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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)
February 24, 1999
Advanta Mortgage Conduit Services, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 333-52351-05 Applied For
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
Attention: President 92127
10790 Rancho Bernardo Drive (Zip Code)
San Diego, California
(Address of Principal Executive Offices)
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Registrant's telephone number, including area code
(619) 674-1800
No change
(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 Mortgage Conduit Services, Inc. (the "Registrant" or
the "Sponsor") registered an issuance of $3,595,000,000 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. 333-52351) (the
"Registration Statement").
Pursuant to the Registration Statement, the Sponsor formed
Advanta Mortgage Loan Trust 1999-1 (the "Trust") which issued approximately
$800,000,000 in aggregate principal amount of its Mortgage Loan Asset-Backed
Certificates (the "Certificates"), on March 9, 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 an Pooling and
Servicing Agreement (the "P&S Agreement") attached hereto as Exhibit 4.1, dated
as of March 1, 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 September 15, 1998, the Preliminary Prospectus Supplement dated
February 19, 1999 filed pursuant to Rule 424(b)(3) of the Act with the
Commission and the Prospectus Supplement dated February 24, 1999 filed pursuant
to Rule 424(b)(5) 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 February 24, 1999, between
the Sponsor and Salomon Smith Barney as Representative of the Underwriters.
4.1 Pooling and Servicing Agreement, dated March 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 March 9, 1999, and
issued and delivered by MBIA Insurance Corporation.
4.3 Conveyance Agreement, dated March 9, 1999, among Advanta
National Bank, Advanta Mortgage Corp. Midatlantic, Advanta Mortgage Corp.
Midatlantic II, Advanta Mortgage Corp. Midwest, Advanta Mortgage Corp. of New
Jersey, Advanta Mortgage Corp. Northeast, Advanta Finance Corp., Advanta Bank
Corp. and Advanta Mortgage Corp. USA (collectively, the "Affiliated
Originators"), the Sponsor, Advanta Conduit Receivables, Inc., as an Affiliate,
and Bankers Trust Company of California, N.A., as Trustee.
4.4 Master Loan Transfer Agreement, dated March 1, 1999, among
the Affiliated Originators, Advanta Conduit Receivables, Inc. 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 March 9, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters,
dated as of March 9, 1999.
10.1 Indemnification Agreement, dated March 1, 1999, among
Salomon Smith Barney, Inc., Lehman Brothers, Morgan Stanley & Co., Inc., Bear
Stearns & Co. Inc. and Prudential Securities Incorporated, as Underwriters (the
"Underwriters"), MBIA Insurance Corporation, as Certificate Insurer, and the
Sponsor.
10.2 Guaranty to MBIA Insurance Corporation and Salomon Smith
Barney, Inc., as Representative of the Underwriters, issued by Advanta Mortgage
Holding Company.
10.3 Guaranty to MBIA Insurance Corporation and Advanta
Mortgage Loan Trust 1999-1 issued by Advanta Mortgage Holding Company.
23.1 Consent of PricewaterhouseCoopers LLP regarding financial
statements of MBIA Insurance Corporation, and their report.*
* Previously filed on Form 8-K filed with the Securities and
Exchange Commission on February 25, 1999.
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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 MORTGAGE CONDUIT SERVICES, INC., as
Registrant and as Sponsor on behalf of
Advanta Mortgage Loan Trust 1999-1.
By: /s/ Michael Coco
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Name: Michael Coco
Title: Vice President
Dated: March 22, 1999
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EXHIBIT INDEX
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Exhibit No. Description
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1.1 Underwriting Agreement, dated February 24, 1999, between the
Sponsor and Salomon Smith Barney as Representative of the
Underwriters.
4.1 Pooling and Servicing Agreement, dated as of March 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 March 9, 1999, and issued
and delivered by MBIA Insurance Corporation.
4.3 Conveyance Agreement, dated March 9, 1999, among Advanta
National Bank, Advanta Mortgage Corp. Midatlantic, Advanta
Mortgage Corp. Midatlantic II, Advanta Mortgage Corp.
Midwest, Advanta Mortgage Corp. of New Jersey, Advanta
Mortgage Corp. Northeast, Advanta Finance Corp., Advanta Bank
Corp. and Advanta Mortgage Corp. USA (collectively, the
"Affiliated Originators"), the Sponsor, Advanta Conduit
Receivables, Inc., as an Affiliate, and Bankers Trust Company
of California, N.A., as Trustee.
4.4 Master Loan Transfer Agreement, dated March 1, 1999, among
the Affiliated Originators, Advanta Conduit Receivables, Inc.
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 March 9, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated
as of March 9, 1999.
10.1 Indemnification Agreement, dated March 1, 1999, among Salomon
Smith Barney, Inc., Lehman Brothers, Morgan Stanley & Co.,
Inc., Bear Stearns & Co. Inc. and Prudential Securities
Incorporated, as Underwriters (the "Underwriters"), MBIA
Insurance Corporation, as Certificate Insurer, and the
Sponsor.
10.2 Guaranty to MBIA Insurance Corporation and Salomon Smith
Barney, Inc., as Representative of the Underwriters, issued
by Advanta Mortgage Holding Company.
10.3 Guaranty to MBIA Insurance Corporation and Advanta Mortgage
Loan Trust 1999-1 issued by Advanta Mortgage Holding Company.
23.1 Consent of PricewaterhouseCoopers LLP regarding financial
statements of MBIA Insurance Corporation and their report.*
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* Previously filed on Form 8-K filed with the Securities and
Exchange Commission on February 25, 1999.
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Exhibit 1.1
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ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1999-1
UNDERWRITING AGREEMENT
February 24, 1999
SALOMON SMITH BARNEY INC.
As Representative of the Underwriters (the "Representative")
named in Schedule I
7 World Trade Center
New York, NY 10048
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1999-1, 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, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the
Class A-5 Certificates, the "Class A Fixed Rate Group Certificates"), (vii) the
Class A-7 Certificates (the "Class A-7 Certificates" or the "Class A ARM Group
Certificates", together with the Class A 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 1999-1 (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 March 9, 1999 (the "Closing Date"),
an aggregate principal balance of approximately $700,000,000 and the Pre-Funding
Account shall have approximately $100,000,000, of which an amount equal to
approximately $50,000,000 may
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be applied to the purchase of additional loans for the Fixed Rate Group and an
amount equal to approximately $50,000,000 may be applied to the purchase of
additional loans for the ARM Group during the period from the Closing Date to on
or before June 9, 1999. The Offered Certificates are to be issued under a
pooling and servicing agreement, to be dated as of March 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 guaranty insurance policy (the "Policy") issued by MBIA
Insurance Corporation (the "Insurer") which will unconditionally and irrevocably
guarantee to the Trustee for the benefit of the holders of the Offered
Certificates the amount by which (i) the Fixed Rate Group Insured Distribution
Amount (as defined in the Pooling and Servicing Agreement), as applicable, for
the Class A Fixed Rate Group Certificates exceeds the Fixed Rate Group Total
Available Funds (as defined in the Pooling and Servicing Agreement) and (ii) the
ARM Group Insured Distribution Amount (as defined in the Pooling and Servicing
Agreement), as applicable, for the Class A ARM Group Certificates exceeds the
ARM Group Total Available Funds (as defined in the Pooling and Servicing
Agreement).
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
Master Loan Transfer Agreement dated on or about March 9, 1999 among the
Trustee, Advanta Mortgage Conduit Services, Inc. and the Affiliated Originators
named therein (together, the "Purchase Agreement"), pursuant to which the
Affiliated 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 March 1, 1999 among the
Underwriters, the Company and the Insurer.
Section 1. Representations and Warranties of the Company
The Company represents and warrants to, and agrees with the
Underwriters that:
a. Registration Statements on Form S-3, 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 Statements have 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
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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 Statements, 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 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 statements, 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 (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 Statements. 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
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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 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 Agreement, dated as of March 1, 1999, between
the Insurer, Master Servicer, Sponsor, Advanta Mortgage Holding
Company, as Joint Obligor and the Trustee (the "Insurance Agreement"),
and the Purchase Agreement, and to cause the Certificates to be issued.
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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 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.
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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, 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: (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 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 March 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 (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
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the Company at 10:00 A.M. New York City time on March 9, 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 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.
-8-
<PAGE> 10
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.
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.
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<PAGE> 11
f. To make generally available to holders of the
Offered Certificates as soon as practicable, but in any event not later
than 90 days after the close of the period covered thereby, a statement
of earnings of the Trust (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than
the first day of the first fiscal quarter following the Closing Date.
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. Not, without the Representative's prior written
consent, which consent shall not be unreasonably withheld, to 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
-10-
<PAGE> 12
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.
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 Delaware, 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
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<PAGE> 13
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.
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.
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<PAGE> 14
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 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 1933 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
nor the registration of the Trust created by such Pooling and
Servicing Agreement under the Investment Company Act of 1940
is presently required.
10. The statements in the Prospectus set
forth under the captions "DESCRIPTION OF THE SECURITIES," "THE
POOLING AND SERVICING AGREEMENT" 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," "CERTAIN FEDERAL INCOME TAX CONSEQUENCES,"
and the statements in the Prospectus set forth under the
caption "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED
MATTERS," 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
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<PAGE> 15
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.
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:
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<PAGE> 16
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;
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
December 31, 1998, which has affected the good standing of the
Company under the laws of the State of Delaware;
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 December 31, 1998;
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
-15-
<PAGE> 17
securities of the Company, if any, by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of the 1933 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 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;
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<PAGE> 18
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 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
corporation, duly incorporated and validly existing under the
laws of 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.
2. The execution and delivery by the Insurer
of the Policy, the Insurance Agreement and the Indemnification
Agreement are within the corporate power of the Insurer and
have been authorized by all necessary corporate action on the
part of the Insurer; the Policy has been duly executed and is
the valid and binding obligation of the Insurer enforceable in
accordance with its terms except that the enforcement of the
Policy may be limited by laws relating to bankruptcy,
insolvency, reorganization, moratorium, receivership and other
similar laws
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<PAGE> 19
affecting creditors' rights generally and by general
principles of equity (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at
law).
3. The Insurer is authorized to deliver the
Indemnification Agreement and the Insurance Agreement and such
agreements have been duly executed and delivered and
constitute the legal, valid and binding obligations of the
Insurer enforceable in accordance with its terms except that
the enforcement of the Insurance Agreement and the
Indemnification Agreement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors'
rights generally and by general principles of equity and, in
the case of the Indemnification Agreement, 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 securities laws.
4. No consent, approval, authorization or
order of any state or federal court or governmental agency or
body is required on the part of the Insurer the lack of which
would adversely affect the validity or enforceability of the
Policy; to the extent required by applicable legal
requirements that would adversely affect validity or
enforceability of the Policy, the Policy form has been filed
with, and approved by, all governmental authorities having
jurisdiction over the Insurer in connection with the Policy.
5. The execution and delivery of the
Insurance Agreement, the Indemnification Agreement and the
Policy, and the compliance with the terms and provisions
thereof, will not conflict with, result in breach of or
constitute a default under any of the terms, provisions or
conditions of the Restated Charter or By-Laws of the Insurer.
The execution, delivery and performance by the Insurer of its
obligations under the policy do not, to the extent that either
of the following would effect the validity or enforceability
of the Policy, (a) contravene any law or government regulation
or order presently binding on the Insurer or (b) contravene
any provision of or constitute a default under any indenture,
contract or other instrument to which the Insurer is a party
or by which the Insurer is bound.
6. The Policy is not required to be
registered under the Securities Act.
7. The information set forth under the
caption "THE CERTIFICATE INSURANCE POLICY" and "THE
CERTIFICATE INSURER" in the Prospectus forming a part of the
Registration Statement, insofar as such statements constitute
a description of the Policy, accurately summarizes the Policy.
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.
-18-
<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.
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 1933 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 1933 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
December 31, 1998, 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. The Representative shall have received from the
Insurer a certificate, signed by the president, a senior vice president
or a vice president of the Insurer, dated the Closing Date, to the
effect that the signer of such certificate has carefully examined the
Policy, the Insurance Agreement, the Indemnification Agreement and the
related documents and that, to the best of his or her knowledge based
on reasonable investigation:
1. There are no actions, suits, proceedings
or investigations pending or, to the best of Insurer's
knowledge, threatened against it at law or at equity or before
or by any court, governmental agency, board or commission or
any arbitrator which, if adversely determined, would
materially and adversely affect the Insurer's condition
(financial or otherwise) or operations or which would
materially and adversely effect its ability to perform its
obligations under the Policy, the Insurance Agreement, or the
Indemnification Agreement;
2. The information contained in the
Prospectus under the captions "THE CERTIFICATE INSURANCE
POLICY" and "THE CERTIFICATE INSURER" (the "Certificate
Insurer Information") is limited and does not purport to
provide the scope of disclosure required to be included in a
prospectus for a registrant under the Securities Act of 1933,
as amended, in connection with the public offer and sale of
securities of such registrant. Within such limited scope of
disclosure, the Certificate Insurer Information does not
contain any untrue statement of a material fact or omits to
state a material fact
-19-
<PAGE> 21
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
3. The tables regarding the Insurer's
capitalization set forth under the heading "THE CERTIFICATE
INSURER" in the Prospectus present fairly the capitalization
of the Insurer as of December 31, 1998;
4. The consolidated financial statements of
the Insurer as of December 31, 1997 and December 31, 1996 and
for each of the three years ended December 31, 1997
incorporated by reference in the Prospectus Supplement (the
"Certificate Insurer Audited Financial Statements"), fairly
present in all material respects the financial condition of
the Insurer as of such date and for the period covered by such
statements in accordance with generally accepted accounting
principles consistently applied. The consolidated financial
statements of the Insurer and its subsidiaries for the nine
months ended September 30, 1998 and for the periods ending
September 30, 1998 and September 30, 1997 include in the
Quarterly Report on Form 10-Q of the Insurer for the period
ending September 30, 1998 incorporated by reference into the
Prospectus Supplement (the "(Certificate Insurer Unaudited
Financial Statements") present fairly in all material respects
the financial condition of the Insurer as of such date and for
the period covered by such statements in accordance with
generally accepted accounting principles applied in a manner
consistent with the accounting principles used in preparing
the Insurer Audited Statements and since September 30, 1998
there has been no material change in such financial condition
of the Insurer which would materially and adversely affect its
ability to perform its obligations under the Policy.
5. The execution and delivery of the
Insurance Agreement, the Indemnification Agreement and the
Policy and the compliance with the terms and provisions
thereof will not conflict with, result in a breach of, or
constitute a default under any of the terms, provisions or
conditions of, the Restated Charter of By-Laws of the Insurer,
or any agreement indenture or other instrument to which the
Insurer is a party.
6. The issuance of the Policy and the
execution, delivery and performance of the Indemnification
Agreement and the Insurance Agreement have been duly
authorized by all necessary corporate proceedings. No further
approvals or filings of any kind, including, without
limitation, any further approvals of or further filing with
any governmental agency or other governmental authority, or
any approval of the Insurer's board of directors or
stockholders, are necessary for the Policy, the
Indemnification Agreement and the Insurance Agreement to
constitute the legal, valid and binding obligations of the
Insurer.
The Insurer shall attach to such certificate 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.
-20-
<PAGE> 22
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.
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 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 substantially in the form of Exhibit A
hereto, 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
-21-
<PAGE> 23
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 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.
-22-
<PAGE> 24
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
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.
-23-
<PAGE> 25
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 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
-24-
<PAGE> 26
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.
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
-25-
<PAGE> 27
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;
(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
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<PAGE> 28
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.
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
-27-
<PAGE> 29
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 Salomon Smith Barney Inc.,
as Representative of the Underwriters, 7 World Trade Center, New York,
New York, 10048, Attention: General Counsel (fax: (212) 783-1446);
b. if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to Advanta Mortgage Conduit
Services, Inc. 10790 Rancho Bernardo Road, San Diego, California 92127
Attention: General Counsel (Fax: 619-674-3592).
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-
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<PAGE> 30
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 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
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<PAGE> 31
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.
-30-
<PAGE> 32
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 MORTGAGE CONDUIT
SERVICES INC.
By: /s/ Michael Coco
-------------------------------
Name: Michael Coco
Title: Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
SALOMON SMITH BARNEY INC.
as Representative of the Underwriters
By: /s/ Paul Humphrey
------------------------
Name: Paul Humphrey
Title: Vice President
-31-
<PAGE> 33
<TABLE>
<CAPTION>
SCHEDULE A
- ------------------------------------------------------------------------------------------------------------------
INITIAL PRINCIPAL PURCHASE PRICE TO
AMOUNT OF OFFERED UNDERWRITERS
REQUIRED RATINGS CERTIFICATES DISREGARDING
CLASS S&P/MOODY'S PURCHASED BY COUPON ACCRUED INTEREST
UNDERWRITERS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-1 AAA /Aaa $ 125,000,000 Fixed 99.8481885%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-2 AAA /Aaa $ 82,000,000 Fixed 99.7880765%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-3 AAA /Aaa $ 44,000,000 Fixed 99.7477353%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-4 AAA /Aaa $ 83,000,000 Fixed 99.6661549%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-5 AAA /Aaa $ 26,000,000 Fixed(2) 99.6331524%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-6 AAA /Aaa $ 40,000,000 Fixed 99.7119279%(1)
- ------------------------------------------------------------------------------------------------------------------
Class A-7 AAA /Aaa $ 400,000,000 Floating(3) 99.7750000%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------
(1) Such amount does not include the accrued interest from March 1, 1999.
(2) Class A-5 is subject to the Fixed Rate Group Available Funds Cap Rate
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> 34
SCHEDULE I
Salomon Smith Barney Inc.
Bear, Stearns & Co. Inc.
Lehman Brothers
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
-2-
<PAGE> 1
Exhibit 4.1
<PAGE> 2
POOLING AND SERVICING AGREEMENT
Relating to
ADVANTA MORTGAGE LOAN TRUST
1999-1
Among
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Sponsor,
ADVANTA MORTGAGE CORP. USA,
as Master Servicer,
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
Dated as of March 1, 1999
<PAGE> 3
TABLE OF CONTENTS
(Not a Part of this Agreement)
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Parties..................................................................................................1
Recitals.................................................................................................1
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION.............................................................6
Section 1.1. Definitions.........................................................................6
Section 1.2. Use of Words and Phrases...........................................................41
Section 1.3. Captions; Table of Contents........................................................41
Section 1.4. Opinions...........................................................................41
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST..................................................42
Section 2.1. Establishment of the Trust.........................................................42
Section 2.2. Office.............................................................................42
Section 2.3. Purposes and Powers................................................................42
Section 2.4. Appointment of the Trustee; Declaration of Trust...................................42
Section 2.5. Expenses of the Trust..............................................................42
Section 2.6. Ownership of the Trust.............................................................43
Section 2.7. Situs of the Trust.................................................................43
Section 2.8. Miscellaneous REMIC Provisions.....................................................43
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPONSOR AND THE MASTER SERVICER; COVENANT
OF SPONSOR TO CONVEY MORTGAGE LOANS................................................47
Section 3.1. Representations and Warranties of the Sponsor......................................47
Section 3.2. Representations and Warranties of the Master Servicer..............................49
Section 3.3. Representations and Warranties of the Sponsor with Respect to the Mortgage Loans...51
Section 3.4. Covenants of Sponsor to Take Certain Actions with Respect to the Mortgage Loans In
Certain Situations..............................................................52
Section 3.5. Conveyance of the Mortgage Loans...................................................54
Section 3.6. Acceptance by Trustee; Certain Substitutions of Mortgage Loans; Certification by
Trustee.........................................................................56
Section 3.7. Cooperation Procedures.............................................................57
Section 3.8. Conveyance of the Subsequent Mortgage Loans........................................57
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES............................................................60
Section 4.1. Issuance of Certificates...........................................................60
Section 4.2. Sale of Certificates...............................................................60
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS........................................................61
Section 5.1. Terms..............................................................................61
Section 5.2. Forms..............................................................................61
Section 5.3. Execution, Authentication and Delivery.............................................61
Section 5.4. Registration and Transfer of Certificates..........................................62
Section 5.5. Mutilated, Destroyed, Lost or Stolen Certificates..................................64
Section 5.6. Persons Deemed Owners..............................................................64
Section 5.7. Cancellation.......................................................................64
Section 5.8. Limitation on Transfer of Ownership Rights.........................................65
Section 5.9. Assignment of Rights...............................................................66
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ARTICLE VI COVENANTS ...................................................................................66
Section 6.1. Distributions......................................................................66
Section 6.2. Money for Distributions to be Held in Trust; Withholding...........................66
Section 6.3. Protection of Trust Estate.........................................................67
Section 6.4. Performance of Obligations.........................................................67
Section 6.5. Negative Covenants.................................................................68
Section 6.6. No Other Powers....................................................................68
Section 6.7. Limitation of Suits................................................................68
Section 6.8. Unconditional Rights of Owners to Receive Distributions............................69
Section 6.9. Rights and Remedies Cumulative.....................................................69
Section 6.10. Delay or Omission Not Waiver.......................................................69
Section 6.11. Control by Owners..................................................................70
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES........................................................70
Section 7.1. Collection of Money................................................................70
Section 7.2. Establishment of Accounts..........................................................71
Section 7.3. The Certificate Insurance Policy...................................................71
Section 7.4. Pre-Funding Account and Capitalized Interest Account...............................72
Section 7.5. Flow of Funds......................................................................73
Section 7.6. Investment of Accounts.............................................................77
Section 7.7. Eligible Investments...............................................................77
Section 7.8. Reports by Trustee.................................................................79
Section 7.9. Additional Reports by Trustee......................................................82
Section 7.10. Supplemental Interest Payment Account, Supplement Interest Payments and Class B
Distribution Account............................................................82
ARTICLE VIII SERVICING AND ADMINISTRATION OF MORTGAGE LOANS.............................................83
Section 8.1. Master Servicer and Sub-Servicers..................................................83
Section 8.2. Collection of Certain Mortgage Loan Payments.......................................85
Section 8.3. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.................85
Section 8.4. Successor Sub-Servicers............................................................86
Section 8.5. Liability of Master Servicer.......................................................86
Section 8.6. No Contractual Relationship Between Sub-Servicer and Trustee or the Owners.........86
Section 8.7. Assumption or Termination of Sub-Servicing Agreement by Trustee....................86
Section 8.8. Principal and Interest Account.....................................................87
Section 8.9. Delinquency Advances, Compensating Interest and Servicing Advances.................88
Section 8.10. Purchase of Mortgage Loans.........................................................90
Section 8.11. Maintenance of Insurance...........................................................90
Section 8.12. Due-on-Sale Clauses; Assumption and Substitution Agreements........................91
Section 8.13. Realization Upon Defaulted Mortgage Loans..........................................92
Section 8.14. Trustee to Cooperate; Release of Files.............................................93
Section 8.15. Servicing Compensation.............................................................94
Section 8.16. Annual Statement as to Compliance..................................................94
Section 8.17. Annual Independent Certified Public Accountants' Reports...........................95
Section 8.18. Access to Certain Documentation and Information Regarding the Mortgage Loans.......95
Section 8.19. Assignment of Agreement............................................................95
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
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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...........................................................103
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......................................................105
Section 10.3. Certain Rights of the Trustee.....................................................106
Section 10.4. Not Responsible for Recitals or Issuance of Certificates..........................107
Section 10.5. May Hold Certificates.............................................................107
Section 10.6. Money Held in Trust...............................................................107
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.................................108
Section 10.10. Acceptance of Appointment by Successor Trustee....................................109
Section 10.11. Merger, Conversion, Consolidation or Succession to Business of the Trustee........110
Section 10.12. Reporting; Withholding............................................................110
Section 10.13. Liability of the Trustee..........................................................110
Section 10.14. Appointment of Co-Trustee or Separate Trustee.....................................111
ARTICLE XI MISCELLANEOUS...............................................................................112
Section 11.1. Compliance Certificates and Opinions..............................................112
Section 11.2. Form of Documents Delivered to the Trustee........................................112
Section 11.3. Acts of Owners....................................................................113
Section 11.4. Notices, etc., to Trustee.........................................................114
Section 11.5. Notices and Reports to Owners; Waiver of Notices..................................114
Section 11.6. Rules by Trustee and Sponsor......................................................114
Section 11.7. Successors and Assigns............................................................114
Section 11.8. Severability......................................................................115
Section 11.9. Benefits of Agreement.............................................................115
Section 11.10. Legal Holidays....................................................................115
Section 11.11. Governing Law.....................................................................115
Section 11.12. Counterparts......................................................................115
Section 11.13. Usury.............................................................................115
Section 11.14. Amendment.........................................................................116
Section 11.15. REMIC Status; Taxes...............................................................117
Section 11.16. Additional Limitation on Action and Imposition of Tax.............................118
Section 11.17. Appointment of Tax Matters Person.................................................119
Section 11.18. The Certificate Insurer...........................................................119
Section 11.19. Maintenance of Records............................................................120
Section 11.20. Notices...........................................................................120
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SCHEDULE I -- Schedules of Mortgage Loans
EXHIBIT A -- Form of Certificates
EXHIBIT B -- Contents of Mortgage Loan File
EXHIBIT C -- Form of Certificate Re: Mortgage Loans Prepaid in Full After the Cut-Off Date
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EXHIBIT D -- Form of Trustee's Acknowledgement of Receipt
EXHIBIT E -- Form of Certification
EXHIBIT F -- Form of Delivery Order
EXHIBIT G -- Form of Class R/RL Tax Matters Transfer Certificate
EXHIBIT H -- Power of Attorney
EXHIBIT I -- Form of Monthly Report
EXHIBIT J -- Form of Master Servicer's Trust Receipt
EXHIBIT K -- Form of Subsequent Transfer Agreement
EXHIBIT L -- Form of Lost Note Affidavit
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POOLING AND SERVICING AGREEMENT, relating to ADVANTA MORTGAGE
LOAN TRUST 1999-1, dated as of March 1, 1999, by and among ADVANTA MORTGAGE
CONDUIT SERVICES, INC., a Delaware corporation, in its capacity as Sponsor of
the Trust (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").
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, 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, MBIA Insurance 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 and will give due consideration to the
Certificateholders' reliance on the Master Servicer.
