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EXHIBIT 10.1
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EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
Between
ADVANTA NATIONAL BANK,
as Originator,
ADVANTA FINANCE CORP.,
as Originator
and
ADVANTA MORTGAGE CONTUIT SERVICES, INC.,
as Purchaser
Dated as of November 1, 1997
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Table of Contents
Page
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Procedures for Purchases of Mortgage Loans; Conditions Precedent;
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.01. Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Delivery of Documents; Purchase of Initial Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03. Delivery of Documents; Purchases of Subsequent Mortgage Loans . . . . . . . . . . . . . . . . . . . . . 7
Section 2.04. Purchase Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.05. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.06. Proceeds of Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.07. Defective Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.01. Intent of Parties; Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.01. Representations and Warranties of each Originator . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.02. Representations and Warranties Regarding Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.03. Representations and Warranties of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.04. Remedies for Breach of Representations and Warranties; Repurchase Obligation . . . . . . . . . . . . 17
ARTICLE V Covenants and Warranties of the Originators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.01. Sale and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII Termination; Additional Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.01. Termination of Commitment to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.02. Additional Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX Exclusive Benefit of Parties; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE X Amendment; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE XI Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE XII Effect of Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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ARTICLE XIII Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XIV Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XV Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVI Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVII RESPA Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XVIII Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XIX Consent to Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XX Submission to Jurisdiction; Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XXI Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE XXII Further Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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PURCHASE AGREEMENT ("Agreement") dated as of November 1, 1997
among Advanta Finance Corp., a Nevada corporation (an "Originator"), Advanta
National Bank, a national banking association (an "Originator") and Advanta
Mortgage Conduit Services, Inc. ("Purchaser").
WHEREAS, the Originators desire to sell from time to time to
Purchaser the Initial Mortgage Loans and Subsequent Mortgage Loans (each as
hereinafter defined), and Purchaser desires to purchase such Initial Mortgage
Loans and Subsequent Mortgage Loans, each in accordance with the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms not defined herein shall have the meanings
set forth in the Sale and Servicing Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"Additional Balance": As to any Mortgage Loan and day, the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.1 of
the Sale and Servicing Agreement.
"Assignment of Mortgage": With respect to each Mortgage Loan,
an assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the recordation of the pledge
of the Mortgage Loans to the Indenture Trustee for the benefit of the Class A
Noteholders.
"Business Day": Any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the State of New York or
in the city in which the principal corporate trust office of the Indenture
Trustee is located, are authorized or obligated by law or executive order to be
closed.
"Class A Note": Any note executed and authenticated by the
Indenture Trustee substantially in the form set forth in Exhibit A-1 to the
Indenture.
"Class A Noteholder": The holder of a Class A Note.
"Closing Date": November 20, 1997.
"Collateral": As defined in Article III hereof.
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"Credit Line Agreement": With respect to any Mortgage Loan,
the related home equity line of credit agreement, security instrument and
promissory note executed by the related Mortgagor and any amendment or
modification thereof.
"Cut-Off Date": With respect to each Initial Mortgage Loan,
November 1, 1997 and with respect to each Subsequent Mortgage Loan, the date on
which such Subsequent Mortgage Loan was transferred to the Trust.
"Cut-Off Date Principal Balance": With respect to any
Mortgage Loan, the unpaid principal balance thereof as of the related Cut-Off
Date.
"Draw": With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the Cut-Off Date in accordance with
the related Credit Line Agreement.
"Event of Termination": As defined in Article IX hereof.
"FHLMC": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created pursuant to the
Emergency Home Finance Act of 1970, as amended, or any successor thereof.
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor
thereof.
"Indenture": The Indenture dated as of November 1, 1997
between the Trust and the Indenture Trustee.
"Indenture Trustee": Bankers Trust Company of California, N.A.
or any successor Indenture Trustee appointed in accordance with the Indenture
that has accepted such appointment in accordance with the Indenture.
"Initial Mortgage Loans": Mortgage Loans transferred and
assigned to the Indenture Trustee on the Closing Date.
"Issuer": Advanta Home Equity Loan Trust 1997-A.
"Liquidated Mortgage Loan": As defined in Section 4.13(b) of
the Sale and Servicing Agreement. A Mortgage Loan which is purchased from the
Trust pursuant to Section 3.3, 3.4, 3.6(b) or 4.10 of the Sale and Servicing
Agreement is not a "Liquidated Mortgage Loan".
"Loan Rate": As defined in the Sale and Servicing Agreement.
"Losses": Any and all out-of-pocket losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and
disbursements) directly incurred by any person specified in this Agreement,
resulting from transactions entered into under this Agreement (other than
liability for taxes). Losses must be accounted for and
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presented for reimbursement documented in reasonable detail and within a
reasonable time.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple interest in real
property securing a Credit Line Agreement.
"Mortgage Files": For each Mortgage Loan, the items listed on
Exhibit B of the Sale and Servicing Agreement.
"Mortgage Loan Schedule": A schedule of Mortgage Loans
transferred to the Trust, attached hereto as Schedule II, as it may be further
supplemented in connection with subsequent transfers of Subsequent Mortgage
Loans.
"Mortgage Loans": Such of the mortgage loans transferred and
assigned to the Trust pursuant to Section 2.1(a) of the Sale and Servicing
Agreement, together with any Qualified Replacement Mortgages substituted
therefor in accordance with this Agreement, as from time to time are held as a
part of the Trust Estate, the Mortgage Loans originally so held being
identified in the Schedule of Mortgage Loans. The term "Mortgage Loan"
includes the terms "First Mortgage Loan" and "Second Mortgage Loan". The term
"Mortgage Loan" includes any Mortgage Loan which is Delinquent, which relates
to a foreclosure or which relates to a Mortgaged Property which is REO Property
prior to such Mortgaged Property's disposition by the Trust. Any mortgage loan
which, although intended by the parties hereto to have been, and which
purportedly was, transferred and assigned to the Trust by the Sponsor, in fact
was not transferred and assigned to the Trust for any reason whatsoever shall
nevertheless be considered a "Mortgage Loan" for all purposes of this
Agreement. The term "Mortgage Loan" includes the terms "Initial Mortgage
Loan," and "Subsequent Mortgage Loan".
"Mortgaged Property": The underlying property securing a
Mortgage Loan.
"Mortgagor": The obligor on a Credit Line Agreement.
"Note Account": The note account established in accordance
with Section 8.3 of the Indenture and maintained by the Indenture Trustee.
