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Exhibit 4.3
TRUST AGREEMENT
between
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor,
and
[OWNER TRUSTEE],
as Owner Trustee
Dated as of [Date]
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TABLE OF CONTENTS
Page
ARTICLE I. Definitions.........................................................................................1
SECTION 1.1 Capitalized Terms.................................................................1
SECTION 1.2 Other Definitional Provisions.....................................................3
SECTION 1.3 Action by or Consent of Noteholders and Certificateholders........................4
ARTICLE II. Organization.......................................................................................4
SECTION 2.1 Name..............................................................................4
SECTION 2.2 Office............................................................................4
SECTION 2.3 Purposes and Powers...............................................................4
SECTION 2.4 Appointment of Owner Trustee......................................................6
SECTION 2.5 Initial Capital Contribution of Trust Estate......................................6
SECTION 2.6 Declaration of Trust..............................................................7
SECTION 2.7 Liability.........................................................................7
SECTION 2.8 Title to Trust Property...........................................................7
SECTION 2.9 Situs of Trust....................................................................7
SECTION 2.10 Representations and Warranties of the Sponsor.....................................8
SECTION 2.11 Federal Income Tax Allocations....................................................8
SECTION 2.12 Covenants of the Sponsor..........................................................9
SECTION 2.13 Covenants of the Certificateholders...............................................9
SECTION 2.14 Investment Companies.............................................................10
ARTICLE III. Certificates and Transfer of Interests...........................................................10
SECTION 3.1 Initial Ownership................................................................10
SECTION 3.2 The Certificates.................................................................11
SECTION 3.3 Authentication of Certificates...................................................11
SECTION 3.4 Registration of Transfer and Exchange of Certificates............................11
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates................................12
SECTION 3.6 Persons Deemed Certificateholders................................................12
SECTION 3.7 Access to List of Certificateholders' Names and Addresses........................12
SECTION 3.8 Maintenance of Office or Agency..................................................12
SECTION 3.9 ERISA............................................................................13
SECTION 3.10 Restrictions on Transfer of Certificates.........................................13
SECTION 3.11 Acceptance of Obligations........................................................14
SECTION 3.12 Payments on Certificates.........................................................14
ARTICLE IV. Voting Rights and Other Actions...................................................................14
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain Matters...............14
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters.....................15
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy..........................15
SECTION 4.4 Restrictions on Certificateholders' Power........................................15
SECTION 4.5 Majority Control.................................................................16
SECTION 4.6 Rights of Note Insurer...........................................................16
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ARTICLE V. Certain Duties.....................................................................................16
SECTION 5.1 Accounting and Records to the Noteholders, Certificateholders,
the Internal Revenue Service and Others........................................16
SECTION 5.2 Signature on Returns; Tax Matters Partner........................................17
ARTICLE VI. Authority and Duties of Owner Trustee.............................................................17
SECTION 6.1 General Authority................................................................17
SECTION 6.2 General Duties...................................................................17
SECTION 6.3 Action upon Instruction..........................................................18
SECTION 6.4 No Duties Except as Specified in this Agreement or in Instructions...............18
SECTION 6.5 No Action Except under Specified Documents or Instructions.......................19
SECTION 6.6 Restrictions.....................................................................19
ARTICLE VII. Concerning the Owner Trustee.....................................................................19
SECTION 7.1 Acceptance of Trust and Duties...................................................19
SECTION 7.2 Furnishing of Documents..........................................................20
SECTION 7.3 Representations and Warranties...................................................20
SECTION 7.4 Reliance; Advice of Counsel......................................................21
SECTION 7.5 Not Acting in Individual Capacity................................................21
SECTION 7.6 Owner Trustee Not Liable for Certificates or Mortgage Loans......................21
SECTION 7.7 Owner Trustee May Own Certificates and Notes.....................................22
SECTION 7.8 Payments from Owner Trust Estate.................................................22
SECTION 7.9 Doing Business in Other Jurisdictions............................................22
ARTICLE VIII. Compensation of Owner Trustee...................................................................22
SECTION 8.1 Owner Trustee's Fees and Expenses................................................22
SECTION 8.2 Indemnification..................................................................23
SECTION 8.3 Payments to the Owner Trustee....................................................23
SECTION 8.4 Non-recourse Obligations.........................................................23
ARTICLE IX. Termination of Trust Agreement....................................................................23
SECTION 9.1 Termination of Trust Agreement...................................................23
ARTICLE X. Successor Owner Trustees and Additional Owner Trustees.............................................24
SECTION 10.1 Eligibility Requirements for Owner Trustee.......................................24
SECTION 10.2 Resignation or Removal of Owner Trustee..........................................25
SECTION 10.3 Successor Owner Trustee..........................................................25
SECTION 10.4 Merger or Consolidation of Owner Trustee.........................................26
SECTION 10.5 Appointment of Co-Owner Trustee or Separate Owner Trustee........................26
ARTICLE XI. Miscellaneous.....................................................................................27
SECTION 11.1 Supplements and Amendments.......................................................27
SECTION 11.2 No Legal Title to Owner Trust Estate in Certificateholders.......................28
SECTION 11.3 Limitations on Rights of Others..................................................28
SECTION 11.4 Notices..........................................................................29
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SECTION 11.5 Severability.....................................................................29
SECTION 11.6 Separate Counterparts............................................................29
SECTION 11.7 Assignments; Note Insurer........................................................29
SECTION 11.8 No Petition......................................................................29
SECTION 11.9 No Recourse......................................................................30
SECTION 11.10 Headings.........................................................................30
SECTION 11.11 GOVERNING LAW....................................................................30
SECTION 11.12 Master Servicer..................................................................30
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
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TRUST AGREEMENT relating to the Advanta Mortgage Loan Trust
____-_ dated as of [Date] between ADVANTA CONDUIT RECEIVABLES, INC., a Nevada
corporation as Sponsor, and [OWNER TRUSTEE], a Delaware banking corporation as
Owner Trustee.
ARTICLE I.
Definitions
SECTION 1.1 Capitalized Terms.
For the purposes of this Agreement, the following terms shall have the meanings
set forth below.
"Accounts" shall have the meaning ascribed thereto in the
Indenture.
"Affiliate" shall mean with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, or owns, directly or
indirectly, 50% or more of, the Person specified.
"Agreement" shall mean this Trust Agreement, as the same may
be amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et. seq. as the same may be amended
from time to time.
"Certificate" means a trust certificate evidencing the
beneficial ownership interest of a Certificateholder in the Trust, substantially
in the form of Exhibit A attached hereto.
"Certificateholder" or "Holder" shall initially mean Holding
Trust, until and unless Holding Trust transfers any or all of its interest in
the Certificate to any other Person and thereafter "Certificateholder" shall
also mean or include such Person.
"Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean
the register maintained and the registrar appointed pursuant to Section 3.4.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
[Address], Attention: Corporate Trust Administration, or at such other address
as the Owner Trustee may designate by notice to the Certificateholders, the
Sponsor and Holding Trust, or the principal corporate trust office of any
successor Owner Trustee (the address of which the successor owner trustee will
notify the Certificateholders and the Sponsor).
"Definitive Certificates" shall mean Certificates issued in
certificated, fully registered form.
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"ERISA" shall have the meaning assigned to such term in
Section 3.9.
"Expenses" shall have the meaning assigned to such term in
Section 8.2.
"Holding Trust" shall mean Advanta Mortgage Holding Trust
____-_.
"Indemnification Agreement" shall mean the Indemnification
Agreement dated as of [Date] between the Note Insurer and
"Indemnified Parties" shall have the meaning assigned to such
term in Section 8.2.
"Indenture" shall mean the Indenture dated as of [Date]
between the Sponsor and the Trust, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" shall initially mean [INDENTURE TRUSTEE].,
in its capacity as indenture trustee, including its successors in interest,
until and unless a successor Person shall have become the Indenture Trustee
pursuant to the Sale and Servicing Agreement and thereafter "Indenture Trustee"
shall mean such successor Person.
"Instructing Party" shall have the meaning assigned to such
term in Section 6.3.
"Insurance Agreement" shall mean the Insurance and Indemnity
Agreement dated as of [Date] among the Note Insurer, the Sponsor, the Master
Servicer, the Trust, and the Indenture Trustee.
"Issuer" shall mean Advanta Mortgage Loan Trust ____-_.
"Master Servicer" shall mean Advanta Mortgage Corp. USA, a
Delaware corporation, and its permitted successors and assigns.
