1
EXHIBIT 4.3
2
EXHIBIT 4.3
Execution Copy
SALE AND SERVICING AGREEMENT
Among
ADVANTA REVOLVING HOME EQUITY LOAN TRUST
1997-A
as Issuer,
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Sponsor,
ADVANTA MORTGAGE CORP. USA,
as Master Servicer,
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Indenture Trustee
Dated as of November 1, 1997
3
TABLE OF CONTENTS
(Not a Part of this Agreement)
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article I DEFINITIONS; RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accepted Servicing Practices" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
----------------------------
"Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------
"Addition Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------
"Additional Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------
"AMHC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----
"Appraised Value" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------
"Assignment of Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----------------------
"Authorized Officer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------
"Capitalized Interest Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----------------------------
"Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------
"Civil Relief Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------
"Class A Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------
"Class A Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-------------------------
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----
"Combined Loan-to-Value Ratio" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------------------
"Credit Limit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------
"Credit Limit Utilization Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----------------------------
"Credit Line Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
---------------------
"Cut-Off Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------
"Cut-Off Date Pool Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-------------------------
"Cut-Off Date Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------------------------
"Date-of-Payment Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
---------------------
"Debt Service Reduction" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----------------------
"Defective Mortgage Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------------
"Deficient Valuation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-------------------
"Delinquent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----------
"Depository" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----------
"Designated Depository Institution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
---------------------------------
"Determination Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------
"Direct Participant" or "DTC Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------ ---------------
"Document Delivery Requirements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------
"Draw" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----
"Draw Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------
"Event of Servicing Termination" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------
i
4
"FDIC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----
"FHLMC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----
"First Mortgage Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------
"Foreclosure Profit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------
"FNMA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----
"Highest Lawful Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------
"Holder" or "Noteholder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------ ----------
"Indemnification Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------------
"Indenture": . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------
"Indenture Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------
"Indenture Trustee's Fee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------------
"Indirect Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------------------
"Initial Cut-Off Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------------------
"Initial Mortgage Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
"Initial Premium" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------------
"Insurance Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------
"Insurance Policy" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------
"Insurance Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------
"Insurer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------
"Interest Collections" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------------
"Interest Remittance Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------------------
"Issuer" or "Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------ -----
"Late Payment Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------
"Lifetime Rate Cap" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------
"Liquidated Mortgage Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------------
"Liquidation Expenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------------
"Liquidation Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
--------------------
"Liquidation Report" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
------------------
"Loan Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------
"Loan Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------
"Loan Rate Cap" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------
"Margin" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
------
"Master Servicer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------------
"Master Servicer Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------------
"Master Servicer's Trust Receipt" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------------------
"Minimum Monthly Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----------------------
"Minimum Originators' Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----------------------------
"Xxxxx'x" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-------
"Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------
"Mortgage Files" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------
"Mortgage Loan Schedule" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------
"Mortgage Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------
"Mortgaged Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------
"Mortgagor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
---------
"Net Liquidation Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------------
"Nonrecoverable Advance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------
"Note Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------------
ii
5
"Officer's Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
---------------------
"Operative Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------------
"Original Class A Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------------------
"Original Principal Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------------------
"Original Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
--------------------------
"Originators" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-----------
"Originators' Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
---------------------
"Outstanding" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-----------
"Owner Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------
"Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------
"Percentage Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------------
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------
"Policy" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------
"Pool Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------
"Pool Certification" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------------
"Pool Factor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-----------
"Pre-Funded Mortgage Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------------------
"Pre-Funding Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------------
"Pre-Funding Transfer Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------------------
"Prepaid Installment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------
"Preference Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-----------------
"Prepayment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----------
"Preservation Expenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------------------
"Prime" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-----
"Principal and Interest Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
------------------------------
"Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-----------------
"Principal Collections" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------------------
"Principal Remittance Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------------------------
"Prospectus" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
----------
"Prospectus Supplement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------
"Qualified Replacement Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
------------------------------
"Realized Loss" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------
"Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-----------
"Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------
"Registration Statement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
----------------------
"Reimbursement Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------
"REO Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------
"Remittance Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------------
"Remittance Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------
"Replacement Cut-Off Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------------------
"Representation Letter" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------------------
"Standard & Poor's" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------
"Schedule of Mortgage Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------------
"Second Mortgage Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------
"Senior Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------
iii
6
"Servicing Advance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------
"Servicing Fee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------
"Servicing Fee Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
------------------
"Sponsor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------
"Subsequent Cut-Off Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------------
"Subsequent Mortgage Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------------------
"Subsequent Transfer Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------------------
"Subsequent Transfer Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
------------------------
"Substitution Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------------
"Sub-Servicer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------
"Sub-Servicing Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------------------
"Telerate Screen Page 3750" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------------
"Termination Fees" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------
"Transfer Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------
"Transfer Notice Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------------------
"Trust Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
---------------
"Trust Collateral Value" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------------
"Trust Estate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------
"Underwriter" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-----------
Section 1.2. Use of Words and Phrases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.3. Captions; Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.4. Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article II CONVEYANCE OF MORTGAGE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.1. Conveyance of the Initial Mortgage Loans . . . . . . . . . . . . . . . . . . . . . 17
Section 2.2. Acceptance by Indenture Trustee; Certain Substitutions of Mortgage Loans;
Certification by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3. Cooperation Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.4. Conveyance of the Subsequent Mortgage Loans . . . . . . . . . . . . . . . . . . . 24
Section 2.5. Retransfers of Mortgage Loans at Election of Sponsor . . . . . . . . . . . . . . . 26
Article III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPONSOR AND THE MASTER SERVICER . . . . . 27
Section 3.1. Representations and Warranties of the Sponsor . . . . . . . . . . . . . . . . . . 27
Section 3.2. Representations and Warranties of the Master Servicer . . . . . . . . . . . . . . 29
Section 3.3. Representations and Warranties of the Sponsor with Respect to the Mortgage Loans;
Retransfer of Certain Mortgage Loans. . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.4. Covenants of Sponsor to Take Certain Actions with Respect to the Mortgage Loans
In Certain Situations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Article IV SERVICING AND ADMINISTRATION OF MORTGAGE LOANS . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.1. Master Servicer and Sub-Servicers. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.2. Collection of Certain Mortgage Loan Payments . . . . . . . . . . . . . . . . . . . 42
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Section 4.3. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers . . . . . . . 43
Section 4.4. Successor Sub-Servicers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.5. Liability of Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.6. No Contractual Relationship Between Sub-Servicer and Indenture Trustee or the Class
A Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.7. Assumption or Termination of Sub-Servicing Agreement by Indenture Trustee . . . . 44
Section 4.8. Principal and Interest Account. . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.9. Servicing Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.10. Purchase of Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.11. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.12. Due-on-Sale Clauses; Assumption and Substitution Agreements . . . . . . . . . . . 47
Section 4.13. Realization Upon Defaulted Mortgage Loans . . . . . . . . . . . . . . . . . . . . 48
Section 4.14. Indenture Trustee to Cooperate; Release of Mortgage Files . . . . . . . . . . . . 49
Section 4.15. Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.16. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.17. Annual Independent Certified Public Accountants' Reports . . . . . . . . . . . . . 52
Section 4.18. Access to Certain Documentation and Information Regarding the Mortgage Loans . . . 52
Section 4.19. Assignment of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Article V SERVICING TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.1. Events of Servicing Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.2. Inspections by Insurer; Errors and Omissions Insurance . . . . . . . . . . . . . . 57
Section 5.3. Merger, Conversion, Consolidation or Succession to Business of Master Servicer . . 57
Section 5.4. Notification to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Article VI ADMINISTRATIVE DUTIES OF THE MASTER SERVICER . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.1. Administrative Duties with Respect to the Indenture . . . . . . . . . . . . . . . . 57
Section 6.2. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.3. Additional Information to be Furnished to the Issuer . . . . . . . . . . . . . . . 59
Article VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.1. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.2. Form of Documents Delivered to the Indenture Trustee . . . . . . . . . . . . . . . 60
Section 7.3. Acts of Class A Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.4. Notices, etc. to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.5. Notices and Reports to Class A Noteholders; Waiver of Notices . . . . . . . . . . . 61
Section 7.6. Rules by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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Section 7.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.8. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.9. Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.10. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.13. Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.14. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.15. The Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.17. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SCHEDULE I -- Schedules of Mortgage Loans
EXHIBIT A-1 -- Form of Class A Note
EXHIBIT A-2 -- Form of Originators Certificate
EXHIBIT B -- Contents of Mortgage Files
EXHIBIT C -- Form of Credit Line Agreement
EXHIBIT D -- Form of Certificate Re: Mortgage Loans Prepaid in
full After the Initial Cut-Off Date
EXHIBIT E -- Form of Indenture Trustee's Receipt
EXHIBIT F -- Form of Pool Certification
EXHIBIT G -- [RESERVED]
EXHIBIT H -- [RESERVED]
EXHIBIT I -- [RESERVED]
EXHIBIT J -- [RESERVED]
EXHIBIT K -- Form of Master Servicer's Trust Receipt
EXHIBIT L -- Subsequent Transfer Agreement
EXHIBIT M -- Form of Liquidation Report
EXHIBIT N -- [RESERVED]
EXHIBIT O -- [RESERVED]
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SALE AND SERVICING AGREEMENT, relating to ADVANTA REVOLVING HOME
EQUITY LOAN TRUST 1997-A (the " Trust" or the " Issuer"), dated as of November
1, 1997, by and among ADVANTA MORTGAGE CONDUIT SERVICES, INC., a Delaware
corporation, in its capacity as Sponsor of the Trust (the "Sponsor"), ADVANTA
MORTGAGE CORP. USA, a Delaware corporation, in its capacity as master servicer
(the "Master Servicer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a
national banking association, in its capacity as Indenture Trustee (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase a portfolio of Mortgage
Loans arising in connection with Credit Line Agreements originated by Advanta
Finance Corp. and Advanta National Bank (each an "Originator" and together the
"Originators");
WHEREAS the Sponsor has purchased such Mortgage Loans from the
Originators and is willing to sell such Mortgage Loans to the Issuer;
WHEREAS, the Issuer desires to purchase Subsequent Mortgage Loans
arising in connection with Credit Line Agreements to be originated by the
Originators.
WHEREAS, the Sponsor has an agreement to purchase such Subsequent
Mortgage Loans from the Originators and is willing to sell such Subsequent
Mortgage Loans to the Issuer;
WHEREAS, the Master Servicer has agreed to service the Mortgage
Loans, which constitute the principal assets of the Trust Estate;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Sponsor, the Master Servicer, the Issuer and
the Indenture Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.1. Definitions. For all purposes of this Agreement, the
following terms shall have the meanings set forth below, unless the context
clearly indicates otherwise. In addition, capitalized terms used herein and
not defined herein shall have their respective meanings as set forth in the
Indenture.
"Accepted Servicing Practices": shall mean the Master
Servicer's normal servicing practices in servicing and administering mortgage
loans for its own account, which in general will conform to the mortgage
servicing practices of prudent mortgage lending institutions which service for
their own account mortgage loans of the same type as the Mortgage Loans in the
jurisdictions in which the related Mortgaged Properties are located and will
give due consideration to the Insurer's and the Noteholders' reliance on the
Master Servicer.
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"Account": Any account established in accordance with Section 4.8
hereof and Section 8.3 of the Indenture.
"Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust pursuant to Section 2.4(b) of this Agreement, a
notice in the form of Exhibit N hereto, which shall be given not later than
five Business Days prior to the related Subsequent Transfer Date, of the
Sponsor's designation of Subsequent Mortgage Loans to be sold to the Trust and
the aggregate Principal Balance of such Subsequent Mortgage Loans.
"Additional Balance": As to any Mortgage Loan and day, the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.1.
"Agreement": This Sale and Servicing Agreement, as it may be
amended from time to time, and including the Exhibits hereto.
"AMHC": Advanta Mortgage Holding Company, a Delaware corporation
and the corporate parent of Advanta Mortgage Corp. USA, and the indirect
corporate parent of Advanta Mortgage Conduit Services, Inc.
"Appraised Value": As to any Mortgaged Property, the value
established by a drive by inspection or a full appraisal of such Mortgaged
Property in order to establish compliance with the underwriting criteria then
in effect in connection with the application for the Mortgage Loan secured by
such Mortgaged Property.
"Assignment of Mortgage": With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the recordation of the pledge
of the Mortgage Loans to the Indenture Trustee for the benefit of the Class A
Noteholders.
"Authorized Officer": With respect to any Person, any person who
is authorized to act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person and, with respect to the Indenture
Trustee, the Master Servicer and the Sponsor, initially including those
individuals whose names appear on the lists of Authorized Officers delivered on
the Closing Date.
"Business Day": Any day that is not a Saturday, Sunday or other
day on which commercial banking institutions in the State of New York, the
State of California or in the city in which the principal corporate trust
office of the Indenture Trustee is located, are authorized or obligated by law
or executive order to be closed.
"Capitalized Interest Account": The Capitalized Interest Account
established in accordance with Section 8.3 of the Indenture and maintained by
the Indenture Trustee.
"Certificate": As defined in the Trust Agreement.
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"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act
of 1940, as amended.
"Class A Note": Any Note designated as a "Class A Note" on the
face thereof, in the form of Exhibit A-1 hereto. The Class A Notes shall be
issued with an initial aggregate Class A Principal Balance equal to the
Original Class A Principal Balance therefor.
"Class A Principal Balance": As of any time of determination,
the Original Class A Principal Balance of the Class A Notes less any amounts
actually distributed theretofore as principal thereon to the Class A Notes of
the Class A Notes on all prior Payment Dates.
"Closing Date": November 20, 1997.
"Code": The Internal Revenue Code of 1986, as amended and any
successor statute.
"Combined Loan-to-Value Ratio": With respect to any Mortgage
Loan as of any date, the percentage equivalent of a fraction, the numerator of
which is the sum of (i) the Credit Limit and (ii) the outstanding principal
balance as of the date of execution of the related Credit Line Agreement (or as
of any subsequent date, if any, as of which such outstanding principal balance
may be determined in connection with an increase in the Credit Limit for such
Mortgage Loan) of any mortgage loan or mortgage loans that are senior in
priority to the Mortgage Loan and which is secured by the same Mortgaged
Property and the denominator of which is the lesser of (i) the Appraised Value
of the related Mortgaged Property as set forth in the Mortgage File on such
date of execution or on such subsequent date, if any, or (ii) in the case of a
Mortgaged Property purchased within one year of such date of execution, the
purchase price thereof.
"Credit Limit": As to any Mortgage Loan, the maximum principal
balance permitted under the terms of the related Credit Line Agreement.
"Credit Limit Utilization Rate": As to any Mortgage Loan, the
percentage equivalent of a fraction the numerator of which is the Principal
Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
"Credit Line Agreement": With respect to any Mortgage Loan, the
related home equity line of credit agreement, security instrument and
promissory note executed by the related Mortgagor and any amendment or
modification thereof.
"Cut-Off Date": With respect to each Initial Mortgage Loan, the
Initial Cut-Off Date. With respect to any Subsequent Mortgage Loan, the
Subsequent Cut-Off Date related to such Subsequent Mortgage Loan. With respect
to each Qualified Replacement Mortgage, the Replacement Cut-off Date related to
such Qualified Replacement Mortgage.
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"Cut-Off Date Pool Balance": The aggregate Principal Balances of
all the Mortgage Loans as of the related Cut-Off Date; as of the Initial
Cut-Off Date, $86,835,573.71.
"Cut-Off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the related Cut-Off Date.
"Date-of-Payment Loans": Any Mortgage Loan as to which, pursuant
to the Credit Line Agreement relating thereto, interest is computed and charged
to the Mortgagor at the rate on the outstanding principal balance of such
Credit Line Agreement based on the number of days elapsed between receipt of
the Mortgagor's last payment through receipt of the Mortgagor's most current
payment.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Minimum Monthly Payment
due on such Mortgage Loan.
"Defective Mortgage Loan": A Mortgage Loan determined not to
satisfy the criteria set forth in this Agreement.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding Principal Balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the United States Bankruptcy Code.
"Delinquent": A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment
has not been received by the close of business on the corresponding day of the
month immediately succeeding the month in which such payment was due, or, if
there is no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st day of such month) then on
the last day of such immediately succeeding month. Similarly for "60 days
delinquent," "90 days delinquent" and so on.
"Depository": The Depository Trust Company, 0 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and any successor Depository hereafter named.
"Designated Depository Institution": With respect to the
Principal and Interest Account, an institution whose deposits are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC,
the long-term deposits of which shall be rated (x) A or better by Standard &
Poor's and (y) A2 or better by Xxxxx'x and in one of the two highest short-term
rating categories, unless otherwise approved in writing by the Insurer and each
of Xxxxx'x and Standard & Poor's, and which is any of the following: (i) a
federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or
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(v) approved in writing by the Insurer, Xxxxx'x and Standard & Poor's and, in
each case acting or designated by the Master Servicer as the depository
institution for the Principal and Interest Account; provided, however, that any
such institution or association shall have combined capital, surplus and
undivided profits of at least $100,000,000. Notwithstanding the foregoing, the
Principal and Interest Account may be held by an institution otherwise meeting
the preceding requirements except that the only applicable rating requirement
shall be that the unsecured and uncollateralized debt obligations thereof shall
be rated Baa3 or better by Xxxxx'x if such institution has trust powers and the
Principal and Interest Account is held by such institution in its trust
capacity and not in its commercial capacity.
"Determination Date": As to each Payment Date, the third
Business Day next preceding such Payment Date or such earlier day as shall be
agreed to by the Insurer and Indenture Trustee.
"Direct Participant" or "DTC Participant": Any broker-dealer,
bank or other financial institution for which the Depository holds the Class A
Notes from time to time as a securities depository.
"Document Delivery Requirements": The Sponsor's obligations to
deliver certain legal documents, to prepare and record certain Mortgage
assignments or to deliver certain opinions relating to Mortgage assignments, in
each case with respect to the Mortgage Loans upon certain conditions as set
forth in Section 2.1 hereof.
"Draw": With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the related Cut-Off Date in accordance
with the related Credit Line Agreement.
"Draw Period": With respect to any Mortgage Loan, the period of
time whereby a Mortgagor may make a Draw under the related Credit Line
Agreement; such period not exceed ten years, unless extended at the option of
the related Originator and/or the Master Servicer
"Event of Servicing Termination": As defined in Section 5.1
hereof.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"First Mortgage Loan": A Mortgage Loan which constitutes a first
priority mortgage lien with respect to any Mortgaged Property.
"Foreclosure Profit": With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Principal Balance (plus accrued and unpaid
interest thereon at the applicable Loan
5
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Rate from the date interest was last paid through the date of receipt of the
final Liquidation Proceeds) of such Liquidated Mortgage Loan immediately prior
to the final recovery of its Liquidation Proceeds.
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor
thereof.
"Highest Lawful Rate": As defined in Section 7.13.
"Holder" or "Noteholder": means the Person in whose name a Note
is registered on the Note Register.
"Indemnification Agreement": The Indemnification Agreement
dated as of November 20, 1997 among the Sponsor, the Insurer and the
Underwriter.
"Indenture": The Indenture dated as of November 1, 1997 between
the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee": Bankers Trust Company of California, N.A.,
located on the date of execution of this Agreement at 0 Xxxx Xxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, not in its individual capacity but solely as
Indenture Trustee under this Agreement, and any successor hereunder.
"Indenture Trustee's Fee": With respect to any Payment Date, the
product of (x) one-twelfth of .015% and (y) the Pool Balance as of the end of
the immediately preceding Remittance Period.
"Indirect Participant" shall mean any financial institution for
whom any Direct Participant holds an interest in the Class A Notes.
"Initial Cut-Off Date": With respect to the Initial Mortgage
Loans, the opening of business on November 1, 1997.
"Initial Mortgage Loans": Mortgage Loans delivered by the
Sponsor to the Trust on the Closing Date.
"Initial Premium": The initial premium payable by the Sponsor on
behalf of the Trust to the Insurer in consideration of the delivery to the
Indenture Trustee of the Insurance Policy.
"Insurance Agreement": The Insurance Agreement dated as of
November 20, 1997 among the Sponsor, the Master Servicer, the Indenture Trustee
and the Insurer, as it may be amended from time to time.
"Insurance Policy": Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan.
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"Insurance Proceeds": Proceeds paid by any insurer (other than
the Insurer) pursuant to any Insurance Policy covering a Mortgage Loan, or
amounts required to be paid by the Master Servicer pursuant to the last
sentence of the first paragraph of Section 4.11(b), or the penultimate sentence
of Section 4.11(c), net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures, or (iv) required to be paid to
any holder of a mortgage senior to such Mortgage Loan.
"Insurer": Ambac Assurance Corporation or any successor thereto,
as issuer of the Insurance Policy.
"Interest Collections": For any Payment Date, amounts collected
during the related Remittance Period, including the portion of Net Liquidation
Proceeds allocated to interest pursuant to the terms of the Credit Line
Agreements, less the Servicing Fee for the related Remittance Period.
"Interest Remittance Amount": As of any Remittance Date, the
sum, without duplication, of (i) all interest collected by the Master Servicer
during the related Remittance Period with respect to the Mortgage Loans (less
the Servicing Fee), except that with respect to Prepaid Installments, interest
shall be remitted in the related Remittance Period and (ii) all Net Liquidation
Proceeds actually collected by the Master Servicer with respect to the Mortgage
Loan during the related Remittance Period (to the extent such Net Liquidation
Proceeds relate to interest).
"Issuer" or "Trust": Advanta Revolving Home Equity Loan Trust
1997-A created by the Trust Agreement.
"Late Payment Rate": For any Payment Date, the rate of interest,
as it is publicly announced by Citibank, N.A. at its principal office in New
York, New York as its prime rate (any change in such prime rate of interest to
be effective on the date such change is announced by Citibank, N.A.) plus 2%.
The Late Payment Rate shall be computed on the basis of a year of 365 days
calculating the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
"Lifetime Rate Cap": With respect to each Mortgage Loan with
respect to which the related Credit Line Agreement provides for a lifetime rate
cap, the maximum Loan Rate permitted over the life of such Mortgage Loan under
the terms of the related Credit Line Agreement, as set forth on Exhibit C
hereto.
"Liquidated Mortgage Loan": As defined in Section 4.13(b)
hereof. A Mortgage Loan which is purchased from the Trust pursuant to Section
3.3, 3.4, 3.6(b) or 4.10 hereof is not a "Liquidated Mortgage Loan".
"Liquidation Expenses": Expenses which are incurred by the
Master Servicer or any Sub-Servicer in connection with the liquidation of any
defaulted
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Mortgage Loan, such expenses, including, without limitation, legal fees and
expenses, and any unreimbursed Servicing Advances expended by the Master
Servicer or any Sub-Servicer pursuant to Section 4.9 with respect to the
related Mortgage Loan.
"Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan, any amounts (including the proceeds of any Insurance Policy but excluding
any amounts drawn on the Insurance Policy) recovered by the Master Servicer in
connection with such Liquidated Mortgage Loan, whether through Indenture
Trustee's sale, foreclosure sale or otherwise.
"Liquidation Report": As set forth in Exhibit M.
"Loan Purchase Price": With respect to any Mortgage Loan
purchased from the Trust on a Remittance Date pursuant to Section 2.2(b), 3.3,
3.4, or 4.10 hereof, an amount equal to the Principal Balance of such Mortgage
Loan as of the date of purchase, plus one month's interest on the outstanding
Principal Balance thereof as of the beginning of the preceding Remittance
Period computed at the Loan Rate, if any, together with, without duplication,
the aggregate amount of (i) all delinquent interest, all Servicing Advances
theretofore made with respect to such Mortgage Loan and not subsequently
recovered from the related Mortgage Loan and (ii) any Reimbursement Amount
relating to such Mortgage Loan.
"Loan Rate": With respect to any Mortgage Loan and as of any
day, the per annum rate of interest applicable under the related Credit Line
Agreement to the calculation of interest for such day on the Principal Balance
of such Mortgage Loan.
"Loan Rate Cap": With respect to each Mortgage Loan, the lesser
of (i) the Lifetime Rate Cap, if any, or (ii) the applicable state usury
ceiling, if any.
"Margin": With respect to each Mortgage Loan with an adjustable
rate, the fixed percentage amount set forth in the related Credit Line
Agreement which amount is added to Prime in accordance with the terms of the
related Credit Line Agreement to determine the Loan Rate for such Mortgage
Loan, subject to any maximum.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Master Servicer Affiliate": A Person (i) controlling,
controlled by or under common control with the Master Servicer and (ii) which
is qualified to service residential mortgage loans.
"Master Servicer's Trust Receipt": The Master Servicer's trust
receipt in the form set forth as Exhibit K hereto.
"Minimum Monthly Payment": With respect to any Mortgage Loan and
any month, the minimum amount required to be paid by the related Mortgagor in
that month.
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"Minimum Originators' Interest": With respect to any date, an
amount equal to 2% of the Trust Collateral Value.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple interest in real
property securing a Credit Line Agreement.
"Mortgage Files": For each Mortgage Loan, the items listed on
Exhibit B hereto.
"Mortgage Loan Schedule": A schedule of Mortgage Loans
transferred to the Trust, attached hereto as Schedule II, as it may be further
supplemented in connection with subsequent transfers of Subsequent Mortgage
Loans.
"Mortgage Loans": Such of the mortgage loans transferred and
assigned to the Trust pursuant to Section 2.1(a) and 2.4 hereof, together with
any Qualified Replacement Mortgages substituted therefor in accordance with
this Agreement, as from time to time are held as a part of the Trust Estate,
the Mortgage Loans originally so held being identified in the Schedule of
Mortgage Loans. The term "Mortgage Loan" includes the terms "First Mortgage
Loan" and "Second Mortgage Loan". The term "Mortgage Loan" includes any
Mortgage Loan which is Delinquent, which relates to a foreclosure or which
relates to a Mortgaged Property which is REO Property prior to such Mortgaged
Property's disposition by the Trust. Any mortgage loan which, although
intended by the parties hereto to have been, and which purportedly was,
transferred and assigned to the Trust by the Sponsor, in fact was not
transferred and assigned to the Trust for any reason whatsoever shall
nevertheless be considered a "Mortgage Loan" for all purposes of this
Agreement. The term "Mortgage Loan" includes the terms "Initial Mortgage
Loan," and "Subsequent Mortgage Loan".
"Mortgaged Property": The underlying property securing a
Mortgage Loan.
"Mortgagor": The obligor on a Credit Line Agreement.
"Net Liquidation Proceeds": As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of, without duplication, Liquidation Expenses and
unreimbursed Servicing Advances and accrued and unpaid Servicing Fees through
the date of liquidation relating to such Liquidated Mortgage Loan. In no event
shall Net Liquidation Proceeds with respect to any Liquidated Mortgage Loan be
less than zero.
"Nonrecoverable Advance" shall mean, with respect to any Mortgage
Loan, any Servicing Advance previously made and not reimbursed pursuant to
Section 4.9 which, in the good faith business judgment of the Master Servicer,
as evidenced by an Officer's Certificate delivered to the Insurer and the
Indenture Trustee on or prior to the related Remittance Date, would not be
ultimately recoverable.
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"Note Account": The Note Account established in accordance with
Section 8.3 of the Indenture and maintained by the Indenture Trustee.
"Officer's Certificate": A certificate signed by any Authorized
Officer of any Person delivering such certificate and delivered to the
Indenture Trustee.
"Operative Documents": Collectively, this Agreement, the
Indenture, the Trust Agreement, the Subsequent Transfer Agreements, the
Insurance Policy, the Class A Notes, the Indemnification Agreement and the
Insurance Agreement.
"Original Class A Principal Balance": $100,000,000.
"Original Principal Amount": With respect to any particular
Class A Note, an amount equal to the product of (i) the Percentage Interest of
such Class A Note and (ii) the Original Class A Principal Balance.
"Original Principal Balance": With respect to each Credit Line
Agreement, the principal amount of such Credit Line Agreement or the mortgage
note relating to a Senior Lien, as the case may be, on the date of origination
thereof.
"Originators": As defined in the Recitals.
"Originators' Interest": As of any Payment Date, is the excess,
if any, of (x) the Trust Collateral Value as of such Payment Date over (y) the
Class A Principal Balance as of such Payment Date (after taking into account
reductions therein on such Payment Date).
"Outstanding": With respect to Class A Notes, as of any date of
determination, all such Class A Notes theretofore executed and delivered
hereunder except:
(i) Class A Notes theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for cancellation;
(ii) Class A Notes or portions thereof for which full and
final payment money in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for the Class A
Noteholders;
(iii) Class A Notes in exchange for or in lieu of which
other Class A Notes have been executed and delivered pursuant to this
Agreement, unless proof satisfactory to the Indenture Trustee is
presented that any such Class A Notes are held by a bona fide purchaser;
and
(iv) Class A Notes alleged to have been destroyed, lost or
stolen for which replacement Class A Notes have been issued as provided
for in Section 2.4 of the Indenture.
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"Owner Trustee": Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, its successors
in interest or any successor Owner Trustee under the Trust Agreement.
"Payment Date": Any date on which the Indenture Trustee is
required to make distributions to the Class A Noteholders, which shall be the
25th day of each month, commencing in the month following the Closing Date or,
if such day is not a Business Day, then on the succeeding Business Day.
"Percentage Interest": As to any Class A Note that percentage,
expressed as a fraction, the numerator of which is the Class A Principal
Balance of such Class A Note as of the related Cut-Off Date and the denominator
of which is the Original Class A Principal Balance of all Class A Notes of the
same Class; and as to any Certificate, Percentage Interest set forth on such
Certificate.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Policy": The financial guaranty insurance policy dated November
20, 1997, issued by the Insurer to the Indenture Trustee for the benefit of the
Noteholders.
"Pool Balance": With respect to any date, the Principal
Balances of the Mortgage Loans as of such date.
"Pool Certification": As defined in Exhibit F attached hereto.
"Pool Factor": A seven-digit decimal which the Indenture Trustee
shall compute monthly expressing the Class A Principal Balance as of each
Payment Date (after giving effect to any distribution of principal on such
Payment Date) as a proportion of the Original Class A Principal Balance. On
the Closing Date, the Pool Factor will be 1.0000000. Thereafter, the Pool
Factor shall decline to reflect reductions in the related Class A Principal
Balance resulting from distributions of principal to the Class A Notes.
"Pre-Funded Mortgage Loans": Subsequent Mortgage Loans assigned
to the Trust in consideration of amounts released to the Originators from the
Pre-Funding Account.
"Pre-Funding Period": The period commencing on the Closing Date
and ending on the earliest to occur of (i) the date on which the amount on
deposit in the Pre-Funding Account (exclusive of any investment earnings) is
less than $100,000, (ii) the date on which a Rapid Amortization Event occurs
and (iii) the February, 1998 Payment Date.
"Pre-Funding Transfer Date": Any Subsequent Transfer Date on
which Pre-Funded Mortgage Loans are assigned to the Trust.
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"Prepaid Installment": With respect to any Mortgage Loan, any
installment of principal thereof and interest thereon received prior to the
scheduled due date for such installment, intended by the Mortgagor as an early
payment thereof and not as a Prepayment with respect to such Mortgage Loan.
"Preference Amount": As defined in the Policy.
"Prepayment": Any payment of principal of a Mortgage Loan which
is received by the Master Servicer in advance of the scheduled due date for the
payment of such principal (other than the principal portion of any Prepaid
Installment), and the proceeds of any Insurance Policy which are to be applied
as a payment of principal on the related Mortgage Loan shall be deemed to be
Prepayments for all purposes of this Agreement.
"Preservation Expenses": Expenditures made by the Master
Servicer or any Sub-Servicer in connection with a foreclosed Mortgage Loan
prior to the liquidation thereof, including, without limitation, expenditures
for real estate property taxes, hazard insurance premiums, property restoration
or preservation.
"Prime": The Prime rate of interest charged from time to time as
set forth in the related Credit Line Agreement.
"Principal and Interest Account": Collectively, each principal
and interest account created by the Master Servicer or any Sub-Servicer
pursuant to Section 4.8(a) hereof, or pursuant to any Sub-Servicing Agreement.
"Principal Balance": As to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and as of any date, the related Cut-Off Date
Principal Balance, plus (i) any Additional Balance in respect of such Mortgage
Loan, minus (ii) all collections credited as principal against the Principal
Balance of any such Mortgage Loan in accordance with the related Credit Line
Agreement prior to such day. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance of zero as of the
first day of the Remittance Period following the Remittance Period in which
such Mortgage Loan becomes a Liquidated Mortgage Loan and at all times
thereafter.
"Principal Collections": As to any Payment Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
principal (including, but not limited to, and Substitution Amounts any portion
of Insurance Proceeds or Net Liquidation Proceeds allocable to principal of the
applicable Mortgage Loan, but excluding Foreclosure Profits) collected by the
Master Servicer under the Mortgage Loans during the related Remittance Period.
The terms of the related Credit Line Agreement shall determine the portion of
each payment in respect of a Mortgage Loan that constitutes principal or
interest.
"Principal Remittance Amount": As of any Remittance Date, the
sum, without duplication, of (i) the principal actually collected by the Master
Servicer with respect to Mortgage Loans during the related Remittance Period,
(ii) the Principal
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Balance of each such Mortgage Loan that either was repurchased by the Sponsor
or purchased by the Master Servicer, to the extent such Principal Balance was
actually deposited in the Principal and Interest Account on such Remittance
Date, (iii) any Substitution Amounts delivered by the Sponsor in connection
with a substitution of a Mortgage Loan, to the extent such Substitution Amounts
were actually deposited in the Principal and Interest Account on such
Remittance Date, and (iv) all Net Liquidation Proceeds actually collected by
the Master Servicer with respect to such Mortgage Loans during the related
Remittance Period (to the extent such Liquidation Proceeds related to
principal).
"Prospectus": That certain Prospectus dated October 30, 1997
naming Advanta Mortgage Conduit Services, Inc. and Advanta Mortgage Corp. USA
as registrants and describing certain mortgage loan asset-backed securities to
be issued from time to time as described in related Prospectus Supplements.
"Prospectus Supplement": That certain Prospectus Supplement
dated November 14, 1997, describing the Class A Notes issued by the Trust.
"Qualified Replacement Mortgage": A Mortgage Loan substituted
for another pursuant to Section 2.2(b), 3.3 or 3.4 hereof, which (i) bears a
variable rate of interest, (ii) has a Loan Rate at least equal to the Loan Rate
of the Mortgage Loan being replaced, (which shall mean a Mortgage Loan having
the same interest rate index, a margin over such index and a maximum interest
rate at least equal to those applicable to the Mortgage Loan being replaced),
(iii) is of the same or better property type and the same or better occupancy
status as the replaced Mortgage Loan, (iv) shall be of the same or better
credit quality classification (determined in accordance with the respective
Originator's credit underwriting guidelines) as the Mortgage Loan being
replaced, (v) shall mature no later than the Payment Date occurring in
February, 2023, (vi) has a Combined Loan-to-Value Ratio as of the Initial
Cut-Off Date or Subsequent Cut-Off Date, as applicable, no higher than the
Combined Loan-to-Value Ratio of the replaced Mortgage Loan at such time, (vii)
has a Principal Balance as of the related Replacement Cut-Off Date equal to or
less than the Principal Balance of the replaced Mortgage Loan as of such
Replacement Cut-Off Date, (viii) is in the same lien position or better.
Except with respect to clause (vi) above, in the event that one or more
mortgage loans are proposed to be substituted for one or more mortgage loans,
the Insurer may allow the foregoing tests to be met on a weighted average basis
or other aggregate basis acceptable to the Insurer, as evidenced by a written
approval delivered to the Indenture Trustee by the Insurer.
"Realized Loss": As to any Liquidated Mortgage Loan, the amount,
if any, by which the Principal Balance thereof as of the date of liquidation is
in excess of Net Liquidation Proceeds realized thereon.
"Record Date": With respect to each Payment Date, the last day
of the calendar month immediately preceding the calendar month in which such
Payment Date occurs.
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"Register": The register maintained by the Indenture Trustee in
accordance with Section 2.3 of the Indenture, in which the names of the Class A
Noteholders are set forth.
"Registrar": The Indenture Trustee, acting in its capacity as
Indenture Trustee appointed pursuant to Section 2.3 of the Indenture, or any
duly appointed and eligible successor thereto.
"Registration Statement": The Registration Statement filed by
the Sponsor with the Securities and Exchange Commission, including all
amendments thereto and including the Prospectus and the Prospectus Supplement
relating to the Class A Notes constituting a part thereof.
"Reimbursement Amount": As of any Payment Date, the sum of
(x)(i) all payments made pursuant to the Insurance Policy previously received
by the Indenture Trustee and all Preference Amounts previously paid to the
Indenture Trustee by the Insurer and in each case not previously repaid to the
Insurer pursuant to Section 8.06(b)(viii) of the Indenture plus (ii) interest
accrued on each such payment made pursuant to the Insurance Policy not
previously repaid calculated at the Late Payment Rate from the date the
Indenture Trustee received the related payment made pursuant to the Insurance
Policy and (y)(i) any amounts then due and owing to the Insurer under the
Insurance Agreement plus (ii) interest on such amounts at the Late Payment
Rate. The Insurer shall notify the Indenture Trustee and the Sponsor of the
amount of any Reimbursement Amount.
"REO Property": A Mortgaged Property acquired by the Master
Servicer or any Sub-Servicer on behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
"Remittance Date": Any date on which the Master Servicer is
required to remit monies on deposit in the Principal and Interest Account to
the Indenture Trustee, which shall be the 18th day or, if such day is not a
Business Day, the next preceding Business Day, of each month, commencing in the
month following the month in which the Closing Date occurs.
"Remittance Period": As to any Payment Date, the calendar month
preceding the month of such Payment Date.
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is conveyed to the Trust.
"Representation Letter" shall mean letters to, or agreements with,
the Depository to effectuate a book entry system with respect to the Class A
Notes registered in the Register under the nominee name of the Depository.
"Standard & Poor's": Standard & Poor's Rating Group, a division
of The McGraw Hill Companies.
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"Schedule of Mortgage Loans": The Schedule of Mortgage Loans,
attached hereto as Schedule II, as it may be further supplemented in connection
with Subsequent Transfers.
"Second Mortgage Loan": A Mortgage Loan which constitutes a
second priority mortgage lien with respect to the related Mortgaged Property.
"Securities Act": The Securities Act of 1933, as amended.
"Senior Lien": With respect to any Second Mortgage Loan, the
mortgage loan relating to the corresponding Mortgaged Property having a first
priority lien.
"Servicing Advance": As defined in Section 4.9 and Section 4.13
hereof.
"Servicing Fee": With respect to any Payment Date, the product
of (i) one-twelfth of the Servicing Fee Rate and (ii) the aggregate Principal
Balance of the Mortgage Loans on the first day of the Remittance Period
preceding such Payment Date (or at the Cut-Off Date with respect to the first
Payment Date).
"Servicing Fee Rate": 0.50% per annum.
"Sponsor": Advanta Mortgage Conduit Services, Inc., a Delaware
Corporation.
"Subsequent Cut-Off Date": With respect to any Subsequent
Mortgage Loan, the opening of business on the first day of the calendar month
in which the related Subsequent Transfer Date occurs.
"Subsequent Mortgage Loans": The Mortgage Loans assigned to the
Trust pursuant to Section 2.4 of the Agreement, which shall be listed on the
Schedule of Mortgage Loans attached to the Subsequent Transfer Agreement.
"Subsequent Transfer Agreement": Each Subsequent Transfer
Agreement dated as of a Subsequent Transfer Date executed by the Indenture
Trustee and the Sponsor substantially in the form of Exhibit L hereto, by which
Subsequent Mortgage Loans are assigned to the Trust.
"Subsequent Transfer Date": The date specified in each
Subsequent Transfer Agreement, which must, with respect to any Payment Date, be
a date occurring during the calendar month in which such Payment Date occurs,
and on or prior to the Remittance Date occurring in such month.
"Substitution Amount": In connection with the delivery of any
Qualified Replacement Mortgage, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date is
less than the Principal Balance of the Mortgage Loan being replaced as of such
Replacement Cut-Off Date, an amount equal to such difference together with
accrued and unpaid interest on
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such amount calculated at the Loan Rate net of the Servicing Fee, if any, of
the Mortgage Loan being replaced.
"Sub-Servicer": Any Person with whom the Master Servicer has
entered into a Sub-Servicing Agreement and who satisfies any requirements set
forth in Section 4.3 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and any Sub-Servicer relating to the servicing and/or
administration of certain Mortgage Loans as permitted by Section 4.3.
"Telerate Screen Page 3750": The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
"Termination Fees": With respect to Mortgage Loans which prepay
in full or in part and are secured by Mortgaged Properties in certain
jurisdictions, an account termination fee generally not exceeding $500 may be
charged by the Master Servicer and retained as additional servicing
compensation pursuant to Section 4.15. Such Termination Fees may not be
applicable to accounts terminated subsequent to a date designated in the
related Credit Line Agreement which depending on the jurisdiction may be during
the Draw Period.
"Transfer Date": As defined in Section 2.5 herein.
"Transfer Notice Date": As defined in Section 2.5 herein.
"Trust Agreement": The Trust Agreement dated as of November 1,
1997 between the Issuer and the Sponsor.
"Trust Collateral Value": As of any Payment Date, the sum of (i)
the Pool Balance at the end of the prior calendar month, (ii) the aggregate
Principal Balances as of the related Cut-Off Dates of all Subsequent Mortgage
Loans previously assigned to the Trust during the calendar month in which such
Payment Date occurs and (iii) the amounts, if any, on deposit in the
Pre-Funding Account at the close of business on such Payment Date.
"Trust Estate": Collectively, all money, instruments and other
property, to the extent such money, instruments and other property are subject
or intended to be held in trust, for the benefit of the Class A Noteholders and
the Insurer, including all proceeds thereof including, without limitation, (i)
the Initial Mortgage Loans, Qualified Replacement Mortgages and Subsequent
Mortgage Loans, (ii) such amounts, including Eligible Investments, as from time
to time may be held in all Accounts (except as otherwise provided herein),
(iii) any Mortgaged Property, the Class A Noteholder of which has been effected
on behalf of the Trust as a result of foreclosure or acceptance by the Master
Servicer or any Sub-Servicer of a deed in lieu of foreclosure and that has not
been withdrawn from the Trust, (iv) any Insurance Policies relating to the
Mortgage Loans and any rights of the Trust and the Sponsor under any Insurance
Policies, (v) Net
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Liquidation Proceeds with respect to any Liquidated Mortgage Loan, (vi) the
Insurance Policy, (vii) such amounts held in the Capitalized Interest Account,
and (viii) such amounts held in the Pre-Funding Account, the Principal and
Interest Account and the Note Account.
"Underwriter": X.X. Xxxxxx Securities Inc.
Section 1.2. Use of Words and Phrases. "Herein", "hereby",
"hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words
refer to this Agreement as a whole and not solely to the particular section of
this Agreement in which any such word is used. The definitions set forth in
Section 1.1 hereof include both the singular and the plural. Whenever used in
this Agreement, any pronoun shall be deemed to include both singular and plural
and to cover all genders.
Section 1.3. Captions; Table of Contents. The captions or headings
in this Agreement and the Table of Contents are for convenience only and in no
way define, limit or describe the scope and intent of any provisions of this
Agreement.
Section 1.4. Opinions. Each opinion with respect to the validity,
binding nature and enforceability of documents or Notes may be qualified to the
extent that the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law) and may state that no
opinion is expressed on the availability of the remedy of specific enforcement,
injunctive relief or any other equitable remedy. Any opinion required to be
furnished by any Person hereunder must be delivered by counsel upon whose
opinion the addressee of such opinion may reasonably rely, and such opinion may
state that it is given in reasonable reliance upon an opinion of another, a
copy of which must be attached, concerning the laws of a foreign jurisdiction.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.1. Conveyance of the Initial Mortgage Loans. (a) The
Sponsor, concurrently with the execution and delivery hereof, hereby transfers,
assigns, sets over and otherwise conveys without recourse, to the Indenture
Trustee, all right, title and interest of the Sponsor in and to (i) each
Initial Mortgage Loan listed on the Schedule of Mortgage Loans, including its
Principal Balance (including all Additional Balances) and all collections in
respect thereof received on or after the Initial Cut-Off Date (excluding
payments in respect of accrued interest due prior to the Initial Cut-Off Date);
(ii) property that secured a Mortgage Loan that is acquired by foreclosure or
deed in lieu of foreclosure; (iii) the Sponsor's rights under the hazard
insurance policies; and (iv) all other assets included or to be included in the
Trust for the benefit of Class A Noteholders and the Insurer; provided,
however, neither the Indenture Trustee nor the Trust assumes the obligation
under any Credit Line Agreement that provides for the funding of future
advances to the Mortgagor thereunder, and neither the Trust nor the Indenture
Trustee
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shall be obligated or permitted to fund any such future advances. Additional
Balances shall be part of the related Principal Balance and are hereby
transferred to the Trust for application to the Originators' Interest only on
the Closing Date pursuant to this Section 2.1, and therefor part of the Trust
estate. In addition, on or prior to the Closing Date, the Sponsor shall cause
the Insurer to deliver the Policy to the Indenture Trustee for the benefit of
the Class A Noteholders of the Class A Notes. The foregoing transfer,
assignment, set-over and conveyance to the Trust shall be made to the Indenture
Trustee, on behalf of the Trust, and each reference in this Agreement to such
transfer, assignment, set-over and conveyance shall be construed accordingly.
The Sponsor agrees to take or cause to be taken such actions and
execute such documents (including, without limitation, the filing of all
necessary continuation statements for the UCC-1 financing statements filed in
the State of New York (which shall have been filed within 90 days of the
Closing Date) describing the Mortgage Loans and naming the Sponsor as debtor
and the Indenture Trustee as secured party and any amendments to UCC-1
financing statements required to reflect a change in the name or corporate
structure of the Sponsor or the filing of any additional UCC-1 financing
statements due to the change in the principal office of the Sponsor (within 90
days of any event necessitating such filing)) as are necessary to perfect and
protect the Class A Noteholders' and the Insurer's interests in each Mortgage
Loan and the proceeds thereof.
(b) In connection with the transfer and assignment of the
Mortgage Loans, the Sponsor agrees to:
(i) cause to be delivered, without recourse to the
Indenture Trustee, on the Closing Date with respect to the Initial
Mortgage Loans or, on the Subsequent Transfer Date with respect to
Subsequent Mortgage Loans, or, on the Transfer Date with respect to the
Qualified Replacement Mortgage listed on the Schedule of Mortgage
Loans, the items listed as items (a) through (f) in Exhibit B hereto;
and
cause, within 75 Business Days following the Closing Date,
Assignments of Mortgage to be submitted for recording in the
appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof as against creditors of or purchasers from
the Sponsor to the Indenture Trustee; provided, however, that
Assignments of Mortgage shall not be required to be submitted for
recording with respect to any Mortgage Loan as to which the
recordholder is one of the Originators (under, with respect to
Advanta National Bank, either its current name, "Advanta National
Bank" or its prior name, "Advanta National Bank USA"), unless the
related Mortgaged Property is not located in a jurisdiction in
which, as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee within 30 Business Days following the Closing
Date, recordation of such Assignment of Mortgage is not necessary
to perfect the lien of the Indenture Trustee in the related
Mortgage Loan.
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All recording, if required pursuant to this Section 2.1, shall be
accomplished at the expense of the Sponsor. Notwithstanding anything to the
contrary contained in this Section 2.1, in those instances where the public
recording office retains the original Mortgage, the assignment of a Mortgage or
the intervening assignments of the Mortgage after it has been recorded, the
Sponsor shall be deemed to have satisfied its obligations hereunder upon
delivery to the Indenture Trustee of a copy of such Mortgage, such assignment
or assignments of Mortgage certified by the public recording office to be a
true copy of the recorded original thereof.
Copies of all Mortgage assignments and any Assignment of Mortgage
in recordable form received by the Indenture Trustee shall be kept in the
related Mortgage File.
(c) In the case of Initial Mortgage Loans which have been
prepaid in full on or after the Initial Cut-Off Date and prior to the Closing
Date, or with respect to Subsequent Mortgage Loans which have been prepaid in
full on or after the Subsequent Cut-Off Date and prior to the Subsequent
Transfer Date, the Sponsor, in lieu of the foregoing, will deliver within 15
Business Days after the Closing Date, or Subsequent Transfer Date, as
applicable, to the Indenture Trustee a certification of an Authorized Officer
in the form set forth in Exhibit D.
(d) The Sponsor shall transfer, assign, set over and otherwise
convey without recourse, to the Indenture Trustee all right, title and interest
of the Sponsor in and to any Qualified Replacement Mortgage delivered to the
Indenture Trustee on behalf of the Trust by the Sponsor pursuant to Section,
2.2, Section 3.3, Section 3.4 hereof and all its right, title and interest to
principal collected and interest accruing on such Qualified Replacement
Mortgage on and after the applicable Replacement Cut-Off Date; provided,
however, that the Sponsor shall reserve and retain all right, title and
interest in and to payments of principal and interest due on such Qualified
Replacement Mortgage prior to the applicable Replacement Cut-Off Date.
(e) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage therefor,
the Indenture Trustee will transfer, assign, set over and otherwise convey
without recourse, on the Sponsor order, all of its right, title and interest in
and to such released Mortgage Loan and all the Trust's right, title and
interest to principal collected and interest accruing on such released Mortgage
Loan on and after the applicable Replacement Cut-Off Date; provided, however,
that the Trust shall reserve and retain all right, title and interest in and to
payments of principal collected and interest accruing on such released Mortgage
Loan prior to the applicable Replacement Cut-Off Date.
(f) In connection with any transfer and assignment of a
Qualified Replacement Mortgage to the Indenture Trustee on behalf of the Trust,
the Sponsor agrees to cause to be delivered to the Indenture Trustee the items
described in Section 2.1(b) on the date of such transfer and assignment or, if
a later delivery time is permitted by Section 2.1(b), then no later than such
later delivery time.
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(g) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage the
Indenture Trustee shall deliver on the date of conveyance of such Qualified
Replacement Mortgage and on the order of the Sponsor (i) the original Credit
Line Agreement, or the certified copy, relating thereto, endorsed without
recourse, to the Sponsor and (ii) such other documents as constituted the
Mortgage File with respect thereto.
(h) If a Mortgage assignment is lost during the process of
recording, or is returned from the recorder's office unrecorded due to a defect
therein, the Sponsor shall prepare a substitute assignment or cure such defect,
as the case may be, and thereafter cause each such assignment to be duly
recorded.
(i) The Sponsor shall reflect on its records that the Mortgage
Loans have been sold to the Trust.
(j) If the Master Servicer's shareholders' equity (on a
consolidated basis with AMHC) calculated pursuant to generally accepted
accounting principles, as evidenced by the Financial Statements (as defined in
the Insurance Agreement, and which the Master Servicer hereby agrees to provide
to the Insurer on a quarterly basis promptly after the same are available),
falls below $5,000,000, then the Sponsor shall promptly prepare and deliver to
the Indenture Trustee the Mortgage assignments. Upon the direction of the
Insurer, the Indenture Trustee shall submit such assignments for recording in
the appropriate jurisdictions. The Master Servicer shall pay the anticipated
recording costs to the Indenture Trustee on the date of delivery of the
assignments to the Indenture Trustee, and if the Master Servicer fails to do so
or the actual recording costs exceed the anticipated recording costs then the
Indenture Trustee shall pay such costs and shall be entitled to reimbursement
therefor from amounts otherwise distributable to the Class A Noteholders.
(k) To the extent that the ratings, if any, then assigned to the
unsecured debt of the Advanta National Bank or of its ultimate corporate parent
are satisfactory to the Insurer, Xxxxx'x and Standard & Poor's, then any of the
Document Delivery Requirements described above may be waived by an instrument
signed by the Insurer, Standard & Poor's and Xxxxx'x (or any documents
theretofore delivered to the Indenture Trustee returned to Advanta National
Bank) on such terms and subject to such conditions as the Insurer, Xxxxx'x and
Standard & Poor's may permit.
Section 2.2. Acceptance by Indenture Trustee; Certain Substitutions
of Mortgage Loans; Certification by Indenture Trustee. (a) The Indenture
Trustee hereby acknowledges its receipt of the Policy and agrees to execute and
deliver on the Closing Date and on each Subsequent Transfer Date and each
Transfer Date an acknowledgment of receipt of the Credit Line Agreements
delivered by the Sponsor in the form attached as Exhibit E hereto, and declares
that it will hold such documents and any amendments, replacement or supplements
thereto, as well as any other assets included in the definition of Trust Estate
and delivered to the Indenture Trustee, as Indenture Trustee in trust upon and
subject to the conditions set forth herein for the benefit of the Class A
Noteholders and the Insurer. The Indenture Trustee further agrees to review
any other documents
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delivered by the Sponsor within 90 days after the Closing Date (or within 90
days with respect to any Subsequent Mortgage Loan or Qualified Replacement
Mortgage after the assignment thereof) and to deliver to the Sponsor, the
Master Servicer and the Insurer a Pool Certification in the form attached
hereto as Exhibit F to the effect that, as to each Mortgage Loan listed in the
Schedule of Mortgage Loans (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such Pool Certification as not covered
by such Pool Certification), (i) all documents required to be delivered to it
pursuant to this Agreement are in its possession and (ii) such documents have
been reviewed by it and on their face appear to relate to such Mortgage Loan;
provided, however, that such Pool Certification shall not be delivered prior to
90 days after the Closing Date with respect to the Initial Mortgage Loans and
90 days after the Pre-Funding Period with respect to the Pre-Funded Mortgage
Loans. The Indenture Trustee shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to verify the validity, legality, enforceability, sufficiency, due
authorization, recordability or genuineness of same or to determine that they
are genuine, enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face, nor shall the
Indenture Trustee be under any duty to determine independently whether there
are any intervening assignments or assumption or modification agreements with
respect to any Mortgage Loan.
(b) If the Indenture Trustee during such 90-day period finds any
document constituting a part of a Mortgage File which is not properly executed,
has not been received within the specified period, or is unrelated to the
Mortgage Loans identified in the Schedules of Mortgage Loans, or that any
Mortgage Loan does not conform in a material respect to the description thereof
as set forth in the Schedules of Mortgage Loans, the Indenture Trustee shall
promptly so notify the Sponsor and the Insurer. In performing any such review,
the Indenture Trustee may conclusively rely on the Sponsor as to the purported
genuineness of any such document and any signature thereon. It is understood
that the scope of the Indenture Trustee's review of the items delivered by the
Sponsor pursuant to Section 2.1(b)(i) is limited solely to confirming that the
documents listed in Section 2.1(b)(i) have been executed and received, on their
face, appear to relate to the Mortgage Files identified in the Schedules of
Mortgage Loans and conform materially to the description thereof in the
Schedule of Mortgage Loans. The Sponsor agrees to use reasonable efforts to
remedy a material defect in a document constituting part of a Mortgage File of
which it is so notified by the Indenture Trustee. If, however, within 60 days
after the Indenture Trustee's notice to it respecting such defect the Sponsor
has not remedied or caused to be remedied the defect and the defect materially
and adversely affects the interest in the related Mortgage Loan of the Class A
Noteholders or of the Insurer, the Sponsor will then on the next succeeding
Business Day (i) substitute in lieu of such Mortgage Loan a Qualified
Replacement Mortgage and, deliver the Substitution Amount applicable thereto to
the Master Servicer for deposit in the Principal and Interest Account or (ii)
purchase such Mortgage Loan at a purchase price equal to the Loan Purchase
Price thereof, which purchase price shall be delivered to the Master Servicer
for deposit in the Principal and Interest Account. Upon receipt of any
Qualified Replacement Mortgage or of written notification signed by a Servicing
Officer to the effect that the Loan Purchase Price in respect of a Defective
Mortgage Loan has been deposited into the Principal and Interest Account, then
as promptly as
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practicable, the Indenture Trustee shall execute such documents and instruments
of transfer presented by the Sponsor, in each case without recourse,
representation or warranty, and take such other actions as shall reasonably be
requested by the Sponsor to effect such transfer by the Trust of such Defective
Mortgage Loan pursuant to this Section. It is understood and agreed that the
obligation of the Sponsor to accept a transfer of a Defective Mortgage Loan and
to either convey a Qualified Replacement Mortgage or to make a deposit of any
related Loan Purchase Price into the Principal and Interest Account shall
constitute the sole remedy respecting such defect available to Class A
Noteholders, the Indenture Trustee and the Insurer against the Sponsor.
The Sponsor, promptly following the transfer of a Defective
Mortgage Loan from or to the Trust pursuant to this Section, shall deliver an
amended Mortgage Loan Schedule to the Indenture Trustee and the Insurer and
shall make appropriate entries in its general account records to reflect such
transfer. The Sponsor shall, following such retransfer, appropriately xxxx its
records to indicate that it is no longer servicing such Mortgage Loan on behalf
of the Trust. The Sponsor, promptly following such transfer, shall
appropriately xxxx its electronic ledger and make appropriate entries in its
general account records to reflect such transfer.
(c) As to any Qualified Replacement Mortgage, the Sponsor shall,
if required to deliver any such Qualified Replacement Mortgage, deliver to the
Indenture Trustee with respect to such Qualified Replacement Mortgage such
documents and agreements as are required to be held by the Indenture Trustee in
accordance with Section 2.2. For any Remittance Period during which the
Sponsor substitutes one or more Qualified Replacement Mortgages, the Master
Servicer shall determine the Substitution Amount which amount shall be
deposited by the Sponsor in the Principal and Interest Account at the time of
substitution. All amounts received in respect of the Qualified Replacement
Mortgage during the Remittance Period in which the circumstances giving rise to
such substitution occur shall not be a part of the Trust Estate and shall not
be deposited by the Master Servicer in the Principal and Interest Account. All
amounts received by the Master Servicer during the Remittance Period in which
the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust Estate shall be deposited by
the Master Servicer in the Principal and Interest Account. Upon such
substitution, the Qualified Replacement Mortgage shall be subject to the terms
of this Agreement in all respects, and the Sponsor shall be deemed (i) to have
made with respect to such Qualified Replacement Mortgage or Loans, as of the
date of substitution, the covenants, representations and warranties set forth
in Section 3.3 and (ii) to have certified that such Mortgage Loan(s) is/are
Qualified Replacement Loan(s). The procedures applied by the Sponsor in
selecting each Qualified Replacement Mortgage shall not be materially adverse
to the interests of the Indenture Trustee, the Class A Noteholders or the
Insurer.
(d) The Master Servicer or the related Originator may consent to
the placing of a lien senior to that of any Mortgage on the related Mortgaged
Property, provided that
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(x) such Mortgage succeeded to a first lien position after the
related Mortgage Loan was conveyed to the Trust and, immediately
following the placement of such senior lien, such Mortgage is in a
second lien position and the outstanding principal amount of the
mortgage loan secured by such subsequent senior lien is no greater than
the outstanding principal amount of the senior mortgage loan secured by
the Mortgaged Property as of the date the related Mortgage Loan was
originated; or
(y) the Mortgage relating to such Mortgage Loan was in a second
lien position as of the related Cut-Off Date and the new senior lien
secures a mortgage loan that refinances an existing first mortgage loan
and the outstanding principal amount and interest rate of the
replacement first mortgage loan immediately following such refinancing
is not greater than the outstanding principal amount and interest rate
of such existing first mortgage loan at the date of origination of such
Mortgage Loan;
provided, further, that such senior lien does not secure a note that provides
for negative amortization. Notwithstanding the foregoing, the Master Servicer
or the Related Originator can consent to the placing of liens senior to that of
a Mortgage on the related Mortgaged Property only if the Combined Loan-to-Value
Ratio and second mortgage ratio is less than or equal to the original Combined
Loan-to-Value Ratio and second mortgage ratio; provided, however, the Master
Servicer or the related Originator may consent to the placing of a senior lien
on up to 5% of the Mortgage Loans if the Combined Loan-to-Value Ratios of any
such Mortgage Loan will not increase to greater than 100%; provided, further,
that the Master Servicer or the related Originator may only approve
modifications if the related Mortgagor has used the Credit Line Agreement in
the past twelve months and has made timely payments, the current
characteristics of the related Mortgagor meet the related Originator's
underwriting guidelines used at the time of origination and the related
Originators receives verbal verification of employment of the related
Mortgagor.
The Master Servicer or the related Originator may also, without
prior approval from the Rating Agencies or the Insurer, increase the Credit
Limits on Mortgage Loans provided that (i) new appraisals are obtained and the
Combined Loan-to-Value Ratios of the Mortgage Loans after giving effect to such
increase are less than or equal to the Combined Loan-to-Value Ratios of the
Mortgage Loans as of the related Cut-Off Date, (ii) such increases are
consistent with the Originator's underwriting policies, (iii) the related
Mortgagor has used the Credit Line Agreement in the past twelve months and has
made timely payments and (iv) the Master Servicer receives verbal verification
of employment of the related Mortgagor. In addition, the Master Servicer may
increase the Credit Limits on Mortgage Loans having aggregate balances of up to
5% of the Pool Balance, without obtaining new appraisals provided that (i) the
increase in the Credit Limit does not cause the Combined Loan-to-Value Ratios
of the Mortgage Loans to exceed 80%, (ii) the increase is consistent with the
related Originator's underwriting policies, (iii) the related Mortgagor has
used the Credit Line Agreement in the past twelve months and has made timely
payments and (iv) the Master Servicer receives verbal verification of
employment of the related Mortgagor.
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Furthermore, the Master Servicer or the related Originator may,
without prior approval from the Rating Agencies and the Insurer solicit
Mortgagors for a reduction in Loan Rates of no more than .50%; provided that
the related Originator can only reduce such Loan Rates on up to 5% of the
Mortgage Loans by Pool Balance. Any such solicitations shall not result in a
reduction in the weighted average Margin of the Mortgage Loans in the pool by
more than 2.5 basis points taking into account any such prior reductions.
Subject to the above limitations, the Originators or the Master
Servicer, may agree to changes in the terms of a Mortgage Loan at the request
of the Mortgagor; provided, that such changes (i) do not materially and
adversely affect the interests of Holders or the Insurer and (ii) are
consistent with Accepted Servicing Practices.
Notwithstanding anything to the contrary, neither the Originators
nor the Master Servicer shall agree to any changes or modifications in the
terms of any Mortgage Loan that, after giving effect to such change or
modifications, would cause any criteria set forth in Section 2.4 to be
violated.
Section 2.3. Cooperation Procedures. (a) The Sponsor shall, in
connection with the delivery of each Qualified Replacement Mortgage to the
Indenture Trustee, provide the Indenture Trustee with the information set forth
in the Schedules of Mortgage Loans with respect to such Qualified Replacement
Mortgage.
(b) The Sponsor, the Master Servicer and the Indenture Trustee
covenant to provide each other with all data and information required to be
provided by them hereunder at the times required hereunder, and additionally
covenant reasonably to cooperate with each other in providing any additional
information required by any of them in connection with their respective duties
hereunder.
Section 2.4. Conveyance of the Subsequent Mortgage Loans. (a) The
Sponsor may, on Subsequent Transfer Dates, deliver to the Indenture Trustee
loans eligible to become Subsequent Mortgage Loans on the next following
Payment Date, in exchange, on such Payment Date, for monies released to the
Originators pursuant to Section 8.5(b) of the Indenture, or a corresponding
increase in the Originators' Interest.
Upon assignment of any Pre-Funded Mortgage Loan, the Indenture
Trustee shall release to the Sponsor an amount equal to the Principal Balance
thereof as of the related Subsequent Cut-Off Date from amounts then on deposit
in the Pre-Funding Account.
(b) The Sponsor shall transfer to the Indenture Trustee the
Subsequent Mortgage Loans and the other property and rights related thereto
described in paragraph (a) above only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date.
(i) the Sponsor shall have provided the Indenture Trustee
and the Insurer with a timely Addition Notice and shall have provided
any information
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reasonably requested by any of the foregoing with respect to the
Subsequent Mortgage Loans;
(ii) the Sponsor shall have delivered to the Indenture
Trustee a duly executed written assignment (including an acceptance by
the Indenture Trustee) in substantially the form of Exhibit L (the
"Subsequent Transfer Agreement"), which shall include Schedules of
Mortgage Loans, listing the Subsequent Mortgage Loans and any other
exhibits listed thereon;
(iii) the Master Servicer shall have deposited in the
Principal and Interest Account all collections in respect of the
Subsequent Mortgage Loans received on or after the related Subsequent
Cut-Off Date;
(iv) as of each Subsequent Transfer Date, neither the
Master Servicer nor the Sponsor was insolvent nor will any of them have
been made insolvent by such transfer nor is any of them aware of any
pending insolvency;
(v) such addition will not result in a material adverse
tax consequence to the Trust or the Class A Noteholders;
(vi) with respect to Subsequent Mortgage Loans which are
Pre-Funded Mortgage Loans, the Pre-Funding Period shall not have
terminated; and
(vii) the Sponsor shall have delivered to the Indenture
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and paragraphs (c)
and (d) below and in the related Subsequent Transfer Agreement;
(c) The obligation of the Trust to accept the assignment of a
Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the
following requirements: (i) such Subsequent Mortgage Loan may not be more
than 59 days contractually delinquent as of the related Subsequent Cut-Off
Date.
(d) The obligation of the Trust to accept the assignment of a
Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the
following additional requirements, any of which may be waived or modified in
any respect by the Insurer by a written instrument executed by the Insurer:
(1) (i) No such Subsequent Mortgage Loan may have (i) a Combined
Loan-to-Value Ratio greater than 100%; (ii) a final maturity date later
than the Payment Date in February 2023; (iii) a Principal Balance in
excess of $280,000; (iv) a remaining term to stated maturity in excess
of 300 months; (v) a Loan Rate (as of the related Subsequent Cut-Off
Date) below 8.00%; (vi) a Margin below 1% or (vii) be more than 59 days
Delinquent (as of the related Subsequent Cut-off Date).
(2) After giving effect to the assignment to the Trust of any such
Subsequent Mortgage Loan (i) the weighted average net Loan Rate of all
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Mortgage Loans shall be no less than 11.7%; (ii) the Mortgage Loans
shall have weighted average Combined Loan-to-Value Ratio no greater than
77.5%; (iii) the weighted average margin shall not be less than 3.3%;
(iv) the weighted average term to stated maturity shall not exceed 255
months and (v) no more the 1.5% of the Pool Balance as of such
Subsequent Transfer Date shall relate to Mortgaged Properties in any one
zip code.
(e) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Sponsor agrees to satisfy the conditions set
forth in Sections 2.1(b)-(j), 2.2 and 2.3.
(f) In connection with the transfer of any Subsequent Mortgage
Loans to the Trust the Sponsor, the Master Servicer and the Indenture Trustee
may, with the prior written consent of the Insurer, amend the definition of
"Specified Overcollateralization Amount" for the purpose of changing the
related Specified Overcollateralization Amount; provided, however, that any
such amendment must comply with the provisions of Sections 7.14(b) and 7.14(d)
hereof.
Section 2.5. Retransfers of Mortgage Loans at Election of Sponsor.
Subject to the conditions set forth below, the Sponsor may, but shall not be
obligated to (except the Sponsor shall be obligated upon a breach of a
representation or warranty), accept the reassignment of Mortgage Loans from the
Trust as of the close of business on a Payment Date (the "Transfer Date"). On
the fifth Business Day (the "Transfer Notice Date") prior to the Transfer Date
designated in such notice, the Sponsor shall give the Indenture Trustee, the
Insurer and the Master Servicer a notice of the proposed reassignment that
contains a list of the Mortgage Loans to be reassigned. Such reassignment of
Mortgage Loans shall be permitted upon satisfaction of the following
conditions:
(i) No Rapid Amortization Event has occurred or will occur
as a result of such removal;
(ii) On the Transfer Notice Date the Originators' Interest
(after giving effect to the removal from the Trust of the Mortgage Loans
proposed to be retransferred) is at least equal to the Minimum
Originators' Interest;
(iii) the Overcollateralization Amount as of such Payment
Date (after giving effect to the removal as described in Section 2.5(ii)
above) equals or exceeds the then Specified Overcollateralization
Amount.
(iv) The transfer of any Mortgage Loans on any Transfer
Date during the Managed Amortization Period shall not, in the reasonable
belief of the Sponsor cause a Rapid Amortization Event to occur or an
event which with notice or lapse of time or both would constitute a
Rapid Amortization Event;
(v) On or before the Transfer Date, the Sponsor shall have
delivered to the Indenture Trustee, the Insurer and the Rating Agencies
a revised Mortgage Loan Schedule, reflecting the proposed transfer and
the Transfer Date,
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and the Master Servicer shall have marked its servicing records to show
that the Mortgage Loans reassigned to the holder of the Sponsor are no
longer owned by the Trust;
(vi) The Sponsor shall represent and warrant that random
selection procedures were used in selecting the Mortgage Loans and no
other selection procedures were used which are adverse to the interests
of the Sponsor of the Class A Noteholders or the Insurer were utilized
in selecting the Mortgage Loans to be removed from the Trust;
(vii) The Sponsor shall have delivered to the Indenture
Trustee and the Insurer an Officer's Certificate certifying that the
items set forth in subparagraphs (i) through (vi), inclusive, have been
performed or are true and correct, as the case may be. The Indenture
Trustee may conclusively rely on such Officer's Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein
and shall incur no liability in so relying.
Upon receiving the requisite information from the Sponsor, the Master Servicer
shall perform in a timely manner those acts required of it, as specified above.
Upon satisfaction of the above conditions, on the Transfer Date the Indenture
Trustee shall deliver, or cause to be delivered, to the Sponsor the Mortgage
File for each Mortgage Loan being so reassigned, and the Indenture Trustee
shall execute and deliver to the Sponsor such other documents prepared by the
Sponsor as shall be reasonably necessary to reassign such Mortgage Loans to the
Sponsor. Any such transfer of the Trust's right, title and interest in and to
Mortgage Loans shall be without recourse, representation or warranty by or of
the Indenture Trustee or the Trust to the Sponsor.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SPONSOR AND THE MASTER SERVICER
Section 3.1. Representations and Warranties of the Sponsor. The
Sponsor hereby represents, warrants and covenants to the Indenture Trustee, the
Master Servicer, the Insurer and to the Class A Noteholders as of the Closing
Date that:
(a) The Sponsor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is in good standing as a foreign corporation in each jurisdiction in
which the nature of its respective business, or the properties owned or
leased by it make such qualification necessary. The Sponsor has all
requisite corporate power and authority to own and operate its
respective properties, to carry out its respective business as presently
conducted and as proposed to be conducted and to enter into and
discharge its respective obligations under this Agreement and the other
Operative Documents to which it is a party.
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(b) The execution and delivery of this Agreement and the
other Operative Documents to which the Sponsor is a party by the Sponsor
and its respective performance and compliance with the terms of this
Agreement and of the other Operative Documents to which it is a party
have been duly authorized by all necessary corporate action on the part
of the Sponsor and will not violate the Sponsor's Articles of
Incorporation or Bylaws or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Sponsor is a party or by which the Sponsor is
bound, or violate any statute or any order, rule or regulation of any
court, governmental agency or body or other tribunal having jurisdiction
over the Sponsor or any of its properties.
(c) This Agreement and the other Operative Documents to
which the Sponsor is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes a
valid, legal and binding obligation of the Sponsor enforceable against
it in accordance with the terms hereof and thereof, except as the
enforcement hereof and thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law).
(d) The Sponsor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Sponsor or its properties or
might have consequences that would materially and adversely affect its
performance hereunder and under the other Operative Documents to which
it is a party.
(e) No litigation is pending or, to the best of the
Sponsor's knowledge, threatened against the Sponsor which litigation
might have consequences that would prohibit its entering into this
Agreement or any other Operative Document to which it is a party or that
would materially and adversely affect the condition (financial or
otherwise) or operations of the Sponsor or its properties or might have
consequences that would materially and adversely affect its performance
hereunder and under the other Operative Documents to which it is a
party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Sponsor
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading.
(g) The statements contained in the Registration Statement
which describe the Sponsor, or matters or activities for which the
Sponsor is responsible in accordance with the Operative Documents or
which are attributed to the Sponsor therein are true and correct in all
material respects, and the
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Registration Statement does not contain any untrue statement of a
material fact with respect to the Sponsor or omit to state a material
fact required to be stated therein or necessary in order to make the
statements contained therein with respect to the Sponsor not misleading.
To the best of the Sponsor's knowledge and belief, the Registration
Statement does not contain any untrue statement of a material fact
required to be stated therein or omit to state any material fact
required to be stated therein or necessary to make the statements
contained therein not misleading.
(h) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be, by
or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state securities
laws, real estate syndication or "Blue Sky" statutes, as to which the
Sponsor make no such representation or warranty), that are necessary or
advisable in connection with the purchase and sale of the Notes and the
execution and delivery by the Sponsor of the Operative Documents to
which it is a party, have been duly taken, given or obtained, as the
case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may
be taken or review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this
Agreement and the other Operative Documents on the part of the Sponsor
and the performance by the Sponsor of its respective obligations under
this Agreement and such of the other Operative Documents to which it is
a party.
It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive delivery of the Mortgage Loans to
the Indenture Trustee.
Section 3.2. Representations and Warranties of the Master Servicer.
The Master Servicer hereby represents, warrants and covenants to the Indenture
Trustee, the Sponsor, the Insurer and to the Class A Noteholders as of the
Closing Date that:
(a) The Master Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, is, in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to enable it to
perform its obligations hereunder and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its business, or
the properties owned or leased by it make such qualification necessary.
The Master Servicer has all requisite corporate power and authority to
own and operate its properties, to carry out its business as presently
conducted and as proposed to be conducted and to enter into and
discharge its obligations under this Agreement and the other Operative
Documents to which it is a party. The Master Servicer has, on a
consolidated
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basis with its parent, AMHC, equity of at least $5,000,000, as
determined in accordance with generally accepted accounting principles.
(b) The execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement and the other Operative Documents to which it is a party
have been duly authorized by all necessary corporate action on the part
of the Master Servicer and will not violate the Master Servicer's
Articles of Incorporation or Bylaws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or
by which the Master Servicer is bound or violate any statute or any
order, rule or regulation of any court, governmental agency or body or
other tribunal having jurisdiction over the Master Servicer or any of
its properties.
(c) This Agreement and the other Operative Documents to
which the Master Servicer is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto, each
constitutes a valid, legal and binding obligation of the Master
Servicer, enforceable against it in accordance with the terms hereof,
except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at
law).
(d) The Master Servicer is not in default with respect to
any order or decree of any court or any order, regulation or demand of
any federal, state, municipal or governmental agency, which might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its
properties or might have consequences that would materially and
adversely affect its performance hereunder and under the other Operative
Documents to which the Master Servicer is a party.
(e) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
litigation might have consequences that would prohibit its entering into
this Agreement or any other Operative Document to which it is a party or
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Master Servicer or its properties or
might have consequences that would materially and adversely affect its
performance hereunder and under the other Operative Documents to which
the Master Servicer is a party.
(f) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be, by
or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state securities
laws, real estate syndication or "Blue Sky" statutes, as to which the
Master Servicer makes no such representation or warranty), that
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are necessary or advisable in connection with the execution and delivery
by the Master Servicer of the Operative Documents to which it is a
party, have been duly taken, given or obtained, as the case may be, are
in full force and effect on the date hereof, are not subject to any
pending proceedings or appeals (administrative, judicial or otherwise)
and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and the
other Operative Documents on the part of the Master Servicer and the
performance by the Master Servicer of its obligations under this
Agreement and such of the other Operative Documents to which it is a
party.
It is understood and agreed that the representations and warranties
set forth in this Section 3.2 shall survive delivery of the Mortgage Loans to
the Indenture Trustee.
Upon discovery by the Master Servicer, the Sponsor, the Insurer or
the Indenture Trustee of a breach of any of the representations and warranties
set forth in this Section 3.2 which materially and adversely affects the
interests of the Class A Noteholders or of the Insurer, the party discovering
such breach shall give prompt written notice to the other parties. Within 60
days of its discovery or its receipt of notice of breach, the Master Servicer
shall cure such breach in all material; provided, however, that if the Master
Servicer can demonstrate to the reasonable satisfaction of the Insurer that it
is diligently pursuing remedial action, then the cure period may be extended
with the written approval of the Insurer.
Section 3.3. Representations and Warranties of the Sponsor with
Respect to the Mortgage Loans; Retransfer of Certain Mortgage Loans.
(a) The Sponsor makes the following representations and
warranties as to the Mortgage Loans on which the Indenture Issuer relies in
accepting the Mortgage Loans and on which the Insurer relies in issuing the
Insurance Policy. Such representations and warranties speak as of the Closing
Date with respect to the Initial Mortgage Loans, and as of the related
Subsequent Transfer Date with respect to any Subsequent Mortgage Loan (unless
otherwise specified below), but shall in each case survive the sale, transfer,
and assignment of the Mortgage Loans to the Indenture Issuer and the pledge
thereof to the Indenture pursuant to the Indenture:
(i) All of the original or certified documentation set
forth in Section 2.1 (including all material documents related thereto)
with respect to each Initial Mortgage Loan has been or will be delivered
to the Indenture Trustee on the Closing Date or, with respect to any
Subsequent Mortgage Loans, on the related Subsequent Transfer Date, or
as otherwise provided in Section 3.2. All such documentation is true
and accurate in all material respects. Each of the documents and
instruments specified to be included therein has been duly executed and
in due and proper form, and each such document or instrument is in a
form generally acceptable to prudent mortgage lenders that regularly
originate
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or purchase mortgage loans comparable to the Mortgage Loans for sale to
prudent investors in the secondary market that invest in mortgage loans
such as the Mortgage Loans;
(ii) Each Mortgage Loan is being serviced by the Master
Servicer or a Person controlling, controlled by or under common control
with the Master Servicer and qualified to service mortgage loans;
(iii) As of the Closing Date with respect to the Initial
Mortgage Loans and the related Subsequent Transfer Date with respect to
any Subsequent Mortgage Loan (unless otherwise specified), and the
applicable Transfer Date with respect to any Qualified Replacement
Mortgage, this Agreement constitutes a valid transfer and assignment to
the Trust of all right, title and interest of the Sponsor in and to the
related Cut-Off Date Principal Balances with respect to the applicable
Mortgage Loans, all monies due or to become due with respect thereto
(excluding payments in respect of accrued interest due prior to the
related Cut-Off Date), and all proceeds of such related Cut-Off Date
Principal Balances with respect to the Mortgage Loans and such funds as
are from time to time deposited in the Principal and Interest Account
(excluding any investment earnings thereon) and all other property
specified in the definition of "Mortgage Loan" as being part of the
corpus of the Trust conveyed to the Trust by the Sponsor, and upon
payment for the Additional Balances, will constitute a valid transfer
and assignment to the Indenture Trustee of all right, title and interest
of the Sponsor in and to the Additional Balances, all monies due or to
become due with respect thereto, and all proceeds of such Additional
Balances and all other property specified in the definition of "Mortgage
Loan" relating to the Additional Balances. However, if this Agreement
is not deemed to be a valid transfer and assignment to the Indenture
Trustee of such right, title and interest, this Agreement shall in any
event constitute a grant of a security interest (as defined in the UCC
as in effect in New York) in such property to the Indenture Trustee on
behalf of the Trust. If this Agreement constitutes the grant of a
security interest to the Trust in such property, and if the Indenture
Trustee maintains possession of the Mortgage File for each Mortgage
Loan, the Trust shall have a first priority perfected security interest
in such property, subject to the effect of Section 9-306 of the UCC with
respect to collections on the Mortgage Loans that are deposited in the
Principal and Interest Account;
(iv) As of the Closing Date with respect to the Initial
Mortgage Loans, the related Subsequent Transfer Date with respect to any
Subsequent Mortgage Loan (unless otherwise specified) and the applicable
Transfer Date with respect to any Qualified Replacement Mortgage and as
of the date any Additional Balance is created, the information set forth
in the Mortgage Loan Schedule for such Mortgage Loans is true and
correct in all material respects;
(v) As of the Closing Date and any Subsequent Transfer
Date, no more than 1.50% of the related Cut-Off Date Pool Balance of the
Mortgage
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Loans is secured by Mortgaged Properties located within any single zip
code area. None of the Mortgage Loans consists of Date-of-Payment
Loans;
(vi) The Mortgages and Credit Line Agreements have not
been assigned or pledged, and the Sponsor is the sole owner and holder
of the Mortgages and Credit Line Agreements free and clear of any and
all liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, and has full right
and authority, under all governmental and regulatory bodies having
jurisdiction over the Class A Noteholder of the applicable Mortgage
Loan, to sell, assign or transfer the same;
(vii) As of the Closing Date with respect to the Initial
Mortgage Loans, the Subsequent Transfer Date with respect to the
Subsequent Mortgage Loans and the applicable Transfer Date with respect
to any Qualified Replacement Mortgage, there is no valid offset, defense
or counterclaim of any obligor under any Credit Line Agreement or
Mortgage. Neither the operation of any of the terms of each Credit Line
Agreement and each Mortgage nor the exercise of any right thereunder
will render either the Credit Line Agreement or the Mortgage
unenforceable, in whole or in part, nor subject to any right of
rescission, set-off, claim, counterclaim or defense, including, without
limitation, the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(viii) No Minimum Monthly Payment is more than 59 days
delinquent (measured on a contractual basis); and with respect to the
Initial Mortgage Loans no more than 1.35% (by Initial Cut-Off Date Pool
Balance) were 30-59 days delinquent (measured on a contractual basis).
No Subsequent Mortgage Loan will be more than 59 days delinquent;
(ix) As of the related Cut-Off Date with respect to the
Mortgage Loans and the applicable Transfer Date with respect to any
Qualified Replacement Mortgage, each Credit Line Agreement and each
Mortgage Loan is an enforceable obligation of the related Mortgagor,
except as the enforceability thereof may be limited by the bankruptcy,
insolvency or similar laws affecting creditors' rights generally;
(x) The weighted average remaining term to maturity of
the Initial Mortgage Loans on a contractual basis as of the Initial
Cut-Off Date for the Mortgage Loans is approximately 253 months. On
each date that the Loan Rates have been adjusted, interest rate
adjustments on the Mortgage Loans were made in compliance with the
related Mortgage and Credit Line Agreement and applicable law. Over the
term of each Initial Mortgage Loan, the Loan Rate may not exceed the
related Loan Rate Cap, if any. The Loan Rate Caps for the Initial
Mortgage Loans range between 16.00% and 24.25%. The Initial Mortgage
Loans margins range between 0.00% and 7.75% and the weighted average
margin is approximately 3.32% as of the related Cut-Off Date for the
Initial Mortgage
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Loans. The Loan Rates on such Initial Mortgage Loans range between 8.50%
and 16.25% and the weighted average Loan Rate is approximately 11.82%;
and
(xi) The Credit Limits on the Initial Mortgage Loans
range between $10,000 and $300,000 with an average of 33,561.98. As of
the Initial Cut-Off Date for the Initial Mortgage Loans, no Initial
Mortgage Loan had a principal balance in excess of approximately
$279,000 and the average principal balance of the Initial Mortgage Loans
is equal to approximately $31,924.84.
(xii) Each Mortgage Loan being transferred to the Trust is
a Mortgage;
(xiii) Each Subsequent Mortgage Loan complies with the
requirements in Section 2.4 of this Agreement, including without
limitation the conditions described in subsections (c) and (d) of such
Section 2.4;
(xiv) Each Mortgaged Property is improved by a single
(one-to-four) family residential dwelling, which may include
manufactured homes, condominiums and townhouses but shall not include
cooperatives or other property which constitutes other than real
property under applicable state law;
(xv) No Mortgage Loan had a Combined Loan-to-Value Ratio
in excess of 100%;
(xvi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans, each Mortgage is either a valid and
subsisting first or second lien of record on the Mortgaged Property
(subject in the case of any Second Mortgage Loan only to a Senior Lien
on such Mortgaged Property) and subject in all cases to the exceptions
to title set forth in the title insurance policy, with respect to the
related Mortgage Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and except for liens for (i) real estate taxes and special
assessments not yet delinquent, (ii) income taxes, (iii) any covenants,
conditions and restrictions, rights of way, easements, and other matters
of public record and such other exceptions to which similar properties
are commonly subject and which do not individually, or in the aggregate,
materially and adversely affect the benefits of the security intended to
be provided by such Mortgage;
(xvii) Immediately prior to the transfer and assignment
herein contemplated, the Sponsor held good and indefeasible title to,
and was the sole owner of, each Mortgage Loan conveyed by the Sponsor
(including its Cut-Off Date Pool Balance), all monies due or to become
due with respect thereto, and all proceeds of such Cut-Off Date Pool
Balances with respect to the Mortgage Loans is subject to no liens,
charges, mortgages, encumbrances or rights of others except liens which
will be released simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein contemplated, the
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Indenture Trustee will hold good and indefeasible title to, and be the
sole owner of, each Mortgage Loan subject to no liens, charges,
mortgages, encumbrances or rights of others except liens which will be
released simultaneously with such transfer and assignment;
(xviii) There is no delinquent tax or assessment lien or
mechanic's lien on any Mortgaged Property, and each Mortgaged Property
is free of substantial damage and is in good repair;
(xix) Each Mortgage Loan at the time it was made complied
in all material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal Truth-in-Lending
Act and other consumer protection laws, real estate settlement
procedure, usury, equal credit opportunity, disclosure and recording
laws;
(xx) With respect to each First Mortgage Loan, and, to
the best of the Sponsor's knowledge, with respect to each Second
Mortgage Loan, a lender's title insurance policy, issued in standard
California Land Title Association form or American Land Title
Association form, or other form acceptable in a particular jurisdiction
by a title insurance company authorized to transact business in the
state in which the related Mortgaged Property is situated, was issued on
the date of origination of the Mortgage Loan and as of the Cut-Off Date
and each applicable Transfer Date with respect to the Subsequent
Mortgage Loan, each such policy is valid and remains in full force and
effect, or a title search or guaranty of title customary in the relevant
jurisdiction was obtained with respect to a Mortgage Loan as to which no
title insurance policy or binder was issued.
(xxi) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Subsequent
Mortgage Loan, each Credit Line Agreement is the legal, valid, binding
and enforceable obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether considered in a proceeding
or action in equity or at law), and all parties to each Mortgage Loan
had full legal capacity to execute all documents relating to such
Mortgage Loan and convey the estate therein purported to be conveyed;
(xxii) The terms of each Credit Line Agreement and each
Mortgage have not been impaired, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary, to
protect the interest of the Class A Noteholders and which has been
delivered to the Indenture Trustee. The substance of any such
alteration or modification is reflected on the related Schedule of
Mortgage Loans and has been approved by the primary mortgage guaranty
insurer, if any;
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(xxiii) Except as otherwise required by law, pursuant to the
statute under which the related Mortgage Loan was made, or in the case
of Mortgage Loans originated by Advanta Finance Corp., the related
Credit Line Agreement is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding
Mortgage;
(xxiv) Each Mortgaged Property is located in the state
identified in the Schedule of Mortgage Loans and consists of one or more
parcels of real property with a residential dwelling erected thereon;
(xxv) There is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property, nor is such a
proceeding currently occurring, and each Mortgaged Property is undamaged
by waste, fire, earthquake or earth movement, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises were
intended;
(xxvi) With respect to each Second Mortgage Loan, either
(A) no consent for such Mortgage Loan was required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxvii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by Indenture Trustee's sale and (B)
otherwise by judicial foreclosure. There is no homestead or other
exemption available which materially interferes with the right to sell
the related Mortgaged Property at a Indenture Trustee's sale or the
right to foreclose the related Mortgage;
(xxviii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to the Subsequent
Mortgage Loans, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Credit Line
Agreement and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and the Sponsor has
not waived any default, breach, violation or event of acceleration;
(xxix) To the best knowledge of the Sponsor, all parties to
the Credit Line Agreement and the Mortgage had legal capacity to execute
the Credit Line Agreement and the Mortgage and each Credit Line
Agreement and Mortgage have been duly and properly executed by such
parties;
(xxx) No selection procedures reasonably believed by the
Sponsor to be adverse to the interests of the Class A Noteholders or the
Insurer was utilized in selecting the Mortgage Loans;
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(xxxi) No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement which has been
approved by the applicable title insurer (to the extent required by such
title insurer) and which is part of the Mortgage File delivered to the
Indenture Trustee;
(xxxii) With respect to each Mortgage Loan that is not a
first mortgage loan, the related prior lien requires equal monthly
payments. At the time of origination of each Mortgage Loan that is not
a first mortgage loan, the related prior lien was not more than 30 days
delinquent;
(xxxiii)All required inspections, licenses and certificates
with respect to the use and occupancy of all occupied portions of all
property securing the Mortgages have been made, obtained or issued, as
applicable;
(xxxiv) No more than 81% of the Mortgage Loans are second
mortgage loans;
(xxxv) With respect to each Mortgage Loan that is not a
first mortgage loan, the related prior lien does not provide for
negative amortization;
(xxxvi) With respect to each Mortgage Loan that is not a
first mortgage loan, the maturity date of the Mortgage Loan is prior to
the maturity date of the related prior lien if such prior lien provides
for a balloon payment;
(xxxvii)Each Mortgage Loan is secured by a property having
an appraised value of less than $1,500,000;
(b) Upon the discovery by the Master Servicer, the Sponsor, the
Insurer or the Indenture Trustee of a breach of any of the representations and
warranties made in respect of any Mortgage Loan which materially and adversely
affects the interests of the Class A Noteholders or of the Insurer in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. The Master Servicer shall promptly notify the
Sponsor of such breach and request that the Sponsor cure such breach or take
the actions described in Section 3.4(b) hereof within the time periods required
thereby, and the Sponsor shall cure such breach or take such actions; provided,
however, that the cure for any breach of a representation and warranty relating
to the characteristics of the Mortgage Loans in the aggregate shall be a
reassignment of, or substitution for, only those Mortgage Loans necessary to
cause such characteristics to be in compliance with the related representation
and warranty. Upon accepting such transfer and making any required deposit
into the Principal and Interest Account or substitution of a Qualified
Replacement Mortgage, as the case may be, the Sponsor shall be entitled to
receive an instrument of assignment or transfer from the Indenture Trustee to
the same extent as set forth in Section 2.2 with respect to the transfer of
Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Sponsor to
accept a transfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Principal and Interest
Account or to substitute an
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Qualified Replacement Mortgage, as the case may be, shall constitute the sole
remedy against the Sponsor respecting such breach available to Class A
Noteholders of the Class A Notes, the Indenture Trustee on behalf of the Class
A Noteholders of the Class A Notes and the Insurer.
Section 3.4. Covenants of Sponsor to Take Certain Actions with
Respect to the Mortgage Loans In Certain Situations. (a) With the provisos and
limitations as to remedies set forth in this Section 3.4, upon the discovery by
Sponsor, the Master Servicer, the Sponsor, the Insurer, any Sub-Servicer or the
Indenture Trustee that the representations and warranties set forth in Section
3.3 of this Agreement were untrue in any material respect as of the Closing
Date (or the Subsequent Transfer Date, or the Transfer Date, as the case may
be) and such breaches of the representations and warranties materially and
adversely affect the interests of the Class A Noteholders or of the Insurer,
the party discovering such breach shall give prompt written notice to the other
parties.
The Sponsor acknowledges that a breach of any representation or
warranty (x) relating to marketability of title sufficient to transfer
unencumbered title to a Mortgage Loan, (y) relating to enforceability of the
Mortgage Loan against the related Mortgagor or Mortgaged Property or (z) set
forth in clause (viii) of Section 3.3 above constitutes breach of a
representation or warranty which "materially and adversely affects the
interests of the Class A Noteholders or of the Insurer" in such Mortgage Loan.
(b) Upon the earliest to occur of the Sponsor's discovery, its
receipt of notice of breach from any one of the other parties hereto or from
the Insurer or such time as a breach of any representation and warranty
materially and adversely affects the interests of the Class A Noteholders or of
the Insurer as set forth above, the Sponsor hereby covenants and warrants that
it shall promptly cure such breach in all material respects or it shall (or
shall cause an affiliate of the Sponsor to), subject to the further
requirements of this paragraph, on the second Remittance Date next succeeding
such discovery, receipt of notice or such other time (i) substitute in lieu of
each Mortgage Loan which has given rise to the requirement for action by the
Sponsor a Qualified Replacement Mortgage and deliver the Substitution Amount
applicable thereto, together with the aggregate amount of all Servicing
Advances theretofore made with respect to such Mortgage Loan, to the Master
Servicer for deposit in the Principal and Interest Account or (ii) purchase
such Mortgage Loan from the Trust at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be delivered to the Master
Servicer for deposit in the Principal and Interest Account. It is understood
and agreed that the obligation of the Sponsor to cure the defect, or substitute
for, or purchase any Mortgage Loan as to which a representation or warranty is
untrue in any material respect and has not been remedied shall constitute the
sole remedy available to the Class A Noteholders, the Indenture Trustee or the
Insurer.
(c) In the event that any Qualified Replacement Mortgage is
delivered by the Sponsor to the Trust pursuant to Section 2.2, Section 3.3 or
Section 3.4 hereof, the Sponsor shall be obligated to take the actions
described in Section 3.4(b) with respect to such Qualified Replacement Mortgage
upon the discovery by any of the Class A
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Noteholders, the Master Servicer, the Sponsor, the Insurer, or the Indenture
Trustee that the representations and warranties set forth in Section 3.3 above
are untrue in any material respect on the date such Qualified Replacement
Mortgage is conveyed to the Trust such that the interests of the Class A
Noteholders or the Insurer in the related Qualified Replacement Mortgage are
materially and adversely affected; provided, however, that for the purposes of
this subsection (c) the representations and warranties set forth in Section 3.3
above referring to items "as of the Initial Cut-Off Date" or "as of the
Subsequent Cut-Off Date" or "as of the related Cut-Off Date" or "as of the
Closing Date" or "as of the Subsequent Transfer Date" shall be deemed to refer
to such items as of the date such Qualified Replacement Mortgage is conveyed to
the Trust.
(d) It is understood and agreed that the covenants set forth in
this Section 3.4 shall survive the pledge of the respective Mortgage Loans
(including Qualified Replacement Mortgage Loans) to the Indenture Trustee on
behalf of the Trust.
ARTICLE IV
SERVICING AND ADMINISTRATION
OF MORTGAGE LOANS
Section 4.1. Master Servicer and Sub-Servicers.
(a) Advanta Mortgage Corp. USA agrees to act as the Master
Servicer and to perform all servicing duties under this Agreement subject to
the terms hereof.
(b) The Master Servicer shall service and administer the
Mortgage Loans on behalf of the Indenture Trustee and the Insurer and shall
have full power and authority, acting alone or through one or more
Sub-Servicers, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or the name
of a Sub-Servicer, may, and is hereby authorized and empowered by the Indenture
Trustee to, execute and deliver, on behalf of itself, the Class A Noteholders,
the Insurer and the Indenture Trustee or any of them, any and all instruments
of satisfaction or cancellation, or of partial or full release or discharge and
all other comparable instruments, with respect to the Mortgage Loans, the
insurance policies and accounts related thereto and the properties subject to
the Mortgages in accordance with the terms of this Agreement. Upon the
execution and delivery of this Agreement, and from time to time as may be
required thereafter, the Indenture Trustee shall furnish the Master Servicer or
its Sub-Servicers with any powers of attorney and such other documents as may
be necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder.
In servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures consistent with Accepted Servicing Practices
and in a manner consistent with recovery under any insurance policy required to
be maintained by the Master Servicer pursuant to this Agreement.
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Costs incurred by the Master Servicer in effectuating the timely
payment of taxes and assessments on the property securing a Credit Line
Agreement and foreclosure costs may be added by the Master Servicer to the
amount owing under such Credit Line Agreement where the terms of such Credit
Line Agreement so permit; provided, however, that the addition of any such cost
shall not be taken into account for purposes of calculating the principal
amount of the Credit Line Agreement and the Mortgage Loan secured by the Credit
Line Agreement or distributions to be made to Class A Noteholders. Such costs
shall be recoverable by the Master Servicer pursuant to Section 4.9 and 4.13.
(c) Without limiting the generality of the foregoing, the Master
Servicer shall continue, and is hereby authorized and empowered by the
Indenture Trustee, to execute and deliver, on behalf of itself, the Class A
Noteholders, the Insurer and the Indenture Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the related Properties, including consenting to the
placement of a lien senior to that of any Mortgage on the related Mortgaged
Property;
provided, that,
(x) such Mortgage succeeded to a first lien position after the
related Mortgage Loan was conveyed to the Trust and, immediately
following the placement of such senior lien, such Mortgage is in a
second lien position and the outstanding principal amount of the
mortgage loan secured by such subsequent senior lien is no greater than
the outstanding principal amount of the senior mortgage loan secured by
the Mortgaged Property as of the date the related Mortgage Loan was
originated; or
(y) the Mortgage relating to such Mortgage Loan was in a second
lien position as of the related Cut-Off Date and the new senior lien
secures a mortgage loan that refinances an existing first mortgage loan
and the outstanding principal amount and interest rate of the
replacement first mortgage loan immediately following such refinancing
is not greater than the outstanding principal amount and interest rate
of such existing first mortgage loan at the date of origination of such
Mortgage Loan;
provided, further, that such senior lien does not secure a note that
provides for negative amortization. Notwithstanding the foregoing, the
Master Servicer can consent to the placing of liens senior to that of a
Mortgage on the related Mortgaged Property only if the Combined
Loan-to-Value Ratio and second mortgage ratio is less than or equal to
the original Combined Loan-to-Value Ratio and second mortgage ratio;
provided, however, the Master Servicer may consent to the placing of a
senior lien on up to 5% of the Mortgage Loans if the Combined
Loan-to-Value Ratios of any such Mortgage Loan will not increase to
greater than 100%; provided, further, that the Master Servicer may only
approve modifications if the related Mortgagor has used the Credit Line
Agreement in the past twelve
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months and has made timely payments, the current characteristics of the
related Mortgagor are consistent with the Accepted Servicing Practices
and the Master Servicer receives verbal verification of employment of
the related Mortgagor.
At the written direction of the Originators, the Master Servicer
may also, without prior approval from the Rating Agencies or the Insurer,
increase the Credit Limits on Mortgage Loans provided that (i) new appraisals
are obtained and the Combined Loan-to-Value Ratios of any such Mortgage Loan of
the Mortgage Loans after giving effect to such increase are less than or equal
to the Combined Loan-to-Value Ratios of the Mortgage Loans as of the related
Cut-Off Date, (ii) such increases are consistent with the Accepted Servicing
Practices, (iii) the related Mortgagor has used the Credit Line Agreement in
the past twelve months and has made timely payments and (iv) the Master
Servicer receives verbal verification of employment of the related Mortgagor.
In addition, the Master Servicer, at the written direction of the Originators,
may increase the Credit Limits on Mortgage Loans having aggregate balances of
up to 5% of the Pool Balance, without obtaining new appraisals provided that
(i) the increase in the Credit Limit does not cause the Combined Loan-to-Value
Ratios of the Mortgage Loans to exceed 100%, (ii) the increase is consistent
with Accepted Servicing Practices, (iii) the related Mortgagor has used the
Credit Line Agreement in the past twelve months and has made timely payments
and (iv) the Master Servicer receives verbal verification of employment of the
related Mortgagor.
Furthermore, the Master Servicer may, without prior approval from
the Rating Agencies and the Insurer solicit Mortgagors for a reduction in Loan
Rates of no more than .50%; provided that the Master Servicer can only reduce
such Loan Rates on up to 5% of the Mortgage Loans by Pool Balance. Any such
solicitations shall not result in a reduction in the weighted average Margin of
the Mortgage Loans in the pool by more than 2.5 basis points taking into
account any such prior reductions.
Subject to the above limitations, the Master Servicer may agree to
changes in the terms of a Mortgage Loan at the request of the Mortgagor;
provided, that such changes (i) do not materially and adversely affect the
interests of Class A Noteholders or the Insurer and (ii) are consistent with
Accepted Servicing Practices.
Notwithstanding anything to the contrary, the Master Servicer shall
not agree to any changes or modifications in the terms of any Mortgage Loan
that, after giving effect to such change or modification, would cause any
criteria set forth in Section 2.4 to be violated.
(d) The relationship of the Master Servicer (and of any
successor to the Master Servicer as servicer under this Agreement) to the
Indenture Trustee under this Agreement is intended by the parties to be that of
an independent contractor and not that of a joint venturer, partner or agent.
In the event that the rights, duties and obligations of the Master
Servicer are terminated hereunder, any successor to the Master Servicer in its
sole discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements
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with any subservicer or assume the terminated Master Servicer's rights under
such subservicing arrangements which termination or assumption will not violate
the terms of such arrangements.
(e) The Master Servicer may, and is hereby authorized to,
perform any of its servicing responsibilities with respect to all or certain of
the Mortgage Loans through a Sub-Servicer as it may from time to time
designate, but no such designation of a Sub-Servicer shall serve to release the
Master Servicer from any of its obligations under this Agreement. Such
Sub-Servicer shall have all the rights and powers of the Master Servicer with
respect to such Mortgage Loans under this Agreement.
(f) Without limiting the generality of the foregoing, but
subject to Sections 4.13 and 4.14, the Master Servicer in its own name or in
the name of a Sub-Servicer may be authorized and empowered pursuant to a power
of attorney executed and delivered by the Indenture Trustee to execute and
deliver, and may be authorized and empowered by the Indenture Trustee, to
execute and deliver, on behalf of itself, the Class A Noteholders and the
Indenture Trustee or any of them, (i) any and all instruments of satisfaction
or cancellation or of partial or full release or discharge and all other
comparable instruments with respect to the Mortgage Loans and with respect to
the Properties, (ii) and to institute foreclosure proceedings or obtain a deed
in lieu of foreclosure so as to effect Class A Noteholdership of any Mortgaged
Property on behalf of the Indenture Trustee, and (iii) to hold title to any
Mortgaged Property upon such foreclosure or deed in lieu of foreclosure on
behalf of the Indenture Trustee; provided, however, that Section 4.14(a) shall
constitute a power of attorney from the Indenture Trustee to the Master
Servicer to execute an instrument of satisfaction (or assignment of mortgage
without recourse) with respect to any Mortgage Loan paid in full (or with
respect to which payment in full has been escrowed). Subject to Sections 4.13
and 4.14, the Indenture Trustee shall furnish the Master Servicer and any
Sub-Servicer with any powers of attorney and other documents as the Master
Servicer or such Sub-Servicer shall reasonably request to enable the Master
Servicer and such Sub-Servicer to carry out their respective servicing and
administrative duties hereunder.
(g) The Master Servicer shall give prompt notice to the
Indenture Trustee of any action, of which the Master Servicer has actual
knowledge, to (i) assert a claim against the Trust or (ii) assert jurisdiction
over the Trust.
(h) Servicing Advances incurred by the Master Servicer or any
Sub-Servicer in connection with the servicing of the Mortgage Loans (including
any penalties in connection with the payment of any taxes and assessments or
other charges) on any Mortgaged Property shall be recoverable by the Master
Servicer or such Sub-Servicer to the extent described in Section 4.9 and in
Section 8.6(b)(x) of the Indenture.
Section 4.2. Collection of Certain Mortgage Loan Payments. (a)
In accordance with Accepted Servicing Practices and subject to the limitations
set forth in Section 4.1, the Master Servicer may in its discretion (i) waive
any assumption fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or other fees which may be
collected in the ordinary course of servicing the
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Mortgage Loans, (ii) if a Mortgagor is in default or about to be in default
because of a Mortgagor's financial condition, arrange with the Mortgagor a
schedule for the payment of delinquent payments due on the related Mortgage
Loan; provided, however, the Master Servicer shall not reschedule the payment
of delinquent payments more than one time in any twelve consecutive months with
respect to any Mortgagor nor extend the maturity of any Mortgage Loan beyond
the Payment Date in February 2023; or (iii) modify payments of monthly
principal and interest on any Mortgage Loan becoming subject to the terms of
the Civil Relief Act, as amended, in accordance with the Master Servicer's
general policies of the comparable mortgage loans subject to such Act.
(b) The Master Servicer shall hold in escrow on behalf of the
related Mortgagor all Prepaid Installments received by it, and shall apply such
Prepaid Installments as directed by such Mortgagor and as set forth in the
related Credit Line Agreement.
Section 4.3. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers. The Master Servicer may enter into Sub-Servicing Agreements for
any servicing and administration of Mortgage Loans with any institution which
is acceptable to the Insurer in compliance with the laws of each state
necessary to enable it to perform its obligations under such Sub-Servicing
Agreement. The Master Servicer shall give notice to the Insurer of the
appointment of any Sub-Servicer and shall furnish to the Insurer a copy of the
Subservicing Agreement. For purposes of this Agreement, the Master Servicer
shall be deemed to have received payments on Mortgage Loans when any
Sub-Servicer has received such payments. Any such Sub-Servicing Agreement shall
be consistent with and not violate the provisions of this Agreement.
Section 4.4. Successor Sub-Servicers. The Master Servicer may
terminate any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement and to either directly service the
related Mortgage Loans itself or enter into a Sub-Servicing Agreement with a
successor Sub-Servicer that qualifies under Section 4.3.
Section 4.5. Liability of Master Servicer. The Master Servicer
shall not be relieved of its obligations under this Agreement notwithstanding
any Sub-Servicing Agreement or any of the provisions of this Agreement relating
to agreements or arrangements between the Master Servicer and a Sub-Servicer or
otherwise, and the Master Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to
enter into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in such Sub-Servicing
Agreement shall be deemed to limit or modify this Agreement. The Trust shall
not indemnify the Master Servicer for any losses due to the Master Servicer's
or any Sub-Servicer's negligence.
Section 4.6. No Contractual Relationship Between Sub-Servicer and
Indenture Trustee or the Class A Noteholders. Any Sub-Servicing Agreement and
any other transactions or services relating to the Mortgage Loans involving a
Sub-Servicer
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shall be deemed to be between the Sub-Servicer and the Master Servicer alone
and the Insurer, the Indenture Trustee and the Class A Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any Sub-Servicer except as set forth in Section
4.7.
Section 4.7. Assumption or Termination of Sub-Servicing Agreement
by Indenture Trustee. In connection with the assumption of the
responsibilities, duties and liabilities and of the authority, power and rights
of the Master Servicer hereunder by the Indenture Trustee pursuant to Section
4.20, it is understood and agreed that the Master Servicer's rights and
obligations under any Sub-Servicing Agreement then in force between the Master
Servicer and a Sub-Servicer may be assumed or terminated by the Indenture
Trustee at its option.
The Master Servicer shall, upon request of the Indenture Trustee,
but at the expense of the Master Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an
accounting of amounts collected and held by it and otherwise use its best
reasonable efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
Section 4.8. Principal and Interest Account.
(a) The Master Servicer and/or each Sub-Servicer, as applicable,
shall establish in the name of the Trust for the benefit of the Class A
Noteholders and the Insurer and maintain at one or more Designated Depository
Institutions the Principal and Interest Account.
Subject to Subsections (c) and (e) below, the Master Servicer and
any Sub-Servicer shall deposit all receipts related to the Mortgage Loans to
the Principal and Interest Account on a daily basis (but no later than the
second Business Day after receipt).
Within one Business Day of the Closing Date, and on each Subsequent
Transfer Date and each Transfer Date, the Sponsor shall cause the Master
Servicer to deposit to the Principal and Interest Account all receipts related
to the related Mortgage Loans received after the Initial Cut-Off Date or
related Replacement Cut-Off Date or related Subsequent Cut-Off Date, as the
case may be.
(b) All funds in the Principal and Interest Account may only be
held (i) uninvested, up to the limits insured by the FDIC or (ii) invested in
Eligible Investments. The Principal and Interest Account shall be held in
trust in the name of the Trust and for the benefit of the Class A Noteholders
and the Insurer. Any investment earnings on funds held in the Principal and
Interest Account shall be for the account of the Master Servicer and may only
be withdrawn from the Principal and Interest Account by the Master Servicer
immediately following the remittance of the Monthly Remittance Amounts by the
Master Servicer. Any references herein to amounts on deposit in the Principal
and Interest Account shall refer to amounts net of such investment earnings.
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The Master Servicer shall deposit the amount of any investment losses
immediately into the Principal and Interest Account as realized.
(c) Subject to Subsection (e) below, the Master Servicer shall
deposit to the Principal and Interest Account all principal and interest
collections on the Mortgage Loans received on or after the Initial Cut-Off Date
or related Subsequent Cut-Off Date, as the case may be, including any
Prepayments and Net Liquidation Proceeds, all Loan Purchase Prices and
Substitution Amounts received or paid by the Master Servicer with respect to
the Mortgage Loans and other recoveries or amounts related to the Mortgage
Loans received by the Master Servicer, together with any amounts which are
reimbursable from the Principal and Interest Account, but net of (i) the
Servicing Fee with respect to each Mortgage Loan and other servicing
compensation to the Master Servicer as permitted by Section 4.15 hereof, (ii)
principal (including Prepayments) collected on the related Mortgage Loans prior
to the Initial Cut-Off Date or related Subsequent Cut-Off Date, as the case may
be, (iii) interest accruing on the related Mortgage Loans prior to the Initial
Cut-Off Date or related Subsequent Cut-Off Date, as the case may be and (iv)
Net Liquidation Proceeds to the extent such Net Liquidation Proceeds exceed the
Principal Balance of the related Mortgage Loan.
(d) (i) The Master Servicer may make withdrawals from the
Principal and Interest Account only for the following purposes:
(A) to effect the timely remittance to the Indenture Trustee of
the Monthly Remittance Amounts due on the Remittance Date;
(B) to pay to itself from any funds in the Principal and
Interest Account any accrued and unpaid Servicing Fees and
reimburse itself pursuant to Section 4.9(a) hereof for
unreimbursed Servicing Advances and Servicing Advances which
have been deemed Nonrecoverable Advances;
(C) to withdraw investment earnings on amounts on deposit in the
Principal and Interest Account;
(D) to withdraw amounts that have been deposited to the
Principal and Interest Account in error; and
(E) to clear and terminate the Principal and Interest Account
following the termination of the Trust Estate pursuant to
Articles X or XII of the Indenture.
(ii) On the tenth day of each month, the Master Servicer shall
send to the Indenture Trustee a report, in the form of a computer tape,
detailing the aggregate payments on the total Mortgage Loans during the prior
Remittance Period. Such tape shall be in the form and have the specifications
as may be agreed to between the Master Servicer and the Indenture Trustee from
time to time.
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(iii) On each Remittance Date the Master Servicer shall remit to
the Indenture Trustee by wire transfer, or otherwise make funds available in
immediately available funds, the Interest Remittance Amount and the Principal
Remittance Amount.
(e) To the extent that the ratings, if any, then assigned to the
unsecured debt of the Master Servicer or of the Master Servicer's ultimate
corporate parent are satisfactory to the Insurer, Xxxxx'x and Standard &
Poor's, then the requirement to maintain the Principal and Interest Account may
be waived by an instrument signed by the Insurer, Standard & Poor's and
Xxxxx'x, and the Master Servicer may be allowed to co-mingle with its general
funds the amounts otherwise required to be deposited to the Principal and
Interest Account, on such terms and subject to such conditions as the Insurer,
Xxxxx'x and Standard & Poor's may permit.
Section 4.9. Servicing Advances . The Master Servicer will pay
all "out-of-pocket" costs and expenses incurred in the performance of its
servicing obligations, including, but not limited to, the cost of (i)
Preservation Expenses, (ii) any enforcement or judicial proceedings, including
foreclosures, and (iii) the management and liquidation of REO Property, but is
only required to pay such costs and expenses to the extent the Master Servicer
reasonably believes such costs and expenses will increase Net Liquidation
Proceeds on the related Mortgage Loan. Each such amount so paid will
constitute a "Servicing Advance". The Master Servicer may recover Servicing
Advances (x) from the Mortgagors to the extent permitted by the Mortgage Loans,
from Liquidation Proceeds realized upon the liquidation of the related Mortgage
Loan, from Insurance Proceeds, and (y) as provided in Section 8.6(b)(viii) of
the Indenture.
Section 4.10. Purchase of Mortgage Loans . The Master Servicer
may, but is not obligated to, purchase for its own account any Mortgage Loan
which becomes Delinquent, in whole or in part, as to 90 days or more or any
Mortgage Loan as to which enforcement proceedings have been brought by the
Master Servicer or by any Sub-Servicer pursuant to Section 4.13. Any such Loan
so purchased shall be purchased by the Master Servicer on a Remittance Date at
a purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be deposited in the Principal and Interest Account.
Section 4.11. Maintenance of Insurance . (a) The Master Servicer
shall cause to be maintained with respect to each Mortgage Loan a hazard
insurance policy with a generally acceptable carrier that provides for fire and
extended coverage, and which provides for a recovery by the Master Servicer on
behalf of the Trust of insurance proceeds relating to such Mortgage Loan in an
amount not less than the least of (i) the outstanding principal balance of the
Mortgage Loan or (ii) the maximum insurable value of the Mortgaged Property.
(b) If any Mortgage Loan originated by Advanta National Bank at
the time of origination relates to a Mortgaged Property in an area identified
in the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, the Master Servicer will cause to be maintained with
respect thereto a flood insurance policy in a form meeting the requirements of
the current guidelines of the Federal
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Insurance Administration with a generally acceptable carrier in an amount
representing coverage, and which provides for a recovery by the Master Servicer
on behalf of the Trust of Insurance Proceeds relating to such Mortgage Loan of
not less than the least of (i) the outstanding Principal Balance of the
Mortgage Loan or (ii) the maximum amount of insurance that is available under
the Flood Disaster Protection Act of 1973. The Master Servicer shall indemnify
the Trust and the Insurer out of the Master Servicer's own funds for any loss
to the Trust and the Insurer resulting from the Master Servicer's failure to
maintain the insurance required by this Section.