"Officer's Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate and delivered to
the Indenture Trustee.
"Payment Date": Any date on which the Indenture Trustee is
required to make distributions to the Class A Noteholders, which shall be the
25th day of each month, commencing in the month following the Closing Day or,
if such day is not a Business Day, then on the succeeding Business Day.
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"Policy": The financial guaranty insurance policy number
AB0132BE, dated as of the Closing Date, issued by Ambac Assurance Corporation to
the Indenture Trustee for the benefit of the Class A Noteholders.
"Principal Balance": As to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and as of any date, the related Cut-Off Date
Principal Balance, plus (i) any Additional Balance in respect of such Mortgage
Loan, minus (ii) all collections credited as principal against the Principal
Balance of any such Mortgage Loan in accordance with the related Credit Line
Agreement prior to such day. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance of zero as of the
first day of the Remittance Period following the Remittance Period in which
such Mortgage Loan becomes a Liquidated Mortgage Loan and at all times
thereafter.
"Purchase": Any purchase of Subsequent Mortgage Loans by
Purchaser from Originators pursuant to the terms hereof and of the applicable
Purchase Request.
"Purchase Date": With respect to the Subsequent Mortgage
Loans, the Subsequent Transfer Date.
"Purchase Price": With respect to the Principal Balance of
the Initial Mortgage Loans as of the Cut-Off Date 98%; with respect to the
Principal Balances of all Additional Balances and all Subsequent Mortgage Loans
98%.
"Purchase Request": A request for the purchase of Subsequent
Mortgage Loans in the form of Exhibit A hereto.
"Qualified Replacement Mortgage": A Mortgage Loan substituted
for another pursuant to Section 2.2(b), 3.3 or 3.4 of the Sale and Servicing
Agreement, which (i) bears a variable rate of interest, (ii) has a Loan Rate at
least equal to the Loan Rate of the Mortgage Loan being replaced, (which shall
mean a Mortgage Loan having the same interest rate index, a margin over such
index and a maximum interest rate at least equal to those applicable to the
Mortgage Loan being replaced), (iii) is of the same or better property type and
the same or better occupancy status as the replaced Mortgage Loan, (iv) shall
be of the same or better credit quality classification (determined in
accordance with the respective Originator's credit underwriting guidelines) as
the Mortgage Loan being replaced, (v) shall mature no later than the Payment
Date occurring in February 20, 2024, (vi) has a Combined Loan-to-Value Ratio as
of the Initial Cut-Off Date or Subsequent Cut-Off Date, as applicable, no
higher than the Combined Loan-to-Value Ratio of the replaced Mortgage Loan at
such time, (vii) has a Principal Balance as of the related Replacement Cut-Off
Date equal to or less than the Principal Balance of the replaced Mortgage Loan
as of such Replacement Cut-Off Date, (viii) is in the same lien position or
better.
"Reference Bank": As defined in the Indenture.
"Reference Bank Rate": As defined in the Indenture.
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"Remittance Period": As to any Payment Date, the calendar
month preceding the month of such Payment Date.
"REO Property": A Mortgaged Property acquired by the Master
Servicer or any Sub-Servicer on behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
"Repurchase Price": The sum of (a) product of (i) the
outstanding principal balance of the related Mortgage Loan as of such date of
repurchase and (ii) the related Purchase Price, plus (b) any accrued interest
as of such date.
"Sale and Servicing Agreement": The Sale and Servicing
Agreement dated as of November 1, 1997 among the Originator, the Purchaser, the
Issuer and the Indenture Trustee.
"SEC": The Securities and Exchange Commission and any
successor thereto.
"Shareholder's Equity": The aggregate "assets" of Originator
less the aggregate "liabilities" of Originator, with the term "asset" having
the meaning ascribed to such term by GAAP and the term "liabilities" being
those obligations or liabilities of the Originator which, in accordance with
GAAP, would be included on the liability side of the Originator's balance
sheet.
"Sponsor": Advanta Mortgage Conduit Services, Inc.
"Subsequent Mortgage Loans": Mortgage Loans sold by the
Originator to the Purchaser on any Subsequent Transfer Date.
"Subsequent Transfer Date": Any date on which the Originator
transfers to the Purchaser Subsequent Mortgage Loans in accordance with the
Sale and Servicing Agreement.
"Termination Date": The date of termination of the Trust in
accordance with the Trust Agreement.
"Trust": The trust created by the Trust Agreement, the corpus
of which consists of the Mortgage Loans, such other assets as shall from time
to time be identified as deposited in a Certificate Account in accordance with
the Sale and Servicing Agreement, property that secured a Mortgage Loan and
that has become REO, the rights of the Sponsor in certain hazard insurance
policies maintained by the Mortgagors or the Master Servicer in respect of the
Mortgage Loans, the Policy, an assignment of certain rights of the Sponsor
under this Agreement, such assets as may be deposited from time to time in a
pre-funding account, rights to certain amounts in a spread account and all
proceeds of each of the foregoing (exclusive of payments of accrued interest on
the Mortgage Loans which are due on or prior to the Cut-Off Date).
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"Trust Agreement": The Trust Agreement dated as of November
1, 1997 between the Sponsor and Wilmington Trust Company, as Owner Trustee.
ARTICLE II
Procedures for Purchases of Mortgage Loans;
Conditions Precedent; Settlements
Section 2.01. Purchase and Sale. (a) On the Closing Date
in consideration for the Purchase Price, each Originator hereby sells,
transfers, assigns, sets over and otherwise conveys to the Purchaser, without
recourse, all of its right, title and interest in and to (i) each Initial
Mortgage Loan, including its Principal Balances and all collections in respect
thereof received on or after the Cut-Off Date (excluding payments in respect of
accrued interest due prior to the Cut-Off Date); (ii) property that secured an
Initial Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure; (iii) each Originator's rights under the hazard insurance policies
and (iv) all proceeds with respect to the foregoing. From time to time, with
respect to any Subsequent Mortgage Loan, pursuant to the terms of this
Agreement, each Originator shall, on the related Subsequent Transfer Date
transfer, assign, set over and otherwise convey to the Purchaser without
recourse all of its right, title and interest in and to the Principal Balances
of the Subsequent Mortgage Loans and all collections in respect thereof
received after the Cut-Off Date for the Subsequent Mortgage Loans or, with
respect to any Additional Balances with respect thereto, on or after the date
of transfer to the Trust.