"Note Account" as defined in the Indenture.
"Note Insurer" shall mean ______________, or its successor in
interest.
"Operative Documents" shall mean this Agreement, the Sale and
Servicing Agreement, the Master Transfer Agreement, the Subsequent Transfer
Agreements, the Note Policy, the Insurance Agreement, the Indemnification
Agreement, the Indenture, and the Notes.
"Originators" shall mean any entity from which the Sponsor has
purchased (or, in the case of Subsequent Mortgage Loans, will purchase) Mortgage
Loans, or Advanta Mortgage Corp. USA, Advanta Mortgage Corp. Midatlantic,
Advanta Mortgage Corp. Midatlantic II, Advanta Mortgage Corp. Midwest, Advanta
Mortgage Corp. of New Jersey, Advanta Mortgage Corp. Northeast, Advanta National
Bank and Advanta Finance Corp.
"Outstanding" shall have the meaning assigned to such term in
the Indenture.
"Owner Trustee" shall mean [OWNER TRUSTEE], a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Owner Trust Estate" shall mean all right, title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Accounts and the Note Account and all other property of the Trust
from time to time, including any rights of the Owner Trustee and the Trust
pursuant to the Sale and Servicing Agreement.
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"Record Date" shall mean with respect to any Payment Date, the
close of business on the last Business Day immediately preceding such Payment
Date, provided, that if the Certificates or Notes are in definitive form, the
Record Date with respect to each Payment Date shall be the last Business Day of
the calendar month immediately preceding the calendar month in which such
Payment Date occurs.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement relating to the Trust among the Trust, the Sponsor, Advanta
Mortgage Corp. USA, as Master Servicer and the Indenture Trustee, dated as of
[Date], as the same may be amended and supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Security Majority" means a majority by principal amount of
the Noteholders so long as the Notes are Outstanding and a majority by principal
amount of the Certificateholders thereafter.
"Sponsor" shall mean Advanta Conduit Receivables, Inc. in its
capacity as Sponsor hereunder.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
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SECTION 1.2 Action by or Consent of Noteholders and
Certificateholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders or Certificateholders, such provision shall be
deemed to refer to the Certificateholder or Noteholder, as the case may be, of
record as of the Record Date immediately preceding the date on which such action
is to be taken, or consent given, by Noteholders or Certificateholders. Solely
for the purposes of any action to be taken, or consented to, by Noteholders or
Certificateholders, any Note or Certificate registered in the name of the
Sponsor, Holding Trust or any Affiliate thereof shall be deemed not to be
outstanding; provided, however, that, solely for the purpose of determining
whether the Indenture Trustee is entitled to rely upon any such action or
consent, only Notes or Certificates which the Owner Trustee, or the Indenture
Trustee, respectively, knows to be so owned shall be so disregarded.
ARTICLE II.
Organization
SECTION 2.1 Name.
There is hereby formed a trust to be known as "Advanta Mortgage Loan Trust
____-_", in which name the Owner Trustee may conduct the business of Trust, make
and execute contracts and other instruments on behalf of the Trust and xxx and
be sued.
SECTION 2.2 Office.
The office of the Trust shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address as the Owner Trustee may
designate by written notice to the Certificateholders and the Sponsor.
SECTION 2.3 Purposes and Powers.
(a) The purpose of the Trust is, and the Trust shall have the
power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and
the Certificates pursuant to this Agreement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to
fund the Pre-Funding Account relating to the Trust and to pay the
organizational, start-up and transactional expenses of the Trust and to
pay the balance to the Sponsor pursuant to the Sale and Servicing
Agreement;
(iii) to assign, grant, transfer, pledge, mortgage
and convey the Owner Trust Estate to the Indenture Trustee on behalf of
the Noteholders and for the benefit of the Note Insurer and to hold,
manage and distribute to the Certificateholders pursuant to the terms
of the Sale and Servicing Agreement any portion of the Owner Trust
Estate released from the lien of, and remitted to the Trust pursuant
to, the Indenture;
(iv) to enter into and perform its obligations under
the Operative Documents to which it is a party;
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(v) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(vi) subject to compliance with the Operative
Documents, to engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and the making
of distributions to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities.
(b) The Trust shall not engage in any activity other than in
connection with those described in Section 2.3(a) or other than as required or
authorized by the terms of this Agreement or the Operative Documents. In
addition, the Trust shall not:
(i) incur any indebtedness other than the Notes
issued pursuant to the Indenture
(ii) engage in any dissolution, liquidation,
consolidation, merger or sale of assets;
(iii) amend this Trust Agreement without a
confirmation from each applicable Rating Agency then rating the Notes,
that such amendment would not result in the qualification, downgrade or
withdrawal of the rating on the Notes;
(iv) effect a transfer of any direct or indirect
ownership interest in the Trust such that either (y) the transferee
owns more than a 49% interest in the Trust, or (z) the transferee is an
affiliate or a family member of a transferor which owned more than a
49% interest in the Borrower before such transfer may be made unless
such transfer is conditioned upon the delivery of an acceptable
non-consolidation opinion to the Rating Agencies concerning, as
applicable, the transferee and/or their respective owners;
(v) engage in any business activity in which it is
not currently engaged;
(vi) take any action that might cause the Trust to
become insolvent; or
(vii) form, or caused to be formed, any subsidiaries;
(c) The Trust shall:
(i) maintain books and records separate from any
other person or entity;
(ii) maintain its bank accounts separate from any
other person or entity;
(iii) not commingle its assets with those of any
other person or entity and will hold all of its assets in its own name;
(iv) conduct its own business in its own name;
(v) maintain separate financial statements, showing
its assets and liabilities separate and apart from those of any other
person or entity and not have its assets listed on the financial
statement of any other entity;
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(vi) file its tax returns separate from those of any
other entity and not file a consolidated federal income tax return with
any other entity;
(vii) except as set forth herein, pay its own
liabilities and expenses only out of its own funds;
(viii) observe all organizational formalities;
(ix) enter into transactions with affiliates only
where each such transaction is intrinsically fair, commercially
reasonable, and on the same terms as would be available in an arm's
length transaction with a person or entity that is not an affiliate;
(x) pay the salaries of its own employees from its
own funds;
(xi) maintain a sufficient number of employees in
light of its contemplated business operations;
(xii) not guarantee or become obligated for the debts
of any other entity or person;
(xiii) not hold out its credit as being available to
satisfy the obligation of any other person or entity;
(xiv) not acquire the obligations or securities of
its affiliates or owners, including partners, members or shareholders,
as appropriate;
(xv) not make loans to any other person or entity or
buy or hold evidence of indebtedness issued by any other person or
entity (except for cash and investment-grade securities);
(xvi) allocate fairly and reasonably any overhead
expenses that are shared with an affiliate, including paying for office
space and services performed by any employee of any affiliate;
(xvii) not pledge its asset for the benefit of any
other person or entity other than with respect to the Notes;
(xviii) hold itself out as a separate identity;
(xix) correct any known misunderstanding regarding
its separate identity;
(xx) not identify itself as a division of any other
person or entity; and
(xxi) maintain adequate capital in light of its
contemplated business operations.
SECTION 2.4 Appointment of Owner Trustee.
The Sponsor hereby appoints the Owner Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers and duties set
forth herein and in the Business Trust Statute.
SECTION 2.5 Initial Capital Contribution of Trust Estate.
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The Sponsor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Sponsor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Note Account. On or prior to the Closing Date, the
Owner Trustee will also, upon receipt thereof, acknowledge on behalf of the
Trust, receipt of the Mortgage Loans pursuant to the Sale and Servicing
Agreement. The Sponsor shall pay the organizational expenses of the Trust as
they may arise.
SECTION 2.6 Declaration of Trust.
The Owner Trustee hereby declares that it will hold the Owner Trust Estate
in trust upon and subject to the conditions set forth herein for the use and
benefit of the Certificateholders, subject to the obligations of the Trust under
the Operative Documents. It is the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income tax purposes, the Trust
shall be treated as a branch; provided, however, that in the event Certificates
are owned by more than one Certificateholder, it is the intention of the parties
hereto that, solely for income and franchise tax purposes, the Trust shall then
be treated as a partnership and that, unless otherwise required by appropriate
tax authorities, only after such time the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.
SECTION 2.7 Liability.
No Holder shall have any personal liability for any liability or obligation
of the Trust.
SECTION 2.8 Title to Trust Property.
