EXECUTION COPY
AMENDED AND RESTATED TRUST AGREEMENT
between
ADVANTA AUTO RECEIVABLES CORP. I
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of December 23, 1997
TABLE OF CONTENTS
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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
Section 1.4. Material Adverse Effect..............................................................5
ARTICLE II Organization.........................................................................5
Section 2.1. Name.................................................................................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............................................................................7
Section 2.8. Title to Trust Property..............................................................7
Section 2.9. Situs of Trust.......................................................................7
Section 2.10. Representations and Warranties of the Depositor......................................7
Section 2.11. Federal Income Tax Allocations.......................................................9
Section 2.12. Covenants of the Depositor...........................................................9
Section 2.13. Covenants of the Certificateholders.................................................10
ARTICLE III Certificates and Transfer of Interests..............................................11
Section 3.1. Initial Ownership...................................................................11
Section 3.2. The Certificates....................................................................11
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...................................14
Section 3.6. Persons Deemed Certificateholders...................................................14
Section 3.7. Access to List of Certificateholders' Names and Addresses...........................15
Section 3.8. Maintenance of Office or Agency.....................................................15
Section 3.9. ERISA Restrictions..................................................................15
Section 3.10. Securities Matters..................................................................16
ARTICLE IV Voting Rights and Other Actions.....................................................16
Section 4.1. Prior Notice to Holders with Respect to Certain Matters.............................16
Section 4.2. Action by Certificateholders with Respect to Certain Matters........................17
Section 4.3. Action by Certificateholders with Respect to Bankruptcy.............................17
(i)
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Section 4.4. Restrictions on Certificateholders' Power...........................................17
Section 4.5. Majority Control....................................................................18
Section 4.6. Rights of Insurer...................................................................18
ARTICLE V Certain Duties......................................................................18
Section 5.1. Accounting and Records to the Noteholders, Certificateholders, the Internal Revenue
Service and Others..................................................................18
Section 5.2. Signature on Returns; Tax Matters Partner...........................................19
Section 5.3. Underwriting Agreement..............................................................19
ARTICLE VI Authority and Duties of Owner Trustee...............................................19
Section 6.1. General Authority...................................................................19
Section 6.2. General Duties......................................................................20
Section 6.3. Action upon Instruction.............................................................20
Section 6.4. No Duties Except as Specified in this Agreement or in Instructions..................21
Section 6.5. No Action Except under Specified Documents or Instructions..........................21
Section 6.6. Restrictions........................................................................21
ARTICLE VII Concerning the Owner Trustee........................................................21
Section 7.1. Acceptance of Trusts and Duties.....................................................21
Section 7.2. Furnishing of Documents.............................................................23
Section 7.3. Representations and Warranties......................................................23
Section 7.4. Reliance; Advice of Counsel.........................................................23
Section 7.5. Not Acting in Individual Capacity...................................................24
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables............................24
Section 7.7. Owner Trustee May Own Certificates and Notes........................................25
Section 7.8. Payments from Owner Trust Estate....................................................25
Section 7.9. Doing Business in Other Jurisdictions...............................................25
ARTICLE VIII Compensation of Owner Trustee.......................................................25
Section 8.1. Owner Trustee's Fees and Expenses...................................................25
Section 8.2. Indemnification.....................................................................25
Section 8.3. Payments to the Owner Trustee.......................................................26
Section 8.4. Non-recourse Obligations............................................................26
ARTICLE IX Termination of Trust Agreement......................................................26
Section 9.1. Termination of Trust Agreement......................................................26
ARTICLE X Successor Owner Trustees and Additional Owner Trustees..............................28
Section 10.1. Eligibility Requirements for Owner Trustee..........................................28
(ii)
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Section 10.2. Resignation or Removal of Owner Trustee.............................................28
Section 10.3. Successor Owner Trustee.............................................................29
Section 10.4. Merger or Consolidation of Owner Trustee............................................29
Section 10.5. Appointment of Co-Trustee or Separate Trustee.......................................30
ARTICLE XI Miscellaneous.......................................................................31
Section 11.1. Supplements and Amendments..........................................................31
Section 11.2. No Legal Title to Owner Trust Estate in Certificateholders..........................32
Section 11.3. Limitations on Rights of Others.....................................................32
Section 11.4. Notices.............................................................................32
Section 11.5. Severability........................................................................33
Section 11.6. Separate Counterparts...............................................................33
Section 11.7. Assignments; Insurer................................................................33
Section 11.8. No Petition.........................................................................33
Section 11.9. No Recourse.........................................................................34
Section 11.10. Headings............................................................................34
Section 11.11. GOVERNING LAW.......................................................................34
Section 11.12. Master Servicer.....................................................................34
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Purchaser Representation Letter
Exhibit D Form of Transferee Representation Letter
(iii)
AMENDED AND RESTATED TRUST AGREEMENT dated as of December 23, 1997 between
ADVANTA AUTO RECEIVABLES CORP. I, a Nevada corporation (the "Depositor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation as Owner Trustee (the
"Owner Trustee").
WHEREAS, the Depositor and the Owner Trustee have entered into a Trust
Agreement, dated as of December 17, 1997 (the "Original Trust Agreement"); and
WHEREAS, the Depositor and the Owner Trustee wish to amend and restate the
Original Trust Agreement by entering into this Agreement.