(b) Each such purchase with respect to the Subsequent
Mortgage Loans, shall be initiated by each Originator pursuant to the delivery
to Purchaser of a Purchase Request in the manner set forth in Section 2.04.
Section 2.02. Delivery of Documents; Purchase of Initial
Mortgage Loans. Prior to the purchase of Initial Mortgage Loans:
(a) Each Originator shall have delivered to the Purchaser
or any agent appointed by the Purchaser the Mortgage File for each of
the Mortgage Loans.
(b) Purchaser shall have received a Mortgage Loan
Schedule pertaining to the related Mortgage Loans.
(c) Purchaser shall have received copies of the
resolutions of the Board of Directors of each Originator, certified by
its respective Secretary, approving this Agreement.
(d) Purchaser shall have received the Articles of
Incorporation or Charter, respectively, of each Originator.
(e) Purchaser shall have received a certificate of the
Secretary or Assistant Secretary of each Originator certifying (i) the
names and signatures of the officers authorized on its behalf to
execute this Agreement, and any other
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documents to be delivered by it hereunder and (ii) a copy of each
Originator's By-laws.
(f) Purchaser shall have received an opinion of counsel
to the Originators as to the due authorization, execution and delivery
by each Originator of this Agreement and as to the validity and
enforceability of the transfers contemplated hereunder and addressing
such other matters as the Purchaser may reasonably request.
(g) Each Originator shall have instructed the applicable
debtor, trustee, paying agent, authenticating agent, transfer agent,
registrar, predecessor in interest, owner (if the Mortgage Loans are
in the form of a security agreement), or servicer, if any, in respect
of the related Mortgage Loans to reflect on their books and records
the transfer of such Mortgage Loans to Purchaser, as owner or secured
party (if the Mortgage Loans are in the form of a security agreement).
(h) Purchaser shall have received the most recent
available standard servicing or lien reports in summary form, if any,
with respect to all of the mortgages in each Originator's portfolio
similar to the Mortgage Loans.
(i) The Purchaser shall be permitted to perform its
standard loan review of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by each
Originator as debtor shall have been filed naming the Purchaser as
secured party and the Indenture Trustee on behalf of the Trust as
assignee.
Section 2.03. Delivery of Documents; Purchases of
Subsequent Mortgage Loans. Prior to any purchase of Subsequent Mortgage Loans
after the purchase of Initial Mortgage Loans, the actions, conditions and
deliveries specified in Section 2.02 shall have been taken or made, as the case
may be with respect to the Subsequent Mortgage Loans.
Section 2.04. Purchase Requests. Each Originator shall
deliver to Purchaser a Purchase Request at least three Business Days prior to
the proposed Purchase Date for any Purchase (unless otherwise agreed by the
parties). Purchaser shall indicate its acceptance or declination of each
Purchase Request by completing the appropriate section of the Purchase Request
and returning the copy thereof to the respective Originator; provided, however,
that Purchaser hereby agrees to accept each Purchase Request if all of the
conditions to such Purchase provided for in this Agreement (including, without
limitation, Section 2.02 hereof and the conditions with respect to the purchase
of Subsequent Mortgage Loans) have been satisfied.
With respect to all Purchase Requests, if Purchaser does not
send a copy of a completed Purchase Request to Originator within at least three
Business Days prior to the proposed Purchase Date (five Business Days, if the
related Purchase Request was received by Purchaser at least two calendar weeks
prior to the proposed Purchase Date), Purchaser shall be deemed to have
accepted such Purchase Request. Each Purchase
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Request accepted by Purchaser shall be irrevocable and binding on Purchaser and
the respective Originator. The respective Originator shall indemnify Purchaser
and hold it harmless against any Losses incurred by Purchaser as a result of
any failure by the respective Originator to timely deliver the Subsequent
Mortgage Loans subject to such Purchase. On the applicable Purchase Date, the
Purchaser shall pay Originator the Purchase Price for the related Subsequent
Mortgage Loans against receipt of the documents required to be delivered by
Originator pursuant to Section 2.03.
Section 2.05. Survival of Representations. The terms and
conditions of the purchase of each Mortgage Loan shall be as set forth in this
Agreement. Each Originator will be deemed on the Closing Date and on each
Purchase Date to have made to Purchaser the representations and warranties set
forth in Article IV hereof and such representations and warranties of each
Originator shall be true and correct on and as of the Closing Date and on and
as of such Purchase Date. Each Purchase Request made by each Originator shall
be deemed to be a restatement of each of the covenants of such Originator made
pursuant to Article V of this Agreement. In addition, each Originator shall
reaffirm the representations and warranties contained in Article IV on the date
of disposition of the Mortgage Loans by the Purchaser pursuant to the Sale and
Servicing Agreement.
Section 2.06. Proceeds of Mortgage Loans. The transfer and
sale hereby of all of the Originators' right, title and interest in and to each
Mortgage Loan shall include all proceeds, products and profits derived
therefrom, including, without limitation, all scheduled payments of principal
of and interest on such Mortgage Loan and other amounts due or payable or to
become due or payable in respect thereof and proceeds thereof, including,
without limitation, all monies, goods and other tangible or intangible property
received upon the liquidation or sale thereof, except any payments in respect
of accrued interest due prior to the Cut-Off Date.
Section 2.07. Defective Mortgage Loans. If any Mortgage
Loan is re-transferred to the Purchaser pursuant to Section 2.2(b) of the Sale
and Servicing Agreement, the respective Originator shall, at the Purchaser's
option, either (a) repurchase such Mortgage Loan at the Repurchase Price, or
(b) provide a Qualified Replacement Mortgage if the respective Originator has
any such loans available for sale at the time, subject to the terms and
conditions of the Sale and Servicing Agreement.
ARTICLE III
Section 3.01. Intent of Parties; Security Interest.
Purchaser and each Originator confirm that the transactions contemplated
herein are intended as purchases and sales rather than as loan transactions. In
the event, for any reason, and solely in such event, any transaction hereunder
is construed by any court or regulatory authority as a loan or other purchase
and sale of the related Mortgage Loans, each Originator shall be deemed to have
hereby pledged to Purchaser as security for the performance by each Originator
of all of its obligations from time to time arising hereunder and under any and
all Purchases effected pursuant thereto, and shall be deemed to have granted to
Purchaser a security interest in, the related Mortgage Loans and all
distributions in respect thereof,
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and the proceeds of any and all of the foregoing (collectively, the
"Collateral"). In furtherance of the foregoing, (i) this Agreement shall
constitute a security agreement, (ii) Purchaser shall have all of the rights of
a secured party with respect to the Collateral pursuant to applicable law and
(iii) Originator shall execute all documents, including, but not limited to,
financing statements under the Uniform Commercial Code as in effect in any
applicable jurisdictions, as the Purchaser may reasonably require to
effectively perfect and evidence Purchaser's first priority security interest
in the Collateral. Each Originator also covenants not to pledge, assign or
grant any security interest to any other party in any Mortgage Loan sold to
Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. Representations and Warranties of each
Originator. Each Originator represents, warrants and covenants to the
Purchaser as of the Closing Date and with respect to the Subsequent Mortgage
Loans as of each related Subsequent Transfer Date that:
(i) each Originator is duly organized, validly
existing and in good standing under its respective jurisdiction of
incorporation and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by such
Originator in any state in which a Mortgaged Property is located to
the extent necessary to ensure the enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;
(ii) each Originator has the full corporate power and
authority to originate each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions
contemplated by this Agreement and the execution, delivery and
performance of this Agreement by each Originator has been duly
authorized by all necessary corporate action on the part of each
Originator; and this Agreement, assuming the due authorization,
execution and delivery thereof by the Purchaser, constitutes a legal,
valid and binding obligation of each Originator, enforceable against
each Originator in accordance with its respective terms, except to the
extent that (a) the enforceability thereof may be limited by federal
or state bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iii) the execution and delivery of this Agreement by
each Originator, the consummation by each Originator of the
transactions herein contemplated, and the fulfillment by each
Originator of or compliance by each Originator with the terms hereof
will not (A) result in a breach of any term or provision of the
charter or by-laws of each Originator or (B) conflict with, result in
a breach, violation or acceleration of, or result in a default under,
the terms of
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any other material agreement or instrument to which each Originator is
a party or by which it may be bound, or any statute, order or
regulation applicable to each Originator of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over each Originator, which breach, violation, default or
non-compliance would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of
each Originator taken as a whole or (b) the ability of each Originator
to perform its obligations under this Agreement; and each Originator
is not a party to, bound by, or in breach or violation of any material
indenture or other material agreement or instrument, or subject to or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to
such Originator's knowledge, would in the future reasonably be
expected to materially and adversely affect, (x) the ability of each
Originator to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of
each Originator taken as a whole;
(iv) each Originator is, and currently intends to
remain, in good standing and qualified to do business in each
jurisdiction where failure to be so qualified or licensed would have a
material adverse effect on (a) the business, operations, financial
condition, properties or assets of such Originator taken as a whole or
(b) the enforceability of any Mortgage Loan in accordance with the
terms of this Agreement;
(v) there is no litigation pending or, to each
Originator's actual knowledge, overtly threatened against such
Originator that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or for each Originator to
perform any of its other obligations hereunder in accordance with the
terms hereof;
(vi) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by each Originator of, or
compliance by each Originator with, this Agreement or the consummation
of the transactions contemplated hereby (except for such consents,
approvals, authorizations, or orders to be obtained in connection with
each Purchase Date with respect to future transactions to be
consummated hereunder), or if any such consent, approval,
authorization or order not relating to a future transaction is
required, each Originator has obtained the same; and
(vii) each Originator has caused to be performed any
and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies of such Originator or a mortgagee
applicable to the Mortgage Loans sold by such Originator.
Section 4.02. Representations and Warranties Regarding
Mortgage Loans. With respect to the Mortgage Loans, each Originator represents
and warrants to
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Purchaser as of the Closing Date with respect to each Initial Mortgage Loan
conveyed by such Originator and as of the related Subsequent Transfer Date with
respect to each Subsequent Mortgage Loan conveyed by such Originator as
follows:
(i) All of the original or certified documentation
set forth in Section 2.1 of the Sale and Servicing Agreement
(including all material documents related thereto) with respect to
each Initial Mortgage Loan has been or will be delivered to the
Purchaser on the Closing Day or, with respect to any Subsequent
Mortgage Loans, on the related Subsequent Transfer Date. All such
documentation is true and accurate in all material respects. Each of
the documents and instruments specified to be included therein has
been duly executed and in due and proper form, and each such document
or instrument is in a form generally acceptable to prudent mortgage
lenders that regularly originate or purchase mortgage loans comparable
to the Mortgage Loans for sale to prudent investors in the secondary
market that invest in mortgage loans such as the Mortgage Loans;
(ii) As of the Closing Day with respect to the Initial
Mortgage Loans, the related Subsequent Transfer Date with respect to
any Subsequent Mortgage Loan (unless otherwise specified) and the
applicable Transfer Date with respect to any Qualified Replacement
Mortgage and as of the date any Additional Balance is created, the
information set forth in the Mortgage Loan Schedule for such Mortgage
Loans is true and correct in all material respects;
(iii) As of the Closing Day and any Subsequent Transfer
Date, no more than 1.50% of the related Cut-Off Date Pool Balance of
the Mortgage Loans is secured by Mortgaged Properties located within
any single zip code area. None of the Mortgage Loans consists of
Date-of-Payment Loans;
(iv) The Mortgages and Credit Line Agreements have not
been assigned or pledged, and each Originator is the sole owner and
holder of the Mortgages and Credit Line Agreements free and clear of
any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature, and
has full right and authority, under all governmental and regulatory
bodies having jurisdiction over the Class A Noteholder of the
applicable Mortgage Loan, to sell, assign or transfer the same;
(v) As of the Closing Day with respect to the Initial
Mortgage Loans, the Subsequent Transfer Date with respect to the
Subsequent Mortgage Loans and the applicable Transfer Date with
respect to any Qualified Replacement Mortgage, there is no valid
offset, defense or counterclaim of any obligor under any Credit Line
Agreement or. Mortgage. Neither the operation of any of the terms of
each Credit Line Agreement and each Mortgage nor the exercise of any
right thereunder will render either the Credit Line Agreement or the
Mortgage unenforceable, in whole or in part, nor subject to any right
of rescission, set-off, claim, counterclaim or defense, including,
without limitation,
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the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(vi) No Minimum Monthly Payment is more than 59 days
delinquent (measured on a contractual basis); and with respect to the
Initial Mortgage Loans no more than 1.35% (by Initial Cut-Off Date
Pool Balance) were 30-59 days delinquent (measured on a contractual
basis). No Subsequent Mortgage Loan will be more than 59 days
delinquent;
(vii) As of the related Cut-Off Date with respect to
the Mortgage Loans and the applicable Transfer Date with respect to
any Qualified Replacement Mortgage, each Credit Line Agreement and
each Mortgage Loan is an enforceable obligation of the related
Mortgagor, except as the enforceability thereof may be limited by the
bankruptcy, insolvency or similar laws affecting creditors' rights
generally;
(viii) The weighted average remaining term to maturity
of the Initial Mortgage Loans on a contractual basis as of the Initial
Cut-Off Date for the Mortgage Loans is approximately 253 months. On
each date that the Loan Rates have been adjusted, interest rate
adjustments on the Mortgage Loans were made in compliance with the
related Mortgage and Credit Line Agreement and applicable law. Over
the term of each Initial Mortgage Loan, the Loan Rate may not exceed
the related Loan Rate Cap, if any. The Loan Rate Caps for the Initial
Mortgage Loans range between 16.00% and 24.25%. The Initial Mortgage
Loans margins range between 0.00% and 7.75% and the weighted average
margin is approximately 3.32% as of the related Cut-Off Date for the
Initial Mortgage Loans. The Loan Rates on such Initial Mortgage Loans
range between 8.50% and 16.25% and the weighted average Loan Rate is
approximately 11.82%; and
(ix) The Credit Limits on the Initial Mortgage Loans
range between $10,000 and $300,000 with an average of $33,561.98. As
of the Initial Cut-Off Date for the Initial Mortgage Loans, no Initial
Mortgage Loan had a principal balance in excess of approximately
$279,000 and the average principal balance of the Initial Mortgage
Loans is equal to approximately $31,924.84.
(x) Each Mortgage Loan being transferred to the Trust
is a Mortgage;
(xi) Each Subsequent Mortgage Loan complies with the
requirements in Section 2.4 of the Sale and Servicing Agreement,
including without limitation the conditions described in subsections
(c) and (d) of such Section 2.4;
(xii) Each Mortgaged Property is improved by a single
(one-to-four) family residential dwelling, which may include
condominiums and townhouses but shall not include cooperatives or
mobile homes attached to a foundation, or otherwise, or constitutes
other than real property under applicable state law;
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(xiii) No Mortgage Loan had a Combined Loan-to-Value
Ratio in excess of 100%;
(xiv) As of the Closing Day with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans, each Mortgage is either a valid and
subsisting first or second lien of record on the Mortgaged Property
(subject in the case of any Second Mortgage Loan only to a Senior Lien
on such Mortgaged Property) and subject in all cases to the exceptions
to title set forth in the title insurance policy, with respect to the
related Mortgage Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and except for liens for (i) real estate taxes and special
assessments not yet delinquent, (ii) income taxes, (iii) any
covenants, conditions and restrictions, rights of way, easements, and
other matters of public record and such other exceptions to which
similar properties are commonly subject and which do not individually,
or in the aggregate, materially and adversely affect the benefits of
the security intended to be provided by such Mortgage;
(xv) Immediately prior to the transfer and assignment
herein contemplated, each Originator held good and indefeasible title
to, and was the sole owner of, each Mortgage Loan conveyed by such
Originator (including its Cut-Off Date Pool Balance), all monies due
or to become due with respect thereto, and all proceeds of such
Cut-Off Date Pool Balances with respect to the Mortgage Loans is
subject to no liens, charges, mortgages, encumbrances or rights of
others except liens which will be released simultaneously with such
transfer and assignment; and immediately upon the transfer and
assignment herein contemplated, the Indenture Trustee will hold good
and indefeasible title to, and be the sole owner of, each Mortgage
Loan subject to no liens, charges, mortgages, encumbrances or rights
of others except liens which will be released simultaneously with such
transfer and assignment;
(xvi) There is no delinquent tax or assessment lien or
mechanic's lien on any Mortgaged Property, and each Mortgaged Property
is free of substantial damage and is in good repair;
(xvii) Each Mortgage Loan at the time it was made
complied in all material respects with all applicable state and
federal laws and regulations, including, without limitation, the
federal Truth-in-Lending Act and other consumer protection laws, real
estate settlement procedure, usury, equal credit opportunity,
disclosure and recording laws;
(xviii) With respect to each First Mortgage Loan, and, to
the best of the Originator's knowledge, with respect to each Second
Mortgage Loan, a lender's title insurance policy, issued in standard
California Land Title Association form or American Land Title
Association form, or other form acceptable in a particular
jurisdiction by a title insurance company authorized to transact
business in the state in which the related Mortgaged Property is
situated,
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was issued on the date of origination of the Mortgage Loan and as of
the Cut-Off Date and each applicable Transfer Date with respect to the
Subsequent Mortgage Loan, each such policy is valid and remains in
full force and effect, or a title search or guaranty of title
customary in the relevant jurisdiction was obtained with respect to a
Mortgage Loan as to which no title insurance policy or binder was
issued.