(a) Legal title to all of the Owner Trust Estate shall be
vested at all times in the Trust as a separate legal entity except where
applicable law in any jurisdiction requires title to any part of the Owner Trust
Estate to be vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Owner Trustee, a co-trustee and/or a separate
trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any
part of the Trust Property. The Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership interest therein only in
accordance with Article IX. No transfer, by operation of law or otherwise, of
any right, title or interest by any Certificateholder of its ownership interest
in the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Trust Property.
SECTION 2.9 Situs of Trust.
The Trust will be located and administered in the State of Delaware. All
bank accounts maintained by the Owner Trustee on behalf of the Trust shall be
located in the State of Delaware or the State of New York. Payments will be
received by the Trust only in Delaware or New York and payments will be made by
the Trust only from Delaware or New York. The Trust shall not have any employees
in any state other than Delaware; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee, the Master Servicer or any agent of the
Trust from having employees within or without the State of Delaware. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
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SECTION 2.10 Representations and Warranties of the Sponsor.
The Sponsor makes the following representations and warranties on which the
Owner Trustee relies in accepting the Owner Trust Estate in trust and issuing
the Certificates and upon which the Note Insurer relies in issuing the Note
Policy.
(a) The Sponsor is duly organized and validly existing as a
Delaware corporation with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted and is proposed to be conducted pursuant to this Agreement
and the Operative Documents;
(b) It is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Operative Documents requires such qualification;
(c) The Sponsor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms; the Sponsor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Sponsor has duly authorized such sale
and assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Sponsor by all necessary corporate action. The Sponsor has
duly executed this Agreement and this Agreement constitutes a legal, valid and
binding obligation of the Sponsor enforceable against the Sponsor, in accordance
with its terms.
(d) To the best knowledge of the Sponsor, no consent, license,
approval or authorization or registration or declaration with, any Person or
with any governmental authority, bureau or agency is required in connection with
the execution, delivery or performance of this Agreement and the Operative
Documents, except for such as have been obtained, effected or made;
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Sponsor, or any material indenture, agreement or
other instrument to which the Sponsor is a party or by which it is bound; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Operative Documents); nor violate any law or, to the
best of the Sponsor's knowledge, any order, rule or regulation applicable to the
Sponsor of any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Sponsor or its properties; and
(f) There are no proceedings or investigations pending or, to
its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Operative Documents, (B) seeking to prevent the issuance
of the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Documents, (C) seeking
any determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Operative Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Notes or the Certificates.
SECTION 2.11 Federal Income Tax Allocations.
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In the event that the Trust is treated as a partnership for Federal income
tax purposes, net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated to the extent of
available net income, among the Certificateholders as of the first Record Date
following the end of such month, in proportion to their ownership percentage of
principal amount of Certificates on such date.
Net losses of the Trust, if any, for any month as determined
for Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated among the
Certificateholders as of the Record Date in proportion to their ownership
percentage of principal amount of Certificates on such Record Date until the
principal balance of the Certificates is reduced to zero. The Sponsor, as agent
on behalf of the Certificateholders, is authorized to modify the allocations in
this paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Certificateholders, or as otherwise required by the Code.
SECTION 2.12 Covenants of the Sponsor.
The Sponsor agrees and covenants for the benefit of each Certificateholder,
the Note Insurer and the Owner Trustee, during the term of this Agreement, and
to the fullest extent permitted by applicable law, that:
(a) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation and the Operative Documents;
(b) it shall not, for any reason, institute proceedings for
the Trust to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against The Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to the bankruptcy of The Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Operative
Document to which it or the Trust is a party and each other agreement entered
into on or after the date hereof to which it or the Trust is a party, an
agreement by each such counterparty that prior to the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against, or
join any other Person in instituting against, it or The Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States; and
(d) it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement, dissolve, institute proceedings for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against it, or file a petition seeking or consenting
to reorganization or relief under any applicable federal or state law relating
to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of it or a
substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action.
SECTION 2.13 Covenants of the Certificateholders.
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Each Certificateholder agrees:
(a) to be bound by the terms and conditions of the
Certificates and of this Agreement, including any supplements or amendments
hereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of The Trust, the Owner Trustee, the Note
Insurer and all other Certificateholders present and future;
(b) to hereby appoint the Sponsor as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of The Trust, if any, and agree that, if requested by The Trust,
it will sign such federal income tax information return in its capacity as
holder of an interest in the Trust. Each Certificateholder also hereby agrees
that in its tax returns it will not take any position inconsistent with those
taken in any tax returns that may be filed by the Trust;
(c) if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and
(d) until the completion of the events specified in Section
9.1(e), not to, for any reason, institute proceedings for the Trust or the
Sponsor to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against The Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Sponsor or the Trust or a substantial part of its property, or
cause or permit the Sponsor or the Trust to make any assignment for the benefit
of its creditors, or admit in writing its inability to pay its debts generally
as they become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.
Except as provided in this Section 2.13, and notwithstanding
any other provision to the contrary in this Agreement, no Certificateholder
shall be deemed to have adopted, be bound by, or succeed in any way to any
representation by, or duty of indemnification by or any other duty of, the
Sponsor, including those contained in Sections 2.10, 2.12, 8.2 or elsewhere
herein.
SECTION 2.14 Investment Company.
Neither the Sponsor nor any Certificateholders shall take any action that
would cause the Trust to become an "Investment Company" required to register
under the Investment Company Act of 1940, as amended.
ARTICLE III.
Certificates and Transfer of Interests
SECTION 3.1 Initial Ownership.
Upon the formation of the Trust by the contribution by the Sponsor pursuant
to Section 2.5, the Owner Trustee, contemporaneously therewith, having full
power, authority, and authorization to do so, has executed, authenticated,
dated, issued, and delivered, in the name and on behalf of The Trust, to the
Sponsor, one or more Certificates representing in the aggregate a 100% interest
in The Trust, and the Sponsor shall direct that such Certificate(s) on the
Certificate Register be registered in the name of Holding Trust. Accordingly,
Holding Trust shall initially be the sole beneficiary of the Trust. Such
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Certificate(s) are duly authorized, validly issued, and entitled to the benefits
of this Agreement. For so long as Holding Trust shall own such 100% interest in
The Trust, Holding Trust shall be the sole beneficial owner of the Trust.
SECTION 3.2 The Certificates.
The Certificates shall be issued in denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of an authorized officer of
the Owner Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of The Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. Subject to Section 2.13(d), a
transferee of a Certificate shall become a Certificateholder, and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder, upon due registration of such Certificate in such transferee's name
pursuant to Section 3.4.
SECTION 3.3 Authentication of Certificates.
Concurrently with the initial sale of the Mortgage Loans to the Trust
pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause each
Certificate, to be executed on behalf of The Trust, authenticated and delivered
to or upon the written order of the Sponsor, signed by its chairman of the
board, its president or any vice president, its treasurer or any assistant
treasurer without further corporate action by the Sponsor, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee, by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 3.4 Registration of Transfer and Exchange of
Certificates.
The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Owner Trustee shall be the
initial Certificate Registrar.
In furtherance of and not in limitation of the foregoing, each
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that it has no right to or interest in any monies at any time held in the
Pre-Funding Account prior to the release of such monies pursuant to Section
8.7(b)(vii) of the Indenture (other than Pre-Funding Earnings), such monies
being held in trust for the benefit of the Noteholders and the Note Insurer.
Notwithstanding the foregoing, in the event that it is ever determined that the
monies held in the Pre-Funding Account constitute a pledge of collateral, then
the provisions of the Sale and Servicing Agreement shall be considered to
constitute a security agreement and the Sponsor and the Certificateholders
hereby grant to the Indenture Trustee and the Note Insurer a first priority
perfected security interest in such amounts. In addition, each
Certificateholder, by acceptance of its Certificate, hereby appoints the Sponsor
as its agent to pledge a first priority perfected security interest in the
Pre-Funding Account, and any amounts held therein from time to time to the
Indenture Trustee and the Note Insurer and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as the Note Insurer shall consider reasonably
necessary in order to perfect the Indenture Trustee's security interest in the
Mortgage Loans.
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SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar, the Owner Trustee and the Note
Insurer such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like class, tenor and denomination. In connection with the
issuance of any new Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in The Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.6 Persons Deemed Certificateholders.