It is understood and agreed that such insurance shall be with
insurers approved by the Master Servicer and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained on
property acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Any cost incurred by the Master Servicer in
maintaining any such insurance shall be added to the amount owing under the
Mortgage Loan where the terms of the Mortgage Loan so permit; provided,
however, that the addition of any such cost shall not be taken into account for
purposes of calculating the principal amount of the Credit Line Agreement or
the distributions to be made to the Class A Noteholders. Such costs shall be
recoverable by the Servicer pursuant to Section 4.9.
(c) In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against fire, flood and hazards of extended
coverage on all of the Mortgage Loans, then, to the extent such policy names
the Master Servicer as loss payee and provides coverage in an amount equal to
the aggregate unpaid principal balance on the Mortgage Loans without
co-insurance, and otherwise complies with the requirements of this Section
4.11, the Master Servicer shall be deemed conclusively to have satisfied its
obligations with respect to fire and hazard insurance coverage under this
Section 4.11, it being understood and agreed that such blanket policy may
contain a deductible clause, in which case the Master Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the preceding paragraphs of this Section 4.11,
and there shall have been a loss which would have been covered by such policy,
deposit in the Principal and Interest Account from the Master Servicer's own
funds the difference, if any, between the amount that would have been payable
under a policy complying with the preceding paragraphs of this Section 4.11 and
the amount paid under such blanket policy. Upon the request of the Indenture
Trustee or the Insurer, the Master Servicer shall cause to be delivered to the
Indenture Trustee or the Insurer, a certified true copy of such policy.
Section 4.12. Due-on-Sale Clauses; Assumption and Substitution
Agreements. When a Mortgaged Property has been or is about to be conveyed by
the Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate
the maturity of the related Mortgage Loan under any "due-on-sale" clause
contained in the related Mortgage or Credit Line Agreement; provided, however,
that the Master Servicer shall not exercise any such right if (i) the
"due-on-sale" clause, in the reasonable belief of the Master Servicer, is not
enforceable under applicable law or (ii) the Master Servicer reasonably
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believes that to permit an assumption of the Mortgage Loan would not materially
and adversely affect the interest of the Class A Noteholders or of the Insurer.
In such event, the Master Servicer shall enter into an assumption and
modification agreement with the person to whom such property has been or is
about to be conveyed, pursuant to which such person becomes liable under the
Credit Line Agreement and, unless prohibited by applicable law or any of the
agreements, guaranties or assignments relating to the Mortgage Loans contained
in the Mortgage Files, the Mortgagor remains liable thereon. If the foregoing
is not permitted under applicable law, the Master Servicer is authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as Mortgagor and becomes liable under the Credit Line Agreement;
provided, however, that to the extent any such substitution of liability
agreement would be delivered by the Master Servicer outside of its usual
procedures for mortgage loans held in its own portfolio the Master Servicer
shall, prior to executing and delivering such agreement, obtain the prior
written consent of the Insurer. The Mortgage Loan, as assumed, shall conform
in all respects to the requirements, representations and warranties of this
Agreement. The Master Servicer shall notify the Indenture Trustee that any
such assumption or substitution agreement has been completed by forwarding to
the Indenture Trustee the original copy of such assumption or substitution
agreement, which copy shall be added by the Indenture Trustee to the related
Mortgage File and which shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. The Master Servicer shall be responsible for
recording any such assumption or substitution agreements. In connection with
any such assumption or substitution agreement, the required monthly payment on
the related Mortgage Loan shall not be changed but shall remain as in effect
immediately prior to the assumption or substitution, the stated maturity or
outstanding principal amount of such Mortgage Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Master Servicer or the Sub-Servicer for
consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Master Servicer as
additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Master Servicer may be restricted by law from preventing, for any reason
whatsoever.
Section 4.13. Realization Upon Defaulted Mortgage Loans. (a) The
Master Servicer shall foreclose upon or otherwise comparably effect the
ownership on behalf of the Mortgaged Properties relating to defaulted Mortgage
Loans as to which no satisfactory arrangements can be made for collection of
Delinquent payments and which the Master Servicer has not purchased pursuant to
Section 4.10. In connection with such foreclosure or other conversion, the
Master Servicer shall exercise such of the rights and powers vested in it
hereunder, and use the same degree of care and skill in their exercise or use,
as prudent mortgage lenders would exercise or use under the circumstances in
the conduct of their own affairs, including, but not limited to, advancing
funds for the
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payment of taxes, amounts due with respect to Senior Liens, and insurance
premiums. Any amounts so advanced shall constitute "Servicing Advances" within
the meaning of Section 4.9 hereof.
Notwithstanding the generality of the foregoing provisions, the
Master Servicer shall manage, conserve, protect and operate each REO Property
for the Class A Noteholders solely for the purpose of its prompt disposition
and sale. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Class
A Noteholders, rent the same, or any part thereof, as the Master Servicer deems
to be in the best interest of the Class A Noteholders for the period prior to
the sale of such REO Property. The Master Servicer shall take into account the
existence of any hazardous substances, hazardous wastes or solid wastes, as
such terms are defined in the Comprehensive Environmental Response Compensation
and Liability Act, the Resource Conservation and Recovery Act of 1976, or other
federal, state or local environmental legislation, on a Mortgaged Property in
determining whether to foreclose upon or otherwise comparably convert the Class
A Noteholdership of such Mortgaged Property.
(b) The Master Servicer shall determine, with respect to each
defaulted Mortgage Loan, when it has recovered, whether through Indenture
Trustee's sale, foreclosure sale or otherwise, all amounts it expects to
recover from or on account of such defaulted Mortgage Loan, whereupon such
Mortgage Loan shall become a "Liquidated Mortgage Loan" and shall promptly
deliver to the Insurer a related Liquidation Report with respect to such
Mortgage Loan.
Section 4.14. Indenture Trustee to Cooperate; Release of Mortgage
Files. (a) Upon the payment in full of the Principal Balance of any Mortgage
Loan (including the repurchase of any Mortgage Loan or any liquidation of such
Mortgage Loan through foreclosure or otherwise), or the receipt by the Master
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer shall deliver to the Indenture
Trustee a Master Servicer's Trust Receipt. Upon receipt of such Master
Servicer's Trust Receipt, the Indenture Trustee shall promptly release the
related Mortgage File, in trust to (i) the Master Servicer, (ii) an escrow
agent or (iii) any employee, agent or attorney of the Indenture Trustee, in
each case pending its release by the Master Servicer, such escrow agent or such
employee, agent or attorney of the Indenture Trustee, as the case may be. Upon
any such payment in full, or the receipt of such notification that such funds
have been placed in escrow, the Master Servicer is authorized to give, as
attorney-in-fact for the Indenture Trustee and the mortgagee under the Mortgage
which secured the Credit Line Agreement, an instrument of satisfaction (or
assignment of Mortgage without recourse) regarding the Mortgaged Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed
that no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Principal and
Interest Account. In lieu of executing any such satisfaction or assignment,
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as the case may be, the Master Servicer may prepare and submit to the Indenture
Trustee, a satisfaction (or assignment without recourse, if requested by the
Person or Persons entitled thereto) in form for execution by the Indenture
Trustee with all requisite information completed by the Master Servicer; in
such event, the Indenture Trustee shall execute and acknowledge such
satisfaction or assignment, as the case may be, and deliver the same with the
related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any applicable Insurance
Policy, the Indenture Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an
escrow agent or an employee, agent or attorney of the Indenture Trustee), upon
request of the Master Servicer and delivery to the Indenture Trustee of a
Master Servicer's Trust Receipt in the form of Exhibit K hereto, release the
related Mortgage File to the Master Servicer and shall execute such documents
as shall be necessary to the prosecution of any such proceedings, including,
without limitation, an assignment without recourse of the related Mortgage to
the Master Servicer; provided, that there shall not be released and unreturned
at any one time more than 300 Mortgage Files. The Indenture Trustee shall
complete in the name of the Indenture Trustee any endorsement in blank on any
Credit Line Agreement prior to releasing such Credit Line Agreement to the
Master Servicer. Such receipt shall obligate the Master Servicer to return the
Mortgage File to the Indenture Trustee when the need therefor by the Master
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of the liquidation information, in physical or
electronic form, a copy of the Master Servicer's Trust Receipt shall be
released by the Indenture Trustee to the Master Servicer.
(c) The Master Servicer shall have the right to approve
applications of Mortgagors for consent to (i) partial releases of Mortgages,
(ii) alterations to Mortgaged Properties and (iii) removal, demolition or
division of Mortgaged Properties. No application for approval shall be
considered by the Master Servicer unless: (x) the provisions of the related
Credit Line Agreement and Mortgage have been complied with; (y) the Combined
Loan-to-Value Ratio (which may, for this purpose, be determined at the time of
any such action in a manner reasonably acceptable to the Insurer) and the
Mortgagor's debt-to-income ratio after any release does not exceed the maximum
Combined Loan-to-Value Ratio and debt-to-income ratio specified as the
then-current maximum levels under the Originator's underwriting guidelines for
a similar credit grade borrower and (z) the lien priority of the related
Mortgage is not adversely affected. Upon receipt by the Indenture Trustee and
the Insurer of an Officer's Certificate executed on behalf of the Master
Servicer setting forth the action proposed to be taken in respect of a
particular Mortgage Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Indenture Trustee shall
execute and deliver to the Master Servicer the consent or partial release so
requested by the Master Servicer. A proposed form of consent or partial
release, as the case may be, shall accompany any Officer's Certificate
delivered by the Master Servicer pursuant to this paragraph.
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(d) No costs associated with the procedures described in this
Section 4.14 shall be an expense of the Trust.
(e) The provisions set forth in Subsections (a) and (b) may be
superseded by any waiver of the Document Delivery Requirement as may be given
by the Insurer, Moody's and Standard & Poor's pursuant to Section 2.1(k)
hereof.
(f) Each Master Servicer's Trust Receipt may be delivered to the
Indenture Trustee (i) via mail or courier, (ii) via facsimile or (iii) by such
other means, including, without limitation, electronic or computer readable
medium, as the Master Servicer and the Indenture Trustee shall mutually agree.
The Indenture Trustee shall promptly release the related Mortgage File(s)
within seven (7) Business Days of receipt of a properly completed Master
Servicer's Trust Receipt pursuant to clauses (i), (ii) or (iii) above or such
shorter period as may be agreed upon by the Master Servicer and the Indenture
Trustee. Receipt of a Master Servicer's Trust Receipt pursuant to clauses (i),
(ii) or (iii) above shall be authorization to the Indenture Trustee to release
such Mortgage Files, provided the Indenture Trustee has determined that such
Master Servicer's Trust Receipt has been executed, with respect to clauses (i)
or (ii) above, or approved, with respect to clause (iii) above, by an
Authorized Officer of the Master Servicer or any Sub-servicer, and so long as
the Indenture Trustee complies with its duties and obligations under this
Agreement. If the Indenture Trustee is unable to release the Mortgage Files
within the time frames previously specified, the Indenture Trustee shall
immediately notify the Master Servicer or any Sub-servicer indicating the
reason for such delay, but in no event shall such notification be later than
seven Business Days after receipt of a Master Servicer's Trust Receipt. If the
Master Servicer is required to pay penalties or damages due solely to the
Indenture Trustee's negligent failure to release the related Mortgage File or
the Indenture Trustee's negligent failure to execute and release documents in a
timely manner, the Indenture Trustee shall be liable for such penalties or
damages.
(g) On each day that the Master Servicer remits to the Indenture
Trustee Master Servicer's Trust Receipts pursuant to clauses (ii) or (iii)
above, the Master Servicer or any Sub-servicer shall also submit to the
Indenture Trustee a summary of the total amount of such Master Servicer's Trust
Receipts requested on such day by the same method as described in such clauses
(ii) or (iii) above.
Section 4.15. Servicing Compensation. As compensation for its
activities hereunder, the Master Servicer shall be entitled to retain the
amount of the Servicing Fee with respect to each Mortgage Loan. Additional
servicing compensation in the form of prepayment charges, Termination Fees,
release fees, bad check charges, assumption fees, late payment charges, or any
other servicing-related fees, Net Liquidation Proceeds not required to be
deposited in the Principal and Interest Account pursuant to Section 4.8(c)(v)
and similar items may, to the extent collected from Mortgagors, be retained by
the Master Servicer.
Section 4.16. Annual Statement as to Compliance. The Master
Servicer, at its own expense, will deliver to the Indenture Trustee, Insurer,
Standard & Poor's and
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Moody's, on or before the fifteenth of April of each year, commencing in 1998,
an Officer's Certificate stating, as to each signer thereof, that (i) a review
of the activities of the Master Servicer during such preceding calendar year
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Master Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Master
Servicer to remedy such defaults.
Section 4.17. Annual Independent Certified Public Accountants'
Reports. On or before the fifteenth of April of each year, commencing in 1998,
the Master Servicer, at its own expense, shall cause to be delivered to the
Indenture Trustee, the Insurer, Standard & Poor's and Moody's a letter or
letters of a firm of independent, nationally recognized certified public
accountants reasonably acceptable to the Insurer stating that such firm has,
with respect to the Master Servicer's overall servicing operations (i)
performed applicable tests in accordance substantially in compliance with the
testing procedures as set forth in Appendix 3 of the Audit Guide for Audits of
HUD Approved Nonsupervised Mortgagees or (ii) examined such operations
substantially in compliance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers, and in either case stating such
firm's conclusions relating thereto.
Section 4.18. Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Master Servicer shall provide to the
Indenture Trustee, the Insurer, the FDIC and the supervisory agents and
examiners of each of the foregoing access to the documentation regarding the
Mortgage Loans required by applicable state and federal regulations, such
access being afforded without charge but only upon reasonable request and
during normal business hours at the offices of the Master Servicer designated
by it.
Upon any change in the format of the computer tape maintained by
the Master Servicer in respect of the Mortgage Loans, the Master Servicer shall
deliver a copy of such computer tape to the Indenture Trustee and in addition
shall provide a copy of such computer tape to the Indenture Trustee and the
Insurer at such other times as the Indenture Trustee or the Insurer may
reasonably request.
Section 4.19. Assignment of Agreement. The Master Servicer may not
assign its obligations under this Agreement, in whole or in part, unless it
shall have first obtained the written consent of the Indenture Trustee and
Insurer, which such consent shall not be unreasonably withheld; provided,
however, that any assignee must meet the eligibility requirements set forth in
Section 5.1(g) hereof for a successor servicer. Notice of any such assignment
shall be given by the Master Servicer to the Indenture Trustee, the Insurer and
Moody's.
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ARTICLE V
SERVICING TERMINATION
Section 5.1. Events of Servicing Termination. (a) If any one of
the following events ("Event of Servicing Termination") shall occur and be
continuing:
(i) The Master Servicer shall fail to deliver to the
Indenture Trustee any proceeds or required payment, which failure
continues unremedied for five Business Days following written notice to
an Authorized Officer of the Master Servicer from the Indenture Trustee
or from Class A Noteholders evidencing Percentage Interest aggregating
not less than 25%.
(ii) The Master Servicer shall (I) apply for or consent
to the appointment of a receiver, Indenture Trustee, liquidator or
custodian or similar entity with respect to itself or its property, (II)
admit in writing its inability to pay its debts generally as they become
due, (III) make a general assignment for the benefit of creditors, (IV)
be adjudicated a bankrupt or insolvent, (V) commence a voluntary case
under the federal bankruptcy laws of the United States of America or
file a voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding or (VI) take corporate action
for the purpose of effecting any of the foregoing;
(iii) If without the application, approval or consent of
the Master Servicer, a proceeding shall be instituted in any court of
competent jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in respect of
the Master Servicer an order for relief or an adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a
composition or arrangement with creditors, a readjustment of debts, the
appointment of a Indenture Trustee, receiver, liquidator or custodian or
similar entity with respect to the Master Servicer or of all or any
substantial part of its assets, or other like relief in respect thereof
under any bankruptcy or insolvency law, and, if such proceeding is being
contested by the Master Servicer in good faith, the same shall (A)
result in the entry of an order for relief or any such adjudication or
appointment or (B) continue undismissed or pending and unstayed for any
period of seventy-five (75) consecutive days; or
(iv) The Master Servicer shall fail to cure any breach of
any of its representations and warranties set forth in Section 3.2 which
materially and adversely affects the interests of the Class A
Noteholders or Insurer for a period of sixty (60) days after the Master
Servicer's discovery or receipt of notice thereof from the Indenture
Trustee, the Insurer, or Class A Noteholders evidencing Percentage
Interests aggregating not less than 25%; provided, however, that if the
Master Servicer can demonstrate to the reasonable satisfaction of the
Insurer that
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it is diligently pursuing remedial action, then the cure period may be
extended with the written consent of the Insurer.
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Master Servicer, either the
Indenture Trustee, the Insurer or the Class A Noteholders evidencing Percentage
Interests aggregating not less than 51% in each case with the consent of the
Insurer, or the Insurer, by notice then given in writing to the Master Servicer
(and to the Indenture Trustee if given by the Insurer of the Class A
Noteholders) may terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement. Any such notice to the Master
Servicer shall also be given to each Rating Agency and the Insurer. On and
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect to
the Notes or the Mortgage Loans or otherwise, shall pass to and be vested in
the Indenture Trustee pursuant to and under this Section 5.1 and, without
limitation, the Indenture Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer and endorsement of
each Mortgage Loan and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts that shall at the time be held by the
Master Servicer and to be deposited by it in the Note Account, or that have
been deposited by the Master Servicer in the Note Account or thereafter
received by the Master Servicer with respect to the Mortgage Loans. All
reasonable costs and expenses (including attorneys' fees) incurred in
connection with amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section 5.1 shall be paid by the predecessor Master
Servicer (or if the predecessor Master Servicer is the Indenture Trustee, the
initial Master Servicer) upon presentation of reasonable documentation of such
costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 5.1(i) for a period of two Business Days or under Section 5.1(iv)
for a period of 60 days, shall not constitute an Event of Servicing Termination
if such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence
shall not relieve the Master Servicer from using its best efforts to perform
its respective obligations in a timely manner in accordance with the terms of
this Agreement and the Master Servicer shall provide the Indenture Trustee, the
Sponsor, the Insurer and the Noteholders with an Officer's Certificate giving
prompt notice of such failure or delay by it, together with a description of
its efforts to so perform its obligations. The Master Servicer shall
immediately notify the Indenture Trustee and the Insurer in writing of any
Events of Servicing Termination.
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(b) In addition to the foregoing, the Insurer may remove the
Master Servicer upon the occurrence of an "Event of Serving Termination" under
the Insurance Agreement.
(c) The Master Servicer shall not resign from the obligations
and duties hereby imposed on it except by mutual written consent of the
Sponsor, the Master Servicer, the Insurer and the Indenture Trustee or upon
determination that its duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer at the date of this Agreement. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an opinion of counsel
to such effect which shall be delivered to the Indenture Trustee and the
Insurer.
(d) No removal or resignation of the Master Servicer shall
become effective until the Indenture Trustee or a successor servicer shall have
assumed the Master Servicer's responsibilities and obligations in accordance
with this Section.