NOW THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1. Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Advanta" shall mean Advanta Auto Finance Corporation.
"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 Amended and Restated Trust Agreement, as the
same may be amended and supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Certificate of Trust, the
Sale and Servicing Agreement, the Spread Account Agreement, the Spread Account
Agreement Supplement, the Insurance Agreement, the Indenture and the other
documents and certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in ss. 3.09.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Codess.3801 et. seq. as the same may be amended from time to time.
"Certificate" means a trust certificate evidencing the beneficial ownership
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Certificate Distribution Account" shall mean the account designated as
such as established and maintained pursuant to the Sale and Servicing Agreement.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B to be filed for the Trust pursuant to ss. 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to ss. 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 and the Depositor, or the
principal corporate trust office of any successor Owner Trustee (the address of
which the successor owner trustee will notify the Certificateholders and the
Depositor).
"Definitive Certificates" shall mean Certificates issued in
certificated, fully registered form.
"Depositor" shall mean Advanta Auto Receivables Corp. I in its capacity as
Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in ss. 3.9.
"Expenses" shall have the meaning assigned to such term in ss. 8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term in ss.
8.2.
"Indenture" shall mean the Indenture dated as of December 1, 1997, among
the Issuer and Norwest Bank Minnesota, National Association, as Trust Collateral
Agent and Trustee, as the same may be amended and supplemented from time to
time.
"Indenture Trustee" shall mean, initially Norwest Bank Minnesota, National
Association, 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 Sale and Servicing Agreement and thereafter "Indenture"
shall mean such successor Person.
"Insurer" shall mean Financial Security Assurance Inc., or its successor in
interest.
"Instructing Party" shall have the meaning assigned to such term in ss.
6.3.
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"Owner 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 Trust Accounts and the Certificate Distribution 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 and the
Spread Account Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to any Distribution Date, the close
of business on the last Business Day immediately preceding such Distribution
Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
among the Trust, Advanta Auto Receivables Corp. I, as Seller, Advanta Auto
Finance Corporation, as Master Servicer and the Trust Collateral Agent, dated as
of December 1, 1997, 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 a majority by principal amount of the Noteholders
so long as the Notes are outstanding and a majority by principal amount of the
Certificateholders thereafter.
"Spread Account" shall mean the Series Spread Account established and
maintained pursuant to the Spread Account Agreement.
"Spread Account Agreement" shall mean the Amended and Restated Spread
Account Agreement, dated as of December 1, 1997, among Advanta Auto Receivables
Corp. I, the Insurer, Bankers Trust Company and Norwest Bank Minnesota, National
Associaiton, as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Accounts" shall have the meaning ascribed thereto in the Sale and
Servicing Agreement.
"Trust Collateral Agent" shall mean, initially, Norwest Bank
Minnesota, National Association, in its capacity as collateral agent, including
its successors in interest, until and unless a successor Person shall have
become the Trust Collateral Agent
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pursuant to the Sale and Servicing Agreement, and thereafter "Trust Collateral
Agent" shall mean such successor Person.
Section 1.2. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Spread Account
Agreement or 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 or thereto, 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; ss. 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 consented to, by Noteholders or
Certificateholders, any Note or Certificate registered in the name of the Seller
or any Affiliate thereof shall be deemed not to be outstanding; provided,
however, that, solely for the purpose of determining whether the Indenture
Trustee or the Trust Collateral Agent is entitled to rely upon any such action
or consent, only Notes or Certificates which the Owner Trustee, the Indenture
Trustee or the Trust Collateral Agent, respectively, knows to be so owned shall
be so disregarded.
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Section 1.4. Material Adverse Effect . Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Noteholders or Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
funds available from claims under the Policy. Whenever a determination is to be
made under this Agreement whether a breach of representation, warranty or
covenant has or could have a material adverse effect on a Receivable or the
interest therein of the Trust, the Noteholders, the Certificateholders or the
Insurer (or any similar or analgous determination), such determination shall be
made by the Insurer in its reasonable discretion and after notifying the Trustee
and the Seller of such potential breach or (x) if an Insurer Default shall have
occurred and be continuing, or (y) upon (i) the expiration of the Policy in
accordance with the terms thereof and (ii) the payment of all amounts owing to
the Insurer under the Sale and Servicing Agreement and the Insurance Agreement,
by a Security Majority.
ARTICLE II
Organization
Section 2.1. Name. There is hereby formed a trust to be known as "Advanta
Auto Receivables Trust 1997-2", 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 Certificateholders and the
Depositor.
Section 2.3. Purposes and Powers. (a) 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 fund the Spread
Account and to pay the organizational, start-up and transactional expenses
of the Trust and to pay the balance to the Depositor pursuant to the Sale
and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Owner Trust Estate (other than the Certificate Distribution Account) to the
Trust Collateral Agent pursuant to the Indenture for the benefit of the
Insurer and the Indenture Trustee on behalf of the Noteholders and to hold,
manage and distribute to the Certificateholders and the Depositor pursuant
to the terms of the Sale and Servicing Agreement any portion of the Owner
Trust Estate released from the Lien of, and remitted to the Trust pursuant
to, the Indenture;
5
(iv) to enter into and perform its obligations under the Basic
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
(vi) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
(b) 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 Basic Documents.