Except as otherwise stated herein, every Person by virtue of becoming a
Certificateholder in accordance with this Agreement and the rules and
regulations of the Certificate Registrar shall be deemed to be bound by the
terms of this Agreement. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee, the Certificate Registrar and the
Note Insurer and any agent of the Owner Trustee, the Certificate Registrar and
the Note Insurer, may treat the Person in whose name any Certificate shall be
registered in the Certificate Register as the owner of such Certificate for the
purpose of receiving distributions pursuant to the Sale and Servicing Agreement
and the Indenture and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or the Note Insurer nor any agent of the
Owner Trustee, the Certificate Registrar or the Note Insurer shall be bound by
any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses.
The Owner Trustee shall furnish or cause to be furnished to the Master
Servicer, the Sponsor or the Note Insurer, within 15 days after receipt by the
Owner Trustee of a request therefor from such Person in writing, a list, of the
names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Certificateholders or one or more Certificateholders evidencing
not less than 25% by Percentage Interest apply in writing to the Owner Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Sponsor, the
Master Servicer, the Owner Trustee or the Note Insurer or any agent thereof
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 3.8 Maintenance of Office or Agency.
The Owner Trustee shall maintain in Wilmington, Delaware an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Operative Documents may
be served. The Owner Trustee initially designates its Corporate Trust Office for
such purposes. The Owner Trustee shall give prompt written notice to the
Sponsor, the Certificateholders and the Note Insurer of any change in the
location of the Certificate Register or any such office or agency.
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SECTION 3.9 ERISA.
The Certificates may not be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan (as defined in Section 4975(e)(1) of
the Code) that is subject to Section 4975 of the Code, or (iii) any entity whose
underlying assets include assets of a plan described in (i) or (ii) plan assets
by reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding its beneficial ownership interest in its Certificate, the
Holder thereof shall be deemed to have represented and warranted that it is not
a Benefit Plan.
SECTION 3.10 Restrictions on Transfer of Certificates.
(a) The Certificates shall be assigned, transferred,
exchanged, pledged, financed, hypothecated or otherwise conveyed (collectively,
for purposes of this Section 3.10 and any other Section referring to the
Certificates, "transferred" or a "transfer") only in accordance with this
Section 3.10.
(b) No transfer of a Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Certificate to Holding Trust and its initial transferee, the Owner Trustee shall
require (i) the transferee to execute an investment letter acceptable to and in
form and substance satisfactory to the Owner Trustee and the Note Insurer
certifying to the Owner Trustee and the Note Insurer the facts surrounding such
transfer, which investment letter shall not be an expense of the Owner Trustee
or the Note Insurer or (ii) if the investment letter is not delivered, a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Owner Trustee, the Note Insurer and the Sponsor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor from said Act or is being made pursuant to said Act, which Opinion of
Counsel shall not be an expense of the Owner Trustee, the Note Insurer or the
Sponsor. The Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Sponsor, the Owner Trustee and the Note Insurer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) The Certificates and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Certificate shall (A) be organized and existing under
the laws of the United States of America or any state thereof or the District of
Columbia; (B) expressly assume, by an agreement supplemental hereto, executed
and delivered to the Owner Trustee, the performance of every covenant and
obligation of the Sponsor hereunder except for the covenants and obligations
contained in Sections 3.1, 3.3, 3.4 of the Sale and Servicing Agreement, and
Sections 2.10, 2.12 or 8.2 of this Agreement; (ii) the person that acquires a
Certificate shall deliver to the Owner Trustee and the Note Insurer an Officer's
Certificate stating that such transfer and such supplemental agreement comply
with this Section 3.10 and that all conditions precedent provided by this
subsection 3.10 have been complied with and an Opinion of Counsel stating that
such transfer and such supplemental agreement comply with this Section 3.10 and
that all conditions precedent provided by this Section 3.10 have been complied
with, and the Owner Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying; (iii) the person that
acquires a Certificate shall deliver to the Owner Trustee and the Note Insurer a
letter from each Rating Agency confirming that its rating of the Notes, after
giving effect to such transfer, will not be reduced or withdrawn without regard
to the Note Policy; (iv) the person that acquires a Certificate shall deliver to
the Owner Trustee and the Note Insurer an Opinion of Counsel to the effect that
(a) such transfer will not adversely affect the treatment of the Notes after
such transfer as debt for federal and applicable state income tax purposes, (b)
such transfer will not result in the Trust being subject to tax at the entity
level for federal or applicable state tax
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purposes, (c) such transfer will not have any material adverse impact on the
federal or applicable state income taxation of a Noteholder and (d) such
transfer will not result in the arrangement created by this Agreement or any
"portion" of the Trust, being treated as a taxable mortgage pool as defined in
Section 7701(i) of the Code; (v) all filings and other actions necessary to
continue the perfection of the interest of the Trust in the Mortgage Loans and
the other property conveyed hereunder shall have been taken or made.
Notwithstanding the foregoing, the requirement set forth in subclause (i)(A) of
this Section 3.10 shall not apply in the event the Owner Trustee and the Note
Insurer shall have received a letter from each Rating Agency confirming that its
rating of the Notes, after giving effect to a proposed transfer to a Person that
does not meet the requirement set forth in subclause (i)(A), shall not be
reduced or withdrawn without regard to the Note Policy. Notwithstanding the
foregoing, the requirements set forth in this paragraph (b) shall not apply to
the initial issuance of the Certificates to the Holding Trust and its initial
transferee.
(d) Except for the initial issuance of the Certificates to
Holding Trust and its initial transferee, no transfer of a Certificate shall be
made unless the Owner Trustee shall have received a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Owner Trustee, to the effect that such transferee is not a
Benefit Plan and is not acting on behalf of or using the assets of a Benefit
Plan, which representation letter shall not be an expense of the Owner Trustee.
(e) No transfer or pledge of the Certificates shall result in
more than 98 other holders of Certificates.
SECTION 3.11 Acceptance of Obligations.
The Sponsor agrees to be bound by and to perform all the duties of the
Sponsor set forth in this Agreement.
SECTION 3.12 Payments on Certificates.
The Certificateholders will be entitled to distributions on each Payment
Date, as provided in the Indenture.
ARTICLE IV.
Voting Rights and Other Actions
SECTION 4.1 Prior Notice to Certificateholders with Respect to
Certain Matters.
With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and the Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute or unless such amendment would not materially and
adversely affect the interests of the Holders);
(b) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
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(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
or
(d) except pursuant to Section 7.14 of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholders.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Note Registrar, or Certificate Registrar within five
Business Days thereof.
SECTION 4.2 Action by Certificateholders with Respect to
Certain Matters.
(a) The Owner Trustee shall not have the power, except upon
the direction of the Note Insurer or in the event that a Note Insurer Default
shall have occurred and is continuing, the Security Majority in accordance with
the Operative Documents, to (i) remove the Master Servicer under the Sale and
Servicing Agreement or (ii) except as expressly provided in the Operative
Documents, sell the Mortgage Loans after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Note Insurer or the Noteholders, as the
case may be, and the furnishing of indemnification satisfactory to the Owner
Trustee by the Certificateholders.
(b) Upon the written request of any Certificateholder (a
"Proposer"), the Owner Trustee shall distribute promptly to all
Certificateholders any request for action or consent of Certificateholders
submitted by such Proposer. The Owner Trustee shall provide a reasonable method
for collecting responses to such request and shall tabulate and report the
results thereof to the Certificateholders and the Sponsor. The Owner Trustee
shall have no responsibility or duty to determine if any such proposed action or
consent is permitted under the terms of this Agreement or applicable law.
SECTION 4.3 Action by Certificateholders with Respect to
Bankruptcy.
Until one year and one day following the day on which the Notes have been
paid in full, the Owner Trustee shall not have the power to, and shall not,
commence any proceeding or other actions contemplated by Section 2.12(b)
relating to the Trust without the prior written consent of the Note Insurer
(unless a Note Insurer Default shall have occurred and is continuing) or upon a
Note Insurer Default, the Security Majority. Until one year and one day
following the day on which the Notes have been paid in full, all amounts due to
the Note Insurer under the Insurance Agreement have been paid in full, the Note
Policy has terminated and the Indenture Trustee has surrendered the Note Policy
to the Note Insurer, the Owner Trustee shall not have the power to, and shall
not, commence any proceeding or other actions contemplated by Section 2.12(b)
relating to the Trust without the prior written consent of all of the
Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power.
(a) The Certificateholders shall not direct the Owner Trustee
to take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Operative Documents or would be contrary to Section 2.3
or otherwise contrary to law nor shall the Owner Trustee be obligated to follow
any such direction, if given.
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(b) No Certificateholder (other than Holding Trust or its
initial transferee) shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any
Operative Document, unless the Certificateholders are the Instructing Party
pursuant to Section 6.3 and unless a Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless Certificateholders
evidencing not less than 25% by Percentage Interest shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit,
or proceeding, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 4.5 Majority Control.
No Certificateholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust except as expressly
provided in this Agreement. Except as otherwise expressly provided herein, any
action that may be taken by the Certificateholders under this Agreement may be
taken by the Holders of Certificates evidencing not less than a majority
interest in the Trust. Except as otherwise expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by Certificateholders evidencing not less than a
majority interest in the Trust at the time of the delivery of such notice.
SECTION 4.6 Rights of Note Insurer.
Notwithstanding anything to the contrary in the Operative Documents,
without the prior written consent of the Note Insurer (or if a Note Insurer
Default shall have occurred and is continuing, the Security Majority) the Owner
Trustee shall not (i) remove the Master Servicer, (ii) initiate any claim, suit
or proceeding by the Trust or compromise any claim, suit or proceeding brought
by or against The Trust, other than with respect to the enforcement of any
Mortgage Loan or any rights of the Trust thereunder, (iii) authorize the merger
or consolidation of the Trust with or into any other business trust or other
entity (other than in accordance with Section 3.10 of the Indenture), (iv) amend
the Certificate of Trust or (v) amend this Agreement in accordance with Section
11.1 of this Agreement.
ARTICLE V.
Certain Duties
SECTION 5.1 Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service
and Others.
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The Sponsor shall (a) maintain (or cause to be maintained) the books of the
Trust on a calendar year basis on the accrual method of accounting, including,
without limitation, the allocations of net income under Section 2.11 hereof, (b)
deliver (or cause to be delivered) to each Certificateholder, as may be required
by the Code and applicable Treasury Regulations, such information as may be
required (including Schedule K-1, if applicable) to enable each
Certificateholder to prepare its Federal and state income tax returns, (c) file
or cause to be filed, if necessary, such tax returns relating to the Trust
(including a partnership information return, Form 1065), and direct the Owner
Trustee or the Master Servicer, as the case may be, to make such elections as
may from time to time be required or appropriate under any applicable state or
Federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a branch, or if applicable, as a partnership, for Federal
income tax purposes and (d) collect or cause to be collected any withholding tax
as described in and in accordance with Section 6.1(a)(ii) of the Sale and
Servicing Agreement with respect to income or distributions to
Certificateholders and the appropriate forms relating thereto. The Owner Trustee
or the Master Servicer, as the case may be, shall make all elections pursuant to
this Section as directed in writing by the Sponsor. The Owner Trustee shall sign
all tax information returns presented to it in final execution form, if any,
filed pursuant to this Section 5.1 and any other returns as may be required by
law, and in doing so shall rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Sponsor or the Master
Servicer. The Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to the
Mortgage Loans. The Owner Trustee shall not make the election provided under
Section 754 of the Code.
SECTION 5.2 Signature on Returns; Tax Matters Partner.
(a) Notwithstanding the provisions of Section 5.1 and in the
event that the Trust is characterized as a partnership, the Owner Trustee shall
sign on behalf of the Trust the tax returns of the Trust presented to it in
final execution form, unless applicable law requires a Certificateholder to sign
such documents, in which case such documents shall be signed by the Sponsor, as
agent, on behalf of the Certificateholders.
(b) In the event that the Trust is characterized as a
partnership, each Certificateholder shall be the "tax matters partner" of the
Trust pursuant to the Code.
ARTICLE VI.
Authority and Duties of Owner Trustee
SECTION 6.1 General Authority.
The Owner Trustee is authorized and directed to execute and deliver the
Operative Documents to which the Trust is named as a party and each certificate
or other document attached as an exhibit to or contemplated by the Operative
Documents to which the Trust is named as a party and any amendment thereto, in
each case, in such form as the Sponsor shall approve as evidenced conclusively
by the Owner Trustee's execution thereof, and on behalf of The Trust, to direct
the Indenture Trustee to authenticate and deliver Notes in the aggregate
principal amount of $____________. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Operative Documents. The Owner Trustee is further
authorized from time to time to take such action as the Instructing Party
recommends with respect to the Operative Documents so long as such activities
are consistent with the terms of the Operative Documents.
SECTION 6.2 General Duties.
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It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all of its responsibilities pursuant to the terms of this Agreement
and to administer the Trust in the interest of the Holders, subject to the
Operative Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Operative
Documents to the extent the Master Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Operative Document, and the Owner Trustee shall
not be liable for the default or failure of the Master Servicer to carry out its
obligations under the Sale and Servicing Agreement.
SECTION 6.3 Action upon Instruction.
(a) Subject to Article IV, the Note Insurer (so long as a Note
Insurer Default shall not have occurred and be continuing) or the
Certificateholders (if a Note Insurer Default shall have occurred and be
continuing) (the "Instructing Party") shall have the exclusive right to direct
the actions of the Owner Trustee in the management of The Trust, so long as such
instructions are not inconsistent with the express terms set forth herein or in
any Operative Document. The Instructing Party shall not instruct the Owner
Trustee in a manner inconsistent with this Agreement or the Operative Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Operative Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Operative Document or is otherwise contrary to
law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Operative Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Operative Documents, as it shall deem to
be in the best interests of the Certificateholders, and shall have no liability
to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Operative Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Operative
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement or
in Instructions.
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The Owner Trustee shall not have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of, or otherwise deal
with the Owner Trust Estate, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Owner Trustee is a party, except as expressly provided by the terms of this
Agreement or in any document or written instruction received by the Owner
Trustee pursuant to Section 6.3; and no implied duties or obligations shall be
read into this Agreement or any Operative Document against the Owner Trustee.
The Owner Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Commission filing for the Trust or to record
this Agreement or any Operative Document. The Owner Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Owner Trust Estate that
result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.5 No Action Except under Specified Documents or
Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of the Owner Trust Estate except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the Operative Documents and
(iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions.
The Owner Trustee shall not take any action (a) that is inconsistent with
the purposes of the Trust set forth in Section 2.3 or (b) that, to the actual
knowledge of the Owner Trustee, would result in the Trust becoming taxable as a
corporation or a publicly traded partnership for Federal income tax purposes.
The Certificateholders shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII.
Concerning the Owner Trustee
SECTION 7.1 Acceptance of Trust and Duties.
The Owner Trustee accepts the trust hereby created and agrees to perform
its duties hereunder with respect to such trust but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Operative Documents and this Agreement. The Owner Trustee shall not be
answerable or accountable hereunder or under any Operative Document under any
circumstances, except (i) for its own willful misconduct, bad faith or gross
negligence, (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
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(a) the Owner Trustee shall not be liable for any error of
judgment, not constituting gross negligence, made by a Responsible Officer of
the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it if such action or omission is in
accordance with the instructions of the Instructing Party, the Sponsor, the
Master Servicer or any Certificateholder pursuant to the terms hereof;
(c) no provision of this Agreement or any Operative Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Operative Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Operative Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Sponsor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or in
respect of the validity or sufficiency of the Operative Documents, other than
the certificate of authentication on the Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty or obligation to the
Sponsor, the Note Insurer, Indenture Trustee, any Certificateholder, other than
as expressly provided for herein and in the Operative Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Sponsor, the Note Insurer, the Indenture Trustee, the Trust,
or the Master Servicer under any of the Operative Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the obligations
under this Agreement or the Operative Documents that are required to be
performed by the Sponsor under this Agreement, by the Indenture Trustee under
the Indenture or the Master Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Operative Document, at the request, order or
direction of the Instructing Party or any of the Certificateholders, unless such
Instructing Party or Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Operative Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence, bad faith
or willful misconduct in the performance of any such act.
SECTION 7.2 Furnishing of Documents.
The Owner Trustee shall furnish to the Certificateholders promptly upon
receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Owner Trustee under the Operative Documents.
SECTION 7.3 Representations and Warranties.
The Owner Trustee hereby represents and warrants, in its individual
capacity, to the Sponsor and the Holders (which shall have relied on such
representations and warranties in issuing the Note Policy), that:
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(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4 Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer, secretary or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Operative Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
(ii) may consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants or other
such persons and according to such opinion not contrary to this Agreement or any
Operative Document.
SECTION 7.5 Not Acting in Individual Capacity.
