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TRUST AGREEMENT
between
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of April 1, 2000
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Table of Contents
Page
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ARTICLE I.
Definitions...................................................................................................... 1
Section 1.1 Capitalized Terms.......................................................................... 1
Section 1.2 Other Definitional Provisions.............................................................. 4
Section 1.3 Action by or Consent of Noteholders and Certificateholders................................. 4
ARTICLE II.
Organization..................................................................................................... 5
Section 2.1 Names...................................................................................... 5
Section 2.2 Office..................................................................................... 5
Section 2.3 Purposes and Powers........................................................................ 5
Section 2.4 Appointment of Owner Trustee............................................................... 6
Section 2.5 Initial Capital Contribution of Trust Estate............................................... 6
Section 2.6 Declaration of Trust....................................................................... 6
Section 2.7 Liability.................................................................................. 6
Section 2.8 Title to Trust Property.................................................................... 6
Section 2.9 Situs of Trust............................................................................. 7
Section 2.10 Representations and Warranties of the Sponsor............................................. 7
Section 2.11 Federal Income Tax Allocations............................................................ 8
Section 2.12 Covenants of the Sponsor.................................................................. 8
Section 2.13 Covenants of the Certificateholders....................................................... 9
Section 2.14 Investment Company........................................................................ 10
ARTICLE III.
Certificates and Transfer of Interests........................................................................... 10
Section 3.1 Initial Ownership.......................................................................... 10
Section 3.2 The Certificates........................................................................... 10
Section 3.3 Authentication of Certificates............................................................. 11
Section 3.4 Registration of Transfer and Exchange of Certificates...................................... 11
Section 3.5 Mutilated, Destroyed, Lost or Stolen Certificates.......................................... 11
Section 3.6 Persons Deemed Certificateholders.......................................................... 11
Section 3.7 Access to List of Certificateholders' Names and Addresses.................................. 12
Section 3.8 Maintenance of Office or Agency............................................................ 12
Section 3.9 ERISA...................................................................................... 12
Section 3.10 Restrictions on Transfer of Certificates.................................................. 12
Section 3.11 Acceptance of Obligations................................................................. 14
Section 3.12 Payments on Certificates.................................................................. 14
ARTICLE IV.
Voting Rights and Other Actions.................................................................................. 14
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Section 4.1 Prior Notice to Holders with Respect to Certain Matters.................................... 14
Section 4.2 Action by Certificateholders with Respect to Certain Matters............................... 15
Section 4.3 Action by Certificateholders with Respect to Bankruptcy.................................... 16
Section 4.4 Restrictions on Certificateholders' Power.................................................. 16
Section 4.5 Majority Control........................................................................... 17
Section 4.6 Rights of Insurer.......................................................................... 17
Section 4.7 Separateness............................................................................... 17
ARTICLE V.
Certain Duties................................................................................................... 17
Section 5.1 Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service and Others............................................ 17
Section 5.2 Signature on Returns; Tax Matters Partner.................................................. 18
ARTICLE VI.
Authority and Duties of Owner Trustee............................................................................ 18
Section 6.1 General Authority.......................................................................... 18
Section 6.2 General Duties............................................................................. 19
Section 6.3 Action upon Instruction.................................................................... 19
Section 6.4 No Duties Except as Specified in this Agreement or in Instructions......................... 20
Section 6.5 No Action Except under Specified Documents or Instructions................................. 20
Section 6.6 Restrictions............................................................................... 20
ARTICLE VII.
Concerning the Owner Trustee..................................................................................... 20
Section 7.1 Acceptance of Trust and Duties............................................................. 20
Section 7.2 Furnishing of Documents.................................................................... 22
Section 7.3 Representations and Warranties............................................................. 22
Section 7.4 Reliance; Advice of Counsel................................................................ 22
Section 7.5 Not Acting in Individual Capacity.......................................................... 23
Section 7.6 Owner Trustee Not Liable for Certificates or Mortgage Loans................................ 23
Section 7.7 Owner Trustee May Own Certificates and Notes............................................... 23
Section 7.8 Payments from Trust Estate................................................................. 23
Section 7.9 Doing Business in Other Jurisdictions...................................................... 24
ARTICLE VIII.
Compensation of Owner Trustee.................................................................................... 24
Section 8.1 Owner Trustee's Fees and Expenses.......................................................... 24
Section 8.2 Indemnification............................................................................ 24
Section 8.3 Payments to the Owner Trustee.............................................................. 25
Section 8.4 Non-recourse Obligations................................................................... 25
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ARTICLE IX.
Termination of Trust Agreement................................................................................... 25
Section 9.1 Termination of Trust Agreement............................................................. 25
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees........................................................... 26
Section 10.1 Eligibility Requirements for Owner Trustee................................................ 26
Section 10.2 Resignation or Removal of Owner Trustee................................................... 27
Section 10.3 Successor Owner Trustee................................................................... 28
Section 10.4 Merger or Consolidation of Owner Trustee.................................................. 28
Section 10.5 Appointment of Co-Owner Trustee or Separate Owner Trustee................................. 28
ARTICLE XI
Miscellaneous.................................................................................................... 30
Section 11.1 Supplements and Amendments................................................................ 30
Section 11.2 [Reserved.]............................................................................... 31
Section 11.3 Limitations on Rights of Others........................................................... 31
Section 11.4 Notices................................................................................... 31
Section 11.5 Severability.............................................................................. 31
Section 11.6 Separate Counterparts..................................................................... 32
Section 11.7 Assignments............................................................................... 32
Section 11.8 No Petition............................................................................... 32
Section 11.9 No Recourse............................................................................... 32
Section 11.10 Headings................................................................................. 32
Section 11.11 Governing Law............................................................................ 32
Section 11.12 Master Servicer.......................................................................... 32
Section 11.13 No Borrowing............................................................................. 33
Section 11.14 Nonpetition Covenant..................................................................... 33
EXHIBITS
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Exhibit A Form of Asset Backed Certificate
Exhibit B Form of Certificate of Trust
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TRUST AGREEMENT dated as of April 1, 2000, between ADVANTA CONDUIT
RECEIVABLES, INC., a Nevada corporation, as sponsor (the "Sponsor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as owner trustee (the
"Owner Trustee").
ARTICLE I.
Definitions
Section 1.1 Capitalized Terms. For the purposes of this Agreement, the
following terms shall have the meanings set forth below. All other capitalized
terms used herein but not defined shall have the meanings set forth in the
Indenture.
"Affiliate" shall mean with respect to any specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, or owns, directly or indirectly,
50% or more of, the Person specified.
"Agreement" shall mean this Trust Agreement, as the same may be amended
and supplemented from time to time.
"Benefit Plan Investor" shall have the meaning assigned to such term in
Section 3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et. seq. as the same may be amended
from time to time.
"Certificate" means a trust certificate evidencing an undivided
beneficial ownership interest of a Certificateholder in the Trust, substantially
in the form of Exhibit A hereto.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
register maintained and the registrar appointed pursuant to Section 3.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders, the Insurer and the
Sponsor, or the principal
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corporate trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholders, the Insurer and the
Sponsor).
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"Expenses" shall have the meaning assigned to such term in Section 8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered on the Certificate Register.
"Indemnification Agreement" shall mean the Indemnification Agreement,
dated as of April 27, 2000, among the Insurer and the Underwriters.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture, dated as of April 1, 2000,
between the Trust and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" shall mean, initially Bankers Trust Company of
California, N.A., in its capacity as indenture trustee, including its successors
in interest, until and unless a successor Person shall have become the Indenture
Trustee pursuant to the Indenture and thereafter "Indenture Trustee" shall mean
such successor Person.
"Instructing Party" shall have the meaning assigned to such term in
Section 6.3.
"Insurance Agreement" shall mean the Insurance and Indemnity Agreement
dated as of April 27, 2000, among the Insurer, the Sponsor, the Trust, the
Master Servicer and the Indenture Trustee.
"Insurer" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance corporation, or any successor thereto.
"Master Servicer" shall mean Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Notes" shall mean any of the Notes issued pursuant to the Indenture.
"Noteholder" shall mean a Person in whose name a Note is registered in
the Note Register.
"Operative Documents" shall mean, collectively, this Agreement, the
Certificate of Trust, the Sale and Servicing Agreement, the Indemnification
Agreement, the Insurance Agreement, the Subsequent Transfer Agreements, the
Indenture, the Purchase Agreement, the Guaranties, and the other documents and
certificates delivered in connection therewith.
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"Originators" shall mean, collectively, Advanta Bank Corp., a Utah
industrial loan corporation, Advanta National Bank, a national banking
association, and Advanta Finance Corp., a Nevada corporation, and their
respective successors and assigns.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, its successors in interest and any successor Owner Trustee
hereunder.