"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 Certificates, the period commencing on the immediately
preceding Payment Date (or the Startup
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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 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.
"Advanta Mortgage Files": For any Mortgage Loan identified on
the related Schedule of Mortgage Loans with an "A" code, 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 L 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 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". 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 all assumption, modification,
consolidation or extension agreements; and
(e) the originals of all intervening assignments of Mortgage,
showing a complete chain of assignment from origination to the related Seller,
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.
"Affiliated Originators": Advanta Mortgage Corp. USA, a
Delaware corporation, Advanta Bank Corp., a Utah industrial loan corporation,
Advanta Mortgage Corp. Midatlantic, a Pennsylvania corporation, Advanta Mortgage
Corp. Midatlantic II, a Pennsylvania corporation, Advanta Mortgage Corp.
Midwest, a Pennsylvania corporation, Advanta Mortgage Corp. of New
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Jersey, a New Jersey corporation, Advanta Mortgage Corp. Northeast, a New York
corporation, Advanta National Bank, a national banking association, Advanta
Finance Corp., a Nevada corporation.
"Aggregate Certificate Principal Balance": As of any date of
determination thereof, the sum of the then 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 Mortgage Conduit Services, 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, 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 0.50% 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, calculated on the basis of a 360-day year and the
actual number of days elapsed.
"Authorized Officer": 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, with respect to the Trustee,
the Sponsor and the Master Servicer, initially including those individuals whose
names appear on the lists of Authorized Officers delivered on the Startup Day.
"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.
"Available Funds Shortfall": As defined in Section
7.5(b)(D)(1) hereof.
"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.
"Benefit Plan Entity": As defined in Section 5.8(b) hereof.
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"Business Day": Any day that is not a Saturday, Sunday or
other day on which the Certificate Insurer, the Master Servicer or the Sponsor
is closed or commercial banking institutions in the State of New York, the State
of California or in the city in which the principal corporate trust office of
the Trustee is located, 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 Certificates and the
Class RL 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 dated March 9, 1999 issued by the Certificate Insurer to the
Trustee for the benefit of the Owners of the Class A Certificates.
"Certificate Insurer": MBIA Insurance Corporation.
"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 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 with respect to the Principal Distribution Amount pursuant to
Section 7.5(b)(F) hereof on all prior Payment Dates.
As of any Payment Date with respect to the Class A-1, A-2, A-3, A-4, A-5, A-6
and the Class A-7 Certificates, the Class A-1 Certificate Principal Balance, the
Class A-2 Certificate Principal Balance, the Class A-3 Certificate Principal
Balance, the Class A-4 Certificate Principal Balance,
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the Class A-5 Certificate Principal Balance, the Class A-6 Certificate Principal
Balance and the Class A-7 Certificate Principal Balance, respectively, as of
such Payment Date. The Class B Certificate, the Class BS Certificate, the Class
R Certificate, the Class RL Certificate and the 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 Certificates or the Class RL
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.
"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.
"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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-1 Certificate Termination Date": The Payment Date on
which the Class A-1 Certificate Principal Balance is reduced to zero.
"Class A-1 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-1 Certificate Principal
Balance immediately prior to such Payment Date during the related Accrual Period
at the Class A-1 Pass-Through Rate; provided,
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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 Class A Principal Distribution
Amount payable to the Owners of Class A-1 Certificates pursuant to Section
7.5(b)(F) 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)
in the event of a Certificate Insurer Default, 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 such 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": The Class A-1 Pass-Through Rate
will be equal to, with respect to any Payment Date, 5.99% 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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-2 Certificate Termination Date": The Payment Date on
which the Class A-2 Certificate Principal Balance is reduced to zero.
"Class A-2 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-2 Certificate Principal
Balance immediately prior to such Payment Date 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 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 Class A Principal Distribution
Amount payable to the Owners of Class A-2 Certificates pursuant to Section
7.5(b)(F) 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)
in the event of a Certificate Insurer Default, 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
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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": The Class A-2 Pass-Through Rate
will be equal to, with respect to any Payment Date, 5.98% 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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-3 Certificate Termination Date": The Payment Date on
which the Class A-3 Certificate Principal Balance is reduced to zero.
"Class A-3 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-3 Certificate Principal
Balance immediately prior to such Payment Date 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 Class A Principal Distribution
Amount payable to the Owners of Class A-3 Certificates pursuant to Section
7.5(b)(F) 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)
in the event of a Certificate Insurer Default, 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.
"Class A-3 Pass-Through Rate": The Class A-3 Pass-Through Rate
will be equal to, with respect to any Payment Date, 6.10% 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.
"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(b)(F) hereof on all prior Payment
Dates.
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<PAGE> 14
"Class A-4 Certificate Termination Date": The Payment Date on
which the Class A-4 Certificate Principal Balance is reduced to zero.
"Class A-4 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-4 Certificate Principal
Balance immediately prior to such Payment Date 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 Class A Principal Distribution
Amount payable to the Owners of Class A-4 Certificates pursuant to Section
7.5(b)(F) 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)
in the event of a Certificate Insurer Default, 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": The Class A-4 Pass-Through Rate
will be equal to, with respect to any Payment Date, 6.30% 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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-5 Certificate Termination Date": The Payment Date on
which the Class A-5 Certificate Principal Balance is reduced to zero.
"Class A-5 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-5 Certificate Principal
Balance immediately prior to such Payment Date 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 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 Class A Principal Distribution
Amount payable to the Owners of Class A-5 Certificates pursuant to Section
7.5(b)(F) hereof.
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<PAGE> 15
"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)
in the event of a Certificate Insurer Default, 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, 6.73% per annum, or (ii) with
respect to any Payment Date thereafter, 7.48% 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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-6 Certificate Termination Date": The Payment Date on
which the Class A-6 Certificate Principal Balance is reduced to zero.
"Class A-6 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-6 Certificate Principal
Balance immediately prior to such Payment Date 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, (z) Class A-6 Principal Distribution Amount
payable to the Owners of the Class A-6 Certificates pursuant to Section
7.5(b)(F).
"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)
in the event of a Certificate Insurer Default, 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 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": The Class A-6 Pass-Through Rate
will be equal to, with respect to any Payment Date, 6.33% per annum.
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<PAGE> 16
"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 with respect to such Payment Date:
<TABLE>
<CAPTION>
PERIOD APPLICABLE PERCENTAGE
------ ---------------------
<S> <C>
April 1999 - March 2002 0.00%
April 2002 - March 2004 45.00%
April 2004 - March 2005 80.00%
April 2005 - March 2006 100.00%
April 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) a fraction,
the numerator of which is the Class A-6 Certificate Principal Balance of the
Class A-6 Certificates immediately prior to such Payment Date and the
denominator of which is the aggregate Certificate Principal Balance of all
Classes of the Group I Certificates immediately prior to such Payment Date and
(y) the Group I Class A Principal Distribution Amount for 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.
"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(b)(F) hereof on all prior Payment
Dates.
"Class A-7 Certificate Termination Date": The Payment Date on
which the Class A-7 Certificate Principal Balance is reduced to zero.
"Class A-7 Current Interest": With respect to any Payment
Date, the amount of interest accrued on the Class A-7 Certificate Principal
Balance immediately prior to such Payment Date during the related Accrual Period
at the Class A-7 Pass-Through Rate; provided, that such amount will be reduced
by the Class A-7 Certificates' pro rata share of 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 Class A Principal
Distribution Amount payable to the Owners of Class A-7 Certificates pursuant to
Section 7.5(b)(F) 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 the immediately preceding Payment Date and (B)
in the event of an Certificate Insurer Default, 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 made to the Owners of the
Class A-7 Certificates on such immediately preceding Payment Date and (y)
interest on such amount at the
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<PAGE> 17
Class A-7 Pass-Through Rate calculated on the basis of the actual number of days
in the related Accrual Period.
"Class A-7 Pass-Through Rate": The Class A-7 Pass-Through Rate
will be equal to the lesser of (i)(a) with respect to any Payment Date which
occurs on or prior to the Step-Up Payment Date, LIBOR plus 0.27% per annum or
(b) with respect to any Payment Date thereafter, LIBOR plus 0.54% per annum and
(ii) the ARM Group Available Funds Cap Rate for such Payment Date.
"Class A-7 Supplemental Interest Amount": With respect to any
Payment Date, the excess, if any, of (x) the Class A-7 Current Interest Amount
due on the Class A-7 Certificates calculated using the Formula Pass-Through Rate
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.
"Class A-7 Supplemental Interest Payment Account": The Class
A-7 Supplemental Interest Payment Account established in accordance with Section
7.10(a) hereof and maintained by the Trustee.
"Class A-7 Supplemental Interest Shortfall Amount": As defined
in Section 7.10(b) hereof.
"Class A-7 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 Class A-7 Supplemental Interest Shortfall as of the
immediately preceding Payment Date and (B) any unpaid Class A-7 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 the Supplemental Interest Rights
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.
"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. The Class B Certificates
represent a class of "regular interests" in the Upper-Tier REMIC.
"Class B Distribution Amount": With respect to any Payment
Date, the amount payable to Class B 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.
"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.
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<PAGE> 18
"Class R Certificate": Any one of the Certificates designated
on the face thereof as a Class R Certificate, substantially in the form annexed
hereto as Exhibit A-R, 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 Upper-Tier REMIC for the purposes
of the REMIC Provisions.
"Class RL Certificate": The uncertificated right to receive
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.
"Clean-Up Call Date": The Payment Date after the Initial
Clean-Up Call 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.
"Combined Loan-to-Value Ratio": 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 with
respect to any Junior Mortgage Loan, the percentage equal to (a) the sum of (i)
the remaining principal balance, as of origination of the Junior Mortgage Loan,
as appropriate, of the Senior Lien note(s) relating to such Junior Mortgage
Loan, as appropriate, and (ii) the Original Principal Amount of the Note
relating to such Junior Mortgage Loan, as appropriate, divided by (b) the
Appraised Value.
"Commitment": The Commitment to issue a Certificate Guaranty
Insurance Policy dated March 8, 1999 and issued by the Certificate Insurer.
"Compensating Interest": As defined in Section 8.9(b) hereof.
"Conduit Acquisition Trust": The trust described in the
Pooling and Servicing Agreement dated as of May 1, 1997 among the Sponsor,
Bankers Trust Company of California, N.A., as trustee, Advanta Mortgage Corp.
USA, as the master servicer, and the "Borrowers" named therein.
"Conduit Mortgage Files": For any Mortgage Loan identified on
the related Schedule of Mortgage Loans with a "B" code, 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 L 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 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
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<PAGE> 19
California, N.A., 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 all 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
the Advanta Mortgage Conduit Services Inc." or "Bankers Trust Company of
California, N.A., as trustee". 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)"; and
(f) the originals of all intervening assignments of Mortgage,
showing a complete chain of assignment from origination to the related Seller,
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.
"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": As 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
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<PAGE> 20
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 F 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 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
hereof.
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"Eligible Investments": Those investments so designated
pursuant to Section 7.7 hereof.
"Event of Default": Any event described in clauses (a) or (b)
of Section 8.20 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.
"File": The documents delivered to the Trustee pursuant to
Section 3.5 hereof pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Advanta Mortgage File or Conduit Mortgage
File, as appropriate, pursuant to this Agreement.
"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.
"Fixed Rate Group Available Funds Cap Rate": As of any Payment
Date, an amount, expressed as a per annum rate, 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 on such Payment Date, divided by
(B) the aggregate outstanding principal balance of the Mortgage Loans in Group I
as of the beginning of the related Remittance Period, calculated on the basis of
a 360-day year consisting of twelve thirty-day months.
"Formula Pass-Through Rate": With respect to the Class A-7
Certificates, interest rate resulting from the calculation set forth in clause
(i) 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
Mortgage Note which amount is added to the Index in accordance with the terms of
the related Mortgage 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 fixed pool of Mortgage Loans
identified in the related Schedule of Mortgage Loans as having been assigned to
Group I, including any Qualified Replacement Mortgages delivered in replacement
thereof and assigned to Group I.
"Group I Available Funds": As defined in Section 7.3(a)
hereof.
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"Group I Capitalized Interest Deposit": $473,750.00.
"Group I Capitalized Interest Requirement": As to any Payment
Date occurring during the Pre-Funding Period, the difference, if any, between
(x) the Group I Interest Distribution Amount for such Payment Date plus the
Premium Amount relating to the Group I Certificates and the Trustee's Fee
relating to the Group I Certificates as of such Payment Date and (y) the sum of
(i) the Group I Interest Remittance Amount as of such Payment Date, and (ii) any
Pre-Funding Earnings relating to Group I to be transferred to the Certificate
Account on such Payment Date pursuant to Section 7.4 hereof.
"Group I Certificate Principal Balance": As of any date of
determination, the aggregate Certificate Principal Balances of all Group I
Certificates.
"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 Class A 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 related 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 the Group I Pool during the related
Remittance Period;
(B) the Loan Balance of each Mortgage Loan in
the Group I Pool that either was repurchased
by the Sponsor or an Originator or purchased
by the Master Servicer or any Sub-Servicer
on the Group I Pool 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 the Group
I Pool, to the extent such Substitution
Amounts are actually received by the
Trustee;
(D) all Net Liquidation Proceeds actually
collected by the Master Servicer with
respect to the Mortgage Loans in the Group I
Pool during the related Remittance Period
(to the extent such Net Liquidation Proceeds
relate to principal);
(E) the amount of any Overcollateralization
Deficit with respect to the Group I Pool for
such Payment Date;
(F) the proceeds received by the Trustee from
any termination of the Group I Pool (to the
extent such proceeds relate to principal);
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(G) any amounts remaining in the Pre-Funding
Account relating to Group I at the end of
the Pre-Funding Period;
(H) the amount of any Overcollateralization
Increase Amount with respect to the Group I
Pool for such Payment Date to the extent of
any Net Monthly Excess Cashflow available
for such purpose;
minus
(ii) the amount of any
Overcollateralization Reduction
Amount with respect to Group I
Pool for such Payment Date.
In no event will the Group I Principal Distribution Amount for
any class of Class A Certificates on any Payment Date (x) be less than zero or
(y) be greater than the then-outstanding principal balance of the related class
of Class A Certificates.
"Group I Deficiency Amount": The excess, if any, of the Group
I Required Distributions over the Group I Net Available Distribution Amount.
"Group I Insured Distribution Amount": As to the Group I
Certificates, the sum of (a) as of any Payment Date, the sum of (x) the Group I
Interest Distribution Amount for such Payment Date and (y) the Group I
Overcollateralization Deficit, if any, as of such Payment Date and (b) the Group
I Preference Amount.
"Group I Insured Payment": An amount equal to (a) as of any
Payment Date, the Group I Deficiency Amount and (b) any unpaid Group I
Preference Amount (without duplication).
"Group I Interest Amount Available": As of any Payment Date,
the Group I Interest Remittance Amount less the sum of the portion of the
Trustee's Fees related to Group I and the Premium Amount related to Group I for
such Payment Date.
"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) without
duplication, the portion of the Loan Purchase Price and the Substitution 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 and Group I).
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<PAGE> 24
"Group I Monthly Excess Cash Flow Amount": For any Payment
Date, the sum of (x) the Group I Monthly Excess Interest Amount and (y) the
Group I Overcollateralization Reduction amount for such Payment Date.
"Group I Monthly Excess Interest Amount": With respect to any
Payment Date, the excess, if any, of (i) the Group I Interest Amount Available
for the related Remittance Period over (ii) the Group I Interest Distribution
Amount on such Payment Date.
"Group I Monthly Remittance Amount": As of any Remittance
Date, the sum of (i) the Group I Interest Remittance Amount for such Remittance
Date and (ii) the Group I Principal Remittance Amount for such Remittance Date.
"Group I Net Available Distribution Amount": The Group I Total
Available Funds.
"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) 0.50% per annum, (B) the Trustee Fee Rate related to Group
I, and (c) the Premium Percentage related to 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 and (y) the Group I Original Pre-Funded Amount, which sum is
$400,000,000.00.
"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 $45,101,010.44.
"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 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 Group I Specified
Overcollateralization Amount for such Payment Date over (y) the Group I
Overcollateralization Amount for such Payment Date.
"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 the
Group I Pool 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.
"Group I Overcollateralization Increase Amount": Any Net
Monthly Excess Cashflow actually applied as an accelerated payment of principal
with respect to Group I.
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<PAGE> 25
"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 Group I Specified Overcollateralization
Amount 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
the Group I Pool.
"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 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 in
connection with a substitution of a Mortgage Loan in Group I, to the extent such
principal portion of the Substitution Amounts were actually deposited in the
Principal and Interest Account on such Remittance Date, (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)(D)(3) and (4) hereof plus (ii) interest accrued on each such
Group I Insured Payment not previously repaid calculated from the date the
Trustee received the related Group I Insured Payment at the Late Payment Rate
applicable 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.
"Group I Required Distributions": An amount equal to the Group
I Insured Distribution Amount.
"Group I Specified Overcollateralization Amount": The
Specified Overcollateralization Amount with respect to Group I.
"Group I Stepdown Date": The later to occur of (x) the 30th
Payment Date from the Startup Day and (y) the Determination Date on which the
outstanding principal balance on the Group I Certificates is equal to 50% of the
Group I Original Balance.
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<PAGE> 26
"Group I Total Available Funds": As defined in Section 7.3(a)
hereof.
"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
delivered in replacement thereof and assigned to Group II.
"Group II Available Funds": As defined in Section 7.3(a)
hereof.
"Group II Capitalized Interest Deposit": $431,226.00.
"Group II Capitalized Interest Requirement": As to any Payment
Date occurring during the Pre-Funding Period, the difference, if any, between
(x) the Group II Interest Distribution Amount on such Payment Date plus the
Premium Amount relating to the Group II Certificates and the Trustee's Fee
relating to the Group II Certificates as of such Payment Date and (y) the sum of
(i) the Group II Interest Remittance Amount for such Payment Date and (ii) any
Pre-Funding Earnings relating to Group II to be transferred to the Certificate
Account on such Payment Date pursuant to Section 7.4 hereof.
"Group II Certificate Principal Balance": As of any date of
determination, the aggregate Certificate Principal Balances of all Group II
Certificates.
"Group II Certificates": The Class A-7 Certificates.
"Group II Class A 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 related
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 the Group II Pool during the
related Remittance Period;
(B) the Loan Balance of each Mortgage Loan in
the Group II Pool that either was
repurchased by the Sponsor or an Originator
or purchased by the Master Servicer or any
Sub-Servicer on the Group II Pool 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 the Group
II Pool, to the extent such Substitution
Amounts are actually received by the
Trustee;
(D) all Net Liquidation Proceeds actually
collected by the Master Servicer with
respect to the Mortgage Loans in the Group
II Pool
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<PAGE> 27
during the related Remittance Period (to the
extent such Net Liquidation Proceeds relate
to principal);
(E) the amount of any Overcollateralization
Deficit with respect to the Group II Pool
for such Payment Date;
(F) the proceeds received by the Trustee from
any termination of the Group II Pool (to the
extent such proceeds relate to principal);
(G) any amounts remaining in the Pre-Funding
Account relating to Group II at the end of
the Pre-Funding Period;
(H) the amount of any Overcollateralization
Increase Amount with respect to Group II
Pool for such Payment Date to the extent of
any Net Monthly Excess Cashflow available
for such purpose;
minus
(ii) the amount of any
Overcollateralization Reduction
Amount with respect to Group II
Pool for such Payment Date.
In no event will the Group II Principal Distribution Amount
for any Class A-7 Certificates on any Payment Date (x) be less than zero or (y)
be greater than the then-outstanding principal balance of the Class A-7
Certificates.
"Group II Deficiency Amount": The excess, if any, of the Group
II Required Distributions over the Group II Net Available Distribution Amount.
"Group II Insured Distribution Amount": As to the Group II
Certificates, the sum of (a) as of any Payment Date, the sum of (x) the Group II
Interest Distribution Amount for such Payment Date and (y) the Group II
Overcollateralization Deficit, if any, as of such Payment Date and (b) the Group
II Preference Amount.
"Group II Insured Payment": An amount equal to (a) as of any
Payment Date, the Group II Deficiency Amount and (b) any unpaid Group II
Preference Amount (without duplication).
"Group II Interest Amount Available": As of any Payment Date,
the Group II Interest Remittance Amount less the sum of the portion of the
Trustee's Fees related to Group II and the Premium Amount related to Group II
for such Payment Date.
"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) without
duplication, the portion of the Loan Purchase Price and
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<PAGE> 28
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 and Group II).
"Group II Monthly Excess Cashflow Amount": For any Payment
Date, the sum of (x) the Group II Monthly Excess Interest Amount and (y) the
Group II Overcollateralization Reduction Amount for such Payment Date.
"Group II Monthly Excess Interest Amount": With respect to any
Payment Date, the excess, if any, of (i) the Group II Interest Amount Available
for the related Remittance Period over (ii) the Group II Interest Distribution
Amount on such Payment Date.
"Group II Monthly Remittance Amount": As of any Remittance
Date, the sum of (i) the Group II Interest Remittance Amount for such Remittance
Date and (ii) the Group II Principal Remittance Amount for such Remittance Date.
"Group II Net Available Distribution Amount": The Group II
Total Available Funds.
"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) 0.50% per annum, (B) the Trustee Fee Rate related to Group
II and (c) the Premium Percentage related to Group II.
"Group II Original Balance": The sum of (x) the aggregate
principal balances of the Initial Mortgage Loans in Group II as of the Initial
Cut-Off-Date and (y) the Group II Original Pre-Funded Amount, which sum is
$400,000,000.00
"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 $41,361,807.81.
"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 Group II Specified
Overcollateralization Amount for such Payment Date over (y) the Group II
Overcollateralization Amount for such Payment Date.
"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 the
Group II Pool 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.
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<PAGE> 29
"Group II Overcollateralization Increase Amount": Any Net
Monthly Excess Cashflow actually applied as an accelerated payment of principal
with respect to Group II.
"Group II Overcollateralization Reduction Amount": As of any
Payment Date, the lesser of (x) the Group II Principal Remittance Amount for
such Payment Date and (y) the excess of (i) the Group II Overcollateralization
Amount for such Payment Date, over (ii) the Group II Specified
Overcollateralization Amount for such Payment Date.
"Group II Preference Amount": Any amount previously
distributed to an Owner on 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
the Group II Pool.
"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 in connection with a substitution of a Mortgage Loan in Group II, to the
extent such principal portion of the Substitution Amounts were actually
deposited in the Principal and Interest Account on such Remittance Date, (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)(D)(3) and (4) hereof plus (ii) interest accrued on each such Group II
Insured Payment not previously repaid calculated from the date the Trustee
received the related Group II Insured Payment at the Late Payment Rate
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": An amount equal to the
Group II Insured Distribution Amount.
"Group II Specified Overcollateralization Amount": The
Specified Overcollateralization Amount with respect to Group II.
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<PAGE> 30
"Group II Stepdown Date": The later to occur of (x) the 36th
Payment Date from the Startup Day and (y) the Determination Date on which the
outstanding principal balance on the Group II Certificates is equal to 50% of
the Group II Original Balance.
"Group II Total Available Funds": An amount defined in Section
7.3(a) hereof.
"Indemnification Agreement": The Indemnification Agreement
dated as of February 24, 1999 among the Certificate Insurer, the Sponsor and the
Underwriters as may be amended from time to time.
"Index": With respect to any adjustable rate Note, the
applicable index set forth therein.
"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 aggregate principal balance of all of the Mortgage Loans
acquired by the Trust as of the Startup Day and acquired by the Trust prior to
the end of the Pre-Funding Period.
"Initial Cut-Off Date": The date as of which Initial Mortgage
Loans are transferred and assigned to the Trust, the opening of business on
March 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.
"Insurance Agreement": The Insurance Agreement dated as of
March 9, 1999 between the Sponsor, the Master Servicer, AMHC, the Trustee and
the Certificate Insurer, as it may be amended from time to time.
"Insurance Policy": Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan.
"Insured Distribution Amount": With respect to Group I, the
Group I Insured Distribution Amount, and with respect to Group II, the Group II
Insured Distribution Amount.
"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
such Payment Date or with respect to the April 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 on a Note becomes effective.
"Junior Mortgage Loan": A Mortgage Loan which constitutes a
junior priority mortgage lien with respect to the related Property.
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<PAGE> 31
"Late Payment Rate": For any Payment Date, the lesser of (a)
the greater of (x) the per annum rate of interest publicly announced from time
to time by Citibank, N.A. as its prime or base lending rate (any change in such
rate of interest to be effective on the date such change is announced by
Citibank, N.A.), plus 2% per annum and (y) the then applicable highest rate of
interest on the Class A Certificates and (b) the maximum rate permissible under
applicable usury or similar laws limiting interest rates. The Late Payment Rate
shall be computed on the basis of the actual number of days elapsed over a year
of 360 days.
"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 such rates appear on Telerate Page 3750 (or
any successor service thereto), as of 11:00 a.m. (London time) on such Interest
Determination Date. On each Interest Determination Date, LIBOR for the related
Accrual Period will be established by the Trustee as follows:
(x) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related Accrual
Period shall be the arithmetic mean of such offered quotations (rounded to the
nearest whole multiple of 1/16%).
(y) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related Accrual
Period shall be the higher of (x) LIBOR as determined on the previous Interest
Determination Date and (y) the Reserve Interest Rate.
"Liquidated Loan": A Mortgage Loan which is purchased from the
Trust as defined in Section 8.13(b) hereof. 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".
"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, including, 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 with respect to the
related Mortgage Loan.
"Liquidation Proceeds": With respect to any Liquidated Loan,
any amounts (including the proceeds of any Insurance Policy) recovered by the
Master Servicer in connection with such Liquidated Loan, whether through
trustee's sale, foreclosure sale or otherwise.
"Loan Balance": With respect to each Mortgage Loan, the
outstanding principal balance thereof as of the Initial Cut-Off Date or
Subsequent Cut-Off Date, as the case may be, less any principal amount relating
to such Mortgage Loan included in previous related 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, 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
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<PAGE> 32
Balance thereof as of the beginning of the related Remittance Period computed at
the Coupon Rate less the Servicing Fee (expressed as an annual percentage rate),
if any, together with, without duplication, the aggregate amount of (i) all
delinquent interest, all Delinquency Advances and Servicing Advances theretofore
made with respect to such Mortgage Loan and not subsequently recovered from the
related Mortgage Loan, (ii) all Delinquency Advances which the Master Servicer
or any Sub-Servicer has theretofore failed to remit with respect to such
Mortgage Loan and (iii) any Group I Reimbursement Amount or Group II
Reimbursement Amount, as the case may be, relating to such Mortgage Loan
relating to such Group.
"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.
"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 RL
Certificate.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Master Servicer's Trust Receipt": The Master Servicer's trust
receipt in the form set forth as Exhibit J hereto.
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"Master Transfer Agreement": Any one of the Master Loan
Transfer Agreements among the Sponsor and/or the Conduit Acquisition Trust, the
Trustee and one or more Originators. For purposes of this Agreement the Master
Loan Transfer Agreements are (x) the Master Loan Transfer Agreement dated as of
March 1, 1999 among the Sponsor, the Trustee and the Affiliated Originators
named therein and (y) any similar agreement with an Unaffiliated Originator
designated as a "Master Transfer Agreement" together, in either case, with any
related Conveyance Agreements (as defined therein).
"Monthly Excess Interest Amount": With respect to Group I, the
Group I Monthly Excess Interest Amount, and with respect to Group II, the Group
II Monthly Excess Interest Amount.
"Monthly Remittance Amount": With respect to Group I, the
Group I Monthly Remittance Amount, and with respect to Group II, the Group II
Monthly Remittance Amount.
"Moody's": Moody's Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple or leasehold interest
in real property securing a Note.
"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 Loans": The mortgage loans transferred and assigned
to the Trust pursuant to Section 3.5(a) hereof, together with any Qualified
Replacement Mortgages substituted therefor in accordance with this Agreement, as
from time to time are held as a part of the Trust Estate, the mortgage loans
originally so held being 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" and
"Subsequent Mortgage Loan".
"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 relating to such
Liquidated Loan. In no event shall Net Liquidation Proceeds with respect to any
Liquidated Loan be less than zero.
"Net Monthly Excess Cashflow": An amount as defined in Section
7.5(b)(E).
"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 or 8.9, (ii) a Delinquency Advance or
Servicing Advance proposed to be made in
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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 1 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 or 8.9 or (iii) any other
advance identified as a Nonrecoverable Advance in subsection 8.9(d).
"Non-REMIC Estate": Collectively, the Supplemental Interest
Trust, the Class A-7 Supplemental Interest Payment Account, the Capitalized
Interest Account and the Pre-Funding Account.
"Note": The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan.
"Officer's Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate.
"Operative Documents": Collectively, this Agreement, the
Master Transfer Agreements, the Subsequent Transfer Agreements, the Certificate
Insurance Policy, the Insurance Agreement, the Indemnification Agreement and
Certificates.
"Original Certificate Principal Balance": As of the Startup
Day as to each of the following Classes of Certificates, the Certificate
Principal Balances thereof, as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Class A-1 Certificates = $125,000,000
Class A-2 Certificates = $82,000,000
Class A-3 Certificates = $44,000,000
Class A-4 Certificates = $83,000,000
Class A-5 Certificates = $26,000,000
Class A-6 Certificates = $40,000,000
Class A-7 Certificates = $400,000,000
</TABLE>
"Original Principal Amount": With respect to each Note, the
principal amount of such Note or with respect to Junior Mortgages, 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 and any Unaffiliated 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;
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(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 Amount": With respect to Group I, the
Group I Overcollateralization Amount and with respect to Group II, the Group II
Overcollateralization Amount.
"Overcollateralization Deficiency Amount": With respect to
Group I, the Group I Overcollateralization Deficiency Amount and with respect to
Group II, the Group II Overcollateralization Deficiency Amount.
"Overcollateralization Deficit": With respect to Group I, the
Group I Overcollateralization Deficit and with respect to Group II, the Group II
Overcollateralization Deficit.
"Overcollateralization Increase Amount": With respect to Group
I, the Group I Overcollateralization Increase Amount and with respect to Group
II, the Group II Overcollateralization Increase Amount.
"Overcollateralization Reduction Amount": With respect to
Group I, the Group I Overcollateralization Reduction Amount and with respect to
Group II, the Group II Overcollateralization Reduction Amount.
"Owner": The Person in whose name a Certificate is registered
in the Register, to the extent described in Section 5.6.
"Pass-Through Rate": As to the each Class of Certificates, the
related Pass-Through Rate.
"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, commencing in the month following the Startup Day, or if the 25th day is
not a Business Day, then the next succeeding Business Day.
"Percentage Interest": As to any Class A Certificate, that
percentage, expressed as a fraction, the numerator of which is the Certificate
Principal Balance of such Certificate as of the Startup Day and the denominator
of which is the Certificate Principal Balance of all Certificates of the same
Class as of the Startup Day; and as to any Class B, Class BS, Class R or Class
RL Certificate, that Percentage Interest set forth on such Class B, Class BS,
Class R or Class RL Certificate.
"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.
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"Pool Factor": As defined in Section 7.8(a) hereof.
"Pool Principal Balance": The aggregate principal 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 the April 1999 Payment
Date, the actual investment earnings earned during the period from March 9, 1999
through April 25, 1999 (inclusive) on the Pre-Funding Account during such period
as calculated by the Trustee pursuant to Section 3.8(e) hereof; with respect to
the May 1999 Payment Date, the actual investment earnings during the period
beginning April 26, 1999 through May 24, 1999 (inclusive) on the Pre-Funding
Account during such period as calculated by the Trustee pursuant to Section
3.8(e) hereof; with respect to the June 1999 Payment Date, the actual investment
earnings during the period beginning May 25, 1999 through June 24, 1999
(inclusive) on the Pre-Funding Account during such period as calculated by the
Trustee pursuant to Section 3.8(e) 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) June 9, 1999.
"Premium Amount": With respect to a Group of Mortgage Loans,
as to any Payment Date, the product of (x) one-twelfth of the Premium Percentage
and (y) the Certificate Principal Balance of such Group of Certificates on such
Payment Date (after taking into account any distributions of the related
Principal Distribution Amount for such Group on such Payment Date).
"Premium Percentage": The percentage as defined in the
Insurance Agreement.
"Prepaid Installment": With respect to any Mortgage Loan, any
installment of principal thereof and accrued interest thereon received prior to
the scheduled due date for such installment, intended by the Mortgagor as an
early payment thereof and not as a Prepayment with respect to such Mortgage
Loan.
"Prepayment": Any payment of principal of a Mortgage Loan
which is received by the Master Servicer in advance of the scheduled due date
for the payment of such principal (other than the principal portion of any
Prepaid Installment), and the proceeds of any 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.
"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.
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"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.
"Principal Remittance Amount": As applicable, the Group I
Principal Remittance Amount or the Group II Principal Amount.
"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 September 15, 1998,
as supplemented by a prospectus supplement dated February 24, 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 Groups.
"Qualified Replacement Mortgage": A Mortgage Loan substituted
for another pursuant to Section 3.3, 3.4 or 3.6(b) hereof, 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 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 March 25,
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 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
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Insurer, except that the requirement of clause (viii) hereof must be satisfied
as to each Qualified Replacement Mortgage.
"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 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).
"Reference Banks": Bankers Trust Company, Barclay's Bank PLC,
The Bank of Tokyo and National Westminster Bank PLC; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, (ii) which is not controlling, under the control of or
under common control with the Sponsor or any affiliate thereof, (iii) whose
quotations appear on the Telerate Page 3750 on the relevant Interest
Determination Date and (iv) which have been designated as such by the Trustee.
"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.
333-52351) 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": With respect to Group I, the Group I
Reimbursement Amount and with respect to Group II, 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, except for the Supplemental Interest Trust, the Class A-7
Supplemental Interest Payment Account, the Capitalized Interest Account and the
Pre-Funding Account.
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"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.
"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": Salomon Smith Barney Inc., as representative
of the Underwriters.
"Required Distributions": The Group I Required Distributions
or the Group II Required Distributions, as applicable.
"Reserve Interest Rate": The rate per annum that the Trustee
determines to be either (i) 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 relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or, in the event that the Trustee can determine no such
arithmetic mean, (ii) the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.
"Schedule of Mortgage Loans": The Schedule of Mortgage Loans,
attached hereto as Schedule I as may be further supplemented in connection with
the transfer of Subsequent Mortgage Loans. Such Schedule shall also contain one
of the following codes for each Mortgage Loan or Subsequent Mortgage Loan: "C"
if such Mortgage Loan is an Unaffiliated Originator Loan or "A" for all other
Mortgage Loans. The information contained on each Schedule of Mortgage Loans
shall be delivered to the Trustee in an electronic media.
"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.
"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.
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"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 0.50% 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 Mortgage Conduit Services, Inc., a Delaware
corporation.
"Standard & Poor's": Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies.
"Startup Day": March 9, 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 M hereto, by which Subsequent
Mortgage Loans are sold 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 satisfies any requirements set
forth in Section 8.3 hereof in respect of the qualification of a Sub-Servicer .
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"Sub-Servicing Agreement": The written contract between the
Master Servicer and any Sub-Servicer relating to servicing and/or administration
of certain Mortgage Loans as permitted by Section 8.3.
"Supplemental Interest Payment Amount Available": As defined
in Section 7.10(b) hereof.
"Supplemental Interest Right": As defined in Section 7.10(e)
hereof.
"Supplemental Interest Trust": The Advanta Supplemental
Interest Trust 1999-1 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 Certificate and the Class RL 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.
"Total Monthly Excess Cashflow": With respect to a Mortgage
Loan Group and any Payment Date, an amount equal to the sum of (x) the Monthly
Excess Interest Amount with respect to such Mortgage Loan Group plus (y) any
Overcollateralization Reduction Amount with respect to such Mortgage Loan Group.
"Transaction Documents": Collectively this Agreement, the
Insurance Agreement, the Underwriting Agreement relating to the Class A
Certificates, the Master Transfer Agreements, 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 1999-1, 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 including principal collections in respect of
the related Mortgage Loans received on or after the Initial Cut-Off Date and
each Subsequent Cut-Off date, including Eligible Investments, as from time to
time may be held in all Accounts (except as otherwise provided herein), except
any premium recapture and interest accrued prior to the Initial Cut-Off Date and
each Subsequent Cut-Off Date, (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 Insurance Policies relating to the Mortgage
Loans and any rights of the Sponsor or any Affiliated Originator under any
Insurance Policies (excluding any non-mortgage related or credit
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life insurance policies), (v) Net Liquidation Proceeds with respect to any
Liquidated Loan, (vi) the rights of the Trustee under the Certificate Insurance
Policy, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account.
"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": 0.00775% per annum.
"Unaffiliated Originator Loan": Any Mortgage Loan purchased by
the Sponsor from an Unaffiliated Originator and sold to the Trust by the
Sponsor.
"Unaffiliated Originators": Any Originator who is not
affiliated with the Sponsor.
"Uncertificated Interest": As defined in Section 2.8(b)
hereof.
"Underwriters": Salomon Smith Barney Inc., Bear, Stearns & Co.
Inc., Lehman Brothers, Morgan Stanley & Co. Incorporated 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.
"Warehouse Trust": Any trust established by an affiliate of
the Sponsor to finance the origination of mortgage loans, including, without
limitation, the Conduit Acquisition Trust.
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.
SECTION 1.4. OPINIONS.
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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 1999-1". 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., Three Park Plaza,
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.
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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 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, $4,000,000). Lower-Tier Interest 2 shall have an initial
principal balance equal to one percent of the Group I Original Balance (that is,
$4,000,000). Lower-Tier Interest 3 shall have an initial principal
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balance equal to one percent of the initial principal balance of the Class A-7
Certificates (that is, $4,000,000). Lower-Tier Interest 4 shall have an initial
principal balance equal to one percent of the Group II Original Balance (that
is, $4,000,000). 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, $784,000,000).
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 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 Class A-7 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 the Group I to
the sum of the Loan Balances of the Mortgage Loans in the 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 Class A-7 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.
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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
(the sum 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 (the sum 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 (the sum
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, 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>
Pass- Allocation Allocation
Lower-Tier REMIC Initial Through of of
Interests Balance Rate Principal Interest
--------- ------- ---- --------- --------
<S> <C> <C> <C> <C>
1 $4,000,000 (1) (4) (5)
2 $4,000,000 (1) (4) (5)
3 $4,000,000 (2) (4) (5)
4 $4,000,000 (2) (4) (5)
5 $784,000,000 (3) (4) (5)
Lower-Tier (6) (6) (6)
Residual
</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 Class A-7 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 Class A-7 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
the 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
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<PAGE> 47
1 and Lower-Tier Interest 3 are first subject to a cap and floor equal
to the Group I Net Weighted Average Coupon Rate and 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 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
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 March 2029.
(e) The Startup Day is hereby designated for each of the
Lower-Tier REMIC and Upper-Tier REMIC as the "startup day" within the meaning of
Section 860G(a)(9) of the Code.
(f) The Trustee shall provide to the Internal Revenue Service
and to the persons described in Section 860E(e)(3) and (6) of the Code, the
information described in Treasury regulations Section 1.860D-1(b)(5)(ii), or any
successor regulation thereto, with respect to each of the Lower-Tier REMIC and
the Upper-Tier REMIC. Such information will be provided in the manner described
in Treasury regulations Section 1.860E-2(a)(5), or any successor regulation
thereto.
(g) 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.
(h) 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.
(i) The final scheduled Payment Date for any Class of
Certificates is hereby established as follows:
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<PAGE> 48
CLASS FINAL SCHEDULED PAYMENT DATES
<TABLE>
<CAPTION>
Final Scheduled
Class Payment Date
----- ------------
<S> <C> <C>
Class A-1 August, 2013
Class A-2 June, 2014
Class A-3 July, 2018
Class A-4 April, 2027
Class A-5 March, 2029
Class A-6 March, 2029
Class A-7 March, 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 Delaware 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.
(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).
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<PAGE> 49
(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 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.
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<PAGE> 50
(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.
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 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.
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<PAGE> 51
(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) [Reserved.]
(i) 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 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.
(j) 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.
(k) The transactions contemplated by this Agreement are in the
ordinary course of business of the Master Servicer.
(l) The terms of each existing Sub-Servicing Agreement and
each designated Sub-Servicer are acceptable to the Master Servicer and any new
Sub-Servicing Agreements or Sub-Servicers will comply with the provisions of
Section 8.3.
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<PAGE> 52
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 Schedules 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 (including all material documents related thereto) with
respect to each Mortgage Loan 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;
(iii) Except for any Unaffiliated Originator Loans being
serviced by a servicer other than the Master Servicer, each Mortgage
Loan is being serviced by the Master Servicer or a Person controlling,
controlled by or under common control with the Master Servicer and
qualified to service mortgage loans;
(iv) The Note related to each Mortgage Loan in Group I as of
the Initial Cut-Off Date bears a Coupon Rate of at least 6.49% per
annum;
(v) As of the Initial Cut-Off Date, no more than 1.87% 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; as of the related Subsequent Cut-Off Date, no Subsequent
Mortgage Loan shall be 60 or more days Delinquent as of the related
Replacement Cut-Off Date, no Qualified Replacement Mortgage shall be 60
or more days Delinquent;
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<PAGE> 53
(vi) As of the Initial Cut-Off Date, no more than 0.32% of the
aggregate principal balances of the Mortgage Loans is secured by
Properties located within any single zip code area and less than 9.85%
of the aggregate Loan Balance of the Mortgage Loans consists of Date of
Payment Loans or "simple interest" Mortgage Loans;
(vii) All of the Mortgage Loans conform, in all material
respects, to the description thereof set forth in the Registration
Statement;
(viii) As of the Initial Cut-Off Date, no more than 6.77% of
the Loan Balance of the Mortgage Loans relates to Mortgage Loans
originated under the Originators' non-income verification program for
self-employed borrowers;
(ix) The credit underwriting guidelines applicable to each
Mortgage Loan conform in all material respects to the description
thereof set forth in the Prospectus; and
(x) 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 each Master Transfer Agreement
applicable to the related Mortgage Loans. Insofar as such Master 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 a Master 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 a Master 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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<PAGE> 54
relating to enforceability of the Mortgage Loan against the related Mortgagor or
Property or (z) set forth in clause (ix) of Section 3.3 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 to or an Originator to),
subject to the further requirements of this paragraph, on the second Remittance
Date next succeeding such discovery, receipt of notice or such other time (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, 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 Section 3.3, Section 3.4 or Section
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 related Master 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) 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 Mortgage Loans) 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 and the Warehouse Trusts 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 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 or the Warehouse Trusts.
(b) The Sponsor agrees to take or cause to be taken such
actions and execute such documents (including, without limitation, the filing of
all necessary continuation statements for the UCC-1 financing statements filed
in the State of New York (which shall have been filed within 90 days of the
Startup Day or the Subsequent Transfer Date, as the case may be)) describing the
Mortgage Loans and naming the Sponsor and the appropriate Warehouse Trust, as
applicable, as debtor and the Trustee as the secured party and 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 officer of the debtor (within 90
days of any event necessitating such filing) as are necessary to perfect and
protect the Owners' and the Certificate Insurer's interests in each Mortgage
Loan and the proceeds thereof.
(c) In connection with the transfer and assignment of the
Mortgage Loans, the Sponsor agrees to:
(i) cause to be delivered, no later than the Startup Day or
any Subsequent Transfer Date, as applicable, without recourse, to the
Trustee the items listed in the definitions of "Advanta Mortgage Files"
and "Conduit Mortgage Files," as appropriate; provided that the
assignments of mortgage listed in clause (e) of Exhibit B hereto shall
be delivered to the Trustee with respect to the Designated Advanta
Mortgage Files within 75 Business Days of the Startup Day or any
Subsequent Transfer Date, as applicable.
(ii) cause, within 75 Business Days following the Startup Day
or any Subsequent Transfer Date, 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 which relates to an Advanta Mortgage File
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
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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 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 Loan file.
Such assignments of mortgage shall, in addition to the
requirements specified in Exhibit B, be in recordable form. On or before the
Startup Day or any Subsequent Transfer Date, as applicable, the Sponsor shall
deliver to the Trustee original executed powers of attorney, from the current
recordholders of the related Mortgage substantially in the form of Exhibit H,
authorizing the Master Servicer on behalf of the Trustee to record the
assignments of mortgage as provided in clause (ii) above. 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) In the case of Mortgage Loans which have been prepaid in
full on or after the Initial Cut-Off Date and prior to the Startup Day, or on or
after any Subsequent Cut-Off Date and prior to the related Subsequent Transfer
Date, as the case may be, the Sponsor, in lieu of the assignment of mortgage,
will deliver within 15 Business Days after the Startup Day or Subsequent
Transfer Date, to the Trustee a certification of an Authorized Officer of the
Sponsor in the form set forth in Exhibit C.
(e) The Sponsor (or any Warehouse Trust, 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 any
Warehouse Trust or of such affiliate) in and to any Qualified Replacement
Mortgage delivered to the Trustee pursuant to Section 3.3, Section 3.4 or
Section 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 the
Conduit Acquisition 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) 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, on the Sponsor's order, 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 interest accruing on such released Mortgage Loan prior
to the applicable Replacement Cut-Off Date.
(g) 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.
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(h) 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 File with respect thereto.
(i) 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.
(j) The Sponsor shall cause to be reflected on the applicable
records that the Mortgage Loans have been sold to the Trust.
(k) 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 and 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.
(l) 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.
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 D hereto of the 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 E 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.
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(b) If the Trustee during such 90-day period finds any
document constituting a part of a File which is not properly executed, has not
been received within the specified period, or is unrelated to the Mortgage Loans
identified in the Schedules of Mortgage Loans, or 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 File of which
it is so notified by the Trustee. If, however, within 60 days after the
Trustee's notice to it respecting such defect the Sponsor has not remedied or
caused to be remedied the defect and the defect materially and adversely affects
the interest in the related Mortgage Loan of the Owners or of the Certificate
Insurer, 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 applicable thereto to the Master Servicer for deposit in the
Principal and Interest Account 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 the Upper-Tier REMIC or Lower-Tier REMIC
or would jeopardize the status of the Upper-Tier REMIC or 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 the
Upper-Tier REMIC or Lower-Tier REMIC or would not jeopardize the status of the
Upper-Tier REMIC or Lower-Tier REMIC 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 or (ii) the delivery of such opinion or (iii) at
the direction of the Control Party.
SECTION 3.7. COOPERATION PROCEDURES.
(a) 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 paragraph (b) below in consideration of the Trustee's delivery to
or upon the order of the Sponsor of all or a portion of the balance of funds in
the Pre-Funding Account which shall be $45,101,010.44 with respect to Group I
Loans and $41,361,807.81 with respect to Group II Loans, the Sponsor shall sell,
transfer, assign, set over and otherwise convey, or shall request or cause the
Trust to acquire from such Warehouse Trust all right, title and interest in and
to each Subsequent Mortgage 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 accruing 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 Insurance Policies;
provided, however, that the Sponsor reserves and retains all its right, title
and interest in and to principal
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collected and interest accruing 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 and the Owners and all parties hereto to be
treated as a sale by the Sponsor or the Warehouse Trust.
The amount released from the Pre-Funding Account shall be
equal to the aggregate Loan Balances of the Subsequent Mortgage Loans so
transferred.
(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 paragraph (a) above 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 shall have provided any information in an electronic data
file form as reasonably requested by any of the foregoing and in a form
agreeable to any of the foregoing 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 K (the "Subsequent
Transfer Agreement"), which shall include a Schedule of Mortgage Loans
listing the Subsequent Mortgage Loans and any other exhibits listed
thereon;
(iii) as of each Subsequent Transfer Date, the
Sponsor shall have deposited in the Principal and Interest Account all
principal collections and interest accrued (excluding premium recapture
and interest accrued prior to the related Subsequent Cut-Off Date) in
respect of the Subsequent Mortgage Loans received on or after the
related Subsequent Cut-Off Date;
(iv) as of each Subsequent Transfer Date, none of the
related Originator, 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 addition 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 this paragraph (b) and paragraphs (c)
and (d) below, and in the related Subsequent Transfer Agreement and (B)
confirming that (i) neither the sale of the Subsequent Mortgage Loans
by Advanta nor the purchase of the Subsequent Mortgage Loans by the
Trust constitutes a "prohibited transaction", as defined in Section
860F(a)(2) of the Code, and (ii) the Subsequent Mortgage Loans are
Qualified Mortgages;
(viii) the Sponsor shall have delivered to the Rating
Agencies, the Certificate Insurer, and the Trustee, Opinions of Counsel
with respect to the transfer of
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the Subsequent Mortgage Loans substantially in the form of the Opinions
of Counsel delivered to the Trustee on the Startup Day (bankruptcy,
corporate and tax opinions);
(ix) an independent accountant retained by the
Sponsor provides the Sponsor with a letter (with copies provided to the
Rating Agencies, the Certificate Insurer, the Underwriters and the
Trustee) stating whether or not the characteristics of the Subsequent
Mortgage Loans conform to the characteristics described in the Pooling
and Servicing Agreement. In preparing such letter, the independent
accountant must use the same type of procedures as were applicable to
the Initial Mortgage Loans which were transferred to the Trust as of
the Startup Day;
(x) the Rating Agencies shall have provided
confirmation that the rating of the Certificates will not be adversely
affected by such transfer of Subsequent Mortgage Loans; and
(xi) the Certificate Insurer shall have approved the
transfer.
(c) The obligation of the Trust to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the following
requirements: (i) such Subsequent Mortgage Loan may not be 30 or more days
contractually delinquent as of the related Subsequent Cut-Off Date; (ii) the
remaining term to maturity of such Subsequent Mortgage Loan may not exceed 30
years; (iii) such Subsequent Mortgage Loan may not have a combined loan-to-value
ratio ("CLTV") in excess of 100%; (iv) such Subsequent Mortgage Loan may not
have a Loan Balance in excess of $500,000; and (v) following the purchase of
Subsequent Mortgage Loans for Group I by the Trust, the Mortgage Loans in Group
I (including the Subsequent Mortgage Loans) (a) will have a weighted average
Coupon Rate of at least 10.30%; (b) will have a weighted average CLTV of not
more than 80.50%; (c) will have not less than 92.00%, by aggregate principal
balance, Mortgage Loans that are considered "fully documented" loans; (d) will
have not less than 87.00%, by aggregate principal balance, Mortgage Loans that
are related to single family detached residences; (e) will have at least 89.50%,
by aggregate principal balance, Mortgage Loans which are first lien mortgages,
(f) will have at least 70.00% by aggregate principal balance of Mortgage Loans
which are "A-" classified or better, (g) will have not more than 11.25%, by
aggregate principal balance, Mortgage Loans that are "C" classified; (h) will
have not more than 2.25%, by aggregate principal balance, Mortgage Loans that
are "D" classified; (i) no more that 2.0% of the Subsequent Mortgage Loans will
be Unaffiliated Mortgage Loans; (j) no more than 4.20% by aggregate principal
balance of Mortgage Loans will have a CLTV of 90.00% or greater; (k) no more
than 62.00% by aggregate principal balance of Mortgage Loans will have a CLTV of
80.00% or greater and (vi) following the purchase of Subsequent Mortgage Loans
for Group II by the Trust, the Mortgage Loans in Group II (including the
Subsequent Mortgage Loans) (a) will have a weighted average Coupon Rate by
aggregate principal balance of Mortgage Loans of at least 9.95%; (b) will have a
weighted average CLTV of no more than 79.50%; (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 89.00% by aggregate principal balance of Mortgage
Loans that are related to single family detached residences; (e) will have a
weighted average margin of at least 6.15%; (f) no more than 5.0% of the
Subsequent Mortgage Loans will be Junior Mortgage Loans; (g) will have at least
54.00% by aggregate principal balance of Mortgage Loans which are "A-"
classified or better; (h) will have not more than 23.30%, by aggregate principal
balance, Mortgage Loans that are "C" classified; (i) will have not more than
4.30%, by aggregate principal balance, Mortgage Loans that are "D" classified;
(j) no more that 2.0% of the Subsequent Mortgage Loans will be Unaffiliated
Mortgage Loans; (k) no more than 0.50% by aggregate principal balance of
Mortgage Loans will
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have a CLTV of 90.00% or greater; (l) no more than 45.00% by aggregate principal
balance of Mortgage Loans will have a CLTV of 80.00% or greater. The Certificate
Insurer may waive or modify any of the above requirements 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)-(j), 3.6, 3.7 and 3.8(b)-(c).
(e) In connection with each Subsequent Transfer Date and on
the Payment Dates occurring in April 1999, May 1999 and June 1999 the Master
Servicer and the Trustee shall co-operate in determining (i) the amount and
correct dispositions of Group I Capitalized Interest Requirement, the Group II
Capitalized Interest Requirement, the Pre-Funding Earnings and the amount then
on deposit in the Pre-Funding Account, and (ii) any other necessary matters in
connection with the administration of the Pre-Funding Account and of the
Capitalized Interest Account. In the event that any amounts are incorrectly
released to the Owners of the Class R Certificates from either of the
Pre-Funding Account or the Capitalized Interest Account, such Owners of the
Class R Certificates shall immediately repay such amounts to the Trustee.
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 F 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, 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 Class A-7 Supplemental Interest Payment Account; (iii) deliver to
the Sponsor, the Class BS Certificates, the Class R Certificates and the Class
RL 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
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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, the Pre-Funding Account, the Capitalized
Interest Account and, with respect to the Class A-7 Certificate, the Class A-7
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 Percentage Interest
and, with respect to the Class A-7 Certificate, certain amounts payable from the
Class A-7 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.
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.
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(a) 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.
(b) 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.
(c) 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 a like aggregate 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.
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(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 Class A Certificate with a denomination equal to the Aggregate
Certificate Principal Balance. 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 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
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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) Neither the Sponsor, the Master Servicer, the Certificate
Insurer, nor the Trustee will have any liability for any actions taken by DTC or
its nominee, Euroclear or CEDEL, 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, CEDEL 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, 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,
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.
Every new Certificate issued pursuant to this Section 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.
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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, 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 or Class RL 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
or Class RL 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 or
Class RL Certificate. Furthermore, in no event shall the Trustee accept
surrender for transfer, registration of transfer, or register the transfer, of
any Class R or Class RL Certificate nor authenticate and make available any new
Class or Class RL Certificate unless the Trustee has received an affidavit from
the proposed transferee in the form attached hereto as Exhibit I. Each holder of
a Class R or Class RL Certificate by his acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section 5.08(b).
(c) No other sale or other transfer of record or beneficial
ownership of a Class B, Class BS, Class R or Class RL Certificate shall be made
unless such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended, and any applicable state securities laws or
is made in accordance with said 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
said Act and laws or is being made pursuant to said Act and laws, which opinion
of counsel shall not be an expense of the Trustee or the Sponsor, and (ii) 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 or Class RL 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 or Class RL 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 or Class RL Certificate shall deliver to the Trustee
a certificate to the effect that it is not a Benefit Plan Entity.
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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 Section 5.4 and Section 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.
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.
(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.
(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 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 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 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 Certificates as provided above.
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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 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, if there
are no longer any affected Class A Certificates then outstanding, by such
majority of the Percentage Interests represented by the Class R 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
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effectiveness of, any such instrument or document, except as expressly provided
in this Agreement or such other instrument or document.
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:
(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
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Class R 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 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 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.
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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 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
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it, other than pursuant to or as 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 relating to such
Mortgage Loan Group 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
such Payment Date with respect to each Mortgage Loan Group (disregarding the
amounts of any Insured Payments with respect to such Mortgage Loan Group) and
equal to the sum of (x) such amounts excluding the amount of any Total Monthly
Excess Cashflow amounts included in such amounts and excluding an amount equal
to the Premium Amount with respect to such Mortgage Loan Group together with any
Servicing Fees and Trustee's Fees with respect to such Mortgage Loan Group for
the related Payment Date plus (y) any amounts of Total Monthly Excess Cashflow
to be applied on account of such Mortgage Loan Group; the amounts described in
the preceding clause (x) with respect to Group I and the related Payment Date,
are the "Group I Available Funds" and with respect to Group II and the related
Payment Date are the "Group II Available Funds"; the sum of the amounts
described in the preceding clauses (x) and (y) are the "Group I Total Available
Funds" with respect to the Mortgage Loans in Group I and "Group II Total
Available Funds" with respect to the Mortgage Loans in Group II; 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 a Group I Deficiency Amount and/or a Group II
Deficiency Amount exists 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 second Business Day preceding such Payment Date as a claim
for an Insured Payment in an amount equal to such Group I and/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 distribute all Insured Payments
received, or the proceeds thereof, in accordance with Section 7.5(b)(F) to the
Owners of the related Class of Class A Certificates.
(d) 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)(F). The Certificate Insurer shall be entitled to receive
the related Reimbursement Amount pursuant to Section 7.5(b)(D)(4) hereof with
respect to each
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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 Section 7.5(b)(D)(4) hereof.
(e) The Trustee shall receive, as attorney-in-fact of each
Owner of a Class A Certificate, any Insured Payment from the Certificate Insurer
and disburse the same to each Owner of a Class A Certificate in accordance with
the provisions of Section 7.3. 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 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 interest rate borne by the Class A Certificates, 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, on behalf of
the Owners, 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 on the Startup Day, the Trustee shall deposit, on behalf of
the Owners, the Group I Capitalized Interest Deposit and the Group II
Capitalized Interest Deposit in the Capitalized Interest Account from the
proceeds of the sale of the Certificates.
(b) On any Subsequent Transfer Date, the Sponsor shall
instruct the Trustee in writing 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) If (x) the Pre-Funded Amount with respect to the related
Mortgage Loan Group has not been reduced to zero by June 9, 1999, or (y) the
Pre-Funded Amount has been reduced to $100,000 or less, or (z) any Event of
Default occurs and is continuing in each case 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 on such Remittance Date and deposit in the Certificate Account (i) on
behalf of the
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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.
(e) On the Payment Dates occurring in April 1999, May 1999 and
June 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 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 Certificates, and the
Capitalized Interest Account shall be closed.
SECTION 7.5. FLOW OF FUNDS.
(a) On each Remittance Date, the Trustee shall deposit to the
Certificate Account with respect to each Mortgage Loan Group, without
duplication, (i) upon receipt, any Insured Payments relating to such Mortgage
Loan Group, the proceeds of any liquidation of the assets of the Trust, insofar
as such assets relate to such Mortgage Loan Group, together with 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
April 1999, May 1999 and June 1999, as applicable, (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 such
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 such Mortgage Loan Group.
(b) On each Payment Date the Trustee shall make the following
allocations, disbursements and transfers of amounts 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:
(A) 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 such Mortgage Loan Group;
(B) 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;
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(C) 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;
(D) fourth, on each Payment Date, the Trustee shall
allocate the Total Monthly Excess Cashflow with respect to
each Mortgage Loan Group in the following order of priority:
1. first, such Total Monthly Excess Cashflow shall be
allocated on such Payment Date with respect to the
related Mortgage Loan Group in an amount equal to the
excess, if any, of (x) the related Insured
Distribution Amount for such Payment Date over (y)
the Available Funds with respect to such Mortgage
Loan Group for such Payment Date (the amount of such
difference being the "Available Funds Shortfall" with
respect to the related Mortgage Loan Group);
2. second, any portion of the Total Monthly Excess
Cashflow with respect to such Mortgage Loan Group
remaining after the application described in clause
(1) above shall be allocated against any Available
Funds Shortfall with respect to the other Mortgage
Loan Group;
3. third, any portion of the Total Monthly Excess
Cashflow with respect to such Mortgage Loan Group
remaining after the allocations described in clauses
(1) and (2) above shall be paid to the Certificate
Insurer in respect of amounts owed on account of any
Reimbursement Amount with respect to the related
Mortgage Loan Group;
4. fourth, any portion of the Total Monthly Excess
Cashflow with respect to such Mortgage Loan Group
remaining after the allocations described in clauses
(1), (2) and (3) above shall be paid to the
Certificate Insurer in respect of any Reimbursement
Amount with respect to the other Mortgage Loan Group;
(E) fifth, the amount, if any, of the Total Monthly
Excess Cashflow with respect to a Mortgage Loan Group on a
Payment Date remaining after the allocations described in
clause (D) above is the "Net Monthly Excess Cashflow" with
respect to such Mortgage Loan Group for such Payment Date;
such amount is required to be applied in the following order
of priority:
1. first, such Net Monthly Excess Cashflow shall be
used to reduce to zero, through the payment of an
Overcollateralization Increase Amount, any
Overcollateralization Deficiency Amount with respect
to the related Mortgage Loan Group as of such Payment
Date;
2. second, any portion of the Net Monthly Excess
Cashflow remaining after the application described in
clause (1) above
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shall be used to reduce to zero, through the payment
of an Overcollateralization Increase Amount, any
Overcollateralization Deficiency Amount with respect
to the other Mortgage Loan Group;
3. third, any remaining Net Monthly Excess Cashflow
remaining after the applications described in clauses
(1) and (2) above shall be paid to the Master
Servicer to the extent of any unreimbursed
Delinquency Advances, unreimbursed Servicing Advances
and accrued and unpaid Servicing Fees, in each case
as certified to the Trustee by the Master Servicer to
be owing to it as of such Payment Date;
(F) sixth, following the making by the Trustee of all
allocations, transfers and disbursements described above under
Sections 7.3 and 7.10 hereof and the prior clauses of this
Section 7.5, from amounts (including any related Insured
Payment) then on deposit in the Certificate Account with
respect to each related Mortgage Loan Group, (such amount with
respect to each Mortgage Loan Group, the related "Group
Distribution Amount") shall be applied as follows:
1. with respect to the Group I Pool, the Group
Distribution Amount shall be applied:
(a) first, pro rata, to the Owners of the
Group I Certificates, their respective Class
A Current Interest;
(b) second, pro rata, to the Owners of the
Group I Certificates, their respective Class
A Interest Carry Forward Amount;
(c) third, the lesser of (x) the remaining
amount of the Group Distribution Amount with
respect to the Group I Pool and (y) the
Group I Class A Principal Distribution
Amount shall be applied in the following
order of priority:
i. first, the Group I Class A
Principal Distribution Amount shall
be distributed to the Owners of the
Class A-6 Certificates in an amount
equal to the Class A-6 Principal
Distribution Amount;
ii. second, the excess of (x) the Group
I Class A Principal Distribution
Amount over (y) the amount
distributed in clause (c)(i) 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;
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iii. third, to the Owners of the Class
A-6 Certificates, any remaining
amount of the Group I Class A
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 Overcollateralization Amount related to
Group I is zero and the Certificate Insurer is in
default, the Principal Distribution Amount with
respect to the Group I Certificates shall be
distributed pro rata to the Owners of the Group I
Certificates and not in accordance with the above
priorities.
2. With respect to the Group II Pool, the Group
Distribution Amount shall be applied:
(a) first, pro rata, to the Owners of the
Group II Certificates, their respective
Class A Current Interest;
(b) second, pro, rata, to the Owners of the
Group II Certificates, their respective
Class A Interest Carry Forward Amount;
(c) third, the lesser of (x) the remaining
amount of the Group Distribution Amount with
respect to the Group II Pool and (y) the
Group II Class A Principal Distribution
Amount shall be distributed to the Owners of
the Class A-7 Certificates until the
Certificate Principal Balance of Class A-7
has been reduced to zero;
(G) seventh, on each Payment Date, the Trustee shall
transfer from amounts then on deposit in the Certificate
Account to the Class A-7 Supplemental Interest Payment
Account, the Class B Distribution Amount; such transfer shall
be deemed to be a distribution on the Class B Certificates;
(H) eighth, 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 Certificates.
(c) 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 Total 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.
(d) 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.
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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 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) The Trustee shall hold funds in the Accounts held by the
Trustee uninvested upon the occurrence of either of the following events:
(i) the Master Servicer or the Control Party, as the case may
be, shall have failed to give investment directions to the Trustee
within ten days after receipt of a written request for such directions
from the Trustee; or
(ii) the Master Servicer or the Control Party, as the case may
be, shall have failed to give investment directions to the Trustee
during the ten-day period described in clause (d)(i) preceding, by
11:15 a.m. New York time (or such other time as may be agreed by the
Master Servicer and the Trustee) on any Business Day (any such
investment by the Trustee pursuant to this clause (d)(ii) to mature on
the next Business Day after the date of such investment).
(e) For purposes of investment, the Trustee shall 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:
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(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 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;
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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 I 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 I
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;
(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;
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(x) the weighted average Coupon Rate of the Mortgage Loans
with respect to each Group;
(xi) the amount of any Class A-7 Supplemental Interest Amount;
(xii) the Overcollateralization Amount, for each Mortgage Loan
Group, 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;
(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;
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(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.
(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
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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 Master
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 1999-1" (the "Supplemental Interest
Trust"). The Supplemental Interest Trust shall hold a trust account (which shall
be an Eligible Account), the "Class A-7 Supplemental Interest Payment Account"
to be held by the Trustee in its name on behalf of the Supplemental Interest
Trust. None of the assets 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 Class A-7
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
Class A-7 Supplemental Interest Payment Account and pay to the Owners of the
Supplemental Interest Right (which Owners shall, in the absence of contrary
instructions received by the Trustee from the Owners of the Class A-7
Certificates, be the Owners of the Class A-7 Certificates) the lesser of (x) the
sum of (i) the Class A-7 Supplemental Interest Amount for such Payment Date plus
(ii) any Class A-7 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 Class A-7 Supplemental Interest
Amount for such Payment Date (such deficiency, the "Class A-7 Supplemental
Interest Shortfall Amount"), the Trustee shall demand
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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 Class A-7 Supplemental Interest Amount plus any Class
A-7 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.
(b) The duties of the Master Servicer shall include collecting
and posting of all payments, responding to inquiries of Mortgagors or by
federal, state or local government authorities with respect to the Mortgage
Loans, investigating delinquencies, reporting tax information to Mortgagors in
accordance with its customary practices and accounting for collections and
furnishing monthly and annual statements to the Trustee and the Certificate
Insurer, as applicable, with respect to distributions, paying Compensating
Interest and 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
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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 the
Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify as a REMIC.
(d) The Master Servicer shall have the right using that degree
of skill and attention that the Master Servicer exercises with respect to
comparable mortgage loans that it services for itself or others, 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 each of the Lower-Tier REMIC and
the Upper-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) The Master Servicer may in its discretion (i) waive any
assumption fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or the fees which may be collected
in the ordinary course of servicing the Mortgage Loans, (ii) if a Mortgagor is
in default or about to be in default because or 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 generally not be permitted to reschedule the payment of
delinquent payments more than one time in any twelve consecutive months with
respect to any Mortgagor and 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 Principal Balance without the prior written consent of the Certificate
Insurer; provided, 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 sole discretion that such modification is
required to be made prior to such five day period, or (iii) 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.
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(g) 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 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.
(h) 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.
(i) 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)(E)(3).
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 Insurance Policies, follow Accepted Servicing Practices. Consistent
with the foregoing, the Master Servicer may in its discretion (i) 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, (ii) 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.
(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-
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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. 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 an affiliate of the Master Servicer. 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.
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 or any of the
provisions of this Agreement relating to agreements or arrangements 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 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-
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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 in the name of the Trust for the benefit of the
Owners of the Certificates and the Certificate Insurer, as their interests may
appear, and maintain at one or more Designated Depository Institutions a
Principal and Interest Account.
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 first
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
and may only be withdrawn from the Principal and Interest Account by the Master
Servicer immediately following the remittance of the Monthly Remittance Amounts
by 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) Subject to Subsection (e) below, the Master Servicer shall
deposit to the Principal and Interest Account all principal collected and
interest accrued on the Mortgage Loans on or after the Initial Cut-Off Date or
related Subsequent Cut-Off Date including any Prepaid Installments, Prepayments
and Net Liquidation Proceeds, all Loan Purchase Prices and Substitution Amounts
received or paid by the Master Servicer with respect to such Mortgage Loans,
other recoveries or amounts related to such Mortgage Loans 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 with respect to each such Mortgage Loan 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 Cut-Off Date, (iii) interest accruing on the related Mortgage
Loans prior to the 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;
(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 Estate
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 report, in the form of 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.
(iii) On each Remittance Date the Master Servicer shall remit
to the Trustee by wire transfer, or otherwise make funds available 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 Interest Remittance Amount and the Group I Principal
Remittance Amount and (B) for Group II, the Group II Interest
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, the Trustee 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, Trustee 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, the Trustee 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 from the Master Servicer's own funds, from collections
on the related Mortgage Loan. The
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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)(E)(3) 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) to the extent not previously
advanced, the interest (less the Servicing Fee) paid by the Mortgagor with
respect to the Mortgage Loan during such Remittance Period (any such amount paid
by the Master Servicer, "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 Relief Act Shortfalls.
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, from Liquidation Proceeds realized upon the liquidation of the
related Mortgage Loan and (y) as provided in Section 7.5(b)(E)(3) 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)(E)(3) hereof.
The parties intend that the provisions of this Section 8.9(c)
comply with Treasury Regulation Section 1.860G-2(c)(3)(iii).
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(d) On the Remittance Date in April 1999, the Master Servicer
shall make an advance (a "Special Advance") with respect to each Mortgage Loan
Group equal to the sum of (x) one-month's interest, calculated at the weighted
average Pass-Through Rate (applicable to the April 1999 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 the April 1999
Remittance Date; the amounts of such 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)(E)(3).
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 Loan so purchased 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 a hazard insurance policy with a generally
acceptable carrier 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 a flood insurance policy in a
form meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable carrier in an amount representing
coverage, and which provides 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 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 provides
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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 and hazard
insurance coverage under this Section 8.11, it being understood and agreed that
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 the preceding paragraphs 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 the preceding paragraphs 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 and 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
File and which shall, for all purposes, be considered a part of such 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
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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.
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 Lower-Tier
REMIC or the Upper-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 Lower-Tier REMIC or the Upper 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
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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 (exclusive of any possibility of a
deficiency judgment), whereupon such Mortgage Loan shall become a "Liquidated
Loan" and 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 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
File, in trust to the applicable party as directed in writing by the Master
Servicer in the Master Servicer's Trust Receipt, in each case pending its
release by the Master Servicer, such escrow agent or such employee, agent or
attorney of the Trustee, as the case may be. 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, as the case may be, 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, as the case may
be, and deliver the same with the related 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 Insurance
Policy, the Trustee shall (except in the case of the payment or liquidation
pursuant to which the related 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 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 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 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
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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.
(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 File(s) no later than seven (7) business days of
receipt of a properly completed Master Servicer's Trust Receipt pursuant to
clauses (i), (ii) or (iii) above or such shorter period as may be agreed upon by
the Master Servicer and the Trustee. Receipt of a Master Servicer's Trust
Receipt pursuant to clauses (i), (ii) or (iii) above shall be authorization to
the Trustee to release such 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 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 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.
On each day that the Master Servicer remits to the Trustee Master
Servicer's Trust Receipts pursuant to clauses (ii) or (iii) above, the Master
Servicer or any Sub-Servicer shall also submit to the Trustee a summary of the
total amount of such Master Servicer's Trust Receipts requested on such day by
the same method as described in such clauses (ii) or (iii) above.
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
Accounts, prepayment charges, release fees, bad check charges, assumption fees,
late payment charges, or 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, the
Certificate Insurer and each Rating Agency, on or before the last day of March
of each year, commencing in 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
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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 2000, the
Master Servicer, at its own expense, shall cause to be delivered to the Trustee,
the Certificate Insurer and each Rating Agency 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.
SECTION 8.18. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS
The Master Servicer shall provide to the Trustee, the Certificate Insurer,
the FDIC and the supervisory agents and examiners of each of the foregoing
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 designated by it.
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 and in addition shall
provide a copy of such computer tape to the Trustee and the Certificate Insurer
at such other times as the Trustee or the Certificate Insurer may reasonably
request.
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. 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:
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(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 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
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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, as such
term is 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; or
(vii) Advanta National Bank fails to be "adequately capitalized" as
defined in Section 1831(o)(b)(1)(B) of the Federal Deposit Insurance
Corporation Improvement Act of 1991, as amended; or
(viii) The tangible net worth of AMHC, on a consolidated basis, is
less than $10,000,000;
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 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.
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(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
Section. If no successor servicer is available, the Trustee shall act as
successor servicer and perform all of the obligations of this Section,
including, without limitation, making Delinquency 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 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
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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 described in this clause (j)) if, in the Trustee's reasonable good
faith judgment, such Delinquency Advances will ultimately be recoverable from
the related Mortgage Loans.
(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.
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SECTION 8.21. INSPECTIONS BY THE CERTIFICATE INSURER AND THE
TRUSTEE; ERRORS AND OMISSIONS INSURANCE.
(a) At any reasonable time and from time to time upon 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 or
its agents or representatives 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, any Originator or the Master Servicer under any
Transaction Document or would constitute a material breach of a representation,
warranty or covenant under any Transaction Document;
(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 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
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(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 Lower-Tier REMIC and the Upper-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.
SECTION 9.2. CLEAN-UP CALL TERMINATION
(a) On any Remittance Date on or after the Initial Clean-Up Call
Date, either the Owners of a majority in Percentage Interest of the Class R
Certificates (the "Redeeming Owners") or the Master Servicer, acting directly or
through one or more of their respective affiliates or, if the Redeeming Owners
or the Master Servicer or their affiliates do not so elect after having given
notice to the Certificate Insurer, the Certificate Insurer (the Redeeming
Owners, the Master Servicer or its affiliates, or the Certificate Insurer, the
"Redeeming Party"),
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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 Monthly
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 Monthly Interest 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 Lower-Tier REMIC and Upper-Tier REMIC.
(c) Promptly following any such purchase, the Trustee will release
the 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
Lower-Tier REMIC do 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 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
purchase, the 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 purchase.
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(b) Upon receipt of such direction from the Certificate Insurer or
the Owners of such Class A Certificates, as applicable, the Trustee shall notify
the Master Servicer and holders of the Class R 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 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 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 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
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 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 the Master Servicer from the Master Servicer's own funds shall be paid
by the Trustee to the Master Servicer.
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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 February 26, 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):
(A) 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
(B) 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
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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
(C) 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
(D) 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
(E) 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
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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 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.
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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 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.
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(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.
(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.
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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.
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, 1999, 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).
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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.
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.
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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.
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 any, 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.
Except as otherwise specifically provided herein, each certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO THE TRUSTEE
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In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate 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.
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.
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(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 or with 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.
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
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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 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.
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
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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
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 the Upper-Tier
REMIC or the Lower-Tier REMIC or upon the transferor of a Class R or Class RL
Certificate as a result of the ownership of any Class R or Class RL 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 (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
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affect the status of either the Upper-Tier REMIC or Lower-Tier REMIC as a 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 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 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 or Class RL
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 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. Such
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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 the Upper-Tier REMIC and
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 and
Lower-Tier REMIC of any other taxes under the Code.
(f) The Upper-Tier REMIC and 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 Lower-Tier REMIC; provided, however, that such transaction is otherwise
permitted under this Agreement.
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 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 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 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 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
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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 and Class RL Certificates in
proportion to their Percentage Interests. To the extent such tax is chargeable
against the Owners of the Class R and Class RL 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 and
Class RL 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 Class R Certificate shall act as the Tax Matters Person
for the Upper-Tier REMIC and the Owner of the Class RL Certificate shall act as
the Tax Matters Person for the Lower-Tier REMIC. The Owners of the Class R and
Class RL Certificates hereby appoint the Trustee as their agent for all purposes
of the Code to perform, or cause to be performed, such duties and take, or cause
to be taken, such actions as are required to be performed or taken by the Tax
Matters Person for each REMIC under the Code.
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 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
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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 1999-1/AM9901
Tel: (949) 253-7575
Fax: (949) 253-7577
The Sponsor: Advanta Mortgage Conduit Services Inc.
10790 Rancho Bernardo Road
San Diego, California 92127
Tel: (619) 674-3317
Attention: Structured Finance
The Master Servicer: Advanta Mortgage Corp. USA
10790 Rancho Bernardo Road
San Diego, California 92127
Tel: (619) 674-3317
Fax: (619) 674-3592
The Certificate Insurer: MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management
(Advanta Mortgage Loan Trust 1999-1,
Mortgage Loan Asset-Backed Certificate
Series 1999-1)
Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: The Mortgage Monitoring
Department
Standard & Poor's: Standard & Poor's Ratings Group
26 Broadway, 15th Floor
New York, New York 10004
Attention: Manager, Structured Finance
Operations Group
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Underwriters: Salomon Smith Barney Inc., as
Representative
390 Greenwich Street
New York, New York 10013
Attention: General Counsel
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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 MORTGAGE CONDUIT SERVICES, INC.
as Sponsor
By: /s/ Michael Coco
----------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA MORTGAGE CORP. USA
as Master Servicer
By: /s/ Michael Coco
----------------------------------
Name: Michael Coco
Title: Vice President
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: Mark McNeill
----------------------------------
Mark McNeill
Assistant Secretary
[POOLING AND SERVICING AGREEMENT]
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STATE OF CALIFORNIA )
: ss.:
COUNTY OF Orange )
On the 4th day of March 1999, before me personally came Mark McNeill
to me known, who, being by me duly sworn did depose and say that his/her office
is located at Three Park Plaza, Irvine, California 92614; that s/he is Asst.
Secretary of Bankers Trust Company of California, N.A., the national banking
corporation described in and that executed the above instrument as Trustee; and
that he signed his name thereto under authority granted by the Board of
Directors of said national banking association.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
Lillian Fakhr
- ----------------------------------
Notary Public
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SCHEDULE 1
Schedules of Mortgage Loans
On file with Trustee.
1-1
<PAGE> 126
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-1 March 9, 1999 00755WGF7
Date CUSIP
$125,000,000 August 25, 2013
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
Registered Owner
A-1-1
<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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $125,000,000. 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-1 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof is
required to send 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-1-2
<PAGE> 128
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 UNDERLYING 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 1999-1, 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 Pooling and Servicing Agreement the Owner of
this Certificate by virtue of acceptance hereof assents and by which such Owner
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 Certificates; Class RL
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 April 26, 1999, the Owners of the Class A-1 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-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 $125,000,000.
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.
A-1-3
<PAGE> 129
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower-Tier REMIC is effected pursuant to the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement additionally provides that (i)
the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-1-4
<PAGE> 130
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 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 Estate.
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 a like 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> 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-1-6
<PAGE> 132
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-2 March 9, 1999 00755WGG5
Date CUSIP
$82,000,000 June 25, 2014
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
Registered Owner
A-2-1
<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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $82,000,000. 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-2 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof is
required to send 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-2-2
<PAGE> 134
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 UNDERLYING 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 1999-1, 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 Pooling and Servicing Agreement the Owner of
this Certificate by virtue of acceptance hereof assents and by which such Owner
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 Certificates; Class RL
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 April 26, 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 $82,000,000.
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.
A-2-3
<PAGE> 135
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower-Tier REMIC is effected pursuant to the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement additionally provides that (i)
the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, or, in certain circumstances, acting directly or through
one or more of their affiliates, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-2-4
<PAGE> 136
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 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 Estate.
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 a like 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> 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-2-6
<PAGE> 138
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-3 March 9, 1999 00755WGH3
-------------- ------------------------------- ----------------
Date CUSIP
$44,000,000 July 25, 2018
- ----------- -------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
-----------
Registered Owner
A-3-1
<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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $44,000,000. 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-3 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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-3-2
<PAGE> 140
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 UNDERLYING 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 1999-1, 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 Pooling and
Servicing Agreement the Owner of this Certificate by virtue of acceptance hereof
assents and by which such Owner 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 Certificates;
Class RL 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 April 26, 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 $44,000,000.
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.
A-3-3
<PAGE> 141
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-3-4
<PAGE> 142
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 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 Estate.
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 a like 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> 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-3-6
<PAGE> 144
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-4 March 9, 1999 00755WGJ9
-------------- ----------------------------- -------------
Date CUSIP
$83,000,000 April 25, 2027
- ----------- --------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------
Registered Owner
A-4-1
<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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $83,000,000. 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-4 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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-4-2
<PAGE> 146
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 UNDERLYING 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 1999-1, 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 Pooling and
Servicing Agreement the Owner of this Certificate by virtue of acceptance hereof
assents and by which such Owner 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 Certificates;
Class RL 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 April 26, 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 $83,000,000.
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.
A-4-3
<PAGE> 147
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-4-4
<PAGE> 148
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 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 Estate.
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 a like 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> 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-4-6
<PAGE> 150
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-5 March 9, 1999 00755WGK6
-------------- --------------------------- ------------------
Date CUSIP
$26,000,000 March 25, 2029
- ----------- --------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------
Registered Owner
A-5-1
<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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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 (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $26,000,000. 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-5 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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-5-2
<PAGE> 152
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 UNDERLYING 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 1999-1, 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 Pooling and
Servicing Agreement the Owner of this Certificate by virtue of acceptance hereof
assents and by which such Owner 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 Certificates;
Class RL 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 April 26, 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 $26,000,000.
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.
A-5-3
<PAGE> 153
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-5-4
<PAGE> 154
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 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 Estate.
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 a like 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> 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-5-6
<PAGE> 156
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: A-6 March 9, 1999 00755WGL4
-------------- ---------------------------- ----------
Date CUSIP
$40,000,000 March 25, 2029
- ----------- --------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------
Registered Owner
A-6-1
<PAGE> 157
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 Mortgage Conduit Services, Inc. ("Advanta" or the
"Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and any rights of the Sponsor
under any Insurance Policies (excluding any non-mortgage related or credit life
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, (vii) the rights of the Sponsor against any Originator pursuant to the
related Master Transfer Agreement and (viii) the amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $40,000,000. 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-6 Certificates. Therefore, the actual outstanding principal amount of
this Certificate, on any date subsequent to April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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-6-2
<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 UNDERLYING 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 1999-1, 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 Pooling and
Servicing Agreement the Owner of this Certificate by virtue of acceptance hereof
assents and by which such Owner 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 Certificates;
Class RL 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 April 26, 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 $40,000,000.
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.
A-6-3
<PAGE> 159
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC
A-6-4
<PAGE> 160
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.
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 Estate.
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 a like 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> 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-6-6
<PAGE> 162
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATES
ADVANTA MORTGAGE LOAN TRUST 1999-1
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 Issuer 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 Mortgage Conduit Services, 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 (i) 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, and (ii) monies held in such Accounts.)
No.: A-7 March 9, 1999 00755WGM2
--------- ------------------------ ------------
Date CUSIP
$400,000,000 March 25, 2029
----------- --------------
Original Principal Amount Final Scheduled
Payment Date
CEDE & CO.
----------
Registered Owner
A-7-1
<PAGE> 163
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of variable rate mortgage loans
(the "Mortgage Loans") assigned to a particular mortgage loan group ("Group II")
which will be formed by Advanta Mortgage Conduit Services, Inc. ("Advanta" or
the "Sponsor"), a Delaware corporation and 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 1999-1 (the "Trust")
pursuant to that certain Pooling and Servicing Agreement dated as of March 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 including principal collections and accrued
interest in respect of the related Mortgage Loans received on or after the
Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group II and any rights of the
Sponsor under any Insurance Policies (excluding any non-mortgage related or
credit life 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, (vii) the rights of the Sponsor against any Originator
pursuant to the related Master Transfer Agreement and (viii) the amounts on
deposit in the Pre-Funding Account and the Capitalized Interest Account. 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 March
9, 1999 (the "Startup Date"), which aggregate amount was $400,000,000. 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 April 26, 1999 (the first Payment
Date) will be less than the Original Principal Amount set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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> 164
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 UNDERLYING 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 1999-1, 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 Pooling and
Servicing Agreement the Owner of this Certificate by virtue of acceptance hereof
assents and by which such Owner 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 Certificates;
Class R 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 April 26, 1999, the Owners of the Class A-7
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-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 $400,000,000.
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.
A-7-3
<PAGE> 165
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.
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 Mortgage Conduit Services, 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 (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate as of the Closing Date and (ii) under certain circumstances
relating to the qualification of either the Upper-Tier REMIC or the Lower-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.
A-7-4
<PAGE> 166
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 Estate.
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 a like 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> 167
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> 168
EXHIBIT A-R
FORM OF CLASS R CERTIFICATES
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R
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 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 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
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 UNDERLYING 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-R-1
<PAGE> 169
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 1991-1
CLASS R
This Certificate does not represent an interest in, or an
obligation of, nor are the underlying Mortgage Loans insured or guaranteed by,
Advanta Mortgage Conduit Services, Inc., Advanta Mortgage Corp. USA, Advanta
National Bank, Advanta Corp., any Originator or any of their subsidiaries and
affiliates.
No: R-1 Date: March 9, 1999
--------------- ---------------------
Percentage Interest: 100% March 25, 2029
--- --------------
Final Scheduled
Payment Date
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee of Advanta Mortgage Loan Trust 1991-1
Registered Owner
This Certificate is one of a Class of duly authorized
Certificates designated as Advanta Mortgage Loan Trust 1991-1, Class R
Certificates (the "Class R Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, dated
as of March 1, 1999 (the "Pooling and Servicing Agreement"), by and among
Advanta Mortgage Conduit Services, Inc. (the "Sponsor"), Bankers Trust Company
of California (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 April 26, 1999 to the persons in whose names the
Class R 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 Certificates such Owner's Percentage Interest
multiplied by any amounts then available to be distributed to the Owners of the
Class R Certificates. Distributions will be made in immediately available funds,
by wire transfer or otherwise, to the account of such Owner at a
A-R-2
<PAGE> 170
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.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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, 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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of a Trust
Estate occurs pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the aggregate
outstanding Loan Balances of the
A-R-3
<PAGE> 171
Mortgage Loans in the Trust Estate is 10% or less of the original aggregate Loan
Balance of the Mortgage Loans as of the Trust Estate acquired on the Startup
Date and acquired prior to the end of the Pre-Funding Period and (ii) under
certain circumstances relating to the qualification of either the Upper-Tier
REMIC or the Lower-Tier REMIC as a REMIC under the Code the Mortgage Loans in
the Trust Estate may be sold, thereby effecting the early retirement of the
Class R 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 the Trust Estate 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 Certificates are exchangeable
for new Class R Certificates evidencing the same Percentage Interest as the
Class R 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-R-4
<PAGE> 172
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-R-5
<PAGE> 173
EXHIBIT A-S
FORM OF SUPPLEMENTAL INTEREST RIGHTS
NEITHER THIS CERTIFICATE NOR THE UNDERLYING 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 1991-1
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 Mortgage Conduit Services, 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 Class A-7 Supplemental Interest Payment Account
described herein.
Date: March 9, 1999
Percentage Interest: ------% March 25, 2029
------- ---------------
Final Scheduled
Payment Date
----------------
Registered Owner
The registered Owner named above is the registered Owner of a
right to receive certain amounts held in the Class A-7 Supplemental Interest
Payment Account (the "Supplemental Interest Right") pursuant to that certain
Pooling and Servicing Agreement dated as of March 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").
A-S-1
<PAGE> 174
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 April 26, 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.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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 Class A-7 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 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> 175
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 Estate or (b)
the disposition of all property acquired in respect of any Mortgage Loan
remaining in the Trust Estate or (ii) at any time when a Qualified Liquidation
of a Trust Estate occurs pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the aggregate
outstanding Loan Balances of the Mortgage Loans in the Trust Estate is 10% or
less of the original aggregate Loan Balance of the Mortgage Loans in the Trust
Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of the REMIC Trust as a REMIC under the Code the Mortgage Loans in
the Trust Estate 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
Class A-7 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> 176
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> 177
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 1999-1
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 Mortgage Conduit Services, 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 (i) 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 and (ii) monies held in such Accounts.)
No.: B-1 March 9, 1999
-------------
Date
Percentage Interest: 100% August 25, 2013
---------------
Final Scheduled
Payment Date
Bankers Trust Company of California, N.A., on behalf of
Advanta 1999-1 Supplemental Interest Trust
------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a
fractional interest in (i) a pool consisting of mortgage loans (the "Mortgage
Loans") assigned to each of the mortgage loan groups which will be formed by
Advanta Mortgage Conduit Services, Inc. ("Advanta" or the "Sponsor"), a Delaware
corporation and 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 1999-1 (the "Trust") pursuant to that certain
Pooling and Servicing Agreement dated as of March 1, 1999 (the "Pooling and
Servicing Agreement") by and among the Sponsor, the Trustee and Advanta Mortgage
Corp. USA, as Master Servicer (the
A-B-1
<PAGE> 178
"Master Servicer"), (ii) such amounts including principal collections and
accrued interest in respect of the related Mortgage Loans received on or after
the Initial Cut-Off Date and each subsequent Cut-Off Date, including Eligible
Investments, as from time to time may be held in all Accounts (except as
otherwise provided in the Pooling and Servicing Agreement), except any premium
recapture and interest accrued prior to the Initial Cut-Off Date and each
subsequent Cut-Off Date, each created pursuant to the Pooling and Servicing
Agreement, (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 Insurance
Policies relating to the Mortgage Loans in Group I and Group II and any rights
of the Sponsor under any Insurance Policies (excluding any non-mortgage related
or credit life 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, (vii) the rights of the Sponsor against any
Originator pursuant to the related Master Transfer Agreement and (viii) the
amounts on deposit in the Pre-Funding Account and the Capitalized Interest
Account.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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).
NEITHER THIS CERTIFICATE NOR THE UNDERLYING 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-B-2
<PAGE> 179
This Certificate is one of a Class of duly-authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-1, 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 Pooling and Servicing Agreement the Owner of
this Certificate by virtue of acceptance hereof assents and by which such Owner
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 Certificates; Class RL
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 April 26, 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.
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 Mortgage Conduit Services, 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
A-B-3
<PAGE> 180
certain collections and recoveries relating to the Mortgage Loans in Group I and
Group II and amounts on deposit in the Accounts (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 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 Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and the Lower-Tier REMIC is effected pursuant to the Pooling
and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the
aggregate outstanding Loan Balances of the Mortgage Loans in the Trust Estate is
10% or less of the original aggregate Loan Balance of the Mortgage Loans in the
Trust Estate acquired on the Startup Date and acquired prior to the end of the
Pre-Funding Period and (ii) under certain circumstances relating to the
qualification of either the Upper-Tier REMIC or the Lower-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 Estate.
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
A-B-4
<PAGE> 181
office designated as the location of the Register, and thereupon one or more new
Certificates of like Class, tenor and a like 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> 182
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> 183
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 UNDERLYING 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 1999-1
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 Mortgage Conduit Services, 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 Class A-7 Supplemental Interest Payment
Account described herein.
No: BS- Date: March 9, 1999
Percentage Interest: ------% March 25, 2029
------- --------------
Final Scheduled
Payment Date
Advanta Finance Receivables, Inc.
Registered Owner
The registered Owner named above is the registered Owner of a
fractional interest in certain excess monies of the Class A-7 Supplemental
Interest Payment Account pursuant to that certain Pooling and Servicing
Agreement dated as of March 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").
A-BS-1
<PAGE> 184
This Certificate is one of a Class of duly authorized
Certificates designated as Advanta Mortgage Loan Trust 1999-1, 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 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 April 26, 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.
Upon receiving the final distribution hereon, the Owner hereof
is required to send 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 Class A-7 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> 185
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 Estate or (b)
the disposition of all property acquired in respect of any Mortgage Loan
remaining in the Trust Estate or (ii) at any time when a Qualified Liquidation
of a Trust Estate occurs pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that
(i) the Master Servicer or the Owner of a majority in Percentage Interest of the
Class R Certificates, acting directly or through one or more of their
affiliates, or, in certain circumstances, the Certificate Insurer, 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 Remittance Date when the aggregate
outstanding Loan Balances of the Mortgage Loans in the Trust Estate is 10% or
less of the original aggregate Loan Balance of the Mortgage Loans in the Trust
Estate acquired on the Startup Date and 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 Estate 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
Class A-7 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> 186
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> 187
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> 188
EXHIBIT B
FORM OF CONTENTS OF MORTGAGE LOAN FILE
(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 L to the Pooling
and Servicing Agreement, 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 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". 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 all 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 the
Advanta Mortgage Conduit Services Inc." or "Bankers Trust Company of California,
N.A., as trustee". 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)"; and
(f) the originals of all intervening assignments of Mortgage, showing a
complete chain of assignment from origination to the related Seller, 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.
B-1
<PAGE> 189
EXHIBIT C
FORM OF CERTIFICATE RE: PREPAID LOANS
I, Michael Coco, Vice President of Advanta Mortgage Conduit
Services, Inc., a Delaware corporation, as sponsor (the "Sponsor"), hereby
certify that between the "Cut-Off Date" (as defined in the Pooling and Servicing
Agreement dated as of March 1, 1999 among the Sponsor, Advanta Mortgage Corp.
USA, as master servicer and Bankers Trust Company of California, N.A., as
trustee) and the date hereof the following schedule of "Mortgage Loans" (each as
defined in the Pooling and Servicing Agreement) has been prepaid in full.
Dated: March __, 1999
By: ___________________________
Name: Michael Coco
Title: Vice President
C-1
<PAGE> 190
SCHEDULE TO EXHIBIT C
SCHEDULE OF PREPAID LOANS
C-2
<PAGE> 191
EXHIBIT D
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 March 1, 1999 (the "Pooling and
Servicing Agreement") by and among Advanta Mortgage Conduit Services, Inc., a
Delaware 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: ________________
D-1
<PAGE> 192
SCHEDULE TO EXHIBIT D
EXCEPTION REPORT
D-2
<PAGE> 193
EXHIBIT E
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 March 1, 1999 (the "Pooling and
Servicing Agreement") by and among Advanta Mortgage Conduit Services, Inc., a
Delaware 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 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 or, in
the event that such documents have not been executed and received or do not so
relate to such 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.
By: _________________________________
E-1
<PAGE> 194
EXHIBIT F
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 March 1, 1999 (the "Pooling and Servicing Agreement") by and among
Advanta Mortgage Conduit Services, Inc., a Delaware 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 1999-1,
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 MORTGAGE CONDUIT
SERVICES, INC.
By: ___________________________
Name: Michael Coco
Title: Vice President
F-1
<PAGE> 195
EXHIBIT G
FORM OF CLASS R AND CLASS RL 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/RL] 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/RL] Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer any such Class [R/RL]
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]
[Corporate Seal]
Attest:
___________________________
[Assistant] Secretary
G-1
<PAGE> 196
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 _______________, ____.
G-2
<PAGE> 197
EXHIBIT H
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, _____________, ______________
of ________________ (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 March 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
the _______________ of _______________, a Delaware 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:
H-1
<PAGE> 198
EXHIBIT I
FORM OF MONTHLY REPORT
Advanta Mortgage Conduit Services, Inc.
Mortgage Loan Asset-Backed Certificates
Series 1999-1
Statement to Certificateholders
<TABLE>
<CAPTION>
PRIOR CURRENT
ORIGINAL FACE PRINCIPAL PRINCIPAL
CLASS VALUE BALANCE INTEREST PRINCIPAL TOTAL 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
RL
- --------------------------------------------------------------------------------
TOTALS
- --------------------------------------------------------------------------------
</TABLE>
FACTOR INFORMATION PER $1000 OF ORIGINAL FACE PASS-THROUGH RATES
<TABLE>
<CAPTION>
PRIOR CURRENT
PRINCIPAL PRINCIPAL
CLASS CUSIP BALANCE INTEREST PRINCIPAL TOTAL BALANCE CURRENT NEXT
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1
A-2
A-3
A-4
A-5
A-6
A-7
B
BS
R
RL
</TABLE>
SPONSOR: Advanta Mortgage Conduit Services, Inc. ACCOUNT
SERVICER: Advanta Mortgage Corp. USA MANAGER: ___________________
LEAD UNDERWRITER: Salomon Smith Barney, Inc..
RECORD DATE:
DISTRIBUTION DATE:
FACTOR INFORMATION:
I-1
<PAGE> 199
Advanta Mortgage Conduit Services, Inc.
Mortgage Loan Asset-Backed Certificates
Series 1999-1
Statement to Certificateholders
AS TO EACH MORTGAGE LOAN GROUP
DISTRIBUTION DATE:
DELINQUENCY ADVANCES MADE:
ACCRUED SERVICING FEE FOR THE CURRENT PERIOD:
PLUS ADDITIONAL SERVICING FEES:
LESS PERMITTED REDUCTIONS TO SERVICING FEES:
TOTAL SERVICING FEES DUE MASTER SERVICER (INCLUDING MASTER SERVICING FEE):
COLLECTED SERVICING FEES FOR CURRENT PERIOD:
<TABLE>
<CAPTION>
Total Delinquency (Excluding Foreclosure &
REO, Including delinquent bankruptcies) Loans in
--------------------------------------- Foreclosure
(Including
30-59 60-89 90+ Total bankruptcies in
Days Days Days Delinquency F/C)
---- ---- ---- ----------- ----
<S> <C> <C> <C> <C> <C>
UPS-$
%-$
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:
I-2
<PAGE> 200
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:
I-3
<PAGE> 201
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:
I-4
<PAGE> 202
EXHIBIT J
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 March 1, 1999 and by and among Advanta Mortgage Corp. USA, as Master
Servicer, and you, as Trustee (the "Agreement"), the Master Servicer hereby
requests a release of the File held by you as Trustee with respect to the
following described 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.
(The Master Servicer hereby certifies that a
Qualified Replacement Mortgage has been or will be
assigned and delivered to you along with the related
File pursuant to the Agreement.)
_______ 4. The Mortgage Loan is being foreclosed.
_______ 5. Other. (Describe)
J-1
<PAGE> 203
The undersigned acknowledges that the above File will be held
by the undersigned in accordance with the provisions of the Agreement and will
be returned to you, except if the Mortgage Loan has been paid in full, or
repurchased or substituted for by a Qualified Replacement Mortgage (in which
case the File will be retained by us permanently) and except if the Mortgage
Loan is being foreclosed (in which case the 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:_______________________
J-2
<PAGE> 204
EXHIBIT K
FORM OF SUBSEQUENT TRANSFER AGREEMENT
Advanta Mortgage Conduit Services, Inc., as Seller, and
Advanta Mortgage Loan Trust 1999-1, as Purchaser, pursuant to the Pooling and
Servicing Agreement dated as of March 1, 1999 among Advanta Mortgage Corp. USA
as Master Servicer, Advanta Mortgage Conduit Services, Inc., as Sponsor, Bankers
Trust Company of California, N.A., as Trustee (the "Pooling and Servicing
Agreement"), hereby confirm their understanding with respect to the sale by the
Seller and the purchase by the Purchaser of those Mortgage Loans listed on the
attached Schedule of Mortgage Loans (the "Subsequent Mortgage Loans").
Conveyance of Subsequent Mortgage Loans. The Seller does
hereby irrevocably transfer, assign, set over and otherwise convey to the
Purchaser, without recourse (except as otherwise explicitly provided for herein)
all of its right, title and interest in and to the Subsequent Mortgage Loans,
including specifically, without limitation, the Mortgages, the Files and all
other documents, materials and properties appurtenant thereto and the Credit
Line Agreements, including all interest accruing and principal collected by the
Seller on or with respect to the Subsequent Mortgage Loans on or after the
Subsequent Cut-Off Date of any related insurance policies on behalf of the
Purchaser (excluding any non-mortgage related or credit life insurance
policies). The Seller shall deliver 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 Seller.
Additional terms of the sale are attached hereto as Attachment
A.
The Seller hereby affirms the representations and warranties
set forth in the Pooling and Servicing Agreement that related to the Subsequent
Mortgage Loans as of the date hereof. The Seller hereby delivers notice and
confirms that each of the conditions set forth in Section 3.8(b) to the Pooling
and Servicing Agreement are satisfied 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.
K-1
<PAGE> 205
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 MORTGAGE CONDUIT
SERVICES, INC.,
as Seller
By:___________________________
Michael Coco
Vice President
ADVANTA MORTGAGE LOAN
TRUST 1999-1
By: Bankers Trust Company of
California, N.A.,
not in its individual capacity but
solely as Trustee
By:___________________________
Name:
Title:
Dated:
Attachments
- -----------
A. Additional Terms of the Sale.
B. Schedule of Mortgage Loans.
C. Opinion of Seller's Counsel.
D. Seller's Officer's Certificate.
E. Opinion of Seller's Bankruptcy Counsel.
F. Trustee's Certificate.
H. Purchase Request.
I. Assignment.
K-2
<PAGE> 206
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
SUBSEQUENT TRANSFER AGREEMENT
ADVANTA MORTGAGE POOL: 1999-1
MARCH, 1998
1. CUTOFF DATE 1 MARCH 1999 (DD MONTH YEAR)
1A. PRICING DATE _____________ (DD MONTH YEAR)
2. CLOSING DATE 9 MARCH 1999 (DD MONTH YEAR)
2A. DAYS - CUTOFF TO CLOSING
3. POOL PRINCIPAL BALANCE AS
OF THE CUTOFF DATE
4. NET PURCHASE PRICE EQUALS: 100.00%
PLUS:
5. ACCRUED INTEREST $_______
EQUALS:
6. NET PROCEEDS $
===============
7. PASSTHROUGH RATE %
SEE FORMULA BELOW
8. FIRST DISTRIBUTION DATE
9. MAXIMUM CLTV
10. REQUIRED MINIMUM COUPON
11. MAXIMUM BALLOON PERCENTAGE
12. MAXIMUM CONCENTRATION PCT
13. MAXIMUM VACATION &
INVESTOR OWNED PCT
13A. MAXIMUM THIRD LIENS
14. ADDITIONAL REPS & WARRANTIES:
15. OTHER MATTERS
K-3
<PAGE> 207
EXHIBIT L
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 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
Instruments 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.
L-1
<PAGE> 208
Executed this ___ day of ______, 199_, on behalf of the Lender by:
By: ______________________________________________
Name:
Title:
- --------------------------------------------------------------------------------
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 _____________________________________
L-2
<PAGE> 1
Exhibit 4.2
<PAGE> 2
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: Advanta Mortgage Loan Trust 1999-1, POLICY NUMBER: 28733
Mortgage Loan Asset-Backed Certificates, Series 1999-1,
$125,000,000 Fixed Rate Class A-1 Certificates,
$82,000,000 Fixed Rate Class A-2 Certificates,
$44,000,000 Fixed Rate Class A-3 Certificates,
$83,000,000 Fixed Rate Class A-4 Certificates,
$26,000,000 Fixed Rate Class A-5 Certificates,
$40,000,000 Fixed Rate Class A-6 Certificates, and
$400,000,000 Adjustable Rate Class A-7 Certificates
(collectively, the "Obligations")
MBIA Insurance Corporation (the "Certificate Insurer"), in
consideration of the payment of the premium and subject to the terms of this
Certificate Guaranty Insurance Policy (this "Policy"), hereby unconditionally
and irrevocably guarantees to any Owner that an amount equal to each full and
complete Insured Payment will be received by Bankers Trust Company of
California, N.A. or its successors, as trustee for the Owners (the "Trustee"),
on behalf of the Owners, from the Certificate Insurer, for distribution by the
Trustee to each Owner of each Owner's proportionate share of the Insured
Payment. The Certificate Insurer's obligations hereunder with respect to a
particular Insured Payment shall be discharged to the extent funds equal to the
applicable Insured Payment are received by the Trustee, whether or not such
funds are properly applied by the Trustee. Insured Payments shall be made only
at the time set forth in this Policy and no accelerated Insured Payments shall
be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of the Certificate Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, any REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). This Policy does not cover, and Insured Payments
do not include, any Civil Relief Act Shortfalls.
The Certificate Insurer will pay any Insured Payment that is a
Preference Amount on the Business Day following receipt on a Business Day by the
Fiscal Agent (as described below) of (i) a certified copy of the order requiring
the return of such a preference payment, (ii) an opinion of counsel satisfactory
to the Certificate Insurer that such order is final and not subject to appeal,
(iii) an assignment in such form as is reasonably required by the Certificate
Insurer, irrevocably assigning to the Certificate Insurer all rights and claims
of the Owner relating to or arising under the Obligations against the debtor
which made such preference payment or otherwise with respect to such preference
payment and (iv) appropriate instruments to effect the appointment of the
Certificate Insurer as agent for such Owner in any legal proceeding related to
such preference payment, such instruments being in a form satisfactory to the
Certificate Insurer, provided that if
<PAGE> 3
such documents are received after 12:00 noon New York City time on such Business
Day, they will be deemed to be received on the following Business Day. Such
payments shall be disbursed to the receiver or trustee in bankruptcy named in
the final order of the court exercising jurisdiction on behalf of the Owner and
not to any Owner directly unless such Owner has returned principal or interest
paid on the Obligations to such receiver or trustee in bankruptcy, in which case
such payment shall be disbursed to such Owner.
The Certificate Insurer will pay any other amount payable hereunder no
later than 12:00 noon New York City time on the later of the Payment Date on
which the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Certificate Insurer or any successor
fiscal agent appointed by the Certificate Insurer (the "Fiscal Agent") of a
Notice (as described below); provided that if such Notice is received after
12:00 noon New York City time on such Business Day, it will be deemed to be
received on the following Business Day. If any such Notice received by the
Fiscal Agent is not in proper form or is otherwise insufficient for the purpose
of making claim hereunder it shall be deemed not to have been received by the
Fiscal Agent for purposes of this paragraph, and the Certificate Insurer or the
Fiscal Agent, as the case may be, shall promptly so advise the Trustee and the
Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Certificate Insurer only and the
Fiscal Agent shall in no event be liable to Owners for any acts of the Fiscal
Agent or any failure of the Certificate Insurer to deposit or cause to be
deposited, sufficient funds to make payments due under this Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement, dated as of
March 1, 1999, among Advanta Mortgage Corp. USA, as Master Servicer, Advanta
Mortgage Conduit Services, Inc., as Sponsor, and Bankers Trust Company of
California, N.A., as Trustee, without regard to any amendment or supplement
thereto.
"Business Day" means any day other than (i) a Saturday or Sunday or
(ii) a day on which the Certificate Insurer is closed or banking institutions in
the State of New York, the State of California or the city in which the
principal corporate trust office of the Trustee under the Agreement is located,
are authorized or obligated by law or executive order to be closed.
"Deficiency Amount" means the excess, if any, of Required Distributions
over the Net Available Distribution Amount.
2
<PAGE> 4
"Insured Payment" means (i) as of any Payment Date, any Deficiency
Amount and (ii) any Preference Amount (without duplication).
"Net Available Distribution Amount" means, with respect to a Mortgage
Loan Group and any Payment Date, the related Group Total Available Funds for
such Payment Date.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by fax substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Trustee specifying the Insured Payment which shall be due and owing on
the applicable Payment Date.
"Owner" means each Owner (as defined in the Agreement) who, on the
applicable Payment Date, is entitled under the terms of the applicable
Obligations to payment thereunder.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations 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.
"Required Distributions" means, with respect to a Mortgage Loan Group
and (i) any Payment Date occurring prior to the Payment Date in March 2029, the
Insured Distribution Amount (net of any shortfalls arising due to the
application of the Relief Act) with respect to such Mortgage Loan Group and (ii)
the Payment Date occurring in March 2029, the aggregate outstanding principal
balance, if any, of the Class A Certificates relating to such Mortgage Loan
Group (after giving effect to all other payments of principal on the Class A
Certificates on such Payment Date).
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment or
modification to the Agreement unless such amendment or modification has been
approved in writing by the Certificate Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Certificate Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006 Attention: Municipal Registrar and Paying Agency or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
3
<PAGE> 5
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Certificate Insurer has caused this Policy to
be executed and attested this 9th day of March, 1999.
MBIA INSURANCE CORPORATION
By /s/ Richard Weill
-----------------------------------
President
Attest:
By /s/ Lisa A. Wilson
-----------------------------------
Assistant Secretary
4
<PAGE> 6
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 28733
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 28733
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Certificate Insurer"), with reference to Certificate Guaranty Insurance Policy
Number: 28733 (the "Policy") issued by the Certificate Insurer in respect of the
Advanta Mortgage Loan Trust 1999-1, Mortgage Loan Asset-Backed Certificates,
Series 1999-1, $125,000,000 Fixed Rate Class A-1 Certificates, $82,000,000 Fixed
Rate Class A-2 Certificates, $44,000,000 Fixed Rate Class A-3 Certificates,
$83,000,000 Fixed Rate Class A-4 Certificates, $26,000,000 Fixed Rate Class A-5
Certificates, $40,000,000 Fixed Rate Class A-6 Certificates and $400,000,000
Adjustable Rate Class A-7 Certificates.
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of March 1, 1999 among Advanta Mortgage Corp. USA,
as Master Servicer, Advanta Mortgage Conduit Services, Inc., as
Sponsor, and the Trustee, as trustee for the Owners;
(ii) the amount due under the definition of Deficiency Amount
for the Payment Date occurring on (the "Applicable Payment Date")
is $ (the "Deficiency Amount");
(iii) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $ (the "Preference Amount");
<PAGE> 7
(iv) the total Insured Payment due is $ , which amount
equals the sum of the Deficiency Amount and the Preference Amount;
(v) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (ii) above to be applied to the payment of the Deficiency
Amount for the Applicable Payment Date in accordance with the Agreement
and for the dollar amount of the Insured Payment set forth in (iii)
above to be applied to the payment of any Preference Amount; and
(vi) the Trustee directs that payment of the Insured Payment
be made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance
Company Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the day of , .
[NAME OF TRUSTEE], as Trustee
By
Title
2
<PAGE> 1
Exhibit 4.3
<PAGE> 2
CONVEYANCE AGREEMENT
Advanta Mortgage Corp. USA, Advanta Mortgage Corp. Midatlantic, Advanta
Mortgage Corp. Midatlantic II, Advanta Mortgage Corp. Midwest, Advanta Mortgage
Corp. of New Jersey, Advanta Mortgage Corp. Northeast, Advanta Finance Corp.,
Advanta National Bank and Advanta Bank Corp. (each, an "Affiliated Originator"),
Advanta Conduit Receivables, Inc., as an Affiliate, and Advanta Mortgage Conduit
Services, Inc., as Sponsor, pursuant to the Master Loan Transfer Agreement,
dated as of March 1, 1999, among themselves and Bankers Trust Company of
California, N.A. as Trustee (the "Master Transfer Agreement"), hereby confirm
their understanding with respect to the conveyance by each Affiliated
Originator, the Warehouse Trusts, the Affiliate and the Sponsor of those
Mortgage Loans listed on the attached Schedule of Mortgage Loans (the
"Transferred Mortgage Loans") to the Sponsor and/or the Advanta Mortgage Loan
Trust 1999-1.
Conveyance of Transferred Mortgage Loans. Each Affiliated Originator,
the Affiliate 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: (i) to convey to the Sponsor,
for assignment to the Advanta Mortgage Loan Trust 1999-1, 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 "related Advanta Pooling Agreement"), the Files and all other
documents, materials and properties appurtenant thereto and the Notes, including
all accrued interest 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 (excluding any non-mortgage related or credit life 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 Master Transfer Agreement with
respect to the Transferred Mortgage Loans.
<PAGE> 3
The Trustee and the Trust are intended beneficiaries of this Agreement
and of the foregoing representations, warranties and agreements.
The "Cut-Off Date" with respect to such Transferred Mortgage Loans
shall be the opening of business on March 1, 1999.
All terms and conditions of the Master Transfer Agreement are hereby
incorporated herein, provided that in the event of any conflict the provisions
of this Conveyance Agreement shall control over the conflicting provisions of
the Master Transfer Agreement.
For purposes of this Conveyance Agreement, the "related Advanta Pooling
Agreement" is the Pooling and Servicing Agreement dated as of March 1, 1999
relating to Advanta Mortgage Loan Trust 1999-1. Terms capitalized herein and not
defined herein shall have their respective meanings as set forth in the Master
Transfer Agreement.
2
<PAGE> 4
Dated: March 9, 1999
ADVANTA MORTGAGE CORP. USA
ADVANTA MORTGAGE CORP. MIDATLANTIC
ADVANTA MORTGAGE CORP. MIDATLANTIC II
ADVANTA MORTGAGE CORP. MIDWEST
ADVANTA MORTGAGE CORP. OF NEW JERSEY
ADVANTA MORTGAGE CORP. NORTHEAST
ADVANTA NATIONAL BANK,
as Affiliated Originators
and
ADVANTA CONDUIT RECEIVABLES, INC.,
as an Affiliate
By:/s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
ADVANTA BANK CORP.
as Affiliated Originator
By:/s/ John L. Richards
-----------------------------
Name: John L. Richards
Title: President & CEO
ADVANTA MORTGAGE CONDUIT
SERVICES, INC., as Sponsor
By: /s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
3
<PAGE> 5
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By: /s/ Mark McNeill
-----------------------------
Name: Mark McNeill
Title: Assistant Secretary
ADVANTA FINANCE CORP.
By: /s/ Michael Coco
-----------------------------
Name: Michael Coco
Title: Vice President
Conveyance Agreement
4
<PAGE> 1
Exhibit 4.4
<PAGE> 2
Execution
- --------------------------------------------------------------------------------
MASTER LOAN TRANSFER AGREEMENT
Dated as of March 1, 1999
by and among
ADVANTA MORTGAGE CORP. USA
ADVANTA MORTGAGE CORP. MIDATLANTIC
ADVANTA MORTGAGE CORP. MIDATLANTIC II
ADVANTA MORTGAGE CORP. MIDWEST
ADVANTA MORTGAGE CORP. OF NEW JERSEY
ADVANTA MORTGAGE CORP. NORTHEAST
ADVANTA NATIONAL BANK
ADVANTA BANK CORP.
ADVANTA FINANCE CORP.,
as Affiliated Originators
ADVANTA CONDUIT RECEIVABLES, INC.
as an Affiliate
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
and
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Sponsor
- --------------------------------------------------------------------------------
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions.......................................................................... 1
Section 2. Interest Calculations................................................................ 3
Section 3. Transfers of Mortgage Loans.......................................................... 4
Section 4. Representations, Warranties and Covenants Regarding the Affiliated
Originators and the Sponsor.......................................................... 4
Section 5. Representations and Warranties of the Affiliated Originators
Regarding the Mortgage Loans......................................................... 8
Section 6. Authorized Representatives........................................................... 14
Section 7. Notices.............................................................................. 14
Section 8. Governing Law........................................................................ 15
Section 9. Assignment........................................................................... 15
Section 10. Counterparts......................................................................... 15
Section 11. Amendment............................................................................ 15
Section 12. Severability of Provisions........................................................... 15
Section 13. No Agency; No Partnership or Joint Venture........................................... 15
Section 14. Further Assurances................................................................... 15
Section 15. The Certificate Insurer.............................................................. 16
Section 16. Maintenance of Records............................................................... 16
</TABLE>
<PAGE> 4
THIS MASTER LOAN TRANSFER AGREEMENT, dated as of March 1,
1999, between Advanta Mortgage Corp. USA, Advanta Mortgage Corp. Midatlantic,
Advanta Mortgage Corp. Midatlantic II, Advanta Mortgage Corp. Midwest, Advanta
Mortgage Corp. of New Jersey, Advanta Mortgage Corp. Northeast, Advanta Mortgage
Conduit Services, Inc., Advanta Finance Corp., Advanta Bank Corp. and Advanta
National Bank, each a seller (each an "Affiliated Originator" and collectively,
the "Affiliated Originators"), Advanta Conduit Receivables, Inc. (the
"Affiliate"), Bankers Trust Company of California, N.A., as trustee ("Trustee")
and Advanta Mortgage Conduit Services, Inc., as sponsor ("Sponsor");
I. BACKGROUND
A. Each Affiliated Originator is an originator or purchaser of
mortgage loans which such Affiliated Originator may, from time to time, convey
to a Warehouse Trust;
B. The Affiliated Originators and the Sponsor expect, from time
to time, to cause such mortgage loans to be conveyed to an Advanta 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; 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 related Advanta Pooling
Agreement.
Advanta Pooling Agreement: Any Pooling and Servicing Agreement
entered into by Advanta Mortgage Conduit Services, Inc. as Sponsor, Advanta
Mortgage Corp. USA, as Master Servicer and a trustee, as it may be amended and
supplemented from time to time by the parties thereto.
Advanta Trust: A securitization trust created by the Sponsor
into which Mortgage Loans described in this Agreement and the Conveyance
Agreements are deposited, including the Conduit Acquisition Trust.
Agreement: This Master 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 from another Originator (other than any other Affiliated
Originator) as part of a bulk portfolio acquisition.
<PAGE> 5
Conduit Acquisition P&S: The Pooling and Servicing Agreement
dated as of May 1, 1997, as amended, by and between the Sponsor and the Trustee
relating to the Conduit Acquisition Trust.
Conduit Acquisition Trust: The trust created pursuant to the
Conduit Acquisition P&S.
Conveyance Agreement: Any conveyance agreement relating to a
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 Pool, as defined 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.
File: The documents delivered to the Trustee pursuant to the
document delivery provisions of the Conduit Acquisition P&S pertaining to a
particular Mortgage Loan, together with any additional documents required to be
added to the File pursuant to the Conduit Acquisition P&S.
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.
Junior Lien: With respect to any Junior Mortgage Loan, the
mortgage loan relating to the corresponding Property having a senior priority
lien.
Loan Balance: With respect to each Mortgage Loan, the
outstanding principal balance thereof on the related Cut-Off Date, less any
related Principal Remittance Amounts relating to such Mortgage Loan included in
previous related Monthly Remittance Amounts that were transferred by the Master
Servicer or any Sub-Servicer to the Trustee for deposit in the related
Certificate Account.
Master Servicer: Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
2
<PAGE> 6
Mortgage Loans: Each of the mortgage loans subject hereto,
together with any Qualified Replacement Mortgages substituted therefor in
accordance with the related Advanta Pooling Agreement.
Note: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan.
Offered Certificates: Any securities issued by an Advanta
Trust which are not retained by the Sponsor, any affiliate of the Sponsor or any
Originator.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool: Any group of Mortgage Loans transferred to the Sponsor
and/or to an Advanta Trust pursuant to a specific Conveyance Agreement.
Property: The underlying property securing a Mortgage Loan.
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
related Advanta Trust.
Schedules of Mortgage Loans: The Schedules of Mortgage Loans
required to be delivered pursuant to the related Advanta Pooling 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.
Unaffiliated Originator Loan: Any Mortgage Loan purchased by
an Affiliated Originator from an Unaffiliated Originator.
Unaffiliated Originators: Any Originator not affiliated with
the Sponsor.
Warehouse Trust: Any trust established by an affiliate of the
Sponsor to finance the origination of mortgage loans, including, without
limitation, the Conduit Acquisition Trust.
Section 2. Interest Calculations.
Calculations of interest hereunder, including, without limitation, calculations
of interest at the Coupon Rate, which are made in respect of the Loan Balance 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 required by the related Note.
3
<PAGE> 7
Section 3. Transfers of Mortgage Loans.
From time to time in connection with the establishment of Advanta Trusts, the
Affiliated Originators and the Sponsor, intend to transfer Mortgage Loans to the
Sponsor and/or to the related Advanta Trust. Each such transfer will be
evidenced by a Conveyance Agreement in substantially the form of Exhibit A
hereto.
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 USA, 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. Such 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 the Conveyance Agreements.
(ii) The execution and delivery of this Agreement by such
Affiliated Originator and its performance and compliance with the terms
of this Agreement and the Conveyance Agreements to which it is a party
have been duly authorized 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 the Conveyance Agreements 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).
4
<PAGE> 8
(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 the
other Conveyance Agreements 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 Agreements to which
it is a party or might have consequences that would materially and
adversely affect its performance hereunder and under the Conveyance
Agreements 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 Loan and other items
of the Mortgage by the Trustee under this Agreement, the related
Advanta Trust will have good and marketable title to such Mortgage Loan
and such other items of the related Trust Estate free and clear of any
lien (other than liens which will be simultaneously released).
(viii) Neither 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 the Conveyance Agreements 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,
5
<PAGE> 9
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 Conveyance Agreements on the part of such
Affiliated Originator and the performance by such Affiliated Originator
of its obligations under this Agreement and such of the Conveyance
Agreements to which it is a party.
(x) The origination practices used by such Affiliated
Originator with respect to the Mortgage Loans originated by such
Affiliated Originator have been, (i) in all material respects, legal,
proper, prudent and customary in the mortgage loan lending business and
(ii) in compliance with the Master Servicer'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 Mortgage 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 such
Affiliated Originator will not be rendered insolvent as a result of the
sale of the Mortgage Loans to the related Advanta Trust.
The representations and warranties set forth in this paragraph (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 related Advanta Pooling
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 Delaware
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
6
<PAGE> 10
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;
(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 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; and
(iv) The Sponsor has the right to cause or request the
transfer of the Mortgage Loans subject to a Warehouse Trust to an
Advanta Trust or to direct or request an Advanta Trust to acquire such
Mortgage Loans.
The representations and warranties set forth in this paragraph (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
7
<PAGE> 11
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 paragraph (b) below is a listing of representations and
warranties which will be deemed to have been made by each Affiliated Originator
in connection with each conveyance of a Pool to the Sponsor and/or the related
Advanta Trust. In addition, a Conveyance Agreement may, with respect to the
Mortgage Loans in the related 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 paragraph (b) below, together with any Additional
Representations and Warranties, are the "Representations and Warranties".
Reference to the Cut-Off Date are as of the Cut-Off Date set forth in the
related Conveyance Agreement with respect to a Mortgage Loan.
(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 Schedules of Mortgage Loans is true and correct as of the
Cut-Off Date;
(ii) All of the original or certified documentation required
to be delivered to the Trustee pursuant to the related Advanta Pooling
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 such Advanta Pooling Agreement.
Each of the documents and instruments specified to be included therein
has been duly executed and 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.
(iii) Each Mortgage Loan being transferred to the Sponsor is a
Qualified Mortgage and is a Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling, which may include manufactured homes which
qualify as eligible for inclusion in a REMIC, condominiums and
townhouses but shall not include cooperatives; provided, however, that
no more than 5.0% by aggregate principal balance of the Mortgage Loans
as of the Initial Cut-Off Date were leasehold mortgages.;
(v) No Mortgage Loan had a Combined Loan-to-Value Ratio in
excess of 100%;
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<PAGE> 12
(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 title
insurance policy, with respect to the related Mortgage Loan, 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 and each Warehouse Trust held
good and indefeasible title to, and was the sole owner of, each
Mortgage Loan conveyed by such Affiliated Originator or such Warehouse
Trust, as applicable, subject to no 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) As of the related Cut-Off Date, no Mortgage Loan is 30
or more days Delinquent, except for any portion of the Mortgage Loans
which the related Advanta Pooling Agreement permits to be more than 30
days Delinquent;
(ix) 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) 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 Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or
the Mortgage unenforceable in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including the defense
of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(xi) 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,
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<PAGE> 13
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 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 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 related Advanta Pooling 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,
(which may be a blanket policy of the type described in the related
Advanta Pooling Agreement) a flood insurance policy 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 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
10
<PAGE> 14
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 servicer in any Insurance Policies
applicable to any Mortgage Loans delivered by such Affiliated
Originator or Warehouse Trust including, to the extent such Mortgage
Loan is not covered by a blanket policy described in the Advanta
Pooling 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 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 Advanta Pooling Agreement, (or are
in the process of being recorded);
(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 not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage;
(xxii) No Mortgage Loan was originated under a buydown plan;
(xxiii) 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;
11
<PAGE> 15
(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 Advanta Pooling 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. The consolidated principal amount does not exceed the
original principal amount of the related Mortgage Loan. 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) 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) 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 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 related 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 File;
12
<PAGE> 16
(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. 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 clause (viii) of this Section,
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) Except for any Bulk Acquisition Loan, 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 which has been approved by
the primary mortgage guaranty insurer, if any, and which has been
delivered to the Trustee;
(xxxv) Except for any Bulk Acquisition Loan, the maturity date
of each Mortgage Loan which is a Junior Mortgage Loan is at least
twelve months prior to the maturity date of the related first mortgage
loan if such first mortgage loan provides for a balloon payment;
(xxxvi) The credit underwriting guidelines applicable to each
Mortgage Loan conform in all material respects to the Sponsor's
underwriting guidelines;
(xxxvii) 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
(xxxviii)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.
(c) No Originator Payment Obligations. There is no obligation
on the part of the Servicer or any other party to make payments in addition to
those made by the Mortgagor except for delinquency.
The Representations and Warranties shall survive the transfer
and assignment of the Mortgage Loans to the related Advanta Trust. Upon
discovery by the 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 Affiliated
Originator as to the facts stated therein, which
13
<PAGE> 17
breach, in the opinion of the Sponsor, materially and adversely affects the
interests of the Sponsor, the Owners or of 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 Advanta Pooling Agreement within the time periods required thereto. Each
Affiliated Originator hereby acknowledges that a breach of any of the
Representations and Warranties listed in clauses (iii), (x), (xvi) and (xxxviii)
above a priori materially and adversely affects the interests of the related
Advanta 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 the Affiliated Originator and of the Sponsor ("Authorized Representatives")
are set forth on Exhibit B. From time to time, the 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
If to the Affiliated Originators or the Sponsor:
Advanta Mortgage Corp. USA
10790 Rancho Bernardo Road
San Diego, California 92127
Attention: Mortgage Structured Finance
Telecopy: (619) 674-3592
Telephone: (619) 674-3317
14
<PAGE> 18
Section 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 the Affiliated Originators,
the Sponsor and the Trustee only by a written instrument executed by such
parties and with the prior written consent of 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.
15
<PAGE> 19
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 payment obligation's under
the related Certificate Insurance Policies. During any period of suspension, the
Certificate Insurer's rights hereunder shall vest in the Owners of the related
Offered Certificates and shall be exercisable by the Owners of at least a
majority in Percentage Interest of the related Offered Certificates then
outstanding. At such time as the related Offered Certificates are no longer
Outstanding under the related Advanta Pooling Agreement and the Certificate
Insurer has been reimbursed for all Insured Payments to which it is entitled
under the related Advanta Pooling 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.
16
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this
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 CORP. MIDATLANTIC
ADVANTA MORTGAGE CORP. MIDATLANTIC II
ADVANTA MORTGAGE CORP. MIDWEST
ADVANTA MORTGAGE CORP. OF NEW JERSEY
ADVANTA MORTGAGE CORP. NORTHEAST
ADVANTA NATIONAL BANK
as Sellers and
ADVANTA CONDUIT RECEIVABLES, INC.
An Affiliate
By: /s/ Michael Coco
--------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA BANK CORP.
as Seller
By: /s/ John L. Richards
--------------------------------
Name: John L. Richards
Title: President & CEO
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee and not in its
individual capacity
By: /s/ Mark McNeill
--------------------------------
Name: Mark McNeill
Title: Vice President
[MASTER LOAN TRANSFER AGREEMENT]
17
<PAGE> 21
ADVANTA MORTGAGE CONDUIT SERVICES,
INC. as Sponsor
By: /s/ Michael Coco
--------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA FINANCE CORP.
By: /s/ Michael Coco
--------------------------------
Name: Michael Coco
Title: Vice President
[MASTER LOAN TRANSFER AGREEMENT]
18
<PAGE> 22
EXHIBIT A
CONVEYANCE AGREEMENT
Advanta Mortgage Corp. USA, Advanta Mortgage Corp.
Midatlantic, Advanta Mortgage Corp. Midatlantic II, Advanta Mortgage Corp.
Midwest, Advanta Mortgage Corp. of New Jersey, Advanta Mortgage Corp. Northeast,
Advanta Finance Corp., Advanta Bank Corp. and Advanta National Bank, (each, an
"Affiliated Originator"), Advanta Conduit Receivables, Inc., as an Affiliate,
and Advanta Mortgage Conduit Services, Inc., as Sponsor, pursuant to the Master
Loan Transfer Agreement dated as of March 1, 1999 among themselves and Bankers
Trust Company of California, N.A. as Trustee (the "Master Transfer Agreement"),
hereby confirm their understanding with respect to the conveyance by each
Affiliated Originator, the Warehouse Trusts the Affiliate and the Sponsor of
those Mortgage Loans listed on the attached Schedule of Mortgage Loans (the
"Transferred Mortgage Loans") to the Sponsor and /or the Advanta Mortgage Loan
Trust_____-__.
Conveyance of Transferred Mortgage Loans.
Each Affiliated Originator, the Affiliate 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 "related Advanta Pooling Agreement"), the Files and all other
documents, materials and properties appurtenant thereto and the Notes, including
all accrued interest 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 (excluding any non-mortgage related or credit life 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.
A-1
<PAGE> 23
The Affiliated Originators hereby make the Representations and
Warranties set forth in Section 5(b) of the Master Transfer Agreement with
respect to the Transferred Mortgage Loans.
The "Cut-Off Date" with respect to such Transferred Mortgage
Loans shall be ________,______.
All terms and conditions of the Master Transfer Agreement are
hereby incorporated herein, provided that in the event of any conflict the
provisions of this Conveyance Agreement shall control over the conflicting
provisions of the Master Transfer Agreement.
For purposes of this Conveyance Agreement, the "related
Advanta Pooling Agreement" is the Pooling and Servicing Agreement dated as of
_________,_____ relating to Advanta Mortgage Loan Trust ______-__.
A-2
<PAGE> 24
Terms capitalized herein and not defined herein shall have
their respective meanings as set forth in the Master Transfer Agreement.
ADVANTA MORTGAGE CORP. USA
ADVANTA MORTGAGE CORP. MIDATLANTIC
ADVANTA MORTGAGE CORP. MIDATLANTIC II
ADVANTA MORTGAGE CORP. MIDWEST
ADVANTA MORTGAGE CORP. OF NEW JERSEY
ADVANTA MORTGAGE CORP. NORTHEAST
ADVANTA NATIONAL BANK,
ADVANTA BANK CORP.
as Affiliated Originators
and
ADVANTA CONDUIT RECEIVABLES, INC.
as an Affiliate
By:_________________________________________
Michael Coco, Vice President
ADVANTA MORTGAGE CONDUIT SERVICES,
INC., as Sponsor
By:_________________________________________
Michael Coco, Vice President
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:_________________________________________
Name:
Title:
ADVANTA FINANCE CORP.
By:_________________________________________
Name:
Title:
Dated:
A-3
<PAGE> 25
EXHIBIT B
AUTHORIZED REPRESENTATIVES
Reference is hereby made to the Master Loan Transfer
Agreement, dated as of March 1, 1999 (the "Agreement"), among Advanta Mortgage
Corp. USA, Advanta Mortgage Corp. Midatlantic, Advanta Mortgage Corp.
Midatlantic II, Advanta Mortgage Corp. Midwest, Advanta Mortgage Corp. of New
Jersey, Advanta Mortgage Corp. Northeast, Advanta Finance Corp., Advanta Bank
Corp. and Advanta National Bank, as Affiliated Originators, Advanta Conduit
Receivables, Inc., as an Affiliate, Advanta Mortgage Conduit Services, Inc., as
Sponsor and Bankers Trust Company of California, N.A., as Trustee:
The following are the Affiliated Originators' Authorized
Representatives for purposes of the Agreement:
Name Title
[Michael Coco] [Vice President]
[Susan McVeigh] [Vice President]
The following are the Sponsor's Authorized Representatives for
purposes of the Agreement:
Name Title
[Michael Coco] [Vice President]
[Susan McVeigh] [Vice President]
B-1
<PAGE> 1
Exhibit 5.1
<PAGE> 2
March 9, 1999
To the Addressees Listed on
the Annex A Hereto:
Re: Advanta Mortgage Loan Trust 1999-1 (the "Trust")
Ladies and Gentlemen:
We have acted as special counsel to Advanta National Bank, a
national banking association (the "Bank"), Advanta Mortgage Corp. Midatlantic,
Advanta Mortgage Corp. Midatlantic II, Advanta Mortgage Corp. Midwest, each of
which is a Pennsylvania corporation, Advanta Mortgage Corp. of New Jersey, a New
Jersey corporation, Advanta Bank Corp. ("ABC"), a Utah industrial loan
corporation, Advanta Mortgage Corp. Northeast, a New York corporation, Advanta
Finance Corp., a Nevada corporation, Advanta Mortgage Corp. USA, a Delaware
corporation ("AMCUSA") (collectively, the "Affiliated Originators"), Advanta
Mortgage Conduit Services, Inc., a Delaware corporation ("Advanta"), Advanta
Mortgage Holding Company, a Delaware corporation ("AMHC") and Advanta Conduit
Receivables Inc., a Delaware corporation ("Receivables") in connection with the
execution and delivery of the following documents:
(i) Pooling and Servicing Agreement, dated as of March 1, 1999
(the "Pooling and Servicing Agreement"), among Advanta, as Sponsor (the
"Sponsor"), AMCUSA, as Master Servicer, and Bankers Trust Company of
California, N.A., a national banking association, as Trustee (the
"Trustee");
(ii) Underwriting Agreement, dated February 24, 1999 (the
"Underwriting Agreement"), between Advanta and Salomon Smith Barney,
Inc. as the Representative of the Underwriters, (the "Representative");
(iii) Master Loan Transfer Agreement, dated as of March 1,
1999, among the Sponsor, Receivables, the Affiliated Originators and
the Trustee, and the Conveyance Agreement, dated as of March 9, 1999
(together, the "Transfer Agreement");
(iv) Two letter agreements executed and delivered by AMHC, one
of which is dated March 1, 1999 and is addressed to the Representative
and MBIA Insurance Corporation ("MBIA"), and one of which is dated
March 1, 1999 and is
<PAGE> 3
addressed to the Trust and MBIA, pursuant to which AMHC acknowledges
its joint-and-several liability with respect to certain of Advanta's,
the Affiliated Originators' and AMCUSA's obligations to the
Underwriters, MBIA and the Trust (collectively, the "AMHC Guaranties");
(v) Insurance Agreement, dated as of March 1, 1999 (the
"Insurance Agreement"), among MBIA, the Sponsor, the Master Servicer,
AMHC and the Trustee;
(vi) Indemnification Agreement, dated as of February 24, 1999
(the "Indemnity Agreement"), among MBIA, the Sponsor and the
Underwriters;
(vii) Forms of the Certificates.
Capitalized terms used herein, but not defined, shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
We have examined executed copies of the Pooling and Servicing
Agreement, the Underwriting Agreement, the Transfer Agreement, the Insurance
Agreement and the Indemnity Agreement and the AMHC Guaranties (collectively, the
"Documents"). We have also examined a copy of each of the executed Certificates.
We have also examined the Registration Statement (No. 333-52351) filed with the
Securities and Exchange Commission (the "Commission") on Form S-3 (the
"Registration Statement), in the form in which such Registration Statement was
declared effective, the Prospectus dated September 15, 1998 (the "Prospectus"),
the Preliminary Prospectus Supplement dated February 19, 1999 (the "Preliminary
Prospectus Supplement") and the Prospectus Supplement dated February 24, 1999
(the "Prospectus Supplement") relating to the Class A Certificates.
We have also examined originals or photostatic or certified
copies of all such corporate records of Advanta, AMCUSA, the Affiliated
Originators, Receivables and AMHC and such certificates of public officials,
certificates of corporate officers, and other documents, and such questions of
law, as we have deemed relevant and necessary as a basis for the opinions
hereinafter expressed. As to certain issues of fact material to the opinions
expressed herein, we have, with your consent, relied to the extent we deemed
appropriate upon certificates and representations of officers of the Sponsor,
AMCUSA, the Affiliated Originators, Receivables and AMHC. In making our
examinations and rendering the opinions herein expressed, we have made the
following assumptions:
(1) each party to each of the Documents (other than Advanta,
AMCUSA, the Affiliated Originators, Receivables and AMHC, as
applicable) has the corporate power to enter into and perform
all of its obligations thereunder;
(2) the due authorization, execution and delivery of the Documents
by all parties thereto other than Advanta, AMCUSA, the
Affiliated Originators, Receivables and AMHC and the validity
and binding effect on all parties other than Advanta, AMCUSA,
the Affiliated Originators, Receivables
2
<PAGE> 4
and AMHC of each of the Documents, as applicable;
(3) the genuineness of all signatures;
(4) the authenticity of all documents submitted to us as originals
and the conformity to originals of all documents submitted to
us as copies;
(5) the Trust will qualify as a real estate mortgage investment
conduit ("REMIC") as defined in Section 860D of the Internal
Revenue Code of 1986, as amended (the "Code");
(6) the Class A Certificates and the Class B Certificates will
each constitute "regular interests" and the Class R
Certificates and Class RL Certificates will each constitute
the "residual interest" in a REMIC, as such terms are defined
in Section 860G(a) of the Code;
(7) as to Paragraph 22 below, we assume that the parties to the
Documents have and will perform their respective obligations
thereunder, including the delivery to the Trustee of Notes
relating to the Mortgage Loans following payment of legal and
sufficient consideration therefor, without any such Note
having been discharged, or the related Mortgage satisfied or
released and without the Trustee having actual or constructive
notice of the existence of any claim, lien, charge, mortgage,
security interest, encumbrance or right of Advanta, any
Affiliated Originator, any Unaffiliated Originator, or
creditors of Advanta or others. Further we have assumed the
absence of any defense against enforcement of, or right of
offset against, each such Note and the related Mortgage. We
have undertaken no independent review of the Mortgage Loans,
including the Notes and the Mortgages and have relied solely
upon the representations of Advanta and of the Affiliated
Originators in the Mortgage Loan Transfer Agreement and the
Pooling and Servicing Agreement that they have title to the
Mortgage Loans; and
(8) in the case of each purchaser of a Class A Certificate
investing assets of an employee benefit plan covered by ERISA,
such plan is a plan to which Prohibited Transaction Exemption
91-14 is fully available.
We have assumed that the Mortgages and rights to receive
payment under the Mortgage Loans are not subject to any right, lien or interest
of any government or any agency or instrumentality thereof (including without
limitation any federal or state tax lien, or lien arising under Title IV of
ERISA) and that they are not subject to any lien arising by operation of law or
any judicial lien.
The opinions expressed in paragraphs 5, 7 and 10 with respect
to the enforceability of certain agreements are subject to the following
additional qualifications:
(a) The effect of bankruptcy, insolvency, reorganization,
moratorium, receivership, or other similar laws of general applicability
relating to or affecting
3
<PAGE> 5
creditors' rights generally or the rights of creditors of national banking
associations in the event of bankruptcy, insolvency, reorganization, moratorium
or receivership.
(b) The application of general principles of equity,
including, but not limited to, the right of specific performance (regardless of
whether enforceability is considered in a proceeding in equity or at law).
In addition, we wish to advise you that the enforceability of
certain provisions set forth in the Underwriting Agreement which purport to
provide for indemnification for losses due to securities laws violations may be
limited by public policy considerations.
We are admitted to the Bars of the States of New York and
California, and we express no opinion as to the laws of any other jurisdiction
except as to matters that are governed by federal law. All opinions expressed
herein are based on laws, regulations and policy guidelines currently in force
and may be affected by future regulations. Furthermore, no opinion is expressed
herein regarding the applicable state Blue Sky, legal investment or real estate
syndication laws.
Based upon the foregoing and subject to the last paragraph
hereof, we are of the opinion that:
1. Advanta has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, and is
qualified to do business in each state necessary to enable it to perform its
obligations under the Documents. Advanta has the requisite power and authority
to execute and deliver, engage in the transactions contemplated by, and perform
and observe the conditions of the Documents.
2. AMCUSA has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and is
qualified to do business in each state necessary to enable it to perform its
obligations under the Transfer Agreement, the Insurance Agreement and the
Pooling and Servicing Agreement. AMCUSA has the requisite power and authority to
execute and deliver, engage in the transactions contemplated by, and perform and
observe the conditions of the Transfer Agreement, the Insurance Agreement and
the Pooling and Servicing Agreement.
3. Each Affiliated Originator (other than ABC) has been duly
organized and is validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Affiliated Originator (other than ABC) has
the requisite power and authority to execute and deliver, engage in the
transactions contemplated by, and perform and observe the conditions of the
Transfer Agreement.
4. Each of the Documents has been duly and validly authorized,
executed and delivered by Advanta, all requisite corporate action having been
taken with respect thereto.
4
<PAGE> 6
5. Each of the Documents constitutes the valid, legal and
binding agreement of Advanta, and is enforceable against Advanta in accordance
with its terms.
6. Each of the Pooling and Servicing Agreement, the Insurance
Agreement and the Transfer Agreement has been duly and validly authorized,
executed and delivered by AMCUSA, and in the case of the Transfer Agreement, by
the Affiliated Originators (other than ABC), all requisite corporate action
having been taken with respect thereto.
7. Each of the Pooling and Servicing Agreement, the Insurance
Agreement and the Transfer Agreement constitutes the valid, legal and binding
agreement of AMCUSA, and in the case of the Transfer Agreement, of the
Affiliated Originators (other than ABC), and each is enforceable against AMCUSA
and in the case of the Transfer Agreement, of the Affiliated Originators, in
accordance with its terms.
8. AMHC has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and is
qualified to do business in each state necessary to enable it to perform its
obligations under the Insurance Agreement and the AMHC Guaranties. AMHC has the
requisite power and authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of, the Insurance
Agreement and AMHC Guaranties.
9. The Insurance Agreement and the AMHC Guaranties have been
duly and validly authorized, executed and delivered by AMHC, all requisite
corporate action having been taken with respect thereto.
10. The Insurance Agreement and each of the AMHC Guaranties
each constitutes the valid, legal and binding agreement of AMHC, and each is
enforceable against AMHC in accordance with its terms.
11. The Pooling and Servicing Agreement, assuming the due
execution and delivery thereof by the Trustee, creates a valid, express trust
under the laws of New York. Each Certificate, assuming the due execution by the
Trustee and due authentication by the Trustee and payment therefor, is validly
issued and outstanding and is entitled to the benefits of the Pooling and
Servicing Agreement.
12. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or court
is required under federal laws or the laws of the State of New York, for the
execution, delivery and performance of any of the Pooling and Servicing
Agreement, the Insurance Agreement or the Transfer Agreement or the consummation
of any other transaction contemplated thereby by AMCUSA or, in the case of the
Transfer Agreement, the Affiliated Originators (other than ABC), except such
which have been obtained.
13. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or court
is required under federal laws or the laws of the State of New York for the
execution, delivery and performance of the Documents or the offer, issuance,
sale or delivery of the Class A Certificates or the
5
<PAGE> 7
consummation of any other transaction contemplated thereby by Advanta, except
such which have been obtained.
14. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or court
is required under federal laws or the laws of the State of New York, for the
execution, delivery and performance of the AMHC Guaranties, except such which
have been obtained.
15. To our knowledge, following due inquiry made of the
appropriate officers of Advanta, AMCUSA and the Affiliated Originators (other
than ABC), there are no actions, proceedings or investigations pending or, to
our knowledge, threatened against Advanta, AMCUSA or the Affiliated Originators
before any court, governmental agency or body or other tribunal (a) asserting
the invalidity of the Documents or the Certificates, (b) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Documents, (c) which would materially and adversely affect
the performance by Advanta, AMCUSA or the Affiliated Originators, as applicable,
of obligations under, or the validity or enforceability of, the Documents or the
Certificates, or (d) that would adversely affect the status of the Trust as a
"real estate mortgage investment conduit" ("REMIC"), as such term is defined in
the Internal Revenue Code of 1986, as amended.
16. Neither the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates, nor the execution, delivery or
performance by the Affiliated Originators (other than ABC) of the Transfer
Agreement, or AMCUSA of the Pooling and Servicing Agreement, the Insurance
Agreement and the Transfer 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 AMCUSA or the Affiliated Originators, as applicable; (ii) any term or
provision of any material agreement, contract, instrument or indenture, to which
AMCUSA or the Affiliated Originators, as applicable, is a party or is bound
which has been identified to us by the appropriate officers of AMCUSA; (iii) any
order, judgment, writ, injunction or decree of any court or governmental agency
or body or other tribunal having jurisdiction over AMCUSA or the Affiliated
Originators which has been identified to us by the appropriate officers of
AMCUSA; or (iv) any law, rule or regulation of the State of New York or the
federal government (including, without limitation, any bulk sales law), 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.
17. Neither the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates, nor the execution, delivery or
performance by Advanta of the Documents (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 Advanta; (ii) any term or provision of any material agreement,
contract, instrument or indenture, to which Advanta is a party or is bound,
which has been identified to us by an officer or representative of Advanta;
(iii) any order, judgment, writ, injunction or decree of any court or
governmental agency or
6
<PAGE> 8
body or other tribunal having jurisdiction over Advanta, which has been
identified to us by an officer or representative of Advanta; or (iv) any law,
rule or regulation of the State of New York or the federal government, or (b)
results or will result in the creation or imposition of any lien, charge or
encumbrance upon the Trust Estate or upon the related Certificates, except as
otherwise contemplated by the Pooling and Servicing Agreement.
18. The execution, delivery or performance by AMHC of the AMHC
Guaranties or the Insurance Agreement does not conflict with or will not
conflict with and does not result or will not result in a breach of, and does
not constitute or will not constitute a default under, (i) any term or provision
of the certificate of incorporation or bylaws of AMHC; (ii) any term or
provision of any material agreement, contract, instrument or indenture, to which
AMHC is a party or is bound, which have been identified to us by appropriate
officers of AMHC; (iii) any order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over AMHC, which have been
identified to us by appropriate officers of AMHC; or (iv) any law, rule or
regulation of the State of New York or the federal government.
19. To the best of our knowledge, following due inquiry made
of the appropriate officers of AMHC, there are no actions, proceedings or
investigations pending or to our knowledge threatened against AMHC before any
court, administrative agency or other tribunal (a) asserting the invalidity of
the Insurance Agreement or the AMHC Guaranties, (b) seeking to prevent the
consummation of any of the transactions contemplated by the Insurance Agreement
or the AMHC Guaranties, or (c) which would materially and adversely affect the
performance by AMHC of obligations of the Insurance Agreement or the AMHC
Guaranties.
20. The Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement and the Prospectus Supplement (other than the
financial and statistical data included therein, as to which we are not called
upon to express any opinion), at the time the Registration Statement became
effective and as of the date hereof comply as to form in all material respects
with the requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the rules and regulations thereunder, and the Exchange Act and the
rules and regulations thereunder, and we do not know of any amendment to the
Registration Statement required to be filed, or of any contracts, indentures or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement, the Prospectus, the Preliminary Prospectus Supplement or the
Prospectus Supplement, which has not been filed or described as required.
21. 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 the Pooling and Servicing Agreement under
the Investment Company Act of 1940 is required.
22. Immediately upon the receipt by the Trust, and the receipt
by Advanta and, as applicable, by each Affiliated Originator of legal and
sufficient consideration therefor, the Trust shall, pursuant to the laws of the
State of New York, be
7
<PAGE> 9
vested with good and indefeasible title to, and shall be the sole owner of, and
shall obtain all right, title and interest of Advanta and of the Affiliated
Originators in and to, the Mortgage Loans, free and clear of any claim, lien,
charge, mortgage, security interest, encumbrance or rights of Advanta or of the
Affiliated Originators or creditors of Advanta or of the Affiliated Originators,
see Federal Deposit Ins. Corp. v. Forte, 463 N.Y.S.2d 844, 849 (A.D.2d Dep't
1983), except that until such time as assignments of mortgage are recorded in
the name of the Trustee in the appropriate jurisdictions (x) the Trustee may
not, in certain jurisdictions, be independently able to enforce the Mortgage
against the related Mortgaged Property or the related Mortgagor, (y) the related
Affiliated Originators could record an assignment of a Mortgage in the name of a
third party or record a discharge and satisfaction of a Mortgage and (z) any
notices which may be given to the record holder of a Mortgage would be given to
the related Affiliated Originators.
23. The statements in the Preliminary Prospectus Supplement
and the Prospectus Supplement set forth under the captions "DESCRIPTION OF THE
CERTIFICATES" and "THE POOLING AND SERVICING AGREEMENT", to the extent such
statements purport to summarize certain provisions of the Certificates or of the
Pooling and Servicing Agreement, are fair and accurate in all material respects.
24. The statements in the Prospectus set forth under the
captions "ERISA CONSIDERATIONS", "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and
"CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED MATTERS" and the statements
in the Preliminary Prospectus Supplement and the Prospectus Supplement set forth
under the captions "ERISA CONSIDERATIONS", "STATE TAXES" and "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES", 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.
25. To the best of our knowledge, the Registration Statement
has become effective and the Commission has not issued any stop order suspending
the effectiveness of the Registration Statements or any order directed to any
prospectus or prospectus supplement relating to the Class A Certificates
(including the Prospectus, the Preliminary Prospectus Supplement and the
Prospectus Supplement), and has not initiated or threatened any proceeding for
that purpose.
26. The provision in the Pooling and Servicing Agreement which
provides for the laws of New York to be the governing law would be upheld by a
court applying New York or California law, or, if not upheld, then such court
applying New York or California law would hold that California law is the
governing law for the Pooling and Servicing Agreement.
We have rendered legal advice and assistance to the Advanta
and AMCUSA in the course of their investigation pertaining to, and their
participation in the preparation of, the Registration Statement, the Prospectus
the Preliminary Prospectus Supplement, the Prospectus Supplement, and other
matters relating to the sale of the Certificates. Rendering such assistance
involved, among other things, discussions and
8
<PAGE> 10
inquiries concerning various legal and related subjects and reviews of certain
records, documents, opinions and certificates in accordance with instructions of
Advanta and AMCUSA. We also participated with the Advanta and AMCUSA in
conferences with representatives of the Underwriters and its counsel during
which the contents of the Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement, the Prospectus Supplement and related matters
were discussed. Although we are not passing upon, and do not assume
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement and the Prospectus Supplement, in the course of our
examination of the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement, the Prospectus Supplement and certain other documents and
our participation in the discussions hereinabove mentioned, no facts have come
to our attention which lead us to believe that the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement
(other than the financial statements and other financial and statistical data
contained therein, as to which we are not called upon to express any belief), at
the time the Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein not misleading, or that the Prospectus, the
Preliminary Prospectus Supplement and the Prospectus Supplement (other than the
financial statements and other financial and statistical data contained therein,
as to which we are not called upon to express any belief) contains any untrue
statement of a material fact, or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
This opinion is furnished by us as special counsel to Advanta,
the Affiliated Originators, AMCUSA and AMHC and is solely for the benefit of the
addressees hereof and their respective counsel. It may not be relied upon by any
other person or for any other purpose without our prior written consent.
Very truly yours,
/s/ Dewey Ballantine LLP
9
<PAGE> 11
ANNEX A
Advanta Mortgage Conduit MBIA Insurance Corporation
Services, Inc. 113 King Street
10790 Rancho Bernardo Road Armonk, New York 10504
San Diego, California 92127
Bankers Trust Company of
Advanta Mortgage Corp. USA California, N.A., as Trustee
10790 Rancho Bernardo Road Three Park Plaza
San Diego, California 92127 16th Floor
Irvine, California 92614
Salomon Smith Barney Inc.
Bear, Stearns & Co. Inc. Moody's Investors Service
Lehman Brothers 99 Church Street
Morgan Stanley & Co. Incorporated New York, New York 10007
Prudential Securities Incorporated
c/o Salomon Smith Barney Inc. Standard & Poor's Ratings Group
390 Greenwich Street 25 Broadway
New York, New York 10013 New York, New York 10004
Arthur Andersen LLP
1601 Market Street
Philadelphia, Pennsylvania 19103
<PAGE> 1
Exhibit 8.1
<PAGE> 2
March 9, 1999
To the Addressees listed
on Schedule I hereto
Re: Advanta Mortgage Loan Trust 1999-1
Mortgage Loan Asset-Backed Certificates, Series 1999-1
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the
issuance and delivery of certain mortgage loan asset-backed certificates
denominated Advanta Mortgage Loan Trust 1999-1, Mortgage Loan Asset-Backed
Certificates, Series 1999-1 (collectively, the "Certificates"), pursuant to a
Pooling and Servicing Agreement dated as of March 1, 1999 (the "Pooling and
Servicing Agreement") among Advanta Mortgage Conduit Services, Inc. ("Advanta"),
Advanta Mortgage Corp. USA, as Master Servicer (the "Master Servicer") and
Bankers Trust Company of California, N.A., as trustee (the "Trustee").
As special tax counsel, we have examined such documents as we
deemed appropriate for the purposes of rendering the opinions set forth below,
including the following: (a) Prospectus dated September 15, 1998 (the
"Prospectus"), a Preliminary Prospectus Supplement dated February 19, 1999 (the
"Preliminary Prospectus Supplement") and a Prospectus Supplement dated February
24, 1999 (the "Prospectus Supplement") with respect to the Class A Certificates,
and (b) an executed copy of the Pooling and Servicing Agreement and the exhibits
attached thereto.
Terms capitalized herein and not otherwise defined herein
shall have their respective meanings as set forth in the Pooling and Servicing
Agreement.
Based upon the foregoing and upon the assumptions set forth
below, we are of the opinion, under the laws of the United States, New York
State, New York City and California in effect as of the date hereof, that:
1. Assuming that (a) each of the Upper-Tier REMIC and the
Lower-Tier REMIC created under the Pooling and Servicing Agreement elects, as it
has covenanted to do in the Pooling and Servicing Agreement, to be treated as a
"real estate mortgage investment conduit" ("REMIC"), as such term is defined in
the Internal Revenue Code of 1986, as amended (the "Code") and (b) the parties
to the Pooling and Servicing Agreement comply with the terms thereof, both the
Upper-Tier REMIC and the Lower-Tier REMIC will be treated as REMICs. Subject to
the above, (i) each Class of Class A Certificates and the Class B Certificates
issued pursuant to the Pooling and Servicing Agreement will be treated as one or
more "regular
<PAGE> 3
March 9, 1999
Page 2
interests" in the related REMIC and (ii) the Class R Certificates and Class RL
Certificates will be treated as the sole "residual interest" in the related
REMIC.
2. The statements under the caption "CERTAIN FEDERAL INCOME
TAX CONSEQUENCES" in the Prospectus, the Preliminary Prospectus Supplement and
the Prospectus Supplement and "STATE TAXES" in the Preliminary Prospectus
Supplement and the Prospectus Supplement are accurate and complete in all
material respects.
3. As a consequence of the qualification of the Upper-Tier
REMIC and the Lower-Tier REMIC each as a REMIC, the Class A Certificates will be
treated as "regular . . . interest(s) in a REMIC" under Section 7701(a)(19)(C)
of the Code and "real estate assets" under Section 856(c) of the Code in the
same proportion that the assets in the Trust consist of qualifying assets under
such Sections. In addition, as a consequence of the qualification of the
Upper-Tier REMIC and the Lower-Tier REMIC each as a REMIC, interest on the Class
A Certificates will be treated as "interest on obligations secured by mortgages
on real property" under Section 856(c) of the Code to the extent that such Class
A Certificates are treated as "real estate assets" under Section 856(c) of the
Code.
4. The Trust will not be subject to tax upon its income or
assets by the taxing authority of New York State or New York City.
5. The Trust will not be subject to the California state
income tax. While REMICS are subject to the California state minimum franchise
tax imposed under Article 2, Section 23153 of the California Revenue and
Taxation Code, no opinion is expressed as to whether the Trust is subject to
such tax.
6. Neither the Trust nor any portion thereof, including,
without limitation, the Supplemental Interest Account, will be treated as an
association taxable as a corporation for federal income tax purposes.
Very truly yours,
/s/ Dewey Ballantine LLP
2
<PAGE> 4
SCHEDULE I
Advanta Mortgage Corp. USA MBIA Insurance Corporation
10790 Rancho Bernardo Road 113 King Street
San Diego, California 92127 Armonk, New York 10504
Salomon Smith Barney Inc. Bankers Trust Company of
Bear, Stearns & Co. Inc. California, N.A.,
Lehman Brothers as Trustee
Morgan Stanley & Co. Incorporated Three Park Plaza
Prudential Securities Incorporated 16th Floor
c/o Salomon Smith Barney Inc. Irvine, California 92714
390 Greenwich Street
New York, New York 10013 Moody's Investors Service, Inc.
99 Church Street
Advanta Mortgage Loan Trust 1999-1 New York, New York 10007
c/o Bankers Trust Company
of California, N.A. Standard & Poor's
Three Park Plaza, 16th Floor 25 Broadway
Irvine, California 92614 New York, New York 10004
<PAGE> 1
Exhibit 10.1
<PAGE> 2
- --------------------------------------------------------------------------------
MBIA INSURANCE CORPORATION,
as Certificate Insurer,
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Sponsor,
and
SALOMON SMITH BARNEY, Inc.,
LEHMAN BROTHERS,
MORGAN STANLEY & CO., INCORPORATED,
BEAR STEARNS & CO.INC.
and
PRUDENTIAL SECURITIES INCORPORATED
as Underwriters
INDEMNIFICATION AGREEMENT
Advanta Mortgage Loan Trust 1999-1,
Mortgage Loan Asset-Backed Certificates, Series 1999-1,
$125,000,000 Fixed Rate Class A-1 Certificates,
$82,000,000 Fixed Rate Class A-2 Certificates,
$44,000,000 Fixed Rate Class A-3 Certificates,
$83,000,000 Fixed Rate Class A-4 Certificates,
$26,000,000 Fixed Rate Class A-5 Certificates,
$40,000,000 Fixed Rate Class A-6 Certificates
and
$400,000,000 Adjustable Rate Class A-7 Certificates
Dated as of February 24, 1999
- --------------------------------------------------------------------------------
<PAGE> 3
INDEMNIFICATION AGREEMENT
This Agreement, dated as of February 24, 1999, is by and among MBIA
INSURANCE CORPORATION (the "Certificate Insurer"), as the Certificate Insurer
under the Certificate Guaranty Insurance Policy (the "Policy") issued in
connection with the Advanta Mortgage Loan Trust 1999-1, Mortgage Loan
Asset-Backed Certificates, Series 1999-1, $125,000,000 Fixed Rate Class A-1
Certificates, $82,000,000 Fixed Rate Class A-2 Certificates, $44,000,000 Fixed
Rate Class A-3 Certificates, $83,000,000 Fixed Rate Class A-4 Certificates,
$26,000,000 Fixed Rate Class A-5 Certificates, $40,000,000 Fixed Rate Class A-6
Certificates and $400,000,000 Adjustable Rate Class A-7 Certificates, described
below, ADVANTA MORTGAGE CONDUIT SERVICES, INC. (the "Sponsor") and SALOMON SMITH
BARNEY INC., LEHMAN BROTHERS, PRUDENTIAL SECURITIES INCORPORATED, MORGAN STANLEY
& CO., INCORPORATED, and BEAR STEARNS & CO. INC. as the Underwriters (the
"Underwriters").
Section 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings stated herein, unless the context clearly
requires otherwise, in both singular and plural form, as appropriate.
Capitalized terms used in this Agreement but not otherwise defined herein will
have the meanings ascribed to such terms in the Pooling and Servicing Agreements
(as described below).
"Act" means the Securities Act of 1933, as amended, together with all
related rules and regulations.
"Agreement" means this Indemnification Agreement by and among the
Insurer, the Sponsor and the Underwriters.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 5 below, as the context requires.
"Indemnifying Party" means any party required to provide
indemnification pursuant to Section 5 below, as the context requires.
"Insurance Agreement" means the Insurance Agreement, dated as of March
1, 1999, by and among the Certificate Insurer, the Sponsor, the Master Servicer,
the Joint Obligor and the Trustee.
"Insured Certificates" means 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 and the Class A-7 Certificates.
"Insurer Party" means the Certificate Insurer and its respective
parents, subsidiaries and affiliates and any shareholder, director, officer,
employee, agent or any "controlling person" (as such term is used in the Act) of
any of the foregoing.
<PAGE> 4
"Losses" means (i) any actual out-of-pocket loss paid by the party
entitled to indemnification or contribution hereunder and (ii) any actual
out-of-pocket costs and expenses paid by such party, including reasonable fees
and expenses of its counsel, to the extent not paid, satisfied or reimbursed
from funds provided by any other Person (provided that the foregoing shall not
create or imply any obligation to pursue recourse against any such other
Person).
"Master Servicer" means Advanta Mortgage Corp. USA, as Master Servicer.
"Offered Certificates" means the Advanta Mortgage Loan Trust 1999-1,
Mortgage Loan Asset-Backed Certificates, Series 1999-1, $125,000,000 Fixed Rate
Class A-1 Certificates, $82,000,000 Fixed Rate Class A-2 Certificates,
$44,000,000 Fixed Rate Class A-3 Certificates, $83,000,000 Fixed Rate Class A-4
Certificates, $26,000,000 Fixed Rate Class A-5 Certificates, $40,000,000 Fixed
Rate Class A-6 Certificates and $400,000,000 Adjustable Rate Class A-7
Certificates issued pursuant to the Pooling and Servicing Agreement.
"Person" means any individual, partnership, joint venture, corporation,
trust or unincorporated organization or any government or agency or political
subdivision thereof.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of March 1, 1999 by and among the Sponsor, the Master
Servicer and the Trustee.
"Prospectus" means the form of final Prospectus dated September 15,
1998 included in the Registration Statement on each date that the Registration
Statement and any post effective amendment or amendments thereto became
effective.
"Prospectus Supplement" means the form of final Prospectus Supplement
dated February 24, 1999.
"Registration Statement" means the Registration Statement No. 333-52351
on Form S-3 of the Sponsor relating to the Offered Certificates.
"Sponsor Party" means the Sponsor, each of its parents, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or any
"controlling person" (as such term is used in the Act) of any of the foregoing.
"State Securities Law" means any state, local or foreign statute, and
any rule or regulation thereunder, regulating (i) transactions and dealings in
securities, (ii) any Person or entity engaging in such transactions or advising
with respect to securities or (iii) investment companies.
"Trustee" means Bankers Trust Company of California, N.A., or any
successor thereto.
"Underwriter Party" means each Underwriter and each of its parents,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Act) of any of the
foregoing.
"Underwriters" means Salomon Smith Barney Inc., Lehman Brothers,
Prudential Securities Incorporated, Bear Stearns & Co. Inc. and Morgan Stanley &
Co., Incorporated.
2
<PAGE> 5
"Underwriting Agreement" means the Underwriting Agreement by and
between the Sponsor and Salomon Smith Barney Inc., as Representative of the
Underwriters, dated February 24, 1999.
Section 2. Representations and Warranties of the Certificate Insurer.
The Certificate Insurer represents and warrants to the Underwriters and the
Sponsor as follows:
(a) Organization and Licensing. The Certificate Insurer is a
duly incorporated and existing New York stock insurance company
licensed to do business in the State of New York.
(b) Corporate Power. The Certificate Insurer has the corporate
power and authority to issue the Policies and to execute and deliver
this Agreement and the Insurance Agreement and to perform all of its
obligations hereunder and thereunder.
(c) Authorization; Approvals. The issuance of the Policies and
the execution, delivery and performance of this Agreement and the
Insurance Agreement have been duly authorized by all necessary
corporate proceedings. No further approvals or filings of any kind,
including, without limitation, any further approvals of or further
filings with any governmental agency or other governmental authority,
or any approval of the Insurer's board of directors or stockholders,
are necessary for the Policies, this Agreement and the Insurance
Agreement to constitute the legal, valid and binding obligations of the
Certificate Insurer.
(d) Enforceability. The Policies, when issued, and this
Agreement and the Insurance Agreement will each constitute a legal,
valid and binding obligation of the Certificate Insurer, enforceable in
accordance with its terms, subject to applicable laws affecting the
enforceability of creditors' rights generally.
(e) Financial Information. The consolidated financial
statements of the Certificate Insurer as of December 31, 1997 and
December 31, 1996 and for each of the three years ended December 31,
1997 incorporated by reference in the Prospectus Supplement (the
"Certificate Insurer Audited Financial Statements"), fairly present in
all material respects the financial condition of the Certificate
Insurer as of such date and for the period covered by such statements
in accordance with generally accepted accounting principles
consistently applied. The consolidated financial statements of the
Certificate Insurer and its subsidiaries for the nine months ended
September 30, 1998 incorporated by reference in the Prospectus
Supplement (the "Certificate Insurer Unaudited Financial Statements")
fairly present in all material respects the financial condition of the
Certificate Insurer as of such date and for the period covered by such
statements in accordance with generally accepted accounting principles
applied in a manner consistent with the accounting principles used in
preparing the Certificate Insurer Audited Financial Statements, and,
since September 30, 1998, there has been no material change in such
financial condition of the Certificate Insurer which would materially
and adversely affect its ability to perform its obligations under the
Policy.
3
<PAGE> 6
(f) Certificate Insurer Information. The information in the
Prospectus Supplement as of the date hereof under the captions "THE
CERTIFICATE INSURER" and "THE CERTIFICATE INSURANCE POLICY" (the
"Insurer Information") is true and correct in all material respects and
does not contain any untrue statement of a fact that is material to the
Certificate Insurer's ability to perform its obligations under the
Policy.
(g) 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 arbitrator
which, if decided adversely, would materially and adversely affect its
condition (financial or otherwise) or operations or which would
materially and adversely affect its ability to perform its obligations
under this Agreement, the Policy or the Insurance Agreement.
Section 3. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE
UNDERWRITERS. Each Underwriter represents and warrants to and agrees with the
Sponsor and the Insurer that the statements in the Prospectus Supplement made in
reliance upon and in conformity with written information relating to each
Underwriter furnished to the Sponsor specifically for use in the preparation of
the Prospectus Supplement, and acknowledged in writing as described in the
Underwriting Agreement (referred to herein as the "Underwriter Information"),
are true and correct in all material respects.
Section 4. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE SPONSOR.
The Sponsor represents and warrants to and agrees with the Certificate Insurer
and the Underwriters as follows:
(a) Registration Statement. The information in the
Registration Statement, the Prospectus and the Prospectus Supplement,
other than the Insurer Information, and the Underwriter Information, is
true and correct in all material respects and does not contain any
untrue statement of a fact that is material or omit to state a fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) Organization. The Sponsor is duly incorporated and
existing under the laws of the State of Delaware 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, makes
such qualification necessary.
(c) Corporate Power. The Sponsor has the corporate power and
authority to execute and deliver this Agreement, the Underwriting
Agreement, the Pooling and Servicing Agreement, the Master Transfer
Agreements and the Insurance Agreement and to perform all of its
obligations hereunder and thereunder.
(d) Authorization; Approvals. The execution, delivery and
performance of this Agreement, the Underwriting Agreement, the Master
Transfer Agreements, the Pooling and Servicing Agreement and the
Insurance Agreement by the Sponsor have been duly
4
<PAGE> 7
authorized by all necessary corporate proceedings. No further approvals
or filings of any kind, including, without limitation, any further
approvals of or further filing with any governmental agency or other
governmental authority, or any approval of the Sponsor's board of
directors or stockholders, are necessary for this Agreement, the
Underwriting Agreement, the Pooling and Servicing Agreement and the
Insurance Agreement to constitute the legal, valid and binding
obligations of the Sponsor.
(e) Enforceability. This Agreement, the Pooling and Servicing
Agreement, the Master Transfer Agreements, the Underwriting Agreement
and the Insurance Agreement will each constitute a legal, valid and
binding obligation of the Sponsor, each enforceable in accordance with
its terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
the enforceability of creditors' rights generally applicable in the
event of the bankruptcy, insolvency or reorganization of the Sponsor
and to general principles of equity.
(f) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Sponsor's knowledge,
threatened against it at law or in equity or before any court,
governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its ability to
perform its obligations under this Agreement, the Underwriting
Agreement, the Master Transfer Agreements, the Pooling and Servicing
Agreement or the Insurance Agreement.
Section 5. INDEMNIFICATION. (a) The Certificate Insurer hereby agrees,
upon the terms and subject to the conditions of this Agreement, to indemnify,
defend and hold harmless each Sponsor Party and each Underwriter Party against
any and all Losses incurred by them with respect to the offer and sale of any of
the Offered Certificates and resulting from the Certificate Insurer's breach of
any of its representations and warranties set forth in Section 2 of this
Agreement.
(b) Each Underwriter hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by it with respect to the
offer and sale of any of the Offered Certificates and resulting from such
Underwriter's breach of any of its representations and warranties set forth in
Section 3 of this Agreement
(c) The Sponsor hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by it with respect to the
offer and sale of any of the Offered Certificates and resulting from the
Sponsor's breach of any of its representations and warranties set forth in
Section 4 of this Agreement.
(d) Upon the incurrence of any Losses entitled to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party promptly
upon establishment by the Indemnified Party to the Indemnifying Party of the
Losses incurred.
5
<PAGE> 8
Section 6. NOTICE TO BE GIVEN. (a) Except as provided in Section 7
below with respect to contribution, the indemnification provided herein by the
Indemnifying Party shall be the exclusive remedy of each Indemnified Party for
the Losses resulting from the Indemnifying Party's breach of a representation,
warranty or agreement hereunder; provided, however, that each Indemnified Party
shall be entitled to pursue any other remedy at law or in equity for any such
breach so long as the damages sought to be recovered shall not exceed the Losses
incurred thereby resulting from such breach.
(b) In the event that any action or regulatory proceeding shall be
commenced or claim asserted which may entitle an Indemnified Party to be
indemnified under this Agreement, such party shall give the Indemnifying Party
written or facsimile notice of such action or claim reasonably promptly after
receipt of written notice thereof.
(c) Upon request of the Indemnified Party, the Indemnifying Party shall
retain counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. The Indemnifying Party may, at its option, at any time upon
written notice to the Indemnified Party, assume the defense of any proceeding
and may designate counsel reasonably satisfactory to the Indemnified Party in
connection therewith provided that the counsel so designated would have no
actual or potential conflict of interest in connection with such representation.
Unless it shall assume the defense of any proceeding, the Indemnifying Party
shall not be liable for any settlement of any proceeding, effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. The Indemnifying Party shall be entitled to participate
in the defense of any such action or claim in reasonable cooperation with, and
with the reasonable cooperation of, each Indemnified Party.
(d) The Indemnified Party will have the right to employ its own counsel
in any such action, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party unless (1) the employment of counsel by the
Indemnified Party at the Indemnifying Party's expense has been authorized in
writing by the Indemnifying Party, (2) the Indemnifying Party has not in fact
employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action or (3) the named
parties to any such action include the Indemnifying Party on the one hand and,
on the other hand, the Indemnified Party, and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them (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 or proceeding on such Indemnified
Party's behalf), in each of which cases the reasonable fees and expenses of
counsel (including local counsel) will be at the expense of the Indemnifying
Party, and all such fees and expenses will be reimbursed promptly as they are
incurred. In the event that any expenses so paid by the Indemnifying Party are
subsequently determined to not be required to be borne by the Indemnifying Party
hereunder, the party which received such payment shall promptly refund to the
Indemnifying Party the amount so paid by such Indemnifying Party.
Notwithstanding the foregoing, in connection with any one action or separate but
substantially
6
<PAGE> 9
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, the Indemnifying Party shall not be liable
for the fees and expenses of more than one counsel for all Sponsor Parties, more
than one counsel for each Underwriter Party and more than one counsel for all
Insurer Parties, as applicable.
(e) The Indemnified Parties shall cooperate with the Indemnifying
Parties in resolving any event which would give rise to an indemnity obligation
pursuant to Section 5 hereof in the most efficient manner.
(f) No settlement of any such claim or action shall be entered into
without the consent of each Indemnified Party who is subject to such claim or
action, on the one hand, and each Indemnifying Party who is subject to such
claim or action, on the other hand; provided, however, that the consent of such
Indemnified Party shall not be required if such settlement fully discharges,
with prejudice against the plaintiff, the claim or action against such
Indemnified Party.
(g) Any failure by an Indemnified Party to comply with the provisions
of this Section shall relieve the Indemnifying Party of liability only if such
failure is materially prejudicial to any legal pleadings, grounds, defenses or
remedies in respect thereof or the Indemnifying Party's financial liability
hereunder, and then only to the extent of such prejudice.
Section 7. CONTRIBUTION. (a) To provide for just and equitable
contribution if the indemnification provided by the Certificate Insurer is
determined to be unavailable for any Underwriter Party or Sponsor Party (other
than pursuant to Section 5 or 6 of this Agreement), the Certificate Insurer
shall contribute to the aggregate costs of liabilities arising from any breach
of a representation or warranty set forth in this Agreement on the basis of the
relative fault of all Underwriter Parties, all Sponsor Parties and all Insurer
Parties, respectively.
(b) To provide for just and equitable contribution if the
indemnification provided by the Sponsor is determined to be unavailable for any
Insurer Party (other than pursuant to Section 5 or 6 of this Agreement), the
Sponsor shall contribute to the aggregate costs of liabilities arising from any
breach of a representation or warranty set forth in this Agreement on the basis
of the relative fault of all Underwriter Parties, all Sponsor Parties and all
Insurer Parties.
(c) To provide for just and equitable contribution if the
indemnification provided by each Underwriter is determined to be unavailable for
any Insurer Party (other than pursuant to Section 5 or 6 of this Agreement),
such Underwriter shall contribute to the aggregate costs of liabilities arising
from any breach of a representation or warranty set forth in this Agreement on
the basis of the relative fault of all Underwriter Parties, all Sponsor Parties
and all Insurer Parties. In no case shall such Underwriter be responsible for
any amount in excess of the Underwriting discount applicable to the Certificates
purchased by such Underwriter pursuant to the Underwriting Agreement.
(d) The relative fault of each Indemnifying Party, on the one hand, and
of each Indemnified Party, on the other hand, 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 in Section 2, 3 or 4 of this Agreement
relates to information supplied by, or action within the control
7
<PAGE> 10
of, the Indemnifying Party or the Indemnified Party and the Parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such breach.
(e) The Parties agree that the Certificate Insurer shall be solely
responsible for the Insurer Information and for the Insurer Financial
Statements, that such Underwriter shall be solely responsible for the
Underwriter Information provided by each Underwriter in writing for use in the
Prospectus Supplement and that the Sponsor shall be responsible for all other
information in the Registration Statement and the Prospectus Supplement.
(f) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(g) The indemnity and contribution agreements contained in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter Party, any Sponsor
Party or any Insurer Party, (ii) the issuance of any Offered Certificates or the
Policy or (iii) any termination of this Agreement.
(h) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to contribution
promptly upon establishment by the party entitled to contribution to the
contributor of the Losses incurred.
Section 8. NOTICES. All notices and other communications provided for
under this Agreement shall be addressed to the address set forth below as to
each party or at such other address as shall be designated by a party in a
written notice to the other party.
If to the Certificate Insurer:
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
Attention: Insured Portfolio Management--Structured
Finance (IPM-SF)
If to the Sponsor:
Advanta Mortgage Conduit Services, Inc.
10790 Rancho Bernardo Road
San Diego, CA 92127
Attention: General Counsel
If to the Underwriters:
Salomon Smith Barney
390 Greenwich Street
New York, NY 10013
Lehman Brothers
8
<PAGE> 11
200 Vesey Street, 12th Floor
3 World Trade Center
New York, NY 10285
Prudential Securities Incorporated
One New York Plaza
New York, NY 10292-2015
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Attention: General Counsel
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Section 9. GOVERNING LAW, ETC. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS CONFLICTS OF LAWS PROVISIONS. This Agreement may not be assigned by any
party without the express written consent of each other party. Amendments of
this Agreement shall be in writing signed by each party. This Agreement shall
not be effective until executed by each of the Certificate Insurer, the Sponsor
and the Underwriters.
Section 10. UNDERWRITING AGREEMENT; POOLING AND SERVICING AGREEMENTS.
This Agreement in no way limits or otherwise affects the indemnification
obligations of the Sponsor under (a) the Underwriting Agreement or (b) the
Pooling and Servicing Agreement. Similarly this Agreement in no way limits or
otherwise affects the indemnification obligations of the Underwriters under the
Underwriting Agreement.
Section 11. LIMITATIONS. Nothing in this Agreement shall be construed
as a representation or undertaking by the Certificate Insurer concerning
maintenance of the rating currently assigned to its claims-paying ability by
Moody's Investors Service, Inc. ("Moody's") and/or Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("S&P") or any other
rating agency (collectively, the "Rating Agencies").
Section 12. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall together constitute but one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
9
<PAGE> 12
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, all as of the date first above written.
MBIA INSURANCE CORPORATION,
as Certificate Insurer
By /s/ Lisa A. Wilson
--------------------------------
Assistant Secretary
ADVANTA MORTGAGE CONDUIT
SERVICES, INC., as Sponsor
By /s/ Michael Coco
--------------------------------
Title Vice President
-----------------------------
SALOMON SMITH BARNEY INC.,
as Underwriter
By /s/ Paul Humphrey
--------------------------------
Title
-----------------------------
LEHMAN BROTHERS INC.,
as Underwriter
By /s/ Samir Tabet
--------------------------------
Title Sr. Vice President
-----------------------------
MORGAN STANLEY & CO., INCORPORATED,
as Underwriter
By /s/ Valerie H. Kay
--------------------------------
Title
-----------------------------
<PAGE> 13
PRUDENTIAL SECURITIES INCORPORATED
as Underwriter
By /s/ John Herbert
--------------------------------
Title Vice President
-----------------------------
BEAR STEARNS & CO. INC.
By /s/ Thomas S. Dunstan
--------------------------------
Title Managing Director
-----------------------------
<PAGE> 14
TABLE OF CONTENTS
<TABLE>
<S> <C>
Section 1. Definitions.......................................................................................... 1
Section 2. Representations and Warranties of the Certificate Insurer............................................ 3
Section 3. Agreements, Representations and Warranties of the Underwriters....................................... 4
Section 4. Agreements, Representations and Warranties of the Sponsor............................................ 4
Section 5. Indemnification...................................................................................... 5
Section 6. Notice To Be Given................................................................................... 5
Section 7. Contribution......................................................................................... 7
Section 8. Notices.............................................................................................. 8
Section 9. Governing Law, Etc................................................................................... 9
Section 10. Underwriting Agreement; Pooling and Servicing Agreements............................................. 9
Section 11. Limitations.......................................................................................... 9
Section 12. Counterparts......................................................................................... 9
</TABLE>
<PAGE> 1
Exhibit 10.2
<PAGE> 2
March 9, 1999
Salomon Smith Barney, Inc.
As Representative of the Underwriters
named in Schedule I
390 Greenwich Street
New York, New York 10013
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Re: Underwriting Agreement dated February 24, 1999 (the
"Underwriting Agreement") between Advanta Mortgage
Conduit Services, Inc. ("Advanta") and Salomon Smith
Barney, Inc. as representative of the Underwriters
(the "Representative") and the Indemnification
Agreement dated as of February 24, 1999 (the
"Indemnification Agreement") among MBIA Insurance
Corporation (the "Insurer"), Advanta and the
Underwriters
Ladies and Gentlemen:
Pursuant to the Underwriting Agreement and the Indemnification
Agreement (together, the "Designated Agreements"), Advanta has undertaken
certain financial obligations with respect to the indemnification of the
Underwriters and the Insurer with respect to the Registration Statement, the
Prospectus and the Prospectus Supplement described in the Designated Agreements.
Any financial obligations of Advanta 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 Advanta under the
Designated Agreements (including the payment of money damages for a breach of
any of Advanta'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 Indemnification Agreement, the Underwriters
and the Insurer have required the undersigned, Advanta Mortgage Holding Company
("AMHC"), the parent corporation of Advanta, to acknowledge its
joint-and-several liability with Advanta for the payment of the Joint and
Several Obligations under the Designated Agreements.
Now, therefore, the Underwriters, the Insurer and AMHC do hereby agree that:
<PAGE> 3
(i) AMHC hereby agrees to be absolutely and
unconditionally jointly and severally liable with
Advanta 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
Advanta to the Insurer for the payment of the Joint
and Several Obligations under the Indemnification
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 Insurer by
Advanta or another affiliate of AMHC.
Capitalized terms used herein and not defined herein shall
have their respective meanings set forth in the Agreement.
2
<PAGE> 4
Very truly yours,
ADVANTA MORTGAGE HOLDING COMPANY
By: /s/ Michael Coco
--------------------------
Name: Michael Coco
Title: Vice President
SALOMON SMITH BARNEY, INC.
[as Representative of the Underwriters]
By: /s/ Paul Humphrey
--------------------------
Name: Paul Humphrey
Title: Vice President
MBIA INSURANCE CORPORATION
By: /s/ Lisa A. Wilson
--------------------------
Name: Lisa A. Wilson
Title: Assistant Secretary
[AMHC Guaranty to the Underwriter]
3
<PAGE> 1
Exhibit 10.3
<PAGE> 2
March 9, 1999
Advanta Mortgage Loan Trust 1999-1 (the "Trust")
c/o Bankers Trust Company of California, N.A.
Three Park Plaza
16th Floor
Irvine, California 92714
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Re: Pooling and Servicing Agreement dated as of March 1,
1999 (the "Pooling and Servicing Agreement") among
Advanta Mortgage Conduit Services, Inc. as the
Sponsor (the "Sponsor"), Advanta Mortgage Corp. USA
("AMCUSA"), as Master Servicer, and Bankers Trust
Company of California, N.A. as Trustee (the
"Trustee") and the Master Loan Transfer Agreement
dated as of June 15, 1997 (the "Master Transfer
Agreement") among the Sponsor, the Trustee, Advanta
Conduit Receivables, Inc. as an Affiliate and the
Affiliated Originators named therein (the "Affiliated
Originators")
Ladies and Gentlemen:
Pursuant to the Pooling and Servicing Agreement and the Master
Transfer Agreement (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 defective 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, 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).
<PAGE> 3
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.
Capitalized terms used herein and not defined herein shall
have their respective meanings as set forth in the Agreement.
2
<PAGE> 4
Very truly yours,
ADVANTA MORTGAGE
HOLDING COMPANY
By: /s/ Michael Coco
-----------------------
Name: Michael Coco
Title: Vice President
Acknowledged and Agreed:
ADVANTA MORTGAGE LOAN
TRUST, 1999-1, by Bankers Trust
Company of California, N.A. as Trustee
By: /s/ Mark McNeill
-----------------------
Name: Mark McNeill
Title: Assistant Secretary
Acknowledged:
MBIA INSURANCE CORPORATION
By: /s/ Lisa A. Wilson
-----------------------
Name: Lisa A. Wilson
Title: Assistant Secretary
Dated: March 9, 1999
[Guaranty to the Trust]