Section 2.4. Appointment of Owner Trustee. The Depositor 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.
Section 2.5. Initial Capital Contribution of Trust Estate. The Depositor
hereby sells, 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 Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account. The Depositor 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 Owner 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 Basic 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.
6
Section 2.7. Liability. (a) The Depositor shall pay organizational expenses
of the Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee.
(b) No Holder, other than to the extent set forth in clause (a), shall have
any personal liability for any liability or obligation of the Trust.
Section 2.8. Title to Trust Property. (a) Legal title to all the Owner
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 Owner 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 part of the Trust
Property. The Holders shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title or
interest by any Certificateholder of its ownership interest in the Owner Trust
Estate 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 part of the Trust Property.
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
Minnesota. Payments will be received by the Trust only in Delaware or Minnesota
and payments will be made by the Trust only from Delaware or Minnesota. 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 Depositor. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Insurer relies in issuing the Note Policy.
(a) Organization and Good Standing. The Depositor 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 Basic Documents.
(b) Due Qualification. It 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 Basic Documents requires such qualification.
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(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.
(d) Binding Obligations. This Agreement, when duly executed and delivered,
shall constitute legal, valid and binding obligations of the Depositor
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and be
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e) No Consent Required. To the best knowledge of the Depositor, 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 of this Agreement and the
Basic Documents, except for such as have been obtained, effected or made.
(f) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not 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 by-laws of the Depositor, or any material indenture, agreement
or other instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
(g) No Proceedings. There are no proceedings or investigations pending or,
to its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Basic 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 Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax attributes of the
Certificates.
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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:
(a) 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 of principal amount of Certificates on such date, an amount of net
income up to the sum of (i) the Certificateholders' Monthly Interest
Distributable Amount for such month, (ii) interest on the excess, if any, of the
Certificateholders' Interest Distributable Amount for the preceding Distribution
Date over the amount in respect of interest at the Certificate Rate that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, to the extent permitted by law, at the Certificate Rate from
such preceding Distribution Date through the current Distribution Date, and
(iii) the portion of the market discount on the Receivables accrued during such
month that is allocable to the excess of the initial aggregate principal amount
of the Certificates over their initial aggregate issue price; and
(b) to the Depositor, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). 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 Record Date in proportion to their ownership of principal amount of
Certificates on such Record Date until the principal balance of the Certificates
is reduced to zero. The Depositor 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 Depositor. The Depositor 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 Basic 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
9
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 Basic 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 ss. 9.1(e)
such counterparty shall not institute against, or join any other Person in
instituting against, it 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;
(b) to hereby appoint the Depositor as such Certificateholder's agent
and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if any, and agree that, if requested by the
Trust, it will sign such federal income tax information return 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 other
entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, 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;
(d) until the completion of the events specified in ss. 9.1(e), not
to, for any reason, institute proceedings for the Trust or the Depositor 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
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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 the Trust or a substantial part
of its property, or cause or permit 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; and
(e) that there shall not be more than 98 other holders of
Certificates.
ARTICLE III
Certificates and Transfer of Interests
Section 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to ss. 2.5 and until the sale of the
Certificates by the Depositor, the Depositor, as the sole Certificateholder,
shall be the sole beneficiary of the Trust.
Section 3.2. The Certificates. The Certificates shall be issued in
denominations of $100,000 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 shall have been 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 ss. 3.4.
Section 3.3. Authentication of Certificates. Concurrently with the initial
sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates, in an aggregate
principal amount equal to the initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further corporate
action by the Depositor, in authorized denominations. 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 ss. 3.8, a Certificate Register in which, subject to such
reasonable regulations
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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.
The Certificates have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") or any state securities law. The Certificate
Registrar shall not register the transfer of any Certificate unless such resale
or transfer is pursuant to an effective registration statement under the
Securities Act or is to the Seller or unless it shall have received (i) a
representation letter substantially in the form of Exhibit D hereto or (ii) such
other representations (or an Opinion of Counsel) satisfactory to the Owner
Trustee to the effect that such resale or transfer is made (A) in a transaction
exempt from the registration requirements of the Securities Act and applicable
state securities laws, or (B) to a person who the transferor of the Certificate
reasonably believes is a qualified institutional buyer (within the meaning of
Rule 144A under the Securities Act) that is aware that such resale or other
transfer is being made in reliance upon Rule 144A. Until the earlier of (i) such
time as the Certificates shall be registered pursuant to a registration
statement filed under the Securities Act and (ii) the date three years from the
later of the date of the original authentication and delivery of the
Certificates and the date any Certificate was acquired from the Seller or any
affiliate of the Seller, the Certificates shall bear a legend as follows:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE IN RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT
AND SUCH STATE SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS
CERTIFICATE MAY BE MADE UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN
ACCORDANCE WITH ss. 3.4 OF THE OWNER TRUST AGREEMENT PERTAINING TO THE
ADVANTA AUTO RECEIVABLES TRUST 1997-2 (THE "AGREEMENT") AND (B) IS
MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT THAT IS AWARE THAT THE
RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND
(C) UPON THE SATISFACTION OF CERTAIN OTHER REQUIREMENTS SPECIFIED IN
THE AGREEMENT.