(xix) As of the Closing Day with respect to the
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loan, each Credit Line Agreement is the legal,
valid, binding and enforceable obligation of the maker thereof and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law),
and all parties to each Mortgage Loan had full legal capacity to
execute all documents relating to such Mortgage Loan and convey the
estate therein purported to be conveyed;
(xx) The terms of each Credit Line Agreement and each
Mortgage have not been impaired, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary,
to protect the interest of the Purchaser. The substance of any such
alteration or modification is reflected on the related Schedule of
Mortgage Loans and has been approved by the primary mortgage guaranty
insurer, if any;
(xxi) Except as otherwise required by law, pursuant to
the statute under which the related Mortgage Loan was made, or in the
case of Mortgage Loans Originated by Advanta Finance Corp., the
related Credit Line Agreement is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xxii) Each Mortgaged Property is located in the state
identified in the Schedule of Mortgage Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxiii) There is no proceeding pending or threatened for
the total or partial condemnation of any Mortgaged Property, nor is
such a proceeding currently occurring, and each Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, flood, tornado
or other casualty, so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;
(xxiv) With respect to each Second Mortgage Loan, either
(A) no consent for such Mortgage Loan was required by the holder of
the related Senior Lien prior to the making of such Mortgage Loan or
(B) such consent has been obtained and is contained in the related
Mortgage File;
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(xxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by Indenture Trustee's sale and (B)
otherwise by judicial foreclosure. There is no homestead or other
exemption available which materially interferes with the right to sell
the related Mortgaged Property at a Indenture Trustee's sale or the
right to foreclose the related Mortgage;
(xxvi) As of the Closing Day with respect to the
Mortgage Loans and the applicable Transfer Date with respect to the
Subsequent Mortgage Loans, there is no default, breach, violation or
event of acceleration existing under any Mortgage or the related
Credit Line Agreement and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration; and
the Sponsor has not waived any default, breach, violation or event of
acceleration;
(xxvii) To the best knowledge of each Originator, all
parties to the Credit Line Agreement and the Mortgage had legal
capacity to execute the Credit Line Agreement and the Mortgage and
each Credit Line Agreement and Mortgage have been duly and properly
executed by such parties;
(xxviii) No selection procedures reasonably believed by
each Originator to be adverse to the interests of the Purchaser was
utilized in selecting the Mortgage Loans;
(xxix) No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement which has been
approved by the applicable title insurer (to the extent required by
such title insurer) and which is part of the Mortgage File delivered
to the Purchaser;
(xxx) With respect to each Mortgage Loan that is not a
first mortgage loan, the related prior lien requires equal monthly
payments. At the time of origination of each Mortgage Loan that is
not a first mortgage loan, the related prior lien was not more than 30
days delinquent;
(xxxi) All required inspections, licenses and
certificates with respect to the use and occupancy of all occupied
portions of all property securing the Mortgages have been made,
obtained or issued, as applicable;
(xxxii) No more than 81% of the Mortgage Loans are second
mortgage loans;
(xxxiii) With respect to each Mortgage Loan that is not a
first mortgage loan, the related prior lien does not provide for
negative amortization;
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(xxxiv) With respect to each Mortgage Loan that is not a
first mortgage loan, the maturity date of the Mortgage Loan is prior
to the maturity date of the related prior lien if such prior lien
provides for a balloon payment;
(xxxv) Each Mortgage Loan is secured by a property
having an appraised value of less than $1,500,000;
Section 4.03. Representations and Warranties of Purchaser.
Purchaser hereby makes the following representations and warranties, each of
which representations and warranties (i) is material and being relied upon by
the Originators and (ii) is true in all respects as of the date of this
Agreement:
(i) Purchaser has been duly organized and is validly
existing as a corporation under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority
and legal right to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of,
this Agreement to be performed by it.
(iii) This Agreement has been duly authorized and
executed by Purchaser, is valid, binding and enforceable against
Purchaser in accordance with its terms, and the execution, delivery
and performance by Purchaser of this Agreement does not conflict with
any material term or provision of any other agreement to which
Purchaser is a party or any term or provision of the Certificate of
Incorporation or the By-laws of the Purchaser, or any law, rule,
equation, order, judgment, writ, injunction or decree applicable to
Purchaser of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Purchaser.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority
or court is required under applicable law in connection with the
execution and delivery by Purchaser of this Agreement.
(v) To the best knowledge of Purchaser, there is no
action, proceeding or investigation pending or threatened against
Purchaser before any court, administrative agency or other tribunal
(i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by
this Agreement, or (iii) which is likely to materially and adversely
affect the performance by Purchaser of its obligations under, or the
validity or enforceability of, this Agreement.
(vi) Each purchase of Initial Mortgage Loans and
Subsequent Mortgage Loans hereunder shall constitute a representation
by Purchaser to Originator that Purchaser understands, and that
Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of, its
investment in the relevant Mortgage Loans.
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Section 4.04. Remedies for Breach of Representations and
Warranties; Repurchase Obligation. It is understood and agreed that the
representations and warranties set forth in Section 4.01 and 4.02 shall survive
each sale of Mortgage Loans to the Purchaser and shall inure to the benefit of
the Purchaser and subsequent transferees notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage Loan File. With respect to the
representations and warranties contained in Sections 4.01 and 4.02 which are
made to the best of the Originator's knowledge or to the actual knowledge of
the Originator, if it is discovered by either the Originator or the Purchaser
that the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the Purchaser's interest therein, then notwithstanding the Originator's
lack of knowledge with respect to the inaccuracy at the time the representation
or warranty was made, the Originator shall repurchase the related Mortgage Loan
in accordance with this Section 4.04 as if the applicable representation or
warranty was breached, subject to the terms and conditions of the Sale and
Servicing Agreement. Upon discovery by either the Originator or the Purchaser
of a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.
Within 60 days of the earlier of either discovery by or notice
to the respective Originator of any breach of a representation or warranty
which materially and adversely affects the value of any Mortgage Loan or the
Purchaser's interest therein, the respective Originator shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured or is not cured or is not being diligently pursued as
evidenced by a notice acceptable to the Purchaser, as evidenced by the
Purchaser's agreement thereto, at the end of such 60-day period, the respective
Originator shall, at the Purchaser's option, either (a) repurchase such
Mortgage Loan at the Repurchase Price, or (b) provide a Qualified Replacement
Mortgage, if such Originator has any such loans available for sale at the time
subject to the terms and conditions of the Sale and Servicing Agreement.
At the time of repurchase or substitution, the Purchaser and
the respective Originator shall arrange for the assignment of such Mortgage
Loan to the respective Originator and the delivery by the Purchaser to the
respective Originator of the related Mortgage Loan Files.
In addition to such cure and repurchase obligation, the
respective Originator shall indemnify the Purchaser and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of the representations and warranties
contained in this Article IV (notwithstanding any limitation in such
representation and warranty as to such Originator's knowledge). It is
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understood and agreed that the obligations of each Originator set forth in this
Section 4.04 to cure or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 4.04 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against the respective Originator relating
to or arising out of the breach of any representations and warranties made in
Sections 4.01 or 4.02 shall accrue as to any Mortgage Loan upon (i) discovery
of such breach by the Purchaser or notice thereof by the respective Originator
to the Purchaser, (ii) failure by the respective Originator to cure such breach
or repurchase such Mortgage Loan as specified above, and (iii) demand upon the
respective Originator by the Purchaser for compliance with the relevant
provisions of this Agreement.
ARTICLE V
Covenants and Warranties of the Originators
So long as this Agreement remains in effect or any Originator
shall have any obligations hereunder, each Originator hereby covenants and
agrees with Purchaser as follows:
Section 5.01. Affirmative Covenants
(a) Each Originator shall do all things necessary to remain
duly incorporated, validly existing and in good standing in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except where failure to
maintain such authority would not have a material adverse effect on the ability
of such Originator to conduct its business or to perform its obligations under
this Agreement.
(b) At all times during this Agreement, each Originator
shall possess sufficient net capital and liquid assets (or ability to access
the same) to satisfy its obligations as they become due in the normal course of
business.
(c) Each Originator shall permit the Purchaser or its
accountants, attorneys or other agents access to all of the books and records
relating to Mortgage Loans purchased and retained by Purchaser for inspection
and copying during normal business hours at all places where such Originator
conducts business.
Section 5.02. Negative Covenants.
(a) Each Originator shall not assign or attempt to assign
this Agreement or any rights hereunder, without first obtaining the specific
written consent of Purchaser.
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(b) Each Originator shall not amend its Articles of
Incorporation or By-laws, which amendment shall have or is likely to have an
adverse effect upon Purchaser or its interests under this Agreement, without
the prior written consent of Purchaser.
(c) Each Originator shall not (i) dissolve or terminate
its existence or (ii) transfer any assets to any affiliate except as otherwise
expressly permitted or contemplated hereby.
(d) Except with the written consent of the Purchaser, the
Originators shall not guarantee, endorse or otherwise in any way become or be
responsible for any obligations of any other person, entity or affiliate,
including, without limitation, whether directly or indirectly by agreement to
purchase the indebtedness of any other person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of stock purchase, capital contribution,
advance or loan for the purposes of paying or discharging any indebtedness or
obligation of such other person or otherwise; provided, however, that nothing
contained herein shall prevent the Originators from indemnifying their
respective officers, directors and agents pursuant to their respective By-laws
and their Articles of Incorporation.
(e) Each Originator will not commit any act in violation
of applicable laws, or regulations promulgated pursuant thereto that relate to
the Mortgage Loans or that materially and adversely affect the operations or
financial conditions of such Originator.
ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. Sale and Servicing Agreement. It is the
intent of each Originator and the Purchaser that with respect to the Mortgage
Loans, the Purchaser shall concurrently sell all of its right, title and
interest to the Mortgage Loans and all other property conveyed to it hereunder
to the Trust pursuant to the Sale and Servicing Agreement.
With respect to such sale, each Originator agrees:
(i) to cooperate fully with the Purchaser and the
Trust with respect to all reasonable requests and due diligence
procedures including participating in meetings with rating agencies,
insurers and such other parties as the Purchaser shall designate and
participating in meetings with the Trust and providing information
reasonably requested by the Trust;
(ii) to execute all other necessary documents to
effect the transactions contemplated therein;
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(iii) each Originator shall make the representations
and warranties set forth herein regarding such Originator and the
Mortgage Loans as of the date of the transfer to the Trust;
(iv) to deliver to the Purchaser for inclusion in any
prospectus or other offering material such publicly available
information regarding the Originator, its financial condition and the
mortgage loan delinquency, foreclosure and loss experience of its
portfolio as is customarily set forth in a prospectus supplement with
respect to a comparable mortgage pool, the underwriting of mortgage
loans, the servicer, the servicing and collection of mortgage loans,
lending activities and loan sales of the servicer, regulatory matters
and delinquency and loss experience and any additional information
reasonably requested by the Purchaser, or as is otherwise reasonably
requested by the Purchaser and which each Originator is capable of
providing without unreasonable effort or expense, and to indemnify the
Purchaser and its affiliates for material misstatements or omissions
contained in such information;
(v) to deliver to the Purchaser, and to any Person
designated by the Purchaser, such legal documents and in-house
opinions of counsel as are customarily delivered by originators and
reasonably determined by the Purchaser to be necessary in connection
with the transactions contemplated by the Sale and Servicing
Agreement, it being understood that the cost of any opinions of
outside special counsel that may be required shall be the
responsibility of the respective Originator; and
(vi) to cooperate fully with the Purchaser and any
prospective Purchaser with respect to the preparation of Mortgage Loan
documents and other documents and with respect to servicing
requirements reasonably requested by the rating agencies and insurers.
ARTICLE VII
Termination; Additional Remedies
Section 7.01. Termination of Commitment to Purchase. The
agreement of the Purchaser to purchase Mortgage Loans from each Originator
hereunder, and the agreement of each Originator to sell Mortgage Loans
hereunder, shall terminate automatically on the first day of the Rapid
Amortization Period. All other provisions hereof shall continue in force and
effect until the Termination Date.
Section 7.02. Additional Remedies. Upon the occurrence of
a Rapid Amortization Event under the Indenture due to an act or omission of a
Originator (an "Event of Termination"), the Purchaser and its assignees shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of an Event of
Termination shall not deny to the Purchaser or its assignees any remedy in
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addition to termination of its obligations to make purchases hereunder to which
the Purchaser or its assignee may be otherwise appropriately entitled, whether
by statute or applicable law, at law or in equity.
ARTICLE VIII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE IX
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties
hereto and their respective successors and assigns and shall not be deemed to
give any legal or equitable right to any other person except the Sponsor, the
Trust, the holders of the Class A Notes and the Insurer. This Agreement may
not be assigned by any party hereto without the prior written consent of the
other party hereto except to the Trust.
ARTICLE X
Amendment; Waivers
This Agreement may be amended from time to time only by
written agreement of each Originator and Purchaser with the prior written
consent of the Insurer, which consent shall not be unreasonably withheld. Any
forbearance, failure, or delay by a party in exercising any right, power, or
remedy hereunder shall not be deemed to be a waiver thereof, and any single or
partial exercise by a party of any right, power or remedy hereunder shall not
preclude the further exercise thereof. Every right, power and remedy of a
party shall continue in full force and effect until specifically waived by it
in writing. No right, power or remedy shall be exclusive, and each such right,
power or remedy shall be cumulative and in addition to any other right, power
or remedy, whether conferred hereby or hereafter available at law or in equity
or by statute or otherwise.
ARTICLE XI
Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which shall constitute
one and the same instrument.
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ARTICLE XII
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
ARTICLE XIII
Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its rules
regarding conflict of laws.
ARTICLE XIV
Notices
Any notices, consents, directions, demands and other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when personally
delivered at or telecopied to the respective addresses or facsimile numbers, as
the case may be, set forth on the signature page hereof for each Originator and
Purchaser, or to such other address or facsimile number as either party shall
give notice to the other party pursuant to this Section. Notices, consents,
etc., may also be effected by first class mail, postage prepaid sent to the
foregoing addresses and will be effective upon receipt by the intended
recipient.
ARTICLE XV
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements between
them, whether oral or written, of any nature whatsoever with respect to the
subject matter hereof.
ARTICLE XVI
Indemnities
Without limiting any other rights which Purchaser or each
Originator may have hereunder or under applicable law, and in addition to any
other indemnity provided hereunder, each Originator hereby agrees to indemnify
Purchaser and its respective
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officers, directors, agents and employees (each, an "Indemnified Party") from
and against any and all Losses incurred by any of them relating to or resulting
from:
(1) any representation or warranty made by each
Originator (or any officers, employees or agents of such Originator)
under or in connection with this Agreement, any periodic report
required to be furnished thereunder or any other information or
document delivered by such Originator pursuant hereto, which shall
have been false or incorrect in any material respect when made or
deemed made;
(2) the failure by such Originator to (a) comply with any
applicable law, rule or regulation with respect to any Purchase or (b)
perform or observe any material obligation or covenant hereunder; or
(3) the failure by such Originator (if so requested by
Purchaser) to execute and properly file, or any delay in executing and
properly filing, financing statements or other similar instruments or
documents under the Uniform Commercial Code of any applicable
jurisdiction or other applicable laws with respect to the Mortgage
Loans.
Promptly after receipt by an Indemnified Party under this
Article XVI of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Article XVI, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any Indemnified Party
otherwise than under this Article XVI. In case any such action is brought
against any Indemnified Party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
Indemnified Party promptly after receiving the aforesaid notice from such
Indemnified Party, to assume the defense thereof, with counsel satisfactory to
such Indemnified Party; provided, however, that if the defendants in any such
action include both the Indemnified Party and the indemnifying party and the
Indemnified Party or parties shall have reasonably concluded that there may be
legal defenses available to it or them and/or other Indemnified Parties that
are different from or additional to those available to the indemnifying party,
the Indemnified Party or parties shall have the right to elect separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such Indemnified Party or parties. Upon receipt of
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense of such action and approval by the Indemnified Party of
counsel, the indemnifying party will not be liable for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of Article XVI, representing the
Indemnified Parties under this Article XVI, who are parties to such action),
(ii) the indemnifying party shall not have employed counsel
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satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the Indemnified
Party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall only be in respect of the counsel
referred to in such clause (i) or (iii).
ARTICLE XVII
RESPA Obligations
Each Originator agrees to discharge on Purchaser's behalf all
obligations, including, without limitation, all disclosure obligations, which
Purchaser may have under the Real Estate Settlement Procedures Act of 1974, as
amended, in connection with Purchaser's purchases of Mortgage Loans hereunder.
Purchaser agrees to provide each Originator with such information as is
reasonably necessary for each Originator to discharge such obligations and
hereby appoints each Originator as its agent in its name for the purposes of,
and only for the purposes of, performing such obligations. Each Originator
hereby agrees to indemnify Purchaser and its respective officers, directors,
agents and employees from any losses suffered by any such party in connection
with each Originator's obligations under this Article XVII.
ARTICLE XVIII
Survival
All indemnities and undertakings of each Originator and
Purchaser hereunder shall survive the termination of this Agreement.
ARTICLE XIX
Consent to Service
Each party irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Article XIV hereof.
ARTICLE XX
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each
party irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough
of Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in any inconvenient forum and
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further irrevocably waives the right to object, with respect to such claim,
suit, action or proceeding brought in any such court, that such court does not
have jurisdiction over such party; provided that service of process is made as
set forth in Article XIX hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and each Originator each irrevocably
waive all right of trial by jury in any action, proceeding or counterclaim
arising out of or in connection with this Agreement or any matter arising
hereunder.
ARTICLE XXI
Construction
The headings in this Agreement are for convenience only and
are not intended to influence its construction. References to Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles,
Sections of and Schedules and Exhibits to this Agreement. The Schedules and
Exhibits are hereby incorporated into and form a part of this Agreement. In
this Agreement, the singular includes the plural, the plural the singular, the
words "and" and "or" are used in the conjunctive or disjunctive as the sense
and circumstances may require and the word "including" means "including, but
not limited to." Unless otherwise stated in this Agreement, in the computation
of a period of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding."
ARTICLE XXII
Further Agreements
Each Originator and the Purchaser each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.
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IN WITNESS WHEREOF, the Purchaser and each Originator have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the date first written above.
ADVANTA MORTGAGE CONDUIT SERVICES INC.,
as Purchaser
By:
------------------------------------
Name:
Title:
ADVANTA FINANCE CORP.,
as Originator
By:
------------------------------------
Name:
Title:
ADVANTA NATIONAL BANK,
as Originator
By:
------------------------------------
Name:
Title:
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Purchase Agreement
EXHIBIT A
[Form of Purchase Request]
Advanta Mortgage Conduit Services, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxxxxx, XX 00000
Pursuant to Section 2.04 of the Purchase Agreement dated as of
November 1, 1997 between Advanta Finance Corp. and Advanta National Bank (the
"Originators") and you, we hereby offer to sell, transfer and assign to you all
of Originator's right, title and interest in and to the Subsequent Mortgage
Loans identified in the attached schedule on the following date (the "Purchase
Date"): , including any Additional Balances thereto.
Please acknowledge your acceptance of such offer by executing
this Purchase Request in the space provided below and returning it to Advanta
Mortgage Conduit Services, Inc. at _____________________________ by facsimile
with an original acceptance to follow by first class mail.
The failure of Advanta Mortgage Conduit Services, Inc. to
return this Purchase Request, after execution by Advanta Mortgage Conduit
Services, Inc., to the Originators in the manner provided above within three
Business Days prior to the Purchase Date (five business days, if this Purchase
Request was received by you at least two calendar weeks prior to the
above-referenced Purchase Date) shall constitute an acceptance of the offer
communicated hereby.
Very truly yours,
[Originator]
By:
-----------------------------
Name:
Title:
Agreed to and acknowledged
this ____ day of __________, ____.
Advanta Mortgage Conduit Services, Inc.
By:
--------------------------------------
Name:
Title:
