net Monthly Excess Cashflow": As of any Payment Date,
the Group I Available Funds, if any, remaining after application of the items
listed in clauses (i) through (xi) of Section 7.5(b) hereof on such Payment
Date.
"Group I Net Weighted Average Coupon Rate": With respect to
any Payment Date, the weighted average of the Coupon Rates of the Mortgage Loans
in Group I (weighted by the Loan Balances of the Mortgage Loans in Group I),
less the sum of (A) 0.75% per annum, (B) the Trustee Fee Rate related to Group
I, and (C) the fraction, expressed as a percentage, (i) the numerator of which
is equal to the product of (x) twelve and (y) the Premium Amount for the related
Payment Date with respect to the Class A-1, A-2, A-3, A-4, A-5, and A-6
Certificates and (ii) the denominator of which is equal to the aggregate Loan
Balances of the Mortgage Loans in Group I.
"Group I Original Balance": The sum of (x) the aggregate
principal balances of the Initial Mortgage Loans in Group I as of the Initial
Cut-Off Date, which equals $331,219,376.10 and (y) the Group I Original
Pre-Funded Amount, which sum is $377,643,504.46.
"Group I Original Pre-Funded Amount": The amount deposited in
the Pre-Funding Account on the Startup Day from the proceeds of the sale of the
Group I Certificates, which amount is $46,424,128.36.
"Group I Overcollateralization Amount": As of any Payment
Date, the amount, if any, by which (x) the aggregate Loan Balance of the
Mortgage Loans in Group I as of the close of business on the last day of the
immediately preceding Remittance Period plus amount on deposit in the
Pre-Funding Account as of the close of business on the last day of the
immediately preceding Remittance Period exceeds (y) the aggregate Certificate
Principal Balance of the Group I Certificates after taking into account all
distributions of principal on such Group I Certificates as of such Payment Date
(except for any payment to be made as to principal from the proceeds of the
Certificate Insurance Policy).
"Group I Overcollateralization Deficiency Amount": With
respect to any Payment Date, the excess, if any, of (x) the Specified
Overcollateralization Amount for Group I over (y) the Group I
Overcollateralization Amount.
"Group I Overcollateralization Deficit": With respect to any
Payment Date, the amount, if any, by which (x) the aggregate Certificate
Principal Balance of the Group I Certificates, after taking into account all
distributions to be made on such Payment Date (except for any payment to be made
as to principal from the proceeds of the Certificate Insurance Policy), exceeds
(y) the sum of (i) aggregate principal balance of the Mortgage Loans in Group I
as of the close of business on the last day of the preceding Remittance Period,
plus (ii) any amounts remaining in the Pre-Funding Account as of the close of
business on the last day of the related Remittance Period.
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<PAGE> 22
"Group I Overcollateralization Increase Amount": As of any
Payment Date, the lesser of (x) the Group I Overcollateralization Deficiency
Amount and (y) the sum of (i) the Group I Net Monthly Excess Cashflow plus (ii)
any Group II Net Monthly Excess Cashflow remaining after funding in full the
Group II Overcollateralization Deficiency Amount.
"Group I Overcollateralization Reduction Amount": As of any
Payment Date, the lesser of (x) the Group I Principal Remittance Amount for such
Payment Date and (y) the excess of (i) the Group I Overcollateralization Amount
for such Payment Date, over (ii) the Specified Overcollateralization Amount for
Group I for such Payment Date.
"Group I Pre-Funded Amount": With respect to any Determination
Date, the amount on deposit in the Pre-Funding Account relating to Group I and
available for the purchase of the Subsequent Mortgage Loans to be conveyed to
Group I.
"Group I Preference Amount": Any amount previously distributed
to an Owner of the Group I Certificates that is recoverable and sought to be
recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
"Group I Principal Distribution Amount": With respect to the
Group I Certificates, as of any Payment Date, the sum of (i) the Group I Base
Principal Distribution Amount, (ii) the amount of any Group I
Overcollateralization Increase Amount, (iii) the amount of any Group I
Overcollateralization Deficit and (iv) with respect to the Payment Date
following the end of the Pre-Funding Period only, any Group I Pre-Funded Amounts
released from the Pre-Funding Account.
"Group I Principal Remittance Amount": As of any Remittance
Date, the sum, without duplication, of (i) the principal actually collected by
the Master Servicer with respect to Mortgage Loans in Group I during the related
Remittance Period, (ii) the Loan Balance of each Mortgage Loan in Group I that
was purchased from the Trust on or prior to such Remittance Date, to the extent
such Loan Balance was actually deposited in the Principal and Interest Account,
(iii) any Substitution Amounts relating to principal delivered by the Sponsor
and deposited in the Principal and Interest Account in connection with a
substitution of a Mortgage Loan in Group I, (iv) any Net Liquidation Proceeds
relating to principal actually collected by the Master Servicer with respect to
such Mortgage Loans in Group I during the related Remittance Period net of
amounts allowed to be retained pursuant to Section 8.8(c), and (v) the proceeds
of any liquidation of the Trust Estate related to Group I (to the extent such
proceeds related to principal).
"Group I Reimbursement Amount": As of any Payment Date, the
sum of (x)(i) all Group I Insured Payments previously received by the Trustee
and all Group I Preference Amounts previously paid by the Certificate Insurer
and in each case not previously repaid to the Certificate Insurer pursuant to
Section 7.5(b)(x) and (xi) hereof plus (ii) interest accrued on each such Group
I Insured Payment not previously repaid calculated at the Late Payment Rate from
the date the Trustee received the related Group I Insured Payment to such date
and (y)(i) any other amounts then due and owing to the Certificate Insurer
relating to the Group I Certificates under the Insurance Agreement plus (ii)
interest on such amounts at the Late Payment Rate, if applicable. On each
Determination Date, the Certificate Insurer shall notify the Trustee and the
Sponsor of the amount of any Group I Reimbursement Amount if such amount is
greater than zero.
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<PAGE> 23
"Group I Required Distributions": As to the Group I
Certificates and as of any Payment Date, the sum of (x) the Group I Interest
Distribution Amount for such Payment Date, (y) the Group I Overcollateralization
Deficit, if any, as of such Payment Date, and (z) the Group I Preference Amount.
"Group II" or "Group II Pool": The pool of adjustable rate
Mortgage Loans identified in the related Schedule of Mortgage Loans as having
been assigned to Group II, including any Qualified Replacement Mortgages and any
Subsequent Mortgage Loans assigned to Group II.
"Group II Available Funds": As defined in Section 7.3(a)
hereof.
"Group II Base Principal Distribution Amount": With respect to
the Group II Certificates, as of any Payment Date, the lesser of:
(a) the Group II Available Funds, plus any Group II Insured
Payment and minus the Group II Interest Distribution Amount, and
(b) (i) the sum, without duplication of:
(A) the principal actually collected by the
Master Servicer with respect to the Mortgage
Loans in Group II during the related
Remittance Period;
(B) the Loan Balance of each Mortgage Loan in
Group II that either was repurchased by the
Sponsor or an Originator or purchased by the
Master Servicer or any Sub-Servicer on the
related Remittance Date, to the extent such
Loan Balance is actually received by the
Trustee;
(C) any Substitution Amounts delivered by the
Sponsor or an Originator on the related
Remittance Date in connection with a
substitution of a Mortgage Loan in Group II,
to the extent such Substitution Amounts are
actually received by the Trustee;
(D) all Net Liquidation Proceeds related to
principal and actually collected by the
Master Servicer with respect to the Mortgage
Loans in Group II during the related
Remittance Period;
(E) the proceeds related to principal received
by the Trustee from any termination of Group
II;
minus
(ii) the amount of any Group II
Overcollateralization Reduction Amount.
"Group II Capitalized Interest Deposit": $117,366.11.
"Group II Capitalized Interest Requirement": As of any Payment
Date occurring during the Pre-Funding Period and the Payment Date immediately
following the Pre-Funding
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<PAGE> 24
Period, the difference, if any, between (x) the sum of (i) the Group II Interest
Distribution Amount on such Payment Date, (ii) the Premium Amount relating to
the Group II Certificates and (iii) the Trustee's Fee relating to the Group II
Certificates and (y) the sum of (i) the Group II Interest Remittance Amount for
such Payment Date and (ii) any Pre-Funding Earnings relating to the Group II
Pre-Funded Amount to be transferred to the Certificate Account on such Payment
Date pursuant to Section 7.4 hereof.
"Group II Certificates": The Class A-7 Certificates.
"Group II Deficiency Amount": The excess, if any, of the Group
II Required Distributions over the Group II Available Funds.
"Group II Insured Payment": As of any Payment Date, an amount
equal to the sum of (a) the Group II Deficiency Amount and (b) any unpaid Group
II Preference Amount (without duplication).
"Group II Interest Distribution Amount": As of any Payment
Date, the sum of (i) the Class A-7 Current Interest and (ii) any Class A-7
Interest Carry Forward Amount.
"Group II Interest Remittance Amount": As of any Remittance
Date with respect to the Mortgage Loans in Group II, the sum, without
duplication, of (i) interest accrued during the related Remittance Period (less
the Servicing Fee with respect to such Mortgage Loans) and actually collected
prior to such Remittance Date, (ii) all Delinquency Advances and all Special
Advances made by the Master Servicer on such Remittance Date, (iii) all
Compensating Interest paid by the Master Servicer on such Remittance Date, net
of amounts allowed to be retained pursuant to Section 8.8(c), (iv) the portion
of the Loan Purchase Price and the Substitution Amount relating to interest
accrued on the Mortgage Loans in Group II and (v) the portion of any Net
Liquidation Proceeds relating to accrued and unpaid interest with respect to
Group II and (vi) the proceeds of any liquidation of the Trust Estate related to
Group II (to the extent such proceeds relate to interest).
"Group II Monthly Remittance Amount": As of any Remittance
Date, the sum of (i) the Group II Interest Remittance Amount and (ii) the Group
II Principal Remittance Amount.
"Group II Net Monthly Excess Cashflow": As of any Payment
Date, the Group II Available Funds, if any, remaining after application of the
items listed in clauses (i) through (xi) of Section 7.5(b) hereof on such
Payment Date.
"Group II Net Weighted Average Coupon Rate": With respect to
any Payment Date, the weighted average of the Coupon Rates of the Mortgage Loans
in Group II(weighted by the Loan Balances of the Mortgage Loans in Group II),
less the sum of (A) 0.75% per annum, (B) the Trustee Fee Rate related to Group
II and (C) the fraction, expressed as a percentage, (i) the numerator of which
is equal to the product of (x) twelve and (y) the Premium Amount for the related
Payment Date with respect to the Class A-7 Certificates and (ii) the denominator
of which is equal to the aggregate Loan Balances of the Mortgage Loans in Group
II.
"Group II Original Balance": The sum of the aggregate
principal balances of the Mortgage Loans in Group II as of the Initial
Cut-Off-Date which equals $142,758,206.98 and (y) the Group II Original
Pre-Funded Amount, which sum equals $155,682,407.85.
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"Group II Original Pre-Funded Amount": The amount deposited in
the Pre-Funding Account on the Startup Day, from the proceeds of the sale of the
Group II Certificates, which amount is $12,924,201.
"Group II Overcollateralization Amount": As of any Payment
Date, the difference between (x) the aggregate Loan Balance of the Mortgage
Loans in Group II as of the close of business on the last day of the immediately
preceding Remittance Period and (y) the aggregate Certificate Principal Balance
of the Group II Certificates after taking into account all distributions of
principal on such Group II Certificates as of such Payment Date (except for any
payment to be made as to principal from the proceeds of the Certificate
Insurance Policy).
"Group II Overcollateralization Deficiency Amount": With
respect to any Payment Date, the excess, if any, of (x) the Specified
Overcollateralization Amount for Group II over (y) the Group II
Overcollateralization Amount.
"Group II Overcollateralization Deficit": With respect to any
Payment Date, the amount, if any, by which (x) the aggregate Certificate
Principal Balance of the Group II Certificates, after taking into account all
distributions to be made on such Payment Date (except for any payment to be made
as to principal from the proceeds of the Certificate Insurance Policy), exceeds
(y) the sum of (i) the aggregate principal balance of the Mortgage Loans in
Group II as of the close of business on the last day of the preceding Remittance
Period plus (ii) any amounts remaining in the Pre-Funding Account as of the
close of business on the last day of the preceding Remittance Period.
"Group II Overcollateralization Increase Amount": As of any
Payment Date, the lesser of (x) the Group II Overcollateralization Deficiency
Amount and (y) the sum of (i) the Group II Net Monthly Excess Cashflow plus (ii)
any Group I Net Monthly Excess Cashflow remaining after funding in full the
Group I Overcollateralization Deficiency Amount.
"Group II Overcollateralization Reduction Amount": As of any
Payment Date, the lesser of (x) the Group II Principal Remittance Amount and (y)
the excess of (i) the Group II Overcollateralization Amount, over (ii) the
Specified Overcollateralization Amount for Group II.
"Group II Preference Amount": Any amount previously
distributed to an Owner of the Group II Certificates that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from time
to time, in accordance with a final nonappealable order of a court having
competent jurisdiction.
"Group II Pre-Funded Amount": With respect to any
Determination Date, the amount on deposit in the Pre-Funding Account and
available for the purchase of the Subsequent Mortgage Loans to be conveyed to
Group II.
"Group II Principal Distribution Amount": With respect to the
Group II Certificates, as of any Payment Date, the sum of (i) the Group II Base
Principal Distribution Amount, (ii) the amount of any Group II
Overcollateralization Increase Amount, (iii) the amount of any Group II
Overcollateralization Deficit and (iv) with respect to the Payment Date
following the end of the Pre-Funding Period only, any Group II Pre-Funded Amount
released from the Pre-Funding Account.
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"Group II Principal Remittance Amount": As of any Remittance
Date, the sum, without duplication, of (i) the principal actually collected by
the Master Servicer with respect to Mortgage Loans in Group II during the
related Remittance Period, (ii) the Loan Balance of each Mortgage Loan in Group
II that was purchased from the Trust on or prior to such Remittance Date, to the
extent such Loan Balance was actually deposited in the Principal and Interest
Account, (iii) any Substitution Amounts relating to principal delivered by the
Sponsor and actually deposited in the Principal and Interest Account in
connection with a substitution of a Mortgage Loan in Group II, (iv) any Net
Liquidation Proceeds relating to principal actually collected by the Master
Servicer with respect to such Mortgage Loans in Group II during the related
Remittance Period net of amounts allowed to be retained pursuant to Section
8.8(c), and (v) the proceeds of any liquidation of the Trust Estate related to
Group II (to the extent such proceeds related to principal).
"Group II Reimbursement Amount": As of any Payment Date, the
sum of (x)(i) all Group II Insured Payments previously received by the Trustee
not previously repaid to the Certificate Insurer pursuant to Section 7.5(b)(x)
and (xi) hereof plus (ii) interest accrued on each such Group II Insured Payment
not previously repaid, calculated at the Late Payment Rate from the date the
Trustee received the related Group II Insured Payment applicable to such date
and (y)(i) any other amounts then due and owing to the Certificate Insurer
relating to the Group II Certificates under the Insurance Agreement plus (ii)
interest on such amounts at the Late Payment Rate, if applicable. On each
Determination Date, the Certificate Insurer shall notify the Trustee and the
Sponsor of the amount of any Group II Reimbursement Amount if such amount is
greater than zero.
"Group II Required Distributions": As to the Group II
Certificates and as of any Payment Date, the sum of (x) the Group II Interest
Distribution Amount, (y) the Group II Overcollateralization Deficit, if any, as
of such Payment Date and (z) the Group II Preference Amount.
"Indemnification Agreement": The Indemnification Agreement
dated as of August 17, 1999 among the Certificate Insurer and the Underwriters
as may be amended from time to time.
"Index": With respect to any adjustable rate Mortgage Loan,
the applicable index set forth in the related Note.
"Indirect Participant" shall mean any financial institution
for whom any Direct Participant holds an interest in a Class A Certificate.
"Initial Clean-Up Call Date": The first Payment Date following
the date on which the aggregate Loan Balances of all Mortgage Loans has declined
to 10% or less of the Maximum Collateral Amount.
"Initial Cut-Off Date": The date as of which Initial Mortgage
Loans are transferred and assigned to the Trust, which date shall be the opening
of business on August 1, 1999.
"Initial Mortgage Loans" shall mean Mortgage Loans conveyed,
or caused to be conveyed, to the Trust by the Sponsor on the Startup Day.
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"Insurance Agreement": The Insurance and Indemnity Agreement
dated as of August 24, 1999 between the Sponsor, the Master Servicer, the
Trustee and the Certificate Insurer, as it may be amended from time to time.
"Insured Amount": With respect to any Payment Date, the sum of
the Group I Deficiency Amount and the Group II Deficiency Amount for such
Payment Date.
"Insured Payment": The Group I Insured Payment and the Group
II Insured Payment.
"Interest Determination Date": With respect to any Payment
Date for the Class A-7 Certificates, the second London Business Day preceding
the Accrual Period relating to such Payment Date or with respect to the
September 1999 Payment Date, the second London Business Day preceding the
Startup Day.
"Interest Rate Adjustment Date": The date on which an
adjustment to the Coupon Rate of an adjustable rate Note becomes effective.
"Junior Mortgage Loan": A Mortgage Loan which constitutes a
junior priority mortgage lien with respect to the related Property.
"Late Payment Rate": The rate defined in the Insurance
Agreement.
"LIBOR": With respect to any Accrual Period for the Class A-7
Certificates, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as they appear on the Telerate Screen 3750, as
of 11:00 a.m., London time.
On each Interest Determination Date, the Trustee will
determine LIBOR for the next Accrual Period for the Class A-7 Certificates as
follows:
first On the basis of offered rates for one month United
States dollar deposits, as this rate appears on Telerate Page 3750, as
of 11:00 a.m., London time.
second If such rate does not appear on Telerate Page 3750 as
of 11:00 a.m., London time, LIBOR will be the arithmetic mean of the
offered quotations of two or more Reference Banks, rounded to the
nearest whole multiple of 1/16%.
third If fewer than two Reference Banks provide offered
quotations, LIBOR for the Accrual Period for the Class A-7 Certificates
will be the higher of (x) LIBOR as determined on the previous Interest
Determination Date and (y) the Reserve Interest Rate.
The establishment of LIBOR on each Interest Determination Date
by the Trustee and the Trustee's calculation of the rate of interest applicable
to the Class A-7 Certificates for the related Accrual Period will, in the
absence of manifest error, be final and binding.
"Liquidated Loan": A Mortgage Loan with respect to which the
related Property has been acquired, liquidated or foreclosed and with respect to
which the Master Servicer determines that all Liquidation Proceeds which it
expects to recover from or on account of such Mortgage Loan have been recovered.
A Mortgage Loan which is purchased from the Trust pursuant to Section 3.3, 3.4,
3.6(b) or 8.10 hereof is not a "Liquidated Loan".
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"Liquidation Expenses": Expenses which are incurred by the
Master Servicer or any Sub-Servicer in connection with the liquidation of any
defaulted Mortgage Loan, such expenses include, without limitation, legal fees
and expenses, and any unreimbursed Servicing Advances expended by the Master
Servicer or any Sub-Servicer pursuant to Section 8.9.
"Liquidation Proceeds": With respect to any Liquidated Loan,
any amounts (including the proceeds of any Mortgage Insurance Policy) recovered
by the Master Servicer in connection with such Liquidated Loan, whether through
trustee's sale, foreclosure sale or otherwise, including payments in connection
with such Liquidated Loan received from the related Mortgagor, other than the
amounts required to be paid to the Mortgagor pursuant to the terms of the
applicable Mortgage or to be applied otherwise pursuant to law.
"Loan Balance": With respect to each Mortgage Loan, the
outstanding principal balance thereof as of the Initial Cut-Off Date, Subsequent
Cut-Off Date or Replacement Cut-Off Date, as the case may be, less any principal
amount relating to such Mortgage Loan included in previous Monthly Remittance
Amounts that were transferred by the Master Servicer or any Sub-Servicer to the
Trustee for deposit in the Certificate Account; provided, however, that the Loan
Balance for any Mortgage Loan which has become a Liquidated Loan shall be zero
as of the first day of the Remittance Period following the Remittance Period in
which such Mortgage Loan becomes a Liquidated Loan, and at all times thereafter.
"Loan Purchase Price": With respect to any Mortgage Loan
purchased from the Trust on a Remittance Date pursuant to Section 3.3, 3.4,
3.6(b) or 8.10 hereof and for which a Qualified Replacement Mortgage was
included, an amount equal to the Loan Balance of such Mortgage Loan as of such
Remittance Date, plus one month's accrued interest (if not already deposited in
the Principal and Interest Account) on the outstanding Loan Balance as of the
beginning of the related Remittance Period computed at the Coupon Rate less the
Servicing Fee (expressed as an annual percentage rate), together with, without
duplication, the aggregate amount of (i) all Delinquency Advances which the
Master Servicer or any Sub-Servicer has theretofore failed to remit with respect
to such Mortgage Loan and (ii) any Group I Reimbursement Amount or Group II
Reimbursement Amount, as the case may be, relating to such Mortgage Loan.
"London Business Day": A day on which banks are open for
dealing in foreign currency and exchange in London and New York City.
"Lower-Tier Balance": As to each Class of Lower-Tier Interests
and any Payment Date, the Initial Lower-Tier Balance as set forth in Section
2.8(a) minus all amounts distributed as principal of such Class on previous
Payment Dates.
"Lower-Tier Interest 1": The interest of that name established
pursuant to Section 2.8(a) hereof.
"Lower-Tier Interest 2": The interest of that name established
pursuant to Section 2.8(a) hereof.
"Lower-Tier Interest 3": The interest of that name established
pursuant to Section 2.8(a) hereof.
"Lower-Tier Interest 4": The interest of that name established
pursuant to Section 2.8(a) hereof.
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"Lower-Tier Interest 5": The interest of that name established
pursuant to Section 2.8(a) hereof.
"Lower-Tier Pass-Through Rate": As to each of the respective
Lower-Tier Interests, the applicable "Lower-Tier Pass-Through Rate" set forth in
Section 2.8 hereof.
"Lower-Tier REMIC": The segregated pool of assets consisting
of the Mortgage Loans, the Accounts (except for the Non-REMIC Estate), any REO
Property and any proceeds of the foregoing.
"Lower-Tier REMIC Interests": As defined in Section 2.8(b)
hereof.
"Lower-Tier REMIC Regular Interests": As defined in Section
2.8(b) hereof.
"Lower-Tier REMIC Residual Interest": The Class R-I
Certificate.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Master Servicer Affiliate": A Person (i) controlling,
controlled by or under common control with the Master Servicer and (ii) which is
qualified to service residential mortgage loans and is acting as a Sub-Servicer
pursuant to Section 8.3 hereof.
"Master Servicer's Trust Receipt": The Master Servicer's trust
receipt in the form set forth as Exhibit I hereto.
"Maximum Collateral Amount": The sum of (i) the Group I Loan
Balances as of the Initial Cut-Off Date, (ii) the Group II Loan Balances as of
the Initial Cut-Off Date, and (iii) the aggregate Loan Balances of all
Subsequent Mortgage Loans acquired by the Trust, as of the respective Subsequent
Cut-Off Dates.
"Monthly Remittance Amount": The Group I Monthly Remittance
Amount or the Group II Monthly Remittance Amount, as applicable.
"Moody's": Moody's Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an interest in real property securing a Note.
"Mortgage File": For each Mortgage Loan, the items listed
below:
(a) the original Note, or , if such Note is lost, a certified
copy thereof along with a Lost Note Affidavit in the form of Exhibit K
hereto, bearing all intervening endorsements, endorsed either (i) "Pay
to the order of Bankers Trust Company of California, N.A., as custodian
or trustee under the applicable custody or trust agreement, without
recourse" or (ii) "Pay to the order of Bankers Trust Company of
California, N.A., as custodian or trustee under the applicable custody
or trust agreement, without recourse, Advanta Mortgage Corp. USA as
Master Servicer," or (iii) "Pay to the order of Bankers Trust Company
of California, N.A., as custodian or trustee" by [Seller, signature,
name, title] and signed in the name of the previous owner by an
authorized officer (in the event that the Mortgage Loan was acquired by
the previous owner in a merger the signature
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must be in the following form: "[the previous owner],successor
by merger to [name of predecessor]", in the event that the Mortgage
Loan was acquired or originated while doing business under another
name, the signature must be in the following form: "[the previous
owner], formerly known as [previous name]" or (iv) "Pay to the order of
Bankers Trust Company of California, N.A., without recourse" or (v)
"Pay to the order of _______________, without recourse". The original
Note should be accompanied by any rider made in connection with the
origination of the related Mortgage Loan;
(b) the original of any guarantee executed in connection with
the Note (if any);
(c) the original Mortgage with evidence of recording thereon
or copies certified by the related recording office or, if the original
Mortgage has not yet been returned from the recording office, a
certified copy of the Mortgage;
(d) the originals of any assumption, modification,
consolidation or extension agreements;
(e) the original assignment of Mortgage of each Mortgage Loan
to "Bankers Trust Company of California, N.A., as custodian or
trustee", "Bankers Trust Company of California, N.A. as trustee or
custodian on behalf of Advanta Conduit Receivables, Inc.", "Bankers
Trust Company of California, N.A., as trustee" or "Pay to the Order of
____________________." In the event that the Mortgage Loan was acquired
by the previous owner in a merger, the assignment of Mortgage must be
by the "(previous owner), successor by merger to (names of
predecessor)"; and in the event that the Mortgage Loan was acquired or
originated by the previous owner while doing business under another
name, the Assignment of Mortgage must be by the "(previous owner),
formerly known as (previous name)";
(f) the originals of all intervening assignments of Mortgage,
showing a complete chain of assignment from origination to the related
Affiliated Originator, including warehousing assignments, with evidence
of recording thereon (or, if an original intervening assignment has not
been returned from the recording office, a certified copy thereof); and
(g) any assignment of Mortgages required to be delivered under
Section 3.5(c)(i) or 3.5(c)(ii) hereunder.
"Mortgage Insurance Policy": Any hazard, title or primary
mortgage insurance policy relating to a Mortgage Loan, but excluding any
non-mortgage related or credit life insurance policy. The term "Mortgage
Insurance Policy" shall not include the Certificate Insurance Policy.
"Mortgage Loan Group": Either Group I or Group II. References
herein to the related Class of Class A Certificates, when used with respect to a
Mortgage Loan Group, shall mean (A) in the case of Group I, the Group I
Certificates and (B) in the case of Group II, the Group II Certificates.
"Mortgage Loan Transfer Agreement": The Mortgage Loan Transfer
Agreement dated as of August 1, 1999 among the Sponsor, the Trustee and the
Affiliated Originators named therein together with any related Conveyance
Agreements (as defined therein).
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"Mortgage Loans": The mortgage loans transferred and assigned
to the Trust pursuant to Section 3.5(a) hereof including any Subsequent Mortgage
Loans, together with any Qualified Replacement Mortgages substituted therefor in
accordance with this Agreement, identified in the Schedule of Mortgage Loans.
The term "Mortgage Loan" includes the terms "First Mortgage Loan" and "Junior
Mortgage Loan". The term "Mortgage Loan" includes any Mortgage Loan which is
Delinquent, which relates to a foreclosure or which relates to a Property which
is an REO Property prior to such Property's disposition by the Trust. Any
mortgage loan which, although intended by the parties hereto to have been, and
which purportedly was, transferred and assigned to the Trust by the Sponsor, in
fact was not transferred and assigned to the Trust for any reason whatsoever
shall nevertheless be considered a "Mortgage Loan" for all purposes of this
Agreement. The term "Mortgage Loan" includes the terms "Initial Mortgage Loan",
"Subsequent Mortgage Loan" and "Qualified Replacement Mortgage".
"Mortgagor": The obligor on a Note.
"Net Liquidation Proceeds": As to any Liquidated Loan,
Liquidation Proceeds net of, without duplication, Liquidation Expenses,
unreimbursed Servicing Advances, unreimbursed Delinquency Advances and accrued
and unpaid Servicing Fees through the date of liquidation. In no event shall Net
Liquidation Proceeds with respect to any Liquidated Loan be less than zero.
"Net Monthly Excess Cash Flow": With respect to any Payment
Date, the Group I Net Monthly Excess Cashflow or Group II Net Monthly Excess
Cashflow, as applicable.
"Nonrecoverable Advances": With respect to any Mortgage Loan,
(i) any Delinquency Advance or Servicing Advance previously made and not
reimbursed pursuant to Sections 7.5(b)(xiv) or 8.9, (ii) a Delinquency Advance
or Servicing 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 Master
Servicer, as evidenced by an Officer's Certificate delivered no later than one
Business Day prior to the related Determination Date to the Certificate Insurer
and the Trustee, would not be ultimately recoverable pursuant to Sections
7.5(b)(xiv) or 8.9 or (iii) any other advance identified as a Nonrecoverable
Advance in Section 8.9(d).
"Non-REMIC Estate": Collectively, the Supplemental Interest
Trust, the Supplemental Interest Payment Account, the Capitalized Interest
Account and the Pre-Funding Account.
"Non-United States Person": Any Person other than a United
States Person.
"Note": The note or other evidence of indebtedness of a
Mortgagor under a Mortgage Loan.
"Offered Certificates": The Class A Certificates.
"Officer's Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate.
"Operative Documents": Collectively, this Agreement, the
Mortgage Loan Transfer Agreement, each Subsequent Transfer Agreement, the
Certificate Insurance Policy, the Insurance Agreement, the Indemnification
Agreement and the Certificates.
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"Original Certificate Principal Balance": The Certificate
Principal Balances as of the Startup Day of each of the following Classes of
Certificates:
Class A-1 Certificates = $117,581,000
Class A-2 Certificates = $69,182,000
Class A-3 Certificates = $46,259,000
Class A-4 Certificates = $74,498,000
Class A-5 Certificates = $29,980,000
Class A-6 Certificates = $37,500,000
Class A-7 Certificates = $150,000,000
"Original Principal Amount": With respect to each Note, the
principal amount of such Note on the date of origination thereof or with respect
to Junior Mortgage Loans, the sum of (i) the principal amount of the mortgage
note relating to the Senior Lien plus (ii) the principal amount of the Note
conveyed to the Trust, as the case may be, on the date of origination thereof.
"Originator": Any entity from which the Sponsor has purchased
(or, in the case of Subsequent Mortgage Loans, will purchase) Mortgage Loans,
including any Affiliated Originator.
"Outstanding": With respect to all Certificates of a Class, as
of any date of determination, all such Certificates theretofore executed and
delivered hereunder except:
(i) Certificates theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Certificates or portions thereof for which full and final
payment money in the necessary amount has been theretofore deposited with the
Trustee in trust for the Owners of such Certificates;
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement, unless
proof satisfactory to the Trustee is presented that any such Certificates are
held by a bona fide purchaser; and
(iv) Certificates alleged to have been destroyed, lost or
stolen for which replacement Certificates have been issued as provided for in
Section 5.5 hereof.
"Overcollateralization Deficit": The Group I
Overcollateralization Deficit or the Group II Overcollateralization Deficit, as
applicable.
"Overcollateralization Increase Amount": The Group I
Overcollateralization Increase Amount or the Group II Overcollateralization
Increase Amount, as applicable.
"Overcollateralization Reduction Amount": The Group I
Overcollateralization Reduction Amount or the Group II Overcollateralization
Reduction Amount, as applicable.
"Owner": The Person in whose name a Certificate is registered
in the Register, to the extent described in Section 5.6.
"Pass-Through Rate": The Class A-1 Pass-Through Rate, the
Class A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4
Pass-Through Rate, the Class A-5
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Pass-Through Rate, the Class A-6 Pass-Through Rate, the Class A-7 Pass-Through
Rate or the Class B Pass-Through Rate, as applicable.
"Payment Date": Any date on which the Trustee is required to
make distributions to the Owners, which shall be the 25th day of each calendar
month, or if the 25th day is not a Business Day, then the next succeeding
Business Day, commencing September 27, 1999.
"Percentage Interest": As to any Class A Certificate, that
percentage, expressed as a fraction, the numerator of which is the Original
Certificate Principal Balance of such Certificate and the denominator of which
is the Original Certificate Principal Balance of all Certificates of the same
Class; and as to any Class B, Class BS, Class R-I or Class R-II Certificate,
that percentage interest set forth on such Class B, Class BS, Class R-I or Class
R-II Certificate, respectively.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Cumulative Realized Losses": With respect to any period,
the sum of all Realized Losses with respect to the Mortgage Loans experienced
during such period.
"Pool Factor": As defined in Section 7.8(a)(xvi) hereof.
"Pool Principal Balance": The aggregate Loan Balances of all
Mortgage Loans.
"Pre-Funding Account": The Pre-Funding Account established in
accordance with Section 7.2 hereof and maintained by the Trustee.
"Pre-Funded Amount": The Group I Pre-Funded Amount and/or the
Group II Pre-Funded Amount, as applicable.
"Pre-Funding Earnings": With respect to any Payment Date, the
actual investment earnings earned during the period from the prior Payment Date
(or with respect to the initial Payment Date, from the Startup Day) through but
not including such Payment Date (inclusive) on the Pre-Funding Amount during
such period, as calculated by the Trustee pursuant to Section 7.6 hereof.
"Pre-Funding Period": The period commencing on the Startup Day
and ending on the earliest to occur of (i) the date on which the Pre-Funded
Amount (exclusive of any investment earnings) is less than $100,000, (ii) the
date on which any Event of Default occurs and (iii) November 18, 1999.
"Premium Amount": With respect to each Group of Mortgage Loans
and, as to any Payment Date, the product of (x) one-twelfth of the Premium
Percentage applicable to such Group and (y) the Certificate Principal Balance of
such Group of Certificates on such Payment Date (after taking into account any
distributions of principal for such Group on such Payment Date).
"Premium Percentage": The percentage defined as such in the
Insurance Agreement with respect to the related Group.
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"Prepaid Installment": With respect to any Mortgage Loan, any
payment of principal and accrued interest thereon received prior to the
scheduled due date for such payment, intended by the Mortgagor as an early
payment thereof and not as a Prepayment.
"Prepayment": Any payment of principal of a Mortgage Loan
which is received by the Master Servicer in advance of the scheduled due date
for such payment (other than the principal portion of any Prepaid Installment).
The proceeds of any Mortgage Insurance Policy which are to be applied as a
payment of principal on the related Mortgage Loan shall be deemed to be
Prepayments for all purposes of this Agreement.
"Prepayment Interest Shortfall": The amount defined in Section
8.9(b) hereof.
"Preservation Expenses": Expenditures made by the Master
Servicer or any Sub-Servicer in connection with a foreclosed Mortgage Loan prior
to the liquidation thereof, including, without limitation, expenditures for real
estate property taxes, hazard insurance premiums, flood insurance premiums and
property restoration or preservation.
"Principal and Interest Account": Collectively, each principal
and interest account created by the Master Servicer or any Sub-Servicer pursuant
to Section 8.8(a) hereof, or pursuant to any Sub-Servicing Agreement.
"Prohibited Transaction": "Prohibited transaction" shall have
the meaning set forth from time to time in the definition thereof contained in
Section 860F(a)(2) of the Code (or any successor statute thereto) and applicable
to the Trust.
"Property": The underlying property securing a Mortgage Loan.
"Prospectus": Such final prospectus dated August 10, 1999, as
supplemented by a prospectus supplement dated August 17, 1999 relating to the
Class A Certificates.
"Purchase Option Period": As defined in Section 9.3(b) hereof.
"Qualified Liquidation": "Qualified Liquidation" shall have
the meaning set forth from time to time in the definition thereof at Section
860F(a)(4) of the Code (or any successor statute thereto) and applicable to the
Trust.
"Qualified Mortgage": "Qualified Mortgage" shall have the
meaning set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code (or any successor statute thereto) and applicable to the
Trust and the Mortgage Loan.
"Qualified Replacement Mortgage": A Mortgage Loan substituted
for another pursuant to Section 3.3, 3.4 or 3.6(b)
hereof.
"Rating Agency": Each of Standard & Poor's and Moody's.
"Realized Loss": As to any Liquidated Loan, the amount, if
any, by which the Loan Balance thereof as of the date of liquidation exceeds the
Net Liquidation Proceeds realized thereon.
"Record Date": With respect to each Payment Date and (x) with
respect to the Group I Certificates, the last Business Day of the calendar month
immediately preceding the
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calendar month in which such Payment Date occurs and (y) with respect
to the Group II Certificates, the Business Day immediately preceding such
Payment Date (unless the Certificates become definitive, in which event the
Record Date shall be the last Business Day of the calendar month immediately
preceding the calendar month in which such Payment Date occurs).
"Redeeming Party": As defined in Section 9.2(a) hereof.
"Reference Banks": Leading banks, selected by the Trustee
after consultation with the Master Servicer, which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (1) with an
established place of business in London, (2) which have been designated by the
Trustee after consultation with the Master Servicer and (3) which are not
controlling, controlled by, or under common control with, the Sponsor.
"Register": The register maintained by the Trustee in
accordance with Section 5.4 hereof, in which the names of the Owners
are set forth.
"Registrar": The Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.4 hereof, or any duly appointed and eligible
successor thereto.
"Registration Statement": The Registration Statement (No.
333-75295) filed by the Sponsor with the Securities and Exchange Commission,
including all amendments thereto and including the Prospectus relating to the
Class A Certificates constituting a part thereof.
"Reimbursement Amount": The Group I Reimbursement Amount and
the Group II Reimbursement Amount.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of the Code, and related provisions, and regulations and
rulings promulgated thereunder, as the foregoing may be in effect from time to
time.
"REMIC Trust": The segregated pool of assets consisting of the
Trust Estate, but excluding the Non-REMIC Estate.
"Remittance Date": Any date on which the Master Servicer is
required to remit monies on deposit in the Principal and Interest Account to the
Trustee, which shall be no later than the 18th day of each month, or, if such
day is not a Business Day, the immediately succeeding Business Day, commencing
in the month following the month in which the Startup Day occurs.
"Remittance Period": The period beginning on the first day of
the calendar month immediately preceding the month in which a Remittance Date
occurs and ending on the last day of such immediately preceding calendar month.
"REO Property": A Property acquired by the Master Servicer or
any Sub-Servicer on behalf of the Trust through foreclosure or grant of a
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
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<PAGE> 36
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is transferred and assigned to the Trust.
"Representation Letter": The letters to, or agreements with,
the Depository to effectuate a book entry system with respect to the Class A
Certificates registered in the Register under the nominee name of the
Depository.
"Representative": Bear, Stearns & Co. Inc., as representative
of the Underwriters.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
the arithmetic mean, rounded to the nearest whole multiple of 1/16%, of the
one-month U.S. dollar lending rates which New York City banks selected by the
Trustee are quoting on the Interest Determination Date to the principal London
offices of leading banks in the London interbank market or, in the event that
the Trustee cannot determine the arithmetic mean, the lowest one-month U.S.
dollar lending rate which New York City banks selected by the Trustee are
quoting on the Interest Determination Date to leading European banks.
"SAS 70": Means the "Statement on Auditing Standards No. 70
Reports on the Processing of Transactions by Service Organizations" as in effect
as of the date hereof, which may be amended from time to time.
"Schedule of Mortgage Loans": The schedule of Mortgage Loans,
attached hereto as Schedule I as may be further supplemented to include
Subsequent Mortgage Loans or Qualified Replacement Mortgages. The information
contained on each Schedule of Mortgage Loans shall be delivered to the Trustee
in an electronic media satisfactory to the Trustee.
"Securities Act": The Securities Act of 1933, as amended.
"Senior Lien": With respect to any Junior Mortgage Loan, the
mortgage loan relating to the corresponding Property having a priority lien.
"Servicing Advance": As defined in Section 8.9(c) and Section
8.13 hereof.
"Servicing Fee": As to any Payment Date the product of (x)
one-twelfth of 0.75% and (y) the aggregate Loan Balances of the Mortgage Loans
as of the opening of business on the first day of the Remittance Period
preceding such Payment Date.
"Servicer Termination Loss Trigger": As defined in the
Insurance Agreement.
"Special Advance": Any advance made by the Master Servicer
pursuant to Section 8.9(d) hereof.
"Specified Overcollateralization Amount": As defined in the
Insurance Agreement.
"Sponsor": Advanta Conduit Receivables, Inc., a Nevada
corporation.
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<PAGE> 37
"Standard & Poor's": Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc.
"Startup Day": With respect to each of the Upper-Tier REMIC
and the Lower-Tier REMIC, August 24, 1999.
"Step-Up Payment Date": The Payment Date following the
calendar month in which the Initial Clean-Up Call Date occurs.
"Subsequent Cut-Off Date": With respect to any Subsequent
Mortgage Loans, the opening of business on the first day of the calendar month
in which such Subsequent Mortgage Loans are transferred and assigned to the
Trust.
"Subsequent Mortgage Loans": The Mortgage Loans sold to the
Trust pursuant to Section 3.8 hereof, which shall be listed on the Schedule of
Mortgage Loans attached to the Subsequent Transfer Agreement.
"Subsequent Transfer Agreement": Each Subsequent Transfer
Agreement dated as of a Subsequent Transfer Date executed by the Trustee and the
Sponsor substantially in the form of Exhibit J hereto, by which Subsequent
Mortgage Loans are transferred and assigned to the Trust.
"Subsequent Transfer Date": The date specified in each
Subsequent Transfer Agreement.
"Substitution Amount": In connection with the delivery of any
Qualified Replacement Mortgage, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date is
less than the Loan Balance of the Mortgage Loan being replaced as of such
Replacement Cut-Off Date, an amount equal to such difference together with
accrued and unpaid interest on such amount calculated at the Coupon Rate (net of
the Servicing Fee) of the Mortgage Loan being replaced.
"Sub-Servicer": Any Person with whom the Master Servicer has
entered into a Sub-Servicing Agreement and who is either a Master Servicer
Affiliate or satisfies any requirements set forth in Section 8.3 hereof in
respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and any Sub-Servicer (other than a Master Servicer Affiliate)
relating to servicing and/or administration of certain Mortgage Loans as
permitted by Section 8.3 hereof.
"Supplemental Interest Amount": With respect to any Payment
Date, the excess, if any, of (x) the Class A-7 Current Interest due on the Class
A-7 Certificates calculated using the Formula Pass-Through Rate for the Class
A-7 Certificates applicable to such Payment Date over (y) the interest due on
such Class calculated at the ARM Group Available Funds Cap Rate applicable to
such Payment Date.
"Supplemental Interest Payment Account": The account
established in accordance with Section 7.10(a) hereof and maintained by the
Trustee.
"Supplemental Interest Payment Amount Available": As defined
in Section 7.10(b) hereof.
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"Supplemental Interest Right": As defined in Section 7.10(e)
hereof.
"Supplemental Interest Shortfall Amount": As defined in
Section 7.10(b) hereof.
"Supplemental Interest Shortfall Carry-Forward Amount": With
respect to any Payment Date, the sum of (x) the amount, if any, by which (i) the
sum of (A) the Supplemental Interest Shortfall Amount as of the immediately
preceding Payment Date and (B) any unpaid Supplemental Interest Shortfalls, as
calculated up through the previous Payment Date and outstanding on such
immediately preceding Payment Date, exceeds (ii) the amount of the actual
distributions made on account of each Supplemental Interest Right on such
immediately preceding Payment Date and (y) interest on such amount at the Class
A-7 Formula Pass-Through Rate calculated on the basis of the actual number of
days in the related Accrual Period.
"Supplemental Interest Trust": The Advanta Supplemental
Interest Trust 1999-3 created pursuant to Section 7.10(a) hereof.
"Tax Matters Person": The Tax Matters Person appointed
pursuant to Section 11.17 hereof.
"Tax Matters Person Residual Interest": The 100% interest in
the Class R-I Certificate and the Class R-II Certificate, each of which shall be
issued to and held by Advanta Finance Residual Corporation or certain affiliates
throughout the term hereof unless another person that is not a Disqualified
Organization shall accept an assignment of such interest and the designation of
Tax Matters Person pursuant to Section 11.17 hereof.
"Termination Notice": As defined in Section 9.3(b) hereof.
"Termination Price": As defined in Section 9.2(a) hereof.
"Transaction Documents": Collectively this Agreement, the
Insurance Agreement, the Underwriting Agreement relating to the Class A
Certificates, the Mortgage Loan Transfer Agreement, any Sub-Servicing Agreement,
the Indemnification Agreement, any Subsequent Transfer Agreements, the
Registration Statement relating to the Class A Certificates and the
Certificates.
"Trust": Advanta Mortgage Loan Trust 1999-3, the trust created
under this Agreement.
"Trust Estate": Collectively, all money, instruments and other
property, to the extent such money, instruments and other property are subject
or intended to be held in trust, and in the subtrusts, for the benefit of the
Owners, including all proceeds thereof, including, without limitation, (i) the
Mortgage Loans, (ii) such amounts in all Accounts including principal collected
and interest accrued in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off date and each Replacement Cut-Off
Date, as applicable, including Eligible Investments, as may from time to time
may be held in such Accounts (except any premium recapture and interest accrued
prior to the Initial Cut-Off Date, each Subsequent Cut-Off Date and each
Replacement Cut-Off Date, as applicable and except for net investment earnings
on the Principal and Interest Account, the Capitalized Interest Account and the
Certificate Account), (iii) any Property, the ownership of which has been
effected on behalf of the Trust as a result of foreclosure or acceptance by the
Master Servicer of a deed in lieu of foreclosure and that has not been withdrawn
from the Trust, (iv) any Mortgage Insurance Policies
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<PAGE> 39
relating to the Mortgage Loans and any rights of the Sponsor or any Affiliated
Originator under any Mortgage Insurance Policies, (v) Net Liquidation Proceeds
with respect to any Liquidated Loan, (vi) the rights of the Trustee under the
Certificate Insurance Policy, and (vii) the rights of the Sponsor against any
Originator pursuant to the related Mortgage Loan Transfer Agreement.
"Trustee": Bankers Trust Company of California, N.A., located
on the date of execution of this Agreement at 3 Park Plaza, Irvine, California
92614, a national banking association, not in its individual capacity but solely
as Trustee under this Agreement, and any successor hereunder.
"Trustee's Fees": With respect to any Payment Date and
Mortgage Loan Group, the product of (x) one-twelfth of the Trustee Fee Rate and
(y) the aggregate Loan Balance of the Mortgage Loan in the related Mortgage Loan
Group as of the beginning of the related Remittance Period.
"Trustee Fee Rate": 0.009% per annum.
"Uncertificated Interest": As defined in Section 2.8(b)
hereof.
"Underwriters": Bear, Stearns & Co. Inc., Salomon Smith
Barney, Inc. and Prudential Securities Incorporated.
"Upper-Tier REMIC": The REMIC established pursuant to Section
2.8 hereof. The assets of the Upper-Tier REMIC shall be the Lower-Tier REMIC
Regular Interests.
"Upper-Tier REMIC Regular Interests": As defined in Section
2.8(c) hereof.
"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
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code.
SECTION 1.2. USE OF WORDS AND PHRASES. "Herein", "hereby",
"hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words
refer to this Agreement as a whole and not solely to the particular section of
this Agreement in which any such word is used. The definitions set forth in
Section 1.1 hereof include both the singular and the plural. Whenever used in
this Agreement, any pronoun shall be deemed to include both singular and plural
and to cover all genders.
SECTION 1.3. CAPTIONS; TABLE OF CONTENTS. The captions or
headings in this Agreement and the Table of Contents are for convenience only
and in no way define, limit or describe the scope and intent of any provisions
of this Agreement.
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SECTION 1.4. OPINIONS. Each opinion with respect to the
validity, binding nature and enforceability of documents or Certificates may be
qualified to the extent that the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law) and may state
that no opinion is expressed on the availability of the remedy of specific
enforcement, injunctive relief or any other equitable remedy. Any opinion
required to be furnished by any Person hereunder must be delivered by counsel
upon whose opinion the addressee of such opinion may reasonably rely, and such
opinion may state that it is given in reasonable reliance upon an opinion of
another, a copy of which must be attached, concerning the laws of a foreign
jurisdiction.
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
SECTION 2.1. ESTABLISHMENT OF THE TRUST. The parties hereto do
hereby create and establish, pursuant to the laws of the State of New York and
this Agreement, the Trust, which, for convenience, shall be known as "Advanta
Mortgage Loan Trust 1999-3". Each Mortgage Loan Group shall constitute a
subtrust of the Trust.
SECTION 2.2. OFFICE. The office of the Trust shall be in care
of the Trustee, addressed to Bankers Trust Company of California, N.A., 3 Park
Plaza, Sixteenth Floor, Irvine, California 92614, or at such other address as
the Trustee may designate by notice to the Sponsor, the Master Servicer, the
Owners and the Certificate Insurer.
SECTION 2.3. PURPOSES AND POWERS. The purpose of the Trust is
to engage in the following activities, and only such activities: (i) the
issuance of the Certificates and the acquiring, owning and holding of Mortgage
Loans and the Trust Estate in connection therewith; (ii) activities that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith, including the investment of monies in accordance
with this Agreement; and (iii) such other activities as may be required in
connection with conservation of the Trust Estate and distributions to the
Owners; provided, however, that nothing contained herein shall permit the
Trustee to take any action which would result in the loss of REMIC status for
the REMIC Trust.
SECTION 2.4. APPOINTMENT OF THE TRUSTEE; DECLARATION OF TRUST.
The Sponsor hereby appoints the Trustee as trustee of the Trust effective as of
the Startup Day, to have all the rights, powers and duties set forth herein. The
Trustee hereby acknowledges and accepts such appointment, represents and
warrants its eligibility as of the Startup Day to serve as Trustee pursuant to
Section 10.8 hereof and declares that it will hold the Trust Estate in trust
upon and subject to the conditions set forth herein for the benefit of the
Owners and the Certificate Insurer, as their interests may appear.
SECTION 2.5. EXPENSES OF THE TRUST. Any expenses of the Trust
that have been reviewed and approved by the Sponsor (which approval shall not be
unreasonably withheld), including the reasonable expenses of the Trustee shall
be paid by the Sponsor to the Trustee or to such other Person to whom such
amounts may be due. Failure by the Sponsor to pay any such fees or other
expenses shall not relieve the Trustee of its obligations hereunder. The Trustee
hereby covenants with the Owners that every material contract or other material
agreement
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<PAGE> 41
entered into by the Trustee on behalf of the Trust shall expressly state therein
that no Owner shall be personally liable in connection with such contract or
agreement.
SECTION 2.6. OWNERSHIP OF THE TRUST. On the Startup Day the
ownership interests in the Trust and the subtrusts shall be transferred as set
forth in Section 4.2 hereof, such transfer to be evidenced by sale of the
Certificates as described therein. Thereafter, transfer of any ownership
interest shall be governed by Sections 5.4 and 5.8 hereof.
SECTION 2.7. SITUS OF THE TRUST. It is the intention of the
parties hereto that the Trust constitute a trust under the laws of the State of
New York. The Trust will be created in, and all Accounts maintained by the
Trustee on behalf of the Trust will be located in, the State of New York. The
Trust will not have any employees and will not have any real or personal
property (other than property acquired pursuant to Section 8.13 hereof) located
in any state other than in the State of New York and payments will be received
by the Trust only in the State of New York and payments from the Trust will be
made only from the State of New York. The Trust's only office will be at the
office of the Trustee as set forth in Section 2.2 hereof.
SECTION 2.8. MISCELLANEOUS REMIC PROVISIONS. (a) The Trustee
shall elect that each of the Lower-Tier REMIC and the Upper-Tier REMIC shall be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of this Agreement shall
be resolved in a manner that preserves the validity of such REMIC elections. The
assets of the Lower-Tier REMIC shall include the Mortgage Loans, the Accounts
(except for the Non-REMIC Estate), any REO Property, and any proceeds of the
foregoing. The Lower-Tier REMIC Regular Interests (as defined below) shall
constitute the assets of the Upper-Tier REMIC.
(b) The Lower-Tier REMIC will be evidenced by (x) Lower-Tier
Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3, Lower-Tier Interest 4,
and Lower-Tier Interest 5 (the "Lower-Tier REMIC Regular Interests"), which will
be uncertificated and non-transferable and are hereby designated as the "regular
interests" in the Lower-Tier REMIC and (y) the Lower-Tier REMIC Residual
Interest, which is hereby designated as the single "residual interest" in the
Lower-Tier REMIC (the Lower-Tier REMIC Regular Interests, together with the
Lower-Tier REMIC Residual Interest, the "Lower-Tier REMIC Interests"). The
Lower-Tier REMIC Regular Interests shall be recorded on the records of the
Lower-Tier REMIC as being issued to and held by the Trustee on behalf of the
Upper-Tier REMIC.
Lower-Tier Interest 1 shall have an initial principal balance
equal to one percent of the sum of the initial principal balances of the Group I
Certificates (that is, $3,750,000). Lower-Tier Interest 2 shall have an initial
principal balance equal to one percent of the Group I Original Balance (that is,
$3,776,435). Lower-Tier Interest 3 shall have an initial principal balance equal
to one percent of the initial principal balance of the Class A-7 Certificates
(that is, $1,500,000). Lower-Tier Interest 4 shall have an initial principal
balance equal to one percent of the Group II Original Balance (that is,
$1,556,824). Lower-Tier Interest 5 shall have an initial principal balance equal
to the excess of (i) the sum of the Group I Original Balance and the Group II
Original Balance over (ii) the sum of the initial principal balances of
Lower-Tier Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3, and
Lower-tier Interest 4 (that is, $522,742,652).
On each Payment Date, principal payments on the Mortgage Loans
shall be allocated 99% to Lower-Tier Interest 2, Lower-Tier Interest 4 and
Lower-Tier Interest 5, and 1% to Lower-Tier Interest 1 and Lower-Tier Interest 3
until paid in full. The aggregate amount of principal allocated to the
Lower-Tier Interest 1 and Lower-Tier Interest 3 shall be apportioned
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<PAGE> 42
between such Interests in the same manner in which principal on the Mortgage
Loans is payable with respect to the Group I Certificates and the Group II
Certificates, respectively. The aggregate amount of principal allocated to
Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier Interest 5 shall be
allocated and apportioned among such Interests first, to Lower-Tier Interest 2
and Lower-Tier Interest 4 the least amount of principal necessary which when
applied to such Interests can be applied so that the ratio of the principal
balance of Lower-Tier Interest 2 to the principal balance of Lower-Tier Interest
4 equals the ratio of the sum of Loan Balances of the Mortgage Loans in Group I
to the sum of the Loan Balances of the Mortgage Loans in Group II (the "Balance
Ratio") and second, to Lower-Tier Interest 5.
Any Overcollateralization Increase Amount will not be paid as
interest to the Lower-Tier REMIC Regular Interests, but instead to the extent
available, a portion of the interest payable with respect to Lower-Tier Interest
5 which equals 1% of the Overcollateralization Increase Amount (and, to the
extent 1% of the Overcollateralization Increase Amount exceeds the interest
payable on Lower-Tier Interest 5, a pro rata portion of the interest payable on
the Lower-Tier Interest 2 and Lower-Tier Interest 4 equal to such excess) will
be payable as a reduction of the principal balances of Lower-Tier Interest 1 and
Lower-Tier Interest 3 in the same manner in which the Overcollateralization
Increase Amount is allocated among the Class A-1, A-2, A-3, A-4, A-5, A-6 and
Class A-7 Certificates, respectively (and will be accrued and added to principal
on Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier Interest 5 in the
same proportion as interest payable on such Interests is used to reduce
principal on other Interests as just described).
Notwithstanding the above, principal payments on the Mortgage
Loans that are attributable to the Overcollateralization Reduction Amount shall
be allocated to Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier
Interest 5 (allocated first to Lower-Tier Interest 5 until such certificates are
paid in full, and second to Lower-Tier Interest 2 and Lower-Tier Interest 4 and
apportioned between Lower-Tier Interest 2 and Lower-Tier Interest 4 in such a
manner that the Balance Ratio is maintained until paid in full).
Realized Losses shall be applied such that after all
distributions have been made on such Payment Date the principal balances
Lower-Tier Interest 1 and Lower-Tier Interest 3 are each 1% of the principal
balances of the Group I Certificates and Group II Certificates, respectively,
and the aggregate principal balance of Lower-Tier Interest 2, Lower-Tier
Interest 4 and Lower-Tier Interest 5 is equal to the sum of the Loan Balances of
the Mortgage Loans less an amount equal to the sum of the principal balances of
Lower-Tier Interest 1 and Lower-Tier Interest 3 and is allocated and apportioned
first, to Lower-Tier Interest 2 and Lower-Tier Interest 4 the least amount of
Realized Losses necessary which when applied to such Interests can be applied in
such a manner that the Balance Ratio is maintained, and second, to Lower-Tier
Interest 5.
Lower-Tier Interest 1 and Lower-Tier Interest 2 shall each
have Pass-Through Rates equal to the Group I Net Weighted Average Coupon Rate
(expressed as a per annum rate on the sum of the Loan Balances for Mortgage
Loans in Group I). Lower-Tier Interest 3 and Lower-Tier Interest 4 shall each
have a Pass-Through Rate equal to the Group II Net Weighted Average Coupon Rate
(expressed as a per annum rate on the sum of the Loan Balances for the Mortgage
Loans in Group II). Lower-Tier Interest 5 shall have a Pass-Through Rate equal
to the weighted average of the Group I Net Weighted Average Coupon Rate and the
Group II Net Weighted Average Coupon Rate (expressed as a per annum rate on the
sum of Loan Balances of the Mortgage Loans). The Lower-Tier REMIC Residual
Interest shall have no principal balance and no Pass-Through Rate and shall be
entitled to only those distributable assets, if any,
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remaining in the Lower-Tier REMIC on each Payment Date after all amounts
required to be distributed to Lower-Tier Interest 1, Lower-Tier Interest 2,
Lower-Tier Interest 3, Lower-Tier Interest 4, and Lower-Tier Interest 5 and
applicable Trust expenses have been paid.
The Lower-Tier REMIC Interests will have the following
designations and Pass-Through Rates, and distributions of principal and interest
thereon shall be allocated to the Certificates in the following manner:
<TABLE>
<CAPTION>
Lower-Tier REMIC Allocation of Allocation of
Interests Initial Balance Pass-Through Rate Principal Interest
--------- --------------- ----------------- --------- --------
<S> <C> <C> <C> <C>
1 $ 3,750,000 (1) (4) (5)
2 $ 3,776,435 (1) (4) (5)
3 $ 1,500,000 (2) (4) (5)
4 $ 1,556,824 (2) (4) (5)
5 $ 522,742,652 (3) (4) (5)
Lower-Tier Residual $ 0 (6) (6) (6)
</TABLE>
- ------------------------
(1) The Pass-Through Rate on these Lower-Tier REMIC Regular Interests shall at
any time of determination equal the Group I Net Weighted Average Coupon
Rate.
(2) The Pass-Through Rate on these Lower-Tier REMIC Regular Interest shall at
any time of determination equal the Group II Net Weighted Average Coupon
Rate.
(3) The Pass-Through Rate on this Lower-Tier REMIC Regular Interest shall at
any time of determination equal the weighted average of the Group I Net
Weighted Average Coupon Rate and the Group II Net Weighted Average Coupon
Rate.
(4) Principal will be allocated to and apportioned among the Group I
Certificates and the Group II Certificates in the same proportion as
principal from the Mortgage Loans is payable with respect to such
Certificates, except that a portion of such principal in an amount equal to
the Overcollateralization Reduction Amount shall first be allocated as a
payment of interest to the Class B Certificates, and all principal will be
allocated as a payment of interest to the Class B Certificates after the
principal balances of the Class A Certificates have been reduced to zero.
(5) Except as provided in the next sentence, interest will be allocated among
the Group I Certificates and Group II Certificates in the same proportion
as interest is payable on such Certificates.
Any interest with respect to each Lower-Tier REMIC Regular Interest in
excess of the product of (i) 100 times the weighted average coupon of
Lower-Tier Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3,
Lower-Tier Interest 4 and Lower-Tier Interest 5, where Lower-Tier Interest
1 and Lower-Tier Interest 3 are first subject to a cap and floor equal to
the weighted average of the Class A-1, A-2, A-3, A-4, A-5 and A-6
Pass-Through Rates and the Class A-7 Pass-Through Rate, respectively, and
Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier Interest 5 are
each subject to a cap equal to 0%, and (ii) the principal balance of each
such Lower-Tier Interest, shall not be allocated to the Class A
Certificates but will be allocated to the Class B Certificates. However,
the Class B Certificates shall be subordinated to the extent provided in
Section 7.5. hereof.
(6) On each Distribution Date, available funds, if any, remaining in the
Lower-Tier REMIC after payments of interest and principal, as designated
above, will be distributed to the Lower-Tier Residual Interest. It is
expected that there shall not be any distributions on the Lower-Tier
Residual Interest.
(c) The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7 and Class B Certificates are hereby designated as "regular
interests" with respect to the Upper-Tier REMIC (the "Upper-Tier REMIC Regular
Interests") and the Class R-II Certificate is hereby designated as the single
"residual interest" with respect to the Upper-Tier REMIC. On each Payment Date,
available funds, if any, remaining in the Upper-Tier REMIC after payments of
interest and principal as designated herein shall be distributed to the Class
R-II Certificates.
(d) For federal income tax purposes, the "latest possible
maturity date" for each of the Lower-Tier REMIC Regular Interests and Upper-Tier
REMIC Regular Interests is hereby set to be the Payment Date of August 2029.
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(e) The Trust and each REMIC shall, for federal income tax
purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(f) The final scheduled Payment Date for any Class of
Certificates is hereby established as follows:
CLASS FINAL SCHEDULED PAYMENT DATES
<TABLE>
<CAPTION>
Final Scheduled
Class Payment Date
----- ------------
<S> <C>
A-1 May 25, 2014
A-2 June 25, 2014
A-3 October 25, 2017
A-4 October 25, 2026
A-5 August 25, 2029
A-6 June 25, 2014
A-7 August 25, 2029
B August 25, 2029
</TABLE>
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SPONSOR AND THE MASTER SERVICER;
COVENANT OF SPONSOR TO CONVEY MORTGAGE LOANS
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE SPONSOR.
The Sponsor hereby represents, warrants and covenants to the Trustee, the
Certificate Insurer and to the Owners as of the Startup Day that:
(a) The Sponsor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and
is in good standing as a foreign corporation in each jurisdiction in
which the nature of its business, or the properties owned or leased by
it make such qualification necessary. The Sponsor has all requisite
corporate power and authority to own and operate its properties, to
carry out its business as presently conducted and as proposed to be
conducted and to enter into and discharge its obligations under this
Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement and the other
Operative Documents to which the Sponsor is a party by the Sponsor and
its performance and compliance with the terms of this Agreement and of
the other Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of the Sponsor
and will not violate the Sponsor's Articles of Incorporation or Bylaws
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the
breach of, any material contract, agreement or other instrument to
which the Sponsor is a party or by which the Sponsor is bound, or
violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over
the Sponsor or any of its properties.
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(c) This Agreement and the other Operative Documents to which
the Sponsor is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes a
valid, legal and binding obligation of the Sponsor, enforceable against
it in accordance with the terms hereof and thereof, except as the
enforcement hereof and thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Sponsor 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, which might have consequences
that would materially and adversely affect the condition (financial or
other) or operations of the Sponsor or its properties or might have
consequences that would materially and adversely affect its performance
hereunder and under the other Operative Documents to which it is a
party.
(e) No litigation is pending or, to the best of the Sponsor's
knowledge, threatened against the Sponsor which litigation might have
consequences that would prohibit its entering into this Agreement or
any other Operative Document to which it is a party or might have
consequences that would materially and adversely affect its performance
hereunder and under the other Operative Documents to which it is a
party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Sponsor
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report
not misleading.
(g) The statements contained in the Registration Statement
which describe the Sponsor or matters or activities for which the
Sponsor is responsible in accordance with the Operative Documents or
which are attributed to the Sponsor therein are true and correct in all
material respects, and the Registration Statement does not contain any
untrue statement of a material fact with respect to the Sponsor or omit
to state a material fact required to be stated therein or necessary in
order to make the statements contained therein with respect to the
Sponsor not misleading. To the best of the Sponsor's knowledge and
belief, the Registration Statement does not contain any untrue
statement of a material fact required to be stated therein or omit to
state any material fact required to be stated therein or necessary to
make the statements contained therein not misleading.
(h) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which the Sponsor makes no such representation or warranty), that are
necessary or advisable in connection with the purchase and sale of the
Certificates and the execution and delivery by the Sponsor of the
Operative Documents to which it is a party, have been duly taken, given
or obtained, as the case may be, are in full force and effect on the
date hereof, are not subject and are not reasonably expected to be
subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may
be
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taken or review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this
Agreement and the other Operative Documents on the part of the Sponsor
and the performance by the Sponsor of its obligations under this
Agreement and such of the other Operative Documents to which it is a
party.
(i) The transactions contemplated by this Agreement are in the
ordinary course of business of the Sponsor.
(j) The Sponsor received fair consideration and reasonably
equivalent value in exchange for the sale of the interests in the
Mortgage Loans evidenced by the Certificates.
(k) The Sponsor did not sell any interest in any Mortgage Loan
evidenced by the Certificates with any intent to hinder, delay or
defraud any of its respective creditors.
(l) The Sponsor is solvent and the Sponsor will not be
rendered insolvent as a result of the sale of the Mortgage Loans to the
Trust or the issuance of the Certificates.
(m) It is understood and agreed that the representations and
warranties set forth in this Section 3.1 shall survive delivery of the
Mortgage Loans to the Trust.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE MASTER
SERVICER. The Master Servicer hereby represents, warrants and covenants to the
Trustee, the Certificate Insurer and the Owners as of the Startup Day that:
(a) The Master Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, is, and each Sub-Servicer is, in compliance with the laws of
each state in which any Property is located to the extent necessary to
enable it to perform its obligations hereunder and is in good standing
as a foreign corporation in each jurisdiction in which the nature of
its business, or the properties owned or leased by it make such
qualification necessary. The Master Servicer and each Sub-Servicer has
all requisite corporate power and authority to own and operate its
properties, to carry out its business as presently conducted and as
proposed to be conducted and to enter into and discharge its
obligations under this Agreement and the other Operative Documents to
which it is a party. The Master Servicer has, on a consolidated basis
with its parent, AMHC, equity of at least $5,000,000, as determined in
accordance with generally accepted accounting principles.
(b) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement and the other Operative Documents to which it is a party have
been duly authorized by all necessary corporate action on the part of
the Master Servicer and will not violate the Master Servicer's Articles
of Incorporation or Bylaws or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material contract, agreement or
other instrument to which the Master Servicer is a party or by which
the Master Servicer is bound or violate any statute or any
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order, rule or regulation of any court, governmental agency or body or
other tribunal having jurisdiction over the Master Servicer or any of
its properties.
(c) This Agreement and the other Operative Documents to which
the Master Servicer is a party, assuming due authorization, execution
and delivery by the other parties hereto and thereto, each constitutes
a valid, legal and binding obligation of the Master Servicer,
enforceable against it in accordance with the terms hereof, except as
the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Master Servicer 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, which might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its
properties or might have consequences that would materially and
adversely affect its performance hereunder and under the other
Operative Documents to which the Master Servicer is a party.
(e) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
litigation might have consequences that would prohibit its entering
into this Agreement or any other Operative Document to which it is a
party or might have consequences that would materially and adversely
affect its performance hereunder and under the other Operative
Documents to which the Master Servicer is a party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Master
Servicer contains any untrue statement of a material fact or omits to
state any material fact necessary to make the certificate, statement or
report not misleading.
(g) The statements contained in the Registration Statement
which describe the Master Servicer or matters or activities for which
the Master Servicer is responsible in accordance with the Operative
Documents or which are attributed to the Master Servicer therein are
true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact with
respect to the Master Servicer or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein with respect to the Master Servicer not misleading.
To the best of the Master Servicer's knowledge and belief, the
Registration Statement does not contain 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 contained therein not
misleading.
(h) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which the Master Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and
delivery by the Master Servicer of the Operative Documents to
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which it is a party, have been duly taken, given or obtained, as the
case may be, are in full force and effect on the date hereof, are not
reasonably expected to be subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative
Documents on the part of the Master Servicer and the performance by the
Master Servicer of its obligations under this Agreement and such of the
other Operative Documents to which it is a party.
(i) The collection practices used by the Master Servicer with
respect to the Mortgage Loans directly serviced by it have been, in all
material respects, legal, proper, prudent and customary in the mortgage
loan servicing business.
(j) The transactions contemplated by this Agreement are in the
ordinary course of business of the Master Servicer.
(k) The terms of each existing Sub-Servicing Agreement are
acceptable to the Master Servicer and any new Sub-Servicing Agreements
or Sub-Servicers will comply with the provisions of Section 8.3.
It is understood and agreed that the representations and
warranties set forth in this Section 3.2 shall survive delivery of the Mortgage
Loans to the Trustee.
Upon discovery by any of the Originators, the Master Servicer,
the Sponsor, any Sub-Servicer, the Certificate Insurer or the Trustee of a
breach of any of the representations and warranties set forth in this Section
3.2 which materially and adversely affects the interests of the Owners or of the
Certificate Insurer, the party discovering such breach shall give prompt written
notice to the other parties. Within 30 days of its discovery or its receipt of
notice of breach, the Master Servicer shall cure such breach in all material
respects and, upon the Master Servicer's continued failure to cure such breach,
may thereafter be removed by the Trustee or the Certificate Insurer pursuant to
Section 8.20 hereof; provided, however, that if the Master Servicer can
demonstrate to the reasonable satisfaction of the Certificate Insurer and the
Trustee that it is diligently pursuing remedial action, then the cure period may
be extended with the written approval of the Certificate Insurer and the
Trustee.
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF THE SPONSOR
WITH RESPECT TO THE MORTGAGE LOANS. (a) The Sponsor makes the following
representations and warranties as to the Mortgage Loans on which the Certificate
Insurer relies and the Trustee relies in accepting the Mortgage Loans in trust
and executing and authenticating the Certificates. Such representations and
warranties speak as of the Startup Day with respect to the Initial Mortgage
Loans, as of the Subsequent Transfer Date with respect to any Subsequent
Mortgage Loan, or as of the date upon which any Qualified Replacement Mortgage
is added to the Trust, but shall survive the sale, transfer, and assignment of
the Mortgage Loans to the Trustee:
(i) The information with respect to each Mortgage Loan set
forth in the Schedule of Mortgage Loans is true and correct as of the
Initial Cut-Off Date, the Replacement Cut-Off Date or the Subsequent
Cut-Off Date, as the case may be;
(ii) All of the original or certified documentation set forth
in Section 3.5(c) (including all material documents related thereto)
with respect to each Mortgage Loan
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has been or will be delivered to the Trustee no later than the Startup
Day, the related Subsequent Transfer Date or the date upon which any
Qualified Replacement Mortgage is added to the Trust, as the case may
be, or as otherwise provided in Section 3.5(c);
(iii) Each Mortgage Loan is being serviced by the Master
Servicer or Master Servicer Affiliate;
(iv) As of the Initial Cut-Off Date, no more than 1.96% of the
aggregate principal balances of the Initial Mortgage Loans are 30-59
days Delinquent and no Initial Mortgage Loan is 60 or more days'
Delinquent;
(v) All of the Mortgage Loans conform, in all material
respects, to the description thereof set forth in the Registration
Statement;
(vi) The credit underwriting guidelines applicable to each
Mortgage Loan conform in all material respects to the description
thereof set forth in the Prospectus; and
(vii) Each Mortgage Loan is a Qualified Mortgage.
(b) The Sponsor hereby assigns to the Trustee for the benefit
of the Owners of the Certificates and the Certificate Insurer (so long as a
Certificate Insurer Default had not occurred and is continuing) all of its
right, title and interest in respect of the Mortgage Loan Transfer Agreement.
Insofar as the Mortgage Loan Transfer Agreement provides for representations and
warranties made by the related Originator in respect of a Mortgage Loan and any
remedies provided thereunder for any breach of such representations and
warranties, such right, title and interest may be enforced by the Master
Servicer or by the Trustee on behalf of the Owners and the Certificate Insurer.
Upon the discovery by the Sponsor, the Master Servicer, the Certificate Insurer
or the Trustee of a breach of any of the representations and warranties made in
the Mortgage Loan Transfer Agreement in respect of any Mortgage Loan which
materially and adversely affects the interests of the Owners or of the
Certificate Insurer in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties. The Master Servicer shall
promptly notify the related Originator of such breach and request that such
Originator cure such breach or take the actions described in Section 3.4(b)
hereof within the time periods required thereby, and if such Originator does not
cure such breach in all material respects, the Sponsor shall cure such breach or
take such actions. The obligations of the Sponsor or Master Servicer, as the
case may be, set forth herein with respect to any Mortgage Loan as to which such
a breach has occurred and is continuing shall constitute the sole obligations of
the Master Servicer and of the Sponsor in respect of such breach.
SECTION 3.4. COVENANTS OF SPONSOR TO TAKE CERTAIN ACTIONS WITH
RESPECT TO THE MORTGAGE LOANS IN CERTAIN SITUATIONS. (a) With the provisos and
limitations as to remedies set forth in this Section 3.4, upon the discovery by
any Originator, the Sponsor, the Master Servicer, the Certificate Insurer, any
Sub-Servicer or the Trustee that the representations and warranties set forth in
Section 3.3 of this Agreement or in the Mortgage Loan Transfer Agreement were
untrue in any material respect as of the Startup Day (or the Subsequent Transfer
Date, as the case may be) and such breaches of the representations and
warranties materially and adversely affect the interests of the Owners or of the
Certificate Insurer, the party discovering such breach shall give prompt written
notice to the other parties.
The Sponsor acknowledges that a breach of any representation
or warranty (x) relating to marketability of title sufficient to transfer
unencumbered title to a Mortgage Loan, (y)
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relating to enforceability of the Mortgage Loan against the related Mortgagor or
Property or (z) set forth in clause (vii) of Section 3.3(a) above constitutes
breach of a representation or warranty which materially and adversely affects
the interests of the Owners or of the Certificate Insurer in such Mortgage Loan.
(b) Upon the earliest to occur of the Sponsor's discovery, its
receipt of notice of breach from any one of the other parties hereto or from the
Certificate Insurer or such time as a breach of any representation and warranty
materially and adversely affects the interests of the Owners or of the
Certificate Insurer as set forth above, the Sponsor hereby covenants and
warrants that it shall promptly cure such breach in all material respects or it
shall (or shall cause an affiliate of the Sponsor or an Originator to), subject
to the further requirements of this paragraph, on the second Remittance Date
next succeeding such discovery or receipt of notice (i) substitute in lieu of
each Mortgage Loan in the related Mortgage Loan Group which has given rise to
the requirement for action by the Sponsor a Qualified Replacement Mortgage and
deliver the Substitution Amount applicable thereto, together with the aggregate
amount of all Delinquency Advances and Servicing Advances theretofore made with
respect to such Mortgage Loan and not previously reimbursed to the Master
Servicer for deposit in the Principal and Interest Account or (ii) purchase such
Mortgage Loan from the REMIC Trust at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be delivered to the Master
Servicer for deposit in the Principal and Interest Account. In connection with
any such proposed purchase or substitution, the Sponsor at its expense, shall
cause to be delivered to the Trustee and the Certificate Insurer an opinion of
counsel experienced in federal income tax matters stating whether or not such a
proposed purchase or substitution would constitute a Prohibited Transaction for
the REMIC Trust or would jeopardize the status of the REMIC Trust as a REMIC,
and the Sponsor shall only be required to take either such action to the extent
such action would not constitute a Prohibited Transaction for the REMIC Trust or
would not jeopardize the status of the REMIC Trust as a REMIC. Any required
purchase or substitution, if delayed by the absence of such opinion shall
nonetheless occur upon the earlier of (i) the occurrence of a default or
imminent default with respect to the Mortgage Loan, (ii) the delivery of such
opinion or (iii) at the direction of the Control Party. It is understood and
agreed that the obligation of the Sponsor to cure the defect, or substitute for,
or purchase any Mortgage Loan as to which a representation or warranty is untrue
in any material respect and has not been remedied shall constitute the sole
remedy available to the Owners, the Trustee and the Certificate Insurer.
(c) In the event that any Qualified Replacement Mortgage is
delivered by an Originator or by the Sponsor (or by an affiliate of the Sponsor,
as the case may be) to the Trust pursuant to Sections 3.3, 3.4 or 3.6 hereof,
the related Originator and the Sponsor shall be obligated to take the actions
described in Section 3.4(b) with respect to such Qualified Replacement Mortgage
upon the discovery by any of the Owners, the Sponsor, the Master Servicer, the
Certificate Insurer, any Sub-Servicer or the Trustee that the representations
and warranties set forth in the Mortgage Loan Transfer Agreement or in Section
3.3 above are untrue in any material respect on the date such Qualified
Replacement Mortgage is conveyed to the Trust such that the interests of the
Owners or the Certificate Insurer in the related Qualified Replacement Mortgage
are materially and adversely affected.
(d) In the event that any Qualified Replacement Mortgage is
delivered to the Trust, such Qualified Replacement Mortgage must be a Mortgage
Loan which: (i) bears a fixed rate of interest if the Mortgage Loan being
replaced is in Group I and bears an adjustable rate of interest if the Mortgage
Loan to be replaced is in Group II, (ii) has a Coupon Rate at least equal to the
Coupon Rate of the Mortgage Loan being replaced, (which, in the case of a
Mortgage Loan in Group II, shall mean a Mortgage Loan having the same interest
rate index, a margin over such
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index and a maximum interest rate equal to or greater than those applicable to
the Mortgage Loan being replaced), (iii) is of the same or better property type
and the same or better occupancy status as the replaced Mortgage Loan, (iv)
shall be of the same or better credit quality classification (determined in
accordance with the Originators' credit underwriting guidelines) as the Mortgage
Loan being replaced, (v) shall mature no later than August 2029, (vi) has a
Combined Loan-to-Value Ratio as of the Replacement Cut-Off Date no higher than
the Combined Loan-to-Value Ratio of the replaced Mortgage Loan at such time,
(vii) has a Loan Balance as of the related Replacement Cut-Off Date equal to or
less than the Loan Balance of the replaced Mortgage Loans as of such Replacement
Cut-Off Date, (viii) satisfies all of the representations and warranties set
forth in Section 3.3 and the criteria set forth from time to time in the
definition thereof at Section 860G(a)(4) of the Code (or any successor statute
thereto) and applicable to the Trust, all as evidenced by an Officer's
Certificate of the Sponsor delivered to the Certificate Insurer, the Sponsor and
the Trustee prior to any such substitution and (ix) is a valid First Mortgage
Loan if the Mortgage Loan to be substituted for is a valid First Mortgage Loan
or, Junior Mortgage Loan of equal or better priority if the Mortgage Loan to be
substituted for is a Junior Mortgage Loan. In the event that one or more
mortgage loans are proposed to be substituted for one or more mortgage loans,
the Certificate Insurer may allow the foregoing tests to be met on a weighted
average basis with respect to the Mortgage Loans only or other aggregate basis
acceptable to the Certificate Insurer, as evidenced by a written consent
delivered to the Trustee by the Certificate Insurer, except that the requirement
of clause (viii) of this Section 3.4(d) must be satisfied as to each Qualified
Replacement Mortgage.
(e) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage therefor, the
Trustee will transfer, sell, assign, set over and otherwise convey without
recourse, all of its right, title and interest in and to such released Mortgage
Loan and all the Trust's right, title and interest to principal collected and
interest accruing on such released Mortgage Loan on and after the applicable
Replacement Cut-Off Date; provided, however, that the Trust shall reserve and
retain all right, title and interest in and to payments of principal collected
and accrued interest on such released Mortgage Loan prior to the applicable
Replacement Cut-Off Date.
(f) In connection with any transfer and assignment of a
Qualified Replacement Mortgage to the Trustee on behalf of the Trust, the
Sponsor agrees to cause to be delivered to the Trustee the items described in
Section 3.5(c) on the date of such transfer and assignment or, if a later
delivery time is permitted by Section 3.5(c), then no later than such later
delivery time.
(g) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage the Trustee
shall deliver, on the date of conveyance of such Qualified Replacement Mortgage,
on the order of the Sponsor (i) the original Note, or the certified copy,
relating thereto, endorsed without recourse, to the Sponsor and (ii) such other
documents as constituted the Mortgage File with respect thereto.
(h) The Sponsor shall, in connection with the delivery of each
Qualified Replacement Mortgage to the Trustee, provide the Trustee with the
information set forth in the Schedules of Mortgage Loans with respect to such
Qualified Replacement Mortgage.
(i) It is understood and agreed that the covenants set forth
in this Section 3.4 shall survive delivery of the respective Mortgage Loans
(including Qualified Replacement Mortgages) to the Trustee.
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SECTION 3.5. CONVEYANCE OF THE MORTGAGE LOANS. (a) The
Sponsor, concurrently with the execution and delivery hereof, hereby transfers,
sells, assigns, sets over and otherwise conveys, or shall request or cause to be
transferred, sold, assigned, set over and otherwise conveyed, without recourse,
for good and valuable consideration, to the Trustee, all right, title and
interest of the Sponsor in and to each Initial Mortgage Loan, including all
right, title and interest in and to principal collected and interest accruing on
each such Initial Mortgage Loan on and after the Initial Cut-Off Date and all
right, title and interest in and to all Mortgage Insurance Policies and any
other assets included or to be included in the Trust for the benefit of Owners
and the Certificate Insurer. The transfer of the Initial Mortgage Loans set
forth on the Schedule of Mortgage Loans to the Trustee is absolute and is
intended by the Owners and all parties hereto to be treated as a sale by the
Sponsor.
(b) The Sponsor agrees to take or cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Owners' and the Certificate Insurer's interests in each Mortgage Loan and the
proceeds thereof (including, without limitation, the filing of all necessary
continuation statements for the UCC-1 financing statements filed in the
appropriate jurisdictions (which shall have been filed within 90 days of the
Startup Day or the Subsequent Transfer Date, as the case may be)) and to file in
the appropriate jurisdictions any amendments to UCC-1 financing statements
required to reflect a change in the name or corporate structure of the debtor or
the filing of any additional UCC-1 financing statements due to a change in the
principal office of the debtor (within 90 days of any event necessitating such
filing).
(c) In connection with the transfer and assignment of the
Mortgage Loans, the Sponsor agrees to:
(i) cause to be delivered to the Trustee, without recourse, no
later than the Startup Day or any Subsequent Transfer Date or date on
which a Qualified Replacement Mortgage is transferred, as applicable,
the items listed in the definition of "Mortgage Files"; provided, that
the assignments of mortgage listed in such definition shall be
delivered to the Trustee within 75 Business Days of the Startup Day,
any Subsequent Transfer Date or date on which a Qualified Replacement
Mortgage is transferred, as applicable.
(ii) cause, within 75 Business Days following the Startup Day,
any Subsequent Transfer Date or date on which a Qualified Replacement
Mortgage is transferred, as applicable, the assignments of Mortgage to
be submitted for recording in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as against
creditors of or purchasers from the related Originator to the Trustee;
provided, however, that, for administrative convenience and
facilitation of servicing and to reduce closing costs, assignments of
mortgage shall not be required to be submitted for recording with
respect to any Mortgage Loan only if the Trustee, the Certificate
Insurer and each Rating Agency has received an Opinion of Counsel,
satisfactory in form and substance to the Certificate Insurer and to
each Rating Agency, to the effect that the recordation of such
assignments in any specific jurisdiction is not necessary to protect
the Trustee's interest in the related Mortgage.
All recording required pursuant to this Section 3.5 shall be
accomplished at the expense of the Originators or of the Sponsor.
Notwithstanding anything to the contrary contained in this Section 3.5, in those
instances where the public recording office retains the original Mortgage, the
assignment of a Mortgage or the intervening assignments of the Mortgage after it
has been recorded, the Sponsor shall be deemed to have satisfied its obligations
hereunder upon
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delivery to the Trustee of a copy of such Mortgage, such assignment or
assignments of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.
Copies of all Mortgage assignments received by the Trustee
shall be kept in the related Mortgage File.
Such assignments of mortgage shall, in addition to the
requirements specified in the definition of "Mortgage Files", be in recordable
form. On or before the Startup Day, any Subsequent Transfer Date or date on
which a Qualified Replacement Mortgage is transferred, as applicable, the
Sponsor shall deliver to the Trustee an original executed power of attorney,
from the current recordholders of the related Mortgage substantially in the form
of Exhibit G, authorizing the Master Servicer on behalf of the Trustee to record
the assignments of mortgage as provided in clause (ii) of this Section 3.5(c).
Pursuant to such power of attorney, the Trustee also may execute a new
assignment of mortgage for any Mortgage Loan if the original assignment of
mortgage delivered by the Sponsor to the Trustee is not in recordable form at
such time as the assignment of mortgage is to be recorded by the Trustee.
(d) [Reserved]
(e) The Sponsor (or any affiliate of the Sponsor) shall
transfer, sell, assign, set over and otherwise convey without recourse, to the
Trustee all right, title and interest of the Sponsor (or of such affiliate) in
and to any Qualified Replacement Mortgage delivered to the Trustee pursuant to
Sections 3.3, 3.4 or 3.6 hereof and all its right, title and interest to
principal collected and interest accruing on such Qualified Replacement Mortgage
on and after the applicable Replacement Cut-Off Date; provided, however, that
the Sponsor (or such affiliate) shall reserve and retain all right, title and
interest in and to payments of principal due and interest accrued on such
Qualified Replacement Mortgage prior to the applicable Replacement Cut-Off Date.
(f) If a Mortgage assignment is lost during the process of
recording, or is returned from the recorder's office unrecorded due to a defect
therein, the Sponsor shall prepare a substitute assignment or cure such defect,
as the case may be, and thereafter cause each such assignment to be duly
recorded.
(g) The Sponsor shall cause to be reflected on the applicable
records that the Mortgage Loans have been sold to the Trust.
To the extent that the ratings, if any, then assigned to the
unsecured debt of the Sponsor or of the Sponsor's ultimate corporate parent are
satisfactory to the Control Party, Standard & Poor's and Moody's, then any of
the Document Delivery Requirements described above may be waived by an
instrument signed by the Control Party, Standard & Poor's and Moody's (or any
documents theretofore delivered to the Trustee returned to the Sponsor) on such
terms and subject to such conditions as the Control Party, Standard & Poor's and
Moody's may permit.
(h) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans (including all other rights and properties
described in Section 3.5(a) above) to the Trust be construed as a sale of the
Mortgage Loans to the Trust. It is, further, not the intent of the parties that
such conveyance be deemed a pledge of the Mortgage Loans to the Trust to secure
a debt or other obligation of the Sponsor or any of its assignors. However, in
the event and to the extent that, notwithstanding the intent of the parties
hereto, any or all of the Mortgage Loans
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(including the other rights and properties described in Section 3.5(a) above)
are held to be property of the Sponsor or any of its assignors, then
(i) this Agreement shall also be deemed to be a security
agreement within the meaning of Article 9 of the New York UCC;
(ii) the conveyance provided for herein shall be deemed to be
a grant by the Sponsor to the Trust of a first priority security
interest in all of the Sponsor's right, title and interest in and to
the Mortgage Loans (including the other rights and properties described
in Section 3.5(a) above) and all amounts payable to the holder of the
Mortgage Loans and/or such rights or properties 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 all amounts from time to time held or
invested in any Account, whether in the form of cash, instruments,
securities or other property;
(iii) the possession by the Trustee or its bailees or agents
of items of property that 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 New York UCC;
(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 Trustee for the purpose of perfecting
such security interest under applicable law; and
(v) the obligations secured by the first priority security
interest described in clause (iii) above shall be deemed to include any
and all obligations of the Trust to pay the principal of and interest
on the Certificates to the Owners and to pay the fees, expenses and
other amounts required to be paid to the Master Servicer, the Trustee,
the Certificate Insurer and the Owners, all in accordance with and
otherwise subject to the Operative Documents.
(i) Any assignment or other transfer of the interest of the
Trustee under any provision hereof shall also be deemed to be an assignment of
any security interest created hereby. Each of the Sponsor and the Master
Servicer shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this 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
would be maintained as such throughout the terms of this Agreement. The Sponsor
also covenants not to pledge, assign or grant any security interest to any third
party in any Mortgage Loan conveyed to the Trustee hereunder.
(j) Upon the Trustee's or the Certificate Insurer's request,
the Sponsor shall perform (or cause to be performed) such further acts and
execute, acknowledge and deliver (or cause to be executed, acknowledged and
delivered) to the Trustee such further documents as the Trustee or the
Certificate Insurer shall deem necessary or advisable in order to evidence,
establish, maintain, protect, enforce or defend its rights in and to the
Mortgage Loans and other rights and properties transferred hereunder or
otherwise to carry out the intent and accomplish the purposes of this Agreement
(including UCC-1 financing statements naming the Sponsor as debtor and the
Trustee as secured party and any continuation statements relating thereto).
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SECTION 3.6. ACCEPTANCE BY TRUSTEE; CERTAIN SUBSTITUTIONS OF
MORTGAGE LOANS; CERTIFICATION BY TRUSTEE. (a) The Trustee agrees to execute and
deliver on the Startup Day, on any Subsequent Transfer Date and any day on which
a Qualified Replacement Mortgage is conveyed to the Trust an acknowledgment of
receipt in the form attached as Exhibit C hereto of the Mortgage Files delivered
by the Sponsor, and declares that it will hold such documents and any
amendments, replacement or supplements thereto, as well as any other assets
included in the definition of Trust Estate and delivered to the Trustee, as
Trustee in trust upon and subject to the conditions set forth herein for the
benefit of the Owners and the Certificate Insurer. On or before the tenth
Business Day after the Startup Day, any Subsequent Transfer Date, and any day on
which a Qualified Replacement Mortgage is conveyed to the Trust, the Trustee
shall execute and deliver to the Certificate Insurer and the Master Servicer an
acknowledgment of receipt of the original Notes for each Mortgage Loan.
The Trustee further agrees to review any documents delivered
by the Sponsor within 90 days after the Startup Day (or within 90 days with
respect to any Subsequent Mortgage Loan or Qualified Replacement Mortgage after
the assignment thereof) and to deliver to the Sponsor, the Certificate Insurer
and the Master Servicer a Certification in the form attached as Exhibit D
hereto. The Trustee 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, nor
shall the Trustee be under any duty to determine independently whether there are
any intervening assignments or assumption or modification agreements with
respect to any Mortgage Loan.
(b) If the Trustee during such 90-day period finds any
document constituting a part of a Mortgage File which (i) is not properly
executed, (ii) has not been received within the specified period, (iii) is
unrelated to the Mortgage Loans identified in the Schedules of Mortgage Loans,
or (iv) that any Mortgage Loan does not conform in a material respect to the
description thereof as set forth in the Schedules of Mortgage Loans, the Trustee
shall promptly so notify the Sponsor and the Certificate Insurer. In performing
any such review, the Trustee may conclusively rely on the Sponsor as to the
purported genuineness of any such document and any signature thereon. The
Sponsor agrees to use reasonable efforts to remedy a material defect in a
document constituting part of a Mortgage File of which it is so notified by the
Trustee. If, however, within 60 days after the Trustee's notice respecting such
defect the Sponsor has not remedied or caused to be remedied the defect and the
defect materially and adversely affects the interest of the Owners or of the
Certificate Insurer in the related Mortgage Loan, the Sponsor will (or will
cause the related Originator or an affiliate of the Sponsor to) on the next
succeeding Remittance Date (i) substitute in lieu of such Mortgage Loan a
Qualified Replacement Mortgage and, deliver the Substitution Amount or (ii)
purchase such Mortgage Loan at a purchase price equal to the Loan Purchase Price
thereof, which purchase price shall be delivered to the Master Servicer for
deposit in the Principal and Interest Account. In connection with any such
proposed purchase or substitution the Sponsor shall cause at the Sponsor's
expense to be delivered to the Trustee and the Certificate Insurer an opinion of
counsel experienced in federal income tax matters stating whether or not such a
proposed purchase or substitution would constitute a Prohibited Transaction for
either the Upper-Tier REMIC or the Lower-Tier REMIC or would jeopardize the
status of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC, and
the Sponsor shall only be required to take either such action to the extent such
action would not constitute a Prohibited Transaction for either the Upper-Tier
REMIC or the Lower-Tier REMIC or would not jeopardize the status of either the
Upper-Tier REMIC or the Lower-Tier as a REMIC. Any required purchase or
substitution, if delayed by the absence of such opinion shall nonetheless occur
upon the earlier of (i) the occurrence of a default or imminent default with
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respect to the Mortgage Loan or (ii) the delivery of such opinion or (iii) at
the direction of the Control Party.
Upon receipt of any Qualified Replacement Mortgage or of
written notification signed by a Servicing Officer to the effect that the Loan
Purchase Price in respect of such Mortgage Loan has been deposited into the
Principal and Interest Account, then as promptly as practicable, the Trustee
shall execute such documents and instruments of transfer presented by the
Sponsor, in each case without recourse, representation or warranty, and take
such other actions as shall reasonably be requested by the Sponsor to effect
such transfer by the Trust of such Mortgage Loan pursuant to this Section 3.6.
It is understood and agreed that the obligation of the Sponsor to accept a
transfer of a Mortgage Loan and to either convey a Qualified Replacement
Mortgage or to make a deposit of any related Loan Purchase Price into the
Principal and Interest Account shall constitute the sole remedy respecting such
defect available to Owners, the Trustee and the Certificate Insurer against the
Sponsor.
The Sponsor, promptly following the transfer of a Mortgage
Loan from or to the Trust pursuant to this Section 3.6, shall deliver an amended
Schedule of Mortgage Loans to the Trustee and the Certificate Insurer and shall
make appropriate entries in its general account records to reflect such
transfer. The Master Servicer shall, following such retransfer, appropriately
mark its records to indicate that it is no longer servicing such Mortgage Loan
on behalf of the Trust.
(c) As to any Qualified Replacement Mortgage, the Sponsor
shall deliver to the Trustee with respect to such Qualified Replacement Mortgage
such documents and agreements as are required to be held by the Trustee in
accordance with this Section 3.6. For any Remittance Period during which the
Sponsor substitutes one or more Qualified Replacement Mortgages, the Master
Servicer shall determine the Substitution Amount, which amount shall be
deposited by the Sponsor in the Principal and Interest Account at the time of
substitution. All amounts received in respect of the Qualified Replacement
Mortgage during the Remittance Period in which the circumstances giving rise to
such substitution occur shall not be a part of the Trust Estate and shall not be
deposited by the Master Servicer in the Principal and Interest Account. All
amounts received by the Master Servicer during the Remittance Period in which
the circumstances giving rise to such substitution occur in respect of any
Mortgage Loan so removed by the Trust Estate shall be deposited by the Master
Servicer in the Principal and Interest Account. Upon such substitution, each
Qualified Replacement Mortgage shall be subject to the terms of this Agreement
in all respects, and the Sponsor shall be deemed (i) to have made with respect
to such Qualified Replacement Mortgage, as of the date of substitution, the
covenants, representations and warranties set forth in Section 3.3 and (ii) to
have certified that such Mortgage Loan(s) is/are Qualified Replacement
Mortgage(s).
SECTION 3.7. COOPERATION PROCEDURES. The Sponsor, the Master
Servicer and the Trustee covenant to provide each other and to the Certificate
Insurer with all data and information required to be provided by them hereunder
at the times required hereunder, and additionally covenant reasonably to
cooperate with each other in providing any additional information required by
any of them in connection with their respective duties hereunder.
SECTION 3.8. CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS. (a)
On any Subsequent Transfer Date, subject to the conditions set forth in Section
3.8(b) in consideration of the Trustee's delivery of all or a portion of the
balance of funds in the Pre-Funding Account, the Sponsor shall sell, transfer,
assign, set over and otherwise convey, or shall request or cause the Trust to
acquire from the Sponsor all right, title and interest in and to each Subsequent
Mortgage
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Loan listed on the Schedule of Mortgage Loans delivered by the Sponsor to the
Trustee on such Subsequent Transfer Date, all right, title and interest in and
to principal collected and interest accrued on each such Subsequent Mortgage
Loan on and after the related Subsequent Cut-Off Date and all right, title and
interest in and to all Mortgage Insurance Policies; provided, however, that the
Sponsor reserves and retains all its right, title and interest in and to
principal collected and interest accrued on each such Subsequent Mortgage Loan
prior to the related Subsequent Cut-Off Date. The transfer to the Trust of the
Subsequent Mortgage Loans set forth on the Schedule of Mortgage Loans shall be
absolute and shall be intended by the Sponsor, the Owners and all parties hereto
to be treated as a sale.
The amount released from the Pre-Funding Account shall be
equal to the aggregate Loan Balances of the Subsequent Mortgage Loans so
transferred, and in no event shall the Sponsor transfer to the Trust (i) with
respect to Group I, Subsequent Mortgage Loans having an aggregate Loan Balance
in excess of the Group I Original Pre-Funded Amount and (ii) with respect to
Group II, Subsequent Mortgage Loans having an aggregate Loan Balance in excess
of the Group II Original Pre-Funded Amount.
(b) The Sponsor shall transfer or cause to be transferred to
the Trust the Subsequent Mortgage Loans and the other property and rights
related thereto described in Section 3.8(a) only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
(i) the Sponsor shall have provided the Trustee, the
Certificate Insurer, Moody's and Standard & Poor's with an Addition
Notice and information in an electronic data file with respect to the
Subsequent Mortgage Loans;
(ii) the Sponsor shall have delivered to the Trustee a duly
executed written assignment (including an acceptance by the Trustee) in
substantially the form of Exhibit J (the "Subsequent Transfer
Agreement"), which shall include a Schedule of Mortgage Loans listing
the Subsequent Mortgage Loans and any other exhibits listed thereon;
(iii) prior to the first Remittance Date following the related
Subsequent Transfer Date, the Sponsor shall have deposited in the
Principal and Interest Account all principal collected and interest
accrued (excluding premium recapture and interest accrued prior to the
related Subsequent Cut-Off Date) in respect of the Subsequent Mortgage
Loans on or after the related Subsequent Cut-Off Date;
(iv) as of each Subsequent Transfer Date, none of the related
Originators, the Master Servicer or the Sponsor was insolvent nor will
any of them have been made insolvent by such transfer nor is any of
them aware of any pending insolvency;
(v) such conveyance of Subsequent Mortgage Loans will not
result in a material adverse tax consequence to the Trust or the Owners
of the Certificates;
(vi) the Pre-Funding Period shall not have terminated;
(vii) the Sponsor shall have delivered to the Trustee an
Officer's Certificate confirming (A) the satisfaction of each condition
precedent specified in Section 3.8(b), (c) and (d), and in the related
Subsequent Transfer Agreement and (B) confirming that (i) neither the
sale of the Subsequent Mortgage Loans nor the purchase of the
Subsequent Mortgage Loans by the Trust constitutes a "prohibited
transaction", as defined in Section
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860F(a)(2) of the Code, and (ii) the Subsequent Mortgage Loans are
Qualified Mortgages;
(viii) the Rating Agencies, the Certificate Insurer, and the
Trustee shall have received, Opinions of Counsel with respect to
certain tax, true sale, and bankruptcy matters related to the transfer
of the Subsequent Mortgage Loans (which Opinions of Counsel may be
delivered on the Startup Day); and
(ix) the Certificate Insurer shall have approved the
Subsequent Mortgage Loans to be transferred.
(c) The obligation of the Trust to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the following
requirements;
(i) for each Subsequent Mortgage Loan in Group I, as of the
related Subsequent Transfer Date:
(A) the Coupon Rate is not less than 7.00%;
(B) the final maturity date is not later than August
2029;
(C) the Combined Loan-to-Value Ratio is not in excess
of 100%; and
(D) the Loan Balance is not in excess of $500,000;
(ii) for each Subsequent Mortgage Loan in Group II, as of the
related Subsequent Transfer Date:
(A) the applicable margin is not less than 2.50%;
(B) the final maturity date is not later than August
2029;
(C) the Combined Loan-to-Value Ratio is not in excess
of 100%; and
(D) the Loan Balance is not in excess of $500,000;
(iii) following the purchase of such Subsequent Mortgage Loans
by the Trust, the Mortgage Loans in Group I (by the aggregate Loan
Balance) (including the Subsequent Mortgage Loans):
(A) will have a weighted average Coupon Rate of at
least 9.85%;
(B) will have a weighted average Combined
Loan-to-Value Ratio of not more than 77.15%;
(C) will have not less than 87.00%, of Mortgage Loans
that are considered "fully documented" loans;
(D) will have not less than 85.00%, Mortgage Loans
that are related to single family detached residences;
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(E) will have at least 94.00% Mortgage Loans which
are First Mortgage Loans,
(F) will have at least 77.00% Mortgage Loans which
are classified "A-" or better,
(G) will have not more than 7.00% Mortgage Loans that
are classified "C";
(H) will have not more than 2.00% Mortgage Loans that
are classified "D"; and
(I) will have not more than 44.00% Mortgage Loans
with a Combined Loan-to-Value Ratio of greater than 80.00%;
and
(iv) following the purchase of the Mortgage Loans in Group II
(by the aggregate Loan Balance) (including the Subsequent Mortgage
Loans)
(A) will have a weighted average Coupon Rate of at
least 9.50%;
(B) will have a weighted average Combined
Loan-to-Value Ratio of no more than 80.00%;
(C) will not have less than 85.00% by aggregate
principal of Mortgage Loans that are considered "fully
documented";
(D) will not have less than 90.00% of Mortgage Loans
that are related to single family detached residences;
(E) 100.00% of Mortgage Loans will be First Mortgage
Loans;
(F) will have at least 72.00% classified "A-"or
better;
(G) will have not more than 9.00% Mortgage Loans that
are classified "C";
(H) will have not more than 1.50% Mortgage Loans that
are classified "D"; and
(I) will have not more than 55.00% Mortgage Loans
with a Combined Loan-to-Value Ratio of greater than 80.00%
The Certificate Insurer may waive or modify any of the
requirements in this Section 3.8(c) or specify any additional criteria provided
that any such modification shall not materially and adversely affect the
Sponsor.
(d) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Sponsor agrees to satisfy the conditions set
forth in Sections 3.5(b) through (j), 3.6, 3.7 and 3.8(b) and (c).
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ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
SECTION 4.1. ISSUANCE OF CERTIFICATES. On the Startup Day,
upon the Trustee's receipt from the Sponsor of an executed Delivery Order in the
form set forth as Exhibit E hereto, the Trustee shall execute, authenticate and
deliver the Certificates on behalf of the Trust in accordance with the
directions set forth in such Delivery Order.
SECTION 4.2. SALE OF CERTIFICATES. At 11 a.m. New York City
time on the Startup Day, at the offices of Dewey Ballantine LLP, 1301 Avenue of
the Americas, New York, New York, the Sponsor will sell and convey the Initial
Mortgage Loans and the money, instruments and other property related thereto to
the Trustee on behalf of the Trust, and the Trustee will (i) deliver to the
Representative, the Group I Certificates and the Group II Certificates with an
aggregate Percentage Interest in each Class equal to 100%, registered in the
name of Cede & Co. or in such other names as the Representative shall direct,
against payment of the purchase price thereof by wire transfer of immediately
available funds to the Trustee; (ii) deliver to the Trustee, the Class B
Certificate with an aggregate Percentage Interest equal to 100%, registered in
the name of the Trustee on behalf of the Supplemental Interest Payment Account;
(iii) deliver to the Sponsor, the Class BS Certificates, the Class R-I
Certificates and the Class R-II Certificates in each case with an aggregate
Percentage Interest equal to 100%, registered in such names as the Sponsor shall
request; and (iv) deliver to the Trustee on behalf of the Owners of the
Supplemental Interest Right, the certificate representing the Supplemental
Interest Right. Upon receipt of the proceeds of the sale of the Certificates,
the Trustee shall, from the proceeds of the sale of the Certificates, pay other
fees and expenses identified by the Sponsor, deposit the Group I Original
Pre-Funded Amount and the Group II Original Pre-Funded Amount into the
Pre-Funding Account, deposit the Group I Capitalized Interest Deposit and the
Group II Capitalized Interest Deposit into the Capitalized Interest Account and
pay to the Sponsor the balance after deducting such amounts.
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 5.1. TERMS. (a) The Certificates are pass-through
securities having the rights described therein and herein. Notwithstanding
references herein or therein with respect to the Certificates as to "principal"
and "interest" no debt of any Person is represented thereby, nor are the
Certificates or the underlying Notes guaranteed by any Person (except that the
Notes may be recourse to the Mortgagors thereof to the extent permitted by law
and except for the rights of the Trustee with respect to the Certificate
Insurance Policy). Distributions on the Certificates are payable solely from
payments received on or with respect to the Mortgage Loans (other than the
Servicing Fees), monies in the Principal and Interest Account (net of investment
earnings), the Pre-Funding Account, the Capitalized Interest Account (net of
investment earnings) and, with respect to Group II Certificates, the
Supplemental Interest Payment Account, except as otherwise provided herein, from
earnings on monies and the proceeds of property held as a part of the Trust
Estate and from Insured Payments. Each Certificate entitles the Owner thereof to
receive monthly, on each Payment Date, in order of priority of distributions
with respect to such Class of Certificates, a specified portion of such payments
with respect to the Mortgage Loans in the related Mortgage Loan Group and
Insured Payments, pro rata in accordance with such Owner's
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Percentage Interest and, with respect to the Group II Certificates, certain
amounts payable from the Supplemental Interest Payment Account.
(b) Each Owner is required, and hereby agrees, to return to
the Trustee any Certificate with respect to which the Trustee has made the final
distribution due thereon. Any such Certificate as to which the Trustee has made
the final distribution thereon shall be deemed cancelled and shall no longer be
Outstanding for any purpose of this Agreement, whether or not such Certificate
is ever returned to the Trustee.
SECTION 5.2. FORMS. The Certificates shall be in substantially
the forms set forth in Exhibit A hereof with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the Sponsor's judgment be necessary, appropriate or
convenient to comply, or facilitate compliance, with applicable laws, and 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
applicable securities laws or as may, consistently herewith, be determined by
the Authorized Officer of the Sponsor executing such Delivery Order, as
evidenced by his execution thereof.
SECTION 5.3. EXECUTION, AUTHENTICATION AND DELIVERY. (a) Each
Certificate shall be executed on behalf of the Trust, by the manual signature of
one of the Trustee's Authorized Officers and shall be authenticated by the
manual signature of one of the Trustee's Authorized Officers.
(b) Certificates bearing the manual signature of
individuals who were at any time the proper officers of the
Trustee shall, upon proper authentication by the Trustee, bind
the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution
and delivery of such Certificates or did not hold such offices
at the date of authentication of such Certificates.
(c) The initial Certificates shall be dated as of the
Startup Day and delivered at the Closing to the parties
specified in Section 4.2 hereof.
(d) No Certificate shall be valid until executed and
authenticated as set forth above.
SECTION 5.4. REGISTRATION AND TRANSFER OF CERTIFICATES. (a)
The Trustee, as registrar, shall cause to be kept a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and the registration of
transfer of Certificates. The Trustee is hereby appointed registrar for the
purpose of registering Certificates and transfers of Certificates as herein
provided. The Owners and the Certificate Insurer shall have the right to inspect
the Register at all reasonable times and to obtain copies thereof.
(b) Subject to the provisions of Section 5.8
hereof, upon surrender for registration of transfer of any Certificate at the
office designated as the location of the Register, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class and in the aggregate
principal amount of the Certificate so surrendered.
(c) At the option of any Owner, Certificates of
any Class owned by such Owner may be exchanged for other Certificates authorized
of like Class, tenor and aggregate
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original principal amount and bearing numbers not contemporaneously outstanding,
upon surrender of the Certificates to be exchanged at the office designated as
the location of the Register. Whenever any Certificate is so surrendered for
exchange, the Trustee shall execute, authenticate and deliver the Certificate or
Certificates which the Owner making the exchange is entitled to receive.
(d) Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same ownership interests
in the Trust and entitled to the same benefits under this Agreement as the
Certificates surrendered upon such registration of transfer or exchange.
(e) Any Certificate presented or surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Owner thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any
registration of transfer or exchange of Certificates, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates; any other expenses in connection with such transfer or
exchange shall be an expense of the Trust.
(g) It is intended that the Class A Certificates be registered
so as to participate in a global book-entry system with the Depository, as set
forth herein. Each Class of Class A Certificates shall, except as otherwise
provided in the next paragraph, be initially issued in the form of a single
fully registered Certificate with a denomination equal to the Original
Certificate Principal Balance for such Class. Upon initial issuance, the
ownership of each such Class A Certificate shall be registered in the Register
in the name of Cede & Co., or any successor thereto, as nominee for the
Depository.
The Sponsor and the Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.
With respect to Class A Certificates registered in the
Register in the name of Cede & Co., as nominee of the Depository, the Sponsor,
the Master Servicer, the Certificate Insurer and the Trustee shall have no
responsibility or obligation to Direct or Indirect Participants or beneficial
owners for which the Depository holds Class A Certificates from time to time as
a Depository. Without limiting the immediately preceding sentence, the Sponsor,
the Master Servicer, the Certificate Insurer and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of the records of
the Depository, Cede & Co., or any Direct or Indirect Participant with respect
to the ownership interest in the Class A Certificates, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a registered
Owner of a Class A Certificate as shown in the Register, of any notice with
respect to the Class A Certificates or (iii) the payment to any Direct or
Indirect Participant or any other Person, other than a registered Owner of a
Class A Certificate as shown in the Register, of any amount with respect to any
distribution of principal or interest on the Class A Certificates. No Person
other than a registered Owner of a Class A Certificate as shown in the Register
shall receive a certificate evidencing such Class A Certificate.
Upon delivery by the Depository to the Trustee of written
notice to the effect that the Depository has determined to substitute a new
nominee in place of Cede & Co., and subject to
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the provisions hereof with respect to the payment of interest by the mailing of
checks or drafts to the registered Owners of Class A Certificates appearing as
registered Owners in the registration books maintained by the Trustee at the
close of business on a Record Date, the name "Cede & Co." in this Agreement
shall refer to such new nominee of the Depository.
(h) In the event that (i) the Depository or the Sponsor
advises the Trustee and the Certificate Insurer in writing that the Depository
is no longer willing or able to discharge properly its responsibilities as
nominee and depository with respect to the Class A Certificates and the Sponsor
or the Trustee is unable to locate a qualified successor or (ii) the Sponsor at
its sole option elects to terminate the book-entry system through the
Depository, the Class A Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. At that time, the Sponsor may determine that the
Class A Certificates shall be registered in the name of and deposited with a
successor depository operating a global book-entry system, as may be acceptable
to the Sponsor, or such depository's agent or designee but, if the Sponsor does
not select such alternative global book-entry system, then the Class A
Certificates may be registered in whatever name or names registered Owners of
Class A Certificates transferring Class A Certificates shall designate, in
accordance with the provisions hereof; provided, that the cost of any such
re-registration shall be paid by the Sponsor.
(i) Notwithstanding any other provision of this Agreement to
the contrary, so long as any Class A Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Class A Certificates as the case may be and all notices with
respect to such Class A Certificates as the case may be shall be made and given,
respectively, in the manner provided in the Representation Letter.
(j) None of the Sponsor, the Master Servicer, the Certificate
Insurer, or the Trustee will have any liability for any actions taken by DTC or
its nominee, Euroclear or Cedelbank, including, without limitation, actions for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Class A Certificates held by Euroclear, Cedelbank or
Cede & Co., as nominee for DTC, or for maintaining supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 5.5. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES. If (i) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (ii) in the case of any mutilated Certificate,
such mutilated Certificate shall first be surrendered to the Trustee, and in the
case of any destroyed, lost or stolen Certificate, there shall be first
delivered to the Trustee such security or indemnity as may be reasonably
required by it to hold the Trustee harmless (provided, that with respect to an
Owner which is an insurance company, a letter of indemnity furnished by it shall
be sufficient for this purpose; provided, further, that such insurance company
possesses at least an investment grade rating from any of the Rating Agencies),
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and aggregate
principal amount, bearing a number not contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section
5.5, the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto; any other
expenses in connection with such issuance shall be an expense of the Trust.
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Every new Certificate issued pursuant to this Section 5.5 in
exchange for or in lieu of any mutilated, destroyed, lost or stolen Certificate
shall constitute evidence of a substitute interest in the Trust, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Certificates of the same Class duly issued hereunder and such
mutilated, destroyed, lost or stolen Certificate shall not be valid for any
purpose.
The provisions of this Section 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 Certificates.
SECTION 5.6. PERSONS DEEMED OWNERS. The Trustee and any agent
of the Trustee may treat the Person in whose name any Certificate is registered
as the Owner of such Certificate for the purpose of receiving distributions with
respect to such Certificate and for all other purposes whatsoever, and neither
the Trustee nor any agent of the Trustee shall be affected by notice to the
contrary.
SECTION 5.7. CANCELLATION. All Certificates surrendered for
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. No Certificate shall be authenticated in lieu of or in exchange for any
Certificate cancelled as provided in this Section 5.7, except as expressly
permitted by this Agreement. All cancelled Certificates may be held by the
Trustee in accordance with its standard retention policy.
SECTION 5.8. LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS. (a)
No sale or other transfer of any Class A Certificate shall be made to the
Sponsor, any Originator or any of their respective affiliates, other than
Advanta National Bank or Advanta Bank Corp.
(b) No sale or other transfer of record or beneficial
ownership of a Class R-I or Class R-II Certificate (whether pursuant to a
purchase, a transfer resulting from a default under a secured lending agreement
or otherwise) shall be made to a Disqualified Organization or an agent of a
Disqualified Organization. The transfer, sale or other disposition of a Class
R-I or Class R-II Certificate (whether pursuant to a purchase, a transfer
resulting from a default under a secured lending agreement or otherwise) to a
Disqualified Organization shall be deemed to be of no legal force or effect
whatsoever and such transferee shall not be deemed to be an Owner for any
purpose hereunder, including, but not limited to, the receipt of distributions
on such Class R-I or Class R-II Certificate. Furthermore, in no event shall the
Trustee accept surrender for transfer, registration of transfer, or register the
transfer, of any Class R-I or Class R-II Certificate nor authenticate and make
available any new Class R-I or Class R-II Certificate unless the Trustee has
received an affidavit from the proposed transferee in the form attached hereto
as Exhibit H. Each holder of a Class R-I or Class R-II Certificate by his
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 5.8(b).
(c) No sale or other transfer of record or beneficial
ownership of a Class B, Class BS, Class R-I or Class R-II Certificate shall be
made unless such transfer is exempt from the registration requirements of the
Securities Act, and any applicable state securities laws or is made in
accordance with the Securities Act and laws. In the event such a transfer is to
be made within two years from the Startup Day, (i) the Trustee or the Sponsor
shall require a written opinion of counsel acceptable to and in form and
substance satisfactory to the Sponsor that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor, from
the Securities Act and laws or is being made pursuant to the Securities Act and
laws, which opinion of counsel shall not be an expense of the Trustee or the
Sponsor, and (ii)
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the Trustee shall require the Transferee to execute an investment letter
acceptable to and in form and substance satisfactory to the Sponsor certifying
to the Trustee and the Sponsor the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Sponsor. The
Owner of a Class B, Class BS, Class R-I or Class R-II Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Sponsor against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws. No Class
B, Class BS, Class R-I or Class R-II Certificate shall be acquired by or
transferred to (i) an employee benefit plan (as defined in section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) subject
to the provisions of Title I of ERISA, (ii) a plan (as defined in Section
4975(e)(1) of the Code) subject to Section 4975 of the Code, or (iii) an entity
whose underlying assets are deemed to be assets of a plan described in (i) or
(ii) above by reason of such plan's investment in the entity (each, a "Benefit
Plan Entity"). Any transferee of a Class B, Class BS, Class R-I or Class R-II
Certificate shall deliver to the Trustee a certificate to the effect that it is
not a Benefit Plan Entity.
SECTION 5.9. ASSIGNMENT OF RIGHTS. An Owner may pledge,
encumber, hypothecate or assign all or any part of its right to receive
distributions hereunder, but such pledge, encumbrance, hypothecation or
assignment shall not constitute a transfer of an ownership interest sufficient
to render the transferee an Owner of the Trust without compliance with the
provisions of Sections 5.4 and 5.8 hereof.
ARTICLE VI
COVENANTS
SECTION 6.1. DISTRIBUTIONS. The Trustee will duly and
punctually pay distributions with respect to the Certificates in accordance with
the terms of the Certificates and this Agreement. Such distributions shall be
made (i) by check mailed on each Payment Date or (ii) if requested by any Owner,
to such Owner by wire transfer to an account within the United States designated
no later than five Business Days prior to the related Record Date, made on each
Payment Date, in each case to each Owner of record on the immediately preceding
Record Date; provided, however, that an Owner of a Class A Certificate shall
only be entitled to payment by wire transfer if such Owner owns Class A
Certificates in the aggregate denomination of at least $5,000,000. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the location specified in the
notice to Certificateholders of the final distribution.
SECTION 6.2. MONEY FOR DISTRIBUTIONS TO BE HELD IN TRUST;
WITHHOLDING. (a) All payments of amounts due and payable with respect to any
Certificate that are to be made from amounts withdrawn from the Certificate
Account pursuant to Section 7.5 hereof or from Insured Payments shall be made by
and on behalf of the Trustee, and no amounts so withdrawn from the Certificate
Account for payments of the Certificates and no Insured Payment shall be paid
over to the Trustee except as provided in this Section 6.2.
(b) The Trustee on behalf of the Trust shall comply with all
requirements of the Code and applicable state and local law with respect to the
withholding from any distributions made by it to any Owner of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
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(c) Any money held by the Trustee in trust for the payment of
any amount due with respect to any Class A or Class B Certificate and remaining
unclaimed by the Owner of such Class A or Class B Certificate for the period
then specified in the escheat laws of the State of New York after such amount
has become due and payable shall be discharged from such trust and be paid
first, to the Certificate Insurer on account of any Reimbursement Amount, and
second to the Owners of the Class R-II Certificates; and the Owner of such Class
A or Class B Certificate shall thereafter, as an unsecured general creditor,
look only to the Owners of the Class R-II Certificates, or the Certificate
Insurer for payment thereof (but only to the extent of the amounts so paid to
the Certificate Insurer or the Owners of the Class R-II Certificates), and all
liability of the Trustee with respect to such trust money shall thereupon cease;
provided, however, that the Trustee, before being required to make any such
payment, shall at the expense of the Sponsor cause to be published once, in the
eastern edition of The Wall Street Journal, notice that such money remains
unclaimed and that, after a date specified therein, which shall be not fewer
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be paid to the Certificate Insurer or the Owners of
the Class R-II Certificates as provided above. The Trustee shall, at the
direction of the Sponsor, also adopt and employ, at the expense of the Sponsor,
any other reasonable means of notification of such payment (including but not
limited to mailing notice of such payment to Owners whose right to or interest
in monies due and payable but not claimed is determinable from the Register at
the last address of record for each such Owner).
SECTION 6.3. PROTECTION OF TRUST ESTATE. (a) The Trustee will
hold the Trust Estate in trust for the benefit of the Owners and the Certificate
Insurer as their interests may appear, and, upon request of the Certificate
Insurer, or with the consent of the Certificate Insurer, at the request and
expense of the Sponsor, will from time to time execute and deliver all such
supplements and amendments hereto pursuant to Section 11.14 hereof and all
instruments of further assurance and other instruments, and will take such other
action upon such request as it deems reasonably necessary or advisable, to:
(i) more effectively hold in trust all or any portion of the
Trust Estate;
(ii) perfect, publish notice of, or protect the validity of
any grant made or to be made by this Agreement;
(iii) enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Trustee, and the ownership interests of the Owners
represented thereby, in such Trust Estate against the claims of all
Persons and parties.
The Trustee shall send copies of any request received from the
Certificate Insurer or the Sponsor to take any action pursuant to this Section
6.3 to the other party.
(b) The Trustee shall have the power to enforce, and shall
enforce the obligations of the other parties to this Agreement and of the
Certificate Insurer by action, suit or proceeding at law or equity, and shall
also have the power to enjoin, by action or suit in equity, any acts or
occurrences which may be unlawful or in violation of the rights of the Owners;
provided, however, that nothing in this Section 6.3 shall require any action by
the Trustee unless the Trustee shall first (i) have been furnished indemnity
satisfactory to it and (ii) when required by this Agreement, have been requested
to take such action by a majority of the Percentage Interests represented by the
affected Class or Classes of Class A Certificates then Outstanding or,
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if there are no longer any affected Class A Certificates then outstanding, by
such majority of the Percentage Interests represented by the Class R-II
Certificates.
(c) The Trustee shall execute any instrument required pursuant
to this Section so long as such instrument does not conflict with this Agreement
or with the Trustee's fiduciary duties.
SECTION 6.4. PERFORMANCE OF OBLIGATIONS. (a) The Trustee will
not take any action that would release the Sponsor or the Certificate Insurer
from any of their respective covenants or obligations under any instrument or
document relating to the Trust Estate or the Certificates or which would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or document, except
as expressly provided in this Agreement or such other instrument or document.
(b) The Trustee may contract with other Persons to assist it
in performing its duties hereunder.
SECTION 6.5. NEGATIVE COVENANTS. The Trustee will not, to the
extent within the control of the Trustee, take any of the following actions:
(i) sell, transfer, exchange or otherwise dispose of any of
the Trust Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the
distributions payable in respect of, the Certificates (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Owner by reason of the payment
of any taxes levied or assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty on behalf of the Trust any
indebtedness of any Person except pursuant to this Agreement;
(iv) dissolve or liquidate the Trust Estate in whole or in
part, except pursuant to Article IX hereof; or
(v) (A) impair the validity or effectiveness of this
Agreement, or release any Person from any covenants or obligations with
respect to the Trust or to the Certificates under this Agreement,
except as may be expressly permitted hereby or (B) create or extend any
lien, charge, adverse claim, security interest, mortgage or other
encumbrance to or upon the Trust Estate or any part thereof or any
interest therein or the proceeds thereof.
SECTION 6.6. NO OTHER POWERS. The Trustee will not, to the
extent within the control of the Trustee, permit the Trust to engage in any
business activity or transaction other than those activities permitted by
Section 2.3 hereof.
SECTION 6.7. LIMITATION OF SUITS. No Owner shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Agreement or the Certificate Insurance Policy or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
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(a) such Owner has previously given written notice to the
Sponsor, the Certificate Insurer, and the Trustee of such Owner's
intention to institute such proceeding;
(b) the Owners of not less than 25% of the Percentage
Interests represented by the affected Class or Classes of Certificates
then Outstanding or, if there are no affected Classes of Class A or
Class B Certificates then Outstanding, by such percentage of the
Percentage Interests represented by the Class R-II Certificates, shall
have made written request to the Trustee to institute such proceeding
in respect of such Event of Default;
(c) such Owner or Owners have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such proceeding;
(e) as long as any Class A Certificate or any Reimbursement
Amount is outstanding, the Certificate Insurer consented in writing
thereto; and
(f) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Certificate
Insurer or by the Owners of a majority of the Percentage Interests
represented by the Class A Certificates or, if there are no Class A
Certificates then Outstanding, by such majority of the Percentage
Interests represented by the Class R-II Certificates;
it being understood and intended that no one or more Owners shall have any right
in any manner whatever by virtue of, or by availing themselves of, any provision
of this Agreement to affect, disturb or prejudice the rights of any other Owner
of the same Class or to obtain or to seek to obtain priority or preference over
any other Owner of the same Class or to enforce any right under this Agreement,
except in the manner herein provided and for the equal and ratable benefit of
all the Owners of the same Class.
In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Owners, each
representing less than a majority of the applicable Class of Certificates, the
Trustee shall act at the direction of the Certificate Insurer, notwithstanding
any other provision of this Agreement.
SECTION 6.8. UNCONDITIONAL RIGHTS OF OWNERS TO RECEIVE
DISTRIBUTIONS. Notwithstanding any other provision in this Agreement, the Owner
of any Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided herein, no right or remedy herein conferred upon or reserved
to the Trustee, the Certificate Insurer or to the Owners 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. Except as otherwise provided herein, the assertion or employment of
any right or
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remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER. No delay of the
Trustee, the Certificate Insurer or any Owner of any Certificate to exercise any
right or remedy under this Agreement to 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 VI or by law
to the Trustee, the Certificate Insurer or to the Owners may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee, the
Certificate Insurer or by the Owners, as the case may be.
SECTION 6.11. CONTROL BY OWNERS. The Certificate Insurer (so
long as a Certificate Insurer Default has not occurred and is continuing) or the
Owners of a majority of the Percentage Interests represented by the Class A
Certificates then Outstanding, with the consent of the Control Party (which may
not be unreasonably withheld) or, if there are no longer any Class A
Certificates then Outstanding, by such majority of the Percentage Interests
represented by the Class R-II Certificates then Outstanding, with the consent of
the Control Party (which may not be unreasonably withheld) may direct the time,
method and place of conducting any proceeding for any remedy available to the
Control Party with respect to the Certificates or exercising any trust or power
conferred on the Control Party with respect to the Certificates or the Trust
Estate, including, but not limited to, those powers set forth in Section 6.3 and
Section 8.20 hereof; provided, that:
(a) such direction shall not be in conflict with any rule of
law or with this Agreement;
(b) the Control Party shall have been provided with indemnity
satisfactory to it; and
(c) the Trustee may take any other action deemed proper by the
Trustee, which is not inconsistent with such direction; provided,
however, that the Trustee need not take any action which it determines
might involve it in liability or may be unjustly prejudicial to the
Owners not so directing; provided, further, that in the event that any
directions provided by the Trustee and the Certificate Insurer conflict
with each other, the Certificate Insurer's direction shall prevail.
So long as an Certificate Insurer Default has not occurred and
is continuing, the Certificate Insurer shall act as the Control Party and be
subrogated thereto until all Reimbursement Amounts have been paid.
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 7.1. COLLECTION OF MONEY. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Trustee pursuant to
this Agreement, including 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 Trustee by the Master Servicer or by any Sub-Servicer. The
Trustee shall hold all such money and property received by it, other than
pursuant to or as
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contemplated by Section 6.2(b) hereof, as part of the Trust Estate and shall
apply it as provided in this Agreement.
SECTION 7.2. ESTABLISHMENT OF ACCOUNTS. On or prior to the
Startup Day, the Sponsor shall cause to be established, and the Trustee shall
maintain, at the corporate trust office of the Trustee, a Certificate Account, a
Pre-Funding Account, and a Capitalized Interest Account, each of which is to be
held by the Trustee in the name of the Trust for the benefit of the Owners of
the Certificates and the Certificate Insurer, as their interests may appear.
SECTION 7.3. THE CERTIFICATE INSURANCE POLICY. On each
Determination Date the Trustee shall determine with respect to the immediately
following Payment Date:
(a) The amounts to be on deposit in the Certificate Account on
each Payment Date with respect to each Mortgage Loan Group
(disregarding the amounts of any net investment earnings and any
Insured Payments with respect to such Mortgage Loan Group and any
investment earnings withdrawn from the Certificate Account in
accordance with Section 7.5(b) hereof) excluding an amount equal to the
sum of the Premium Amount, the Servicing Fees and the Trustee's Fees
each with respect to such Mortgage Loan Group for the related Payment
Date; such amounts with respect to Group I, are the "Group I Available
Funds" and with respect to Group II are the "Group II Available Funds";
provided, however, that the amounts which cannot be distributed to the
Owners of the Class A Certificates as a result of proceedings under the
United States Bankruptcy Code or similar insolvency laws will not be
considered in determining the amount of Available Funds;
(b) If the Trustee determines that a Group I Deficiency Amount
or a Group II Deficiency Amount will exist with respect to any Payment
Date, the Trustee shall complete a Notice in the form of Exhibit A to
the Certificate Insurance Policy and submit such notice to the
Certificate Insurer no later than 12:00 noon New York City time on the
Business Day preceding such Payment Date as a claim for an Insured
Amount in an amount equal to such Group I Deficiency Amount or Group II
Deficiency Amount. Upon receipt of Insured Payments from the
Certificate Insurer under the Certificate Insurance Policy, the Trustee
shall deposit such Insured Payments in the Certificate Account.
(c) The Trustee shall (i) receive Insured Payments as
attorney-in-fact of each Owner of the Class A Certificates of the
related Class receiving any Insured Payment from the Certificate
Insurer and (ii) disburse such Insured Payment to the Owners of the
related Class A Certificates as set forth in Section 7.5(b). The
Certificate Insurer shall be entitled to receive the Group I
Reimbursement Amount or Group II Reimbursement Amount, as applicable,
pursuant to Sections 7.5(x) and (xi) hereof with respect to each
Insured Payment made by the Certificate Insurer. The Trustee hereby
agrees on behalf of each Owner of Class A Certificates and the Trust
for the benefit of the Certificate Insurer that it recognizes that to
the extent the Certificate Insurer makes Insured Payments, either
directly or indirectly (as by paying through the Trustee), to the
Owners of such Class A Certificates, the Certificate Insurer will be
entitled to receive the related Reimbursement Amount pursuant to
Sections 7.5(x) and (xi) hereof.
(d) Insured Payments disbursed by the Trustee from proceeds of
the Certificate Insurance Policy shall not be considered payment by the
Trust Estate nor shall such payments discharge the obligation of the
Trust Estate with respect to such Class A
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Certificates, and the Certificate Insurer shall become the owner of
such unpaid amounts due from the Trust Estate in respect of the Class A
Certificates. The Trustee hereby agrees on behalf of each Owner of a
Class A Certificate for the benefit of the Certificate Insurer that it
recognizes that to the extent the Certificate Insurer makes any Group I
Insured Payment or Group II Insured Payment, as applicable, either
directly or indirectly (as by paying through the Trustee), to the Class
A Certificateholders, the Certificate Insurer will be subrogated to the
rights of the Class A Certificateholders with respect to such Insured
Payment, shall be deemed to the extent of payments so made to be a
registered Class A Certificateholder and shall receive all future
distributions until all such Insured Payments by the Certificate
Insurer, together with interest thereon at the Late Payment Rate, have
been fully reimbursed. To evidence such subrogation, the Trustee shall,
or shall cause the Registrar to, note the Certificate Insurer's rights
as subrogee on the registration books maintained by the Trustee or the
Registrar upon receipt from the Certificate Insurer of proof of payment
of any Group I Insured Payment or Group II Insured Payment, as
applicable. The effect of the foregoing provisions is that, to the
extent of Insured Payments made by it, the Certificate Insurer shall be
paid before payment of the balance of the distributions are made to the
other Owners of the Class A Certificates.
SECTION 7.4. PRE-FUNDING ACCOUNT AND CAPITALIZED INTEREST
ACCOUNT. (a) On the Startup Day, the Trustee will deposit from the sale of the
Certificates (i) the Group I Original Pre-Funded Amount and the Group II
Original Pre-Funded Amount in the Pre-Funding Account from the proceeds of the
sale of the Certificates and (ii) the Group I Capitalized Interest Deposit and
the Group II Capitalized Interest Deposit in the Capitalized Interest Account.
(b) On any Subsequent Transfer Date, the Sponsor shall
instruct the Trustee in writing by executing the Subsequent Transfer Agreement
to withdraw from the Pre-Funding Account an amount equal to 100% of the
aggregate Loan Balances of the Subsequent Mortgage Loans sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Sponsor upon satisfaction of the conditions set forth in Section 3.8 hereof with
respect to such transfer.
(c) At the end of the Pre-Funding Period, after giving effect
to any reductions in the Pre-Funded Amount on or before the related such
Remittance Date, the Sponsor shall instruct the Trustee to withdraw from the
Pre-Funding Account all amounts remaining in the Pre-Funding Account on such
Remittance Date and deposit such amounts in the Certificate Account (i) on
behalf of the Owners of the Group I Certificates, the difference, if any,
between (A) the Group I Original Pre-Funded Amount and (B) all amounts
theretofore withdrawn from the Pre-Funding Account with respect to Subsequent
Mortgage Loans purchased for Group I and (ii) on behalf of the Owners of the
Group II Certificates, the difference, if any, between (A) the Group II Original
Pre-Funded Amount and (B) all amounts theretofore withdrawn from the Pre-Funding
Account with respect to Subsequent Mortgage Loans purchased for Group II.
(d) On each Payment Date during the Pre-Funding Period, the
Trustee shall transfer the Pre-Funding Earnings, if any, relating to such
Payment Date from the Pre-Funding Account to the Certificate Account.
(c) On the Payment Dates occurring in September 1999, October
1999 and November 1999, the Trustee shall transfer from the Capitalized Interest
Account to the Certificate Account with respect to Group I, the Group I
Capitalized Interest Requirement, if any, for such
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Payment Dates and with respect to Group II, the Group II Capitalized Interest
Requirement, if any, for such Payment Dates.
(f) On the Payment Date immediately following the end of the
Pre-Funding Period, any amounts remaining in the Capitalized Interest Account
after taking into account the transfers on such Payment Date described in clause
(e) above shall be paid to the Owners of the Class R-II Certificates, and the
Capitalized Interest Account shall be closed.
(g) On the Payment Dates occurring in September 1999, October
1999 and November 1999, the Trustee shall transfer any investment earnings with
respect to amounts on deposit in the Capitalized Interest Account to the Master
Servicer or its designee.
SECTION 7.5. FLOW OF FUNDS. (a) The Trustee shall:
(i) on each Remittance Date, deposit to the Certificate
Account with respect to each Mortgage Loan Group, without duplication,
(a) upon receipt, any Insured Payments relating to such Mortgage Loan
Group, (b) the proceeds of any liquidation of the assets of the Trust,
(c) the Monthly Remittance Amount with respect to such Mortgage Loan
Group remitted by the Master Servicer or any Sub-Servicer, and
(ii) on the Payment Dates occurring in September 1999, October
1999 and November 1999, deposit in the Certificate Account; (x) the
Pre-Funding Earnings transferred by the Trustee pursuant to Section
7.4(d) hereof, (y) the Group I Capitalized Interest Requirement and the
Group II Capitalized Interest Requirement to be transferred on such
Payment Dates from the Capitalized Interest Account, pursuant to
Section 7.4(e) hereof with respect to the related Mortgage Loan Group
and (z) the portion of the amount, if any, to be transferred on such
Payment Date from the Pre-Funding Account, pursuant to Section 7.4(c)
hereof with respect to the related Mortgage Loan Group.
(b) On each Payment Date the Trustee shall withdraw from the
Certificate Account and remit to the Master Servicer or its designee all net
investment earnings then on deposit in the Certificate Account (exclusive of any
such earnings transferred from the Pre-Funding Account), and shall make the
following allocations, disbursements and transfers of the remaining amount then
on deposit in the Certificate Account with respect to each Mortgage Loan Group
in the following order of priority, and each such allocation, transfer and
disbursement shall be treated as having occurred only after all preceding
allocations, transfers and disbursements have occurred:
(i) first, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Trustee, an
amount equal to the Trustee's Fees then due to it with respect to each
Mortgage Loan Group;
(ii) second, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Certificate
Insurer the related Premium Amount for such Payment Date;
(iii) third, from amounts then on deposit in the Certificate
Account to the Master Servicer, an amount equal to any Servicing Fees
then due to it, to the extent not previously received by the Master
Servicer pursuant to Sections 8.8(c)(i) or 8.9(a) hereof;
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(iv) fourth, from amounts then on deposit in the Certificate Account
with respect to such Mortgage Loan Group, to the Owners of the related
Class A Certificates, pro rata, their respective Class A Current Interest
for such Payment Date;
(v) fifth, from amounts then on deposit in the Certificate Account
with respect to such Mortgage Loan Group, to the Owners of the related
Class A Certificates, pro rata, their respective Class A Interest Carry
Forward Amount;
(vi) sixth, from amounts then on deposit in the Certificate Account
with respect to such Mortgage Loan Group, for allocation to the Owners of
the Class A Certificates of the other Mortgage Loan Group, an amount equal
to any shortfall in the full amount of the Class A Current Interest for
such other Mortgage Loan Group with respect to such Payment Date, after
taking into account the allocation of 100% of the Available Funds for the
other Mortgage Loan Group on such Payment Date;
(vii) seventh, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, for allocation to the
Owners of the Class A Certificates of the other Mortgage Loan Group, an
amount equal to any shortfall in the full amount of the Class A Interest
Carry Forward Amount for such other Mortgage Loan Group with respect to
such Payment Date, after taking into account the allocation of 100% of the
Available Funds for the other Mortgage Loan Group on such Payment Date;
(viii) eighth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Owners of the
related Class A Certificates, as a distribution of principal, the Base
Principal Distribution Amount with respect to such Mortgage Loan Group for
such Payment Date; such amount to be paid out as a portion of the
Principal Distribution Amount for the related Mortgage Loan Group pursuant
to Section 7.5(c);
(ix) ninth, from amounts then on deposit in the Certificate Account
with respect to such Mortgage Loan Group, to the Owners of the related
Class A Certificates, as a distribution of principal, the
Overcollateralization Deficit with respect to such Mortgage Loan Group for
such Payment Date; such amount to be paid out as a portion of the
Principal Distribution Amount for the related Mortgage Loan Group pursuant
to Section 7.5(c);
(x) tenth, from amounts then on deposit in the Certificate Account
with respect to such Mortgage Loan Group, if such Payment Date is the
Payment Date following the end of the Pre-Funding Period for the Class A
Certificates, as a distribution of principal, any amount remaining in the
Pre-Funding Account with respect to such Mortgage Group (after taking into
account all transfers of Subsequent Mortgage Loans to the related Mortgage
Loan Group on or prior to such Payment Date); such amount to be paid out
as a portion of the Principal Distribution Amount for the related Mortgage
Loan Group pursuant to Section 7.5(c);
(xi) eleventh, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, for allocation to the
Owners of the related Class A Certificates of the other Mortgage Loan
Group, an amount equal to any Overcollateralization Deficit for such other
Mortgage Loan Group with respect to such Payment Date, after taking into
account the allocation of 100% of the Available Funds for the other
Mortgage Loan Group on such Payment Date;
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(xii) twelfth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Certificate
Insurer, the Reimbursement Amount, if any, then due to it with respect to
such Mortgage Loan Group;
(xiii) thirteenth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Certificate
Insurer, the Reimbursement Amount for the other Mortgage Loan Group, if
any, then due to it after taking into account 100% of the Available Funds
for the other Mortgage Loan Group on such Payment Date;
(xiv) fourteenth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Owners of the
related Class A Certificates with respect to such Mortgage Loan Group, as
a distribution of principal, up to an amount equal to the
Overcollateralization Increase Amount with respect to such Group; such
amount to be paid out as a portion of the Principal Distribution Amount
for the related Mortgage Loan Group pursuant to Section 7.5(c);
(xv) fifteenth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Owners of the
related Class A Certificates of the other Mortgage Loan Group, as a
distribution of principal, up to an amount equal to the
Overcollateralization Increase Amount with respect to such other Group,
after taking into account the allocation of 100% of the Available Funds
for the other Mortgage Loan Group on such Payment Date;
(xvi) sixteenth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Master Servicer,
to the extent of any unreimbursed Delinquency Advances, unreimbursed
Servicing Advances, including Nonrecoverable Delinquency Advances and
Nonrecoverable Servicing Advances and accrued and unpaid Servicing Fees as
of such Payment Date;
(xvii) seventeenth, from amounts then on deposit in the Certificate
Account with respect to such Mortgage Loan Group, to the Trustee, to the
extent of any unreimbursed expenses owed to it;
(xviii) eighteenth, on each Payment Date, the Trustee shall transfer
from amounts then on deposit in the Certificate Account to the
Supplemental Interest Payment Account, the Class B Distribution Amount;
such transfer shall be deemed to be a distribution on the Class B
Certificates; and
(xix) nineteenth, on each Payment Date, the Trustee shall transfer
all remaining monies then on deposit in the Certificate Account to the
Owners of the Class R-II Certificates.
(c)Principal Distribution Amounts shall be applied as follows:
(i)the Group I Principal Distribution Amount shall be applied in the
following order of priority:
(A) first, the Group I Principal Distribution Amount shall
be distributed to the Owners of the Class A-6
Certificates in an amount equal to the lesser of (x) the
Class A-6 Principal
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Distribution Amount for such Payment Date and (y) the
Outstanding Class A-6 Certificate Principal Balance for
such Payment Date;
(B) second, the excess of (x) the Group I Class A Principal
Distribution Amount over (y) the amount distributed in
clause (c)(i)(A) above shall be distributed to the
Owners of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4
Certificates and the Class A-5 Certificates,
sequentially in that order, until the Certificate
Principal Balance of each Class (in ascending order of
numerical designation) has been reduced to zero;
(C) third, to the Owners of the Class A-6 Certificates, any
remaining amount of the Group I Principal Distribution
Amount for such Payment Date until the Certificate
Principal Balance of the Class A-6 Certificates has been
reduced to zero.
Notwithstanding the foregoing, on any Payment Date on which the
Group I Overcollateralization Amount is zero and the Certificate Insurer
is in default, the Group I Principal Distribution Amount shall be
distributed pro rata to the Owners of the Group I Certificates and not in
accordance with the above priorities;
(ii) the Group II Principal Distribution Amount shall be distributed
to the Owners of the Class A-7 Certificates until the Certificate
Principal Balance of the Class A-7 Certificates has been reduced to zero.
(d) Notwithstanding paragraph (b) above, on any Payment Date during
the continuance of any Certificate Insurer Default, no Premium Amounts or
Reimbursement Amounts shall be paid to the Certificate Insurer unless the
Certificate Insurer or its custodian, trustee, agent, receiver or similar
official continues to make payment under the Policy, and any amounts otherwise
payable to the Certificate Insurer as Premium Amounts or Reimbursement Amounts
shall be retained in the Certificate Account as the Available Funds with respect
to the related Mortgage Loan Group, as appropriate. On any Payment Date wherein
such Certificate Insurer Default has been cured, the Premium Amounts or
Reimbursement Amount shall be paid to the Certificate Insurer.
(c) Notwithstanding any of the foregoing provisions, the aggregate
amount distributed to the Owners of any Class A Certificates on account of
principal shall not exceed the Certificate Principal Balance for the related
Class.
SECTION 7.6 INVESTMENT OF ACCOUNTS. (a) So long as no event
described in Sections 8.20(a) or (b) hereof shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of the Accounts (other than the Principal and Interest Account) held by the
Trustee shall be invested and reinvested by the Trustee in the name of the
Trustee for the benefit of the Owners and the Certificate Insurer, as their
interests may appear, as directed in writing by the Master Servicer, in one or
more Eligible Investments bearing interest or sold at a discount, other than the
Capitalized Interest Account which funds shall be invested and reinvested by the
Trustee on behalf of the Master Servicer. The Master Servicer may invest funds
held in the Principal and Interest Account in one or more Eligible Investments.
During the continuance of an event described in Sections 8.20(a) or (b) hereof
and following any removal of
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the Master Servicer, the Control Party shall direct such investments. No
investment in any Account shall mature later than the Business Day immediately
preceding the next Payment Date.
(b) If any amounts are needed for disbursement from any Account held
by the Trustee or the Master Servicer, as the case may be, and sufficient
uninvested funds are not available to make such disbursement, the Trustee or the
Master Servicer, as the case may be, shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account. No
investments will be liquidated prior to maturity unless the proceeds thereof are
needed for disbursement.
(c) Subject to Section 10.1 hereof, the Trustee shall not in any way
be held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any loss on any Eligible Investment included therein (except and
only to the extent that the bank serving as Trustee is the obligor thereon and
is otherwise liable).
(d) In the absence of any investment direction from the Master
Servicer with respect to amounts on deposit in the Accounts, the Trustee shall
invest such amounts in the Eligible Investment set forth in Section 7.7(i)
hereof.
(e) For purposes of investment, the Trustee may aggregate all
amounts on deposit in the Accounts. All income or other gain from investments in
the Accounts shall be deposited, pro rata, in the Accounts immediately on
receipt, and any loss resulting from such investments shall be charged, pro
rata, to the Accounts.
SECTION 7.7. ELIGIBLE INVESTMENTS. The following are Eligible
Investments:
(a) Direct general obligations of the United States or the
obligations of any agency or instrumentality of the United States fully
and unconditionally guaranteed, the timely payment or the guarantee of
which constitutes a full faith and credit obligation of the United States.
(b) Federal Housing Administration debentures and rated Aa2 or
higher by Moody's and AA or better by Standard & Poor's.
(c) Freddie Mac senior debt obligations and rated Aa2 or higher by
Moody's and AA or better by Standard & Poor's.
(d) Federal Home Loan Banks' consolidated senior debt obligations
and rated Aa2 or higher by Moody's and AA or better by Standard & Poor's.
(e) Fannie Mae senior debt obligations and rated Aa2 or higher by
Moody's.
(f) Federal funds, certificates of deposit, time and demand
deposits, and bankers' acceptances (having original maturities of not more
than 365 days) of any domestic bank, the short-term debt obligations of
which have been rated A-1 or better by Standard & Poor's and P-1 by
Moody's.
(g) Investment agreements approved by the Control Party provided:
(1) The agreement is with a bank or insurance company which
has an unsecured, uninsured and unguaranteed obligation
(or
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claims-paying ability) rated Aa2 or better by Moody's
and AA or better by Standard & Poor's, and
(2) Monies invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's
notice (provided such notice may be amended or canceled
at any time prior to the withdrawal date), and
(3) The agreement is not subordinated to any other
obligations of such insurance company or bank, and
(4) The same guaranteed interest rate will be paid on any
future deposits made pursuant to such agreement, and
(5) The Trustee and the Certificate Insurer receive an
opinion of counsel that such agreement is an enforceable
obligation of such insurance company or bank.
(h) Commercial paper (having original maturities of not more than
365 days) rated A-1 or better by Standard & Poor's and P-1 or better by
Moody's.
(i) Investments in money market funds rated AAAm or AAAM-G by
Standard & Poor's and Aaa or P-1 by Moody's.
(j) Investments approved in writing by the Control Party and
acceptable to the Rating Agencies and the Certificate Insurer;
provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) 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 above 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; and provided, further, that, with respect to any
instrument described above, such instrument qualifies as a "permitted
investment" within the meaning of Section 860G(a)(5) of the Code and the
regulations thereunder.
SECTION 7.8. REPORTS BY TRUSTEE. (a) On each Payment Date the
Trustee shall provide to each Owner, to the Master Servicer, to the Certificate
Insurer, to each Underwriter, to the Sponsor and to each Rating Agency a written
report in substantially the form set forth as Exhibit H hereto with respect to
each Mortgage Loan Group, as such form may be revised by the Trustee and the
Master Servicer from time to time, but in every case setting forth the
information requested on Exhibit H hereto and the following information:
(i) the amount of the distribution with respect to the related Class
of Certificates;
(ii) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein;
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(iii) the amount of such distributions allocable to interest;
(iv) the Interest Carry Forward Amount for each Class;
(v) the Certificate Principal Balance for each Class of Class A
Certificates as of such Payment Date, together with the principal amount
of such Class of Class A Certificates (based on a Certificate in an
original principal amount of $1,000) then outstanding, in each case after
giving effect to any payment of principal on such Payment Date;
(vi) with respect to the Class A Certificates, the amount of any
Class A Insured Payment included in the amounts distributed in respect of
the Class A Certificates;
(vii) the aggregate Loan Balance of all Mortgage Loans after giving
effect to any payment of principal on such Payment Date both in the
aggregate and in each of the Mortgage Loan Groups;
(viii) information furnished by the Sponsor pursuant to Section
6049(d)(7)(C) of the Code and the regulations promulgated thereunder to
assist the Owners in computing their market discount;
(ix) the total of any Substitution Amounts and any Loan Purchase
Price amounts included in such distribution;
(x) the weighted average Coupon Rate of the Mortgage Loans with
respect to each Group;
(xi) the amount of any Supplemental Interest Amount;
(xii) the Group I Overcollateralization Amount and the Group II
Overcollaterization Amount after giving effect to any payment of principal
on such Payment Date;
(xiii) the aggregate Loan Balances of all Mortgage Loans in each
Mortgage Loan Group that were repurchased during the related Remittance
Period and any repurchases pursuant to Section 8.10;
(xiv) the amounts, if any, of any Realized Losses in each Mortgage
Loan Group for the related Remittance Period;
(xv) the Pool Cumulative Realized Losses (x) as a percentage of the
average Pool Principal Balance as of the close of business on the last day
of each of the twelve preceding Remittance Periods and (y) as a percentage
of the sum of the aggregate Loan Balances of the Mortgage Loans as of the
Initial Cut-Off Date;
(xvi) a number with respect to each Class (the "Pool Factor" for
such Class) computed by dividing the Certificate Principal Balance for
such Class (after giving effect to any distribution of principal to be
made on such Payment Date) by the Certificate Principal Balance for such
Class on the Startup Day;
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(xvii) whether a Servicer Termination Loss Trigger has occurred, as
such terms are defined in the Insurance Agreement.
Items (i) through (iii) above shall, with respect to each Class of
Class A Certificates, be presented on the basis of a Certificate having a $1,000
denomination. In addition, by January 31 of each calendar year following any
year during which the Certificates are outstanding, the Trustee shall furnish a
report to each Owner of record at any time during each calendar year as to the
aggregate of amounts reported pursuant to (i), (ii) and (iii) with respect to
the Certificates for such calendar year. If a Class of Certificates is in
book-entry form, DTC will supply such reports to the Owners of such Class of
Certificates as are in accordance with its procedures.
(b) In addition, on each Payment Date the Trustee will distribute to
each Owner, to the Certificate Insurer, to each Underwriter, to the Master
Servicer, to the Sponsor and to each Rating Agency, together with the
information described in Subsection (a) preceding, the following information
with respect to each Mortgage Loan Group as of the close of business on the last
Business Day of the prior calendar month, which is hereby required to be
prepared by the Master Servicer and furnished to the Trustee for such purpose on
or prior to the related Remittance Date:
(i) the total number and aggregate Loan Balances of Mortgage Loans
in each Mortgage Loan Group and the percentage (based on the aggregate
Loan Balances) of the aggregate Loan Balances of such Mortgage Loans in
the related Mortgage Loan Group which are (a) 30-59 days Delinquent, (b)
60-89 days Delinquent and (c) 90 or more days Delinquent;
(ii) the number, aggregate Loan Balances and percentage (based on
the aggregate Loan Balances of the Mortgage Loans in such Mortgage Loan
Group) of all Mortgage Loans in the related Mortgage Loan Group in
foreclosure proceedings (and whether any such Mortgage Loans are also
included in any of the statistics described in the foregoing clause (i));
(iii) the number, aggregate Loan Balances and percentage (based on
the aggregate Loan Balances of the Mortgage Loans in such Mortgage Loan
Group) of all Mortgage Loans in the related Mortgage Loan Group relating
to Mortgagors in bankruptcy proceedings (and whether any such Mortgage
Loans are also included in any of the statistics described in the
foregoing clause (i));
(iv) the number, aggregate Loan Balances and percentage (based on
the aggregate Loan Balances of the Mortgage Loans in such Mortgage Loan
Group) of all Mortgage Loans in the related Mortgage Loan Group relating
to REO Properties (and whether any such Mortgage Loans are also included
in any of the statistics described in the foregoing clause (i));
(v) the loan number of the Mortgage Loans and the book value of any
REO Property in each Mortgage Loan Group;
(vi) the aggregate Loan Balance of 60+ Day Delinquent Mortgage Loans
with respect to each Group; and
(vii) the book value of any REO Property.
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(c) The foregoing reports shall be sent be to an Owner only insofar
as such Owner owns a Certificate with respect to the related Mortgage Loan
Group.
(d) The Sponsor and the Master Servicer, on behalf of
Certificateholders and the Trust (the "Trust Parties") hereby authorize the
Trustee to include the loan level information with respect to the Mortgage
Loans, excluding any information relating to the fees or amounts due to the
Certificate Insurer, contained in reports provided to the Certificate Insurer or
the Trustee by the Master Servicer hereunder and, if so directed by an
Authorized Officer of the Sponsor in writing to the Trustee, the monthly report
to the Owners prepared by the Trustee (the "Information") on The Bloomberg, an
on-line computer based on-line information network maintained by Bloomberg L.P.
("Bloomberg") or on any other on-line computer based on-line information network
or service ("Information Network"), or in other electronic or print information
services deemed acceptable by the Sponsor or the Master Servicer as designated
in writing to the Trustee by an Authorized Officer of the Master Servicer. The
Trust Parties agree not to commence any actions or proceedings, or otherwise
assert any claims, against the Trustee or its affiliates or any of the Trustee's
or its affiliates' respective agents, representatives, directors, officers or
employees (collectively, the "Designated Parties"), arising out of, or related
to or in connection with the dissemination and/or use of any Information by the
Trustee, including, but not limited to, claims based on allegations of
inaccurate or incomplete information by the Trustee to Bloomberg or to any
Information Network or otherwise (other than in connection with the Trustee's
negligence or willful misconduct). The Trust Parties waive their rights to
assert any such claims against the Designated Parties and fully and finally
release the Designated Parties from any and all such claims, demands,
obligations, actions and liabilities (other than in connection with such
Designated Parties' negligence or willful misconduct). The Trustee makes no
representations or warranties, expressed or implied, of any kind whatsoever with
respect to the accuracy, adequacy, timeliness, completeness, merchantability or
fitness for any particular purpose of any Information in any form or manner. The
authorizations, covenants and obligations of the Trust Parties under this
section shall be irrevocable and shall survive the termination of this
Agreement.
SECTION 7.9. ADDITIONAL REPORTS BY TRUSTEE. (a) The Trustee shall
report to the Sponsor, the Certificate Insurer and the Master Servicer with
respect to the amount then held in each Account (including investment earnings
accrued or scheduled to accrue) held by the Trustee and the identity of the
investments included therein, as the Sponsor, the Master Servicer or the
Certificate Insurer may from time to time request. Without limiting the
generality of the foregoing, the Trustee shall, at the request of the Sponsor,
the Master Servicer or the Certificate Insurer, transmit promptly to the
Sponsor, the Certificate Insurer and the Master Servicer copies of all
accounting of receipts in respect of the Mortgage Loans furnished to it by the
Master Servicer and shall notify the Sponsor, the Certificate Insurer and the
Master Servicer if any such receipts have not been received by the Trustee.
(b) The Trustee shall immediately report to the Certificate Insurer,
Sponsor and Master Servicer with respect to its actual knowledge, without
independent investigation, of any breach of any of the representations or
warranties relating to individual Mortgage Loans set forth in any Mortgage Loan
Transfer Agreement or in Section 3.3(a) hereof.
SECTION 7.10. SUPPLEMENTAL INTEREST PAYMENT ACCOUNT AND SUPPLEMENTAL
INTEREST PAYMENTS. (a) The parties hereto do hereby create and establish a
trust, the "Advanta Supplemental Interest Trust 1999-3". The Supplemental
Interest Trust shall hold a trust account at the corporate trust office of the
Trustee; the "Supplemental Interest Payment Account" to be held by the Trustee
in its name on behalf of the Supplemental Interest Trust. None of the assets
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of the Supplemental Interest Trust shall be considered assets of the REMIC
Trust, and any amounts transferred from the REMIC Trust to the Supplemental
Interest Trust shall be treated as distributions with respect to the Class B
Certificates.
(b) The amount, if any, on deposit in the Supplemental Interest
Payment Account on any Payment Date is the "Supplemental Interest Payment Amount
Available" on such Payment Date.
On each Payment Date, the Trustee shall withdraw from the
Supplemental Interest Payment Account and pay to the Owners of each Supplemental
Interest Right (which Owners shall, in the absence of contrary instructions
received by the Trustee from the Owners of the A-7 Certificates, be the Owners
of the A-7 Certificates), pro rata based on the Supplemental Interest Amount due
to each such Class, the lesser of (x) the sum of (i) the Supplemental Interest
Amount for such Payment Date plus (ii) any Supplemental Interest Shortfall
Carry-Forward Amount and (y) the Supplemental Interest Payment Amount Available.
If, on any Payment Date, the Supplemental Interest Payment Amount
Available is insufficient to pay the Supplemental Interest Amount for such
Payment Date (such deficiency, the "Supplemental Interest Shortfall Amount"),
the Trustee shall demand that the Designated Residual Owner fund such deficiency
on the related Payment Date and the Designated Residual Owner shall be required
to fund such deficiency.
(c) Any portion of the Supplemental Interest Payment Amount
Available remaining after application of clause (b) above shall be distributed
to the owners of the Class BS Certificates pro rata in accordance with their
Percentage Interests.
(d) The Trustee, on behalf of the Supplemental Interest Trust, shall
comply with all requirements of the Code and applicable state and local law with
respect to the withholding from any distributions made by it to any Person
entitled thereto of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(e) Notwithstanding any other provision of this Section 7.10, the
right to receive the Supplemental Interest Amount plus any Supplemental Interest
Shortfall Carry-Forward Amounts (such right, the "Supplemental Interest Right")
shall be separately transferable from the Class A-7 Certificates, subject to the
restrictions on transfer set forth in Article V hereof.
ARTICLE VIII
SERVICING AND ADMINISTRATION
OF MORTGAGE LOANS
SECTION 8.1. MASTER SERVICER AND SUB-SERVICERS. (a) Acting directly
or through one or more Sub-Servicers as provided in Section 8.3, the Master
Servicer, as master servicer, shall service and administer the Mortgage Loans in
accordance with this Agreement on behalf of the Trustee, the Owners and the
Certificate Insurer in accordance with Accepted Servicing Practices, and shall
have full power and authority, acting alone, to do or cause to be done any and
all things in connection with such servicing and administration which it may
deem necessary or desirable.
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(b) With respect to the Mortgage Loans, the duties of the Master
Servicer shall include (i) collecting and posting of all payments, (ii)
responding to inquiries of Mortgagors or by federal, state or local government
authorities, (iii) investigating delinquencies, (iv) reporting tax information
to Mortgagors in accordance with its customary practices, (v) accounting for
collections, (vi) furnishing monthly and annual statements to the Trustee and
the Certificate Insurer, as applicable, with respect to distributions, (vii)
paying Compensating Interest and (viii) making Delinquency Advances and
Servicing Advances pursuant hereto. The Master Servicer shall follow its
customary standards, policies and procedures in performing its duties as Master
Servicer. The Master Servicer shall cooperate with the Trustee and furnish to
the Trustee with reasonable promptness information in its possession as may be
necessary or appropriate to enable the Trustee to perform its tax reporting
duties hereunder
(c) Subject to clause (e) below, without limiting the generality of
the foregoing, the Master Servicer (i) shall continue, and is hereby authorized
and empowered by the Trustee, to execute and deliver, on behalf of itself, the
Owners, the Certificate Insurer and the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of full release or discharge and
all other comparable instruments, with respect to the Mortgage Loans and with
respect to the related Properties; (ii) may consent to any modification of the
terms of any Note not expressly prohibited hereby if the effect of any such
modification (x) will not be to affect materially and adversely the security
afforded by the related Property, the timing of receipt of any payments required
hereby or the interests of the Certificate Insurer and (y) will not cause either
the Upper-Tier REMIC or the Lower-Tier to fail to qualify as a REMIC.
(d) The Master Servicer shall, in accordance with Accepted Servicing
Practices, have the right to approve applications of Mortgagors for consent to
(i) partial releases of Mortgages, (ii) alterations to Properties and (iii)
removal, demolition or division of Properties. No application for consent may be
approved by the Master Servicer unless: (x) the provisions of the related Note
and Mortgage have been complied with; (y) the Combined Loan-to-Value Ratio
(which may, for this purpose, be determined at the time of any such action in a
manner reasonably acceptable to the Trustee) and the Mortgagor's debt-to-income
ratio after any release does not exceed the Combined Loan-to-Value Ratio and
debt-to-income ratio applicable to such Mortgage Loan at origination and (z) the
lien priority of the related Mortgage is not adversely affected or reduced;
provided, however, that the foregoing requirements (x), (y) and (z) shall not
apply to any such situation described in this paragraph if such situation
results from any condemnation or easement activity by a governmental entity.
(e) The parties intend that both the Upper-Tier REMIC and the
Lower-Tier REMIC shall constitute a REMIC and that the affairs of each shall be
conducted so as to qualify each as a REMIC. In furtherance of such intention,
the Master Servicer covenants and agrees that it shall act as agent (and the
Master Servicer is hereby appointed to act as agent) on behalf of each such
REMIC and that in such capacity it shall: (i) use its best efforts to conduct
the affairs of each such REMIC at all times that any Class of Certificates are
outstanding so as to maintain the status of each such REMIC as a REMIC under the
REMIC Provisions; (ii) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of either
such REMIC or that would subject the Trust to tax and (iii) exercise reasonable
care not to allow either such REMIC to receive income from the performance of
services or from assets not permitted under the REMIC Provisions to be held by
each REMIC.
(f) Without limiting the generality of the foregoing, but subject to
Sections 8.13 and 8.14, the Master Servicer in its own name or in the name of a
Sub-Servicer may be authorized and empowered pursuant to a power of attorney
executed and delivered by the Trustee
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to execute and deliver, and may be authorized and empowered by the Trustee, to
execute and deliver, on behalf of itself, the Owners, the Certificate Insurer
and the Trustee or any of them, (i) any and all instruments of satisfaction or
cancellation or of partial or full release or discharge and all other comparable
instruments with respect to the Mortgage Loans and with respect to the
Properties, (ii) and to institute foreclosure proceedings or obtain a deed in
lieu of foreclosure so as to effect ownership of any Property on behalf of the
Trustee, and (iii) to hold title to any Property upon such foreclosure or deed
in lieu of foreclosure on behalf of the Trustee; provided, however, that Section
8.14(a) shall constitute a power of attorney from the Trustee to the Master
Servicer or any Sub-Servicer to execute an instrument of satisfaction (or
assignment of mortgage without recourse) with respect to any Mortgage Loan paid
in full (or with respect to which payment in full has been escrowed). Subject to
Sections 8.13 and 8.14, the Trustee shall furnish the Master Servicer and any
Sub-Servicer with any powers of attorney and other documents as the Master
Servicer or such Sub-Servicer shall reasonably request to enable the Master
Servicer and such Sub-Servicer to carry out their respective servicing and
administrative duties hereunder.
(g) The Master Servicer shall give prompt notice to the Trustee of
any action, of which the Master Servicer has actual knowledge, to (i) assert a
claim against the Trust or (ii) assert jurisdiction over the Trust.
(h) Servicing Advances incurred by the Master Servicer or any
Sub-Servicer in connection with the servicing of the Mortgage Loans (including
any penalties in connection with the payment of any taxes and assessments or
other charges) on any Property shall be recoverable by the Master Servicer or
such Sub-Servicer to the extent described in Section 8.9(c) and in Section
7.5(b)(xiv).
(i) The Master Servicer shall modify payments of monthly principal
and interest on any Mortgage Loan becoming subject to the terms of the Civil
Relief Act in accordance with the Master Servicer's general policies of the
comparable mortgage loans subject to the Civil Relief Act.
SECTION 8.2. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS. (a) The
Master Servicer shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any applicable Mortgage Insurance
Policies, follow Accepted Servicing Practices. The Master Servicer may in its
discretion waive any assumption fees, late payment charges, charges for checks
returned for insufficient funds, prepayment fees, if any, or other fees which
may be collected in the ordinary course of servicing the Mortgage Loans,
In addition, the Master Servicer may, if a Mortgagor is in default
or about to be in default because of a Mortgagor's financial condition, arrange
with the Mortgagor a schedule for the payment of delinquent payments due on the
related Mortgage Loan; provided, however, the Master Servicer shall not
reschedule the payment of delinquent payments more than one time in any twelve
consecutive months with respect to any Mortgagor and provided further that such
modifications shall not be made in excess of 5% of the aggregate of the Group I
Original Balance and the Group II Original Balance without the prior written
consent of the Certificate Insurer; provided, further, however, that, if the
Certificate Insurer has not given its consent within five (5) Business Days
after notice from the Master Servicer, the Certificate Insurer shall be deemed
to have given its consent to such modification or rescheduling for payments of
delinquent payments; provided, however, that such notice and consent shall not
be required in the event that the Master Servicer determines, in its good faith
business judgment that such modification is legally required to be made prior to
such five day period, in which case the Master Servicer shall give the
Certificate Insurer immediate notice of such action.
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(b)The Master Servicer shall hold in escrow on behalf of the related
Mortgagor all Prepaid Installments received by it, and shall apply such Prepaid
Installments as directed by such Mortgagor and as set forth in the related Note.
SECTION 8.3. SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUB-SERVICERS. The Master Servicer may and is hereby authorized to perform any
of its servicing responsibilities with respect to all or certain of the Mortgage
Loans through a Sub-Servicer, which may be an Affiliate. Pursuant to the
foregoing, the Master Servicer may enter into Sub-Servicing Agreements for any
servicing and administration of Mortgage Loans with any institution which is in
compliance with the laws of each state necessary to enable it to perform its
obligations under such Sub-Servicing Agreement. The Master Servicer shall give
notice to the Certificate Insurer and the Trustee of the appointment of any
Sub-Servicer which is not a Master Servicer Affiliate. The Master Servicer shall
also furnish to the Certificate Insurer and the Trustee a copy of the
Sub-Servicing Agreement, except when the Sub-Servicer is a Master Servicer
Affiliate. For purposes of this Agreement, the Master Servicer shall be deemed
to have received payments on Mortgage Loans when any Sub-Servicer has received
such payments. Any such Sub-Servicing Agreement shall be consistent with and not
violate the provisions of this Agreement.
By delivery of the Certificate Insurance Policy, the Certificate
Insurer is deemed to have approved Advanta National Bank and Advanta Finance
Corp. as Sub-Servicers hereunder.
SECTION 8.4. SUCCESSOR SUB-SERVICERS. The Master Servicer may
terminate any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement and either directly service the
related Mortgage Loans itself or enter into a Sub-Servicing Agreement with a
successor Sub-Servicers that qualifies under Section 8.3.
SECTION 8.5 LIABILITY OF MASTER SERVICER. The Master Servicer shall
not be relieved of its obligations under this Agreement notwithstanding any
Sub-Servicing Agreement between the Master Servicer and a Sub-Servicer or
otherwise, and the Master Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in such Sub-Servicing
Agreement shall be deemed to limit or modify this Agreement. The Trust shall not
indemnify the Master Servicer for any losses due to the Master Servicer's
negligence.
SECTION 8.6. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICER AND
TRUSTEE OR THE OWNERS. Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Master Servicer alone and the Certificate
Insurer, the Trustee and the Owners shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect to
any Sub-Servicer except as set forth in Section 8.7.
SECTION 8.7. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENT BY
TRUSTEE. In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Master Servicer
hereunder by the Trustee pursuant to Section 8.20, it is understood and agreed
that the Master Servicer's rights and obligations under any Sub-Servicing
Agreement then in force between the Master Servicer and a Sub-Servicer may be
assumed or terminated by the Trustee at its option. Any termination fee due
under any such
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Sub-Servicing agreement shall be paid by the preceding Master Servicer but in no
event shall the Trustee be liable for any such fee.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party documents and
records relating to each Sub-Servicing Agreement and an accounting of amounts
collected and held by it and otherwise use its best reasonable efforts to effect
the orderly and efficient transfer of the Sub-Servicing Agreements to the
assuming party, without the payment of any fee by the Trustee, notwithstanding
any contrary provision in any Sub-Servicing Agreement.
SECTION 8.8. PRINCIPAL AND INTEREST ACCOUNT. (a) The Master Servicer
and/or each Sub-Servicer, as applicable, shall establish and maintain at one or
more Designated Depository Institutions in the name of the Trust for the benefit
of the Owners of the Certificates and the Certificate Insurer, as their
interests may appear, a Principal and Interest Account. The establishment of the
Principal and Interest Account shall be evidenced by the Master Servicer's
delivery of a notice in the form of Exhibit B hereto, properly completed.
Subject to Subsections (c) and (e) below, the Master Servicer and
any Sub-Servicer shall deposit all receipts of principal and accrued interest
related to the Mortgage Loans in each such Mortgage Loan Group to the Principal
and Interest Account on a daily basis (but no later than the second Business Day
after receipt).
(b) All funds in the Principal and Interest Account may only be held
(i) uninvested, up to the limits insured by the FDIC or (ii) invested in
Eligible Investments. The Principal and Interest Account shall be held in trust
in the name of the Trust and for the benefit of the Owners of the Certificates
and the Certificate Insurer. Any investment earnings on funds held in the
Principal and Interest Account shall be for the account of the Master Servicer.
Any references herein to amounts on deposit in the Principal and Interest
Account shall refer to amounts net of such investment earnings. Any investment
losses are at the expense of the Master Servicer and shall be replaced on or
prior to the Remittance Date.
(c) With respect to the Mortgage Loans and subject to Section
8.8(e), the Master Servicer shall deposit to the Principal and Interest Account
all principal collected and interest accrued on or after the Initial Cut-Off
Date, related Subsequent Cut-Off Date or Replacement Cut-Off Date including any
Prepaid Installments, Prepayments, Net Liquidation Proceeds, all Loan Purchase
Prices and Substitution Amounts received or paid by the Master Servicer, other
recoveries or amounts received by the Master Servicer, Compensating Interest and
Delinquency Advances together with any amounts which are reimbursable from such
Principal and Interest Account, but net of (i) the Servicing Fee and other
servicing compensation due to the Master Servicer as permitted by Section 8.15
hereof, (ii) principal (including Prepayments) collected on the related Mortgage
Loans prior to the Initial Cut-Off Date, Subsequent Cut-Off Date or Replacement
Cut-Off Date (iii) interest accruing on the related Mortgage Loans prior to the
Initial Cut-Off Date, Subsequent Cut-Off Date or Replacement Cut-Off Date and
(iv) Net Liquidation Proceeds to the extent such Net Liquidation Proceeds exceed
the sum of the Loan Balance of the related Mortgage Loan and accrued and unpaid
interest thereon.
(d) (i) The Master Servicer may make withdrawals from the Principal
and Interest Account only for the following purposes:
(1) to effect the timely remittance to the Trustee of the
Monthly Remittance Amounts due on the Remittance Date;
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(2) to reimburse itself pursuant to Section 8.9(a) hereof for
unreimbursed Delinquency Advances and Servicing Advances and
Nonrecoverable Advances;
(3) to withdraw investment earnings on amounts on deposit in
the Principal and Interest Account, if such investment earnings have
been deposited in the Principal and Interest Account;
(4) to withdraw amounts that have been deposited to a
Principal and Interest Account in error;
(5) to clear and terminate each Principal and Interest Account
following the termination of the Trust pursuant to Article X; and
(6) to invest in Eligible Investments.
(ii) On the tenth day of each month, the Master Servicer shall send
to the Trustee a computer tape, detailing the payments on the Mortgage
Loans during the prior Remittance Period. Such tape shall be in the form
and have the specifications as may be agreed to between the Master
Servicer and the Trustee from time to time. The Certificate Insurer shall
have the right to request this computer tape upon providing 3 Business
Days written notice to the Master Servicer. Upon any change in the format
of the electronic medium maintained by the Master Servicer in respect of
the Mortgage Loans, the Master Servicer shall deliver a copy of such
electronic medium to the Trustee.
(iii) On each Remittance Date the Master Servicer shall remit to the
Trustee by wire transfer in immediately available funds for deposit in the
Certificate Account the amounts specified in Section 7.5(a) of this
Agreement, (A) for Group I, the Group I Monthly Remittance Amount and (B)
for Group II, the Group II Monthly Remittance Amount and the Group II
Principal Remittance Amount.
(e) To the extent that the ratings, if any, then assigned to the
unsecured debt of the Master Servicer or of the Master Servicer's ultimate
corporate parent are satisfactory to the Certificate Insurer and each Rating
Agency, then the requirement to maintain the Principal and Interest Account and
deposit of principal collections and accrued interest may be waived by an
instrument signed by the Certificate Insurer and each Rating Agency, and the
Master Servicer may be allowed to co-mingle with its general funds the amounts
otherwise required to be deposited to the Principal and Interest Account, on
such terms and subject to such conditions as the Certificate Insurer and each
Rating Agency may permit.
SECTION 8.9. DELINQUENCY ADVANCES, COMPENSATING INTEREST AND
SERVICING ADVANCES. (a) The Master Servicer is required, not later than each
Remittance Date, to deposit into the Principal and Interest Account an amount
equal to the sum of the interest portions accrued (net of the Servicing Fees and
certain other administrative amounts, if any) with respect to Delinquent
Mortgage Loans during the related Remittance Period but not collected on or
prior to such Remittance Date, but only if, in its good faith business judgment,
the Master Servicer reasonably believes that such amount will ultimately be
recoverable from the related Mortgage Loan. Such amounts are "Delinquency
Advances".
The Master Servicer shall be permitted to fund its payment of
Delinquency Advances on any Remittance Date and to reimburse itself for any
Delinquency Advances paid
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from the Master Servicer's own funds, from subsequent collections on the related
Mortgage Loan. The Master Servicer may use funds deposited to the Principal and
Interest Account subsequent to the related Remittance Period and shall deposit
into the Principal and Interest Account with respect thereto (i) late
collections from the Mortgagor whose Delinquency gave rise to the shortfall
which resulted in such Delinquency Advance and (ii) Net Liquidation Proceeds
recovered on account of the related Mortgage Loan to the extent of the amount of
aggregate Delinquency Advances related thereto or (iii) from its own funds. If
not therefore recovered from the related Mortgagor or the related Net
Liquidation Proceeds, Delinquency Advances constituting Nonrecoverable Advances
shall be recoverable pursuant to Section 7.5(b)(xiv) hereof.
The parties hereto intend the provision of this Section 8.9(a) to
comply with Treasury Regulation Section 1.860G-2(c)(3).
(b) On or prior to each Remittance Date, the Master Servicer shall
deposit in the Principal and Interest Account with respect to any full
Prepayment received on a Mortgage Loan during the related Remittance Period out
of its own funds without any right of reimbursement therefor, an amount equal to
the difference between (x) 30 days' interest at the Mortgage Loan's Coupon Rate
(less the Servicing Fee) on the Loan Balance of such Mortgage Loan as of the
first day of the related Remittance Period and (y) the interest (less the
Servicing Fee) paid by the Mortgagor with respect to the Mortgage Loan during
such Remittance Period. Such amount is "Compensating Interest". The Master
Servicer shall in no event be required to pay Compensating Interest with respect
to any Remittance Period in an amount in excess of the aggregate Servicing Fee
received by the Master Servicer with respect to all Mortgage Loans for such
Remittance Period nor shall it be required to pay Compensating Interest due to
partial prepayments or Civil Relief Act Shortfalls. The amount of Compensating
Interest in excess of the Servicing Fee is a "Prepayment Interest Shortfall".
The parties hereto intend the provisions of this Section 8.9(b) to
comply with Treasury Regulation Section 1.860G-2(e).
(c) The Master Servicer will pay all "out-of-pocket" costs and
expenses incurred by the Master Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) Preservation
Expenses (including the payment of flood insurance premiums), (ii) any
enforcement or judicial proceedings, including (a) foreclosures, and (b) other
legal actions and costs associated therewith that potentially affect the
existence, validity, priority, enforceability or collectibility of the Mortgage
Loans, including collection agency fees and costs of pursuing or obtaining
personal judgments, garnishments, levies, attachment and similar actions, (iii)
the conservation, management, liquidation, sale or other disposition of any
Mortgaged Property acquired in satisfaction of the related Mortgage Loan,
including reasonable fees paid to any independent contractor in connection
therewith, and (iv) advances to keep liens current; and with respect to any of
the foregoing, the Master Servicer is only required to pay such costs and
expenses to the extent the Master Servicer reasonably believes such costs and
expenses will be recoverable from the related Mortgage Loan. Each such amount so
paid will constitute a "Servicing Advance". The Master Servicer may recover
Servicing Advances (x) from the Mortgagors to the extent permitted by the
Mortgage Loans, (y) from Liquidation Proceeds realized upon the liquidation of
the related Mortgage Note and (z) as provided in Section 7.5(b)(xiv) hereof. In
no case may the Master Servicer recover Servicing Advances from principal and
interest payments on any other Mortgage Loan or from any amounts relating to any
other Mortgage Loan except as provided pursuant to Section 7.5(b)(xiv) hereof.
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The parties intend that the provisions of this Section 8.9(c) comply
with Treasury Regulation Section 1.860G-2(c)(3)(iii).
(d) On the first Remittance Date following the Startup Day, the
Master Servicer shall make an advance (a "Special Advance") with respect to each
Mortgage Loan Group equal to the sum of one-month's interest, calculated at the
weighted average Pass-Through Rate (applicable to such Payment Date, as the case
may be, for the classes of Class A Certificates related to such Group) with
respect to all Mortgage Loans not having a payment due prior to September 1999;
the amounts of such Special Advances shall be included in the related Interest
Remittance Amount. Reimbursement of Special Advances shall be made only as
provided in Section 7.5(b)(xiv).
SECTION 8.10. PURCHASE OF MORTGAGE LOANS. The Master Servicer may,
but is not obligated to, purchase for its own account any Mortgage Loan which
becomes Delinquent, in whole or in part, as to four consecutive monthly
installments or any Mortgage Loan as to which enforcement proceedings have been
brought by the Master Servicer or by any Sub-Servicer pursuant to Section 8.13.
Any such Mortgage Loan shall be purchased by the Master Servicer on a Remittance
Date at a purchase price equal to the Loan Purchase Price thereof, which
purchase price shall be deposited in the Principal and Interest Account.
Notwithstanding the foregoing, the Master Servicer may not purchase any such
Mortgage Loan unless the Master Servicer has delivered to the Trustee and the
Certificate Insurer an opinion of counsel experienced in federal income tax
matters acceptable to the Trustee to the effect that such a purchase would not
constitute a Prohibited Transaction for the Trust or otherwise subject the Trust
to tax and would not jeopardize the status of either the Upper-Tier REMIC or the
Lower-Tier REMIC as a REMIC.
SECTION 8.11. MAINTENANCE OF INSURANCE. (a) The Master Servicer
shall cause to be maintained with respect to each Mortgage Loan either a blanket
insurance policy as described in Section 8.11(c) hereof or a hazard insurance
policy that provides for fire and extended coverage, and which provides for a
recovery by the Master Servicer on behalf of the Trust of insurance proceeds
relating to such Mortgage Loan in an amount not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the minimum amount
required to compensate for damage or loss on a replacement cost basis and (iii)
the full insurable value of the premises.
(b) If the Mortgage Loan at the time of origination relates to a
Property in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Master Servicer will
cause to be maintained with respect thereto either a blanket policy as described
in Section 8.11(c) hereof or a flood insurance policy in a form meeting the
requirements of the current guidelines of the Federal Insurance Administration.
Such policy shall provide for a recovery by the Master Servicer on behalf of the
Trust of insurance proceeds relating to such Mortgage Loan of not less than the
least of (i) the outstanding principal balance of the Mortgage Loan, (ii) the
minimum amount required to compensate for damage or loss on a replacement cost
basis and (iii) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973. The Master Servicer shall indemnify the
Trust and the Certificate Insurer out of the Master Servicer's own funds for any
loss to the Trust and the Certificate Insurer resulting from the Master
Servicer's failure to maintain the insurance required by this Section.
(c) In the event that the Master Servicer shall obtain and maintain
a blanket insurance policy insuring against fire, flood and hazards of extended
coverage on all of the Mortgage Loans, then, to the extent such policy names the
Master Servicer as loss payee and
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provides coverage in an amount equal to the aggregate unpaid principal balance
on the Mortgage Loans without co-insurance, and otherwise complies with the
requirements of this Section 8.11, the Master Servicer shall be deemed
conclusively to have satisfied its obligations with respect to fire, flood and
hazard insurance coverage under this Section 8.11. Such blanket policy may
contain a deductible clause, in which case the Master Servicer shall, in the
event that there shall not have been maintained on the related Property a policy
complying with paragraphs (a) and (b) of this Section 8.11, and there shall have
been a loss which would have been covered by such policy, deposit in the
Principal and Interest Account from the Master Servicer's own funds the
difference, if any, between the amount that would have been payable under a
policy complying with paragraphs (a) and (b) of this Section 8.11 and the amount
paid under such blanket policy. Upon the request of the Trustee or the
Certificate Insurer, the Master Servicer shall cause to be delivered to the
Trustee or the Certificate Insurer, a certified true copy of such policy.
The parties hereto intend that the provisions of this Section 8.11
comply with Treasury Regulation Section 1.860G-2(c)(3)(ii).
SECTION 8.12. DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION
AGREEMENTS. When a Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Note; provided, however, that the Master Servicer
shall not exercise any such right if (i) the "due-on-sale" clause, in the
reasonable belief of the Master Servicer, is not enforceable under applicable
law or (ii) the Master Servicer reasonably believes that to permit an assumption
of the Mortgage Loan would not materially and adversely affect the interest of
the Owners or of the Certificate Insurer. In such event, the Master Servicer
shall enter into an assumption and modification agreement with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Note and, unless prohibited by applicable law or
the Mortgage Documents, the Mortgagor remains liable thereon. If the foregoing
is not permitted under applicable law, the Master Servicer is authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as Mortgagor and becomes liable under the Note; provided, however,
that to the extent any such substitution of liability agreement would be
delivered by the Master Servicer outside of its usual procedures for mortgage
loans held in its own portfolio the Master Servicer shall, prior to executing
and delivering such agreement, obtain the prior written consent of the Control
Party. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Master
Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement, which copy shall be added by the
Trustee to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Master Servicer shall
be responsible for recording or causing the recordation any such assumption or
substitution agreements. In connection with any such assumption or substitution
agreement, the required monthly payment on the related Mortgage Loan shall not
be changed but shall remain as in effect immediately prior to the assumption or
substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Master
Servicer or the Sub-Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Master Servicer as additional servicing compensation.
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Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master 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 by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason whatsoever.
SECTION 8.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) The
Master Servicer shall foreclose upon or otherwise comparably effect the
ownership on behalf of the Trust of Properties relating to defaulted Mortgage
Loans as to which no satisfactory arrangements can be made for collection of
Delinquent payments and which the Master Servicer has not purchased pursuant to
Section 8.10. In connection with such foreclosure or other conversion, the
Master Servicer shall exercise such of the rights and powers vested in it
hereunder, and use the same degree of care and skill in their exercise or use,
as prudent mortgage lenders would exercise or use under the circumstances in the
conduct of their own affairs, including, but not limited to, advancing funds for
the payment of taxes, amounts due with respect to Senior Liens, and insurance
premiums. Any amounts so advanced shall constitute "Servicing Advances" within
the meaning of Section 8.9(c) hereof. The Master Servicer shall sell any REO
Property within 35 months of its acquisition by the Trust, unless the Master
Servicer obtains for the Trustee an opinion of counsel experienced in federal
income tax matters, addressed to the Trustee, the Certificate Insurer and the
Master Servicer, to the effect that the holding by the Trust of such REO
Property for any greater period will not result in the imposition of taxes on
"Prohibited Transactions" of the Trust or any REMIC therein as defined in
Section 860F of the Code or cause either the Upper-Tier REMIC or the Lower-Tier
REMIC to fail to qualify as a REMIC under the REMIC Provisions at any time that
any Certificates are outstanding.
Notwithstanding the generality of the foregoing provisions, the
Master Servicer shall manage, conserve, protect and operate each REO Property
for the Owners and the Certificate Insurer solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by the Upper-Tier REMIC or the Lower-Tier
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Owners, rent the same, or any part thereof, as the Master
Servicer deems to be in the best interest of the Owners for the period prior to
the sale of such REO Property. The Master Servicer shall take into account the
existence of any hazardous substances, hazardous wastes or solid wastes, as such
terms are defined in the Comprehensive Environmental Response Compensation and
Liability Act, the Resource Conservation and Recovery Act of 1976, or other
federal, state or local environmental legislation, on a REO Property in
determining whether to foreclose upon or otherwise comparably convert the
ownership of such REO Property. With respect to any Mortgage Loan secured by a
mixed use REO Property, the Master Servicer shall, prior to foreclosing upon or
otherwise comparably effecting the ownership in the name of the Master Servicer
on behalf of the Trust, either (x) perform a "phase one environmental study" of
such REO Property or (y) repurchase such REO Property at the Loan Purchase
Price.
(b) The Master Servicer shall determine, with respect to each
defaulted Mortgage Loan, when it has recovered, whether through trustee's sale,
foreclosure sale or otherwise, all amounts it expects to recover from or on
account of such defaulted Mortgage Loan
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(exclusive of any possibility of a deficiency judgment), whereupon such Mortgage
Loan shall become a "Liquidated Loan" and, if requested, shall promptly deliver
to the Certificate Insurer a related liquidation report with respect to such
Liquidated Loan.
SECTION 8.14. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES. (a)
Upon the payment in full of any Mortgage Loan (including the repurchase of any
Mortgage Loan or any liquidation of such Mortgage Loan through foreclosure or
otherwise), or the receipt by the Master Servicer or any Sub-Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer or any Sub-Servicer shall deliver to the
Trustee a Master Servicer's Trust Receipt. Upon receipt of such Master
Servicer's Trust Receipt, the Trustee shall promptly release the related
Mortgage File, as directed by the Master Servicer in the Master Servicer's Trust
Receipt. Upon any such payment in full, or the receipt of such notification that
such funds have been placed in escrow, the Master Servicer or any Sub-Servicer
is authorized to give, as attorney-in-fact for the Trustee and the mortgagee
under the Mortgage which secured the Note, an instrument of satisfaction (or
assignment of Mortgage without recourse) regarding the Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Principal and Interest Account. In
lieu of executing any such satisfaction or assignment the Master Servicer or any
Sub-Servicer may prepare and submit to the Trustee, a satisfaction (or
assignment without recourse, if requested by the Person or Persons entitled
thereto) in form for execution by the Trustee with all requisite information
completed by the Master Servicer or any Sub-Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment and deliver the
same with the related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any applicable Mortgage
Insurance Policy, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon request of the
Master Servicer or any Sub-Servicer and delivery to the Trustee of a Master
Servicer's Trust Receipt, release the related Mortgage File to the Master
Servicer and shall execute such documents as shall be necessary to the
prosecution of any such proceedings, including, without limitation, an
assignment without recourse of the related Mortgage to the Master Servicer;
provided that the Master Servicer shall not have received and not returned at
any one time more than 10% of the entire number of Mortgage Files. The Trustee
shall complete in the name of the Trustee any endorsement in blank on any Note
prior to releasing such Note to the Master Servicer or any Sub-Servicer. Such
receipt shall obligate the Master Servicer or any Sub-Servicer to return the
Mortgage File to the Trustee when the need therefor by the Master Servicer or
any Sub-Servicer no longer exists unless the Mortgage Loan shall be liquidated,
in which case, upon receipt of the liquidation information, in physical or
electronic form acceptable to the Master Servicer and the Trustee, a copy of the
Master Servicer's Trust Receipt shall be released by the Trustee to the Master
Servicer or any Sub-Servicer.
(c) No costs associated with the procedures described in this
Section 8.14 shall be an expense of the Trust.
(d) The provisions set forth in Subsections (a) and (b) may be
superseded by any waiver of the Document Delivery Requirement as may be given by
the Certificate Insurer and the Rating Agencies pursuant to Section 3.5(j)
hereof.
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(e) Each Master Servicer's Trust Receipt may be delivered to the
Trustee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Master Servicer and the Trustee shall mutually agree. The Trustee shall
promptly release the related Mortgage File(s) no later than seven (7) business
days of receipt of a properly completed Master Servicer's Trust Receipt or such
shorter period as may be agreed upon by the Master Servicer and the Trustee.
Receipt of a Master Servicer's Trust Receipt shall be authorization to the
Trustee to release such Mortgage Files, provided the Trustee has determined that
such Master Servicer's Trust Receipt has been executed, with respect to clauses
(i) or (ii) above, or approved, with respect to clause (iii) above, by an
Authorized Officer of the Master Servicer or any Sub-Servicer, and so long as
the Trustee complies with its duties and obligations under this Agreement. If
the Trustee is unable to release the Mortgage Files within the time frames
previously specified, the Trustee shall immediately notify the Master Servicer
or any Sub-Servicer indicating the reason for such delay, but in no event shall
such notification be later than five business days after receipt of a Master
Servicer's Trust Receipt. If the Master Servicer is required to pay penalties or
damages due to the Trustee's negligent failure to release the related Mortgage
File or the Trustee's negligent failure to execute and release documents in a
timely manner, the Trustee shall be liable for such penalties or damages.
SECTION 8.15. SERVICING COMPENSATION. As compensation for its
activities hereunder, the Master Servicer shall be entitled to retain the amount
of the Servicing Fee with respect to each Mortgage Loan. Additional servicing
compensation in the form of investment income on the Principal and Interest
Account, the Capitalized Interest Account, and on the Certificate Account,
prepayment charges, release fees, bad check charges, assumption fees, late
payment charges, any other servicing-related fees, Net Liquidation Proceeds not
required to be deposited in the Principal and Interest Account pursuant to
Section 8.8(c)(v) and similar items may, to the extent collected from
Mortgagors, be retained by the Master Servicer.
SECTION 8.16. ANNUAL STATEMENT AS TO COMPLIANCE. The Master
Servicer, at its own expense, will deliver to the Trustee and the Certificate
Insurer, on or before the last day of March of each year, commencing in the year
2000, an Officer's Certificate stating, as to each signer thereof, that (i) a
review of the activities of the Master Servicer during such preceding calendar
year and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Master Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Master
Servicer to remedy such defaults.
SECTION 8.17. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORTS. On or before the last day of March of each year, commencing in the year
2000, the Master Servicer, at its own expense, shall cause to be delivered to
the Trustee and the Certificate Insurer a letter or letters of a firm of
independent, nationally recognized certified public accountants reasonably
acceptable to the Control Party stating that such firm has, with respect to the
Master Servicer's overall servicing operations (i) performed applicable tests in
accordance with the compliance testing procedures as set forth in Appendix 3 of
the Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees or (ii)
examined such operations in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers, and in either case stating such
firm's conclusions relating thereto or (iii) examined such operations in
accordance with the requirements of SAS 70.
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SECTION 8.18. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS. The Master Servicer shall provide to the Trustee
and the Certificate Insurer access to the documentation regarding the Mortgage
Loans required by applicable state and federal regulations, such access being
afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Master Servicer.
SECTION 8.19. ASSIGNMENT OF AGREEMENT. The Master Servicer may not
assign its obligations under this Agreement, in whole or in part, unless it
shall have first obtained the written consent of the Trustee and the Certificate
Insurer, which such consent shall not be unreasonably withheld; provided,
however, that any assignee must meet the eligibility requirements set forth in
Section 8.20(g) hereof for a successor servicer; and provided, further, this
Section 8.19 does not apply to the appointment of Sub-Servicers or to any
assignment to a Master Servicer Affiliate. Notice of any such assignment shall
be given by the Master Servicer to the Trustee, the Certificate Insurer and
Moody's.
SECTION 8.20. REMOVAL OF MASTER SERVICER; RESIGNATION OF MASTER
SERVICER. (a) The Trustee, with the consent of the Certificate Insurer (or the
Owners pursuant to Section 6.11 hereof) may remove the Master Servicer upon the
occurrence of any of the following events:
(i) The Master Servicer shall fail to deliver to the Trustee any
proceeds or required payment, which failure continues unremedied for five
Business Days following written notice to an Authorized Officer of the
Master Servicer from the Trustee or from any Owner.
(ii) The Master Servicer shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or similar
entity with respect to itself or its property, (ii) admit in writing its
inability to pay its debts generally as they become due, (iii) make a
general assignment for the benefit of creditors, (iv) be adjudicated a
bankrupt or insolvent, (v) commence a voluntary case under the federal
bankruptcy laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement with creditors
or an order for relief or seeking to take advantage of any insolvency law
or file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding or
(vi) take corporate action for the purpose of effecting any of the
foregoing;
(iii) If without the application, approval or consent of the Master
Servicer, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the Master
Servicer an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or similar entity with respect
to the Master Servicer or of all or any substantial part of its assets, or
other like relief in respect thereof under any bankruptcy or insolvency
law, and, if such proceeding is being contested by the Master Servicer in
good faith, the same shall (A) result in the entry of an order for relief
or any such adjudication or appointment or (B) continue undismissed or
pending and unstayed for any period of seventy-five (75) consecutive days;
or
(iv) The Master Servicer shall fail to perform any one or more of
its obligations hereunder other than the obligations contemplated by
Subsection 8.20(i) above, and shall continue in default thereof for a
period of sixty (60) days after notice by
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the Trustee or the Certificate Insurer of said failure; provided, however,
that if the Master Servicer can demonstrate to the reasonable satisfaction
of the Control Party that it is diligently pursuing remedial action, then
the cure period may be extended with the written approval of the Control
Party; or
(v) The Master Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 3.2 which materially
and adversely affects the interests of the Owners or the Certificate
Insurer for a period of thirty (30) days after the Master Servicer's
discovery or receipt of notice thereof; provided, however, that if the
Master Servicer can demonstrate to the reasonable satisfaction of the
Control Party that it is diligently pursuing remedial action, then the
cure period may be extended with the written approval of the Control
Party.
(b) The Certificate Insurer also may remove the Master Servicer upon
the occurrence of any of the following events:
(i) upon the making of any Insured Payment; provided, however, that
the Certificate Insurer shall have no right to remove the Master Servicer
under this clause (i) if the Master Servicer can demonstrate to the
reasonable satisfaction of the Certificate Insurer that such event was due
to circumstances beyond the control of the Master Servicer; or
(ii) the failure by the Master Servicer to make any required
Servicing Advance; or
(iii) the failure by the Master Servicer to perform any one or more
of its obligations hereunder or under the Insurance Agreement, which
failure materially and adversely affects the interests of the Certificate
Insurer and the Trustee; or
(iv) the failure by the Master Servicer to make any required
Delinquency Advance, any Special Advance or to pay any Compensating
Interest; or
(v) the occurrence of a Servicer Termination Loss Trigger or of a
Servicer Termination Delinquency Trigger, as such terms are defined in the
Insurance Agreement; or
(vi) the enactment of any law by a legislative body that declares,
or any finding or ruling by a court of competent jurisdiction, that the
Insurance Agreement or this Agreement is not valid and binding on the
Sponsor or the Master Servicer.
provided, however, with respect to clause (iv), if the Master Servicer can
demonstrate to the reasonable satisfaction of the Control Party that any such
event was due to circumstances beyond the control of the Master Servicer, such
event shall not be considered an event of termination of the Master Servicer;
provided, however, that (x) prior to any removal of the Master Servicer by the
Control Party pursuant to clauses (i) or (ii) of this Section 8.20(b), the
Master Servicer shall first have been given by the Control Party and by
registered or certified mail, notice of the occurrence of one or more of the
events set forth in clauses (i), (ii) or (iii) above and the Master Servicer
shall not have remedied, or shall not have taken actions satisfactory to the
Control Party to remedy, such event or events within 30 days (60 days with
respect to clause (iii)) after the Master Servicer's receipt of
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such notice (provided, however, that if the Master Servicer can demonstrate to
the reasonable satisfaction of the Control Party that it is diligently pursuing
remedial action, then the cure period in each case may be extended with the
written approval of the Control Party) and (y) in the event of the refusal or
inability of the Master Servicer to make any required Delinquency Advance or
Special Advance or to pay any Compensating Interest (as described in clause
(iv)) or Monthly Remittance, such removal shall be effective (without the
requirement of any action on the part of the Certificate Insurer or of the
Trustee) at 4 p.m. on the second Business Day following the day on which the
Trustee or the Certificate Insurer notifies an Authorized Officer of the Master
Servicer that a required Delinquency Advance or Special Advance has not been
received by the Trustee. Upon the Trustee's determination that a required
Delinquency Advance or Special Advance or payment of Compensating Interest has
not been made by the Master Servicer, the Trustee shall so notify in writing an
Authorized Officer of the Master Servicer and the Certificate Insurer as soon as
is reasonably practical.
(c) The Master Servicer shall not resign from the obligations and
duties hereby imposed on it, except upon determination that its duties hereunder
are no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer at the date of this Agreement. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an opinion of counsel to such effect which shall be delivered to
the Trustee and the Certificate Insurer.
(d) No removal or resignation of the Master Servicer shall become
effective until the Trustee or a successor servicer shall have assumed the
Master Servicer's responsibilities and obligations in accordance with this
Agreement. If no successor servicer is available, the Trustee shall act as
successor servicer and perform all of the obligations of this Agreement,
including, without limitation, making Delinquency Advances, Servicing Advances
and paying Compensating Interest; provided, however, that the Trustee will not
be obligated to act as successor servicer if it is legally unable to perform its
duties hereunder.
(e) Upon removal or resignation of the Master Servicer, the Master
Servicer also shall promptly deliver or cause to be delivered to a successor
servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Master Servicer has
maintained for the Mortgage Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Master Servicer's possession.
(f) Any collections received by the Master Servicer after removal or
resignation shall be endorsed by it to the Trustee and remitted directly and
immediately to the Trustee or the successor Master Servicer.
(g) Upon removal or resignation of the Master Servicer, the Trustee
(x) may solicit bids for a successor servicer as described below, and (y)
pending the appointment of a successor Master Servicer as a result of soliciting
such bids, shall serve as Master Servicer. The Trustee shall, if it is unable to
obtain a qualifying bid and is prevented by law from acting as Master Servicer,
appoint, or petition a court of competent jurisdiction to appoint, any housing
and home finance institution, bank or mortgage servicing institution which has
shareholders' equity of not less than $10,000,000, as determined in accordance
with generally accepted accounting principles, and acceptable to the Certificate
Insurer as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the
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Master Servicer hereunder. The compensation of any successor servicer
(including, without limitation, the Trustee) so appointed shall be the aggregate
Servicing Fees, together with the other servicing compensation in the form of
assumption fees, late payment charges or otherwise as provided in Sections 8.8
and 8.15; provided, however, that if the Trustee acts as successor Master
Servicer then the Sponsor agrees to pay to the Trustee at such time that the
Trustee becomes such successor Master Servicer a fee of twenty-five dollars
($25.00) for each Mortgage Loan then included in the Trust Estate. The Trustee
shall be obligated to serve as successor Master Servicer whether or not the
$25.00 fee described in the preceding sentence is paid by the Sponsor, but shall
in any event be entitled to receive, and to enforce payment of, such fee from
the Sponsor.
(h) In the event the Trustee solicits bids as provided above, the
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 Master Servicer shall be entitled to the compensation set forth in
clause (g) above. Within thirty days after any such public announcement, the
Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid. The Trustee shall deduct from any sum
received by the Trustee from the successor to the Master 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. After such deductions, the remainder of such sum
shall be paid by the Trustee to the Master Servicer at the time of such sale,
transfer and assignment to the Master Servicer's successor.
(i) The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Master Servicer agrees to cooperate with the Trustee and any
successor Master Servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Master Servicer, as applicable, all documents and
records reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and shall promptly also transfer to the Trustee or such
successor Master Servicer, as applicable, all amounts which then have been or
should have been deposited in the Principal and Interest Account by the Master
Servicer or which are thereafter received with respect to the Mortgage Loans.
Neither the Trustee nor any other successor Master 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 Master
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 Master Servicer or (iii) any breaches of a predecessor Master Servicer.
(j) The Trustee or any other successor Master Servicer, upon
assuming the duties of Master Servicer hereunder, shall immediately make all
Delinquency Advances and pay all Compensating Interest which the Master Servicer
has theretofore failed to remit with respect to the Mortgage Loans; provided,
however, that if the Trustee is acting as successor Master Servicer, the Trustee
shall only be required to make Delinquency Advances (including the Delinquency
Advances required to be made by the predecessor Master Servicer but not so
deposited) if, in the Trustee's reasonable good faith judgment, such Delinquency
Advances will ultimately be recoverable from the related Mortgage Loans.
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(k) The Master Servicer which is being removed or is resigning shall
give notice to the Mortgagors and to each Rating Agency of the transfer of the
servicing to the successor.
(l) The Trustee shall give notice to the Certificate Insurer, each
Rating Agency and to the Owners of the occurrence of any event specified in
Section 8.20(a) of which the Trustee has knowledge.
(m) Notwithstanding anything herein to the contrary, upon
termination of the Master Servicer hereunder, any liabilities of the Master
Servicer which accrued prior to such termination shall survive such termination.
SECTION 8.21. INSPECTIONS BY THE CERTIFICATE INSURER AND THE
TRUSTEE; ERRORS AND OMISSIONS INSURANCE. (a) At any reasonable time during
business hours and from time to time upon five Business Days' reasonable notice,
the Certificate Insurer, the Trustee, or any agents or representatives thereof
may inspect the Master Servicer's servicing operations and discuss the servicing
operations of the Master Servicer with any of its officers or directors. The
reasonable costs and expenses incurred by the Master Servicer in connection with
any such examinations or discussions shall be paid by the Master Servicer.
(b) The Master Servicer agrees to maintain errors and omissions
coverage and a fidelity bond, each at least to the extent generally maintained
by prudent mortgage loan servicers having servicing portfolios of a similar
size.
SECTION 8.22. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF MASTER SERVICER. Any corporation into which the Master Servicer may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Master
Servicer shall be a party, or any corporation succeeding to all or substantially
all of the business of the Master Servicer, shall be the successor of the Master
Servicer hereunder upon notice to the Certificate Insurer, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto provided that such corporation is a housing and home finance institution,
bank or mortgage servicing institution which has shareholders' equity of not
less than $10,000,000, as determined in accordance with generally accepted
accounting principles.
SECTION 8.23. NOTICES OF MATERIAL EVENTS. The Master Servicer shall
give prompt notice to the Certificate Insurer, the Trustee, and each Rating
Agency of the occurrence of any of the following events:
(a) Any default or any fact or event which results, or which with
notice or the passage of time, or both, would result in the occurrence of
a default by the Sponsor or the Master Servicer under any Transaction
Document or would constitute a material breach of a representation,
warranty or covenant under any Transaction Document which would have a
material adverse effect on the Owners or the Certificate Insurer;
(b) The submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against
the Sponsor, the Master Servicer or AMHC in any federal, state or local
court or before any governmental body or agency, or before any arbitration
board, or any such proceedings threatened by any governmental agency,
which, if adversely determined, would have a material adverse
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effect upon any the Sponsor's, the Master Servicer's or AMHC's ability to
perform its obligations under any Transaction Document;
(c) The commencement of any proceedings by or against the Sponsor,
the Master Servicer or AMHC under any applicable bankruptcy,
reorganization, liquidation, insolvency or other similar law now or
hereafter in effect or of any proceeding in which a receiver, liquidator,
trustee or other similar official shall have been, or may be, appointed or
requested for the Sponsor, the Master Servicer or AMHC; and
(d) The receipt of notice from any agency or governmental body
having authority over the conduct of any of the Sponsor's the Master
Servicer's or the AMHC's business that the Sponsor, the Master Servicer or
AMHC is to cease and desist, or to undertake any practice, program,
procedure or policy employed by the Sponsor, the Master Servicer or AMHC
in the conduct of the business of any of them, and such cessation or
undertaking will materially adversely affect the conduct of the Sponsor's,
the Master Servicer's or AMHC's business or its ability to perform under
the Transaction Documents or materially adversely affect the financial
affairs of the Sponsor, the Master Servicer or AMHC.
ARTICLE IX
TERMINATION OF TRUST
SECTION 9.1. TERMINATION OF TRUST. The Trust created hereunder and
all obligations created by this Agreement will terminate upon the earlier of (i)
the payment to the Owners of all Certificates from amounts other than those
available under the Certificate Insurance Policy of all amounts held by the
Trustee and required to be paid to such Owners pursuant to this Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust Estate or (b)
the disposition of all property acquired in respect of any Mortgage Loan
remaining in the Trust Estate, (ii) at any time when a Qualified Liquidation of
the REMIC Trust is effected as described below or (iii) as described in Section
9.2 or 9.3 hereof. To effect a termination of this Agreement pursuant to clause
(ii) above, the Owners of all Certificates then Outstanding shall (x)
unanimously direct the Trustee on behalf of the Upper-Tier REMIC and the
Lower-Tier REMIC to adopt a plan of complete liquidation with respect to each of
the Mortgage Loan Groups as contemplated by Section 860F(a)(4) of the Code and
(y) provide to the Trustee an opinion of counsel experienced in federal income
tax matters to the effect that such liquidation constitutes a Qualified
Liquidation, and the Trustee either shall sell the Mortgage Loans and distribute
the proceeds of the liquidation of the Trust Estate, or shall distribute
equitably in kind all of the assets of the Trust Estate to the remaining Owners
of the Certificates based on their interests in the Trust, and distribute to the
Certificate Insurer any amounts owed under the Insurance Agreement and return
the Certificate Insurance Policy to the Certificate Insurer, each in accordance
with such plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of this
Agreement occur no later than the close of the 90th day after the date of
adoption of the plan of liquidation and such liquidation qualifies as a
Qualified Liquidation. In no event, however, will the Trust created by this
Agreement continue beyond the expiration of twenty-one (21) years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the United Kingdom, living on the date
hereof. The Trustee shall give written notice of termination of the Agreement to
each Owner in the manner set forth in Section 11.5.
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SECTION 9.2. CLEAN-UP CALL TERMINATION. (a) On any Remittance Date
on or after the Initial Clean-Up Call Date, either the Master Servicer or any
Master Servicer Affiliate (the Master Servicer or any Master Servicer Affiliate,
the "Redeeming Party") may determine to purchase and may cause the purchase from
the Trust of all (but not fewer than all) Mortgage Loans in the Trust Estate and
all property theretofore acquired in respect of any such Mortgage Loan by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate at a price equal to the sum of (v) the greater of (i) 100% of the
aggregate Loan Balances of all of the Mortgage Loans as of the day of purchase
minus the amount actually remitted by the Master Servicer representing the
related Group I Principal Remittance Amount and Group II Principal Remittance
Amount on such Remittance Date for the related Remittance Period and (ii) the
fair market value of such Mortgage Loans (disregarding accrued interest), (w) if
the Master Servicer is the Redeeming Party, the amount of any difference between
the related Group I Interest Remittance Amount and Group II Principal Remittance
Amount actually remitted by the Master Servicer on such Remittance Date and the
related Monthly Interest Remittance Amount due on such Remittance Date, (x) the
related Reimbursement Amount, if any, and (y) if the Master Servicer is the
Redeeming Party, the aggregate amount of any Delinquency Advances and Servicing
Advances remaining unreimbursed, together with any accrued and unpaid Servicing
Fees, as of such Remittance Date (such amount, the "Termination Price"). In
connection with such purchase, the Redeeming Party shall remit to the Trustee
all amounts then on deposit in the Principal and Interest Account for deposit to
the Certificate Account, which deposit shall be deemed to have occurred
immediately preceding such purchase. Notwithstanding the foregoing, the
Redeeming Party may not terminate the Trust pursuant to this Section 9.2 without
the consent of the Certificate Insurer, if termination would result in a draw on
the Certificate Insurance Policy.
(b) In connection with any such purchase, the Redeeming Party shall
provide to the Trustee an opinion of counsel experienced in federal income tax
matters to the effect that such purchase constitutes a Qualified Liquidation of
the Upper-Tier REMIC and the Lower-Tier REMIC.
(c) Promptly following any such purchase, the Trustee will release
the Mortgage Files to the Redeeming Party, or otherwise upon their order, in a
manner similar to that described in Section 8.14 hereof.
(d) Upon such purchase, the Certificate Insurance Policy will
terminate and shall be returned to the Certificate Insurer.
SECTION 9.3. TERMINATION UPON LOSS OF REMIC STATUS. (a) Following a
(x) final determination by the Internal Revenue Service, or by a court of
competent jurisdiction, in either case from which no appeal is taken within the
permitted time for such appeal, or (y) if any appeal is taken, following a final
determination of such appeal from which no further appeal can be taken, to the
effect that either the Upper-Tier REMIC or the Lower-Tier REMIC does not and
will no longer qualify as a REMIC pursuant to Section 860D of the Code (the
"Final Determination") or (z) following the delivery of an opinion of counsel
("REMIC Opinion") to the effect that the effect of the Final Determination is to
increase substantially the probability that either the Upper-Tier REMIC or the
Lower-Tier REMIC will no longer qualify as a "REMIC" pursuant to Section 860D of
the Code, on any Remittance Date on or after the date which is 30 calendar days
following such Final Determination, the Certificate Insurer, or if Certificate
Insurer Default has occurred and is continuing, the Owners of a majority in
Percentage Interest represented by the Class A Certificates then Outstanding may
direct the Trustee to adopt a plan of complete liquidation with respect to the
Trust Estate. In connection with such liquidation, the
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Master Servicer shall remit to the Trustee all amounts then on deposit in the
Principal and Interest Account for deposit in the Certificate Account, which
deposit shall be deemed to have occurred immediately preceding such liquidation.
(b) Upon receipt of such direction from the Certificate Insurer or
the Owners of such Class R-II Certificates, as applicable, the Trustee shall
notify the Master Servicer and holders of the Class R-II Certificates of such
election to liquidate or such determination to purchase, as the case may be,
(the "Termination Notice"). The Master Servicer or Owner of a majority of the
Percentage Interest of the Class R Certificates then Outstanding acting directly
or through one or more of their affiliates may, on any Remittance Date, within
60 days from the date of receipt of the Termination Notice (the "Purchase Option
Period"), at their option, purchase from the Trust all (but not fewer than all)
Mortgage Loans in the Trust Estate, and all property theretofore acquired by
foreclosure, deed in lieu of foreclosure, or otherwise in respect of any
Mortgage Loan then remaining in the Trust Estate at a purchase price equal to
the Termination Price.
(c) If, during the Purchase Option Period, the Master Servicer or
the Owners of the Class R-II Certificates have not exercised the option
described in the immediately preceding paragraph, then upon the expiration of
the Purchase Option Period in the event that the Owners of the Class A
Certificates have given the Trustee the direction described in clause (a)(i)
above, the Trustee shall (with the prior consent of the Certificate Insurer, so
long as no Certificate Insurer Default has occurred and is continuing) sell the
Mortgage Loans and distribute the proceeds of the liquidation of the Trust
Estate, such that, if so directed, the liquidation of the Trust Estate, the
distribution of the proceeds of such liquidation occur no later than the close
of the 60th day, or such later day as the Owner of a majority of the Percentage
Interest of the Class A Certificates shall permit or direct in writing, after
the expiration of the Purchase Option Period.
(d) Following a Final Determination, the Owners of a majority of the
Percentage Interest of the Class R-II Certificates then Outstanding may, at
their option on any Remittance Date and upon delivery to the Owners of the Class
A Certificates and the Trustee of an opinion of counsel experienced in federal
income tax matters selected by the Owners of a majority of the Percentage
Interest of such Class R-II Certificates which opinion shall be reasonably
satisfactory in form and substance to a majority of the Percentage Interests
represented by the Class A Certificates then Outstanding and the Trustee, to the
effect that the effect of the Final Determination is to increase substantially
the probability that the gross income of either the Upper-Tier REMIC or the
Lower-Tier REMIC will be subject to federal taxation, purchase from the Trust
all (but not fewer than all) Mortgage Loans in the Trust Estate, and all
property theretofore acquired by foreclosure, deed in lieu of foreclosure, or
otherwise in respect of any Mortgage Loan then remaining in the Trust Estate at
a purchase price equal to the Termination Price. In connection with such
purchase, the Master Servicer shall remit to the Trustee all amounts then on
deposit in the Principal and Interest Account for deposit to the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase. The foregoing opinion shall be deemed satisfactory unless the
Owners of a majority of the Percentage Interest represented by the Class A
Certificates then Outstanding or the Trustee give the Owners of a majority of
the Percentage Interest of the Class R-II Certificates notice that such opinion
is not satisfactory within thirty days after receipt of such opinion.
SECTION 9.4. DISPOSITION OF PROCEEDS. The Trustee shall, upon
receipt thereof, deposit the proceeds of any liquidation of the Trust Estate
pursuant to this Article IX to the Certificate Account; provided, however, that
any amounts representing Servicing Fees, unreimbursed Delinquency Advances or
unreimbursed Servicing Advances theretofore funded by
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the Master Servicer from the Master Servicer's own funds shall be paid by the
Trustee to the Master Servicer.
SECTION 9.5. NETTING OF AMOUNTS. If any Person paying the
Termination Price would receive a portion of the amount so paid, such Person may
net any such amount against the Termination Price otherwise payable.
ARTICLE X
THE TRUSTEE
SECTION 10.1. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The Trustee
(i) undertakes to perform such duties and only such duties as are specifically
set forth in this Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Trustee and (ii) in the absence of bad
faith on its part, may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished pursuant to and conforming to the requirements of this Agreement; but
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, shall be under a duty
to examine the same to determine whether or not they conform to the requirements
of this Agreement.
(b) Notwithstanding the appointment of the Master Servicer
hereunder, the Trustee is hereby empowered to perform the duties of the Master
Servicer hereunder whether following the failure of the Master Servicer to
perform, pursuant to Section 8.20 hereof or otherwise. Specifically, and not in
limitation of the foregoing, the Trustee shall have the power:
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Mortgage Loans;
(iii) to enforce due-on-sale clauses and to enter into assumption
and substitution agreements as permitted by Section 8.12 hereof;
(iv) to deliver instruments of satisfaction pursuant to Section
8.14;
(v) to make Delinquency Advances and Servicing Advances and to pay
Compensating Interest, and
(vi) to enforce the Mortgage Loans.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by an Authorized Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Certificate Insurer or of the Owners of a majority in
Percentage Interest of the Certificates of the affected Class or Classes
and the Certificate Insurer relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement relating to such Certificates.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
(e) No provision of this Agreement shall require the 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.
(f) The permissive right of the Trustee to take actions enumerated
in this Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its own negligence or willful misconduct.
(g) The Trustee shall be under no obligation to institute any suit,
or to take any remedial proceeding under this Agreement, or to take any steps in
the execution of the trusts hereby created or in the enforcement of any rights
and powers hereunder until it shall be indemnified to its satisfaction against
any and all costs and expenses, outlays and counsel fees and other reasonable
disbursements and against all liability, except liability which is adjudicated
to have resulted from its negligence or willful misconduct, in connection with
any action so taken. The Trustee shall receive from the Sponsor promptly upon
demand therefor, reimbursement of expenses as are described in the fee quote
letter, dated July 28, 1999 and executed by the Sponsor.
SECTION 10.2. REMOVAL OF TRUSTEE FOR CAUSE. (a) The Trustee may be
removed pursuant to paragraph (b) hereof upon the occurrence of any of the
following events (whatever the reason for such event 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):
(i) the Trustee shall fail to distribute to the Owners entitled
thereto on any Payment Date amounts available for distribution in
accordance with the terms hereof; or
(ii) the Trustee shall fail in the performance of, or breach, any
covenant or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection
herewith shall prove to be incorrect in any material respect as of the
time when the same shall have been made, and such failure or breach shall
continue or not be cured for a period of 30 days after there shall have
been given, by registered or certified mail, to the Trustee by the
Sponsor, the Certificate Insurer or by the Owners of at least 25% of the
aggregate Percentage Interests represented by the Class A Certificates
then Outstanding a written notice specifying such failure or breach and
requiring it to be remedied; or
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(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator 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 Trustee, and such decree or order shall have remained in force
undischarged or unstayed for a period of 75 days; or
(iv) a conservator or receiver or liquidator or sequestrator or
custodian of the property of the Trustee is appointed in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Trustee or relating to all or
substantially all of its property; or
(v) the Trustee shall become insolvent (however insolvency is
evidenced), generally fail to pay its debts as they come due, file or
consent to the filing of a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, voluntarily suspend payment of its obligations, or take
corporate action for the purpose of any of the foregoing.
The Sponsor shall give to the Certificate Insurer and each Rating
Agency notice of the occurrence of any such event of which the Sponsor is aware.
(b) If any event described in Paragraph (a) occurs and is
continuing, then and in every such case (i) the Certificate Insurer or (ii) with
the prior written consent (which shall not be unreasonably withheld) of the
Certificate Insurer (x) the Sponsor or (y) the Owners of a majority of the
Percentage Interests represented by the Class A Certificates, or, if there are
no Class A Certificates then Outstanding, by such Percentage Interest
represented by any Class of Class R Certificates then Outstanding may, whether
or not the Trustee resigns pursuant to Section 10.9 hereof, immediately,
concurrently with the giving of notice to the Trustee, and without delaying the
30 days required for notice therein, appoint a successor Trustee pursuant to the
terms of Section 10.9 hereof.
SECTION 10.3. CERTAIN RIGHTS OF THE TRUSTEE. Except as otherwise
provided in Section 10.1 hereof:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note 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) any request or direction of the Sponsor, the Certificate Insurer
or the Owners of any Class of Certificates mentioned herein shall be
sufficiently evidenced in writing;
(c) whenever in the administration of this Agreement the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel, and the written advice of
such counsel shall be full and complete authorization and protection in
respect of any action
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taken, suffered or omitted by it hereunder in good faith and in reasonable
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or
direction of any of the Owners pursuant to this Agreement, unless such
Owners shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the 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, direction, consent, order,
bond, note or other paper or document, but the Trustee in its discretion
may make such further inquiry or investigation into such facts or matters
as it may see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed and supervised
with due care by it hereunder; and
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person or within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication
of the Certificates.
SECTION 10.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates, except any
such recitals relating to the Trustee, shall be taken as the statements of the
Sponsor and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or sufficiency of this
Agreement or of the Certificates other than as to validity and sufficiency of
its authentication of the Certificates.
SECTION 10.5. MAY HOLD CERTIFICATES. The Trustee or any agent of the
Trust, in its individual or any other capacity, may become an Owner or pledgee
of Certificates and may otherwise deal with the Trust with the same rights it
would have if it were not Trustee or such agent.
SECTION 10.6. MONEY HELD IN TRUST. Money held by the Trustee in
trust hereunder need not be segregated from other trust funds except to the
extent required herein or required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Sponsor and except to the extent of income or other gain on
investments which are deposits in or certificates of deposit of the Trustee in
its commercial capacity and income or other gain actually received by the
Trustee on Eligible Investments.
SECTION 10.7. NO LIEN FOR FEES. The Trustee shall have no lien on
the Trust Estate for the payment of any fees and expenses.
SECTION 10.8. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee hereunder which shall be a corporation or association
organized and doing business under the laws of the United States of America or
of any State authorized under such
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laws to exercise corporate trust powers, having a combined capital and surplus
of at least $100,000,000, subject to supervision or examination by the United
States of America or any such State having a rating or ratings acceptable to the
Certificate Insurer or, if the last sentence of Section 11.18 hereof is
applicable, the Sponsor and having (x) long-term, unsecured debt rated at least
A-1 by Moody's (or such lower rating as may be acceptable to Moody's) and (y) a
short-term deposit rating of at least A-1 from Standard & Poor's (or such lower
rating as may be acceptable to Standard & Poor's). If such Trustee 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
this Section, the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall, upon the request of the Sponsor (with the consent of the Certificate
Insurer) (which consent shall not be unreasonably withheld) or of the
Certificate Insurer, resign immediately in the manner and with the effect
hereinafter specified in this Article X.
SECTION 10.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a)
No resignation or removal of the Trustee and no appointment of a successor
trustee pursuant to this Article X shall become effective until the acceptance
of appointment by the successor trustee under Section 10.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
resign at any time by giving written notice of resignation to the Sponsor and by
mailing notice of resignation by first-class Mail, postage prepaid, to the
Certificate Insurer and the Owners at their addresses appearing on the Register.
A copy of such notice shall be sent by the resigning Trustee to each Rating
Agency. Upon receiving notice of resignation, the Sponsor shall promptly appoint
a successor trustee or trustees by written instrument, in duplicate, executed on
behalf of the Trust by an Authorized Officer of the Sponsor, one copy of which
instrument shall be delivered to the Trustee so resigning and one copy to the
successor trustee or trustees. If no successor trustee shall have been appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Owner may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(c) If at any time the Trustee shall cease to be eligible under
Section 10.8 hereof and shall fail to resign after written request therefor by
the Sponsor or by the Certificate Insurer, the Certificate Insurer or the
Sponsor (with the written consent of the Certificate Insurer) may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
executed on behalf of the Trust by an Authorized Officer of the Sponsor, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(d) The Owners of a majority of the Percentage Interests represented
by the Class A Certificates, or, if there are no Class A Certificates then
Outstanding, by such majority of the Percentage Interests represented by Class R
Certificates then Outstanding may at any time, with the prior written consent of
the Certificate Insurer, remove the Trustee and appoint a successor trustee by
delivering to the Trustee to be removed, to the successor trustee so appointed,
to the Sponsor and to the Certificate Insurer, copies of the record of the act
taken by the Owners, as provided for in Section 11.3 hereof.
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(e) If the Trustee fails to perform its duties in accordance with
the terms of this Agreement or becomes ineligible to serve as Trustee, the
Certificate Insurer or, if the last sentence of Section 11.18 hereof is
applicable, the Sponsor may remove the Trustee and appoint a successor trustee
by written instrument, in triplicate, signed by the Certificate Insurer and the
Sponsor duly authorized, one complete set of which instruments shall be
delivered to the Sponsor, one complete set to the Certificate Insurer, one
complete set to the Trustee so removed and one complete set to the successor
Trustee so appointed.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Sponsor shall promptly appoint a successor Trustee acceptable to the
Certificate Insurer. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy, a successor Trustee shall be
appointed by act of the Owners of a majority of the Percentage Interests
represented by the Class A Certificates then Outstanding or, if there are no
Class A Certificates then Outstanding, by such majority of the Percentage
Interest of the Class R Certificates delivered to the Sponsor and the retiring
Trustee, the successor Trustee so appointed shall forthwith upon its acceptance
of such appointment become the successor Trustee and supersede the successor
Trustee appointed by the Sponsor. If no successor Trustee shall have been so
appointed by the Sponsor or the Owners and shall have accepted appointment in
the manner hereinafter provided, any Owner may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.
(g) The Sponsor shall give notice of any removal of the Trustee by
mailing notice of such event by first-class mail, postage prepaid, to the
Certificate Insurer and to the Owners as their names and addresses appear in the
Register. Each notice shall include the name of the successor Trustee and the
address of its corporate trust office.
SECTION 10.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Sponsor on behalf of the Trust and to its predecessor Trustee an instrument
accepting such appointment hereunder and stating its eligibility to serve as
Trustee hereunder, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts, duties and obligations of its predecessor hereunder; but, on request of
the Sponsor or the successor Trustee, such predecessor Trustee shall, upon
payment of its charges then unpaid, execute and deliver an instrument
transferring to such successor Trustee all of the rights, powers and trusts of
the Trustee so ceasing to act, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such Trustee so ceasing to
act hereunder. Upon request of any such successor Trustee, the Sponsor on behalf
of the Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Sponsor shall mail notice thereof by first-class mail, postage
prepaid, to the Owners at their last addresses appearing upon the Register. The
Sponsor shall send a copy of such notice to each of the Rating Agencies and the
Certificate Insurer. If the Sponsor fails to mail such notice within ten days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the Trust.
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No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor shall be qualified and eligible under this
Article X.
SECTION 10.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF THE TRUSTEE. Any corporation or association into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation or association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
association succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation or
association shall be otherwise qualified and eligible under this Article X. In
case any Certificates have been executed, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such Trustee
may adopt such execution and deliver the Certificates so executed with the same
effect as if such successor Trustee had itself executed such Certificates.
SECTION 10.12. REPORTING; WITHHOLDING. With respect to each of the
REMIC Trusts and the Non-REMIC Estate, the Trustee shall timely provide to the
Owners (or other Persons entitled thereto) the Internal Revenue Service's Form
1099 and any other statement required by applicable Treasury regulations or
analogous provisions of state or local law as determined by the Sponsor, and
shall withhold, as required by applicable law, federal, state or local taxes, if
any, applicable to distributions to the Owners, including, but not limited to,
backup withholding under Section 3406 of the Code, the withholding tax on
distributions to foreign investors under Sections 1441 and 1442 of the Code and
beginning after December 31, 2000, shall report as effectively connected income
distributions with respect to Supplemental Interest Rights held by foreign
holders if such holders have not provided certification that such distributions
are not effectively connected income.
SECTION 10.13. LIABILITY OF THE TRUSTEE. The Trustee shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Trustee herein. Neither the Trustee nor any
of the directors, officers, employees or agents of the Trustee shall be under
any liability on any Certificate or otherwise to any Account, the Sponsor, the
Master Servicer or any Owner 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 Trustee
or any such Person against any liability which would otherwise be imposed by
reason of negligent action, negligent failure to act or bad faith in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Subject to the foregoing sentence, the Trustee shall not be
liable for losses on investments of amounts in any Account (except for any
losses on obligations on which the bank serving as Trustee is the obligor and is
otherwise liable). In addition, the Sponsor and Master Servicer covenant and
agree to indemnify the Trustee, and its officers, directors, employees and
agents, including, without limitation, when the Trustee is acting as Master
Servicer, and hold it harmless against, any and all losses, liabilities,
damages, claims or expenses (including legal fees and expenses) other than those
resulting from the negligence or bad faith of the Trustee. The indemnification
provided in this Section 10.13 shall survive the termination of this Agreement
or the resignation or removal of the Trustee hereunder. The Trustee and any
director, officer, employee or agent of the Trustee may rely and shall be
protected in acting or refraining from acting in good faith on any certificate,
notice or other document of any kind prima facie properly executed and submitted
by the Authorized Officer of any Person respecting any matters arising
hereunder.
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SECTION 10.14 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or Property may at the time be located, the Master Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Certificate Insurer to act as co-Trustee or co-Trustees, jointly with
the Trustee, of all or any part of the Trust Estate or separate Trustee or
separate Trustees of any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity and for the benefit of the Owners, such title to the
Trust Estate, or any part thereof, and, subject to the other provisions of this
Section 10.14, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case any event indicated in
Sections 8.20(a) or 8.20(b) shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment with the consent of the
Certificate Insurer. No co-Trustee or separate Trustee hereunder shall be
required to meet the terms of eligibility as a successor Trustee under Section
10.8 and no notice to Owner of the appointment of any co-Trustee or separate
Trustee shall be required under Section 10.8.
Every separate Trustee and co-Trustee shall, to the extent
permitted, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate Trustee or co-Trustee jointly
(it being understood that such separate Trustee or co-Trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate Trustee or
co-Trustee, but solely at the direction of the Trustee;
(ii) No co-Trustee hereunder shall be held personally liable by
reason of any act or omission of any other co-Trustee hereunder; and
(iii) The Master Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate Trustee or
co-Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate Trustees and co-Trustees,
as effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Section 10.14. Each separate Trustee and co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer.
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Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate Trustee or co-Trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
The Trustee shall give to the Rating Agencies, the Sponsor and the
Certificate Insurer notice of the appointment of any Co-Trustee or separate
Trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Sponsor, the Certificate Insurer or the Owners to
the Trustee to take any action under any provision of this Agreement, the
Sponsor, the Certificate Insurer or the Owners, as the case may be, shall
furnish to the Trustee a certificate stating that all conditions precedent, if
applicable, provided for in this Agreement relating to the proposed action have
been complied with, except that in the case of any such application or request
as to which the furnishing of any documents is specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate need be furnished.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO THE 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 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 of an Authorized Officer of the Trustee may be
based, insofar as it relates to legal matters, upon an opinion of counsel,
unless such Authorized Officer knows, or in the exercise of reasonable care
should know, that the opinion is erroneous. Any such certificate of an
Authorized Officer of the Trustee or any opinion of counsel may be based,
insofar as it relates to factual matter upon a certificate or opinion of, or
representations by, one or more Authorized Officers of the Sponsor or of the
Master Servicer, stating that the information with respect to such factual
matters is in the possession of the Sponsor or of the Master Servicer, unless
such Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any opinion of counsel may also be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer of the Trustee, stating that the
information with respect to such matters is in the possession of the Trustee,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
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 Trustee may reasonably rely
upon the opinion of such other counsel.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 11.3. ACTS OF OWNERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by the Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Owners 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 Trustee, and, where it is
hereby expressly required, to the Sponsor and/or the Certificate Insurer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Owners 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
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.
(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 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 Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Owner of any Certificate shall bind the Owner of
every Certificate 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 Trustee or the Trust in reliance thereon, whether or
not notation of such action is made upon such Certificates.
SECTION 11.4. NOTICES, ETC., TO TRUSTEE. Any request, demand,
authorization, direction, notice, consent, waiver or act of the Owners or other
documents provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with the Trustee by any Owner, the Certificate Insurer or
by the Sponsor shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to and received by the Trustee at its corporate
trust office as set forth in Section 2.2 hereof.
SECTION 11.5. NOTICES AND REPORTS TO OWNERS; WAIVER OF NOTICES.
Where this Agreement provides for notice to Owners of any event or the mailing
of any report to Owners, such notice or report shall be sufficiently given
(unless otherwise herein expressly provided) if mailed, first-class postage
prepaid, to each Owner affected by such event or to whom such report is required
to be mailed, at the address of such Owner as it appears on the 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 Owners 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 Owner shall affect the sufficiency of such notice or
report with respect to other Owners, and any notice or report which is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given or provided.
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Where this Agreement 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 Owners shall be filed with the 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 Owners when such notice is required to be given
pursuant to any provision of this Agreement, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Agreement provides for notice to any rating agency that
rated any Certificates, failure to give such notice shall not affect any other
rights or obligations created hereunder.
SECTION 11.6. RULES BY TRUSTEE AND SPONSOR. The Trustee may make
reasonable rules for any meeting of Owners. The Sponsor may make reasonable
rules and set reasonable requirements for its functions.
SECTION 11.7. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Agreement by any party hereto shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.8. SEVERABILITY. In case any provision in this Agreement
or in the Certificates 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 11.9. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates, expressed or implied, shall give to any Person, other than the
Owners, the Certificate Insurer and the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
SECTION 11.10. LEGAL HOLIDAYS. In any case where the date of any
Payment Date, any other date on which any distribution to any Owner is proposed
to be paid, or any date on which a notice is required to be sent to any Person
pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Certificates or this Agreement)
payment or mailing 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 or mailed on
the nominal date of any such Payment Date, or such other date for the payment of
any distribution to any Owner or the mailing of such notice, as the case may be,
and no interest on such payment 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 11.11. GOVERNING LAW. In view of the fact that Owners are
expected to reside in many states and outside the United States and the desire
to establish with certainty that this Agreement 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 Agreement and each Certificate 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.
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SECTION 11.12. 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.
SECTION 11.13. USURY. The amount of interest payable or paid on any
Certificate under the terms of this Agreement shall be limited to an amount
which shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the State of New York or any applicable law of the United
States permitting a higher maximum nonusurious rate that preempts such
applicable New York laws, which could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Certificate exceeds the Highest Lawful Rate, the Trust stipulates that such
excess amount will be deemed to have been paid to the Owner of such Certificate
as a result of an error on the part of the Trustee acting on behalf of the Trust
and the Owner receiving such excess payment shall promptly, upon discovery of
such error or upon notice thereof from the Trustee on behalf of the Trust,
refund the amount of such excess or, at the option of such Owner, apply the
excess to the payment of principal of such Certificate, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Trustee for the
benefit of Owners of Certificates 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 Certificates.
SECTION 11.14. AMENDMENT. (a) The Trustee, the Sponsor and the
Master Servicer, may at any time and from time to time, with the prior written
consent of the Certificate Insurer but without the giving of notice to or the
receipt of the consent of the Owners, amend this Agreement, and the Trustee
shall consent to such amendment, for the purpose of (i) curing any ambiguity, or
correcting or supplementing any provision hereof which may be inconsistent with
any other provision hereof or of the Transaction Documents, or to add provisions
hereto which are not inconsistent with the provisions hereof, (ii) upon receipt
of an opinion of counsel experienced in federal income tax matters to the effect
that no entity-level tax will be imposed on either the Upper-Tier REMIC or the
Lower-Tier REMIC or upon the transferor of a Class R-I or Class R-II Certificate
as a result of the ownership of any Class R-I or Class R-II Certificate by a
Disqualified Organization, removing the restriction on transfer set forth in
Section 5.8(b) hereof or (iii) complying with the requirements of the Code and
the regulations proposed or promulgated thereunder; provided, however, that any
such action shall not, as evidenced by an opinion of counsel delivered to the
Trustee, materially and adversely affect the interests of any Owner (without its
written consent).
(b) The Trustee, the Sponsor and the Master Servicer may, at any
time and from time to time, with the prior written consent of the Certificate
Insurer but without the giving of notice to or the receipt of the consent of the
Owners, amend this Agreement, and the Trustee shall consent to such amendment,
for the purpose of changing the definitions of "Group I Specified
Overcollateralization Amount," and "Group II Specified Overcollateralization
Amount"; provided, however, that no such change shall affect the weighted
average life of the related Class of Class A Certificates (assuming an
appropriate prepayment speed as determined by the Representative) by more than
five percent, as determined by the Representative.
(c) This Agreement may also be amended by the Trustee, the Sponsor,
and the Master Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer and not less than a majority of the
Percentage Interest represented by each affected Class of Certificates then
Outstanding, for the purpose of adding any provisions or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Owners hereunder; provided, however, that no such
amendment shall
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(a) change in any manner the amount of, or change the timing of, payments which
are required to be distributed to any Owner without the consent of the Owner of
such Certificate, (b) change or reduce the aforesaid percentages of Percentage
Interests which are required to consent to any such amendments or (c) result in
a down-rating or withdrawal of any ratings then assigned to the Class A
Certificates, without the consent of the Owners of all Certificates of the Class
or Classes affected then Outstanding.
(d) Each proposed amendment to this Agreement shall be accompanied
by an opinion of counsel nationally recognized in federal income tax matters
addressed to the Trustee and to the Certificate Insurer to the effect that such
amendment would not adversely affect the status of either the Upper-Tier REMIC
or the Lower-Tier REMIC. Neither such opinion of counsel nor any expense of any
such proposed amendment shall be at the Trustee's expense.
(e) The Certificate Insurer, the Owners and each Rating Agency shall
be provided with copies of any amendments to this Agreement, together with
copies of any opinions or other documents or instruments executed in connection
therewith.
SECTION 11.15. REMIC STATUS; TAXES. (a) The Tax Matters Person shall
prepare and file or cause to be filed with the Internal Revenue Service federal
tax or information returns with respect to the Upper-Tier REMIC and the
Lower-Tier REMIC and the Certificates containing such information and at the
times and in such manner as may be required by the Code or applicable Treasury
regulations, and shall furnish to Owners such statements or information at the
times and in such manner as may be required thereby. For this purpose, the Tax
Matters Person may, but need not, rely on any proposed regulations of the United
States Department of the Treasury. The Tax Matters Person shall indicate the
election to treat each of the Upper-Tier REMIC and the Lower-Tier REMIC as a
REMIC (which election shall apply to the taxable period ending December 31, 1999
and each calendar year thereafter) in such manner as the Code or applicable
Treasury regulations may prescribe. The Trustee, as Tax Matters Person appointed
pursuant to Section 11.17 hereof shall sign all tax information returns filed
pursuant to this Section 11.15. The Tax Matters Person shall provide information
necessary for the computation of tax imposed on the transfer of a Class R-I or
Class R-II Certificate to a Disqualified Organization, or an agent of a
Disqualified Organization, or a pass-through entity in which a Disqualified
Organization is the record holder of an interest. The Tax Matters Person shall
provide the Trustee with copies of any Federal tax or information returns filed,
or caused to be filed, by the Tax Matters Person with respect to the REMIC Trust
or the Certificates.
(b) The Tax Matters Person shall timely file all reports required to
be filed by the Trust with any federal, state or local governmental authority
having jurisdiction over the Trust, including other reports that must be filed
with the Owners, such as the Internal Revenue Service's Form 1066 and Schedule Q
and the form required under Section 6050K of the Code, if applicable to REMICs.
The Trustee shall be liable to the Master Servicer and the Sponsor for any
penalties or interest as a result of its negligence with respect to such
filings. Furthermore, the Tax Matters Person shall report to Owners, if
required, with respect to the allocation of expenses pursuant to Section 212 of
the Code in accordance with the specific instructions to the Tax Matters Person
by the Sponsor with respect to such allocation of expenses. The Tax Matters
Person shall collect any forms or reports from the Owners determined by the
Sponsor to be required under applicable federal, state and local tax laws. The
Trustee shall provide copies of all filings to the Master Servicer within 15
days of the required date of such filing. In addition, the Trustee agrees not to
file more than one extension per required filing without prior consultation
with, and the consent of, the Master Servicer. Further, the Trustee shall
provide to the Sponsor
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and the Master Servicer access to any documentation regarding its tax reporting
duties hereunder as well as providing access to the Trustee's officers and
personnel in order to discuss the methodology and preparation of any filings or
returns hereunder. Such access shall be provided to the Master Servicer and the
Sponsor without cost or charge.
(c) The Tax Matters Person shall provide to the Internal Revenue
Service and to persons described in Section 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any
successor regulation thereto. With respect to either the Upper-Tier REMIC or the
Lower-Tier REMIC, such information will be provided in the manner described in
Treasury Regulation Section 1.860E-2(a)(5), or any successor regulation thereto.
(d) The Sponsor covenants and agrees that within ten Business Days
after receiving a written request from the Trustee it shall provide to the
Trustee any information necessary to enable the Trustee to meet its obligations
under subsections (b) and (c) above.
(e) The Trustee, the Sponsor and the Master Servicer each covenants
and agrees for the benefit of the Owners (i) to take no action which would
result in the termination of "REMIC" status for either the Upper-Tier REMIC or
the Lower-Tier REMIC, (ii) not to engage in any "prohibited transaction", as
such term is defined in Section 860F(a)(2) of the Code and (iii) not to engage
in any other action which may result in the imposition on the Upper-Tier REMIC
or the Lower-Tier REMIC of any other taxes under the Code.
(f) The Upper-Tier REMIC and the Lower-Tier REMIC shall, for federal
income tax purposes, maintain books on a calendar year basis and report income
on an accrual basis.
(g) Except as otherwise permitted by Section 7.6(b), no Eligible
Investment shall be sold prior to its stated maturity (unless sold pursuant to a
plan of liquidation in accordance with Article IX hereof).
(h) Neither the Sponsor nor the Trustee shall enter into any
arrangement by which the Trustee will receive a fee or other compensation for
services rendered pursuant to this Agreement, which fee or other compensation is
paid from the Trust Estate, other than as expressly contemplated by this
Agreement.
(i) Notwithstanding the foregoing clauses (g) and (h), the Trustee
or the Sponsor may engage in any of the transactions prohibited by such clauses,
provided that the Trustee shall have received the prior written consent of the
Certificate Insurer and an opinion of counsel experienced in federal income tax
matters to the effect that such transaction does not result in a tax imposed on
the Trustee or cause a termination of REMIC status for either the Upper-Tier
REMIC or the Lower-Tier REMIC; provided, however, that such transaction is
otherwise permitted under this Agreement.
(j) The Startup Day is hereby designated for the Upper-Tier REMIC
and the Lower-Tier REMIC as the "startup day" within the meaning of Section
860G(a)(9) of the Code.
SECTION 11.16. ADDITIONAL LIMITATION ON ACTION AND IMPOSITION OF
TAX. (a) Any provision of this Agreement to the contrary notwithstanding, the
Trustee shall not, without having obtained, and delivered to the Certificate
Insurer, an opinion of counsel experienced in federal income tax matters (which
opinion shall be at the expense of the Sponsor) to the effect
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that such transaction does not result in a tax imposed on the Trust or cause a
termination of REMIC status for either the Upper-Tier REMIC or the Lower-Tier
REMIC, (i) sell any assets in the Trust Estate, (ii) accept any contribution of
assets after the Startup Day or (iii) agree to any modification of this
Agreement.
(b) In the event that any tax is imposed on "prohibited
transactions" of either the Upper-Tier REMIC or the Lower-Tier REMIC as defined
in Section 860F(a)(2) of the Code, on the "net income from foreclosure property"
as defined in Section 860G(c) of the Code, on any contribution to either the
Upper-Tier REMIC or the Lower-Tier REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax, including liability for
withholding tax, (other than any minimum tax imposed by Sections 23151(a) or
23153(a) of the California Revenue and Taxation Code) is imposed on the REMIC
Trust or the Non-REMIC Estate, such tax shall be paid by (i) the Trustee, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) the Master Servicer, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under this Agreement, or otherwise (iii) the Owners of the Class R-I and Class
R-II Certificates in proportion to their Percentage Interests. To the extent
such tax is chargeable against the Owners of the Class R-I and Class R-II
Certificates, notwithstanding anything to the contrary contained herein, the
Trustee is hereby authorized to retain from amounts otherwise distributable to
the Owners of the Class R-I and Class R-II Certificates on any Payment Date
sufficient funds to reimburse the Trustee for the payment of such tax (to the
extent that the Trustee has not been previously reimbursed or indemnified
therefor).
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust
Estate (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect thereto that involves the
Internal Revenue Service or state tax authorities); provided, however, that if
such audit resulted solely from the negligence of the Master Servicer or the
Sponsor, as the case may be, the Master Servicer or Sponsor shall pay such
expenses. The Trustee shall act on behalf of the Trust Estate in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto.
(d) On or before April 15 of each calendar year, commencing April
15, 2000, the Trustee shall deliver to the Master Servicer a Certificate from a
Responsible Officer of the Trustee stating the Trustee's compliance with its tax
reporting duties set forth in this Agreement.
(e) The Trustee agrees to indemnify the Trust Estate, the Master
Servicer and the Sponsor for any taxes and costs, including, without limitation,
any penalties, interest, professional fees and attorneys' fees imposed on or
incurred by the Trust Estate, the Master Servicer or the Sponsor, as a result of
a breach of the Trustee's covenants set forth in this Agreement or as a result
of the Trustee's negligence, willful misconduct or bad faith.
SECTION 11.17. APPOINTMENT OF TAX MATTERS PERSON. The Owner of the
Tax Matters Person Residual Interests in the Upper-Tier REMIC and the Lower-Tier
REMIC is hereby designated as "tax matters person" as defined in the REMIC
Provisions with respect to each such REMIC.
SECTION 11.18. THE CERTIFICATE INSURER. The Certificate Insurer is a
third-party beneficiary of this Agreement. Any right conferred to the
Certificate Insurer shall be suspended during any period in which the
Certificate Insurer is in default in its payment obligations under
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the Certificate Insurance Policy, except with respect to amendments to this
Agreement pursuant to Section 11.14. During the continuance of a Certificate
Insurer Default, the Certificate Insurer's rights hereunder shall vest in the
Trustee on behalf of the Owners of the Class A Certificates and shall be
exercisable by the Owners of at least a majority in Percentage Interest of the
Class A Certificates then Outstanding. At such time as the Class A Certificates
are no longer Outstanding hereunder and the Certificate Insurer has been
reimbursed for all Reimbursement Amounts to which it is entitled hereunder and
the Certificate Insurance Policy has expired, the Certificate Insurer's rights
hereunder shall terminate.
SECTION 11.19. MAINTENANCE OF RECORDS. Each Originator and Owner of
a Class R Certificate shall each continuously keep an original executed
counterpart of this Agreement in its official records.
SECTION 11.20. NOTICES. All notices hereunder shall be given as
follows, until any superseding instructions are given to all other Persons
listed below:
The Trustee: Bankers Trust Company
of California, N.A.
3 Park Plaza, 16th Floor
Irvine, CA 92614
Attention: Advanta 1999-3/AM9903
Tel: (949) 253-7575
Fax: (949) 253-7577
The Sponsor: Advanta Conduit Receivables, Inc.
10790 Rancho Bernardo Road
San Diego, California 92127
Tel: (858) 674-3317
Attention: Structured Finance
The Master Servicer: Advanta Mortgage Corp. USA
10790 Rancho Bernardo Road
San Diego, California 92127
Tel: (858) 674-3317
Fax: (858) 674-3592
The Certificate Insurer: Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Advanta Mortgage Loan Trust 1999-3
Structured Finance Department
Fax: (212) 363-1459
Moody's: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: The Mortgage Monitoring Department
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Standard & Poor's: Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
Attention: Manager, Structured Finance
Operations Group
Underwriters: Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Asset-Backed Securities Group
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Sponsor, the Master Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers
thereunto duly authorized, all as of the day and year first above written.
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
By:
--------------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA MORTGAGE CORP. USA,
as Master Servicer
By:
--------------------------------------
Name: Michael Coco
Title: Vice President
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:
--------------------------------------
[Pooling and Servicing Agreement]
<PAGE> 119
SCHEDULE 1
Schedules of Mortgage Loans
See Tab 35.
<PAGE> 120
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-1 CERTIFICATES
(Class A-1 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
No.: A-1-1 August 24, 1999 00755W GV 2
-------------- --------------- -----------
Date CUSIP
$117,581,000 May 25, 2014
- ------------------------- ---------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
A-1-1
<PAGE> 121
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-1 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $117,581,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-1 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) may be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-1-2
<PAGE> 122
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-1 Group I Certificates (the "Class A-1
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-2 Certificates; Class A-3
Certificates; Class A-4 Certificates; Class A-5 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts. All
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-1
Certificates as of the close of business on the business day immediately
preceding such Payment Date (the "Record Date") will be entitled to receive the
Class A-1 Distribution Amount relating to such Payment Date. Distributions will
be made in immediately available funds to such Owners, by wire transfer or
otherwise, to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee at
least five business days prior to the related record date, or by check mailed to
the address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-1 Certificates. The Percentage
Interest of each Class A-1 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-1 Certificate by $117,581,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-1-3
<PAGE> 123
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-1 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing
A-1-4
<PAGE> 124
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-1 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-1 Certificates are
exchangeable for new Class A-1 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-1-5
<PAGE> 125
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
--------------------------------
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------------
Name:
Title:
A-1-6
<PAGE> 126
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-2 GROUP I CERTIFICATES (Class
A-2 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
No.: A-2-1 August 24, 1999 00755W GW 0
-------------- --------------- -----------
Date CUSIP
$69,182,000 June 25, 2014
- ------------------------- ---------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
A-2-1
<PAGE> 127
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-2 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $69,182,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-2 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) may be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-2-2
<PAGE> 128
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-2 Group I Certificates (the "Class A-2
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-3
Certificates; Class A-4 Certificates; Class A-5 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts. All
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-2
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-2
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-2 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-2 Certificates. The Percentage
Interest of each Class A-2 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-2 Certificate by $69,182,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-2-3
<PAGE> 129
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-2 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing
A-2-4
<PAGE> 130
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-2 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-2 Certificates are
exchangeable for new Class A-2 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-2-5
<PAGE> 131
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------------
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------------
Name:
Title:
A-2-6
<PAGE> 132
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-3 GROUP I CERTIFICATES (Class
A-3 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
No.: A-3-1 August 24, 1999 00755W GX 8
-------------- --------------- -----------
Date CUSIP
$46,259,000 October 25, 2017
- ------------------------- ----------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
A-3-1
<PAGE> 133
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-3 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $46,259,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-3 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) may be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-3-2
<PAGE> 134
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-3 Group I Certificates (the "Class A-3
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-2
Certificates; Class A-4 Certificates; Class A-5 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts; all
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-3
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-3
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-3 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-3 Certificates. The Percentage
Interest of each Class A-3 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-3 Certificate by $46,259,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-3-3
<PAGE> 135
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-3 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing
A-3-4
<PAGE> 136
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-3 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-3 Certificates are
exchangeable for new Class A-3 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-3-5
<PAGE> 137
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
-------------------------
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------------
Name:
Title:
A-3-6
<PAGE> 138
EXHIBIT 4.1
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-4 GROUP I CERTIFICATES
(Class A-4 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
<TABLE>
<CAPTION>
<S> <C> <C>
No.: A-4-1 August 24, 1999 00755W GY 6
-------------- ----------------------------------- ---------------------
Date CUSIP
$74,498,000 October 25, 2026
------------------------------ ------------------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
</TABLE>
A-4-1
<PAGE> 139
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-4 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $74,498,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-4 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) may be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-4-2
<PAGE> 140
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-4 Group I Certificates (the "Class A-4
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-2
Certificates; Class A-3 Certificates; Class A-5 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts; all
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-4
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-4
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-4 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-4 Certificates. The Percentage
Interest of each Class A-4 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-4 Certificate by $74,498,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-4-3
<PAGE> 141
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-4 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing
A-4-4
<PAGE> 142
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-4 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-4 Certificates are
exchangeable for new Class A-4 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-4-5
<PAGE> 143
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-4-6
<PAGE> 144
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-5 GROUP I CERTIFICATES
(Class A-5 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
<TABLE>
<CAPTION>
<S> <C> <C>
No.: A-5-1 August 24, 1999 00755W GZ 3
-------------- ----------------------------------- ---------------------
Date CUSIP
$29,980,000 August 25, 2029
- ------------------------- ----------------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
</TABLE>
A-5-1
<PAGE> 145
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-5 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $29,980,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-5 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) may be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-5-2
<PAGE> 146
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-5 Group I Certificates (the "Class A-5
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-2
Certificates; Class A-3 Certificates; Class A-4 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts, all
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-5
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-5
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-5 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-5 Certificates. The Percentage
Interest of each Class A-5 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-5 Certificate by $29,980,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-5-3
<PAGE> 147
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC(TM) is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-5 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing
A-5-4
<PAGE> 148
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-5 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-5 Certificates are
exchangeable for new Class A-5 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-5-5
<PAGE> 149
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-5-6
<PAGE> 150
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-6 GROUP I CERTIFICATES
(Class A-6 Group I Fixed Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group I.
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I described herein, monies
in certain Accounts created pursuant to the Pooling and Servicing Agreement and
certain other rights relating thereto and is payable only from amounts received
by the Trustee relating to the Mortgage Loans in Group I held by the Trust.)
<TABLE>
<CAPTION>
<S> <C> <C>
No.: A-6-1 August 24, 1999 00755W HA 7
-------------- ----------------------------------- ---------------------
Date CUSIP
$37,500,000 June 25, 2014
------------------------ ---------------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
</TABLE>
A-6-1
<PAGE> 151
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") which
will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a Nevada
corporation, and sold or caused to be sold by the Sponsor to Bankers Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group I, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group I, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group I and
other amounts and property enumerated above are hereinafter referred to as
"Group I."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-6 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $37,500,000. The Owner
hereof is entitled to principal payments in the amounts and at the times set
forth in the Pooling and Servicing Agreement, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Payment Date of the Class A-6 Certificates. Therefore, the
actual outstanding principal amount of this Certificate, on any date subsequent
to September 27, 1999 (the first Payment Date) may be less than the Original
Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO
A-6-2
<PAGE> 152
DEBT OF ANY PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL
INCOME TAX PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-6 Group I Certificates (the "Class A-6
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-2
Certificates; Class A-3 Certificates; Class A-4 Certificates; Class A-5
Certificates; Class A-7 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts, all
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-6
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-6
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-6 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-6 Certificates. The Percentage
Interest of each Class A-6 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-6 Certificate by $37,500,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans.
A-6-3
<PAGE> 153
No appointment of any Sub-Servicer shall release the Master Servicer from any of
its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and amounts on deposit in the Accounts related to Group I
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-6 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
A-6-4
<PAGE> 154
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-6 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-6 Certificates are
exchangeable for new Class A-6 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-6-5
<PAGE> 155
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-6-6
<PAGE> 156
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
CLASS A-7 GROUP II CERTIFICATES
(Class A-7 Group II Floating Rate Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans in Group II
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
Unless this certificate 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 certificate 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.
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group II described herein,
monies in certain Accounts created pursuant to the Pooling and Servicing
Agreement and certain other rights relating thereto and is payable only from
amounts received by the Trustee relating to the Mortgage Loans in Group II held
by the Trust.)
<TABLE>
<CAPTION>
<S> <C> <C>
No.: A-7-1 August 24, 1999 00755W HB 5
-------------- ----------------------------------- ---------------------
Date CUSIP
$150,000,000 August 25, 2029
- ------------------------- ---------------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------------
Registered Owner
100%
- -------------------
Percentage Interest
</TABLE>
A-7-1
<PAGE> 157
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of adjustable rate mortgage loans
(the "Mortgage Loans") assigned to a particular mortgage loan group ("Group II")
which will be formed by Advanta Conduit Receivables, Inc. (the "Sponsor"), a
Nevada corporation, and sold or caused to be sold by the Sponsor to Bankers
Trust Company of California, N.A., a national banking association, as trustee
(the "Trustee") on behalf of Advanta Mortgage Loan Trust 1999-3 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") by and among the Sponsor, the
Trustee and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer"), (ii) such amounts in all Accounts including principal collected and
accrued interest in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, including Eligible Investments, as may from time to time may be held in
such Accounts (except any premium recapture and interest accrued prior to the
Initial Cut-Off Date, each Subsequent Cut-Off Date and each Replacement Cut-Off
Date, as applicable and except for net investment earnings on the Principal and
Interest Account, the Capitalized Interest Account and the Certificate Account),
(iii) any Property relating to the Mortgage Loans in Group II, the ownership of
which has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group II and any rights of the Sponsor under any
Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to the
Mortgage Loans in Group II, (vi) the rights of the Trustee under the Certificate
Insurance Policy, and (vii) the rights of the Sponsor against any Originator
pursuant to the related Transfer Agreement. Such Mortgage Loans in Group II and
other amounts and property enumerated above are hereinafter referred to as
"Group II."
The Original Principal Amount set forth above is equal to the
product of (i) the Percentage Interest represented by this Certificate and (ii)
the aggregate Original Principal Amount of the Class A-7 Certificates on August
24, 1999 (the "Startup Day"), which aggregate amount was $150,000,000. The Owner
hereof is entitled to principal payments on each Payment Date, as hereinafter
described, which will fully amortize such Original Principal Amount over the
period from the date of initial delivery hereof to the final Payment Date of the
Class A-7 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to September 27, 1999 (the first
Payment Date) will be less than the Original Principal Amount set forth above.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
A-7-2
<PAGE> 158
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX
PURPOSES).
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class A-7 Group II Certificates (the "Class A-7
Certificates") and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which the Owner of this
Certificate, by virtue of acceptance hereof assents, and is bound. Also issued
under the Pooling and Servicing Agreement are Class A-1 Certificates; Class A-2
Certificates; Class A-3 Certificates; Class A-4 Certificates; Class A-5
Certificates; Class A-6 Certificates; Class B Certificates; Class BS
Certificates; Class R-I Certificates; Class R-II Certificates; and a Certificate
representing the right to receive certain supplemental interest amounts, all
such Certificates are collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class A-7
Certificates as of the close of business on the business day immediately
preceding such Payment Date (the "Record Date") will be entitled to receive the
Class A-7 Distribution Amount relating to such Payment Date. Distributions will
be made in immediately available funds to such Owners, by wire transfer or
otherwise, to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee at
least five business days prior to the related record date, or by check mailed to
the address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-7 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts distributed
on such Payment Date to the Owners of the Class A-7 Certificates. The Percentage
Interest of each Class A-7 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the Original Principal Amount set
forth on such Class A-7 Certificate by $150,000,000.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for
A-7-3
<PAGE> 159
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Master
Servicer from any of its obligations under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group II and amounts on deposit in the Accounts related to Group II
(except as otherwise provided in the Pooling and Servicing Agreement) all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate, may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class A-7 Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
A-7-4
<PAGE> 160
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-7 Certificates are issuable only as registered
Certificates in denominations of $1,000 Original Principal Amount and integral
multiples of $1,000. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-7 Certificates are
exchangeable for new Class A-7 Certificates of authorized denominations
evidencing the same aggregate principal amount.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-7-5
<PAGE> 161
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-7-6
<PAGE> 162
EXHIBIT A-RI
FORM OF CLASS R-I CERTIFICATES
TRANSFER OF THIS CLASS R-I CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-I
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(e)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING THEREOF SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R-I CERTIFICATE WILL BE REGISTERED BY THE
TRUSTEE UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-I CERTIFICATE FOR THE ACCOUNT OF A
DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN
AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R-I
CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY
TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE
PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF
THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
A-RI-1
<PAGE> 163
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
ADVANTA MORTGAGE LOAN TRUST 1999-3
CLASS R-I
This Certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Corp., any Originator or any of their subsidiaries and affiliates.
<TABLE>
<CAPTION>
<S> <C>
No: R-I-1 Date: August 24, 1999
------------------- ---------------------
Percentage Interest: 100% August 25, 2029
---- -------------------------
Final Scheduled
Payment Date
</TABLE>
----------------------
Registered Owner
This Certificate is one of a Class of duly authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Class R-I
Certificates (the "Class R-I Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, dated
as of August 1, 1999 (the "Pooling and Servicing Agreement"), by and among
Advanta Conduit Receivables, Inc. (the "Sponsor"), Bankers Trust Company of
California, N.A. (the "Trustee"), and Advanta Mortgage Corp. USA (the "Master
Servicer") to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound.
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date"), commencing September 27, 1999 to the persons in whose names the
Class R-I Certificates are registered at the close of business on the last
business day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (the "Record Date"), the Trustee will distribute
to each Owner of the Class R-I Certificates such Owner's Percentage Interest
multiplied by any amounts then available to be distributed to the Owners of the
Class R-I Certificates.
A-RI-2
<PAGE> 164
Distributions will be made in immediately available funds, by wire transfer or
otherwise, to the account of such Owner at a domestic bank or other entity
having appropriate facilities therefor, if such Owner has so notified the
Trustee at least five business days prior to the related record date, or by
check mailed to the address of the person entitled thereto as it appears on the
Register.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable state or local law by any Person from a distribution to
any Owner shall be considered as having been paid by the Trustee to such Owner
for all purposes of the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, the Sponsor, Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp. or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have the right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of a Trust occurs
pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate may at its option,
purchase from the Trust all (but not fewer than all) Mortgage Loans and other
property then constituting the Trust, and thereby effect early retirement of the
Certificates, on any Payment Date when the aggregate outstanding Loan Balance of
the Mortgage Loans in the Trust is 10% or less of the original aggregate Loan
A-RI-3
<PAGE> 165
Balance of the Mortgage Loans as of the Trust acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Lower-Tier REMIC or the Upper-Tier REMIC as a REMIC
under the Code the Mortgage Loans in the Trust may be sold, thereby effecting
the early retirement of the Class R-I Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form required by the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and
aggregate fractional undivided interest in the Trust will be issued to the
designated transferee or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, Class R-I Certificates are
exchangeable for new Class R-I Certificates evidencing the same Percentage
Interest as the Class R-I Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-RI-4
<PAGE> 166
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed, pursuant to the provisions of the Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-RI-5
<PAGE> 167
EXHIBIT A-RII
FORM OF CLASS R-II CERTIFICATES
TRANSFER OF THIS CLASS R-II CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-II
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(e)(5) OF THE CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING
ELECTRIC ENERGY OR PROVIDING THEREOF SERVICE TO PERSONS IN RURAL AREAS, OR ANY
ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL
INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS
INCOME. NO TRANSFER OF THIS CLASS R-II CERTIFICATE WILL BE REGISTERED BY THE
TRUSTEE UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-II CERTIFICATE FOR THE ACCOUNT OF
A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN
AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS
R-II CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN
ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO
THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION
OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
A-RII-1
<PAGE> 168
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
ADVANTA MORTGAGE LOAN TRUST 1999-3
CLASS R-II
This Certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Corp., any Originator or any of their subsidiaries and affiliates.
<TABLE>
<CAPTION>
<S> <C>
No: R-II-1 Date: August 24, 1999
------------------- ---------------------
Percentage Interest: 100% August 25, 2029
---- --------------------------
Final Scheduled
Payment Date
</TABLE>
----------------------
Registered Owner
This Certificate is one of a Class of duly authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Class R-II
Certificates (the "Class R-II Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, dated
as of August 1, 1999 (the "Pooling and Servicing Agreement"), by and among
Advanta Conduit Receivables, Inc. (the "Sponsor"), Bankers Trust Company of
California, N.A. (the "Trustee"), and Advanta Mortgage Corp. USA (the "Master
Servicer") to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound.
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date"), commencing September 27, 1999 to the persons in whose names the
Class R-II Certificates are registered at the close of business on the last
business day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (the "Record Date"), the Trustee will distribute
to each Owner of the Class R-II Certificates such Owner's Percentage Interest
multiplied by any amounts then available to be distributed to the Owners of the
Class R-II Certificates.
A-RII-2
<PAGE> 169
Distributions will be made in immediately available funds, by wire transfer or
otherwise, to the account of such Owner at a domestic bank or other entity
having appropriate facilities therefor, if such Owner has so notified the
Trustee at least five business days prior to the related record date, or by
check mailed to the address of the person entitled thereto as it appears on the
Register.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable state or local law by any Person from a distribution to
any Owner shall be considered as having been paid by the Trustee to such Owner
for all purposes of the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, the Sponsor, Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp. or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have the right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of a Trust occurs
pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate may at its option,
purchase from the Trust all (but not fewer than all) Mortgage Loans and other
property then constituting the Trust, and thereby effect early retirement of the
Certificates, on any Payment Date when the aggregate outstanding Loan
A-RII-3
<PAGE> 170
Balance of the Mortgage Loans in the Trust is 10% or less of the original
aggregate Loan Balance of the Mortgage Loans as of the Trust acquired prior to
the end of the Pre-Funding Period and (ii) under certain circumstances relating
to the qualification of either the Lower-Tier REMIC or the Upper-Tier REMIC as a
REMIC under the Code the Mortgage Loans in the Trust may be sold, thereby
effecting the early retirement of the Class R-II Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form required by the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and
aggregate fractional undivided interest in the Trust will be issued to the
designated transferee or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, Class R-II Certificates are
exchangeable for new Class R-II Certificates evidencing the same Percentage
Interest as the Class R-II Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-RII-4
<PAGE> 171
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed, pursuant to the provisions of the Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-RII-5
<PAGE> 172
EXHIBIT A-S
FORM OF SUPPLEMENTAL INTEREST RIGHTS
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SUPPLEMENTAL INTEREST PAYMENT ACCOUNT
RELATING TO
ADVANTA MORTGAGE LOAN TRUST 1999-3
SUPPLEMENTAL INTEREST RIGHT
This Certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., any Originator or any of their
subsidiaries and affiliates. This Certificate represents a right to receive
certain amounts held in the Supplemental Interest Payment Account described
herein.
Date: August 24, 1999
Percentage Interest: 100% August 25, 2029
---- ----------------
Final Scheduled
Payment Date
Bankers Trust Company of California, N.A.
on behalf of the Owners of the Class A-7 Certificates
-----------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a
right to receive certain amounts held in the Supplemental Interest Payment
Account (the "Supplemental Interest Right") pursuant to that certain Pooling and
Servicing Agreement dated as of August 1, 1999 (the "Pooling and Servicing
Agreement") by and among Advanta Conduit Receivables, Inc, as sponsor (the
"Sponsor"), and Bankers Trust Company of California, N.A., as trustee (the
"Trustee"), and Advanta Mortgage Corp. USA, as master servicer (the "Master
Servicer").
A-S-1
<PAGE> 173
This Certificate issued under and subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound.
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date"), commencing September 27, 1999 to the persons in whose names the
Supplemental Interest Rights are registered at the close of business on the last
business day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (the "Record Date"), the Trustee will distribute
to each Owner of Supplemental Interest Rights such Owner's Percentage Interest
multiplied by any amounts then available to be distributed to the Owners of the
Supplemental Interest Rights. Distributions will be made in immediately
available funds, by wire transfer or otherwise, to the account of such Owner at
a domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee at least five business days prior to the
related record date, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable state or local law by any Person from a distribution to
any Owner shall be considered as having been paid by the Trustee to such Owner
for all purposes of the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, the Sponsor, Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp. or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
amounts held in the Supplemental Interest Payment Account all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have the right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, for
the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
A-S-2
<PAGE> 174
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of a Trust occurs
pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate may at its option,
purchase from the Trust all (but not fewer than all) Mortgage Loans and other
property then constituting the Trust Estate, and thereby effect early retirement
of the Certificates, on any Payment Date when the aggregate outstanding Loan
Balance of the Mortgage Loans in the Trust is 10% or less of the original
aggregate Loan Balance of the Mortgage Loans in the Trust acquired prior to the
end of the Pre-Funding Period and (ii) under certain circumstances relating to
the qualification of either the Lower-Tier REMIC or the Upper-Tier REMIC as a
REMIC under the Code the Mortgage Loans in the Trust may be sold, thereby
effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form required by the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and
aggregate fractional undivided interest in certain amounts held in the
Supplemental Interest Payment Account will be issued to the designated
transferee or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-S-3
<PAGE> 175
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed, pursuant to the provisions of the Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-S-4
<PAGE> 176
EXHIBIT A-B
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
A-4, CLASS A-5, CLASS A-6 AND CLASS A-7 CERTIFICATES OF THIS SERIES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT DESCRIBED HEREIN.
ADVANTA MORTGAGE LOAN TRUST 1999-3
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
INTEREST-ONLY CLASS B CERTIFICATES
(Class B Certificate)
Comprised of a Certificate Representing
Certain Interests Relating to a Pool of
Mortgage Loans
The Mortgage Loans are Serviced by
ADVANTA MORTGAGE CORP. USA, as Master Servicer
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., an Originator or any of their
subsidiaries and affiliates. This certificate is comprised of a Certificate
representing a fractional ownership interest in Group I and Group II described
herein, monies in certain Accounts created pursuant to the Pooling and Servicing
Agreement and certain other rights relating thereto and is payable only from
amounts received by the Trustee relating to the Mortgage Loans in Group I and
Group II held by the Trust.
No.: B-1 August 24, 1999
u Date
Percentage Interest: 100% August 25, 2029
---- ----------------------
Final Scheduled
Payment Date
Bankers Trust Company of California, N.A., on behalf of
Advanta 1999-3 Supplemental Interest Trust
------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of fixed rate mortgage loans (the
"Mortgage Loans") assigned to a particular mortgage loan group ("Group I") and a
pool consisting of adjustable rate Mortgage Loans assigned to a separate
mortgage loan group ("Group II"), each of which will be formed by Advanta
Conduit Receivables, Inc. (the "Sponsor"), a Nevada corporation, and sold or
caused to
A-B-1
<PAGE> 177
be sold by the Sponsor to Bankers Trust Company of California, N.A., a
national banking association, as trustee (the "Trustee") on behalf of Advanta
Mortgage Loan Trust 1999-3 (the "Trust") pursuant to that certain Pooling and
Servicing Agreement dated as of August 1, 1999 (the "Pooling and Servicing
Agreement") by and among the Sponsor, the Trustee and Advanta Mortgage Corp.
USA, as master servicer (the "Master Servicer"), (ii) such amounts in all
Accounts including principal collected and accrued interest in respect of the
related Mortgage Loans on or after the Initial Cut-Off Date, each Subsequent
Cut-Off Date and each Replacement Cut-Off Date, including Eligible Investments,
as may from time to time may be held in such Accounts (except any premium
recapture and interest accrued prior to the Initial Cut-Off Date, each
Subsequent Cut-Off Date and each Replacement Cut-Off Date, as applicable and
except for net investment earnings on the Principal and Interest Account, the
Capitalized Interest Account and the Certificate Account), (iii) any Property
relating to the Mortgage Loans in Group I and Group II, the ownership of which
has been effected on behalf of the Trust as a result of foreclosure or
acceptance by the Master Servicer of a deed in lieu of foreclosure and that has
not been withdrawn from the Trust, (iv) any Mortgage Insurance Policies relating
to the Mortgage Loans in Group I and Group II and any rights of the Sponsor
under any Mortgage Insurance Policies, (v) Net Liquidation Proceeds relating to
the Mortgage Loans in Group I and Group II, (vi) the rights of the Trustee under
the Certificate Insurance Policy, and (vii) the rights of the Sponsor against
any Originator pursuant to the related Transfer Agreement. Such Mortgage Loans
in Group I and other amounts and property enumerated above are hereinafter
referred to as "Group I." Such Mortgage Loans in Group II and other amounts and
property enumerated above are hereinafter referred to as "Group II."
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS AN INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY,
IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH
860G) OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY (OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX
PURPOSES).
A-B-2
<PAGE> 178
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Mortgage Loan
Asset-Backed Certificates, Class B Certificates (the "Class B Certificates") and
issued under and subject to the terms, provisions and conditions of the Pooling
and Servicing Agreement, to which the Owner of this Certificate, by virtue of
acceptance hereof assents and, is bound. Also issued under the Pooling and
Servicing Agreement are Class A-1 Certificates; Class A-2 Certificates; Class
A-3 Certificates; Class A-4 Certificates; Class A-5 Certificates; Class A-6
Certificates; Class A-7 Certificates; Class BS Certificates; Class R-I
Certificates; Class R-II Certificates; and a Certificate representing the right
to receive certain supplemental interest amounts. All such Certificates are
collectively referred to as the "Certificates."
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing September 27, 1999, the Owners of the Class B
Certificates as of the close of business on the last business day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs (the "Record Date") will be entitled to receive the Class B
Distribution Amount relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or otherwise, to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee at least five
business days prior to the related record date, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class B Certificate will be entitled
to receive such Owner's Percentage Interest in the amounts distributed on such
Payment Date to the Owners of the Class B Certificates. The Percentage Interest
of each Class B Certificate as of any date of determination will be equal to the
percentage set forth on such Class B Certificate.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as having been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Mortgage Loans will be serviced by the Master Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Master Servicer to enter into Sub-Servicing Agreements
with certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Sub-Servicer shall release the Master Servicer from any of its obligations under
the Pooling and Servicing Agreement.
A-B-3
<PAGE> 179
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA,
Advanta National Bank, Advanta Bank Corp., Advanta Corp., any Originator or any
of their subsidiaries and affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans in Group I and Group II and amounts on deposit in the Accounts related to
Group I (except as otherwise provided in the Pooling and Servicing Agreement)
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of either the
Lower-Tier REMIC or the Upper-Tier REMIC is effected pursuant to the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate may at its option,
purchase from the Trust all (but not fewer than all) remaining Mortgage Loans
and other property then constituting the Trust Estate, and thereby effect early
retirement of the Class A Certificates, on any Payment Date when the aggregate
outstanding Loan Balance of the Mortgage Loans in the Trust is 10% or less of
the original aggregate Loan Balance of the Mortgage Loans in the Trust acquired
prior to the end of the Pre-Funding Period and (ii) under certain circumstances
relating to the qualification of either the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC under the Code the Mortgage Loans may be sold, thereby
affecting the early retirement of the Class B Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, upon compliance with the requirements
set forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust.
A-B-4
<PAGE> 180
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register, and thereupon one or more new Certificates of like
Class, tenor and Percentage Interest will be issued to the designated transferee
or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class B Certificates are issuable only as registered
Certificates in minimum percentage interests of all interests in the Class B
Certificates. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class B Certificates are exchangeable for
new Class B Certificates of the same percentage interest as the Class B
Certificates exchanged.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-B-5
<PAGE> 181
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed on behalf of the Trust.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-B-6
<PAGE> 182
EXHIBIT A-BS
FORM OF CLASS BS CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
SUPPLEMENTAL INTEREST PAYMENT ACCOUNT
RELATING TO
ADVANTA MORTGAGE LOAN TRUST 1999-3
CLASS BS
This Certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Conduit Receivables, Inc., Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp., any Originator or any of their
subsidiaries and affiliates. This Certificate represents a fractional ownership
interest in certain excess monies of the Supplemental Interest Payment Account
described herein.
No: BS- Date: August 24, 1999
Percentage Interest: ____% August 24, 2029
__________________
Final Scheduled
Payment Date
__________________
Registered Owner
The registered Owner named above is the registered Owner of a
fractional interest in certain excess monies of the Supplemental Interest
Payment Account pursuant to that certain Pooling and Servicing Agreement dated
as of August 1, 1999 (the "Pooling and Servicing Agreement") by and among
Advanta Conduit Receivables, Inc., as sponsor (the "Sponsor"), Bankers Trust
Company of California, N.A., as trustee (the "Trustee"), and Advanta Mortgage
Corp. USA, as master servicer (the "Master Servicer").
A-BS-1
<PAGE> 183
This Certificate is one of a Class of duly authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-3, Class BS
Certificates (the "Class BS Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the Owner of this Certificate, by virtue of acceptance hereof assents, and
is bound.
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 25th day of each month or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date"), commencing September 27, 1999 to the persons in whose names the
Class BS Certificates are registered at the close of business on the last
business day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (the "Record Date"), the Trustee will distribute
to each Owner of the Class BS Certificates such Owner's Percentage Interest
multiplied by any amounts then available to be distributed to the Owners of the
Class BS Certificates. Distributions will be made in immediately available
funds, by wire transfer or otherwise, to the account of such Owner at a domestic
bank or other entity having appropriate facilities therefor, if such Owner has
so notified the Trustee at least five business days prior to the related record
date, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
In order to receive the final distribution hereon, the Owner
hereof is required to present this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable state or local law by any Person from a distribution to
any Owner shall be considered as having been paid by the Trustee to such Owner
for all purposes of the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Mortgage Loans insured
or guaranteed by, the Sponsor, Advanta Mortgage Corp. USA, Advanta National
Bank, Advanta Bank Corp., Advanta Corp. or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
amounts held in the Supplemental Interest Payment Account, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have the right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such
A-BS-2
<PAGE> 184
Certificate or to institute suit for the enforcement of any such distribution,
and such right shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available under
the Certificate Insurance Policy of all amounts held by the Trustee and required
to be paid to such Owners pursuant to the Pooling and Servicing Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust or (ii) at any time when a Qualified Liquidation of a Trust occurs
pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or any Master Servicer Affiliate may at its option,
purchase from the Trust all (but not fewer than all) Mortgage Loans and other
property then constituting the Trust Estate, and thereby effect early retirement
of the Certificates, on any Payment Date when the aggregate outstanding Loan
Balance of the Mortgage Loans in the Trust is 10% or less of the original
aggregate Loan Balance of the Mortgage Loans in the Trust acquired prior to the
end of the Pre-Funding Period and (ii) under certain circumstances relating to
the qualification of either the Lower-Tier REMIC or the Upper-Tier REMIC as a
REMIC under the Code the Mortgage Loans in the Trust may be sold, thereby
effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form required by the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like aggregate fractional undivided interest in certain amounts held in the
Supplemental Interest Payment Account will be issued to the designated
transferee or transferees.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class BS Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class BS Certificates are exchangeable
for new Class BS Certificates evidencing the same Percentage Interest as the
Class BS Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A-BS-3
<PAGE> 185
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary.
A-BS-4
<PAGE> 186
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed, pursuant to the provisions of the Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
Trustee Authentication
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: ______________________
Name:
Title:
A-BS-5
<PAGE> 187
EXHIBIT B
FORM OF NOTICE OF ESTABLISHMENT OF
PRINCIPAL AND INTEREST ACCOUNT
Bankers Trust Company
of California, N.A.
Three Park Plaza, 16th Floor
Irvine, CA 92614
Attention: Corporate Trust Administration
Ladies & Gentlemen:
In accordance with Section 8.8 of the Pooling and Servicing
Agreement dated as of August 1, 1999 between Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), Advanta Mortgage Corp. USA, as
master servicer (the "Master Servicer"), and Advanta Conduit Receivables, Inc.,
as sponsor, please be advised that the Master Servicer has established the
Principal and Interest Account in trust for the Trustee, as follows:
BANK ACCOUNT NUMBER
PNC 8612821519
--------------
Bank of America
--------------
Very truly yours,
ADVANTA MORTGAGE CORP. USA
By:____________________________
Name: Michael Coco
Title: Vice President
Dated: August 24, 1999
[Evidence of Establishment of Principal and Interest Account]
B-1
<PAGE> 188
EXHIBIT C
FORM OF TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
Bankers Trust Company of California, N.A., a national banking
association, in its capacity as trustee (the "Trustee") under that certain
Pooling and Servicing Agreement dated as of August 1, 1999 (the "Pooling and
Servicing Agreement") by and among Advanta Conduit Receivables, Inc., a Nevada
corporation, as sponsor (the "Sponsor"), Advanta Mortgage Corp. USA, a Delaware
corporation, as master servicer, and the Trustee, hereby acknowledges receipt of
the items delivered to it by the Sponsor with respect to the Mortgage Loans
listed on Schedule 1 of the Pooling and Servicing Agreement, except as set forth
on the exception report (the "Exception Report") attached hereto.
The Trustee hereby additionally acknowledges that it shall
review such items (i) to confirm that an original Note is contained in the file
within 10 Business Days after the Startup Day and (ii) as required by Section
3.6(a) of the Pooling and Servicing Agreement, during the period specified
therein, and shall otherwise comply with Section 3.6(b) of the Pooling and
Servicing Agreement as required thereby.
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By:________________________________
Name:
Title:
Dated:_________________
C-1
<PAGE> 189
SCHEDULE TO EXHIBIT C
EXCEPTION REPORT
C-2
<PAGE> 190
EXHIBIT D
FORM OF CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of Bankers
Trust Company of California, N.A., a national banking association, acting in its
capacity as trustee (the "Trustee") of a certain pool of mortgage loans (the
"Pool") heretofore conveyed in trust to the Trustee, pursuant to that certain
Pooling and Servicing Agreement dated as of August 1, 1999 (the "Pooling and
Servicing Agreement") by and among Advanta Conduit Receivables, Inc., a Nevada
corporation, as sponsor (the "Sponsor"), Advanta Mortgage Corp. USA, a Delaware
corporation, as master servicer, and the Trustee; and
WHEREAS, the Trustee is required, pursuant to Section 3.6(a)
of the Pooling and Servicing Agreement, to review the Mortgage Files relating to
the Pool within a specified period following the Startup Day and to notify the
Sponsor promptly of any defects with respect to the Pool, and the Sponsor is
required to remedy such defects or take certain other action, all as set forth
in Section 3.6(b) of the Pooling and Servicing Agreement; and
WHEREAS, Section 3.6(a) of the Pooling and Servicing Agreement
requires the Trustee to deliver this Certification upon the satisfaction of
certain conditions set forth therein.
NOW, THEREFORE, it has determined that all required documents
(or certified copies of documents listed in Section 3.5 of the Pooling and
Servicing Agreement) have been executed or received, and that such documents
relate to the Initial Mortgage Loans identified in the Schedules of Mortgage
Loans pursuant to Section 3.5(a) of the Pooling and Servicing Agreement. In the
event that such documents have not been executed and received or do not relate
to the Initial Mortgage Loans, any remedial action by the Sponsor pursuant to
Section 3.6(b) of the Pooling and Servicing Agreement has been completed. The
Trustee makes no certification hereby, however, with respect to any intervening
assignments or assumption and modification agreements.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as trustee
By:____________________________
Name:
Title:
D-1
<PAGE> 191
EXHIBIT E
FORM OF DELIVERY ORDER
________________________ (date)
Bankers Trust Company
of California, N.A.
Three Park Plaza
16th Floor
Irvine, California 92714
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Pursuant to Article IV of the Pooling and Servicing Agreement,
dated as of August 1, 1999 (the "Pooling and Servicing Agreement") by and among
Advanta Conduit Receivables , Inc., a Nevada corporation, as sponsor (the
"Sponsor"), Advanta Mortgage Corp. USA, as master servicer, and Bankers Trust
Company of California, N.A., as trustee, the Sponsor hereby certifies that all
conditions precedent to the issuance of Advanta Mortgage Loan Trust 1999-3,
Mortgage Loan Asset-Backed Certificates (the "Certificates") have been satisfied
and hereby requests you to authenticate and deliver said Certificates, and to
release said Certificates to the Owners thereof, or otherwise upon their order.
Very truly yours,
ADVANTA CONDUIT
RECEIVABLES, INC.
By: ___________________________
Name: Michael Coco
Title: Vice President
E-1
<PAGE> 192
EXHIBIT F
FORM OF CLASS R-I AND CLASS R-II
TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION 860E(e)
OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of __________] [the United States], on behalf of
which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization"
and will not be a "disqualified organization" as of [date of transfer] (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the foregoing (other than
certain taxable instrumentalities), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural areas, or any
organization (other than a farmers' cooperative) that is exempt from federal
income tax unless such organization is subject to the tax on unrelated business
income); (ii) it is not acquiring the Class [R-I/R-II] Certificates for the
account of disqualified organization; (iii) it consents to any amendment of the
Pooling and Servicing Agreement that shall be deemed necessary by the Trustee
(upon advice of counsel) to constitute a reasonable arrangement to ensure that
the Class [R-I/R-II] Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer any such Class
[R-I/R-II] Certificate unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.
IN WITNESS WHEREOF, the Investor has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this __ day of __________, ____.
[NAME OF INVESTOR]
By:__________________________
[Name of Officer]
[Title of Officer]
F-1
<PAGE> 193
[Corporate Seal]
Attest:
___________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of
Officer], known or proved to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Investor, and acknowledged to
me that he executed the same as his free act and deed and the free act and deed
of the Investor.
Subscribed and sworn before me this ____ day of _______, ____.
___________________________
NOTARY PUBLIC
COUNTY OF__________________
STATE OF___________________
My commission expires the ____ day of __________, ____.
F-2
<PAGE> 194
EXHIBIT G
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, _____________,
______________ of Advanta Conduit Receivables, Inc. (the "Sponsor"), do hereby
constitute and appoint Bankers Trust Company of California, N.A., as the true
and lawful attorney, for the Sponsor and in its name, place and stead, to record
the assignments of mortgage with respect to the Mortgage Loans transferred to
the Bankers Trust Company of California, N.A., as trustee (the "Trustee"), under
that Pooling and Servicing Agreement dated as of August 1, 1999 by and among the
Sponsor, the Trustee and Advanta Mortgage Corp. USA, as master servicer, and to
do and perform all other things and acts relating to such assignments of
mortgage as may be necessary to effectuate the transfer of such Mortgage Loans
to the Trustee, including the execution and delivery of new assignments of
mortgage where necessary to comply with applicable real estate recording laws at
the time of recordation.
This power of attorney is irrevocable and is coupled with an
interest in the Mortgage Loans, and it may at all times be relied upon by any
person, firm or corporation dealing with the attorney named herein as remaining
in full force and effect, and such person, firm or corporation shall have no
liability to the Sponsor with respect thereto.
WITNESS the following signature this ____ day of ___________
_____.
______________________
By:___________________
Name:_________________
Title:________________
STATE OF PENNSYLVANIA
COUNTY OF MONTGOMERY
I, _____________, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that _______________, who acknowledged himself to
be the _______________ of Advanta Conduit Receivables, Inc., a Nevada
corporation, personally appeared before me in the jurisdiction aforesaid and
that he as such ______________ executed the foregoing instrument on behalf of
said corporation for the purposes therein contained.
Witness my hand and official seal this _____ day of _________________.
_______________________________(SEAL)
Notary Public
My Commission Expires:
G-1
<PAGE> 195
EXHIBIT H
FORM OF MONTHLY REPORT
Advanta Conduit Receivables, Inc.
Mortgage Loan Asset-Backed Certificates
Series 1999-3
Statement to Certificateholders
<TABLE>
<CAPTION>
PRIOR
ORIGINAL FACE PRINCIPAL CURRENT
CLASS VALUE BALANCE INTEREST PRINCIPAL TOTAL PRINCIPAL BALANCE
- ---------------- ------------------- ---------------- ---------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
A-1
A-2
A-3
A-4
A-5
A-6
A-7
B
BS
R-I
R-II
- ---------------- ------------------- ---------------- ---------------- --------------- ----------- ------------------
TOTALS
- ---------------- ------------------- ---------------- ---------------- --------------- ----------- ------------------
</TABLE>
FACTOR INFORMATION PER $1000 OF ORIGINAL FACE PASS-THROUGH RATES
<TABLE>
<CAPTION>
PRIOR CURRENT
PRINCIPAL PRINCIPAL
CLASS CUSIP BALANCE INTEREST PRINCIPAL TOTAL BALANCE CURRENT NEXT
- -------------- ----------- --------------- --------------- --------------- ------------- ---------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1
A-2
A-3
A-4
A-5
A-6
A-7
B
BS
R-I
R-II
</TABLE>
SPONSOR: Advanta Conduit Receivables, Inc. ACCOUNT
SERVICER: Advanta Mortgage Corp. USA MANAGER: _________________
LEAD UNDERWRITER: Bear, Stearns & Co., Inc.
RECORD DATE:
DISTRIBUTION DATE:
FACTOR INFORMATION:
H-1
<PAGE> 196
Advanta Conduit Receivables, Inc.
Mortgage Loan Asset-Backed Certificates
Series 1999-3
Statement to Certificateholders
AS TO EACH MORTGAGE LOAN GROUP
DISTRIBUTION DATE:
DELINQUENCY ADVANCES MADE:
ACCRUED SERVICING FEE FOR THE CURRENT PERIOD:
PLUS ADDITIONAL SERVICING FEES:
LESS PERMITTED REDUCTIONS TO SERVICING FEES:
TOTAL SERVICING FEES DUE MASTER SERVICER (INCLUDING MASTER SERVICING FEE):
COLLECTED SERVICING FEES FOR CURRENT PERIOD:
Total Delinquency (Excluding Foreclosure &
REO, Including delinquent bankruptcies)
<TABLE>
<CAPTION>
Loans in
Foreclosure
(Including
30-59 60-89 90+ bankruptcies in
Days Days Days Total Delinquency F/C)
---- ---- ---- ----------------- ---
<S> <C> <C> <C> <C> <C>
UPS-$
%-$
Loans-$
%-#
</TABLE>
BOOK VALUE AND LOAN NUMBER OF REO PROPERTY:
NUMBER OF LOANS AS OF THE CURRENT DISTRIBUTION DATE:
NUMBER OF LOANS AS OF THE NEXT DISTRIBUTION DATE:
WEIGHTED AVERAGE COUPON AS OF THE CURRENT DISTRIBUTION DATE:
WEIGHTED AVERAGE COUPON AS OF THE NEXT DISTRIBUTION DATE:
H-2
<PAGE> 197
SUBSTITUTION AMOUNTS:
LOAN PURCHASE PRICES
Bankruptcy
Proceedings
Loans -# UPB-$
Status
Current
Delinquent*
Foreclosure*
Total
Modified Loans
Loans-# UPS-$
Status
Current
Delinquent*
Foreclosure*
Total
* included in delinquency and foreclosure statistics above
CURTAILMENTS INCLUDED IN CURRENT DISTRIBUTION:
PREPAYMENTS IN FULL INCLUDED IN CURRENT DISTRIBUTION:
RECOVERIES OF PRINCIPAL INCLUDED IN CURRENT DISTRIBUTION:
CARRY-FORWARD AMOUNT:
AMOUNT OF OVERCOLLATERALIZATION INCREASE OR DECREASE WITH
RESPECT TO A MORTGAGE LOAN GROUP:
INFORMATION PURSUANT TO
SECTION 6049(d)(7)(C):
PROJECTED EXCESS SPREAD FOR MORTGAGE LOAN GROUP:
BALANCE OF LARGEST LOAN:
H-3
<PAGE> 198
TRUST ACTIVITY
CERTIFICATE ACCOUNT DEPOSIT
AS TO EACH MORTGAGE LOAN GROUP:
PROCEEDS OF LIQUIDATION OF TRUST ESTATE:
AMOUNT OF DEPOSIT IN THE CERTIFICATE ACCOUNT:
LOAN PURCHASE PRICE AMOUNTS:
SUBSTITUTION AMOUNT:
INVESTMENT EARNINGS: ON CERT. ACCT.
MONTHLY REMITTANCE FOR EACH CLASS:
AMOUNT OF EXCESS SPREAD ALLOCABLE TO A GROUP USED TO COVER SHORTFALLS WITH
RESPECT TO ANOTHER GROUP:
AMOUNT WITHDRAWN FROM CERTIFICATE ACCOUNT
AND DEPOSITED IN THE EXPENSE ACCOUNT:
AMOUNT WITHDRAWN FROM CERTIFICATE ACCOUNT
AND DISTRIBUTED TO SUBORDINATED CERTIFICATES:
.
.
AMOUNT REMAINING IN CERTIFICATE ACCOUNT:
PREMIUM AMOUNT:
H-4
<PAGE> 199
EXHIBIT I
FORM OF MASTER SERVICER'S TRUST RECEIPT
To: Bankers Trust Company
of California, N.A.
Three Park Plaza
16th Floor
Irvine, California 92614
Attn: Corporate Trust
Date:
In connection with the administration of the Mortgage Loans
held by you as Trustee under a certain Pooling and Servicing Agreement dated as
of August 1, 1999 by and among Advanta Mortgage Corp. USA, as master servicer
(the "Master Servicer"), Advanta Conduit Receivables, Inc., as sponsor, and you,
as trustee (the "Agreement"), the Master Servicer hereby requests a release of
the Mortgage File held by you as Trustee with respect to the following Mortgage
Loan for the reason indicated below:
Mortgagor's Name:
Loan No.:
Reason for requesting file:
_______ 1. Mortgage Loan paid in full.
(The Master Servicer hereby certifies that
all amounts received in connection with the
loan have been or will be credited to the
Certificate Account (whichever is applicable)
pursuant to the Agreement.)
_______ 2. Mortgage Loan repurchased pursuant to Section 3.3,
3.4, 3.6(b) or 8.10 of the Agreement.
(The Master Servicer hereby certifies that
the Loan Purchase Price has been or will be
paid to the Certificate Account pursuant to
the Agreement.)
_______ 3. Mortgage Loan substituted.
I-1
<PAGE> 200
(The Master Servicer hereby certifies that a
Qualified Replacement Mortgage has been or
will be assigned and delivered to you along
with the related Mortgage File pursuant to
the Agreement.)
_______ 4. The Mortgage Loan is being foreclosed.
_______ 5. Other. (Describe)
The undersigned acknowledges that the above File will be held
by the Master Servicer in accordance with the provisions of the Agreement and
will be returned to you, unless the Mortgage Loan has been (i) paid in full,
(ii) repurchased, (iii) substituted by a Qualified Replacement Mortgage (in
which case the Mortgage File will be retained by us permanently) or (iv) is
being foreclosed, in which case the Mortgage File will be returned when no
longer required by us for such purpose.
Capitalized terms used herein shall have the meanings ascribed
to them in the Agreement.
ADVANTA MORTGAGE CORP. USA
By_________________________
Name:
Title:
I-2
<PAGE> 201
EXHIBIT J
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT
Advanta Conduit Receivables, Inc. (the "Sponsor") and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), of the Advanta
Mortgage Loan Trust 1999-3 (the "Trust"), pursuant to the Pooling and Servicing
Agreement dated as of August 1, 1999 among Advanta Mortgage Corp. USA, as master
servicer (the "Master Servicer"), the Sponsor and the Trustee (the "Pooling and
Servicing Agreement"), hereby confirm their understanding with respect to the
acquisition by the Trust of those Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").
Conveyance of Subsequent Mortgage Loans. The Sponsor does
hereby irrevocably transfer, assign, set over and otherwise convey to the Trust
and does hereby request or direct the Trust to acquire, without recourse (except
as otherwise explicitly provided for herein) all of its right, title and
interest in and to the Subsequent Mortgage Loans listed on the attached Schedule
of Mortgage Loans, including specifically, without limitation, the Mortgages,
the Mortgage Files and all other documents, materials and properties appurtenant
thereto, including all principal collected and interest accrued on or after
__________, _____ (the "Subsequent Cut-Off Date") and any Mortgage Insurance
Policies relating thereto. The Sponsor shall deliver or cause to be delivered
the original Mortgage or mortgage assignment with evidence of recording thereon
(except as otherwise provided by the Pooling and Servicing Agreement) and other
required documentation in accordance with the terms set forth in Section 3.8(b)
of the Pooling and Servicing Agreement.
The costs relating to the delivery of the documents specified
in this Subsequent Transfer Agreement and the Pooling and Servicing Agreement
shall be borne by the Sponsor.
The Sponsor hereby affirms the representations and warranties
set forth in the Pooling and Servicing Agreement that relate to itself and to
the Subsequent Mortgage Loans as of the date hereof.
All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified, confirmed and incorporated herein; provided that
in the event of any conflict, the provisions of this Subsequent Transfer
Agreement shall control over the conflicting provisions of the Pooling and
Servicing Agreement.
J-1
<PAGE> 202
Terms and capitalized and not defined herein shall have their
respective meanings as set forth in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the parties have executed this Subsequent
Transfer Agreement as of this ____ day of________________,____________
ADVANTA CONDUIT RECEIVABLES,
INC.,
as Sponsor
By:________________________
Michael Coco
Vice President
ADVANTA MORTGAGE LOAN
TRUST 1999-3
By: Bankers Trust Company of
California, N.A.,
not in its individual capacity but
solely as Trustee
By:_______________________
Name:
Title:
Dated:
Attachments
A. Addition Notice.
B. Schedule of Mortgage Loans.
C. Officer's Certificate.
D. Trustee's Certificate.
E. Conveyance Agreement.
J-2
<PAGE> 203
EXHIBIT K
FORM OF LOST NOTE AFFIDAVIT
AFFIDAVIT OF LOST NOTE
Loan # : Note Date:
Current Borrower(s) :
I, ___________________, being duly sworn, do hereby state under oath that:
1. I, as [Title] of _________________ (the "Lender"), am authorized to make this
affidavit.
2. The Lender is the payee under the mortgage note ("Note"). A mortgage/deed
of trust ("Security Instrument") signed by the Borrower(s) refers to the
note made of even date. The Security Instrument is attached as Exhibit 1.
3. The Lender is the lawful owner of the Note and has good title to the Note
and has the right to convey good title thereto, and the Lender has not
canceled, altered, assigned or hypothecated the Note except to the Sponsor
and the Trustee.
4. The Note was not located after a thorough and diligent search which
consisted of the following actions:
Searching of all servicing and collateral loan files
Querying the loan servicing employees
5. Attached hereto as Exhibit 1 is a true and correct copy of the Security
Instrument with an original note endorsement in blank by Lender.
6. This Affidavit is intended to be relied on by [Advanta entity], its
successors, and assigns.
7. Following the assignment of the Note to the Trustee, the Trustee will be
entitled to enforce the Note pursuant to Section 3-309 of the Uniform
Commercial Code.
Executed this ___ day of ______, 199_, on behalf of the Lender by:
By: _____________________
Name:
Title:
K-1
<PAGE> 204
ON THIS ____ DAY OF ____________, 199_, BEFORE ME APPEARED
_____________________________, to me personally known, who being duly sworn did
say that he is the [Title] of ___________________________, and that said
Affidavit of Lost Note was signed and sealed in behalf of such corporation as
Lender and said __________________________ acknowledged this instrument to be
the free act and deed of said corporation.
______________________________________________________
Notary Public in and for the State of ____________
My commission expires _____________________________________
K-2
<PAGE> 1
Exhibit 4.2
<PAGE> 2
[Ambac Assurance Corporation Letterhead]
AMBAC
CERTIFICATE GUARANTY INSURANCE POLICY
Insured Obligations: $525,000,000 Policy Number: AB0284BE
Advanta Mortgage Loan Trust 1999-3, Advanta Mortgage Loan Asset-Backed
Certificates, Series 1999-3, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6 and Class A-7
Premium: Calculated as set
forth in Certificate Guaranty
Insurance Policy Endorsement
attached hereto and made a
part hereof
AMBAC ASSURANCE CORPORATION (AMBAC) A Wisconsin Stock Insurance Company in
consideration of the payment of the premium and subject to the terms of this
Policy, hereby agrees unconditionally and irrevocably to pay to the Trustee for
the benefit of the Holders of the Insured Obligations, that portion of the
Insured Amounts which shall become Due for Payment but shall be unpaid by reason
of Nonpayment.
Ambac will make such payments to the Trustee from its own funds on the later of
(a) one (1) Business Day following notification to Ambac of Nonpayment or (b)
the Business Day on which the Insured Amounts are Due for Payment. Such payments
of principal or interest shall be made only upon presentation of an instrument
of assignment in form and substance satisfactory to Ambac, transferring to Ambac
all rights under such Insured Obligations to receive the principal of and
interest on the Insured Obligation. Ambac shall be subrogated to all the
Holders' rights to payment on the Insured Obligations to the extent of the
insurance disbursements so made. Once payments of the Insured Amounts have been
made to the Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amounts.
In the event the Trustee for the Insured Obligations has notice that any payment
of principal or interest on an Insured Obligation which has become Due for
Payment and which is made to a Holder by or on behalf of the Trustee has been
deemed a preferential transfer and theretofore recovered from its Holder
pursuant to the United States Bankruptcy Code in accordance with a final,
nonappealable order of a court of competent jurisdiction, such Holder will be
entitled to payment from Ambac to the extent of such recovery if sufficient
funds are not otherwise available.
This Policy is noncancelable by Ambac for any reason, including failure to
receive payment of any premium due hereunder. The premium on this Policy is not
refundable for any reason. This Policy does not insure against loss of any
prepayment or other acceleration payment which at any time may become due in
respect of any Insured Obligation, other than at the sole option of Ambac, nor
against any risk other than Nonpayment, including failure of the Trustee to make
any payment due Holders of Insured Amounts.
To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such rights
and defenses may be available to Ambac, to avoid payment of its obligations
under this Policy in accordance with the express provisions hereof.
Any capitalized terms not defined herein shall have the meaning given such terms
in the endorsement attached hereto or in the Agreement.
In witness whereof, Ambac has caused this Policy to be affixed with its
corporate seal and to be signed by its duly authorized officers in facsimile to
become effective as their original signatures and binding upon Ambac by virtue
of the countersignature of its duly authorized representative.
/s/ P. Lassiter /s/ Stephen D. Cooke
- --------------- --------------------
President Secretary
/s/ [Authorized Representative]
-------------------------------
Effective Date: August 24, 1999 Authorized Representative
<PAGE> 1
Exhibit 4.3
<PAGE> 2
CONVEYANCE AGREEMENT
Advanta Mortgage Corp. USA, Advanta Mortgage Conduit Services,
Inc., Advanta Mortgage Corp. Midwest, Advanta Mortgage Corp. Northeast, Advanta
Finance Corp., Advanta Bank Corp. and Advanta National Bank, (each, an
"Affiliated Originator"), and Advanta Conduit Receivables, Inc., as sponsor,
pursuant to the Mortgage Loan Transfer Agreement dated as of August 1, 1999 (the
"Transfer Agreement") among themselves and Bankers Trust Company of California,
N.A., as trustee (the "Trustee"), hereby confirm their understanding with
respect to the conveyance by each Affiliated Originator of those Mortgage Loans
listed on the attached Schedule of Mortgage Loans (the "Transferred Mortgage
Loans") to the Sponsor.
Conveyance of Transferred Mortgage Loans. Each Affiliated
Originator and the Sponsor, concurrently with the execution and delivery of this
Conveyance Agreement, does hereby irrevocably transfer, assign, set over and
otherwise convey, and does direct the Trustee to convey to the Sponsor and/or
the Advanta Mortgage Loan Trust, without recourse (except as otherwise
explicitly provided for herein) all of its right, title and interest in and to
the Transferred Mortgage Loans being conveyed by it, including specifically,
without limitation, the Mortgages (as such term is defined in the Pooling and
Servicing Agreement, dated as of August 1, 1999 (the "Pooling and Servicing
Agreement") among the Sponsor, the Master Servicer and the Trustee), the Files
and all other documents, materials and properties appurtenant thereto and the
Notes, including all interest accrued and principal received by such Affiliated
Originator on or with respect to such Transferred Mortgage Loans on or after the
related Cut-off Date, together with all of its right, title and interest in and
to the proceeds received on or after the related Cut-off Date of any related
Mortgage Insurance Policies.
If an Affiliated Originator cannot deliver the original
Mortgage or mortgage assignment with evidence of recording thereon concurrently
with the execution and delivery of this Conveyance Agreement solely because of a
delay caused by the public recording office where such original Mortgage or
mortgage assignment has been delivered for recordation, such Affiliated
Originator shall promptly deliver to the Trustee such original Mortgage or
mortgage assignment with evidence of recording indicated thereon upon receipt
thereof from the public recording official.
The costs relating to the delivery of the documents specified
in this Conveyance Agreement shall be borne by each Affiliated Originator.
The Affiliated Originators hereby make the Representations and
Warranties set forth in Section 5(b) of the Transfer Agreement with respect to
the Transferred Mortgage Loans.
The "Cut-off Date" with respect to such Transferred Mortgage
Loans shall be August 1, 1999.
All terms and conditions of the Transfer Agreement are hereby
incorporated herein, provided that in the event of any conflict the provisions
of this
<PAGE> 3
Conveyance Agreement shall control over the conflicting provisions of the
Transfer Agreement.
Terms capitalized herein and not defined herein shall have
their respective meanings as set forth in the Transfer Agreement.
[Remainder of Page Intentionally left Blank]
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this
Conveyance Agreement to be duly executed by their respective officers, all as of
the 24th day of August, 1999.
ADVANTA MORTGAGE CORP. USA
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
ADVANTA MORTGAGE CORP. MIDWEST
ADVANTA MORTGAGE CORP. NORTHEAST
ADVANTA FINANCE CORP.
ADVANTA NATIONAL BANK,
as Affiliated Originators
By: /s/ Michael Coco
------------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA CONDUIT
RECEIVABLES, INC., as Sponsor
By: /s/ Michael Coco
------------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA BANK CORP.,
as an Affiliated Originator
By: /s/ Mark Hales
------------------------------------
Name: Mak Hales
Title: Vice President
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By: /s/ Mark McNeill
------------------------------------
Name: Mark McNeill
Title:
Conveyance Agreement
<PAGE> 1
Exhibit 4.4
<PAGE> 2
MORTGAGE LOAN TRANSFER AGREEMENT
by and among
ADVANTA MORTGAGE CORP. USA,
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
ADVANTA MORTGAGE CORP. MIDWEST,
ADVANTA MORTGAGE CORP. NORTHEAST,
ADVANTA NATIONAL BANK,
ADVANTA BANK CORP.,
ADVANTA FINANCE CORP.,
as Affiliated Originators
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
and
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
Dated as of August 1, 1999
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
SECTION 1. DEFINITIONS.........................................................................1
SECTION 2. INTEREST CALCULATIONS...............................................................3
SECTION 3. TRANSFERS OF MORTGAGE LOANS.........................................................3
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING THE AFFILIATED
ORIGINATORS AND THE SPONSOR.........................................................3
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AFFILIATED ORIGINATORS REGARDING THE
MORTGAGE LOANS......................................................................7
SECTION 6. AUTHORIZED REPRESENTATIVES.........................................................11
SECTION 7. NOTICES............................................................................12
SECTION 8. GOVERNING LAW......................................................................12
SECTION 9. ASSIGNMENT.........................................................................12
SECTION 10. COUNTERPARTS.......................................................................12
SECTION 11. AMENDMENT..........................................................................12
SECTION 12. SEVERABILITY OF PROVISIONS.........................................................12
SECTION 13. NO AGENCY; NO PARTNERSHIP OR JOINT VENTURE.........................................13
SECTION 14. FURTHER ASSURANCES.................................................................13
SECTION 15. THE CERTIFICATE INSURER............................................................13
SECTION 16. MAINTENANCE OF RECORDS.............................................................13
</TABLE>
i
<PAGE> 4
THIS MORTGAGE LOAN TRANSFER AGREEMENT, dated as of August 1,
1999, between Advanta Mortgage Corp. USA, Advanta Mortgage Conduit Services,
Inc., Advanta Mortgage Corp. Midwest, Advanta Mortgage Corp. Northeast, Advanta
Finance Corp., Advanta Bank Corp. and Advanta National Bank, each as a seller
(each, an "Affiliated Originator" and collectively, the " Affiliated
Originators"), Bankers Trust Company of California, N.A., as trustee (the
"Trustee") and Advanta Conduit Receivables, Inc., as sponsor (the "Sponsor");
W I T N E S S E T H:
WHEREAS, each Affiliated Originator is an originator or
purchaser of mortgage loans; and
WHEREAS, the Affiliated Originators and the Sponsor expect,
from time to time, to cause such mortgage loans to be conveyed to the Trust in
connection with a securitization transaction sponsored by the Sponsor;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein contained, the parties hereto hereby agree as follows:
SECTION 1 Definitions. Whenever used in this Agreement or in
any Conveyance Agreement, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Section 1;
provided, however, that any capitalized terms used herein or in any Conveyance
Agreement and not defined herein shall have their respective meanings as set
forth in the Pooling and Servicing Agreement (as defined below).
Agreement: This Mortgage Loan Transfer Agreement, as it may be
amended from time to time, including the exhibits and supplements hereto.
Bulk Acquisition Loan: Any Mortgage Loan purchased by an
Affiliated Originator as part of a bulk portfolio acquisition.
Conveyance Agreement: Any conveyance agreement relating to a
Mortgage Pool, in substantially the form set forth as Exhibit A hereto.
Coupon Rate: The rate of interest borne by each Note.
Cut-Off Date: With respect to any Mortgage Pool, the date
defined as such in the related Conveyance Agreement.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
<PAGE> 5
First Mortgage Loan: A Mortgage Loan which constitutes a first
priority mortgage lien with respect to any Property.
FNMA: The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor thereof.
Junior Mortgage Loan: A Mortgage Loan which constitutes a
junior priority mortgage lien with respect to the related Property.
Loan Balance: With respect to each Mortgage Loan, the
outstanding principal balance thereof on the related Cut-Off Date, less any
payments of principal on such Mortgage Loan that were transferred by the Master
Servicer or any Sub-Servicer to the Trustee for deposit in the Certificate
Account.
Master Servicer: Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
Mortgage File: The documents delivered to the Trustee pursuant
to the document delivery provisions of the Pooling and Servicing Agreement
pertaining to a particular Mortgage Loan.
Mortgage Loans: Each of the mortgage loans subject hereto,
together with any Qualified Replacement Mortgages substituted therefor in
accordance with the Pooling and Servicing Agreement.
Mortgage Pool: Any group of Mortgage Loans transferred to the
Sponsor and/or to the Trust pursuant to a specific Conveyance Agreement or
Subsequent Transfer Agreement.
Note: The note or other evidence of indebtedness of a
Mortgagor under a Mortgage Loan.
Offered Certificates: The Class A Certificates issued by the
Trust.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement dated as of August 1, 1999, by and among Advanta Conduit Receivables,
Inc. as Sponsor, Advanta Mortgage Corp. USA, as master servicer, and Bankers
Trust Company of California, N.A., as trustee.
Property: The underlying property securing a Mortgage Loan.
2
<PAGE> 6
Qualified Mortgage: "Qualified Mortgage" shall have the
meaning set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code (or any successor statute thereto) and applicable to the
Trust and the Mortgage Loan.
Schedule of Mortgage Loans: The Schedule of Mortgage Loans
required to be delivered pursuant to the Pooling and Servicing Agreement.
Trust: Advanta Mortgage Loan Trust 1999-3, the trust created
under the Pooling and Servicing Agreement.
Trustee: Bankers Trust Company of California, N.A., located on
the date of execution of this Agreement at 3 Park Plaza, Irvine, California
92614, a national banking association, not in its individual capacity but solely
as trustee, and any successor hereunder.
SECTION 2 Interest Calculations. Calculations of interest
hereunder, including, without limitation, calculations of interest at the Coupon
Rate, which are made in respect of a Mortgage Loan shall be made on a daily
basis using any of the following (i) a 360-day year comprised of twelve 30-day
months, (ii) a 360-day year and the actual number of days elapsed in the
applicable interest period, or (iii) a 365-day year and the actual number of
days elapsed in the applicable interest period, as specified in the related
Note.
SECTION 3 Transfers of Mortgage Loans. From time to time the
Affiliated Originators intend to transfer Mortgage Loans to the Sponsor pursuant
to a Conveyance Agreement in substantially the form of Exhibit A hereto. The
Sponsor will then transfer the Mortgage Loans to the Trust pursuant to the
Pooling and Servicing Agreement.
SECTION 4 Representations, Warranties and Covenants Regarding
the Affiliated Originators and the Sponsor. (a) Each Affiliated Originator
hereby represents and warrants to the Sponsor, the Trustee and their respective
successors and assigns that, as of the date hereof;
(i) Such Affiliated Originator is a corporation (or, in the
case of Advanta National Bank, a national banking association, and, in
the case of Advanta Bank Corp., a Utah industrial loan corporation)
duly organized, validly existing and in good standing under the laws
governing its creation and existence and is in good standing as a
foreign corporation in each jurisdiction in which the nature of its
business, or the properties owned or leased by it make such
qualification necessary. Each Affiliated Originator has all requisite
corporate power and authority to own and operate its properties, to
carry out its business as presently conducted and as proposed to be
conducted, to enter into and discharge its obligations under this
Agreement and each Conveyance Agreement.
(ii) The execution and delivery of this Agreement by each
Affiliated Originator and its performance and compliance with the terms
of this Agreement and each Conveyance Agreement to which it is a party
have been duly authorized
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by all necessary corporate action on the part of such Affiliated
Originator and will not violate such Affiliated Originator's Articles of
Incorporation, Articles of Association or Bylaws or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or result in a breach of, any material contract, agreement or other
instrument to which such Affiliated Originator or its properties is a party or
by which such Affiliated Originator is bound or violate any statute or any
order, rule or regulation of any court, governmental agency or body or other
tribunal having jurisdiction over such Affiliated Originator or any of its
properties.
(iii) This Agreement and each Conveyance Agreement to which
such Affiliated Originator is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto, each
constitutes a valid, legal and binding obligation of such Affiliated
Originator, enforceable against it in accordance with the terms hereof,
except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at
law).
(iv) Such Affiliated Originator 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, which might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of such Affiliated
Originator or its properties, or might have consequences that would
materially and adversely affect its performance hereunder and under
each Conveyance Agreement to which such Affiliated Originator is a
party, or which would draw into question the validity of this Agreement
or the Mortgage Loans taken as a whole or of any action taken or to be
taken in connection with the obligations of the Affiliated Originator
contemplated herein.
(v) No litigation is pending or, to the best of such
Affiliated Originator's knowledge, threatened against such Affiliated
Originator which litigation might have consequences that would prohibit
its entering into this Agreement or any Conveyance Agreement to which
it is a party or might have consequences that would materially and
adversely affect its performance hereunder and under each Conveyance
Agreement to which such Affiliated Originator is a party.
(vi) Neither this Agreement nor any certificate of an officer,
statement furnished in writing or report delivered pursuant to the
terms hereof by such Affiliated Originator contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(vii) Upon the receipt of each Mortgage File by the Trustee
under this Agreement, the Trust will have good and marketable title to
such Mortgage Loan
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and such other items of the Mortgage File free and clear of any lien
(other than liens which will be simultaneously released).
(viii) Such Affiliated Originator nor any affiliate thereof
will report on any financial statement any part of the Servicing Fee as
an adjustment to the sales price of the Mortgage Loans.
(ix) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc., under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which such Affiliated Originator makes no such representation or
warranty), that are necessary or advisable in connection with the sale
of the Mortgage Loans and the execution and delivery by such Affiliated
Originator of this Agreement and each Conveyance Agreement to which it
is a party, have been duly taken, given or obtained, as the case may
be, are in full force and effect on the date hereof, are not subject to
any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be
taken or review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this
Agreement and each Conveyance Agreement on the part of such Affiliated
Originator and the performance by such Affiliated Originator of its
obligations under this Agreement and each Conveyance Agreement to which
it is a party.
(x) The origination practices used by such Affiliated
Originator with respect to the Mortgage Loans have been, (i) in all
material respects, legal, proper, prudent and customary in the mortgage
loan lending business and (ii) in compliance with the Sponsor's
underwriting criteria as described in the Prospectus.
(xi) The transactions contemplated by this Agreement are in
the ordinary course of business of such Affiliated Originator. The
transfer, assignment and conveyance of the Notes and the Mortgages by
the Master Servicer pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(xii) Such Affiliated Originator received fair consideration
and reasonably equivalent value in exchange for the sale of the
interests in the Mortgage Loans.
(xiii) Such Affiliated Originator did not sell any interest in
any Mortgage Loan with any intent to hinder, delay or defraud any of
its respective creditors.
(xiv) Such Affiliated Originator is solvent and will not be
rendered insolvent as a result of the sale of the Mortgage Loans to the
Trust.
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The representations and warranties set forth in this Section
4(a) shall survive the sale and assignment of the Mortgage Loans to the Sponsor.
In addition, each Affiliated Originator hereby covenants to
perform the obligations, if any, imposed upon it by the Pooling and Servicing
Agreement.
(b)The Sponsor hereby represents and warrants to each
Affiliated Originator and the Trustee that, as of the date hereof:
(i) The Sponsor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and
has all licenses and qualifications necessary to carry on its business
as now being conducted and to perform its obligations hereunder; the
Sponsor has the power and authority to execute and deliver this
Agreement and to perform its obligations in accordance herewith; the
execution, delivery and performance of this Agreement (including any
Conveyance Agreement and any other instruments of transfer to be
delivered pursuant to this Agreement) by the Sponsor and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action and do not violate
the organization documents of the Sponsor, contravene or violate any
law, regulation, rule, order, judgement or decree to which the Sponsor
or its properties are subject or contravene, violate or result in any
breach of any provision of, or constitute a default under, or result in
the imposition of any lien on any assets of the Sponsor pursuant to the
provisions of, any mortgage, indenture, contract, agreement or other
undertaking to which the Sponsor is a party or which purports to be
binding upon Sponsor or any of Sponsor's assets; this Agreement
evidences the valid and binding obligation of the Sponsor enforceable
against the Sponsor in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditor's rights generally or the
application of equitable principles in any proceeding, whether at law
or in equity;
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency, that are necessary in connection with the execution and
delivery by the Sponsor of this Agreement, have been duly taken, given
or obtained, as the case may be, are in full force and effect, are not
subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may
be taken or review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this
Agreement on the part of the Sponsor and the performance by the Sponsor
of its obligations under this Agreement; and
(iii) There is no action, suit, proceeding or investigation
pending or, to the best of the Sponsor's knowledge, threatened against
the Sponsor which, either in any one instance or in the aggregate, may
result in any material adverse change
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in the business, operations, financial condition, properties
or assets of the Sponsor or in any material impairment of the right or
ability of the Sponsor to carry on its business substantially as now
conducted, or in any material liability on the part of the Sponsor or
which would draw into question the validity of this Agreement or of any
action taken or to be taken in connection with the obligations of the
Sponsor contemplated herein, or which would be likely to impair the
ability of the Sponsor to perform under the terms of this Agreement.
The representations and warranties set forth in this Section
4(b) shall survive the sale and assignment of the Mortgage Loans to the Sponsor.
Upon discovery of a breach of any of the foregoing representations and
warranties which materially and adversely affects the interests of the
Affiliated Originator, the Affiliated Originator shall give prompt written
notice to the Sponsor. Within 30 days of its receipt of notice of breach, the
Sponsor shall cure such breach in all material respects.
SECTION 5 Representations and Warranties of the Affiliated
Originators Regarding the Mortgage Loans. (a) Set forth in Section 5(b) below is
a listing of representations and warranties which will be deemed to have been
made by each Affiliated Originator in connection with the Mortgage Loans such
Affiliated Originator will convey to the Sponsor and/or the Trust. In addition,
a Conveyance Agreement may, with respect to the Mortgage Loans in the related
Mortgage Pool, delete or modify any of such representations and warranties, or
may add additional representations and warranties ("Additional Representations
and Warranties"). The representations and warranties listed in Section 5(b)
below, together with any Additional Representations and Warranties, are the
"Representations and Warranties". Reference to the Cut-Off Date is as of the
Cut-Off Date set forth in the related Conveyance Agreement.
(b) With respect to each Mortgage Loan, each Affiliated
Originator hereby represents, warrants and covenants to the Sponsor and the
Trustee, as of the related Cut-Off Date, as follows, on which representations,
warranties and covenants the Trustee relies in accepting the Mortgage Loans:
(i) The information with respect to each Mortgage Loan set
forth in the Schedule of Mortgage Loans is true and correct;
(ii) All of the original or certified documentation required
to be delivered to the Trustee pursuant to the Pooling and Servicing
Agreement (including all material documents related thereto) with
respect to each Mortgage Loan has been or will be delivered to the
Trustee in accordance with the terms of the Pooling and Servicing
Agreement. Each of the documents and instruments specified to be
included therein has been duly executed and is in due and proper form,
and each such document or instrument is in a form generally acceptable
to prudent mortgage lenders that regularly originate or purchase
mortgage loans comparable to the Mortgage Loans for sale to prudent
investors in the secondary market that invest in mortgage loans such as
the Mortgage Loans.
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(iii) Each Mortgage Loan being transferred to the Sponsor is a
Qualified Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling, condominiums and townhouses, which may
include manufactured homes which qualify as eligible for inclusion in a
REMIC; provided, however, that no more than 10.0% by aggregate
principal balance of the Mortgage Loans as of the Initial Cut-Off Date
are leasehold mortgages;
(v) No Mortgage Loan had a Combined Loan-to-Value Ratio in
excess of 100% at the time of origination;
(vi) Each Mortgage is either a valid and subsisting first,
second or third lien of record on the Property (subject in the case of
any Junior Mortgage Loan only to a Senior Lien on such Property) and
subject in all cases to the exceptions to title set forth in the
Mortgage Loan's title insurance policy, which exceptions are generally
acceptable to banking institutions in connection with their regular
mortgage lending activities, and such other exceptions to which similar
properties are commonly subject and which do not individually, or in
the aggregate, materially and adversely affect the benefits of the
security intended to be provided by such Mortgage;
(vii) Immediately prior to the transfer and assignment herein
contemplated, each Affiliated Originator held good and indefeasible
title to, and was the owner of, each Mortgage Loan conveyed by such
Affiliated Originator. The Mortgage Loan was not subject to liens,
charges, mortgages, encumbrances or rights of others except liens which
will be released simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein contemplated, the
Trustee will hold good and indefeasible title to, and be the sole owner
of, each Mortgage Loan subject to no liens, charges, mortgages,
encumbrances or rights of others except liens which will be released
simultaneously with such transfer and assignment;
(viii) No Mortgage Loans are 30 or more days Delinquent as of
the Cut-Off Date, except for any portion of the Mortgage Loans which
the Pooling and Servicing Agreement so permits;
(iv) To the best knowledge of such Affiliated Originator,
there is no delinquent tax or assessment lien or mechanic's lien on any
Property, and each Property is free of substantial damage and is in
good repair;
(x) To the best knowledge of such Affiliated Originator, there
is no valid and enforceable right of rescission offset, defense or
counterclaim to any Note or Mortgage, including the obligation of the
related Mortgagor to pay the unpaid principal of or interest on such
Note or the defense of usury, nor will the operation of any of the
terms of the Note or the Mortgage, or the exercise of any right
thereunder, render either the Note or the Mortgage unenforceable in
whole
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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;
(xi) To the best knowledge of such Affiliated Originator,
there is no mechanics' lien or claim for work, labor or material
affecting any Property which is or may be a lien prior to, or equal
with, the lien of the related Mortgage except those which are insured
against by any title insurance policy referred to in paragraph (xiii)
below;
(xii) Each Mortgage Loan at the time it was made complied in
all material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedure, usury, equal credit opportunity, disclosure and
recording laws;
(xiii) With respect to each Mortgage Loan, a title search or a
lender's title insurance policy, issued in standard California Land
Title Association form or American Land Title Association form, or
other form acceptable in a particular jurisdiction by a title insurance
company authorized to transact business in the state in which the
related Property is situated, in an amount at least equal to the
Original Principal Amount of such Mortgage Loan insuring the
mortgagee's interest under the related Mortgage Loan as the holder of a
valid first, second or third mortgage lien of record on the real
Property described in the related Mortgage, as the case may be, subject
only to exceptions of the character referred to in paragraph (vi)
above, was effective on the date of the origination of such Mortgage
Loan, and, as of the Cut-Off Date such policy, if issued, will be valid
and thereafter such policy shall continue in full force and effect;
(xiv) The improvements upon each Property are covered by a
valid and existing hazard insurance policy (which may be a blanket
policy of the type described in the Pooling and Servicing Agreement)
with a generally acceptable carrier that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Mortgage Loan (together,
in the case of a Junior Mortgage Loan, with the outstanding principal
balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the
full insurable value of the Property;
(xv) If the Mortgage Loan at the time of origination relates
to a Property in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a
flood insurance policy (which may be a blanket policy of the type
described in the Pooling and Servicing Agreement) in a form meeting the
requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable carrier is in effect with
respect to such Property in an amount representing coverage, and which
provides for a recovery by the Master Servicer of insurance proceeds
relating to
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such Mortgage Loan of not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the minimum
amount required to compensate for damage or loss on a replacement cost
basis and (iii) the maximum amount of insurance that is available under
the Flood Disaster Protection Act of 1973;
(xvi) Each Mortgage and Note is the legal, valid and binding
obligation of the maker thereof and is enforceable in accordance with
its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether considered in a proceeding or
action in equity or at law), and all parties to each Mortgage Loan had
full legal capacity to execute all documents relating to such Mortgage
Loan and convey the estate therein purported to be conveyed;
(xvii) Each Affiliated Originator has caused and will cause to
be performed any and all acts required to be performed to preserve the
rights and remedies of the Master Servicer in any Mortgage Insurance
Policy applicable to any Mortgage Loan delivered by such Affiliated
Originator including, to the extent such Mortgage Loan is not covered
by a blanket policy described in the Pooling and Servicing Agreement,
any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of co-insured, joint loss payee
and mortgagee rights in favor of the Master Servicer;
(xviii) Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof for
the benefit of the applicable Affiliated Originator, subject to the
provisions of Section 3.5(b) of the Pooling and Servicing Agreement;
(xix) The terms of each Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interest of the owners and which has been delivered to the Trustee. The
substance of any such alteration or modification is reflected on the
related Schedule of Mortgage Loans and has been approved by the primary
mortgage guaranty insurer, if any;
(xx) The proceeds of each Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to
make future advances thereunder. 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 closing or recording
such Mortgage Loans were paid;
(xxi) Except as otherwise required by law or pursuant to the
statute under which the related Mortgage Loan was made, the related
Note is not and has
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not been secured by any collateral, pledged account or other security
except the lien of the corresponding Mortgage;
(xxii) To the best knowledge of such Affiliated Originator, no
Mortgage Loan was originated under a buydown plan;
(xxiii) To the best knowledge of such Affiliated Originator,
no Mortgage Loan provides for negative amortization, has a shared
appreciation feature, or other contingent interest feature;
(xxiv) Each Property is located in the state identified in the
Schedule of Mortgage Loans and consists of one or more parcels of real
Property with a residential dwelling erected thereon;
(xxv) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the related Mortgage
Loan in the event the related Property is sold without the prior
consent of the mortgagee thereunder, except as may be otherwise
provided in the Pooling and Servicing Agreement;
(xxvi) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-Off Date, have been consolidated
with the outstanding principal amount secured by the related Mortgage,
and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Schedule of
Mortgage Loans. No Note permits or obligates the Master Servicer, the
Sub-Servicer or the Sponsor to make future advances to the related
Mortgagor at the option of the Mortgagor;
(xxvii) To the best knowledge of such Affiliated Originator,
there is no proceeding pending or threatened for the total or partial
condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty, so as to affect
adversely the value of the Property as security for the Mortgage Loan
or the use for which the premises were intended;
(xxviii) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie wholly
within the boundaries and building restriction lines of such Property,
and no improvements on adjoining properties encroach upon such
Property, and, if a title insurance policy exists with respect to such
Property, are stated in such title insurance policy and affirmatively
insured;
(xxix) To the best knowledge of such Affiliated Originator, no
improvement located on or being part of any 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 each Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy and
fire underwriting certificates, have been
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made or obtained from the appropriate authorities and such Property is
lawfully occupied under the applicable law;
(xxx) With respect to each Mortgage constituting 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, and no fees or expenses are or will become payable by
the Sponsor or the Trust to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related
Mortgagor;
(xxxi) With respect to each Junior Mortgage Loan, either (A)
no consent for such Mortgage Loan was required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxxii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related 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 knowledge of such Affiliated
Originator, there is no homestead or other exemption available which
materially interferes with the right to sell the related Property at a
trustee's sale or the right to foreclose the related Mortgage;
(xxxiii) Except as provided by paragraph (viii) of this
Section 5(b), there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Note and no
event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration; and the applicable Affiliated
Originator has not waived any default, breach, violation or event of
acceleration;
(xxxiv) To the best knowledge of such Affiliated Originator,
no instrument of release or waiver has been executed in connection with
any Mortgage Loan, and no Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement and which has
been delivered to the Trustee;
(xxxv) The credit underwriting guidelines applicable to each
Mortgage Loan conform in all material respects to the Sponsor's
underwriting guidelines;
(xxxvi) All parties to the Note and the Mortgage had legal
capacity to execute the Note and the Mortgage and each Note and
Mortgage have been duly and properly executed by such parties; and
(xxxvii) The related Affiliated Originator has no actual
knowledge that there exist on any Property any hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act,
the Resource Conservation and Recovery Act of 1976, or other federal,
state or local environmental legislation.
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(c) No Affiliated Originator Payment Obligations. There is no
obligation on the part of the Master Servicer or any other party to make
payments in addition to those made by the Mortgagor except as specified in the
Pooling and Servicing Agreement.
The Representations and Warranties shall survive the transfer
and assignment of the Mortgage Loans to the Trust. Upon discovery by any
Affiliated Originator or the Sponsor of a breach of any of the Representations
and Warranties, without regard to any limitation set forth in such
Representation or Warranty concerning the knowledge of the related Affiliated
Originator as to the facts stated therein, which breach, in the opinion of the
Sponsor, materially and adversely affects the interests of the Sponsor, the
Owners or the Certificate Insurer in the related Mortgage Loan or Mortgage
Loans, the party discovering such breach shall give prompt written notice to the
other party, and the related Affiliated Originator shall be required to take the
remedial actions required by the related Pooling and Servicing Agreement within
the time periods required therein. No Affiliated Originator shall be obliged to
act in regard to Mortgage Loans not conveyed by it. Each Affiliated Originator
hereby acknowledges that a breach of any of the Representations and Warranties
listed in paragraph (iii), (x) and (xvi) of Section 5(b) materially and
adversely affects the interests of the Trust, the related Owners and the
Certificate Insurer.
SECTION 6 Authorized Representatives. The names of the
officers of the Affiliated Originators and of the Sponsor who are authorized to
give and receive notices, requests and instructions and to deliver certificates
and documents in connection with this Agreement on behalf of each Affiliated
Originator and of the Sponsor ("Authorized Representatives") are set forth on
Exhibit B. From time to time, each Affiliated Originator and the Sponsor may, by
delivering to the Trustee a revised exhibit, change the information previously
given, but the Trustee shall be entitled to rely conclusively on the last
exhibit until receipt of a superseding exhibit.
SECTION 7 Notices. All demands, notices and communications
relating to this Agreement shall be in writing and shall be deemed to have been
duly given when received by the other party or parties at the address shown
below, or such other address as may hereafter be furnished to the other party or
parties by like notice. Any such demand, notice or communication hereunder shall
be deemed to have been received on the date delivered to or received at the
premises of the addressee.
If to the Trustee:
Bankers Trust Company of California, N.A.
3 Park Plaza
Irvine, CA 92614
Telecopy: (949) 253-7577
Telephone: (949) 253-7575
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If to any Affiliated Originator or the Sponsor:
Advanta Mortgage Corp. USA
10790 Rancho Bernardo Road
San Diego, California 92127
Attention: Mortgage Structured Finance
Telecopy: (858) 674-3592
Telephone: (858) 676-3099
SECTIONS 8 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws rules applied in the State of New York.
SECTION 9 Assignment. No party to this Agreement may assign
its rights or delegate its obligations under this Agreement without the express
written consent of the other parties, except as otherwise set forth in this
Agreement.
SECTION 10 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which shall be
deemed to be an original, and together shall constitute and be one and the same
instrument.
SECTION 11 Amendment. This Agreement may be amended from time
to time by any of the Affiliated Originators, the Sponsor and the Trustee only
by a written instrument executed by such parties and with the prior written
consent of each of the other parties hereto and the Certificate Insurer.
SECTION 12 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, 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 provisions of this Agreement.
SECTION 13 No Agency; No Partnership or Joint Venture. Neither
the Affiliated Originators nor the Sponsor is the agent or representative of the
other, and nothing in this Agreement shall be construed to make either the
Affiliated Originator nor the Sponsor liable to any third party for services
performed by it or for debts or claims accruing to it against the other party.
Nothing contained herein nor the acts of the parties hereto shall be construed
to create a partnership or joint venture between the Sponsor and the Affiliated
Originator.
SECTION 14 Further Assurances. The Affiliated Originators and
Sponsor agree to cooperate reasonably and in good faith with one another in the
performance of this Agreement.
SECTION 15 The Certificate Insurer. The Certificate Insurer is
a third-party beneficiary of this Agreement. Any right conferred to the
Certificate Insurer shall be suspended during any period in which the
Certificate Insurer is in default in its
14
<PAGE> 18
payment obligation's under the Certificate Insurance Policy. During any period
of suspension, the Certificate Insurer's rights hereunder shall vest in the
Owners of the Offered Certificates and shall be exercisable by the Owners of at
least a majority in Percentage Interest of the Offered Certificates then
outstanding. At such time as the related Offered Certificates are no longer
Outstanding under the Pooling and Servicing Agreement and the Certificate
Insurer has been reimbursed for all Insured Payments to which it is entitled
under the Pooling and Servicing Agreement, the Certificate Insurer's rights
hereunder shall terminate.
SECTION 16 Maintenance of Records. Each Affiliated Originator
shall each continuously keep an original executed counterpart of this Agreement
in its official records.
[Remainder of Page Intentionally Left Blank]
15
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this
Mortgage Loan Transfer Agreement to be duly executed by their respective
officers, all as of the day and year first above written.
ADVANTA MORTGAGE CORP. USA,
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
ADVANTA MORTGAGE CORP. MIDWEST,
ADVANTA MORTGAGE CORP. NORTHEAST,
ADVANTA FINANCE CORP.,
ADVANTA NATIONAL BANK,
as Sellers
By: /s/ Michael Coco
-------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA BANK CORP.,
as Seller
By: /s/ Mark Hales
-------------------------------
Name: Mark Hales
Title: Vice President
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
By: /s/ Michael Coco
-------------------------------
Name: Michael Coco
Title: Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as
Trustee and not in its
individual capacity
By: /s/ Mark McNeill
-------------------------------
Name: Mark McNeill
Title:
<PAGE> 1
Exhibit 10.1
<PAGE> 2
Exhibit 10.1
<PAGE> 3
AMBAC ASSURANCE CORPORATION,
BEAR, STEARNS & CO. INC.
SALOMON SMITH BARNEY INC.
and
PRUDENTIAL SECURITIES INCORPORATED
INDEMNIFICATION AGREEMENT
ADVANTA MORTGAGE LOAN TRUST 1999-3
Dated as of August 17, 1999
<PAGE> 4
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and shall not
be deemed to be part of this Indemnity Agreement. All capitalized terms used in
this Indemnity Agreement and not otherwise defined shall have the meanings set
forth in Article I of this Indemnity Agreement.)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Defines Terms. 1
Section 2. Other Definitional Provisions. 1
Section 3. Representations and Warranties of the Underwriters. 2
Section 4. Representations and Warranties of the Certificate Insurer. 2
Section 5. Indemnification. 3
Section 6. Amendments, Etc. 5
Section 7. Notices. 5
Section 8. Severability. 6
Section 9. Governing Law. 6
Section 10. Counterparts. 6
Section 11. Headings. 6
</TABLE>
<PAGE> 5
INDEMNIFICATION AGREEMENT dated as of August 17, 1999 (the "Indemnity
Agreement"), by and among AMBAC ASSURANCE CORPORATION, as Certificate Insurer,
and BEAR, STEARNS & CO. INC., SALOMON SMITH BARNEY INC. and PRUDENTIAL
SECURITIES INCORPORATED (the "Underwriters").
Section 1. Defined Terms. Unless the context clearly requires otherwise,
all capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement, the Insurance
Agreement or the Policy. For purposes of this Indemnity Agreement, the following
terms shall have the following meanings:
"Certificate Insurer" means Ambac Assurance Corporation, or any successor
thereto, as issuer of the Policy.
"Certificate Insurer Information" has the meaning given such term
in Section 4.
"Insurance Agreement" means the Insurance and Indemnity Agreement (as may
be amended, modified or supplemented from time to time) dated as of August 24,
1999 by and among the Certificate Insurer, Advanta Conduit Receivables, Inc., as
Sponsor, Advanta Mortgage Corp. USA, as Master Servicer, and Bankers Trust
Company of California, N.A., as Trustee.
"Offering Document" means, together, the Preliminary Prospectus
Supplement, dated August 13, 1999, and the Prospectus Supplement, dated August
17, 1999, in respect of the Certificates, and any amendment or supplement
thereto, and any other offering document in respect of the Certificates that
makes reference to the Policy.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of August 1, 1999, relating to the Advanta Mortgage Loan
Trust 1999-3, Mortgage Loan Asset-Backed Certificates, Series 1999-3, by and
among the Sponsor, the Master Servicer and the Trustee (as may be amended,
modified or supplemented from time to time as set forth therein).
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Underwriters" means Bear, Stearns & Co. Inc., Salomon Smith Barney Inc.
and Prudential Securities Incorporated, severally.
"Underwriters' Information" has the meaning given such term in Section 3.
<PAGE> 6
Section 2. Other Definitional Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Indemnity Agreement
shall refer to this Indemnity Agreement as a whole and not to any particular
provision of this Indemnity Agreement, and Section, subsection, Schedule and
Exhibit references are to this Indemnity Agreement unless otherwise specified.
The meanings given to terms defined herein shall be equally applicable to both
the singular and plural forms of such terms. The words "include" and "including"
shall be deemed to be followed by the phrase "without limitation."
Section 3. Representations and Warranties of the Underwriters. Each
Underwriter severally represent and warrant as of the Closing Date as follows:
(a) Compliance With Laws. Such Underwriter will comply in all
material respects with all legal requirements in connection with offers
and sales of the Certificates and will make such offers and sales in the
manner to be provided in the Offering Document.
(b) Offering Document. Such Underwriter will not use, or distribute
to other broker-dealers for use, any Offering Document in connection with
the offer and sale of the Certificates unless such Offering Document
includes such information relating to the Certificate Insurer as has been
furnished by the Certificate Insurer for inclusion therein and has been
approved by the Certificate Insurer.
(c) Underwriters' Information. All material provided by the
Underwriters for inclusion in the Offering Document (as revised from time
to time), shall be true and correct in all material respects, it being
understood and agreed that the only such information furnished by the
Underwriters consists of the following information (collectively, the
"Underwriters' Information"): the information regarding the Underwriters
contained under the heading "Underwriting" in the Offering Document.
Section 4. Representations and Warranties of the Certificate Insurer. The
Certificate Insurer represents and warrants to each Underwriter as follows:
(a) Organization and Licensing. The Certificate Insurer is a duly
organized and licensed and validly existing Wisconsin stock insurance
company duly qualified to conduct an insurance business in the State of
New York.
(b) Corporate Power. The Certificate Insurer has the corporate power
and authority to issue the Policy and execute this Indemnity Agreement and
to perform all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for the
issuance of the Policy and the execution, delivery and performance of this
Indemnity Agreement
<PAGE> 7
have been taken and all material licenses, orders, consents or other
authorizations or approvals of any governmental boards or bodies legally
required for the enforceability of the Policy have been obtained; any
proceedings not taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the Policy.
(d) Enforceability. The Policy, when issued, and this Indemnity
Agreement will each constitute a legal, valid and binding obligation of
the Certificate Insurer, enforceable in accordance with its terms, subject
to insolvency, reorganization, moratorium, receivership and other similar
laws affecting creditors' rights generally and by general principles of
equity and subject to principles of public policy limiting the right to
enforce the indemnification provisions contained therein and herein,
insofar as such provisions relate to indemnification for liabilities
arising under federal securities laws.
(e) Financial Information. The consolidated financial statements of
the Certificate Insurer and subsidiaries as of December 31, 1998 and
December 31, 1997, and for each of the years in the three-year period
ended December 31, 1998, prepared in accordance with generally accepted
accounting principles, included in the Annual Report on Form 10-K of Ambac
Financial Group, Inc. (which was filed with the Commission on March 30,
1999; Commission File Number 1-10777) and the unaudited consolidated
financial statements of the Certificate Insurer and subsidiaries as of
June 30, 1999 and for the periods ending June 30, 1999 and June 30, 1998
included in the Quarterly Report on Form 10-Q of Ambac Financial Group,
Inc. for the period ended June 30, 1999 (which was filed with the
Commission on August 13, 1999), which are incorporated by reference in the
Offering Document, fairly present in all material respects the financial
condition of the Certificate Insurer as of such dates and for the periods
covered by such statements in accordance with generally accepted
accounting principles consistently applied. Since June 30, 1999, there has
been no material change in such financial condition of the Certificate
Insurer that would materially and adversely affect its ability to perform
its obligations under the Policy.
(f) Certificate Insurer Information. The information in the Offering
Document as of the date hereof under the captions "The Certificate
Insurer" and "The Certificate Insurance Policy" (together, the
"Certificate Insurer Information") is true and correct in all material
respects and does not contain any untrue statement of a material fact.
(g) Rating. The Certificate Insurer is not aware of any facts that
if disclosed to Moody's or S&P would be reasonably expected to result in a
downgrade of the rating of the financial strength of the Certificate
Insurer by either of such Rating Agencies.
(h) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Certificate Insurer's
knowledge, threatened against it at law or in equity or before or by any
court, governmental agency, board or commission or any
<PAGE> 8
arbitrator which, if decided adversely, would result in a Material Adverse
Change or would materially and adversely affect its ability to perform its
obligations under the Policy or this Indemnification Agreement.
(i) 1933 Act Registration. The Policy is exempt from registration
under the Securities Act.
Section 5. Indemnification.
(a) The Underwriters hereby severally agree to pay, and to protect,
indemnify and save harmless, the Certificate Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who
controls the Certificate Insurer within the meaning of either Section 15
of the Securities Act or Section 20 of the Securities Exchange Act from
and against, any and all claims, losses, liabilities (including
penalties), actions, suits, judgments, demands, damages, costs or expenses
(including reasonable fees and expenses of attorneys, consultants and
auditors and reasonable costs of investigations) of any nature arising out
of or by reason of any untrue statement of a material fact or an omission
to state a material fact necessary in order to make the statements therein
in light of the circumstances in which they were made not misleading,
contained in the Underwriters' Information or a breach of any of the
representations and warranties of the Underwriters contained in Section 3.
(b) The Certificate Insurer agrees to pay, and to protect, indemnify
and save harmless, each Underwriters and their respective officers,
directors, shareholders, employees, agents and each Person, if any, who
controls such Underwriters within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act from and
against, any and all claims, losses, liabilities (including penalties),
actions, suits, judgments, demands, damages, costs or expenses (including
reasonable fees and expenses of attorneys, consultants and auditors and
reasonable costs of investigations) of any nature arising out of or by
reason of any untrue statement of a material fact or an omission to state
a material fact necessary in order to make the statements therein in light
of the circumstances in which they were made not misleading, contained in
the Certificate Insurer Information or a breach of any of the
representations and warranties of the Certificate Insurer contained in
Section 4.
(c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person
(individually, an "Indemnified Party" and, collectively, the "Indemnified
Parties") in respect of which the indemnity provided in this Section 5(a)
or (b) may be sought from any of the Underwriters, on the one hand, or the
Certificate Insurer, on the other (each, an "Indemnifying Party")
hereunder, each such Indemnified Party shall promptly notify the
Indemnifying Party in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
Indemnified Party shall have the right to employ separate counsel in any
such action
<PAGE> 9
and to participate in the defense thereof at the expense of the
Indemnified Party; provided, however, that the fees and expenses of such
separate counsel shall be at the expense of the Indemnifying Party if (i)
the Indemnifying Party has agreed to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such action
or proceeding and employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party, and the
Indemnified Party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party (in which case, if
the Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the
defense of such action or proceeding on behalf of such Indemnified 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 the Indemnified Parties, which firm
shall be designated in writing by the Indemnified Party). The Indemnifying
Party shall not be liable for any settlement of any such action or
proceeding effected without its written consent to the extent that any
such settlement shall be prejudicial to the Indemnifying Party, but, if
settled with its written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding with respect to which the
Indemnifying Party shall have received notice in accordance with this
subsection (c), the Indemnifying Party agrees to indemnify and hold the
Indemnified Parties harmless from and against any loss or liability by
reason of such settlement or judgment.
(d) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other
than due to application of this Section), each Indemnifying Party shall
contribute to the losses incurred by the Indemnified Party on the basis of
the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand provided, that no Underwriter shall
be liable for any amount in excess of (i) the excess of the sales prices
of the Certificates to the public over the prices paid therefor by the
Underwriters over (ii) the aggregate amount of any damages which the
Underwriters have otherwise been required to pay in respect of the same or
any substantially similar claim.
The relative fault of each Indemnifying Party, on the one
hand, and each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged breach
of, any of its representations and warranties set forth 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
<PAGE> 10
prevent such breach.
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.
Section 6. Amendments, Etc. This Indemnity Agreement may be amended,
modified, supplemented or terminated only by written instrument or written
instruments signed by the parties hereto.
Section 7. Notices. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered and
telecopied to the recipient as follows:
(a) To the Certificate Insurer:
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Structured Finance Department - MBS
Telecopy No.: 212-363-1459
Confirmation: 212-668-0340
(b) To the Representative of the Underwriters:
Bear, Stearns & Co. Inc.
245 Park Avenue, 4th Floor
New York, New York 10167
Attention: Asset-Backed Securities Group
Telecopy No.: 212-272-7294
Confirmation: 212-272-2000
A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.
Section 8. Severability. In the event that any provision of this Indemnity
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect in
any way
<PAGE> 11
the ability of such party to pursue any other remedy available to it.
Section 9. Governing Law. This Indemnity Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 10. Counterparts. The Indemnity Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.
Section 11. Headings. The headings of Sections and the Table of Contents
contained in this Indemnity Agreement are provided for convenience only. They
form no part of this Indemnity Agreement and shall not affect its construction
or interpretation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement, all as of the day and year first above mentioned.
AMBAC ASSURANCE CORPORATION,
as Certificate Insurer
By:
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
Name:
Title:
SALOMON SMITH BARNEY INC.
By:
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
Name:
Title:
<PAGE> 1
Exhibit 10.2
<PAGE> 2
August 17, 1999
Bear, Stearns & Co. Inc.
As representative of the Underwriters
245 Park Avenue
New York, New York 10167
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Re: Underwriting Agreement dated August 17, 1999 (the
"Underwriting Agreement") between Advanta Conduit
Receivables, Inc. ("ACRI") and Bear, Stearns & Co.
Inc. as representative of the Underwriters (the
"Representative") and the Insurance and Indemnity
Agreement dated as of August 24, 1999 (the "Insurance
Agreement") among Ambac Assurance Corporation (the
"Certificate Insurer"), ACRI, as sponsor, Advanta
Mortgage Corp. USA, as master servicer, and Bankers
Trust Company of California, N.A., as trustee
Ladies and Gentlemen:
Pursuant to the Underwriting Agreement and the Insurance Agreement
(together, the "Designated Agreements"), ACRI has undertaken certain financial
obligations with respect to the indemnification of the Underwriters and the
Certificate Insurer with respect to the Registration Statement, the Prospectus
and the Prospectus Supplement described in the Designated Agreements. Any
financial obligations of ACRI under the Designated Agreements, whether or not
specifically enumerated in this paragraph, are hereinafter referred to as the
"Joint and Several Obligations"; provided, however, the "Joint and Several
Obligations" shall mean only the financial obligations of ACRI under the
Designated Agreements (including the payment of money damages for a breach of
any of ACRI's obligations under the Designated Agreement, whether financial or
otherwise) but shall not include any obligations not relating to the payment of
money.
As a condition of their respective executions of the Underwriting
Agreement and of the Insurance Agreement, the Representative and the Certificate
Insurer have required the undersigned, Advanta Mortgage Holding Company
("AMHC"), the indirect parent corporation of ACRI, to acknowledge its
joint-and-several liability with ACRI for the payment of the Joint and Several
Obligations under the Designated Agreements.
<PAGE> 3
Now, therefore, the Representative, the Certificate Insurer and AMHC do hereby
agree that:
(i) AMHC hereby agrees to be absolutely and unconditionally
jointly and severally liable with ACRI to the Underwriters for
the payment of the Joint and Several Obligations under the
Underwriting
Agreement.
(ii) AMHC hereby agrees to be absolutely and unconditionally
jointly and severally liable with ACRI to the Certificate
Insurer for the payment of the Joint and Several Obligations
under the Insurance Agreement.
(iii) AMHC may honor its obligations hereunder either by direct
payment of any Joint and Several Obligations or by causing any
Joint and Several Obligations to be paid to the Underwriters
and to the Certificate Insurer by ACRI or another affiliate of
AMHC.
[Remainder of Page Intentionally Left Blank]
<PAGE> 4
Capitalized terms used herein and not defined herein shall have
their respective meanings set forth in the Agreement.
Very truly yours,
ADVANTA MORTGAGE HOLDING COMPANY
By: _______________________________
Name: Michael Coco
Title: Vice President
BEAR, STEARNS & CO. INC.,
as Representative of the Underwriters
By: _______________________________
Name:
Title:
AMBAC ASSURANCE CORPORATION
By: _______________________________
Name:
Title:
[AMHC Guaranty to the Underwriter]
<PAGE> 1
Exhibit 10.3
<PAGE> 2
August 24, 1999
Advanta Mortgage Loan Trust 1999-3 (the "Trust")
c/o Bankers Trust Company of California, N.A.
3 Park Plaza
16th Floor
Irvine, California 92714
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Re: Pooling and Servicing Agreement dated as of August 1,
1999 (the "Pooling and Servicing Agreement") among
Advanta Conduit Receivables, Inc., as sponsor (the
"Sponsor"), Advanta Mortgage Corp. USA ("AMCUSA"), as
master servicer (the "Master Servicer"), and Bankers
Trust Company of California, N.A. as trustee (the
"Trustee") and the Mortgage Loan Transfer Agreement
dated as of August 1, 1999 (the "Transfer Agreement")
among the Sponsor, the Trustee and the affiliated
originators named therein (the "Affiliated
Originators")
Ladies and Gentlemen:
Pursuant to the Pooling and Servicing Agreement and the Transfer
Agreement (together, the "Agreements"), AMCUSA in its capacity as Master
Servicer, has undertaken certain financial obligations with respect to its
servicing of the Mortgage Loans, including, but not limited to, the making of
Delinquency Advances and Servicing Advances. In addition, the Sponsor and the
Affiliated Originators have, in the Agreements undertaken certain financial
obligations, including, but not limited to, the payment of the Loan Purchase
Price relating to the repurchase of non-qualifying Mortgage Loans, the payment
of Substitution Amounts in connection with the substitution of Qualified
Replacement Mortgages and the payment of certain expenses of the Trust. Any
financial obligations of AMCUSA, the Sponsor or any Affiliated Originator under
either of the Agreements, whether or not specifically enumerated in this
paragraph, are hereinafter referred to as the "Joint and Several Obligations";
provided, however, that "Joint and Several Obligations" shall mean only the
financial obligations of AMCUSA, the Sponsor or any Affiliated Originator under
either of the Agreements (including the payment of money damages for a breach of
any of AMCUSA's, the Sponsor's or any Affiliated Originator's obligations under
either of the Agreements,
<PAGE> 3
whether financial or otherwise) but shall not include any obligations not
relating to the payment of money (e.g., the obligation to service the Mortgage
Loans).
The Certificate Insurer has required the undersigned, Advanta
Mortgage Holding Company ("AMHC"), the parent corporation of AMCUSA and the
indirect corporate parent of the Sponsor, to acknowledge its joint-and-several
liability with AMCUSA, the Sponsor and the Affiliated Originators for the
payment of the Joint and Several Obligations under the Agreements.
Now, therefore, the Trust, the Certificate Insurer and AMHC do
hereby agree that:
(i) AMHC hereby agrees to be absolutely and unconditionally
jointly and severally liable with AMCUSA, the Sponsor and the
Affiliated Originators to the Trust and the Certificate
Insurer for the payment of the Joint and Several Obligations.
(ii) AMHC may honor its obligations hereunder either by direct
payment of any Joint and Several Obligations or by causing any
Joint and Several Obligations to be paid to the Trust and the
Certificate Insurer by AMCUSA, the Sponsor, any Affiliated
Originator or another affiliate of AMHC.
[Remainder of Page Intentionally Left Blank]
<PAGE> 4
Capitalized terms used herein and not defined herein shall have
their respective meanings as set forth in the Agreements.
Very truly yours,
ADVANTA MORTGAGE
HOLDING COMPANY
By: ________________________________
Name: Michael Coco
Title: Vice President
Acknowledged and Agreed:
ADVANTA MORTGAGE LOAN
TRUST, 1999-3, by Bankers Trust
Company of California, N.A., as Trustee
By:_____________________________
Name:
Title:
Acknowledged:
AMBAC ASSURANCE CORPORATION
By:_____________________________
Name:
Title:
Dated: August 24, 1999
[Guaranty to the Trust]