Except as provided in this Article VII, in accepting the trusts hereby
created [OWNER TRUSTEE] acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Operative
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
SECTION 7.6 Owner Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Owner Trustee on the Certificates) shall
be taken as the statements of the Sponsor and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Operative Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Mortgage Loan or related documents. The Owner Trustee shall at no time have
any
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responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage Loan, or the perfection and priority of any
security interest created by any Mortgage Loan or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Mortgage Loan; the existence and enforceability of any insurance thereon; the
existence and contents of any Mortgage Loan on any computer or other record
thereof; the validity of the assignment of any Mortgage Loan to the Trust or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the Sponsor,
the Master Servicer or any other Person with any warranty or representation made
under any Operative Document or in any related document or the accuracy of any
such warranty or representation or any action of the Indenture Trustee or the
Master Servicer or any Sub-Servicer taken in the name of the Owner Trustee.
SECTION 7.7 Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates or Notes and may deal with the Sponsor, the
Indenture Trustee and the Master Servicer in banking transactions with the same
rights as it would have if it were not Owner Trustee.
SECTION 7.8 Payments from Owner Trust Estate.
All payments to be made by the Owner Trustee under this Agreement or any of
the Operative Documents to which the Trust or the Owner Trustee is a party shall
be made only from the income and proceeds of the Owner Trust Estate and only to
the extent that the Trust shall have received income or proceeds from the Owner
Trust Estate to make such payments in accordance with the terms hereof. [OWNER
TRUSTEE], or any successor thereto, in its individual capacity, shall not be
liable for any amounts payable under this Agreement or any of the Operative
Documents to which the Trust or the Owner Trustee is a party.
SECTION 7.9 Doing Business in Other Jurisdictions.
Notwithstanding anything contained to the contrary, neither [OWNER TRUSTEE]
or any successor thereto, nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware ; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by [OWNER TRUSTEE] (or any successor thereto); or
(iii) subject [OWNER TRUSTEE] (or any successor thereto) to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
[OWNER TRUSTEE] (or any successor thereto) or the Owner Trustee, as the case may
be, contemplated hereby.
ARTICLE VIII.
Compensation of Owner Trustee
SECTION 8.1 Owner Trustee's Fees and Expenses.
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The Owner Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date hereof between the
Sponsor and the Owner Trustee, and the Owner Trustee shall be entitled to be
reimbursed by the Sponsor for its other reasonable expenses hereunder, including
the reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder and under the Operative Documents.
SECTION 8.2 Indemnification.
The Sponsor shall be liable as primary obligor for, and shall indemnify the
Owner Trustee (in its individual and trust capacities) and its officers,
directors, successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may (in its
trust or individual capacities) at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Operative Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Sponsor shall not be liable
for or required to indemnify the Owner Trustee from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section
7.1. The indemnities contained in this Section and the rights under Section 8.1
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In any event of any claim, action or proceeding
for which indemnity will be sought pursuant to this Section, the Owner Trustee's
choice of legal counsel shall be subject to the approval of the Sponsor which
approval shall not be unreasonably withheld.
SECTION 8.3 Payments to the Owner Trustee.
Any amounts paid to the Owner Trustee pursuant to this Article VIII shall
be deemed not to be a part of the Owner Trust Estate immediately after such
payment.
SECTION 8.4 Non-recourse Obligations.
Notwithstanding anything in this Agreement or any Operative Document, the
Owner Trustee agrees in its individual capacity and in its capacity as Owner
Trustee for the Trust that all obligations of the Trust to the Owner Trustee
individually or as Owner Trustee for the Trust shall be recourse to the Owner
Trust Estate only and specifically shall not be recourse to the assets of any
Certificateholder.
ARTICLE IX.
Termination of Trust Agreement
SECTION 9.1 Termination of Trust Agreement.
(a) This Agreement and the Trust shall terminate and be of no
further force or effect upon the later of (i) the maturity or other liquidation
of the last Mortgage Loan (including the redemption by the Majority
Certificateholders at its option of the corpus of the Trust as described in
Section 10.1(b) of the Indenture) and the subsequent distribution of amounts in
respect of such Mortgage Loans as provided in the Operative Documents or (ii)
the payment to Certificateholders of all amounts required to be paid to them
pursuant to this Agreement and the payment to the Note Insurer of all amounts
payable or reimbursable to it pursuant to the Sale and Servicing Agreement and
the Insurance Agreement; provided, however, that the rights to indemnification
under Section 8.2 and the rights under Section 8.1 shall survive the termination
of the Trust. The Master Servicer shall promptly
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notify the Owner Trustee and the Note Insurer of any prospective termination
pursuant to this Section 9.1. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder shall not (x) operate to terminate this
Agreement or The Trust, nor (y) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Sponsor nor
any other Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of The Trust, specifying the
Payment Date upon which the Certificateholders shall surrender their
Certificates to the Indenture Trustee for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
redemption from the Master Servicer given pursuant to Section 10.1 of the Sale
and Servicing Agreement, stating (i) the Payment Date upon or with respect to
which final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of the Indenture Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Indenture Trustee therein specified. The Owner Trustee shall give such
notice to the Certificate Registrar (if other than the Owner Trustee) and the
Indenture Trustee at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Indenture Trustee shall
cause to be distributed to Certificateholders amounts distributable on such
Payment Date pursuant to Section 8.7(b)(xx) of the Indenture.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to applicable escheat
laws, by the Owner Trustee to the Sponsor and Certificateholders shall look
solely to the Sponsor for payment.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Sponsor.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X.
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1 Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation (i) satisfying the
provisions of Section 3807(a) of the Business Trust Statute; (ii) authorized to
exercise corporate trust powers; (iii) having a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by Federal or
State
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authorities; (iv) having (or having a parent which has) a rating of at least
Baa3 by Moody's or A-1 by Standard & Poors or being otherwise acceptable to the
Rating Agencies; and (v) acceptable to the Note Insurer in its sole discretion.
If such corporation shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 10.2.
SECTION 10.2 Resignation or Removal of Owner Trustee.
The Owner Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Sponsor, the Note Insurer
and the Master Servicer. Upon receiving such notice of resignation, the Sponsor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth in Section 10.1 herein, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Owner Trustee and one copy
to the successor Owner Trustee, provided that the Sponsor shall have received
written confirmation from each of the Rating Agencies that the proposed
appointment will not result in an increased capital charge to the Note Insurer
by either of the Rating Agencies. If no successor Owner Trustee shall have been
so appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee or the Note Insurer may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Sponsor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then a majority of the Certificateholders with the consent of the
Note Insurer (so long as no Note Insurer Default shall have occurred and is
continuing) may remove the Owner Trustee. If a majority of the
Certificateholders shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Sponsor shall promptly appoint a successor
Owner Trustee, meeting the qualifications set forth in Section 10.1 herein, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed, one copy to the Note Insurer
and one copy to the successor Owner Trustee and the Sponsor shall pay all fees
owed to the outgoing Owner Trustee, if not previously paid by the Trust.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 10.3 and payment of all reasonable
fees and expenses owed to the outgoing Owner Trustee.
Notwithstanding any other provision of this Agreement, and in
addition to any other method of removal of the Owner Trustee contained herein,
upon a proposal made pursuant to Section 4.2(b) and the subsequent consent of
Certificateholders representing no less than a 66-2/3% interest in The Trust,
the Owner Trustee may be removed as Owner Trustee , subject to the consent of
the Note Insurer (so long as no Note Insurer Default shall have occurred and is
continuing), which consent is not to be unreasonably withheld. In the event the
Owner Trustee is removed pursuant to this paragraph, the provisions of this
Agreement, including Article X herein, shall apply as if the Owner Trustee had
resigned hereunder.
SECTION 10.3 Successor Owner Trustee.
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Any successor Owner Trustee appointed pursuant to Section 10.2 shall
execute, acknowledge and deliver to the Sponsor, the Master Servicer, the Note
Insurer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver to
the successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and the Sponsor and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Master Servicer shall mail notice of the successor
of such Owner Trustee to all Certificateholders, the Indenture Trustee and the
Noteholders. If the Master Servicer shall fail to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Master Servicer.
The successor Owner Trustee shall file an amendment to the
Certificate of Trust with the Secretary of State reflecting the name and
principal place of business of such successor Owner Trustee in the State of
Delaware.
SECTION 10.4 Merger or Consolidation of Owner Trustee.
Any corporation into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5 Appointment of Co-Owner Trustee or Separate Owner
Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Mortgaged Property may at the time be
located, the Master Servicer and the Owner Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee and the Note Insurer to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to The Trust, or any part thereof, and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Owner Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Owner Trustee
subject to the approval of the Note Insurer (which approval shall not be
unreasonably withheld) shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.3.
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Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be
personally liable by reason of any act or omission of any other trustee
under this Agreement; and
(iii) the Master Servicer and the Owner Trustee
acting jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Master Servicer and the Note Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE XI.
Miscellaneous
SECTION 11.1 Supplements and Amendments.
(a) This Agreement may be amended by the Sponsor and the Owner
Trustee, with the prior written consent of the Note Insurer (so long as no Note
Insurer Default shall have occurred and is continuing), without the consent of
any of the Noteholders or Certificateholders (i) to cure any ambiguity or defect
or (ii) to correct, supplement or modify any provisions in this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel which may be based upon a certificate of the Master Servicer, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
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32
(b) This Agreement may also be amended from time to time, with
the prior written consent of the Note Insurer which consent shall not be
unreasonably withheld (so long as no Note Insurer Default shall have occurred
and is continuing) by the Sponsor and the Owner Trustee, with prior written
notice to the Rating Agencies, and, to the extent such amendment materially and
adversely affects the interests of the Noteholders, with the consent of the
Noteholders evidencing not less than a majority of the Outstanding amount of the
Notes and, the consent of the Certificateholders evidencing not less than a
majority interest in the Trust (which consent of any Holder of a Certificate or
Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that, subject to the
express rights of the Note Insurer under the Operative Documents, no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Mortgage Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificates, the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and holders of all outstanding
Certificates.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Operative Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe. Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders.
The Certificateholders shall not have legal title to any part of the Owner
Trust Estate. The Certificateholders shall be entitled to receive distributions
with respect to their ownership interest therein only in accordance with Article
IX. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholders to and in their ownership interest in the
Owner Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Owner Trust Estate.
SECTION 11.3 Limitations on Rights of Others.
Except for Section 11.7, the provisions of this Agreement are solely for
the benefit of the Owner Trustee, the Sponsor, the Certificateholders, the
Master Servicer and, to the extent expressly provided
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33
herein, the Note Insurer, the Indenture Trustee and the Noteholders, and nothing
in this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.4 Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt personally delivered, delivered by overnight courier or mailed first
class mail or certified mail, in each case return receipt requested, and shall
be deemed to have been duly given upon receipt, if to the Owner Trustee,
addressed to the Corporate Trust Office; if to the Sponsor, addressed to Advanta
Conduit Receivables Inc., Welsh & XxXxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxxx
00000; if to the Note Insurer, addressed to, _____________, Attention:
____________, Telecopy No.: __________; or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdictional shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.6 Separate Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.7 Assignments; Note Insurer.
(a) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. This Agreement shall also inure to the benefit of the Note Insurer for
so long as a Note Insurer Default shall not have occurred and be continuing.
Without limiting the generality of the foregoing, all covenants and agreements
in this Agreement which confer rights upon the Note Insurer shall be for the
benefit of and run directly to the Note Insurer, and the Note Insurer shall be
entitled to rely on and enforce such covenants, subject, however, to the
limitations on such rights provided in this Agreement and the Operative
Documents. The Note Insurer may disclaim any of its rights and powers under this
Agreement (but not its duties and obligations under the Note Policy) upon
delivery of a written notice to the Owner Trustee.
SECTION 11.8 No Petition.
The Owner Trustee (not in its individual capacity but solely as Owner
Trustee), by entering into this Agreement, each Certificateholder, by accepting
a Certificate, and the Indenture Trustee and each Noteholder by accepting the
benefits of this Agreement, hereby covenants and agrees that they will not at
any time institute against the Sponsor, or join in any institution against the
Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings
29
34
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificates, the Notes, this Agreement or
any of the Operative Documents.
SECTION 11.9 No Recourse.
Each Certificateholder by accepting a Certificate acknowledges that such
Certificateholder's Certificates represent beneficial interests in the Trust
only and do not represent interests in or obligations of the Master Servicer,
the Sponsor, the Owner Trustee, the Indenture Trustee, the Note Insurer or any
Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificates or the Operative Documents.
SECTION 11.10 Headings.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.11 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.12 Master Servicer.
The Master Servicer is authorized to prepare, or cause to be prepared,
execute and deliver on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust or
Owner Trustee to prepare, file or deliver pursuant to the Operative Documents.
Upon written request, the Owner Trustee shall execute and deliver to the Master
Servicer a limited power of attorney appointing the Master Servicer the Trust's
agent and attorney-in-fact to prepare, or cause to be prepared, execute and
deliver all such documents, reports, filings, instruments, certificates and
opinions.
30
35
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
[OWNER TRUSTEE], as Owner Trustee
By:________________________________
Name:
Title:
ADVANTA CONDUIT RECEIVABLES, INC.,
as Sponsor
By:________________________________
Name:
Title:
31
36
Exhibit A
CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE
EXTENT DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION
AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.10 OF THE TRUST
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE OWNER TRUSTEE
SHALL HAVE RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF SUCH
CERTIFICATE, ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE OWNER TRUSTEE, TO THE EFFECT THAT SUCH TRANSFEREE IS NOT A BENEFIT
PLAN AND NOT ACTING ON BEHALF OF OR USING THE ASSETS OF A BENEFIT PLAN,
WHICH REPRESENTATION LETTER SHALL NOT BE AN EXPENSE OF THE OWNER
TRUSTEE.
NO TRANSFER OF A CERTIFICATE SHALL BE MADE UNLESS SUCH TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR IS MADE
IN ACCORDANCE WITH SAID ACT AND LAWS. EXCEPT FOR THE INITIAL ISSUANCE
OF THE CERTIFICATES TO HOLDING TRUST AND ITS INITIAL TRANSFEREE, THE
OWNER TRUSTEE SHALL REQUIRE (i) THE TRANSFEREE TO EXECUTE AN INVESTMENT
LETTER ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
OWNER TRUSTEE AND THE NOTE INSURER CERTIFYING TO THE OWNER TRUSTEE AND
THE NOTE INSURER THE FACTS SURROUNDING SUCH TRANSFER, WHICH INVESTMENT
LETTER SHALL NOT BE AN EXPENSE OF THE OWNER TRUSTEE OR THE NOTE INSURER
OR (ii) IF THE INVESTMENT LETTER IS NOT DELIVERED, A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
OWNER TRUSTEE, THE NOTE INSURER AND THE SPONSOR THAT SUCH TRANSFER MAY
BE MADE PURSUANT TO AN EXEMPTION, DESCRIBING THE APPLICABLE EXEMPTION
AND THE BASIS THEREFOR, FROM SAID ACT OR IS BEING MADE PURSUANT TO SAID
ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE OWNER
TRUSTEE, THE NOTE INSURER OR THE SPONSOR. THE HOLDER OF A CERTIFICATE
DESIRING TO EFFECT SUCH TRANSFER SHALL, AND DOES HEREBY AGREE TO,
INDEMNIFY THE SPONSOR AND THE NOTE INSURER AGAINST ANY LIABILITY THAT
MAY RESULT IF THE TRANSFER IS NOT SO EXEMPT OR IS NOT MADE IN
ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS.
