1
ARTICLES OF INCORPORATION
OF
ADVANTA CONDUIT RECEIVABLES,INC.
I, the person hereinafter named as incorporator, for the
purpose of establishing a corporation under the provisions and subject to the
requirements of Title 7, chapter 78 of the Nevada Revised Statutes and the acts
amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the following
Articles of Incorporation:
ARTICLE FIRST
The name of this corporation is ADVANTA CONDUIT
RECEIVABLES, INC. (the "Corporation").
ARTICLE SECOND
The address of the Corporation's resident office in the State
of Nevada is as follows:
1325 Airmotive Way
Suite 130
Reno, Nevada 89502
The resident at the foregoing address is Griffin Corporate Services, located in
Washoe County.
ARTICLE THIRD
The total number of shares which this Corporation is
authorized to issue is one-thousand (1,000), all of which are of a par value of
One Cent ($0.01) per share. All of said shares are of one class and are
designated as common stock.
No holder of any of the shares of any class of the Corporation
shall be entitled as a right to subscribe for, purchase or otherwise acquire any
shares of any class of the Corporation which the Corporation proposes to issue,
or any rights to options which the Corporation propose to grant for the purchase
of shares of any class of the Corporation or for the purchase of any shares,
bonds, securities, or obligations of the Corporation which are convertible into
or exchangeable for, or which carry any rights to subscribe for, purchase or
2
otherwise acquire shares of any class of the Corporation; and any and all of
such shares, bonds, securities or obligations of the Corporation, whether now or
hereafter authorized or created, may be issued or may be reissued or transferred
if the same have been reacquired and have treasury status, and any and all of
such rights and options may be granted by the Board of Directors to such
persons, firms, corporations and associations for such lawful consideration and
on such terms as the Board of Directors in its discretion may determine, without
first offering the same, or any thereof, to any said holder.
The capital stock of the Corporation, after the amount of the
consideration for the issuance of shares, as determined by the Board of
Directors, has been paid, is not subject to assessment to pay the debts of the
Corporation and no stock issued as fully paid up may ever be assessed, and the
Articles of Incorporation cannot be amended in this respect.
ARTICLE FOURTH
(a) The governing board of the Corporation shall be styled as
a "Board of Directors", and any member of said Board shall be styled as a
"Director" except as provided by statute.
(b) The number of members constituting the first Board of
Directors of the Corporation is five; and the name and post office box or street
address, either residence or business, of each of said members is as follows:
NAME ADDRESS
- ---- -------
John J. Calamari 200 Tournament Drive
Horsham, PA 19044
Mark Casale 500 Office Center Drive
Fort Washington, PA 19034
James L. Sheero 500 Office Center Drive
Fort Washington, PA 19034
Janice C. George 1325 Airmotive Way
Suite 130
Reno, Nevada 89502
Francis B. Jacobs II c/o Delaware Trust Capital
Management
900 Market Street
Wilmington, DE 19801
The number of directors of the corporation may be increased or
decreased in the manner provided in the By-laws of the Corporation, provided,
that the number of directors
2
3
shall never be less than one, and provided, further that the sole remaining
director must be an Independent Director. The Corporation shall at all times
have at least two independent directors, (each an "Independent Director") except
where there is only one remaining director.
At least one Independent Director shall satisfy the following
conditions:
(i) Such Independent Director shall be an
individual who is not, and never was,
(A) a stockholder, director, officer, employee,
affiliate, associate, customer or supplier of, or any person
that has received any benefit (excluding, however, any
compensation received by the director, in such person's
capacity as director as required by this Article FOURTH) in
any form whatever from, or any person that has provided any
service (excluding, however, any service provided by the
director, in such person's capacity as director as required by
this Article FOURTH) in any form whatever to, Advanta Corp.,
Advanta Mortgage Corp. USA or any of their affiliates,
subsidiaries, parents or associates, or
(B) (i) any person owning beneficially, directly or
indirectly, any outstanding shares of common stock of Advanta
Corp., Advanta Mortgage Corp. USA or any of their affiliates,
subsidiaries, parents or (ii) a stockholder, director,
officer, employee, affiliate, associate, customer or supplier
of, or any person that has received any benefit (excluding,
however, any compensation received by the director, in such
person's capacity as director as required by this Article
FOURTH) in any form whatever from, or any person that has
provided any service (excluding, however, any service provided
by the director, in such person's capacity as director as
required by this Article FOURTH) in any form whatever to, such
beneficial owner or any of such beneficial owner's affiliates
or associates; provided, that, the ownership of up to 5% of
any class of stock (other than stock of the Corporation)
listed on a national securities exchange shall not prevent an
individual from meeting the requirements of this Article
FOURTH;
provided, that, such Independent Director may act as a director or
officer of other special purpose corporations or special purpose
entities.
3
4
Each Independent Director shall satisfy the following
conditions:
(i) No director serving pursuant to the requirements of
this Article FOURTH shall, with regard to any act, or failure to act,
in connection with any matter referred to in clause (iv) of Article
EIGHTH, owe a fiduciary duty or other obligation to the stockholders
(except as may specifically be required by the statutory law of any
applicable jurisdiction); instead, such director's fiduciary duty and
other obligations with regard to such act, or failure to act, in
connection with any matter referred to in clause (iv) of Article EIGHTH
shall be owed to the Corporation, including, without limitation, the
creditors of the Corporation. Every stockholder shall be deemed to have
consented to the foregoing by virtue of such stockholder's purchase of
shares of capital stock of the Corporation, no further act or deed of
any stockholder being required to evidence such consent;
(ii) As used in this Article FOURTH, the term "person"
means a natural person, corporation or other entity, government, or
political subdivision, agency, or instrumentality of a government; an
"affiliate" of a person is a person that directly, or indirectly
through one of 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; and the term "associate," when used to
indicate a relationship with any person, means (1) a corporation or
organization of which such person is an officer, director or partner or
is, directly or indirectly, the beneficial owner of 10% or more of any
class of equity securities, (2) any trust or other estate in which such
person serves as trustee or in a similar capacity, and (3) any relative
or spouse of such person, or any relative of such spouse, who has the
same home as such person;
(iii) When voting on matters subject to the vote of the
Board of Directors, including those matters specified in clause (iv) of
Article EIGHTH hereof, notwithstanding that the Corporation is not then
insolvent, the directors serving pursuant to the requirements of this
Article FOURTH shall take into account the interests of the creditors
of the Corporation as well as the interests of the Corporation.
(C) In the interim between elections of directors by
stockholders entitled to vote, all vacancies, including vacancies caused by an
increase in the number of directors and including vacancies resulting from the
removal of directors by the stockholders entitled to vote which are not filled
by said
4
5
stockholders, may be filled by the remaining directors or the sole remaining
director, though less than a quorum.
ARTICLE FIFTH
The name and address of the incorporator is as follows:
Susan M. Giusti
Five Horsham Business Center
300 Welsh Road
Horsham, PA 19044
ARTICLE SIXTH
The business in which the Corporation may engage and the
powers which the Corporation may exercise are restricted exclusively to the
following:
(a) to acquire from time to time all right,
title and interest in and to Mortgage Loans secured by first or second Mortgages
or deeds of trust on one-to-four family residential or mixed-use properties,
including, without limitation, monies due thereunder, proceeds from claims on
insurance policies related thereto, and related rights and other property
appurtenant thereto (collectively, the "Mortgage Loans");
(b) to acquire, own, hold, service, sell,
assign, pledge and otherwise deal with the Mortgage Loans, collateral securing
all or a portion of the Mortgage Loans, related insurance policies, agreements
with other originators or servicers of all or a portion of the Mortgage Loans
and any proceeds or further rights associated with any of the foregoing;
(c) to enter from time to time into interim
arrangements relating to all or a portion of the Mortgage Loans, whereby all or
a portion of the Mortgage Loans are transferred to a custodian on behalf of the
entity providing financing, pursuant to one or more repurchase agreements or
other agreements (each, an "Interim Agreement") to be entered into by, among
others, the Corporation, the entity providing financing, the custodian named
therein and any entity acting as servicer of all or a portion of the Assets;
provided, however, that there may be only one Interim Agreement at one time;
(d) to transfer from time to time all or a
portion of the Mortgage Loans to trusts (the "Trusts")
5
6
pursuant to one or more pooling and servicing agreements or other agreements
("Securitization Agreements"), or to sell all or a portion of the Mortgage Loans
to whole-loan purchasers pursuant to one or more whole-loan sale agreements
("Whole-Loan Sale Agreements") (Securitization Agreements and Whole-Loan Sale
Agreements, together, "Disposition Agreements"), to be entered into by, among
others, the Corporation, the trustee named therein (the "Trustee"), the
whole-loan purchaser, as appropriate, and any entity acting as servicer of all
or a portion of the Mortgage Loans.
(e) to authorize, sell and deliver any class
of certificates or other securities issued by the Trusts under
the related Securitization Agreements;
(f) to acquire from the Trustee certificates
issued by Trusts to which the Corporation transferred all or
a portion of the Mortgage Loans;
(g) to authorize, issue, sell and deliver one
or more series and classes of bonds, notes or other evidences of indebtedness
(other than contingent indebtedness) secured or collateralized by one or more
pools of Mortgage Loans and issued under an indenture or similar agreement
(each, an "Indenture") or by certificates of any class issued by any Trust
established by the Corporation (collectively, the "Notes"), provided that the
Corporation shall have no liability under any Notes except to the extent of the
Mortgage Loans or the certificates securing or collateralizing such Notes;
(h) to enter from time to time into financing
agreements ("Residual Financing Agreements") for any subordinate or residual
certificates, participation interests or notes issued under Disposition
Agreements or Indentures ("Mortgage Loan Pool Equity Interests"), provided that
the Corporation shall have no liability under any such Residual Financing
Agreements except to the extent of the related Mortgage Loan Pool Equity
Interests securing or collateralizing the related financing;
(i) to hold and enjoy all of the rights and
privileges of any Mortgage Loan Pool Equity Interests;
(j) to sell all or a portion of the Mortgage
Loans to any Person, including any Affiliate (which Person or Affiliate shall
then be considered a whole-loan purchaser as described above) and to loan money
to any Affiliate; and
(k) to perform its obligations under each
Interim Agreement, each Disposition Agreement, each Indenture and each Residual
Financing Agreement (collectively hereinafter referred to as the "Obligations");
and
6
7
(l) to engage in or transact any lawful
activity or business for which corporations may be incorporated under the Nevada
General Corporation Law and to exercise any powers permitted to corporations
under the laws of the State of Nevada but only to the extent incidental to and
necessary or convenient to accomplish the purposes set forth in paragraphs (a)
through (k) of this Article Sixth.
ARTICLE SEVENTH
No Director or, to the extent specified from time to time by
the Board of Directors, officer of the Corporation will be liable to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, excepting only (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or (b) the payment
of dividends in violation of 78.300 of the Nevada Revised Statutes. No amendment
or repeal of this Article SEVENTH applies to or has any effect on the liability
or alleged liability of any Director or officer of this Corporation for or with
respect to any acts or omissions of the Director or officer occurring prior to
the amendment or repeal, except as otherwise required by law. In the event that
Nevada law is amended to authorize the further elimination or limitation of
liability of directors or officers, then this Article SEVENTH shall also be so
amended to provide for the elimination or limitation of liability to the fullest
extent permitted by Nevada law.
The Corporation shall indemnify the officers and directors of
the Corporation to the fullest extent permitted by the Nevada Private
Corporations Law as the same exists or may hereafter be amended. In the event
that the Nevada Private Corporations Law is amended, after the filing of these
Articles of Incorporation, to authorize corporate action further eliminating or
limiting the personal liability of an officer or director, then the liability of
an officer or director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Nevada Private Corporations Law, as so amended.
The Corporation shall pay the expenses incurred by an officer
or director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
officer or director to repay such amount if it should be ultimately determined
that he/she is not entitled to be indemnified by the Corporation as authorized
by Nevada Private Corporations Law.
7
8
Any amendment to or repeal of any of the provisions in this
Article SEVENTH shall not adversely affect any right or protection of an officer
or director of the Corporation for or with respect to any act or omissions of
such director occurring prior to such amendment or repeal.
ARTICLE EIGHTH
Notwithstanding any other provision of these Articles of
Incorporation and any provision of law that otherwise so empowers the
Corporation, the Corporation shall not, without the prior written consent of the
Trustee under any applicable Securitization Agreement (and any supplements
thereto), do any of the following:
(i) (x) consolidate or merge with or into any other
entity or convey, transfer or assign any residual or subordinate
interest to any Related Company (as defined below), or dissolve or
transfer its properties and assets substantially as an entirety to any
entity (other than to a trust formed pursuant to a pooling and
servicing agreement or similar agreement and only to the extent that
the trust is deemed to be a subsidiary of the Corporation), or lend or
advance any moneys to, or make an investment in, any person or amend or
repeal its bylaws or these Articles of Incorporation or (y) engage in
any other action that bears on whether the separate legal identity of
the Corporation and any Related Company will be respected, including,
without limitation (a) holding itself out as being liable for the debts
of any other party; (b) forming, or causing to be formed, any
subsidiaries; (c) acting other than in its corporate name and through
its duly authorized officers or agents; (d) failing to hold appropriate
meetings of the Board of Directors at least three times per annum and
otherwise as necessary to authorize all corporate action; and (e)
failing to hold meetings of the stockholders at least one time per
annum;
(ii) incur any indebtedness, or assume or guaranty any
indebtedness of any other entity, other than Notes and any Indebtedness
to ADVANTA Mortgage Corp. USA, a Delaware corporation, or any affiliate
thereof in connection with the acquisition of Assets;
(iii) consolidate or merge with or into any other entity
or convey or transfer its properties and assets substantially as an
entirety to any entity, unless
(A) the entity (if other than the Corporation) formed
or surviving the consolidation or merger or which acquires the
properties and
8
9
assets of the Corporation is organized and existing under the
laws of the State of Nevada, expressly assumes the due and
punctual payment of all obligations of the Corporation,
including those obligations of the Corporation under each
Securitization Agreement and has Articles of Incorporation
containing provisions substantially identical to the
provisions of Articles FOURTH, SIXTH and this Article EIGHTH;
and
(B) immediately after giving effect to the
transaction, no default or event of default has occurred and
is continuing under any Securitization Agreement, any
indebtedness of the Corporation or any agreements relating to
such indebtedness; or
(iv) without (A) the affirmative vote of 100% of
the members of the Board of Directors of the Corporation (including an
affirmative vote of each Independent Director required by Article FOURTH) and
(B) the affirmative vote of the holders of 100% of the common stock outstanding
of the Corporation, make an assignment for the benefit of creditors, file a
petition in bankruptcy, petition or apply to any tribunal for the appointment of
a custodian, receiver or any trustee for it or for a substantial part of its
property, commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereinafter in effect, consent or acquiesce to
the entry of an order for relief, or in the filing of any such petition,
application, proceeding or appointment of or taking possession by the custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Corporation or any substantial part of its property, or admit
its inability to pay its debts generally as they become due or authorize any of
the foregoing to be done or taken on behalf of the Corporation; provided that if
there shall not be two directors required by Article FOURTH (b) of these
Articles of Incorporation then in office and acting, a vote upon any matter set
forth in this Article EIGHTH shall not be taken unless and until two directors
meeting the requirements of Article FOURTH (b) of these Articles of
Incorporation shall have been elected.
For purpose of this Certificate, "Related Company" means the
stockholder or stockholders of this Corporation or any entity other than this
Corporation now or hereafter controlled directly or indirectly by, or under
direct or indirect common control with, the stockholders of this Corporation.
9
10
ARTICLE NINTH
In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors of the Corporation is expressly authorized:
(a) To make, alter, amend or repeal the By-laws of the
Corporation, except that such By-laws or any alteration,
amendment or repeal thereof shall not in any manner impair the
intent of, Article SIXTH, Article EIGHTH or this Article NINTH
of these Articles of Incorporation.
(b) To take, lease, purchase or otherwise acquire, and to own,
use, hold, sell, convey, exchange, lease, mortgage or
otherwise encumber, work, improve, develop, divide and
otherwise handle, deal in, and dispose of real estate, real
and personal property and any interest or right therein.
(c) To determine the use and disposition of any surplus
and net profits of the Corporation, including the
determination of the amount of working capital
required, to set apart out of any of the funds of
the Corporation, whether or not available for
dividends, a reserve or reserves for any proper
purpose and to abolish any such reserve in the
manner in which it was created.
(d) By a majority of the Board of Directors, to
designate one or more committees, each committee to
consist of one or more of the directors of the
Corporation. The Board of Directors may designate
one or more directors as alternate members of any
committee, who may replace any absent or
disqualified member at any meeting of the
committee. The By-laws may provide that in the
absence or disqualification of a member of a
committee, the member or members thereof present at
any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any
such absent or disqualified member. Any such
committee, to the extent provided in the resolution
of the Board of Directors, or in the By-laws of the
Corporation, shall have and may exercise all the
powers and authority of the Board of Directors in
the management of the business and affairs of the
Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may
require it; and no such committee shall have the
power or authority in reference to amending the
10
11
Articles of Incorporation, to authorize or take any action
described in Article SIXTH, Article EIGHTH and this Article
NINTH, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease, or exchange
of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the
By-laws of the Corporation; and no such committee shall have
the power or authority to declare a dividend or to authorize
the issuance of stock.
(e) When and as authorized by the stockholders in
accordance with statute, to sell, lease or exchange
all or substantially all of the property and assets
of the Corporation, including its good will and its
corporate franchise, upon such terms and conditions
and for such consideration, which may consist in
whole or in part of money or property including
shares of stock in, and/or other securities of, any
other corporation or corporations, as the Board of
Directors shall deem expedient for the best
interests of the Corporation.
(f) To exercise, in addition to the powers and
authorities hereinbefore or by law conferred upon
it, any such powers and authorities and do all such
acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the
provisions of the laws of the State of Nevada and
of these Articles of Incorporation and of the By-
laws of the Corporation.
In addition to the foregoing, the Corporation shall conduct
its affairs in the following manner:
(i) it shall not commingle the Corporation's assets with those
of any direct or ultimate parent of the Corporation or any subsidiary
or affiliate of any such parent;
(ii) it shall maintain separate corporate records and books of
account from those of any direct or ultimate parent of the Corporation
or any subsidiary or affiliate of any such parent;
(iii) it shall conduct its business from an office separate
from any direct or ultimate parent of the Corporation or any subsidiary
or affiliate of any such parent;
11
12
(iv) it shall maintain its assets separately from the accounts
of any other Person (including through the maintenance of a separate
bank account); and
(v) it shall pay from its assets all obligations and
indebtedness of any kind incurred by it, and shall not pay from its
assets any obligations or indebtedness of any other entity or person.
ARTICLE TENTH
Without (i) the prior written consent of each Trustee under
any Securitization Agreement (and any supplements thereto), (ii) the affirmative
vote of 100% of the members of the Board of Directors of the Corporation,
including, without limitation, the affirmative vote of each of the directors
required by Article FOURTH (b) of these Articles of Incorporation, and (iii) the
affirmative vote of the holders of 100% of the Common Stock outstanding, the
Corporation shall not amend, alter, change or repeal Article FOURTH, Article
SIXTH, Article EIGHTH, Article NINTH or this Article TENTH; provided, however,
that if the two directors required by Article FOURTH (b) of these Articles of
Incorporation are not then in office and acting, a vote upon any matter set
forth in this Article TENTH shall not be taken unless and until two directors
meeting the requirements of Article FOURTH (b) of these Articles of
Incorporation shall have been elected and shall be present and acting at such
vote.
ARTICLE ELEVENTH
The Corporation is to have perpetual existence.
12
13
I, THE UNDERSIGNED, being the incorporator hereinbefore named,
for the purpose of forming a corporation pursuant to the laws of the State of
Nevada, as amended, do make this certificate, hereby declaring and certifying
that this is my act and deed and that the facts herein stated are true and that
I have accordingly hereunto affixed my signature this 6th day of May, 1996.
/s/ Susan M. Giusti
-----------------------------
Susan M. Giusti
Incorporator
On this 6th day of May, 1996, before me personally came Susan
M. Giusti, to me known, who, being by me duly sworn, did depose and say that she
is an employee of Advanta Corp. and authorized to act as Incorporator of Advanta
Conduit Receivables, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.
-------------------------------
Notary Public
[Notarial Seal]
13