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NEITHER THE SELLER, THE MASTER SERVICER, THE TRUST NOR THE OWNER
TRUSTEE IS OBLIGATED TO REGISTER THE CERTIFICATES UNDER THE SECURITIES
ACT OR ANY APPLICABLE STATE SECURITIES LAWS.
The Certificate Registrar shall not register the initial placement of the
Certificates unless it shall have received a Purchaser Representation Letter in
the form of Exhibit C.
The Certificate Registrar shall provide the Trust Collateral Agent with a
list of the names and addresses of the Certificateholders on the Closing Date in
the form which such information is provided to the Certificate Registrar by the
Depositor. Upon any transfers of Certificates, the Certificate Registrar shall
notify the Trust Collateral Agent of the name and address of the transferee in
writing, by facsimile, on the day of such transfer.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to ss. 3.8, the Owner Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate face amount dated the date of authentication by the Owner
Trustee or any authenticating agent. At the option of a Holder, Certificates may
be exchanged for other Certificates of the same class in authorized
denominations of a like aggregate amount upon surrender of the Certificates to
be exchanged at the office or agency maintained pursuant to ss. 3.8.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
Notwithstanding the preceding provisions of this Section, the Owner Trustee
shall not be required to make, and the Certificate Registrar shall not be
required to register, transfers and exchanges of Certificates for a period of 15
days preceding the due date for any payment with respect to the Certificate.
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The Seller shall not sell, transfer, assign, convey or pledge any
Certificate at any time subsequent to the Closing Date to any Person that is an
Affiliate of the Seller, unless, prior to such sale, transfer, assignment,
conveyance or pledge, the Seller delivers to Financial Security an Opinion of
Counsel substantially similar in form and substance to the Opinion of Counsel
delivered on the Closing Date as to non-consolidation of the assets and
liabilities of (x) the Seller and Advanta or (y) the Seller and any such Person
that is an Affiliate of the Seller (other than Advanta).
In furtherance of and not in limitation of the foregoing, each
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that it has no right to or interest in any monies at any time held pursuant to
the Spread Account Agreement or prior to the release of such monies pursuant to
ss. 5.7(a) of the Sale and Servicing Agreement, such monies being held in trust
for the benefit of the Noteholders and the Insurer. Notwithstanding the
foregoing, in the event that it is ever determined that the monies held in the
Spread Account constitute a pledge of collateral, then the provisions of the
Sale and Servicing Agreement and the Spread Account Agreement shall be
considered to constitute a security agreement and the Seller and the
Certificateholders hereby grant to the Trust Collateral Agent for the benefit of
the Trustee and the Insurer a first priority perfected security interest in such
amounts, to be applied as set forth in ss. 3.03 of the Spread Account Agreement.
In addition, each Certificateholder, by acceptance of its Certificate, hereby
appoints the Seller as its agent to pledge a first priority perfected security
interest in the Spread Account, and any amounts held therein from time to time
to the Trust Collateral Agent for the benefit of the Trustee and the Insurer
pursuant to the Spread Account Agreement and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case the Insurer shall consider reasonably
necessary in order to perfect the Trust Collateral Agent's Security Interest in
the Collateral (as such terms are defined in the Spread Account Agreement).
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 (unless an Insurer Default
shall have occurred and be continuing) 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
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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 agent 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 for all
other purposes whatsoever, and none of the Owner Trustee, the Certificate
Registrar or the Insurer nor 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
Depositor or (unless an Insurer Default shall have occurred and be continuing)
the Insurer, within 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 not less than
25% of the Certificate Balance 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 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 Depositor, the Master Servicer,
the Owner Trustee or the Insurer or any agent thereof accountable by reason of
the disclosure of its name and address, regardless of the source from which such
information was derived.
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 Basic 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 Depositor, the Certificateholders and (unless
an Insurer Default shall have occurred and be continuing) the Insurer of any
change in the location of the Certificate Register or any such office or agency.
Section 3.9. ERISA Restrictions. The Certificates may not be acquired by or
for the account of (i) an employee benefit plan (as defined in ss. 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 described in ss.
4975(e)(1) of the Internal Revenue Code of 1985, as amended, or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). 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.
15
Section 3.10. Securities Matters. Notwithstanding anything contained herein
to the contrary, the Owner Trustee shall not be responsible for ascertaining
whether any transfer complies with the registration provisions or exemptions
from the Securities Act of 1933, as amended, the Securities Act of 1934, as
amended, applicable state securities law or the Investment Company Act;
provided, however, that if a certificate is specifically required to be
delivered to the Owner Trustee by a purchaser or transferee of a Certificate,
the Owner Trustee shall be under a duty to examine the same to determine whether
it conforms to the requirements of this Trust Agreement and shall promptly
notify the party delivering the same if such certificate does not so conform.
Section 3.11. Paying Agent. Distributions on the Certificate to be made
pursuant to the Sale and Servicing Agreement shall be made by the Trust
Collateral Agent by wire transfer or check mailed to the Certificateholder of
record in the Certificate Register without the presentation or surrender of the
Certificate or the making of any notation therein.
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 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Certificateholders have
withheld consent or 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 the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
or
(d) except pursuant to ss. 13.1(b) of the Sale and Servicing Agreement, the
amendment, change or modification of the Sale and Servicing Agreement, except to
cure any ambiguity or defect or to amend or supplement any provision in a manner
that would not materially adversely affect the interests of the
Certificateholders.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Note Registrar, Trust Collateral Agent or Certificate
Registrar within five Business Days thereof.
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Section 4.2. Action by Certificateholders with Respect to Certain Matters.
The Owner Trustee shall not have the power, except upon the direction of the
Insurer or, in the event that an Insurer Default shall have occurred and be
continuing, the Security Majority in accordance with the Basic Documents, to (a)
remove the Master Servicer under the Sale and Servicing Agreement or (b) except
as expressly provided in the Basic Documents, sell the Receivables after the
termination of the Indenture. The Owner Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by the
Insurer or the Securityholders, as the case may be, and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholders.
Section 4.3. Action by Certificateholders with Respect to Bankruptcy. Until
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 ss.
2.13(d) hereof relating to the Trust without the prior written consent of the
Insurer (unless an Insurer Default shall have occurred and be continuing) or the
Security Majority upon an Insurer Default. After the Notes have been paid in
full, all amounts due to the Insurer under the Insurance Agreement have been
paid in full, the Term of the Policy has expired and the Trust Collateral Agent
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 ss. 2.13(d) hereof relating to the Trust without the prior written consent of
all of the Certificateholders and the delivery to the Owner Trustee by each such
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 Basic
Documents or would be contrary to ss. 2.3 or otherwise contrary to law nor shall
the Owner Trustee be obligated to follow any such direction, if given.
(b) No Certificateholder (other than the Depositor as sole
Certificateholder) 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 Basic
Document, unless the Certificateholders are the Instructing Party pursuant to
ss. 6.3 and unless 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 also unless Certificateholders evidencing not less than
25% of the Certificate Balance 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 therein or thereby, and the Owner Trustee, for 30
days after its receipt of such notice, request, and offer of indemnity, shall
have neglected 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 ss. 6.3; it being understood and
17
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 ss. 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.
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 not less
than a majority of the Certificate Balance. Except as expressly provided herein,
any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Certificateholders evidencing not less
than a majority of the Certificate Balance at the time of the delivery of such
notice.
Section 4.6. Rights of Insurer. Notwithstanding anything to the contrary in
the Basic Documents, without the prior written consent of the Insurer or if an
Insurer Default shall have occurred and be 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 Receivable 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 (other than in accordance with ss. 3.10 of the
Indenture), (iv) amend the Certificate of Trust or (v) amend this Agreement in
accordance with ss. 11.1 of this Agreement.
ARTICLE V
Certain Duties
Section 5.1. Accounting and Records to the Noteholders, Certificateholders,
the Internal Revenue Service and Others. Subject to Sections 12.1(b)(iii) and
12.1(c) of the Sale and Servicing Agreement, the Depositor shall (a) maintain
(or cause to be maintained) the books of the Trust on a calendar year basis on
the accrual method of accounting, including, without limitation, the allocations
of net income under ss. 2.11, (b) deliver (or cause to be delivered) to each
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1, 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
18
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 ss. 5.9(c)
of the Sale and Serving 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 ss. as directed in writing by the Depositor. The Owner Trustee shall sign
all tax information returns, if any, filed pursuant to this ss. 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 Depositor or the Master Servicer. The Owner Trustee shall elect
under ss. 1278 of the Code to include in income currently any market discount
that accrues with respect to the Receivables. The Owner Trustee shall not make
the election provided under ss. 754 of the Code.
Section 5.2. Signature on Returns; Tax Matters Partner. (a) Notwithstanding
the provisions of ss. 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, unless applicable law requires a Certificateholder to sign such
documents, in which case such documents shall be signed by the Depositor.
(b) In the event that the Trust is characterized as a partnership, the
Depositor shall be the "tax matters partner" of the Trust pursuant to the Code.
Section 5.3. Underwriting Agreement. The Master Servicer is hereby
authorized to execute and deliver on behalf of the Trust the Underwriting
Agreement with respect to the Notes.
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 Basic 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 Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor 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
Class A-1 Notes in the aggregate principal amount of $20,000,000, Class A-2
Notes in the aggregate principal amount of $31,000,000, Class A-3 Notes in the
aggregate principal amount of $29,000,000, and Class A-4 Notes in the aggregate
principal amount of $16,192,000. 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 Basic Documents. The Owner Trustee is further authorized
from time to time to take such action as the Instructing Party recommends with
respect to the Basic Documents so long as such activities are consistent with
the terms of the Basic 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 Basic 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 Basic
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 Basic 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 and the
terms of the Spread Account Agreement, 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 Basic Document.