(e) Upon removal or resignation of the Master Servicer, the
Master Servicer also shall promptly deliver or cause to be delivered to a
successor servicer or the Indenture Trustee all the books and records
(including, without limitation, records kept in electronic form) that the
Master Servicer has maintained for the Mortgage Loans, including all tax bills,
assessment notices, insurance premium notices and all other documents as well
as all original documents then in the Master Servicer's possession.
(f) Any collections received by the Master Servicer after
removal or resignation shall be endorsed by it to the Indenture Trustee and
remitted directly and immediately to the Indenture Trustee or the successor
Master Servicer.
(g) Upon removal or resignation of the Master Servicer, the
Indenture Trustee (x) may solicit bids for a successor servicer as described
below, and (y) pending the appointment of a successor Master Servicer as a
result of soliciting such bids, shall serve as Master Servicer. The Indenture
Trustee shall, if it is unable to obtain a qualifying bid and is prevented by
law from acting as Master Servicer, appoint, or petition a court of competent
jurisdiction to appoint, any housing and home finance institution, bank or
mortgage servicing institution which has shareholders' equity of not less than
$5,000,000, as determined in accordance with generally accepted accounting
principles, and acceptable to the Insurer as the successor to the Master
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. The
compensation of any successor servicer (including, without limitation, the
Indenture Trustee) so appointed shall be the aggregate Servicing Fees, together
with the other servicing compensation in the form of assumption fees, late
payment charges or otherwise as provided in Sections 4.8 and 4.15; provided,
however, that if the Indenture Trustee acts as successor Master Servicer then
the Sponsor agrees to pay to the Indenture Trustee at such time that the
Indenture Trustee becomes such successor Master Servicer a fee of twenty-five
dollars ($25.00) for each Mortgage Loan then included in the Trust Estate. The
Indenture Trustee shall be obligated to serve as
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successor Master Servicer whether or not the $25.00 fee described in the
preceding sentence is paid by the Sponsor, but shall in any event be entitled
to receive, and to enforce payment of, such fee from the Originators.
(h) In the event the Indenture Trustee solicits bids as provided
above, the Indenture Trustee shall solicit, by public announcement, bids from
housing and home finance institutions, banks and mortgage servicing
institutions meeting the qualifications set forth above. Such public
announcement shall specify that the successor Master Servicer shall be entitled
to the full amount of the aggregate Servicing Fees as servicing compensation,
together with the other servicing compensation in the form of assumption fees,
late payment charges or otherwise as provided in Sections 4.8 and 4.15. Within
thirty days after any such public announcement, the Indenture Trustee shall
negotiate and effect the sale, transfer and assignment of the servicing rights
and responsibilities hereunder to the qualified party submitting the highest
satisfactory bid. The Indenture Trustee shall deduct from any sum received by
the Indenture Trustee from the successor to the Master Servicer in respect of
such sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities hereunder. After such deductions, the remainder of such
sum shall be paid by the Indenture Trustee to the Master Servicer at the time
of such sale, transfer and assignment to the Master Servicer's successor.
(i) The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. The Master Servicer agrees to cooperate with the Indenture
Trustee and any successor Master Servicer in effecting the termination of the
Master Servicer's servicing responsibilities and rights hereunder and shall
promptly provide the Indenture Trustee or such successor Master Servicer, as
applicable, all documents and records reasonably requested by it to enable it
to assume the Master Servicer's functions hereunder and shall promptly also
transfer to the Indenture Trustee or such successor Master Servicer, as
applicable, all amounts which then have been or should have been deposited in
the Principal and Interest Account by the Master Servicer or which are
thereafter received with respect to the Mortgage Loans. Neither the Indenture
Trustee nor any other successor Master Servicer shall be held liable by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the Master Servicer to
deliver, or any delay in delivering, cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
Master Servicer.
(j) The Master Servicer which is being removed or is resigning
shall give notice to the Mortgagors and to Moody's and Standard & Poor's of the
transfer of the servicing to the successor.
(k) The Indenture Trustee shall give notice to the Insurer,
Moody's and Standard & Poor's and to the Class A Noteholders of the occurrence
of any event specified in Section 5.1(a) of which the Indenture Trustee has
actual knowledge.
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Section 5.2. Inspections by Insurer; Errors and Omissions
Insurance. (a) At any reasonable time and from time to time upon reasonable
notice, the Insurer, the Indenture Trustee, or any agents or representatives
thereof may inspect the Master Servicer's servicing operations and discuss the
servicing operations of the Master Servicer with any of its officers or
directors.
(b) The Master Servicer agrees to maintain errors and omissions
coverage and a fidelity bond, each at least to the extent generally maintained
by prudent mortgage loan servicers having servicing portfolios of a similar
size.
Section 5.3. Merger, Conversion, Consolidation or Succession to
Business of Master Servicer. Any corporation into which the Master Servicer may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Master
Servicer shall be a party, or any corporation succeeding to all or
substantially all of the business of the Master Servicer, shall be the
successor of the Master Servicer hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto provided
that such corporation meets the qualifications set forth in Section 5.1(f).
Section 5.4. Notification to Noteholders. Upon any termination
or appointment of a successor to the Master Servicer pursuant to this Article
V, the Indenture Trustee shall give prompt written notice thereof to the
Noteholders at their respective addresses appearing in the Note Register, the
Insurer and each Rating Agency.
ARTICLE VI
ADMINISTRATIVE DUTIES OF THE MASTER SERVICER
Section 6.1. Administrative Duties with Respect to the
Indenture. The Master Servicer shall perform all its duties and the duties of
the Issuer under the Indenture. In addition, the Master Servicer shall
consult with the Owner Trustee as the Master Servicer deems appropriate
regarding the duties of the Issuer under the Indenture. The Master Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the
Indenture. The Master Servicer shall prepare for execution by the Issuer or
shall cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Indenture. In
furtherance of the foregoing, the Master Servicer shall take all necessary
action that is the duty of the Issuer to take pursuant to the Indenture.
(a) Duties with Respect to the Issuer.
(i) In addition to the duties of the Master Servicer set forth
in this Agreement or any of the Documents, the Master Servicer shall
perform such calculations and shall prepare for execution by the Issuer
or the Owner Trustee or
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shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Owner Trustee to prepare, file
or deliver pursuant to this Agreement or any of the Operative Documents
or under state and federal tax and securities laws, and at the request
of the Owner Trustee shall take all appropriate action that it is the
duty of the Issuer to take pursuant to this Agreement or any of the
Operative Documents. In accordance with the directions of the Issuer or
the Owner Trustee, the Master Servicer shall administer, perform or
supervise the performance of such other activities in connection with
the Mortgage Loans (including the Operative Documents) as are not
covered by any of the foregoing provisions and as are expressly
requested by the Issuer or the Owner Trustee and are reasonably within
the capability of the Master Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Operative Documents to the contrary, the Master Servicer shall be
responsible for promptly notifying the Owner Trustee and the Indenture
Trustee in the event that any withholding tax is imposed on the Issuer's
payments (or allocations of income) with respect to the Originators'
Interest as contemplated by this Agreement. Any such notice shall be in
writing and specify the amount of any withholding tax required to be
withheld by the Owner Trustee or the Indenture Trustee pursuant to such
provision.
(iii) Notwithstanding anything in this Agreement or the Operative
Documents to the contrary, the Master Servicer shall be responsible for
performance of the duties of the Issuer or the Sponsor set forth in
Section 5.1(a), (b), (c) and (d) of the Trust Agreement with respect to,
among other things, accounting and reports with respect to the
Originators' Interest.
(iv) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Master Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Master Servicer's opinion, no less favorable to the
Issuer in any material respect.
(b) Non-Ministerial Matters.
With respect to matters that in the reasonable judgment of the Master Servicer
are non-ministerial, the Master Servicer shall not take any action pursuant to
this Article VI unless within a reasonable time before the taking of such
action, the Master Servicer shall have notified the Owner Trustee and the
Insurer of the proposed action and the Owner Trustee and the Insurer shall not
have withheld consent or provided an alternative direction. For the purpose of
the preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Indenture;
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(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the Mortgage
Loans);
(C) the amendment, change or modification of this Agreement or
any of the Operative Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the Indenture
or the appointment of Successor Servicers or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee of
its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(c) Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Operative
Documents, the Master Servicer, in its capacity hereunder, shall not be
obligated to, and shall not, (1) make any payments to the Noteholders to the
Originators under the Operative Documents, (2) sell the Trust Property pursuant
to Section 12.1 of the Indenture, (3) take any other action that the Issuer
directs the Servicer not to take on its behalf or (4) in connection with its
duties hereunder assume any indemnification obligation of any other Person.
(d) The Indenture Trustee or any successor Servicer shall not be
responsible for any obligations or duties of the Master Servicer under Section
6.1.
Section 6.2. Records. The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Agreement, which books of account and records shall be accessible for
inspection by the Issuer and the Indenture Trustee at any time during normal
business hours.
Section 6.3. Additional Information to be Furnished to the
Issuer. The Master Servicer shall furnish to the Issuer and the Indenture
Trustee from time to time such additional information regarding the Mortgage
Loans as the Issuer and the Indenture Trustee shall reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Compliance Certificates and Opinions. Upon any
application or request by the Sponsor, the Insurer or the Class A Noteholders
to the Indenture Trustee to take any action under any provision of this
Agreement, the Sponsor, the Insurer or the Class A Noteholders, as the case may
be, shall furnish to the Indenture Trustee a certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with, except that in the case of any such
application or request as to which the furnishing of any documents is
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specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate need be furnished.
Except as otherwise specifically provided herein, each certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 7.2. Form of Documents Delivered to the Indenture
Trustee. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate of an Authorized Officer of the Indenture Trustee
may be based, insofar as it relates to legal matters, upon an opinion of
counsel, unless such Authorized Officer knows, or in the exercise of reasonable
care should know, that the opinion is erroneous. Any such certificate of an
Authorized Officer of the Indenture Trustee or any opinion of counsel may be
based, insofar as it relates to factual matter upon a certificate or opinion
of, or representations by, one or more Authorized Officers of the Sponsor or of
the Master Servicer, stating that the information with respect to such factual
matters is in the possession of the Sponsor or of the Master Servicer, unless
such Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any opinion of counsel may also be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer of the Indenture Trustee, stating
that the information with respect to such matters is in the possession of the
Indenture Trustee, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous. Any opinion of counsel may be based on
the written opinion of other counsel, in which event such opinion of counsel
shall be accompanied by a copy of such other counsel's opinion and shall
include a statement to the effect that such counsel believes that such counsel
and the Indenture Trustee may reasonably rely upon the opinion of such other
counsel.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 7.3. Acts of Class A Noteholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by the Class A Noteholders may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Class A Noteholders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee, and, where it is hereby expressly required, to the
Sponsor. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the Class A
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Whenever such execution is by an officer of a corporation or a member
of a partnership on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority.
(c) The ownership of the Class A Notes shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Class A Noteholder shall bind the Holder
of every Class A Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Trust in reliance thereon,
whether or not notation of such action is made upon such Class A Notes.
Section 7.4. Notices, etc. to Indenture Trustee. Any request,
demand, authorization, direction, notice, consent, waiver or act of the Class A
Noteholders or other documents provided or permitted by this Agreement to be
made upon, given or furnished to, or filed with the Indenture Trustee by any
Owner, the Insurer or by the Sponsor shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with and received
by the Indenture Trustee at its Corporate Trust Office as set forth in the
Indenture.
Section 7.5. Notices and Reports to Class A Noteholders; Waiver
of Notices. Where this Agreement provides for notice to Class A Noteholders of
any event
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or the mailing of any report to Class A Noteholders, such notice or report
shall be sufficiently given (unless otherwise herein expressly provided) if
mailed, first-class postage prepaid, to each Owner affected by such event or to
whom such report is required to be mailed, at the address of such Owner as it
appears on the Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice or the mailing of
such report. In any case where a notice or report to Class A Noteholders is
mailed in the manner provided above, neither the failure to mail such notice or
report nor any defect in any notice or report so mailed to any particular Owner
shall affect the sufficiency of such notice or report with respect to other
Class A Noteholders, and any notice or report which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided.
Where this Agreement provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Class A Noteholders shall be filed with the
Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Class A Noteholders when such notice is required
to be given pursuant to any provision of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.
Where this Agreement provides for notice to any rating agency that
rated any Class A Notes, failure to give such notice shall not affect any other
rights or obligations created hereunder.
Section 7.6. Rules by Indenture Trustee. The Indenture Trustee
may make reasonable rules for any meeting of Class A Noteholders.
Section 7.7. Successors and Assigns. All covenants and agreements
in this Agreement by any party hereto shall bind its successors and assigns,
whether so expressed or not.
Section 7.8. Severability. In case any provision in this
Agreement or in the Class A Notes shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 7.9. Benefits of Agreement. Nothing in this Agreement or
in the Class A Notes, expressed or implied, shall give to any Person, other
than the Class A Noteholders, the Insurer and the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
Section 7.10. Legal Holidays. In any case where the date of any
Payment Date, any other date on which any distribution to any Holder is
proposed to be paid, or
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any date on which a notice is required to be sent to any Person pursuant to the
terms of this Agreement shall not be a Business Day, then (notwithstanding any
other provision of the Class A Notes or this Agreement) payment or mailing need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made or mailed on the nominal date of any
such Payment Date, or such other date for the payment of any distribution to
any Owner or the mailing of such notice, as the case may be, and no interest
shall accrue for the period from and after any such nominal date, provided such
payment is made in full on such next succeeding Business Day.
Section 7.11. Governing Law. In view of the fact that Class A
Noteholders are expected to reside in many states and outside the United States
and the desire to establish with certainty that this Agreement will be governed
by and construed and interpreted in accordance with the law of a state having a
well-developed body of commercial and financial law relevant to transactions of
the type contemplated herein, this Agreement and each Class A Note shall be
construed in accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed therein.
Section 7.12. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 7.13. Usury. The amount of interest payable or paid on any
Class A Note under the terms of this Agreement shall be limited to an amount
which shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the State of New York or any applicable law of the United
States permitting a higher maximum nonusurious rate that preempts such
applicable New York laws, which could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Class A Note exceeds the Highest Lawful Rate, the Trust stipulates that
such excess amount will be deemed to have been paid to the Owner of such Class
A Note inadvertently in error by the Indenture Trustee acting on behalf of the
Trust and the Owner receiving such excess payment shall promptly, upon
discovery of such error or upon notice thereof from the Indenture Trustee on
behalf of the Trust, refund the amount of such excess or, at the option of such
Owner, apply the excess to the payment of principal of such Class A Note, if
any, remaining unpaid in any event, the Indenture Trustee shall not be
responsible for any repayment of such excess payments. In addition, all sums
paid or agreed to be paid to the Indenture Trustee for the benefit of Class A
Noteholders of Class A Notes for the use, forbearance or detention of money
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Class A Notes.
Section 7.14. Amendment. (a) The Indenture Trustee, the Sponsor
and the Master Servicer, may at any time and from time to time, with the prior
approval of the Insurer but without the giving of notice to or the receipt of
the consent of the Class A Noteholders, amend this Agreement, and the Indenture
Trustee shall consent to such amendment, for the purpose of (i) curing any
ambiguity, or correcting or supplementing any provision hereof which may be
inconsistent with any other provision hereof, or to
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add provisions hereto which are not inconsistent with the provisions hereof, or
(ii) complying with the requirements of the Code and the regulations proposed
or promulgated thereunder; provided, however, that any such action shall not,
as evidenced by an opinion of counsel delivered to the Indenture Trustee,
materially and adversely affect the interests of any Owner (without its written
consent).
(b) The Indenture Trustee, the Sponsor and the Master Servicer
may, at any time and from time to time, with the prior approval of the Insurer
but without the giving of notice to or the receipt of the consent of the Class
A Noteholders, amend this Agreement, and the Indenture Trustee shall consent to
such amendment, for the purpose of changing the definition of "Specified
Overcollateralization Amount"; provided, however, that no such change shall
affect the weighted average life of the Class A Notes (assuming an appropriate
prepayment speed as determined by the Underwriter as evidenced in writing) by
more than five percent, as determined by the Underwriter.
(c) This Agreement may also be amended by the Indenture Trustee,
the Sponsor, and the Master Servicer at any time and from time to time, with
the prior written approval of the Insurer and not less than a majority of the
Percentage Interest represented by the Class A Notes then Outstanding, for the
purpose of adding any provisions or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Class A Noteholders hereunder; provided, however, that no such amendment
shall (a) change in any manner the amount of, or change the timing of, payments
which are required to be distributed to any Owner without the consent of the
Owner of such Class A Notes or (b) reduce the aforesaid percentages of
Percentage Interests which are required to consent to any such amendments,
without the consent of all Class A Noteholders then Outstanding.
(d) The Insurer, the Class A Noteholders, Moody's and Standard &
Poor's shall be provided with copies of any amendments to this Agreement,
together with copies of any opinions or other documents or instruments executed
in connection therewith.
Section 7.15. The Insurer. The Insurer is a third-party
beneficiary of this Agreement. Any right conferred to the Insurer shall be
suspended during any period in which the Insurer is in default in its payment
obligations under the Insurance Policy except with respect to amendments to
this Agreement pursuant to Section 11.14. During any period of suspension the
Insurer's rights hereunder shall vest in the Class A Noteholders of the Class A
Notes and shall be exercisable by the Class A Noteholders of at least a
majority in Percentage Interest of the Class A Notes then Outstanding. At such
time as the Class A Notes are no longer Outstanding hereunder and the Insurer
has been reimbursed for all payments made pursuant to the Insurance Policy to
which it is entitled hereunder, the Insurer's rights hereunder shall terminate.
Section 7.16. Notices. All notices hereunder shall be given as
follows, until any superseding instructions are given to all other Persons
listed below:
The Indenture Trustee: Bankers Trust Company
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of California, N.A.
0 Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: ADVANTA REVOLVING HOME
EQUITY LOAN TRUST 1997-A
Tel: (000) 000-0000
Fax: (000) 000-0000
The Sponsor: ADVANTA Mortgage Conduit
Services, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Vice President,
Structured Finance
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy addressed to the attention of the
General Counsel at the same address.
The Master Servicer: ADVANTA Mortgage Corp. USA
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Senior Vice President, Loan Service
Tel: (000) 000-0000
Fax: (000) 000-0000
The Insurer: Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Moody's: Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: The Home Equity
Monitoring Department
Standard & Poor's: Standard & Poor's Ratings Group
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Dept.
The Trust: Advanta Revolving Home Equity Loan
Trust 1997-A
c/o Wilmington Trust Company, as Owner Trustee
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Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Section 7.17. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of the Issuer under the Trust Agreement, in the
exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to this Agreement and
by any person claiming by, through or under them and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaking by
the Issuer under this Agreement or any related documents.
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IN WITNESS WHEREOF, the Sponsor, the Issuer, the Master Servicer
and the Indenture Trustee have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Sponsor
By:
-------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
ADVANTA MORTGAGE CORP. USA, as Master
Servicer
By:
-------------------------
Name:
Title:
ADVANTA REVOLVING HOME EQUITY
LOAN TRUST 1997-A, as Issuer
by: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee,
By:
-------------------------
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its individual capacity,
but solely as Indenture Trustee
By:
-------------------------
Name:
Title:
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