"Policy" shall mean the certificate guaranty insurance policy (No.
AB0358BE) with respect to the Notes, dated April 27, 2000, issued by the Insurer
to the Indenture Trustee for the benefit of the Noteholders.
"Record Date" shall mean with respect to any Payment Date, (i) in the
case of the Certificates, the close of business on the last Business Day of the
month immediately preceding such Payment Date and (ii) in the case of the Notes,
so long as the Notes are Book Entry Notes, the Business Day immediately
preceding such Payment Date, and, so long as the Notes are Definitive Notes, the
last Business Day of the calendar month preceding the calendar month in which
such Payment Date occurs.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement among the Trust, the Sponsor, the Master Servicer and the Indenture
Trustee, dated as of April 1, 2000, as the same may be amended and supplemented
from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Security Majority" means, at any time, Noteholders holding Notes
evidencing a majority of the Note Balance so long as any Notes are outstanding
and Holders of a majority by principal amount of the Certificates if no Notes
are then Outstanding.
"Shadow Rating" shall mean, with respect to a Rating Agency, at any
time, the rating assigned to the Notes by such Rating Agency based on the
characteristics of the Mortgage Loans and the transaction structure, in the
absence of the Policy.
"Sponsor" shall mean Advanta Conduit Receivables, Inc., a Nevada
corporation, in its capacity as Sponsor hereunder.
"Subsequent Transfer Agreement" shall mean each Subsequent Transfer
Agreement executed by the Owner Trustee and the Sponsor substantially in the
form of Exhibit H to the Sale and Servicing Agreement, by which Subsequent
Mortgage Loans are transferred and assigned to the Trust.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary
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regulations shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Estate" shall mean all right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to Article II of
the Sale and Servicing Agreement, all funds on deposit from time to time in the
Accounts (excluding any investment earnings on the Principal and Interest
Account, Note Account and the Capitalized Interest Account) and all other
property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement.
Section 1.2 Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in the
Sale and Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
Section 1.3 Action by or Consent of Noteholders and Certificateholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders or Certificateholders, such provision shall be
deemed to refer to the Certificateholder or Noteholder, as the case may be, of
record as of the Record Date immediately preceding the date on which such action
is to be taken, or consent given, by Noteholders or Certificateholders. Solely
for the purposes of any action to be taken, or
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consented to, by Noteholders or Certificateholders, any Note or Certificate
registered in the name of the Sponsor or any Affiliate thereof shall be deemed
not to be outstanding; provided, however that, solely for the purpose of
determining whether the Indenture Trustee is entitled to rely upon any such
action or consent, only Notes or Certificates which the Indenture Trustee or the
Owner Trustee, respectively, knows to be so owned shall be so disregarded.
ARTICLE II.
Organization
Section 2.1 Names. There is hereby formed a trust to be known as
"Advanta Revolving Home Equity Loan Trust 2000-A," in which name the Owner
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and xxx and be sued.
Section 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Indenture Trustee for the
Noteholders, the Certificateholders, the Insurer and the Sponsor.
Section 2.3 Purposes and Powers. The purpose of the Trust is, and the
Trust shall have the power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to pay the
organizational, startup and transactional expenses of the Trust and to pay the
balance to the Sponsor pursuant to the Sale and Servicing Agreement;
(iii) to acquire, hold, dispose of and release the Trust Estate
in accordance with the Operative Documents, and to Grant the Trust Estate to the
Indenture Trustee for the benefit of the Noteholders and the Insurer and to
hold, manage and distribute to the Certificateholders pursuant to the terms of
this Agreement, any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Operative Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
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(vi) subject to compliance with the Operative Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the
Operative Documents.
Section 2.4 Appointment of Owner Trustee. The Sponsor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein and in the Business
Trust Statute.
Section 2.5 Initial Capital Contribution of Trust Estate. The Sponsor
hereby assigns, transfers, conveys and sets over to the Owner Trustee, as of the
date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt in
trust from the Sponsor, as of the date hereof, of the foregoing contribution,
which shall constitute the initial Trust Estate and shall be deposited in a
segregated trust account established and maintained by the Owner Trustee for the
benefit of the Certificateholders. On or prior to the Closing Date, the Owner
Trustee will also, upon receipt thereof, acknowledge on behalf of the Trust,
receipt of the Mortgage Loans pursuant to the Sale and Servicing Agreement. The
Sponsor shall pay organizational expenses of the Trust as they may arise.
Section 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Operative Documents. It is the intention
of the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income tax purposes, the Trust shall be treated as a branch;
provided, however, that in the event Certificates are owned by more than one
Certificateholder, it is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall then be treated as a
partnership and that, unless otherwise required by appropriate tax authorities,
only after such time the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Trust as a partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and to the extent not inconsistent herewith, in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.
Section 2.7 Liability. No Holder shall have any personal liability for
any liability or obligation of the Trust.
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Section 2.8 Title to Trust Property. (a) Legal title to all of the
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
(b) The Holders shall not have legal title to any specific part of the
Trust Estate. The Holders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest in the Trust only in
accordance with Article IX. No transfer, by operation of law or otherwise, by
any Certificateholder of its ownership interest in the Trust shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any specific part of the
Trust Estate.
Section 2.9 Situs of Trust. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. Payments will be received by the Trust only in Delaware or New York
and payments will be made by the Trust only from Delaware or New York. The Trust
shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee, the
Master Servicer or any agent of the Trust from having employees within or
without the State of Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
Section 2.10 Representations and Warranties of the Sponsor. The Sponsor
makes the following representations and warranties on which the Owner Trustee
relies in accepting the Trust Estate in trust and issuing the Certificates and
upon which the Insurer relies in issuing the Policy:
(i) The Sponsor is duly organized and validly existing as a
Nevada corporation with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted and is proposed to be conducted pursuant to this Agreement
and the other Operative Documents;
(ii) The Sponsor is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the other Operative Documents requires such qualification;
(iii) The Sponsor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms. The Sponsor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Sponsor has duly authorized such sale
and assignment and deposit to the Trust by all necessary corporate action. The
execution, delivery and performance of this Agreement has been duly authorized
by the Sponsor by all necessary corporate action. The Sponsor has duly executed
this Agreement and this Agreement constitutes a legal, valid and binding
obligation of the Sponsor enforceable against the Sponsor, in accordance with
its terms, except as
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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).
(iv) To the best knowledge of the Sponsor, no consent, license,
approval or authorization or registration or declaration with, any Person or
with any governmental authority, bureau or agency is required in connection with
the execution, delivery or performance by the Sponsor of this Agreement and the
other Operative Documents, except for such as have been obtained, effected or
made;
(v) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not (A) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Sponsor, or any material indenture, agreement or
other instrument to which the Sponsor is a party or by which it is bound, (B)
result in the creation or imposition of any lien upon any of the Sponsor's
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Operative Documents), or (C) violate any
law or, to the best of the Sponsor's knowledge, any order, rule or regulation
applicable to the Sponsor of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Sponsor or its properties; and
(vi) There are no proceedings or investigations pending or, to
the Sponsor's knowledge, threatened against the Sponsor before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Sponsor or its properties (A)
asserting the invalidity of this Agreement or any of the other Operative
Documents, (B) seeking to prevent the issuance of the Certificates or the Notes
or the consummation of any of the transactions contemplated by this Agreement or
any of the other Operative Documents, (C) seeking any determination or ruling
that might materially and adversely affect the Sponsor's performance of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Operative Documents, or (D) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the Notes or the
Certificates.
Section 2.11 Federal Income Tax Allocations. In the event that the
Trust is treated as a partnership for Federal income tax purposes, net income of
the Trust for any month as determined for Federal income tax purposes (and each
item of income, gain, loss, credit and deduction entering into the computation
thereof) shall be allocated to the extent of available net income, among the
Certificateholders as of the first Record Date following the end of such month,
in proportion to their ownership percentage of the outstanding principal amount
of the Certificates on such Record Date.
Net losses of the Trust, if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated among the
Certificateholders as of the first Record Date following the end of such month,
in proportion to their ownership percentage of the principal amount of the
Certificates outstanding on such Record Date until the principal balance of the
Certificates is reduced to zero. The Sponsor, as agent on
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behalf of the Originators, is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Certificateholders, or as otherwise required by the Code.
Section 2.12 Covenants of the Sponsor. The Sponsor agrees and covenants
for the benefit of each Certificateholder, the Insurer and the Owner Trustee,
during the term of this Agreement, and to the fullest extent permitted by
applicable law, that:
(a) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its certificate of
incorporation and the Operative Documents;
(b) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Operative Document
to which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, the Sponsor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
Section 2.13 Covenants of the Certificateholders. Each
Certificateholder agrees:
(a) to be bound by the terms and conditions of the Certificates and of
this Agreement, including any supplements or amendments hereto and to perform
the obligations of a Certificateholder as set forth therein or herein, in all
respects as if it were a signatory hereto. This undertaking is made for the
benefit of the Trust, the Owner Trustee, the Insurer and all other
Certificateholders present and future;
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(b) to appoint, and hereby appoints, the Sponsor as such
Certificateholder's agent and attorney-in-fact to sign all federal, state and
local income or franchise tax returns and any federal income tax information
return filed on behalf of the Trust, if any, and agrees that, if requested by
the Trust, it will sign such tax returns and information returns in its capacity
as holder of an interest in the Trust. Each Certificateholder also hereby agrees
that in its tax returns it will not take any position inconsistent with those
taken in any tax returns that may be filed by the Trust;
(c) if such Certificateholder is other than an individual or entity
holding its Certificate through a broker who reports securities sales on Form
1099B, to notify the Owner Trustee of any transfer by it of a Certificate in a
taxable sale or exchange, within 30 days of the date of the transfer; and
(d) until the completion of the events specified in Section 9.1(e), not
to, for any reason, (i) institute proceedings for the Trust or the Sponsor to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust, or (ii) file a petition seeking or
consenting to reorganization or relief under any applicable federal or state law
relating to bankruptcy, with respect to the Sponsor or the Trust, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Sponsor or the Trust or a substantial part of the
Sponsor's or the Trust's property, or (iii) cause or permit the Sponsor or the
Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
Except as provided in this Section 2.13, and notwithstanding any other
provision to the contrary in this Agreement, no Certificateholder shall be
deemed to have adopted, be bound by, or succeed in any way to any representation
by, or duty of indemnification by or any other duty of, the Sponsor, including
those contained in Sections 2.10, 2.11, 2.12, and 8.2 or elsewhere herein.
Section 2.14 Investment Company. Neither the Sponsor nor any Holder
shall take any action that would cause the Trust to become an "investment
company" required to register under the Investment Company Act of 1940, as
amended.
ARTICLE III.
Certificates and Transfer of Interests
Section 3.1 Initial Ownership. Upon the formation of the Trust by the
contribution by the Sponsor pursuant to Section 2.5, the Owner Trustee,
contemporaneously therewith, having full power, authority, and authorization to
do so, has executed, authenticated, dated, issued, and delivered, in the name
and on behalf of the Trust, to the Originators, one or more Certificates
representing in the aggregate a 100% interest in the Trust, and has registered
such Certificates on the Certificate Register in the names of the Originators.
Initially, the Originators shall be the sole beneficiaries of the Trust. Such
Certificates are duly authorized, validly
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issued, and entitled to the benefits of this Agreement. For so long as the
Originators shall own such 100% interest in the Trust, the Originators shall be
the sole beneficial owners of the Trust. For so long as any Notes remain
outstanding, each Originator shall not transfer its ownership interest in the
Trust, in whole or in part, to any Person that is not an Affiliate of the such
Originator, without the Insurer's prior written consent. Each Originator shall
give the Insurer notice of any transfer of its ownership interest in the Trust
to an Affiliate of such Originator.
Section 3.2 The Certificates. The Certificates shall be issued in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures were affixed, authorized to sign on behalf of the Trust, shall
be validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates. A
transferee of a Certificate shall become a Certificateholder, and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder, upon due registration of such Certificate in such transferee's name
pursuant to Section 3.4. The Trust shall not issue any other Certificate, other
than (i) in connection with a transfer or exchange of a Certificate in
accordance with Sections 3.4 and 3.10 or (ii) in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Certificate, in accordance with Section
3.5.
Section 3.3 Authentication of Certificates. Concurrently with the
initial sale of the Mortgage Loans to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause each Certificate to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Sponsor in authorized denominations; provided, that, such
written order, if any, is signed by the chairman of the board, the president,
any vice president, the treasurer or any assistant treasurer of the Sponsor
without further corporate action by the Sponsor. No Certificate shall entitle
its holder to any benefit under this Agreement, or shall be valid for any
purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee, by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.4 Registration of Transfer and Exchange of Certificates. The
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Owner Trustee shall be the initial
Certificate Registrar.
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Section 3.5 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Owner Trustee and the Insurer such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee shall 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 denomination. In connection with the issuance of any new
Certificate under this Section, the Owner Trustee or the Certificate Registrar
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.6 Persons Deemed Certificateholders. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement and the rules
and regulations of the Certificate Registrar shall be deemed to be bound by the
terms of this Agreement. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee, the Certificate Registrar and the
Insurer, and any agents of the Owner Trustee, the Certificate Registrar and the
Insurer, may treat the Person in whose name any Certificate shall be registered
in the Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant to the Sale and Servicing Agreement and the
Indenture and for all other purposes whatsoever, and none of the Owner Trustee,
the Certificate Registrar or the Insurer or any agent of the Owner Trustee, the
Certificate Registrar or the Insurer shall be bound by any notice to the
contrary.
Section 3.7 Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall furnish or cause to be furnished to the Master Servicer,
the Sponsor and/or the Insurer, within fifteen (15) days after receipt by the
Owner Trustee of a request therefor from such Person in writing, a list of the
names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Holders of Certificates or one or more Holders of Certificates
evidencing an aggregate Percentage Interest of not less than 25% apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to hold
any of the Sponsor, the Master Servicer, the Owner Trustee or the Insurer or any
agent of any of them accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
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Section 3.8 Maintenance of Office or Agency. The Owner Trustee shall
maintain in Wilmington, Delaware an office or offices or agency or agencies
where Certificates may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Owner Trustee in respect of the
Certificates and the Operative Documents may be served. The Owner Trustee
initially designates its Corporate Trust Office for such purposes. The Owner
Trustee shall give prompt written notice to the Sponsor, the Certificateholders
and the Insurer of any change in the location of the Certificate Register or any
such office or agency.
Section 3.9 ERISA. The Certificates may not be acquired by or for the
account of (i) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that is
subject to the provisions of Title I of ERISA, (ii) a plan (as defined in
Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code, or
(iii) any person acting on behalf of or using the assets of a plan described in
(i) or (ii) of this Section 3.9 (each, a "Benefit Plan Investor"). By accepting
and holding its beneficial ownership interest in its Certificate, the Holder
thereof shall be deemed to have represented and warranted that it is not a
Benefit Plan Investor.
Section 3.10 Restrictions on Transfer of Certificates. (a) The
Certificates shall be assigned, transferred, exchanged, pledged, financed,
hypothecated or otherwise conveyed (collectively, for purposes of this Section
3.10 and any other Section referring to the Certificates, "transferred" or a
"transfer") only in accordance with this Section 3.10.
(b) No transfer of a Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and any applicable state securities laws or is
made in accordance with the Securities Act and such state securities laws.
Except for the initial issuance of the Certificates to the Originators, the
Owner Trustee shall require (i) the transferee to execute an investment letter
acceptable to and in form and substance satisfactory to the Owner Trustee and
the Insurer, certifying to the Owner Trustee and the Insurer the facts
surrounding such transfer, which investment letter shall not be an expense of
the Owner Trustee or the Insurer, or (ii) if the investment letter is not
delivered, a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Owner Trustee and the Insurer that such transfer may be made
pursuant to an exemption from the Securities Act, describing the applicable
exemption and the basis therefor, or is being made in accordance with the
Securities Act, which Opinion of Counsel shall not be an expense of the Owner
Trustee, the Insurer or the Sponsor. The Holder of a Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Sponsor, the
Owner Trustee and the Insurer 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.
(c) No Certificate or any interest therein shall be transferred except
upon satisfaction of the following conditions precedent: (i) the Person that
acquires such Certificate shall: (A) be organized and existing under the laws of
the United States of America or any state thereof or the District of Columbia;
(B) expressly assume, by an agreement supplemental hereto, executed and
delivered to the Owner Trustee, the performance of every covenant and obligation
of the Sponsor hereunder except for the covenants and obligations contained in
Sections 2.1, 2.2, 2.3, 2.4, 3.3 and 3.4 of the Sale and Servicing Agreement and
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in the Credit Line Agreements and the Mortgage Notes; (ii) the Person that
acquires such Certificate shall deliver to the Owner Trustee and the Insurer an
Officer's Certificate stating that such transfer and such supplemental agreement
comply with this Section 3.10 and that all conditions precedent set forth in
this Section 3.10 have been complied with and an Opinion of Counsel stating that
such transfer and such supplemental agreement comply with this Section 3.10 and
that all conditions precedent set forth in this Section 3.10 have been complied
with, and the Owner Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying; (iii) the Person that
acquires such Certificate shall deliver to the Owner Trustee and the Insurer a
letter from each Rating Agency confirming that its Shadow Rating will not be
reduced, after giving effect to the proposed transfer, solely as a result of the
transfer to such Person; (iv) the Person that acquires such Certificate shall
deliver to the Owner Trustee and the Insurer an Opinion of Counsel to the effect
that (A) such transfer will not adversely affect the treatment of the Notes
after such transfer as debt for federal and applicable state income tax
purposes, (B) such transfer will not result in the Trust being subject to tax at
the entity level for federal or applicable state tax purposes, (C) such transfer
will not have any material adverse impact on the federal or applicable state
income taxation of a Noteholder and (D) such transfer will not result in the
arrangement created by this Agreement or any "portion" of the Trust being
treated as a taxable mortgage pool as defined in Section 7701(i) of the Code;
(v) all filings and other actions necessary to continue the perfection of the
interest of the Trust in the Mortgage Loans and the other property conveyed
hereunder shall have been taken or made; and (vi) the prior written consent of
the Insurer has been obtained, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, the requirement set forth in subclause (c)(i)(A)
of this Section 3.10 shall not apply in the event the Owner Trustee and the
Insurer shall have received a letter from each Rating Agency confirming that its
Shadow Rating will not be reduced, after giving effect to a proposed transfer to
a Person that does not meet the requirement set forth in subclause (c)(i)(A),
solely as a result of the transfer to such Person. Notwithstanding the
foregoing, the requirements set forth in this paragraph (c) shall not apply to
the initial issuance of the Certificates to the Originators.
(d) Except for the initial issuance of the Certificates to the
Originators, no transfer of a Certificate shall be made unless the Owner Trustee
and the Insurer shall have received a representation letter from the transferee
of such Certificate, acceptable to and in form and substance satisfactory to
the Owner Trustee and the Insurer, to the effect that such transferee is not a
Benefit Plan Investor, which representation letter shall not be an expense of
the Owner Trustee.
(e) No transfer or pledge of the Certificates shall result in more than
ninety-eight (98) other holders of Certificates.
Section 3.11 Acceptance of Obligations. The Sponsor agrees to be bound
by and to perform all the duties of the Sponsor set forth in this Agreement.
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Section 3.12 Payments on Certificates. The Holders of the Certificates
will be entitled to distributions on each Payment Date, as provided in the
Indenture.
ARTICLE IV.
Voting Rights and Other Actions
Section 4.1 Prior Notice to Holders with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action
unless at least thirty (30) days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders and the Insurer in writing of
the proposed action and (i) the Insurer shall have consented in writing thereto
and (ii) the Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that the
Certificateholders have withheld consent or, with the written consent of the
Insurer, provided alternative direction:
(a) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute or unless such amendment would not materially and adversely affect the
interests of the Holders);
(b) the amendment of any Operative Document;
(c) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or, pursuant to Agreement, of a
successor Certificate Registrar or the consent by the Trust or the Owner Trustee
to the assignment by the Note Registrar, Paying Agent, Indenture Trustee or
Certificate Registrar of its obligations under the Indenture or this Agreement,
as applicable;
(d) the consent to the declaration or waiver of any default under any
Operative Document;
(e) the consent to the assignment by the Indenture Trustee or Master
Servicer of their respective obligations under any Operative Document;
(f) the performance of any act that conflicts with any other Operative
Document;
(g) the performance of any act which would make it impossible to carry
on the ordinary business of the Trust as described in Section 2.3 hereof;
(h) the confession of a judgment against the Trust;
(i) the possession of Trust assets or assignment of the Trust's
interest in any property, for any purpose other than a purpose enumerated in
Section 2.3;
(j) a loan by the Trust to any Person; or
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(k) any change in the Trust's purposes and powers enumerated in Section
2.3.
The Owner Trustee shall notify the Certificateholders and the Insurer in writing
of any appointment of a successor Note Registrar or Certificate Registrar within
five (5) Business Days thereof.
In addition, the Owner Trustee shall not: (i) cause the Trust to merge
or consolidate with or into any other entity, or convey or transfer all or
substantially all of the Trust's assets to any other entity; (ii) cause the
Trust to incur, assume or guaranty any indebtedness other than as set forth in
this Trust Agreement; or (iii) except as provided in Article IX hereof,
dissolve, terminate or liquidate the Trust in whole or in part.
Section 4.2 Action by Certificateholders with Respect to Certain
Matters. (a) The Owner Trustee shall not have the power, except upon the written
direction of the Insurer or in the event that an Insurer Default shall have
occurred and is continuing, instruction of the Security Majority in accordance
with the Operative Documents, to (i) remove the Master Servicer under the Sale
and Servicing Agreement, (ii) except as expressly provided in the Operative
Documents, sell the Mortgage Loans after the termination of the Indenture, (iii)
institute proceedings to have the Trust declared or adjudicated to be bankrupt
or insolvent, (iv) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (v) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (vi) consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or any similar
official) of the Trust or a substantial portion of the property of the Trust,
(vii) make any assignment for the benefit of the Trust's creditors, (viii) cause
the Trust to admit in writing its inability to pay its debts generally as they
become due, (ix) take any action or cause the Trust to take any action in
furtherance of any of the foregoing clauses (iii) through (viii) (any such
action, a "Bankruptcy Action"). So long as the Indenture and the Insurance
Agreement remain in effect, no Certificateholder shall have the power to take,
and shall not take, any Bankruptcy Action with respect to the Trust or direct
the Owner Trustee to take any Bankruptcy Action with respect to the Trust. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Insurer or the Security Majority, as the
case may be, and the furnishing of indemnification satisfactory to the Owner
Trustee.
(b) Upon the written request of any Certificateholder (a "Proposer"),
the Owner Trustee shall distribute promptly to all Certificateholders any
request for action or consent of Certificateholders submitted by such Proposer.
The Owner Trustee shall provide a reasonable method for collecting responses to
such request and shall tabulate and report the results thereof to the
Certificateholders and the Sponsor. The Owner Trustee shall have no
responsibility or duty to determine if any such proposed action or consent is
permitted under the terms of this Agreement or applicable law.
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Section 4.3 Action by Certificateholders with Respect to Bankruptcy.
Until one year and one day following the day on which the Notes have been paid
in full, the Owner Trustee shall not have the power to, and shall not, commence
any proceeding or other actions contemplated by Section 2.12(b) relating to the
Trust without the prior written consent of the Insurer (unless an Insurer
Default shall have occurred and is continuing) or the Security Majority upon an
Insurer Default. Until one year and one day following the day on which the Notes
have been paid in full, all amounts due to the Insurer under the Insurance
Agreement have been paid in full, the Policy has been terminated and the
Indenture Trustee has surrendered the Policy to the Insurer, the Owner Trustee
shall not have the power to, and shall not, commence any proceeding or other
actions contemplated by Section 2.12(b) relating to the Trust without the prior
written consent of all of the Certificateholders and the delivery to the Owner
Trustee by each Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
Section 4.4 Restrictions on Certificateholders' Power. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the other
Operative Documents or would be contrary to Section 2.3 or otherwise contrary to
law and the Owner Trustee shall not be obligated to follow any such direction,
if given.
(b) No Certificateholder (other than an Originator) shall have any
right by virtue or by availing itself of any provisions of this Agreement to
institute any suit, action, or proceeding in equity or at law upon or under or
with respect to this Agreement or any other Operative Document, unless (i) the
Certificateholders are the Instructing Party pursuant to Section 6.3 and (ii) a
Certificateholder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as provided in this Agreement
and Holders of Certificates evidencing an aggregate Percentage Interest of not
less than 25% shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred by the Owner Trustee in connection therewith, and the Owner Trustee,
for 30 days after its receipt of such notice, request, and offer of indemnity,
shall have failed or refused to institute any such action, suit, or proceeding,
and during such 30-day period no request or waiver inconsistent with such
written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3, it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
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Section 4.5 Majority Control. No Certificateholder shall have any right
to vote or in any manner otherwise control the operation and management of the
Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Certificates evidencing an
aggregate Percentage Interest in excess of 50%. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of Certificates evidencing an
aggregate Percentage Interest in excess of 50% at the time of the delivery of
such notice.
Section 4.6 Rights of Insurer. Notwithstanding anything to the contrary
in the Operative Documents, without the prior written consent of the Insurer (or
if an Insurer Default shall have occurred and is continuing, the Security
Majority), the Owner Trustee shall not (i) remove the Master Servicer, (ii)
initiate any claim, suit or proceeding by the Trust or compromise any claim,
suit or proceeding brought by or against the Trust, other than with respect to
the enforcement of any Mortgage Loan or any rights of the Trust thereunder,
(iii) authorize the merger or consolidation of the Trust with or into any other
business trust or other entity, (iv) amend the Certificate of Trust or (v) amend
this Agreement in accordance with Section 11.1 of this Agreement.
Section 4.7 Separateness. The Trust shall (i) not commingle its assets
with those of any other entity; (ii) maintain its financial and accounting books
and records separate from those of any other entity; (iii) maintain appropriate
minutes or other records of all appropriate actions and maintain books and
records separate from any other entity; (iv) conduct its own business in its own
name; (v) except as expressly set forth herein, pay its indebtedness, operating
expenses and liabilities from its own funds; (vi) enter into transactions with
affiliates only on terms that are commercially reasonable and on the same terms
as would be available in an arm's length transaction; (vii) not pay the
indebtedness, operating expenses and liabilities of any other entity; (viii) not
hold out its credit as being available to satisfy the obligation of any other
entity; (ix) not make loans to any other entity or buy or hold evidence of
indebtedness issued by any other entity (except for cash and investment-grade
securities); (x) use separate stationery, invoices, and checks bearing its own
name; (xi) allocate fairly and reasonably any overhead expenses that are shared
with an affiliate, including paying for office space and services performed by
any employee of any affiliate; (xii) not identify itself as a division of any
other entity; (xiii) hold itself out as a separate identity; and (xiv) maintain
adequate capital in light of its contemplated business operation.
ARTICLE V.
Certain Duties
Section 5.1 Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
6.1(a) and 6.1(c) of the Sale and Servicing Agreement, the Sponsor shall (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis using the accrual method of accounting, including, without limitation, the
allocations of net income under Section 2.11 hereof, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by the
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Code and applicable Treasury Regulations, such information as may be required
(including Schedule K1, if applicable) to enable each Certificateholder to
prepare its Federal and state income tax returns, (c) file or cause to be filed,
if necessary, such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee or the Master
Servicer, as the case may be, to make such elections as may from time to time be
required or appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
branch, or if applicable, as a partnership, for Federal income tax purposes and
(d) collect or cause to be collected any withholding tax as described in and in
accordance with Section 6.1(a) of the Sale and Servicing Agreement with respect
to income or distributions to Certificateholders and the appropriate forms
relating thereto. The Owner Trustee or the Master Servicer, as the case may be,
shall make all elections pursuant to this Section as directed in writing by the
Sponsor. The Owner Trustee shall sign all tax information returns presented to
it in final execution form, if any, filed pursuant to this Section 5.1 and any
other returns as may be required by law, and in doing so shall rely entirely
upon, and shall have no liability for information provided by, or calculations
provided by, the Sponsor or the Master Servicer. The Owner Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Mortgage Loans. The Owner Trustee
shall not make the election provided under Section 754 of the Code.
Section 5.2 Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.1 and in the event that the Trust is
characterized as a partnership, the Owner Trustee shall sign on behalf of the
Trust the tax returns of the Trust presented to it in final execution form,
unless applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the Sponsor, as agent, on behalf of
the Certificateholders.
(b) In the event that the Trust is characterized as a partnership, the
Sponsor shall be the "tax matters partner" of the Trust pursuant to the Code.
ARTICLE VI.
Authority and Duties of Owner Trustee
Section 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Operative Documents to which the Trust is
named as a party and each certificate or other document attached as an exhibit
to or contemplated by the Operative Documents to which the Trust is named as a
party and any amendment thereto, in each case, in such form as the Sponsor shall
approve as evidenced conclusively by the Owner Trustee's execution thereof, and
on behalf of the Trust, to direct the Indenture Trustee to authenticate and
deliver Notes in the aggregate principal amount of $400,000,000. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Operative Documents. The
Owner Trustee is further authorized from time to time to take such action as the
Instructing Party recommends with respect to the Operative Documents so long as
such activities are consistent with the terms of the Operative Documents.
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Section 6.2 General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the Trust in the interest of the
Holders, subject to the Operative Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and responsibilities hereunder and
under the other Operative Documents to the extent the Master Servicer has agreed
in the Sale and Servicing Agreement to perform any act or to discharge any duty
of the Trust or the Owner Trustee hereunder or under any Operative Document, and
the Owner Trustee shall not be liable for the default or failure of the Master
Servicer to carry out its obligations under the Sale and Servicing Agreement.
Section 6.3 Action upon Instruction. (a) Subject to Article IV, the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Certificateholders (if an Insurer Default shall have occurred
and be continuing) (the "Instructing Party") shall have the exclusive right to
direct the actions of the Owner Trustee in the management of the Trust, so long
as such instructions are not inconsistent with the express terms set forth
herein or in any other Operative Document. The Instructing Party shall not
instruct the Owner Trustee in a manner inconsistent with this Agreement or the
other Operative Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Operative Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any other Operative Document or is otherwise contrary
to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
other Operative Document, the Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten (10) days of such notice (or
within such shorter period of time as reasonably may be specified in such notice
or may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this
Agreement or the other Operative Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any other Operative Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance
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with any such instruction received, the Owner Trustee shall not be liable, on
account of such action or inaction, to any Person. If the Owner Trustee shall
not have received appropriate instruction within ten (10) days of such notice
(or within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under
no duty to, take or refrain from taking such action, not inconsistent with this
Agreement or the other Operative Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
Section 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3, and no implied duties or obligations
shall be read into this Agreement or any other Operative Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or make any filing with the Commission for
the Trust or to record this Agreement or any other Operative Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any property
constituting part of the Trust Estate that result from actions by, or claims
against, the Owner Trustee (solely in its individual capacity) and that are not
related to the ownership or the administration of the Trust Estate.
Section 6.5 No Action Except under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any property constituting part of the Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Operative
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.3.
Section 6.6 Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation or a publicly traded partnership for
Federal income tax purposes. The Certificateholders shall not direct the Owner
Trustee to take any action that would violate the provisions of this Section.
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ARTICLE VII.
Concerning the Owner Trustee
Section 7.1 Acceptance of Trust and Duties. The Owner Trustee accepts
the trust hereby created and agrees to perform its duties hereunder with respect
to such trust but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all monies actually received by it constituting part of the
Trust Estate upon the terms of the Operative Documents and this Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Operative Document under any circumstances, except (i) for its own willful
misconduct, bad faith or gross negligence, (ii) in the case of the inaccuracy of
any representation or warranty contained in Section 7.3 expressly made by the
Owner Trustee in its individual capacity, (iii) for liabilities arising from the
failure of the Owner Trustee to perform obligations expressly undertaken by it
in the last sentence of Section 6.4 hereof, (iv) for any investments issued by
the Owner Trustee or any branch or affiliate thereof in its commercial capacity
or (v) for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Owner Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment,
not constituting gross negligence, made by an Authorized Officer of the Owner
Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it if such action or omission is in accordance
with the instructions of the Instructing Party, the Sponsor, the Master Servicer
or any Certificateholder pursuant to the terms hereof;
(c) no provision of this Agreement or any other Operative Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Operative Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Operative Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Sponsor or for the form, character, genuineness, sufficiency, value or validity
of any of the Trust Estate or for or in respect of the validity or sufficiency
of any of the other Operative Documents, other than the certificate of
authentication on the Certificates, and the Owner Trustee shall in no event
assume or incur any liability, duty or obligation to the Sponsor, the Insurer,
the Indenture Trustee, or any Certificateholder, other than as expressly
provided for herein and in the other Operative Documents;
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(f) the Owner Trustee shall not be liable for the default or misconduct
of the Sponsor, the Insurer, the Indenture Trustee, or the Master Servicer under
any of the Operative Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations under this Agreement or the
other Operative Documents that are required to be performed by the Sponsor under
this Agreement, by the Indenture Trustee under the Indenture or the Master
Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Operative Document, at the request, order or direction of the
Instructing Party or any of the Certificateholders, unless such Instructing
Party on the Certificateholders have offered to the Owner Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any other Operative Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than its gross
negligence, bad faith or willful misconduct in the performance of any such act.
Section 7.2 Furnishing of Documents. The Owner Trustee shall furnish to
the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Operative Documents.
Section 7.3 Representations and Warranties. The Owner Trustee hereby
represents and warrants, in its individual capacity, to the Sponsor, the Holders
and the Insurer (which shall have relied on such representations and warranties
in issuing the Policy), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby nor compliance by
it with any of the terms or provisions hereof will contravene any federal or
Delaware state law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
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Section 7.4 Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Operative Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
(ii) may consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants or other
such persons and according to such opinion not contrary to this Agreement or any
Operative Document.
Section 7.5 Not Acting in Individual Capacity. Except as provided in
this Agreement, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any other Operative Document
shall look only to the Trust Estate for payment or satisfaction thereof.
Section 7.6 Owner Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Owner Trustee on the Certificates) shall
be taken as the statements of the Sponsor and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
other Operative Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes (other
than the signature of the Owner Trustee on the Notes), or of any Mortgage Loan
or related documents. The Owner Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability of
any Mortgage Loan, or the perfection and priority of any security interest
created by any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without limitation:
the existence, condition and ownership of any Mortgage Loan; the existence and
enforceability of any insurance thereon; the existence of, and information with
respect to, any Mortgage Loan on any computer or other record thereof; the
validity of the assignment of any Mortgage Loan to the Trust or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan; the
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compliance by the Sponsor, the Master Servicer or any other Person with any
warranty or representation made under any Operative Document or in any related
document or the accuracy of any such warranty or representation or any action of
the Indenture Trustee or the Master Servicer or any Sub-Servicer taken in the
name of the Owner Trustee.
Section 7.7 Owner Trustee May Own Certificates and Notes. Subject to
the provisions of Section 3.1 hereof, the Owner Trustee in its individual or any
other capacity may become the owner or pledgee of Certificates or Notes and may
deal with the Sponsor, the Indenture Trustee and the Master Servicer in banking
transactions with the same rights as it would have if it were not Owner Trustee.
Section 7.8 Payments from Trust Estate. All payments to be made by the
Owner Trustee under this Agreement or any of the other Operative Documents to
which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Trust Estate and only to the extent that the Owner
Trustee shall have received income or proceeds from the Trust Estate to make
such payments in accordance with the terms hereof. Wilmington Trust Company, or
any successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the other Operative Documents to
which the Trust or the Owner Trustee is a party.
Section 7.9 Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company or
any successor thereto, nor the Owner Trustee, shall be required to take any
action in any jurisdiction other than the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Wilmington Trust Company (or any successor
thereto); or (iii) subject Wilmington Trust Company (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VIII.
Compensation of Owner Trustee
Section 8.1 Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Sponsor and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Sponsor
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the
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Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder and under the Operative Documents.
Section 8.2 Indemnification. The Sponsor shall be liable as primary
obligor for, and the Master Servicer pursuant to the Sale and Servicing
Agreement shall be the secondary obligor for, and shall indemnify the Owner
Trustee (in its individual and trust capacities) and its officers, directors,
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may (in its trust or
individual capacities) at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Agreement, the other Operative Documents, the Trust Estate,
the administration of the Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Sponsor and the Master Servicer shall
not be liable for or required to indemnify the Owner Trustee from and against
any Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1. The indemnities contained in this Section and the
rights under Section 8.1 shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In the event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Sponsor which approval shall not be unreasonably withheld.
Section 8.3 Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Trust Estate immediately after such payment.
Section 8.4 Non-recourse Obligations. Notwithstanding anything in this
Agreement or any other Operative Document, the Owner Trustee agrees, in its
individual capacity and in its capacity as Owner Trustee for the Trust, that
with respect to all obligations of the Trust to the Owner Trustee, individually
or as Owner Trustee for the Trust, the Owner Trustee shall have recourse to the
Trust Estate only and the Owner Trustee shall not have recourse to the assets of
any Originator or any Certificateholder.
ARTICLE IX.
Termination of Trust Agreement
Section 9.1 Termination of Trust Agreement. (a) This Agreement and the
Trust shall terminate and be of no further force or effect upon the later of (i)
the maturity or other liquidation of the last Mortgage Loan (including the
redemption by the Master Servicer at its option of the Notes as described in
Section 10.1(b) of the Indenture) and the subsequent distribution of amounts in
respect of such Mortgage Loans or redemption, as the case may be, as provided in
the Operative Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to the
Insurer of all amounts payable or reimbursable to it pursuant to the Sale and
Servicing Agreement
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and the Insurance Agreement and (iii) the termination of the Indenture and the
Insurance Agreement; provided, however, that the rights to indemnification under
Section 8.2 and the rights under Section 8.1 shall survive the termination of
the Trust. The Master Servicer shall promptly notify the Owner Trustee and the
Insurer of any prospective termination pursuant to this Section 9.1. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this Agreement or the
Trust, or (y) entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Trust Estate or (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Sponsor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholders shall surrender their Certificates to the
Indenture Trustee for payment of the final distribution and cancellation, shall
be given by the Owner Trustee by letter to the Certificateholders mailed within
five (5) Business Days of receipt of notice of such redemption from the Master
Servicer given pursuant to Section 10.1 of the Indenture, stating (i) the
Payment Date upon or with respect to which final payment of the Certificates
shall be made upon presentation and surrender of the Certificates at the office
of the Indenture Trustee therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Payment Date
is not applicable, payments being made only upon presentation and surrender of
the Certificates at the office of the Indenture Trustee therein specified. The
Owner Trustee shall give such notice to the Certificate Registrar (if other than
the Owner Trustee) and the Indenture Trustee at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Indenture Trustee shall cause to be distributed to Certificateholders amounts
distributable on such Payment Date pursuant to Section 8.6(b)(xiii) of the
Indenture.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to applicable escheat
laws, by the Owner Trustee to the Sponsor and Holders shall look solely to the
Sponsor for payment.
(d) Any funds remaining in the Trust after funds for final distribution
have been distributed or set aside for distribution shall be distributed by the
Owner Trustee to the Sponsor.
(e) Notwithstanding any other provision to the contrary herein, the
Trust shall not dissolve or liquidate so long as any Notes are outstanding.
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(f) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X.
Successor Owner Trustees and Additional Owner Trustees
Section 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) organized, existing and
doing business under the laws of the United States of America or any State
thereof or the District of Columbia; (iii) authorized to exercise corporate
trust powers; (iv) having a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or State authorities; (v)
having (or having a parent which has) a rating of at least Baa3 by Moody's or
A-1 by Standard & Poor's or being otherwise acceptable to the Rating Agencies;
and (vi) acceptable to the Insurer in its sole discretion. If such corporation
shall publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
Section 10.2 Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Sponsor, the Insurer and the Master
Servicer. Upon receiving such notice of resignation, the Sponsor shall promptly
appoint a successor Owner Trustee, meeting the qualifications set forth in
Section 10.1 herein, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Sponsor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Insurer by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Sponsor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then a majority of the Certificateholders with the consent of the
Insurer (so long as no Insurer
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Default shall have occurred and is continuing) may remove the Owner Trustee. If
a majority of the Certificateholders shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Sponsor shall promptly
appoint a successor Owner Trustee acceptable to the Insurer meeting the
qualifications set forth in Section 10.1 herein, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee so removed, one copy to the Insurer and one copy to the successor Owner
Trustee, and the Sponsor shall pay all fees owed to the outgoing Owner Trustee,
if not previously paid by the Trust.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all reasonable fees and expenses
owed to the outgoing Owner Trustee. The Servicer shall provide written notice of
such resignation or removal of the Owner Trustee to the Rating Agencies and the
Insurer.
Notwithstanding any other provision of this Agreement, and in addition
to any other method of removal of the Owner Trustee contained herein, upon a
proposal made pursuant to Section 4.2(b) and the subsequent consent of Holders
of Certificates evidencing an aggregate Percentage Interest of no less than
66-2/3%, the Owner Trustee may be removed as Owner Trustee, subject to the
consent of the Insurer (so long as no Insurer Default shall have occurred and is
continuing), which consent is not to be unreasonably withheld. In the event the
Owner Trustee is removed pursuant to this paragraph, the provisions of this
Agreement, including Article X herein, shall apply as if the Owner Trustee had
resigned hereunder.
Section 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Sponsor, the Master Servicer, the Insurer and its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall, upon payment of its
reasonable fees and expenses, deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement and the
Sponsor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required to fully vest
and confirm in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Master Servicer shall mail notice of the succession to the
Certificateholders, the Indenture Trustee, the Insurer and the Noteholders. If
the Master Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Master
Servicer.
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The successor Owner Trustee shall file an amendment to the Certificate
of Trust with the Secretary of State reflecting the name and principal place of
business of such successor Owner Trustee in the State of Delaware.
Section 10.4 Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee 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 Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 10.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding. The Owner
Trustee shall mail notice of such merger or consolidation to the Rating Agencies
and the Insurer.
Section 10.5 Appointment of Co-Owner Trustee or Separate Owner 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 any Mortgaged Property may at the time be located, the
Master Servicer and the Owner Trustee, acting jointly, shall have the power, and
shall execute and deliver all instruments, to appoint one or more Persons
approved by the Owner Trustee and the Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Owner 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, the Owner Trustee, subject to the
approval of the Insurer (which approval shall not be unreasonably withheld),
shall have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 10.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 10.3,
except that notice to, and written consent of, the Insurer shall be required for
the appointment of a co-trustee.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner 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 Owner 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, the Owner 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 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 Owner
Trustee;
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(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement; and
(iii) the Master Servicer and the Owner Trustee, acting
jointly, may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Owner 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 Article. 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 Owner
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 Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Master Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
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
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI.
Miscellaneous
Section 11.1 Supplements and Amendments. (a) This Agreement may be
amended by the Sponsor and the Owner Trustee, with the prior written consent of
the Insurer and prior written notice to the Rating Agencies (so long as no
Insurer Default shall have occurred and is continuing) and without the consent
of any of the Noteholders (i) to cure any ambiguity or defect or (ii) to
correct, supplement or modify any provisions in this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel which
may be based upon a certificate of the Master Servicer, adversely affect in any
material respect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Insurer (so long as no Insurer Default shall have
occurred and is continuing) by the Sponsor and the Owner Trustee, with prior
written notice to the Rating Agencies, and, to the extent such amendment
materially and adversely affects the interests of the Noteholders, with the
consent of Noteholders holding Notes evidencing more than 50% of the Note
Balance and the consent of the Holders of Certificates
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evidencing an aggregate Percentage Interest greater than 50% (which consent of
any Holder of a Certificate or Note given pursuant to this Section or pursuant
to any other provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Certificate or Note and of any
Certificate or Note issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
Certificate or Note) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that, subject to the express rights of the Insurer under the
Operative Documents, no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Mortgage Loans or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (b) reduce the
aforesaid percentage of the Note Balance or the aggregate Percentage Interest,
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Holders of all the
outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Insurer, to each Certificateholder and the Indenture
Trustee.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Operative Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe. Promptly after
the execution of any amendment to the Certificate of Trust, the Owner Trustee
shall cause the filing of such amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise. The Owner Trustee shall furnish copies of any such
amendments to the Rating Agencies.
Section 11.2 [Reserved.]
Section 11.3 Limitations on Rights of Others. Except for Section 11.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Sponsor, the Certificateholders, the Master Servicer and, to the
extent expressly provided herein, the Insurer, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any
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other Person any legal or equitable right, remedy or claim in the Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
Section 11.4 Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be: (i) in writing and
personally delivered, delivered by overnight courier or mailed first class mail
or certified mail, in each case return receipt requested; (ii) deemed to have
been duly given upon receipt; and (iii) if to the Owner Trustee, addressed to
the Corporate Trust Office; if to the Sponsor, addressed to Advanta Conduit
Receivables, Inc., 00000 Xxxxxx Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000; if
to the Insurer, addressed to Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Department - MBS,
Telecopy No.:000-000-0000, Confirmation No.:212-668-0340; or, if to any party,
addressed to such other address as shall be designated by such party in a
written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 11.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.6 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11.7 Assignments. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. This Agreement shall also inure to the benefit of the Insurer
for so long as an Insurer Default shall not have occurred and be continuing.
Without limiting the generality of the foregoing, all covenants and agreements
in this Agreement which confer rights upon the Insurer shall be for the benefit
of and run directly to the Insurer, and the Insurer shall be entitled to rely on
and enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Operative Documents. The Insurer may disclaim
any of its rights and powers under this Agreement (but not its duties and
obligations under the Policy) upon delivery of a written notice to the Owner
Trustee.
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Section 11.8 No Petition. The Owner Trustee (in its individual capacity
and as Owner Trustee), by entering into this Agreement, each Certificateholder,
by accepting a Certificate, and the Indenture Trustee, the Originators and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not at any time institute against the Sponsor or the
Trust, or join in any institution against the Sponsor or the Trust of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or
similar law.
Section 11.9 No Recourse. Each Certificateholder, by accepting a
Certificate, acknowledges that such Certificateholder's Certificates represent
undivided beneficial interests in the Trust only and do not represent interests
in or obligations of the Master Servicer, the Sponsor, the Owner Trustee, the
Indenture Trustee, the Insurer or any Affiliate thereof and no recourse may be
had against such parties or their assets, except as may be expressly set forth
or contemplated in this Agreement, the Certificates or the other Operative
Documents.
Section 11.10 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 11.11 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.12 Master Servicer. The Master Servicer is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust or Owner Trustee to prepare, execute or deliver
pursuant to the Operative Documents. Upon written request, the Owner Trustee
shall execute and deliver to the Master Servicer a limited power of attorney
appointing the Master Servicer the Trust's agent and attorney-in-fact to
prepare, or cause to be prepared, execute and deliver all such documents,
reports, filings, instruments, certificates and opinions.
Section 11.13 No Borrowing. The Trust shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and (iii) any other Indebtedness
permitted by or arising under the Operative Documents, except that the Trust
shall not incur any Indebtedness that would cause it, or any portion thereof, to
be treated as a "taxable mortgage pool" under Section 7701(i) of the Code. The
proceeds of the Notes shall be used exclusively to fund the Trust's purchase of
the Mortgage Loans and the other assets specified in the Sale and Servicing
Agreement and to pay the Trust's organizational, transactional and start-up
expenses.
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Section 11.14 Nonpetition Covenant. (a) Until one year plus one day
shall have elapsed since the full discharge of all obligations under the
Indenture with respect to Noteholders in accordance with its terms, neither the
Sponsor nor any assignee of the Sponsor shall petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Trust under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Trust without the consent of the Owner Trustee.
(b) So long as Notes remain outstanding, no voluntary petition for the
purpose of commencing or sustaining a case against the Trust under any federal
or state bankruptcy, insolvency or similar law shall be filed without the
consent of the Owner Trustee.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized as of
the day and year first above written.
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
WILMINGTON TRUST COMPANY, as
Owner Trustee
By: /s/ Xxxxxx X. XxxXxxxxx
------------------------------------
Name: Xxxxxx X. XxxXxxxxx
Title: Vice President
41
EXHIBIT A
FORM OF
ASSET BACKED CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE EXTENT
DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (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 3.10 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE OWNER TRUSTEE AND THE
INSURER SHALL HAVE RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF SUCH
CERTIFICATE, ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE OWNER
TRUSTEE AND THE INSURER, TO THE EFFECT THAT SUCH TRANSFEREE IS NOT (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), (II) A PLAN (AS DEFINED IN
SECTION 4975(e) (1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, OR (III) A PERSON ACTING
ON BEHALF OF OR USING THE ASSETS OF A PLAN DESCRIBED IN (I) OR (II) ABOVE, WHICH
REPRESENTATION LETTER SHALL NOT BE AN EXPENSE OF THE OWNER TRUSTEE OR THE
INSURER.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS SUCH TRANSFER IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH THE SECURITIES ACT AND SUCH
STATE SECURITIES LAWS. EXCEPT FOR THE INITIAL ISSUANCE OF THIS CERTIFICATE TO
[________________________], THE OWNER TRUSTEE SHALL REQUIRE (I) THE TRANSFEREE
TO EXECUTE AN INVESTMENT LETTER ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE OWNER TRUSTEE AND THE INSURER CERTIFYING TO THE OWNER
TRUSTEE AND
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THE INSURER THE FACTS SURROUNDING SUCH TRANSFER, WHICH INVESTMENT LETTER SHALL
NOT BE AN EXPENSE OF THE OWNER TRUSTEE OR THE INSURER OR (II) IF THE INVESTMENT
LETTER IS NOT DELIVERED, A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM
AND SUBSTANCE SATISFACTORY TO THE OWNER TRUSTEE AND THE INSURER THAT SUCH
TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT,
DESCRIBING THE APPLICABLE EXEMPTION AND THE BASIS THEREFOR, OR IS BEING MADE
PURSUANT TO THE SECURITIES ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE OWNER TRUSTEE OR THE INSURER. THE HOLDER OF A CERTIFICATE DESIRING TO
EFFECT SUCH TRANSFER SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE SPONSOR, THE
OWNER TRUSTEE AND THE INSURER 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.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED EXCEPT UPON
SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE PERSON THAT ACQUIRES
THIS CERTIFICATE SHALL: (A) BE ORGANIZED AND EXISTING UNDER THE LAWS OF THE
UNITED STATES OF AMERICA OR ANY STATE THEREOF OR THE DISTRICT OF COLUMBIA; (B)
EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO, EXECUTED AND DELIVERED TO
THE OWNER TRUSTEE, THE PERFORMANCE OF EVERY COVENANT AND OBLIGATION OF THE
SPONSOR UNDER THE TRUST AGREEMENT, EXCEPT FOR THE COVENANTS AND OBLIGATIONS
CONTAINED IN SECTIONS 2.1, 2.2, 2.3, 2.4, 3.3 AND 3.4 OF THE SALE AND SERVICING
AGREEMENT AND UNDER THE CREDIT LINE AGREEMENTS AND THE MORTGAGE NOTES; (II) THE
PERSON THAT ACQUIRES THIS CERTIFICATE SHALL DELIVER TO THE OWNER TRUSTEE AND THE
INSURER AN OFFICER'S CERTIFICATE STATING THAT SUCH TRANSFER AND SUCH
SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 3.10 OF THE TRUST AGREEMENT AND THAT
ALL CONDITIONS PRECEDENT SET FORTH IN SECTION 3.10 OF THE TRUST AGREEMENT HAVE
BEEN COMPLIED WITH AND AN OPINION OF COUNSEL STATING THAT SUCH TRANSFER AND SUCH
SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 3.10 AND THAT ALL CONDITIONS
PRECEDENT SET FORTH IN SECTION 3.10 HAVE BEEN COMPLIED WITH, AND THE OWNER
TRUSTEE MAY CONCLUSIVELY RELY ON SUCH OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY
TO MAKE INQUIRIES WITH REGARD TO THE MATTERS SET FORTH THEREIN AND SHALL INCUR
NO LIABILITY IN SO RELYING; (III) THE PERSON THAT ACQUIRES THIS CERTIFICATE
SHALL DELIVER TO THE OWNER TRUSTEE AND THE INSURER A LETTER FROM EACH RATING
AGENCY CONFIRMING THAT ITS RATING OF THE NOTES, AFTER GIVING EFFECT TO SUCH
TRANSFER, WILL NOT BE REDUCED OR WITHDRAWN, AS SET FORTH IN THE TRUST AGREEMENT;
(IV) THE PERSON THAT ACQUIRES THIS CERTIFICATE SHALL DELIVER TO THE OWNER
TRUSTEE AND THE INSURER AN OPINION OF COUNSEL TO THE EFFECT THAT (A) SUCH
TRANSFER WILL NOT ADVERSELY AFFECT THE TREATMENT OF THE NOTES AFTER SUCH
TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE STATE INCOME TAX PURPOSES, (B) SUCH
TRANSFER WILL NOT RESULT IN THE TRUST BEING SUBJECT TO TAX AT THE ENTITY LEVEL
FOR FEDERAL OR APPLICABLE STATE TAX
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PURPOSES, (C) SUCH TRANSFER WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE
FEDERAL OR APPLICABLE STATE INCOME TAXATION OF A NOTEHOLDER AND (D) SUCH
TRANSFER WILL NOT RESULT IN THE ARRANGEMENT CREATED BY THE TRUST AGREEMENT OR
ANY "PORTION" OF THE TRUST, BEING TREATED AS A TAXABLE MORTGAGE POOL AS DEFINED
IN SECTION 7701(i) OF THE CODE; (V) ALL FILINGS AND OTHER ACTIONS NECESSARY TO
CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST IN THE MORTGAGE LOANS AND
THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT SHALL HAVE BEEN TAKEN OR
MADE.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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ADVANTA REVOLVING HOME EQUITY LOAN TRUST 2000-A
ASSET BACKED CERTIFICATE
Percentage Interest: [____]%
Cut-Off Date:
Close of business on March 31, 2000
First Payment Date: Issue Date: April 27, 2000
May 25, 2000
No. ____
[__________________________________]
Registered Holder
The Trust was created pursuant to a Trust Agreement dated as of April
1, 2000 (the "Trust Agreement"), between Advanta Conduit Receivables, Inc., as
sponsor (the "Sponsor"), and Wilmington Trust Company, as owner trustee (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as Advanta Revolving Home Equity Loan Trust 2000-A "Asset Backed Certificates."
The Certificates are issued under and are subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound. Under the Indenture dated as of April 1, 2000 (the "Indenture")
between the Trust and Bankers Trust Company of California, N.A., as indenture
trustee (the "Indenture Trustee"), the Trust issued the Advanta Revolving Home
Equity Loan Asset Backed Notes, Series 2000-A (the "Notes"). The property of the
Trust includes a pool of adjustable rate revolving home equity credit line loans
secured by first or second deeds of trust or mortgages on primarily one-to-four
family residential properties.
Under the Trust Agreement, there will be distributed on the 25th day of
each month or, if such 25th day is not a Business Day, the next Business Day
(the "Payment Date"), commencing on May 25, 2000, to the Person in whose name
this Certificate is registered at the close of business on the Business Day
preceding such Payment Date (the "Record Date") such Certificateholder's
Percentage Interest in the amount to be distributed to Certificateholders on
such Payment Date.
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The holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
It is the intent of the Sponsor, the Master Servicer and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Certificates are held by more than
one Holder, it is the intent of the Sponsor, the Master Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a partnership and the Certificateholders will be treated as partners
in that partnership. The Sponsor and any other Certificateholders, by acceptance
of a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust. Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust or the Sponsor, or join in any institution against the Trust or the
Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, the Trust Agreement or any of the other Operative
Documents.
Distributions on this Certificate will be made as provided in the Sale
and Servicing Agreement and the Indenture by the Indenture Trustee by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Owner Trustee of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency maintained for the purpose by the Owner Trustee in the Corporate Trust
Office.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the Holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
Date: April 27, 2000 ADVANTA REVOLVING HOME EQUITY LOAN TRUST 2000-A
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
By: _________________________________
Name:
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned
Trust Agreement.
WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee
By:_____________________________
Authenticating Agent
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(Reverse of Certificate)
This Certificate shall have the initial Percentage Interest set forth
on the face hereof, which Percentage Interest equals the percentage obtained by
dividing (x) the aggregate Principal Balance of the Initial Mortgage Loans
transferred to the Trust by the related Originator by (y) the aggregate
Principal Balance of all Initial Mortgage Loans. Thereafter, the Percentage
Interest of this Certificate, as of any date of determination, shall equal the
percentage obtained by dividing (x) the aggregate Principal Balance of the
Mortgage Loans transferred to the Trust by the related Originator by (y) the
aggregate Principal Balance of all of the Mortgage Loans transferred to the
Trust, in each case, as of such date of determination.
The Certificates do not represent an obligation of, or an interest in,
the Originators, the Sponsor, the Master Servicer, the Insurer, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Indenture or the other Operative
Documents. In addition, this Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections with respect to the Mortgage Loans, as more specifically set forth
herein, in the Sale and Servicing Agreement and in the Indenture. A copy of each
of the Sale and Servicing Agreement and the Trust Agreement may be examined by
any Certificateholder upon written request during normal business hours at the
principal office of the Sponsor, and at such other places, if any, designated by
the Sponsor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Sponsor and the rights of the Certificateholders under the Trust Agreement at
any time by the Sponsor and the Owner Trustee with the prior written consent of
the Insurer and with the consent of Noteholders holding Notes evidencing more
than 50% of the Note Balance and holders of Certificates evidencing an aggregate
Percentage Interest greater than 50%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such holder and on all future
holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent is made upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates (other than the Sponsor or the Insurer).
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is Wilmington Trust Company.
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Except for Certificates issued to the Sponsor, the Certificates are
issuable only as registered Certificates without coupons in denominations of
$1,000 or integral multiples of $1,000 in excess thereof. As provided in the
Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates in authorized denominations
evidencing the same aggregate denomination, as requested by the holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Insurer and any agent
of the Owner Trustee, the Certificate Registrar or the Insurer, may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to the
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust.
The recitals contained herein shall be taken as the statements of the
Sponsor or the Master Servicer, as the case may be, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Certificate or of
any Mortgage Loan or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ___________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
____________________________________*
Signature Guaranteed:
____________________________________*
________________
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
A-9
50
EXHIBIT B
CERTIFICATE OF TRUST OF
ADVANTA REVOLVING HOME EQUITY LOAN TRUST 2000-A
This Certificate of Trust of Advanta Revolving Home Equity Loan Trust
2000-A (the "Trust") is being duly executed and filed by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
Code Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is Advanta
Revolving Home Equity Loan Trust 2000-A.
2. Delaware Trust. The name and business address of the Owner Trustee
of the Trust in the State of Delaware is Wilmington Trust Company, Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attn:
Corporate Trust Administration.
3. This Certificate of Trust will be effective April ___, 2000.
IN WITNESS WHEREOF, the undersigned, in accordance with Section 3811(a)
of the Act, has duly executed this Certificate of Trust.
WILMINGTON TRUST COMPANY
not in its individual capacity but solely
as Owner Trustee of the Trust
By: ________________________________
Name:
Title:
B-1