The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic 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 Basic 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
Basic 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 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 Basic 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 Basic 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
20
refrains from acting in good faith in accordance 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 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 Basic
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 Owner 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 ss. 6.3; and no implied duties or obligations shall be
read into this Agreement or any Basic 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 file any Commission filing for the Trust or to record
this Agreement or any Basic 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 part of the Owner 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 Owner 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 part of the Owner 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 Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to ss. 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 ss. 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 action that would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
Section 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Owner Trustee also
agrees
21
to disburse all monies actually received by it constituting part of the Owner
Trust Estate upon the terms of the Basic Documents and this Agreement. The Owner
Trustee shall not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own willful misconduct, bad
faith or negligence, (ii) in the case of the inaccuracy of any representation or
warranty contained in ss. 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 ss. 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 made by
a Responsible 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 in accordance with the instructions of the
Instructing Party, the Depositor, the Master Servicer or any Certificateholder;
(c) no provision of this Agreement or any Basic 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 Basic
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 Basic 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
Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic 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 Depositor, the Insurer,
Trustee, Trust Collateral Agent, the Collateral Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the Basic
Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct of
the Depositor, the Insurer, the Trustee, the Trust Collateral Agent or the
Master Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations under
this Agreement or the Basic Documents that are required to be performed by the
Depositor under this Agreement, by the Trustee under the Indenture or the Trust
Collateral Agent or the Master Servicer under the Sale and Servicing Agreement;
and
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(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 Basic Document, at the request, order or direction of the
Instructing Party or any of the Certificateholders, unless such Instructing
Party or Certificateholders have offered to the Owner Trustee security or
indemnity 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
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its 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 Basic Documents.
Section 7.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants, in its individual capacity, to the Depositor, the
Holders and the Insurer (which shall have relied on such representations and
warranties in issuing the Policies), 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 by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
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
23
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 Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, 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 Basic Document.
Section 7.5. Not Acting in Individual Capacity. Except as provided in this
Article VII, 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 Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables. 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 Depositor 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 Basic Document or of the
Certificates (other than the signature and countersignature of the Owner Trustee
on the Certificates) or the Notes, or of any Receivable 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 Receivable, or
the perfection and priority of any security interest created by any Receivable
in any Financed Vehicle or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Owner 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 Financed Vehicle; the
existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the validity
of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor, the Master Servicer or any
other Person with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Master Servicer or any
subservicer taken in the name of the Owner Trustee.
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Section 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledge
of Certificates or Notes and may deal with the Depositor, the 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 Owner Trust Estate. All payments to be made by
the Owner Trustee or the Trust Collateral Agent under this Agreement or any of
the Basic Documents to which the Trust or the Owner Trustee is a party shall be
made only from the income and proceeds of the Owner Trust Estate and only to the
extent that the Owner Trust shall have received income or proceeds from the
Owner 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
Basic Documents to which the Trust or the Owner Trustee is a party.
Section 7.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained 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 in 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 ss. 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 Advanta and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder and under the
Basic Documents.
Section 8.2. Indemnification. The Depositor shall be liable as primary
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
25
"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 Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Depositor shall not be
liable for or required to indemnify the Owner Trustee from and against Expenses
arising or resulting from any of the matters described in the third sentence of
ss. 7.1. The indemnities contained in this ss. and the rights under ss. 8.1
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In any 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 Depositor 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
Owner Trust Estate immediately after such payment.
Section 8.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of 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 latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Master Servicer at its option of the corpus of the Trust as
described in ss. 11.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents or (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; provided, however, that the rights to indemnification under ss. 8.2
and the rights under ss. 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 ss. 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder shall not (x) operate
to terminate this Agreement or the Trust, nor (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 Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
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(b) Except as provided in clause (a), neither the Depositor nor any other
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholders shall surrender their Certificates to the
Trust Collateral Agent for payment of the final distribution and cancellation,
shall be given by the Owner Trustee by letter to Certificateholders mailed
within five Business Days of receipt of notice of such termination from the
Master Servicer given pursuant to ss. 11.1(c) of the Sale and Servicing
Agreement, stating (i) the Distribution 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 Trust Collateral Agent therein designated,
(ii) the amount of any such final payment, (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trust
Collateral Agent therein specified and (iv) interest will cease to accrue on the
Certificates. The Owner Trustee shall give such notice to the Certificate
Registrar (if other than the Owner Trustee) and the Trust Collateral Agent at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Trust Collateral Agent shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to ss. 5.7 of the Sale and Servicing Agreement.
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 Depositor and Holders shall look solely to the Depositor
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 Depositor.
(e) 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
ss. 3810 of the Business Trust Statute.
27
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 ss. 3807(a)
of the Business Trust Statute; (ii) authorized to exercise corporate trust
powers; (iii) having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authorities; (iv)
having (or having a parent which has) a rating of at least Baa3 by Moody's or
A-1 by Standard & Poors; and (v) acceptable to the Insurer in its sole
discretion, so long as an Insurer Default shall not have occurred and be
continuing. 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 ss. 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 Depositor (or in the event that the
Depositor is not the sole Certificateholder, the Holders of Certificates
evidencing not less than a majority of the Certificate Balance), the Insurer and
the Master Servicer. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth in ss. 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 Depositor 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 ss. 10.1 and shall fail to resign after written request
therefor by the Depositor, 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 the Depositor
with the consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) may remove the Owner Trustee. If the Depositor shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Owner Trustee,
meeting the qualifications set forth in ss. 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
28
Insurer and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.
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 ss. 10.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Depositor shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.
Section 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to ss. 10.2 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer, the Insurer and to 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 fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming 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 ss. 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Master Servicer shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Trustee, the Noteholders and the
Rating Agencies. 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.
Any successor Owner Trustee appointed pursuant to this Section 10.3 shall
promptly file an amendment to the Certificate of Trust with the Secretary of
State identifying 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 ss. 10.1, without the execution
or filing of any instrument or any further act on
29
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided further that the Owner Trustee shall mail notice of
such merger or consolidation to the Rating Agencies.
Section 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle 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 Owner 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, unless an
Insurer Default shall have occurred and be continuing, 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 ss. 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to ss. 10.3.
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;
(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
30
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 Depositor and the Owner Trustee, with the prior written consent of the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) and with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or, in the event that the Depositor is not the
sole Certificateholder, the Certificateholders, (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 an Insurer Default shall not have
occurred and be continuing) by the Depositor and the Owner Trustee, with prior
written notice to the Rating Agencies, to the extent such amendment materially
and adversely affects the interests of the Noteholders, with the consent of the
Noteholders evidencing not less than a majority of the Outstanding Amount of the
Notes and, the consent of the Certificateholders evidencing not less than a
majority of the Certificate Balance (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 Basic
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
31
Receivables 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 Outstanding Amount of the Notes and the Certificate Balance,
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
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 each Certificateholder, the Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the 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 Basic 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.
Section 11.2. No Legal Title to Owner Trust Estate in Certificateholders.
The Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise, of any right,
title or interest of the Certificateholders to and in their ownership interest
in the Owner Trust Estate 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 part of the Owner Trust Estate.
Section 11.3. Limitations on Rights of Others. Except for ss. 2.7, the
provisions of this Agreement are solely for the benefit of the Owner Trustee,
the Depositor, the Certificateholders, the Master Servicer and, to the extent
expressly provided herein, the Insurer, the Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner 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 in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class
32
mail or certified mail, in each case return receipt requested, and shall be
deemed to have been duly given upon receipt, if to the Owner Trustee, addressed
to the Corporate Trust Office; if to the Depositor, addressed to Advanta Auto
Receivables Corp. I, 0000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxx, Xxxxxx 00000; if to
the holder of the Insurer, addressed to Insurer, Financial Security Assurance
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Surveillance Department,
Telex No.: (000) 000-0000, Confirmation: (000) 000-0000, Telecopy Nos.: (212)
339-3518, (000) 000-0000 (in each case in which notice or other communication to
Financial Security refers to an Event of Default, a claim on the Policies or
with respect to which failure on the part of Financial Security to respond shall
be deemed to constitute consent or acceptance, then a copy of such notice or
other communication should also be sent to the attention of the General Counsel
and the Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); or, as to
each party, at 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; Insurer. 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 Basic Documents.
The Insurer may disclaim any of its rights and powers under this Agreement (but
not its duties and obligations under the Policies) upon delivery of a written
notice to the Owner Trustee.
Section 11.8. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not
33
at any time institute against the Depositor, or join in any institution against
the Depositor 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, this Agreement or any of the Basic Documents.
Section 11.9. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Master Servicer, the Depositor, the Owner Trustee, the
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 Basic 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 LAW 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, file or deliver
pursuant to the Basic 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.
34
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY
Owner Trustee
By:/s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ADVANTA AUTO RECEIVABLES
CORP. I
Depositor
By:/s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: President
Acknowledged and Agreed:
ADVANTA AUTO FINANCE CORPORATION
Master Servicer
By:/s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: President
[Signature Page for Amended and Restated Trust Agreement]
35
EXHIBIT A
FORM OF CERTIFICATE
NUMBER $36,486,749.40
1
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH ss. 3.4 OF THE
OWNER TRUST AGREEMENT PERTAINING TO THE ADVANTA AUTO RECEIVABLES TRUST 1997-2
(THE "AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN
OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE SELLER, THE MASTER
SERVICER, THE TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER THE
CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS SET
FORTH IN THE SALE AND SERVICING AGREEMENT AND THE TRUST AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
---------------------------------
6.26% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by Advanta Auto Receivables Corp. I.
(This Certificate does not represent an interest in or obligation of Advanta
Auto Receivables Corp. I or any of its Affiliates, except to the extent
described below.)
A-1
THIS CERTIFIES THAT Advanta Auto Receivables Corp. I is the registered
owner of $36,486,749.40 nonassessable, fully-paid, beneficial ownership interest
in certain distributions of Advanta Automobile Receivables Trust 1997-2 (the
"Trust") formed by Advanta Auto Receivables Corp. I, a Nevada corporation (the
"Depositor"). The Certificates have a Certificate Rate of 6.26% per annum.
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
by _____________________________________________________________________________
The Trust was created pursuant to an Amended and Restated Trust Agreement
dated as of December 23, 1997 (the "Trust Agreement"), between the Depositor 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
"6.26% Asset Backed Certificates" (herein called the "Certificates"). Also
issued under the Indenture dated as of December 1, 1997, between the Trust and
Norwest Bank Minnesota, National Association, as trustee and trust collateral
agent, are four classes of Notes designated as "Class A-1 5.85625% Asset Backed
Notes" (the "Class A-1 Notes"), "Class A-2 6.19% Asset Backed Notes" (the "Class
A-2 Notes"), "Class A-3 6.22% Asset Backed Notes" (the "Class A-3 Notes"), and
"Class A-4 6.26% Asset Backed Notes" (the "Class A-4 Notes", together with the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes (the "Notes"). This
Certificate is issued under and is 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. The property of the Trust includes a pool of retail installment sale
contracts secured by new and used automobiles, vans or light duty trucks (the
"Receivables"), all monies due thereunder on or after Initial Cutoff Date,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement, all right, to and interest of the Depositor in and to the Purchase
Agreement dated as of December 1, 1997 between Advanta Auto Finance Corporation
and Advanta Auto Receivables Corp. I and all proceeds of the foregoing.
Under the Sale and Servicing Agreement, there will be distributed on the
15th day of each month or, if such 15th day is not a Business Day, the next
Business Day
A-2
(the "Distribution Date"), commencing on January 15, 1998, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day preceding such Distribution Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date. No principal will
be paid on the Certificate until the Class A-4 Notes have been paid in full.
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.
The holder of this Certificate, by acceptance of this Certificate,
specifically acknowledges that it has no right to or interest in any monies at
any time held pursuant to the Spread Account Agreement or prior to the release
of such monies pursuant to ss. 5.7(a) of the Sale and Servicing Agreement, such
monies being held in trust for the benefit of the Noteholders and the Insurer.
Notwithstanding the foregoing, in the event that it is ever determined that the
monies held in the Spread Account constitute a pledge of collateral, then the
provisions of the Sale and Servicing Agreement and the Spread Account Agreement
shall be considered to constitute a security agreement and the holder of this
Certificate hereby grants to the Trust Collateral Agent for the benefit of the
Trustee and the Insurer a first priority perfected security interest in such
amounts, to be applied as set forth in ss. 3.03 of the Spread Account Agreement.
In addition, each Certificateholder, by acceptance of its Certificate, hereby
appoints the Seller as its agent to pledge a first priority perfected security
interest in the Spread Account, and any amounts held therein from time to time
to the Collateral Agent for the benefit of the Trustee and the Insurer pursuant
to the Spread Account Agreement and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as the Insurer shall consider reasonably
necessary in order to perfect the Trust Collateral Agent's security interest in
the Collateral.
It is the intent of the Depositor, 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 more than one
Holder, it is the intent of the Depositor, 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 Depositor 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 Depositor, or join in any institution
against the Trust or the Depositor 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 Basic Documents.
A-3
Distributions on this Certificate will be made as provided in the Sale and
Servicing Agreement by the Trust Collateral Agent 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.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-4
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.
ADVANTA AUTOMOBILE
RECEIVABLES TRUST 1997-2
By: WILMINGTON TRUST COMPANY not in
its individual capacity but solely as Owner
Trustee
Dated: December __, 1997 By:______________________________
By: ____________________________
Name:
Title:
A-5
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an interest in, the
Depositor, the Master Servicer, 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 Basic 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 Receivables, as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Depositor, and at
such other places, if any, designated by the Depositor, by any Certificateholder
upon written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the prior written consent
of Financial Security Assurance, Inc. (the "Insurer") so long as no Insurer
Default has occurred and is continuing, and with the consent of the holders of
the Notes and the Certificates evidencing not less than a majority of the
outstanding Notes and the Certificate Balance. 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 Depositor 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.
Except for Certificates issued to the Depositor, the Certificates are
issuable only as registered Certificates without coupons in denominations of
$100,000 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.
A-6
The Owner Trustee, the Certificate Registrar 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 nor 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 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 Master Servicer of the Receivables may at its option purchase the
corpus of the Trust at a price specified in the Sale and Servicing Agreement,
and such purchase of the Receivables and other property of the Trust will effect
a transfer of the Certificates; however, such right of purchase is exercisable,
subject to certain restrictions, only as of the last day of any Monthly Period
as of which the Pool Balance is 10% or less of the Original Pool Balance.
The Certificates may not be acquired by (a) an employee benefit plan (as
defined in ss.3(3) of ERISA) that is subject to the provisions of Title I of
ERISA, (b) a plan described in ss. 4975(e) (1) of the Code or (c) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). By accepting and holding this Certificate,
the Holder hereof shall be deemed to have represented and warranted that it is
not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor 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 Receivable 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.
A-7
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-8
EXHIBIT B
CERTIFICATE OF TRUST OF
ADVANTA AUTOMOBILE RECEIVABLES TRUST 1997-2
This Certificate of Trust of Advanta Automobile Receivables Trust 1997-2
(the "Trust"), dated as of December 23, 1997, is being duly executed and filed
by Wilmington Trust Company, a Delaware banking corporation, as trustee, to form
a business trust under the Delaware Business Trust Act (12 Del. Code, ss. 3801
et seq.).
Name. The name of the business trust formed hereby is Advanta Automobile
Receivables Trust 1997-2.
Delaware Trust. The name and business address of the 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.
This Certificate of Trust will be effective December 23, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY
not in its individual capacity but solely as
owner trustee of the Trust.
By: _________________________________
Name:
Title:
B-1