37
THE CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE
PERSON THAT ACQUIRES A CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING
UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE OR THE
DISTRICT OF COLUMBIA THEREOF, (B) EXPRESSLY ASSUME, BY AN AGREEMENT
SUPPLEMENTAL HERETO, EXECUTED AND DELIVERED TO THE OWNER TRUSTEE, THE
PERFORMANCE OF EVERY COVENANT AND OBLIGATION OF THE SPONSOR UNDER THE
TRUST AGREEMENT, EXCEPT FOR THE COVENANTS AND OBLIGATIONS CONTAINED IN
SECTIONS 3.1, 3.3, AND 3.4 OF THE SALE AND SERVICING AGREEMENT, AND
SECTIONS 2.10, 2.12 OR 8.2 OF THE TRUST AGREEMENT; (II) THE PERSON THAT
ACQUIRES A CERTIFICATE SHALL DELIVER TO THE OWNER TRUSTEE AND THE NOTE
INSURER AN OFFICER'S CERTIFICATE STATING THAT SUCH TRANSFER AND SUCH
SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 3.10 OF THE TRUST AGREEMENT
AND THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 3.10 OF THE TRUST
AGREEMENT HAVE BEEN COMPLIED WITH AND AN OPINION OF COUNSEL STATING
THAT SUCH TRANSFER AND SUCH SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION
3.10 AND THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 3.10 HAVE
BEEN COMPLIED WITH, AND THE OWNER TRUSTEE MAY CONCLUSIVELY RELY ON SUCH
OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY TO MAKE INQUIRIES WITH REGARD
TO THE MATTERS SET FORTH THEREIN AND SHALL INCUR NO LIABILITY IN SO
RELYING; (III) THE PERSON THAT ACQUIRES A CERTIFICATE SHALL DELIVER TO
THE OWNER TRUSTEE AND THE NOTE INSURER A LETTER FROM EACH RATING AGENCY
CONFIRMING THAT ITS RATING OF THE NOTES, AFTER GIVING EFFECT TO SUCH
TRANSFER, WILL NOT BE REDUCED OR WITHDRAWN WITHOUT REGARD TO THE NOTE
POLICY; (IV) THE PERSON THAT ACQUIRES A CERTIFICATE SHALL DELIVER TO
THE OWNER TRUSTEE AND THE NOTE INSURER AN OPINION OF COUNSEL TO THE
EFFECT THAT (A) SUCH TRANSFER WILL NOT ADVERSELY AFFECT THE TREATMENT
OF THE NOTES AFTER SUCH TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE
STATE INCOME TAX PURPOSES, (B) SUCH TRANSFER WILL NOT RESULT IN THE
TRUST BEING SUBJECT TO TAX AT THE ENTITY LEVEL FOR FEDERAL OR
APPLICABLE STATE TAX PURPOSES, (C) SUCH TRANSFER WILL NOT HAVE ANY
MATERIAL ADVERSE IMPACT ON THE FEDERAL OR APPLICABLE STATE INCOME
TAXATION OF A NOTEHOLDER AND (D) SUCH TRANSFER WILL NOT RESULT IN THE
ARRANGEMENT CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE
TRUST, BEING TREATED AS A TAXABLE MORTGAGE POOL AS DEFINED IN SECTION
7701(I) OF THE CODE; (V) ALL FILINGS AND OTHER ACTIONS NECESSARY TO
CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST IN THE MORTGAGE
LOANS AND THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT SHALL
HAVE BEEN TAKEN OR MADE.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
38
ADVANTA MORTGAGE LOAN TRUST
____-_ CERTIFICATE
Percentage Interest: 100%
Date of Cut-Off Date:
[Date]
First Payment Date: Issue Date: [Date]
April 26, 1999
No. 1
---------------------------------
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
[OWNER TRUSTEE]
not in its individual
capacity but solely as
Owner Trustee
by:____________________________________
Authenticating Agent
The Trust was created pursuant to a Trust Agreement dated as
of [Date] (the "Trust Agreement"), between the Sponsor and [OWNER TRUSTEE], as
owner trustee (the "Owner Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as Advanta Mortgage Loan Trust ____-_ Certificates (herein called the
"Certificates"). Also issued under the Indenture dated as of [Date], among the
Trust and [INDENTURE TRUSTEE], as indenture trustee (the "Indenture Trustee")
are Notes (the "Notes"). These Certificates are issued under and are subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. The property of the Trust includes a
pool of fixed-rate mortgage loans secured by first or second deeds of trust or
Mortgages on primarily one-to-four family residential properties.
Under the Trust Agreement, there will be distributed on the
25th day of each month or, if such 25th day is not a Business Day, the next
Business Day (the "Payment Date"), commencing on April 26, 1999, to the Person
in whose name this Certificate is registered at the close of business on the
39
Business Day preceding such Payment Date (the "Record Date") such
Certificateholder's Percentage Interest in the amount to be distributed to
Certificateholders on such Payment Date.
The holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
The holder of this Certificate, by acceptance of this
Certificate, specifically acknowledges that it has no right to or interest in
any monies at any time held pursuant to the Pre-Funding Account or prior to the
release of such monies pursuant to Section 8.7 of the Indenture, such monies
being held in trust for the benefit of the Noteholders and the Note Insurer.
Notwithstanding the foregoing, in the event that it is ever determined that the
monies held in the Pre-Funding Account constitute a pledge of collateral, then
the provisions of the Sale and Servicing Agreement shall be considered to
constitute a security agreement and the holder of this Certificate hereby grants
to the Indenture Trustee and the Note Insurer a first priority perfected
security interest in such amounts. In addition, each Certificateholder, by
acceptance of its Certificate, hereby appoints the Sponsor as its agent to
pledge a first priority perfected security interest in the Pre-Funding Account
and agrees to execute and deliver such instruments of conveyance, assignment,
grant, confirmation, etc., as well as any financing statements, in each case as
the Note Insurer shall consider reasonably necessary in order to perfect the
Indenture Trustee's security interest in the Trust Property.
It is the intent of the Sponsor, the Master Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Certificates are held by more than
one Holder, it is the intent of the Sponsor, the Master Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a partnership and the Certificateholders will be treated as partners
in that partnership. The Sponsor and any other Certificateholders, by acceptance
of a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust. Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust or the Sponsor, or join in any institution against the Trust or the
Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, the Trust Agreement or any of the Operative
Documents.
Distributions on this Certificate will be made as provided in
the Sale and Servicing Agreement and the Indenture by the Indenture Trustee by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in the Corporate Trust Office.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
40
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
ADVANTA MORTGAGE LOAN TRUST ____-_
By: [OWNER TRUSTEE] not in its individual capacity but
solely as Owner Trustee
Dated: [Date]
By:_________________________________________
Name:
Title:
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(Reverse of Certificate)
The Certificates do not represent an obligation of, or an
interest in, the Originators, the Sponsor, the Master Servicer, the Note
Insurer, the Owner Trustee or any Affiliates of any of them and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated herein or in the Trust Agreement, the Indenture or the
Operative Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Mortgage Loans, as more specifically set
forth herein, in the Sale and Servicing Agreement and in the Indenture. A copy
of each of the Sale and Servicing Agreement and the Trust Agreement may be
examined during normal business hours at the principal office of the Sponsor,
and at such other places, if any, designated by the Sponsor, by any
Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Sponsor and the rights of the Certificateholders under the
Trust Agreement at any time by the Sponsor and the Owner Trustee with the prior
written consent of the Note Insurer and with the consent of the holders of the
Notes and the Certificates evidencing not less than a majority of the
outstanding Notes and the Certificates. Any such consent by the holder of this
Certificate shall be conclusive and binding on such holder and on all future
holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
holders of any of the Certificates (other than the Sponsor or the Note Insurer).
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is [OWNER TRUSTEE].
Except for Certificates issued to Advanta Mortgage Holding
Trust ____-_, the Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 or integral multiples of $1,000 in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar, the Note Insurer
and any agent of the Owner Trustee, the Certificate Registrar, the Note Insurer
or the Note Insurer may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Certificate Registrar, the Note Insurer nor any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Indenture and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Certificateholder may
at its option elect
42
to redeem the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and after such redemption of the Mortgage Loans and other property of
the Trust, all proceeds will be distributed to the Certificateholders; however,
the Certificateholder's right to elect to redeem is exercisable, subject to
certain restrictions, only on any Payment Date on or after the Payment Date
immediately prior to which the Note Principal Balance is less than 10% of the
Original Note Principal Balance and all amounts due and owing to the Note
Insurer for unpaid premiums and unreimbursed draws on the Note Policy and all
other amounts due and owing to the Note Insurer pursuant to the Insurance
Agreement, together with interest thereon as provided under the Insurance
Agreement, have been paid.
The recitals contained herein shall be taken as the statements
of the Sponsor or the Master Servicer, as the case may be, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Certificate or of
any Mortgage Loan or related document.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
43
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
________________________________________________________________________________
constituting and appointing
___________________________________________ Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
____________________________________*
Signature Guaranteed:
____________________________________*
----------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
44
EXHIBIT B
CERTIFICATE OF TRUST OF
ADVANTA MORTGAGE LOAN TRUST ____-_
This Certificate of Trust of Advanta Mortgage Loan Trust
____-_ (the "Trust"), dated as of [Date], is being duly executed and filed by
[OWNER TRUSTEE], a Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. Code, Section 3801 et
seq.).
1. Name. The name of the business trust formed hereby is
Advanta Mortgage Loan Trust ____-_.
2. Delaware Trust. The name and business address of the Owner
Trustee of the Trust in the State of Delaware is [OWNER TRUSTEE], [ADDRESS]
Attn: Corporate Trust Administration.
3. This Certificate of Trust will be effective [Date].
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
The Trust, has executed this Certificate of Trust as of the date first above
written.
[OWNER TRUSTEE]
not in its individual capacity but solely
as Owner Trustee of the Trust.
By:_________________________________
Name:
Title:
